Strategy & Implementation Summary
Companies in the automotive aftermarket will not necessarily seek out Internet consultants who are focused towards the automotive aftermarket because, for all intents and purposes, they don't exist. This is the type of industry where AutoAftermarket.com must have an aggressive sales campaign with brochures, and advertisements in industry journals, and must be constantly making contacts. Fortunately, John Teller has many contacts throughout the industry. Also, John's father is well known, being an industry executive himself, so the Teller name has an excellent reputation.
Strategy Pyramids
Our main strategy is to emphasize the business-to-business automation as automotive after-market firms strive to become more competitive, especially with the automobile manufacturers. In a sense, we will be pioneering a relatively new market, so deviating from the strategy is not an option.
Underneath this strategy, our main tactics are utilizing industry experience, advanced technical knowledge based assets, and unparalleled communication and educational skills.
Our industry experience will aid us in understanding the customer and the customer's customer to bridge the communication gap between the jobber and professional installer. We will stay active in various trade organizations like the Automotive Warehouse Distributors Association and the Automotive Parts and Accessories Association to build and maintain relationships throughout the industry. We will constantly maintain our presence by targeting customers based on industry knowledge first, and technological skills second.
Our technological skills will help us get the job done after the program is sold. Part of a successful consulting business is to keep as close to the schedule as possible. It is much like law firms, all that matters are billable hours. It will be critical that our technical skills be excellent and to not go over 10 percent on projects. Otherwise, AutoAftermarket.com runs the risk of a tarnished reputation.
Our communication skills will be extremely important in educating the customer and the end user on how to utilize the system we have built. It is relatively easy to put together an Internet system that functions, but having the ability to educate the users is when the project is truly finished. Our focus on education will be another distinction of AutoAftermarket.com from the competition.
John has extensive training experience with PCs at the distributor level, as well as ERPs at the manufacturing level. In fact, John was part of the implementation training team in SAP/R3 for pricing database management, as well as sales analysis for Moog Automotive.
Value Proposition
One of our major value propositions is that AutoAftermarket.com will have already spent the money, time, and resources to develop a sophisticated behind-the-scenes approach to cataloging and SKU database management. A single company to do this independently would be extremely expensive and time consuming. Our pooling of resources will benefit the customer in the end to get them faster to market.
Another value proposition is that because of our excellent relationships with manufacturers, our database will be more up-to-date than anyone else in the industry. Most companies wait until the next issue of Triad's Electronic Catalog because it is a quarterly publication. But, AutoAftermarket.com's customers will be more up to date than anyone else in the industry because we will constantly update the database whenever new applications are released.
Our clients will benefit from a team of experts with experience in the aftermarket to come into their business for a specialized product that will help them become more effective selling entities. They will be happy to pay top dollar for industry-specific expertise, especially since it addresses critical competitive issues. Our e-commerce developments are a one-time variable cost, whereas the alternative is a management team including major additions to their MIS department that would be a fixed cost, and this person would not be as skilled at the specific job that we do.
Competitive Edge
We start with a critical competitive edge: there is no competitor we know of that can claim anywhere near as much specific technological expertise, coupled by the fact that we have grown up in the industry with experience at all levels. Our positioning on this fact is very hard to match, but only if we maintain this focus in our strategy, sales and marketing, education, and industry relationships. It is important to note that hiring more generalized Internet consultants would tend to dilute the expertise that AutoAftermarket.com brings to the table.
Another competitive edge that will distinguish AutoAftermarket.com from the competition is that not only do we provide e-commerce publishing services, but we also have heavily invested in machine and database capital to ensure that our site runs at the greatest speed with the latest technologies. It will be updated every month for new applications and prices automatically because all e-commerce applications at AutoAftermarket.com run on the same database behind the scenes.
Marketing Strategy
Part of our marketing strategy will be to offer our e-commerce service for free to a smaller company to prove to the industry what we can do. This customer must be chosen carefully, however, because we would not want to get into a 6-month implementation. It needs to be someone relatively local so that we may work with them more closely to iron out any bugs that may be in the system. One good candidate that we are considering is Superior Chassis located in Gary, Indiana. They have one main product line with a standard set of part numbers that would be relatively simple when compared to some of the larger, more complex companies. Because the automotive aftermarket works on a word-of-mouth basis, especially with IS consultants, we believe this would get our name out there.
