E-MARKETING PLAN- CARFAX IN CHINA

1. CARFAX

• Carfax is a commercial web-based company that supplies Vehicle History Reports (VHR) to individuals and businesses on used-cars and light trucks

• Presence in America & Canada• Core Product- Carfax Report

What is Carfax?

• Used Car Buyers• Auto Dealers

Customers

2. SITUATION ANALYSIS

2.1 MARKET OPPORTUNITY

• Used Vehicle Market on rise• In 2010, China became the largest single vehicle market

in the world and was projected at that time to experience approximately 8% growth and contribute approximately 35% of worldwide growth for the following 10 years.

Trend

• Expected CAGR >16% (2014-2017)• Expected Transaction volume of $9.5M in 2017

Opportunity

2.2 PEST ANALYSIS

Economic• In 2013, UC Trading Volume - 5

million Cars and 291.6 billion CNY• 7-8% growth per year over the

next 10 years

Social and Cultural factors• Potential need to change or

upgrade the vehicle• Willingness to buy a used car.• Developing habit of conducting

online research and purchasing

Technological factors• Internet technology is upgrading

along with online payment technology

• Lots of Online dealership website had been launched.

Political• Government support• Increasing difficulty of obtaining a

new license plate in China’s tier 1 cities

2.3 SWOT ANALYSISHARMFUL

To achieving objectivesHELPFUL

To achieving objectivesIN

TER

NA

L FA

CTO

RS

EXTE

RN

AL

FAC

TOR

S

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

SWOTAnalysis

● Rich Industry Experience● High Profit Business Margin● Brand Identity & Reputation

● Cultural and Language Barrier

● No other service in Market that provides VHR

● Car density limits● Supplier resource

and reputation● Threat of Hacking –

internal & Externa

2.4 COMPETITOR ANALYSISCOMPETITOR OVERVIEW PRODUCT INFORMATION

268 v standardization used car test assessment system

- A professional system invented by Beijing Peak Science and Technology Co. Ltd.

- Owned by CheYiPai (one of the biggest online dealership in China)

- China’s first intelligent test assessment system for the UC trade service industry.

- judges the accident level- run a comprehensive appraisal of used car

condition - Does a price assessment. - Assists in understanding UC condition and

value.

Check Auto

- Individual UC testing system that is owned by another online dealership website YouXinPai

- The only system to have China’s national used car testing patent.

- Provides customers professional optimized used car testing

- Allows customers to customize the testing items and other value-add services.

- Provides a reflection of the vehicle’s current condition and a suggested sales price.

Local Dealerships

- Provide customized used car checking service in their body shops.

- Some dealerships collaborate with online dealer websites to provide a door-to-door used car checkup service.

- Provides very basic assessment with some oral suggestions.

3.0 GLOBAL E-MARKETING STRATEGIC PLANNING

3.1 DEMAND ANALYSIS

Demand for UC is driven by Income Inequality

• Richest 1%of households owning a third of the country’s wealth

• High quality secondhand versus low quality first hand

Our plan- Capture 10% of total UC Market – 1.7 Million VHR

3.2 SUPPLY ANALYSIS (1 OF 2)

UC Supply Determinants

• Reduction due to Dealers inability to fill inventory• Increasing supply trend as owners sell into the market rather than handing on

vehicles to other family members – Driven by overall economic growth

Carfax Report Supply

• Our supply is based on UC supply in the Market• We don’t Manufacture reports. Reports are created by our innovative digital

solutions from our database• Systems capable enough to supply 1.7M VHR

3.2 SUPPLY ANALYSIS (2 OF 2)• Small and Big car markets are popping up • Newly acquired 26,000-square-meter auto mall in Tianjin into a

flagship site for its used car business, in $91.4MMarket Responsiveness

• Trading volume -350,000 vehicles, Amount- RMB19.26 billion, a respective YOY surge of 58.4% and 60.3%.

• cheyipai.com and youxinpai.com: UC trading volume - 71.4% of the entire UC e-commerce market

UC e-commerce Market Supply in 2014

• Used vehicles make up only 19.1% of total car sales volume in China, compared with 72.4% in the United States.Room for Growth

3.3 SEGMENT ANALYSIS -1 OF 2

Informal and fragmented Market

Pricing of UC is not definite, since history is unavailable.

Customer dealing is Informal

3.3 SEGMENT ANALYSIS – 2 OF 2

People don’t trust car dealers

Accident History –Difficult to Retrieve

Car dealers are facing the issue of ‘Trust’

3.4 SEGMENTATION STRATEGY

• Having sunk costs and a vested interested in selling vehicles.

• Fighting the industry stigma of being dishonest.• Needing to differentiate themselves from truly

dishonest dealerships.• Easy to create buzz among potential UC Buyers • Big Network to create word of Mouth.

TARGET MARKET 1: Car Dealerships

• Don’t have enough Time and Money for Alternatives• VHR will help them take an informed decision on

owning a car for further sale• New and inexperience drivers, do not possess

knowledge on Car and Car-buying• Looking for time-saving options to make car-purchase

decisions.

TARGET MARKET 2: Age group of 18-35

year olds Car Buyers

3.5 PRODUCT DIFFERENTIATIONHow We’re Different

ONLY vehicle report on the market that includes past performance of vehicle.

Written VHR is meticulously comprehensive and organized chronologically-far superior to most current products in this market.

No physical inspection of vehicle needed- done electronically with VIN number.

Value Added UC Dealers Protects Dealership when purchasing cars.Enhances Dealer Reputation/Increases Trust

UC BuyersAlerts buyers to hidden problems.Helps make decisions with confidence.

