Car Wrapping Industry
In recent years, vehicle wrapping and graphics has been used in a wider variety; the idea of this technology was developed for the wide usage of companies for “moving” advertising of their products and services. With more than fifty years of development, vehicle wrapping today is considered to be one of the most effective marketing tools. More specifically, this approach is able to catch more than 70,000 potential customers a day.
This technique is so efficient due to its ability to create brand awareness in people’s minds while on the road or simply walking on the street. Vehicle wrapping is common on tracks, cars, boats, trams, trains, and even airplanes; clients can choose to wrap the whole surface of the vehicle, or a part of it. The wrap is made by a material called vinyl and there is a possibility to extend its life span up to five years. The high quality vinyl is further brushed by a clear laminate in order to last longer; the usage of cast vinyl, a material that stretches and is applied on the vehicle in accordance to its shape, is the most common material used for high quality vehicles.
Obtaining a vehicle wrap is a process; one can explain his desire to designers of the supplier, who in turn have the responsibility to design the idea, make an offer to the client, explain to him the application of the car wrap, and of course, the way to remove it. If a client desires something specific, he may bring with him a sketch of the design.
Although it all started as a marketing tool for corporations, today vehicle wrapping is used for changing the face of one’s personal car; most companies have specific designs available at stock and customers can order the car wrap. However, some major players on the global market, as well as on the German market (the one that the company will eventually aim to penetrate), mainly on the car industry, such as Mini Cooper, have developed a vinyl based car wrap that will be suggested to customers to purchase only for the added value of 2800 Euros. The reason behind the popularization of the technique is that it is cost efficient, it is cheaper than painting the car, one can rip it off when he wants and change the face of his car, and to some extend it protects the car from scratching and saves money- it is cheaper to wrap the car once again then repaint it.
The cost of vehicle wraps can be divided into two main groups:
- The cost for companies wanting to wrap their vehicles for marketing purposes- this type of marketing is considered to be more expensive than others. However, the effect of the car wrap will be higher than other approaches, thus, worth every penny.
- The cost for individuals wanting to wrap their vehicles, instead of painting them- the cost of a vehicle wrap depends on the quality of the vinyl and the nature of the wrap (if the design is more complex, it can be expected to be more expensive). In general, these costs vary among 2000 and 5000 dollars, when production and installation are included.
When deciding to use a car wrap, customers should bear in mind that maintaining one involves several specifications: the car should not be taken to a car wash, instead, it should be cleaned by a mild vehicle detergent; gasoline shouldn’t be spilled on the wrap; general care for the wrap.
Nature of Car Wrapping the Business
The new invented company will be called “Re-Styling”, operating on the car wrapping industry only. The nature of the business will be very specific and will start by allocating its headquarters in Germany. The reasons behind the choice of the country lie upon not only economic and environmental factors, but also because Germany has become the center of creative car wraps (the “European Wrap Star” contest takes place in Germany every year).
Three main ideas will be incorporated into the company:
1. Commercial Wrapping (providing vehicle wraps to companies for marketing purposes) – this service will be based on economies of scale, low costs for materials, and will be the base for annual profits.
2. Specialized Car Wrap – every customer will be able to choose among already-made car wrap designs, which will be created at the beginning of the working year cycle. Colors and combinations could vary among customers’ desires.
3. Personalized Car Wrap – the production line, which will differentiate Re-Styling from other companies- together with its software experts, the company will create a software tool, designed for personalizing car wrap designs. Until today the approach to personalized car wraps was that the customer needs to provide the supplier with a sketch of his idea, but in reality many potential buyers do not think of purchasing a car wrap only because they cannot personalize it by themselves. Thus, Re-Styling’s innovation to the market will be a software production, in which many basic colors, pictures and forms will be listed. The customer will be able either with an assistant of the company, or by himself, to use the software in Re-Styling offices, to use the software as a game, building his dream car wrap. The aim of this line is to attract luxury clients, providing the best quality of goods (wrap) and services (designers). The cost of such a wrap will be significantly more expensive than the first type.
The macro environment of a company concerns the external factors that can influence its activities. Those are abbreviated as STEEP- Socio-cultural and demographics; Technology; Economic conditions; Ecology and physical environment; and Political and legal.
The nature of the business of Re-Styling will not have a different impact of the ecological and physical environment; the political environment at the moment is in favor of innovative way of thinking. Moreover, the two components that could have the highest influence on Re-Styling are socio-cultural and technology.
Following a thorough market analysis, the company has based its activities on the fact that social awareness towards car wrapping industries is growing in a vast speed, especially in Germany, where every year is conducted a show, as well as an attempt to enter the book of Records of Guinness for wrapping cars.
Governmental interventions in recent years are in favor to new technologies; one of the core values of the company will be the design of new software.
Lastly, even though there is an obvious growing demand for personalized car wraps, Re-Styling will enter the market with the other two traditional ways mentioned earlier in order to diversify its portfolio, in case of dramatic changes in the market.
Micro Environment- Porter’s Five Forces
- Level of rivalry- the main competitors of Re-Styling are of two types- the first are car producers, who alone provide the customer with the possibility to purchase a car wrap instead of painting the car; the second are companies selling car wraps mainly for marketing. The major players on the German market, except international companies who have a very small portion of the market share, are: Hexis S.A., 3M, SEMA, Pendle Signs, Cartridge World, FashionPaint & KK Colors, Car Wrapping Autoglastonung, and many others.