Part of this marketing technique will require us to have a website at www.AutoAftermarket.com that shows our capabilities and what we are all about. We will also show links to the sites that reside on our system, such as Superior Chassis in our previous example. We feel confident that when word travels about our new service, prospects will jump on our website to at least check us out.
When we are going through this implementation process, we would like to have some press coverage as well. Aftermarket Business would more than likely want to carry the story, especially to address how the automotive aftermarket is responding to the automobile industry's massive changes. Aftermarket Business happens to be the largest publication of its kind and would be a great avenue to make our name heard, especially in light of a headline such as, "AutoAftermarket.com addresses Automakers e-commerce Issues: For free!!!" Imagine the number of hits our site would get in that day alone.
AutoAftermarket.com will have two brochures; one for manufacturers and one for distributors (consequently, the distributor version will be written generically enough to be used for other applications as well). The manufacturing brochure will include details of the automakers' requirements and why it is critical for them to have business-to-business capabilities. The distributor version will focus more towards doing business online, whether business-to-business or business-to-consumer and what they may be missing out on in the future.
We will also run a couple of ads throughout the year in trade magazines. One in particular that we would like to run is an ad focusing around online manufacturers. We may even look into working out an interview about how critical it is to be online in order to be a major automotive supplier.
Another marketing strategy that AutoAftermarket.com will utilize is to go directly to the automotive manufacturers and form a strategic alliance to gain some business through them. If we were able to establish an excellent rapport and reputation with one of them, it would make all the difference in pursuing new customers. Fortunately, John's grandfather, Walt Johnson, used to be the Vice President of Personnel at Ford Motor Company for many years. We feel confident that we could get a meeting together because of some old contact to try to be their "go-to" firm when a manufacturer is looking to get online. It will be very critical for us to get the first customer under our belt to show that we are capable.
We will also hold two free seminars per year to educate companies about what AutoAftermarket.com can do for them. One will be held in Indianapolis and the other will be held in Las Vegas at the Automotive Warehouse Distributors Association (AWDA) annual conference. We believe that showing people our capabilities face-to-face tends to be more effective.
Positioning Statement
For manufacturers and distributors of auto parts who intend to stay competitive by automating the selling transaction, AutoAftermarket.com offers very specialized, industry specific expertise. Unlike the general Internet consultants, AutoAftermarket.com can provide a superior Internet commerce solution along with a top-notch ASP designed to be immediately effective in the automotive aftermarket.
Pricing Strategy
AutoAftermarket.com will be priced at the upper edge of what the market will bear, competing with general Internet consultants. The pricing fits with the general positioning of AutoAftermarket.com as high-level, industry specific expertise. We will require 50 percent up front with the balance at project completion.
E-commerce consulting will be based on $130 per hour, and $90 per hour for general web design. Graphic design portions of projects will be priced around $40 per hour. These numbers were established through a pricing analysis based on general web-consulting, as well as price quotes throughout the industry.
We will be charging $150 per month for a company to host its e-commerce site on our server. For this service they receive e-mail capabilities, high-speed access for themselves as well as their customers, use of an unparalleled database and catalog, and unlimited service from our staff. For a general website, we will charge $50 per month, which seems to be the middle of the road for business site hosting.
For our service, we will also require that the company pay back to us 1 percent of all sales gained on our server. We believe that the market can bear 1 percent of its total earnings.
Promotion Strategy
Our promotion strategy will be three-fold. Our primary strategy will be the high-quality brochure sent to strategic individuals as mentioned previously. We will also run a couple ads per year in various automotive trade magazines. Lastly, we will offer two free seminars once a year to be held in Indianapolis and Las Vegas for industry professionals to learn more about what the Internet can do for their aftermarket company. This demonstration should generate some major activity. Needless to say, there is no better sales tool than actual demonstrations.
Business-to-business e-commerce services will be the key product offered to the OEM/aftermarket manufacturers. Our main selling point will be that the system we will design will be tailored to their business strategy and will reduce operating costs considerably. According to Intersearch Corporation, most executives believe that an Internet-based electronic trading system would increase the accuracy of billing by 31 percent, increase the accuracy of orders by 29 percent, reduce the purchase cycle by 62 percent, and reduce operating costs associated with this cycle by 45 percent. Gartner Group takes this further by saying that the most successful Internet strategies are those where companies use the Web to strengthen the distribution chain. Once we have some projects completed, we will show potential customers what we have done previously.
