I.
Executive Summary
The projected focus on this marketing plan is to gain more market share in the
transfer of fuels and chemicals industry. We follow the concept of similar repair
facilities, however emphasizing on customer service and superior workmanship. We
are following the American Society of Mechanical Engineers (ASME), and Department
of Transportation (DOT) standards to comply with every single aspect of repairs on
boiler vessels and vehicles. Furthermore we provide research on our market by
studying on a demographic location to open a repair facility, near fuel loading terminals
where significant transit of fuel carrying vessels takes place. Aside from service and
repairs, distribution of tanker parts will be sold to potential customers as needed. The
time cycle of the products that will be sold on Empire Tanker are still in the growth stage,
meaning there is great potential for growth on sales and profits. Also the logistics and
supply chain mechanism has been considered at length. Our service methods,
distribution methods and information technology will follow the various stages of the
supply chain. Finally it is discussed whether the competitive advantage that Empire
Tanker has is sustainable or not. We set our focus on the budget, marketing plan and
the balance between expenses and the profits.
II.
Company Description
Empire Tanker is a fully equipped repair and tanker parts distribution facility that
strives in offering expert service to fuel and chemical transportation lines. Our services
will offer a higher level of quality and excellence that our customers have yet to
experience. We will strive to enhance our own craft and results with top of the line
parts, customer service, and techniques. Empire Tanker fully understands the
importance of using high quality parts in our repairs, as well as employing registered
inspectors and certified welders who will also be well trained in trailer repair and
maintenance. When our customers see our service brand, they will relate it to leading
service whether it is for repair, maintenance, testing or inspections.
III.
Strategic Focus and Plan
a. Mission/Vision Statements
In order to fulfill the customer’s repair needs, we will contact welding supply
stores, as well as tanker parts suppliers. In order to aid our economy, Empire Tanker
will only use American made supplies and parts to make repairs. Furthermore, we will
register with the National Board of Boiler and Pressure Vessel Inspectors, California Air
Resources Board, and US Department of Transportation to give our customers the ease
of mind that our work is certified. Empire Tanker will gain the reputation as:
“Your one stop shop for parts and quality repair needs”
b. Goals
In terms of goals, for the next six months, Empire Tanker will promote its
business by making sales visits to potential customers. Our outside sales
representatives will inform clients of the types of repair we perform, our shop
certifications, and the parts we carry. Also a website will be developed in order to show
our facility and repair capabilities. Also we will introduce an incentive program where
after the customer’s fleet tenth visit, they will receive an annual CARB test at no charge.
From this promotion, we are aiming for a five percent increase in overall sales. In
addition this will draw more customers, as well as reward the existing customer base.
c. Core Competency and Sustainable Competitive Advantage
In terms of core competencies, Empire Tanker will develop a reputation for
providing high quality workmanship due to its qualifications. In order to sustain this
competitive advantage, our repair technicians will be tested every three years as
required by the National Board of Boilers and Pressure Vessel Inspectors. In addition
our employees will partake in training seminars offered by our vendors. Empire
Tanker’s technicians will be fully trained in all aspects of tank trailer repairs.
IV.
Situational Analysis
a. SWOT analysis
b. Industry Analysis
In the fuel, chemical, and propane industries, tests are required in order for fleets
to be complaint with the Air Resources Board, and the Department of Transportation.
For this reason, many of these haulers are constantly looking for repair facilities to take
LOCATION
OF FACTOR
TYPE OF FACTOR
Favorable
Unfavorable
Strengths
Weaknesses
Certified Facility, Website,
Experienced managers needed
Opportunities
Threats
External
Fuel, Chemical, and Propane
Competition may offer same or
care of their required inspections. With the Department of Transportation, trailer units
Internal
are required to be inspected every 90 days. These 90 day BIT inspections cover
suspension and frame of the vessels. Keeping into consideration that most trailers
weigh over 23 thousand pounds, constant break down is imminent. Thus repairs and
parts replacements are constantly needed. Also the tankers on fuel, chemical, and
propane units must be inspected yearly and every five years as required by the Air
Resource Board. These tests also translate into potential repairs. Aside from the
repairs these units of transportation require, the markets that they serve must be taken
into consideration. We will start by addressing the Propane market.
The propane industry primarily fuel the following six applications which are:
residential, commercial, agricultural, industrial, transportation, and chemical & refinery.
Stringent environment regulations and growing petrochemical industry are expected to
be the major growth drivers for the propane market. According to the report “Propane
Market by Application” presented by Research and Markets, “propane ranks as the
fourth important source of energy for the residential segment. As an energy source,
propane competes with electricity, natural gas and fuel oil on the parameters such as
profitability, price and availability.”
In the fuel sector, using the year 2013 as the bases, “Gasoline dominated the
global transportation fuel market in 2013. Gasoline accounted for more than 40% of the
global transportation fuel market in 2013. Furthermore, North America accounted for
more than 30% of the global market share in 2013. It was the largest regional segment
in terms of volume in the same year” (Retrieved from Transparency Market Research).
