Marketing Plan On Recycling Tires

please provide a marketing plan on recycling tires. how it could be effective to the environment, etc.

Marketing Plan On Recycling Tires

1.Executive Summary

Flamco is a start-up tire recycling firm. The company’s primary activities are collecting, separating, sorting, and recycling tire waste into ground rubber. The final products are eventually sold to tire manufacturing companies, automobile manufacturers, and other entrepreneurs dealing in ground rubber and other related products.

The tire recycling industry in which Flamco is involved has grown exponentially and garnered massive support from governments and other stakeholders over the years as they strive to eliminate the nuisance of tire waste. As the literature suggests, waste tires account for approximately two percent of total waste (Sana et al., 2014). Despite its small proportion, waste tires can be environmentally problematic because they are non-biodegradable. Furthermore, scholars aver that the disposal of waste tires can be a challenge because they demand valuable landfill space and may result in accidental fires and pollution emissions (Sana et al., 2014). Besides, waste tires landfills are the ideal breeding environment for disease-spreading insects such as mosquitoes. Therefore, Flamco aims to help solve this environmental problem by recycling waste tires into ground tires that can be used to manufacture other products. However, like any other profit-oriented firm, the company plans to adopt a strategic marketing plan to help the management target the ideal market and convert potential leads to sales.

2.Situational Analysis/ SWOT Analysis

As a start-up company, Flamco is in its first year of business in the waste tire recycling industry. So far, the company’s recycled products have a positive reception, notably among environmental-conscious automobile dealers. However, Flamco’s reach is still small, and there is a need to expand its customer base. Therefore, a marketing plan will play a vital role in increasing awareness about its products among potential customers and subsequently broadening its customer base.

a)SWOT Analysis

This SWOT analysis outlines the strengths and opportunities that Flamco should capitalize on and the weakness and threats that should be addressed for the firm to remain competitive.

Strengths

• Competent workforce

The company’s core strength lies within the workforce. Flamco’s workforce consists of highly competent recycling engineers and machine operators whose synergy enables the firm to recycle several tonnes of waste tires each day.

• Modern recycling plant

Flamco’s waste tire recycling plant is also built to fit into the modern century recycling plant model. The plant is equipped with advanced equipment to quicken the recycling process, minimize waste, and reduce harmful emissions into the environment.

• Industrial insight

Before indulging in the recycling industry, Flamco conducted thorough industrial research that equipped it will adequate sectoral insights that could be used to its advantage.

Weakness

• Creating brand awareness

One of the firm’s primary weakness is building brand awareness in an already competitive industry. Notably, as a start-up firm, it may be challenging for Flamco to gain substantial consideration from industrial giants that utilize recycled tire wastes in their manufacturing processes.

• Lack of adequate capital

Capital is also the other weakness that the firm may face in its effort to develop brand awareness. As noted, Flamco is a start-up firm, and it may not have adequate funds to inject into multiple marketing platforms like other top profile competitors.

1. External Environmental Analysis

Opportunities

• Changes in the manufacturing industry

One of the significant opportunities that Flamco should capitalize on is the change in the manufacturing industry. Most notably, many manufacturers today are shifting to the use of recycled tires rather than the extraction of raw materials for use in production. This shift presents an opportunity for Flamco to target the growing customer base.

• Advanced technology

Each day, newer technology is invented to deal with contemporary issues. The ongoing proliferation of advanced technology in the manufacturing industry presents an opportunity for Flamco to recycle multiple tonnes of waste tires each day.

• Increased automobile production

The global increase in automobile production is a blessing in disguise for Flamco. As automobiles and trucks’ worldwide production increases, tire waste also increases dramatically (Sana et al., 2014). Scholars estimate that about one billion waste tires are released from the automobile and truck industry annually (Sana et al., 2014). These tires wastes are, in turn, a critical input for the company.

• Legal/political

United States government has supported the tire and rubber recycling industry to enhance its efficiency in ensuring proper waste tire disposal for several years. This support has mainly been in subsidies and landfill tipping fees (“Tire & rubber recycling”, 2019). The ongoing legal aid is an opportunity for Flamco to grow its business to the desired level.