3.6 ADVERTISING & POSITIONING CONTENT• Making VHR a Necessity in Buying used car

GOALS

• Leverage Brand Reputation in America and Canada• Position Carfax as an objective advocate for all parties in UC

transaction by providing transparency

STRATEGY

• All Audio, Video, Text will be consistent in delivering our message

CONSISTENCY

• Brand Reputation of CARFAX• Product Value and its uniqueness • Elements of Carfax Report and their Benefits• Perceived Benefits to Car Dealerships• Costs savings in the long run for end consumers• The sales process for Sample Client

ADVERTISING CONTENT WILL HIGHLIGHT

3.7 POSITIONING POSITIONING Position the company as provider of truth and transparency-

an advocate of the Chinese consumer, the UC Dealer, and thus the overall China UC market.

Position our product as a necessary compliment to the used car transaction.

TAG LINES “Whether buying or selling a vehicle, you want to get a CARFAX report”

“Buying a used car? Just say-Show me the CARFAX!”

3.8 POSITIONING STATEMENTS

“Having helped Used car buyers in USA and Canada, Carfax is now in china.”

“For Used car Buyers and Sellers, Carfax is the only online service that provides instant access to Vehicle History Report and helps in making decision with confidence”

4. MARKETING

4.1 MARKETING OBJECTIVESUtilize local direct sales force to obtain 10% dealer market penetration within initial opening year.

Increase dealer market penetration quarterly.

Maintain quarterly sales growth consistent with or outpacing China’s used car industry growth.

Increase end user purchases quarter over quarter.

Increase sales revenue consistent with bullets 3 and 4.

Increase brand recognition by showing quarterly improvement in brand recall and brand recognition scores.

Systematically Improve database volume and efficiency to maximum performance and product value while reducing costs. Increase website traffic quarter over quarter during initial 2 year ramp up period.

5. GLOBAL E-MARKETING STRATEGIES

5.1 FOUR ‘P’ STRATEGIES (1 OF 2)OUR OFFER PRODUCT• e-Report containing Various Sections in the Report• In Chinese Language• Free Access to condensed reports to build brand awareness and

familiarity with our web platforms. Example: ‘odometer only’ report

VALUE PRICE• The existing market players charge a commission fee for assessing the safety of

a used Car which is nearly 1% of the UC value. • Conducted several questionnaire and focus group survey• Chinese customers willing to pay - One Carfax report for $39.99 and Five

CARFAX Report for $49.99.

5.1 FOUR ‘P’ STRATEGIES (2 OF 2)Distribution Place

• Direct Marketing (online & offline)• Via Website• Via App• Online Access on Web + E-mail Access

Communication Promotion• Target Market 1:Display adverts on

Online Car trading platforms• Target Market 2: Social Media

5.2 RELATIONSHIP MANAGEMENT STRATEGY (1 OF 2)

CarfaxServiceChinalink.com. Service facilities that can contribute data to CARFAX CHINA

Strategy : Connection, Collaboration and Value Creation via SRMMutually Beneficial- They Provide Information, We provide Brand Recognition

Supplier Relationship Management (SRM) Insurance Co. Motor Vehicle

RecordsState and other

InspectionsFire & Police departments

Service and Repair facilities (4S stores)

5.2 RELATIONSHIP MANAGEMENT STRATEGY (2 OF 2)

Strategy- 24x7 Customer Support

Call Supprt Number Online Chat Send Email

CRMCar Dealers End Users

6. IMPLEMENTATION PLAN

6.1 MARKETING MIX (6 P’S) TACTICS6P’s Aim Digital Tools  

Product/Service Serve customers’ need Website CarfaxChina.cn

Price/Fees Payment MethodOnline Payment Gateways to Banks

Alipay, Hijaouax

Place (Availability)

Product delivery (How) Online /email  Product Availability(Where)

SEO (Search Engine Visibility) Baidu

Promotion Marketing/PR/Branding

Blogging, social media, Mobile Marketing, website, email

Qzone, Sina Weibo, Wechat, Youku, Iqiyi

People Provide Customer Service

Live Chat, emails, Phone  

Process High Quality Product

Innovative Digital Solutions  

6.2 VIRAL MARKETING & TRAFFIC GENERATION TACTICS

7. FINANCIALS

7.1 PLAN OF ACTION

Website Localization

15%Social Media

Marketing15%

Email Marketing

6%Mobile

10%SEO20%

Video10%

Display Ad24%

oNLINE MARKETIG BUDGET DISTRIBUTIONDecided Marketing Budget: $180,000

Timeline : 1 year

7.2 POTENTIAL MARKET IN TERMS OF DOLLARS, PROFITS AND SALES

7.3 ROI ON MARKETING EFFORTS

8. EVALUATION PLAN

8.1 DIFFICULTIES/RISKA Collectivistic Society• Harmony in group is highly

important. Accuracy of reports may be affected.

Partial judiciary system• No strong laws protecting

intellectual property• Cyber Espionage.

Predicted economic growth of 7 to 8% Slow economic

growth may benefit the use car market.

Low visibility online - China has over 700 million internet users in 2016 a 52.2% penetration

rate.

Credit Card Penetration- 43.5% in 2012

8.2 WORST CASE RISKWHAT IF:

1. Revenues are lower than expected?

2. What if our quarterly growth does not consistently outpace China’s Used-Car industry growth?

3. What if our dealer market penetration quarterly with 2 year goal of over 50% market penetration did not materialize?

4. What if our goal of 10% dealer market penetration within initial two quarters of operation did not materialize?