Also the freight rail network is powered by distilled fuels. As mentioned in the US
Department of Transportation Federal Railroad Administration, “the U.S. freight rail
network is widely considered one of the most dynamic freight systems in the world. The
$60 billion industry consists of 140,000 rail miles operated by seven Class I railroads
(railroads with operating revenues of $433.2 million or more)”.
c. Competitor Analysis
Empire Tanker is surrounded by only one competitor. The nearest one is Polar
Service Center which is National Company. These service centers are located
nationwide and can safely be considered a large company. Polar sells parts that are
related to the fuel industry as well as suspension components. In addition, they provide
testing and service to distilled fuel haulers. However, because Polar is a large
corporation, they have a hard time providing proper customer service. Their completion
time on most of their projects exceeds days, making customers lose money by having
their equipment sit idle for too long. Most fuel haulers carry about 9000 gallons,
generating an estimated $23,000 dollars in revenue per daily load (averaging the price
of fuel at $2.55 per gallon). For this reason, fuel haulers will look for the facility that will
quickly repair their units in order to avoid long periods of down time.
d. Customer Analysis
Our target customers will consist of fuel, chemical and propane haulers. In these
three sectors mentioned in the report, Oil & Natural Gas Transportation & Storage
Infrastructure: Status, Trends, & Economic Benefits, submitted by the American
Petroleum Institute, “Driven by growth in U.S. natural gas, natural gas liquids, and crude
oil, the past 2 years have witnessed rapid growth in direct capital investment toward oil
and gas infrastructure assets. IHS estimates that capital spending in oil and gas
midstream and downstream infrastructure has increased by 60 percent, from $56.3
billion in 2010 to $89.6 billion in 2013.” Other services include transportation of products
such as ethanol, coal, and carbon dioxide. When taking into consideration these
numbers, we can see there is potential to gain a significant market share.
V.
Market-Product Focus
a. Marketing and Product Objectives
Empire Tanker’s marketing intent will focus towards gaining market share in the
repair of fuel, propane, and chemical transfer units (trucks and trailers). In order to
obtain this marketing objective our plan is to fully exploit our core competencies, and
take advantage of the limited competition.
b. Target Markets
The primary target markets for Empire Tanker will be fuel and propane haulers.
In the fuel sector, companies such as KAG West LLC where according to their 2013
publishing, “KAG revenue for 2002 was $269,228,000, which ranks first among
petroleum carriers, and third among all North American bulk carriers”
(http://www.thekag.com/node/444). In addition we will target propane haulers like
Amerigas, who in their 2014 fiscal year report, “net income attributable to AmeriGas
Partners for the fiscal year ended September 30, 2014 of $289.9 million”
(http://investors.amerigas.com/investor-relations/news-releases/news-releasedetails/2014/AmeriGas-Partners-Reports-Record-Earnings-for-Fiscal2014/default.aspx).
c. Points of Difference
The characteristics of Empire Tanker that set us apart in relation to our tanker
trailer repair competitors are the following:
We are a small repair facility. The service we provide to our customers genuine
and reliable.
Empire Tanker’s technicians are well trained and fully certified.
Extensive knowledge in fuel, propane, and chemical parts.
Empire Tanker has decided to reach out these companies who want fast and
reliable service at reasonable prices. Our goal is for the customer to avoid as much
down time do to repairs. Competition in the tanker repair industry has a reputation of
leaving their customers fleet down for too long, resulting in significant money loss. At
Empire Tanker we will strive to get our customers’ units back on the road, without
sacrificing quality in our work.
d. Positioning
Location is key in succeeding in this type of industry, that is why will establish
ourselves near loading racks, where significant traffic of fuel and propane units takes
place. Also we will strategically place billboard advertisement near freeway exits to our
location as well as potential customers’ locations. In addition we will set our parts
warehouse in the front area, so that customers can see the vast array of tanker parts
that we stock.
VI.
Marketing Program
a. Product Strategy
Empire Tanker’s competitive edge lies in its vision, where we understand better
than the competition that a service visit does not just include repairing a client’s trailer
equipment. It also includes the entire service experience from the first time a customer
talks to one of our technicians until they drive away from our premises. The long-term
profitability of a repair facility of this type lies in the recurring customer that finds Empire
Tanker’s services an excellent experience, despite the fact that they usually have
experience a breakdown or just a stop for a routine test. Furthermore, the company will
seek to examine all aspects of the service experience, in order to find ways to improve
its customer satisfaction. In addition, all of our technicians will be rigorously trained to
take into consideration customer satisfaction in order to create a self-sustaining
company culture that focuses around this issue.
b. Price Strategy
Since many of the repairs at Empire Tanker involve routine testing, we will adopt
Project-based pricing. This type of pricing will involve a flat fee arrangement agreed to
before a certain testing, repair or modification is perform on the vessel. We will take an
estimate based on our hourly rate, and then price the project accordingly. Our objective
will be to finish the work as quickly as possible without sacrificing our high quality
standards. For this to function successfully, the type of work to be performed must be
established up front. Also for jobs that do not require a quote, an hourly rate of 90
dollars will be charged.
To reach our breaking even point we must consider the following numbers:
Rent=10,000; salaries= 32,000; utilities= 1200; shop supplies= 3,000; Inventory=4,000.
Cannot establish a Price Strategy without some numbers: sale price of a service, minus,
cost of labor and materials to equal a gross profit per service. Then these are divided
into fixed costs of the business for a BEP