- Barriers to entry- as a result of the European Union’s economic crisis, many governments stick to a less “open”-oriented economies. Furthermore, the impact that new possible negative shifts will have on legislation and regulation of domestic markets is unknown, thus, becoming a risk to new entrants and innovators.
- Bargaining Power of Suppliers- low; the suppliers needed are of raw materials, as well as software designing companies.
- Bargaining Power of Buyers- the risk of lower costs of the competition is high in the first two lines of the company; the innovation however will play a balancing role in such a risk.
- Threat of Substitute Products- as mentioned above, there is a high risk of substitute products for wrap for marketing purposes and a low one for personalized wrapping.
Car Wrapping SWOT Analysis
A wide range of targeted customers
The possibility to influence bigger audience
Once the software is created, costs of production are low but the provision of high quality goods and services remains.
The development of such innovations may boost a new wave of ideas, as well as increase local demand
High competition and level of substitutes
High costs for R&D and managerial staff, as well as expertise
High investment costs
Training employees- innovation and the usage of specific software requires integration of staff into the program
Risk of market rejection to innovations
Economies of scale
Boost new technological advancements
Alliances and merging with other companies
The creation of local networks
The creation of partnerships with car dealers, who may use the company for creating their own car wrap
The possibility to sell the Know How of the company, mainly the software of the innovation, in case of a threat from bankruptcy.
Possible entrance of new competitors and substitutes
The Economical Crisis of the Euro-zone
Possible legislations against car wrapping industries due to environmental factors
The increase of supplier power
Segmentation and Target Market
Re-Styling chooses to segment the market trough customization and not mass marketing; the reason for this is that our company will offer different programs for each customer. Sample plans will be created for each segment of the market that the company will want to influence. As said earlier in this paper, segments that will be chosen are: middle and big companies wanting to use car wrap as a marketing strategy; any customer that wants to create his own car wrap, according to e personalized design (luxury customers); a wider audience – will be able to chose among ready-to-use designs of car wraps for their vehicles.
Specific segmentation will tackle only the luxury wrapping group: customers should be Value oriented and emotion oriented, men and women equally, age of no difference, want to express their feelings, communicate their emotional stage with the outside world, want to be noticed, re searching for new passions, be themselves and feel confident about it.
Points of Parity
The points of parity, or in other words, the similarities of Re-Styling with its competition are that they all share a significantly low price for car wrap and the target market consists of the broad mass. Moreover, all car wrap companies use the same raw material for its final products; in place where raw materials are the same, there is no place for uniqueness in the process of the technical creation, thus, quality of all suppliers can be considered as the same.
Points of Difference
The main point of difference of the company will be the launch of new technology and new practice, never seen on the market before. Further, no other company has created such a personalization of car wraps; Re-Styling customers will be able to design their own cars without the need of pervious knowledge in the field. Customers could create a whole new concept with the help of the new software, or use semi-final product designs, stored in the software’s memory and achieve the combination they seek. Either way, it is a step forward for the whole vehicle wrapping industry.
Lastly, the main image differentiation the company wants to convey is personalized innovation through materializing dreams and ideas, through which customers will be able to express themselves.
The perpetual map shows the relation of Re-Styling and its position on the market; the pink points represent other companies in the industry- most of them do not even consider personalized products. The other colors on the map are the three lines of Re-Styling, when the blue one is the personalized line, the yellow is the specific one, and the red one represents the commercial line.
- Branding Strategy. A good/service is delivered through the interaction between the provider and its customers; when branding a good that is tightly related to the service provided, one is essentially branding this interaction. While making a decision, customers have to go through the following stages: information search, evaluating of the alternatives, purchase and consumption and post purchase valuation. The branding strategy of the company includes high customization, high performance quality, assistance of experts, a fast delivery of goods due to advanced technologies, high reliability and loyalty.
- Brand Name. The name of the brand will be “Re-Styling”, as the words suggest- the meaning is linked to the ability of customers to re-style the car they have and convert it to be based on their ideas; this principle goes beyond the traditional car wrapping (read differentiation section).
- Logo. The logo of the company consists of a black-and-white picture of half a car (see bottom of each page or front page), touched by a human hand. The place where the hand and car meet will be in color, representing the whole concept of Re-Styling.
- Slogan. Combining the nature of the business – car wrapping- and the high customization and personalization, the slogan that best describes the brand is “Wrap your ideas”.
- Pricing Strategy. As mentioned earlier, there will be three types of prices in the company, according to the type of service demanded- commercial, customized or personalized. The commercial wrap will be the cheapest, followed by the customized, where the software of the company is needed and some level of expertise; the cost will not exceed a lot the basic one, because the production process stays the same. With the personalized products, on the other hand, prices will be individual, depending on the design chosen. Half price and other discounts will be offered in the first two months in order to attract customers and increase their brand awareness.
Advertising Strategy and Budgeting
- Some of the communication channels for the advertising campaign will be:
- TV advertisements
- Brochures for the commercial and customized wraps
- Public events – the campaign will start with a public event in a tent in Germany, where the environment will be computerized; customers will be able to enter freely for a week and try the new software technology, receive general information from experts and design their own cars.
- Internet website of the firm will give overall information.
- Display media-posters, starting in Germany.
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