Hybrid Conversions Inc - Market Segmentation

Positioning Statement:

Hybrid Conversions, Inc. is the most cost effective among all hybrid conversion kit manufacturers because the technological, industry, and partner expertise allows for a lower total cost of ownership.

Market Segmentation and targets:

In research, HCI was looking at various statistics to select initial target markets to start the deployment of the conversion kits in pickup trucks. The target segments are shown below:

Types Of Customers Rank

Utility and Telecom Companies 1

Government Municipalities 2

rental car/fleet leasing companies 3

universities and large school systems public or private 4

telecom installers 5

Railroad Companies 5

Building contractors 6

moving companies 7

Table 1: Target Customer Rank

The main target segment is Utility and Telecom companies. Their qualities are as follows:

1. Large fleets, comprised mostly of trucks

2. Travel longer distances than other industries (University fleets)

3. Long idle times

4. Industry is making a concerted effort to turn their fleet into hybrids (Pacific Gas and Electric)

Government municipalities will be a second channel as while the fleet is large, the amount of travel is considerably less than for Utility and telecom companies.

The rental car market is a very large market. It makes up approximately 51% of all fleet sales in 2005 for light trucks according to R.L. Polk. The challenge in the target market is the frequency rental companies move their vehicle inventory. Adding 3,500 to 5,000 per car is not practical for the rental car industry. HCI will have to review the market because of the large amount of customers.

Hybrid matrix:

To create the map of the channel for the utility and telecom companies, the processes are identified. The processes are shown below:

Step number Procedures description

1 Attract the Company as a potential supplier Trade Magazines, catalog, trade shows

2 Position Company versus competitors in the market National Sales Force

3 Describe the available product versus the competitors National Sales Force

4 Work with certified vendor to explain installation Certified VARS and National Sales Force

5 Negotiate Price and Terms Certified VARS and National Sales Force

6 Accept Order Certified VARS and National Sales Force

7 Work with certified vendor to coordinate installation Certified VARS and National Sales Force

8 Deliver system to certified vendors for installation Freight Company (UPS)

9 Work with certified vendor for ongoing training and maintenance Manufacturer

10 Sell additional systems Certified VARS and National Sales Force

Table 2 Channel processes for Utility companies

Due to the control that needs to be kept over the product due to the complexity of the product, only Certified Value Added Resellers