Position Statement
“A comprehensive boat dealer that provides financial solutions by connecting sellers and high-net worth buyers. Through this acquisition People’s United Bank will continue to diversify their revenue stream and increase net present value’’
Research
According to NMBA and NMMA (1) the Marine Industry has undergone a major change and growth in the past decade with huge sales and loan portfolios identified across various markets. However, of late the industry has suffered various blows with some of the lenders leaving the industry with the hope of investing in other sectors. The outcome is an increase in demand and reduction in suppliers to meet this ever-growing market demand (NMBA and NMMA 1). At the same time, there has been increase in interest rates increasing the potential benefits companies would accrue from investing in the recreational marine lending sector (NMBA and NMMA 1). The boating industry remains a lucrative investment for companies and even individuals considering boating is one of the most popular recreational activities that people have invested in on a large scale. It is estimated that in 2007, there were nearly 17million boats used with retail expenditures reaching nearly $37.5 Billion in 2006 and $39.5 Billion in 2006 (NMBA and NMMA 2).
The unit retail sales in 2016 and 2017 highlight some of the factors that are necessary in evaluating the operations of the industry and the ability of the industry to remain operational. The 1980s recession and the 2007-2009 recessions have had a huge impact on the number of unit sales made and purchases. With the end of the 2007-2009 Great Recession, it was projected that the number of boat owners would increase.
Source: Yu, Houseworth and Lais 6
However, entering 2017, there has been a huge shift in terms of the number of boat owners. A projected estimation of the number of boat owners from 1995 shows a downward trend in the number of willing buyers as compared to number of people purchasing homes. The effect of the housing bubble as a causative factor for the Great Recession has created a major shift in the Marine Industry for individuals with people prioritizing owning a home to purchasing a boat. Between 2010 and 2015, the number of boat owners dropped from 9,151 to 8,588 (Houseworth, Lais and Burnham). By 2020, it is projected that the number will drop even lower to 8,440 and by 2025, it will have reached 8,191. All the while, the number of homeowners is expected to continue increasing.
Source: (Houseworth, Lais and Burnham 9)
However, the reduction in the number of boat owners has created a new gap within the Marine Industry for lenders to fill. The recreational activities among homeowners have increased significantly considering that there is a higher amount set aside for recreation rather than purchasing the boats. With the increased demand within the market, this segment of the Marine Industry remains a lucrative segment for investment.
4Ps (Product, Price, Promotion, Place)
The products in the industry include the outboard boats, boat trailers, personal watercrafts, sterndrive boats, inboard ski-boats, sailboats, inboard cruisers, jet boats, and yachts. The type of product to be leased to the customer depends largely on the expenditure budget of the customer and the function. At the same time, depending on the distance to be covered with the vessel, the type of product can be decided for the customer.
The price for the boats also varies depending on the specifications of the customers and the function. The boats and ships also vary in terms of engine size and engine power. The strong and huge performers are charged higher based on the performance and ability to allow the users to use them or various functions.
Promotion for the products and the business will be factored largely on the connectivity that the company has with its customers. Social media is the first platform for promotion of the services and the products. The adoption of social media as a promotional tool will also encourage the use of standard promotion strategies such as the use of salespersons to reach out to customers to help increase awareness about the services and products being offered.
The location/ place will be available in selected centers or branches of the company. The objective is to reduce the issues related to accessibility and connection to the customers. Through using centralized regions or centers, it becomes easier to connect to customers and even take information related to repairs and maintenance. Any booking or order placed, the company will assume the transportation costs to ensure that the customers receive the product and that it reaches the destination in perfect condition.
Target Audience
The targeted populations for the business are mainly families. Recreational activities are best enjoyed among family members with the largest population of people who participate in such activities being family members. However, there are also an increasing number of young adults interested in recreational activities. Holidays and boot camps are mostly preferred by teenagers who seek to enjoy the travelling experience among friends and even siblings. The last audiences being targeted are the corporates. Businesses have invested in developing programs meant to develop team-building among workers and
Demographic
Most boat buyers are middle class citizens with established families, their own homes, and have an income estimation of nearly $100,000 annually. The average timeframe most of the owners spend on the boats reach 32 days, which is a summative of the weekends throughout the year. The estimated amount spent for the inboard cruiser and larger sailboat owners reach $134,000, the personal watercraft reach up to $71,000.
Works Cited
Houseworth, Peter, Noel Lais and John Burnham. State of the Industry 2017. Cicago, IL.: InfoLink, 2017. Print. <http://boatingindustry.com/wp-content/uploads/2011/10/2017-Boating-Industry-State-of-the-Industry.pdf>.
NMBA; NMMA. Marine Industry Executive Summary for Lenders. Chicago, IL.: National Marine Bankers Association; National Marine Manufaturers Association, 2016. Print. <http://www.nmma.org/lib/docs/nmma/Marine_Lending_White_Paper.pdf>.
Yu, Vicky, Peter Houseworth and Noel Lais. State of the Industry 2016. Chicago, IL.: National Marine Manufacturing Association, 2016. Print. <http://boatingindustry.com/wp-content/uploads/2016/08/2016-State-of-the-Industry.pdf>.