Our other major product segment will be to build websites for aftermarket companies. These generally take less time to compile and are good for keeping the cash flow of the business in good standing. Our web pages will be better than the competition because of our vast experience with the automotive field. One of our selling points will be that our graphic artist has worked in the automotive parts manufacturing industry in a graphic arts capacity for over a year.
Marketing Programs
Our most important method of gaining recognition throughout the industry will be networking with key executives through current relationships. We do not believe that a major advertising campaign will bring major inquiries on our services. However, we will run some ads in automotive trade magazines to at least get our name out in the industry. Our annual budget for magazine advertising will be no more than $7,500. We will plan to run a small ad every quarter in two automotive journals: one focused on manufacturing and one focused on distributors.
Sales Strategy
Our key sales strategy will be to first send out the corporate brochure to highly qualified prospects within the industry. This will be followed closely by a phone call from John Teller to set up a meeting to discuss. In the first few months, John will be taking the e-commerce professional to these meetings so that he/she can demonstrate what they have done in the past and what they can do for the customer. Once a couple of customers have been established, John can make these calls independently (unless it is a major proposal) and use examples from what AutoAftermarket.com has done for other customers.
It will be vital to our business to sell quality based on technological background and business industry experience. We will also exploit the fact that most consultants are not an ASP, and virtually none of them have both an ASP and come from the automotive aftermarket. It is certainly not our intention to be the low cost provider. AutoAftermarket.com's services are much more valuable than the competition. Any Internet company can build a website, but only AutoAftermarket.com truly understands their customer and the industry. Business-to-business e-commerce only becomes truly effective when solutions are industry-specific.
Sales Forecast
The following table and chart give a run-down on forecasted sales. We expect sales to be sluggish as AutoAftermarket.com tries to establish itself. We do expect sales to increase within a few months of startup. We are also forecasting higher increases at the beginning of each year due to budgets being established. The sales budget is based on $130 per hour for e-commerce work/business-to-business work, $90 per hour for general web programming, and $40 per hour for graphic design. The budget takes into account 70 percent efficiency.
Sales are considerably higher in years 2 and 3 due to adding one employee per year. We expect an increase in sales of 83.5 percent in year 2, and 61.5 percent in year 3. We are confident that once the word is out that there is an Internet consultant with automotive experience, our market niche will be booming.
| Sales | 2001 | 2002 | 2003 |
| Graphic Design | $46,072.00 | $59,156.00 | $59,565.00 |
| Web Development | $103,661.00 | $265,044.00 | $265,724.00 |
| E-Commerce | $149,737.00 | $192,258.00 | $387,172.00 |
| % Sales | $1,796.91 | $15,584.00 | $109,191.00 |
| Web Hosting - General | $8,974.40 | $28,673.00 | $28,697.00 |
| Web Hosting - E-Commerce | $7,137.17 | $12,525.00 | $25,272.00 |
| Total Sales | $317,378.48 | $573,240.00 | $875,621.00 |
Sales Programs
We do not want to run any promotions or discounts at this point. There is little point in offering discounts or free services to a virtually untapped market. As mentioned previously, our discounts will occur if there is added business or a long-term relationship is established.
Strategic Alliances
The major strategic alliance that we want to form is with Ford Motor Company. If a manufacturer ever asks automakers where they can find a company to put them on the Internet, we want them referred to us.
Milestones
The accompanying table lists important program milestones, with start and end dates, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation.
What the table doesn't show is the commitment behind it. We will hold monthly follow-up meetings every month to discuss the variance and course corrections to ensure that everything is completed in a timely fashion.
| Milestone | Start Date | End Date | Budget |
| Purchase Hardware and Software | 12/1/00 | 1/1/01 | $25,931 |
| Set-up Office | 1/1/01 | 1/15/01 | $5,000 |
| Pursue Loan | 7/1/00 | 9/1/00 | $0 |
| Brochures | 10/1/00 | 11/1/00 | $10,000 |
| Hire Staff | 10/1/00 | 12/15/00 | $300 |
| New Hire - Web Design | 1/1/02 | 2/1/02 | $300 |
| New Hire - E-Commerce | 1/1/03 | 2/1/03 | $300 |
| New Computer Year 2 | 1/1/02 | 1/15/02 | $2,199 |
| New Computer Year 3 | 1/1/03 | 1/15/03 | $2,199 |
| Totals | $46,229 |