Threats

• Competition

Flamco faces considerable competition from industrial rivals who have had a long history in the industry. These firms include the West Coast, Magallanes, and Globarket tire recycling firms.

• Changes in the legal and political environment

The government has supported the tire and rubber recycling industry for decades to facilitate the proper disposal and management of waste tires. However, with the industry’s continued maturity and saturation of participants, the government may likely withdraw its support, which may threaten the survival of Flamco.

• Economic downturn

The United States economy is forecasted to experience a downturn following the global COVID-19 pandemic. The Worldbank estimates that the U.S. economy will contract by 6.1% in 2020 (“COVID-19 to plunge”, 2020). This economic downturn is likely to affect households’ purchasing power and eventually cripple the recycling industry because of reduced consumption of recycled products.

c)Competitive Advantage

Flamco’s key competitive advantage lies in the highly skilled labour. The firm has a world-class workforce consisting of certified recycling engineers and machine operators that are highly productive. The firm can leverage the knowledge and experience of the workforce to explore and fill existing niches in the tire recycling sector.

d)Major Competitors (Comparative Analysis)

Flamco plans to pursue waste tire recycling in the United States primarily. The industry is saturated, but there is still room for more firms because of the growth in tires’ disposal from the automobile industry. Unfortunately, competition in the sector is very stiff, arising primarily from the key players that have had a long history in the industry; and, thus, significant connections with high profile consumers of recycled tires. Some of the company’s top competitors in California include Kris & A Investment Inc and Magallanes Tire Recycling, with a six-year history in the tire recycling sector.

e)Market trends and needs

Market needs

Flamco seeks to recycle waste tires and provide crumb rubber to manufacturing companies. The primary needs and benefits that the firm intends to offer to its clients include:

• Cost-effective substitute raw materials. “Virgin” raw materials such as synthetic and raw rubber can be expensive to extract, especially for small and medium-sized companies. Therefore, Flamco intends to provide cost-effective crumb rubber as an alternative raw material for automobiles, tires, shoes, and flip flop manufacturing companies.
• Environmentally friendly raw materials. For years, the manufacturers have exerted pressure on natural resources to search for their industries’ raw materials. Flamco seeks to provide these manufacturers with an alternative source of environmentally friendly inputs.

Market Trends

One of the most salient market trends in the tires waste recycling industry is technological advancement. Several breakthroughs in technology, such as pyrolysis and devulcanization, have been made in this sector, making tire recycling much more manageable than was the case decades ago. Flamco will capitalize on this technological trend to recycle more tire wastes and meet the growing demand for this alternative source of raw materials.

The other visible market trend is the growth and recognition of other industrial participants’ tire waste recycling industry. Unlike before, most manufacturing companies are more receptive to recycled materials in their production processes, which is also bolstered by government policy to promote environmentally sustainable practices. This market trend presents an opportunity for Flamco to expand its market to both small flip flop manufacturers to large automotive industries that rely on rubber in their manufacturing processes.

3.Business Mission Statement

Flamco’s mission is to provide clients with high standard recycled tires. The firm’s mission statement is “we exist to provide manufacturers with high standard recycled tires to help them save on costs and energy of acquiring raw materials while pursuing environmentally sustainable practices that will save the world from preventable damage and degradation.” This mission statement will navigate Flamco towards achieving its long-term goal of profit maximization.

4.Marketing (Short-Term Goals) and Long-term objectives

Marketing (Short-term goals)

• Enhance the brand’s awareness
• Convert potential leads to purchases.
• Attract and retain customers.

Long term Marketing Objectives

• Attain a stable increase in customer base over the next three years.
• Achieve steady growth in the sale of recycled tires in the coming years of operations.

5.Financial Goals/ Objectives

• Achieve a double-digit growth rate within the next two years of operation.
• Attain a steady increase in profit margins in each quarter of the company’s fiscal year.

6.Selection of Markets

Flamco developed its primary market segment after conducting rigorous market analysis on the main consumers of recycled tires in California. After research and analysis, the firm determined that its core target markets are tires, automobile and shoes, and flip flops manufacturers. During the initial research, the information gathered is expected to help Flamco better understand and serve its target market.

Analysis of Market Segments

Flamco will select its target market through a two-step process:

1. The firm will establish a broad product market for recycled tires.
2. The firm will divide the broad market into segments that can easily be targeted through its selected product.

Market Segments

Flamco’s customer base can be classified into four segments based on a variety of variables:

• Based on rubber type

This customer segment consists of customers with a varying taste for rubber. Most notably, some may prefer natural rubber while others prefer synthetic rubber such as ethylene-propylene-diene monomer. Understanding this segment of consumers will help Flamco meet their distinct needs adequately.

• Based on product type

Flamco’s market segment may also be classified according to the type of product that each consumer seeks. Some consumers may seek crumb rubber, flooring products, and playground material.

• Based on End-Users

This market segment will be based on the final consumer of recycled tires. Some of the end-users will include automotive, shoe and flip flop companies, and tire manufacturing companies.

• Based on Geography

Under this category, Flamco will target domestic and international end-users. One of the global markets that the firm will target is Asia, which is predicted to be the most dominant regional segment of the tire recycling downstream products market (Transparency Market Research, 2020). Flamco will also target the United States market, which is expected to grow significantly in the coming years.

7.Target Market Strategies

Flamco will utilize mass marketing for its four target markets because of their similarity in product consumption. Most notably, despite their variation in segmentation, the four market segments use recycled tires as raw materials to manufacture other end products. Therefore, it will be more cost-effective to appeal to all the four markets using a single strategy that targets the most extensive customer base by communicating a standard marketing message.

8.Positioning

Flamco will position itself in the recycling industry as a low-cost, high-quality recycling company. Flamco will attain this market positioning by leveraging its competitive advantage of a highly-skilled workforce. The firm will most notably utilize its certified recycling engineers and machine operators to recycle high-quality rubber for an array of manufacturers and other end users.

9.Marketing Mix and Strategies

The core aim of Flamco’s marketing mix and strategies is to enhance the brand’s awareness and achieve optimal connections with high profile clients. These objectives will help Flamco to attain its long-term goal of profit maximization. Flamco’s marketing mix will comprise four approaches: product, price, distribution, and promotion strategy.

a)Product Strategy:

Flamco’s primary product is ground rubber used by manufacturers to produce end products such as shoes and flip flops. The firm will pursue a product differentiation strategy to distinguish itself from other market participants that recycle waste tires. Notably, product differentiation in Flamco will entail the creation of different packaging designs for the ground rubber. The firm acknowledges that each customer is different, and so is their demand for the products. For example, flip flop manufacturers may not require as much rubber as automotive manufacturers. Therefore, the company will package the ground rubber in different packages depending on the customer’s demand and budget.

b)Price strategy

Flamco will pursue a hybrid pricing strategy consisting of both competitive and cost-plus pricing strategies. On the one hand, cost-plus pricing will involve summing the total recycling costs and including a standard mark-up to set the ground rubber’s final price. The cost-plus pricing strategy is selected because of its effectiveness in facilitating a stable return rate to the company. On the other hand, competitive pricing will entail considering competitors’ charges before setting the firm’s prices. The hybrid pricing strategy will enable Flamco to attract a broad customer base by setting competitive prices while ensuring that it maintains a consistent return rate.

c)Distribution Strategy

Flamco will distribute its ground rubber directly to its customers. This strategy is chosen because it will help the company build close connections with its clients, which is essential for its future. Besides, this distribution strategy will help Flamco maintain the lowest cost for its products by avoiding additional costs introduced by middlemen.

d)Promotion Strategy

Being a start-up company, Flamco will need to build awareness about its existence among the industry’s prospects. The firm will attain this objective through two promotion strategies; advertising and direct marketing. On the one hand, the firm will advertise its operations on online platforms such as YouTube and Facebook because they have a vast subscription, and it is likely for potential clients to stumble into such ads. Besides, the firm will utilize online adverts because they are cost-effective compared to paying for TV adverts.

On the other hand, the firm will also use direct marketing to enhance the brand’s visibility among potential consumers. In this context, direct marketing will involve making direct offers to the company’s potential clients through channels such as emails, catalog distribution, promotional letters, and website marketing. This promotion strategy will help Flamco enhance its brand’s visibility and build close connections with new clients.

10.Marketing Research

At the beginning of its operations, Flamco conducted market research by interviewing industrial participants and observing market trends over the past few years, which equipped the firm with adequate information about the sector. With this information in hand, Flamco will be well equipped to satisfy its customers’ demands while considering their unique needs. However, several changes occur each day in the business sector, which implies that the firm should conduct frequent research to identify changes in the industry and enhance its practices accordingly. Flamco may obtain information on industrial changes by analyzing news regarding the recycling industry and interviewing key industrial players.

11.Budget and Timing

In the initial year of operations, Flamco’s sales will depend primarily on its investment in marketing. Arguably, if done appropriately, marketing will enable the firm to enhance its operations’ visibility, attract potential clients, and enhance its customer base. The marketing budget is also expected to decline year after year as Flamco continues to achieve its marketing goals. Table 1 highlights the marketing budget that will enable Flamco to attain these goals.

Table 1: Marketing Budget

Marketing Expense Budget
	2020	2021	2022
Advertisements	$20,000	$14,000	$10,000
Emails	$6,000	$4,500	$2,000
Catalog distribution	$4,000	$3,200	$3,000
Promotional letters	$5,000	$3,000	$2,000
Website	$24,000	$20,000	$15,000

12.Implementation of the Strategies

The firm will implement each of the proposed strategies within a predetermined duration. This move will ensure that each milestone is accomplished and that the set budget is adhered to. Furthermore, Flamco will obligate specific individuals to oversee each milestone’s implementation to ensure proper coordination of the tasks and accountability. Table 2 outline the implementation strategies for the company.

Table 2: Milestone implementation

Milestone	Start date	End date	Budget	Supervisor	Department
Marketing plan	12/12/2020	13/12/2020	$0	Davis	Marketing
Creation of a website	14/12/2020	15/12/2020	$30,000	Outsource service	Marketing
Creation of advertisement message	16/12/2020	16/12/2020	$0	Bentlet	Marketing
Totals	$30,000

13.Monitoring and Evaluation of the Strategies

Besides developing and implementing the proposed marketing plan, it will be vital for Flamco to monitor and control the plan. The plan will most notably be monitored and evaluated by assessing its capability to target the intended market, attract a larger customer base for the firm, and enhance sales. Furthermore, the firm will evaluate the firm based on its ability to meet the proposed goals within the set budget.

14.Control

The controls will be established to gauge Flamco’s marketing plan performance. Some of the controls for the plan will include auditing the following areas:

• New customer connections.
• Annual and monthly revenue and expenses.
• Consumer satisfaction with the final recycled product.

15.Contingency Plan

Risks that could occur:

• The actual budget may exceed the proposed budget due to economic changes.
• The developed company website may be prone to cyberattacks, which may hinder its functionality.

Contingency plan

• Flamco will hold extra funds in case the budget exceeds the projected amount.
• The firm will implement security protocols to prevent cyber attacks on its website.

References

“COVID-19 to plunge global economy into worst recession since World War II” (2020, June 8). The World Bank. https://www.worldbank.org/en/news/press-release/2020/06/08/covid-19-to-plunge-global-economy-into-worst-recession-since-world-war-ii

“Tire & rubber recycling in the US industry trends (2014-2019).” (2019, October 28). IBIS World. https://www.ibisworld.com/united-states/market-research-reports/tire-rubber-recycling-industry/

Sana, K., Paraschiv, M., Kuncser, R., & Tazerout, M. (2014). Managing the environmental hazards of waste tires. Journal of Engineering Design, 20(14), 1-11. https://www.researchgate.net/deref/http%3A%2F%2Fdx.doi.org%2F10.29081%2Fjesr.v20i4.52

Transparency Market Research (2020, March 23). Increasing demand from construction industry will help tire recycling downstream products market to reach valuation worth- US$6 Bn by 2027, projects TMR. PR Newswire. https://www.prnewswire.com/news-releases/increasing-demand-from-construction-industry-will-help-tire-recycling-downstream-products-market-to-reach-valuation-worth-us6-bn-by-2027-projects-tmr-301028037.html