HydroPower Electric Cars, Inc. is an American electric vehicle manufacturer and dealer with a conscious marketing strategy and mission to move the world closer to zero emissions by providing working- and middle-class consumers with affordable and accessible electric car options that suit their every-day needs. HydroPower started as a used car retailer that sold previously owned electric cars while providing specialized maintenance for electric cars. While providing these services partners Chanell Daly, Maddie Roberts, and Suzanne Martinez discovered there was an unserved market of people who were interested in purchasing a zero-emission vehicle but could not afford the current price tag. HydroPower understands that environmental sustainability can only be achieved if every consumer can contribute to the reduction of carbon emissions. This is why HydroPower is dedicated to helping the average American to reduce their carbon footprint. Zero-emissions cannot be obtained if eco-friendly vehicles remain luxury items for the financially wealthy. When the median income in the United States $63,179 and 40% of the working adults making less than $40,000 a year, consumers need viable alternatives to conventional cars that fit their budget (Rothbaum & Edwards, 2019). HydroPower provides quality electric sedans, small SUVs, and motorcycles, at prices that are competitive with conventional vehicles.

HydroPower’s conscious marketing objective is ingrained in the culture of the organization, and its commitment to environmental sustainability is demonstrated throughout its supply chain. In addition to HydroPower’s offices, electric charging stations, and manufacturing plants being powered by renewable energy, HydroPower also only partners with financial institutions and suppliers that are committed to environmental sustainability. The primary incentive for HydroPower’s commitment to the environment is its dedication to humanity, people, and specifically its target market.

Completion of a situational analysis identified that HydroPower’s strengths lie in its organizational culture, operational excellence, financial partnerships, and excellence in customer service. All of which work together to reinforce the organization’s underlying goal of environmental sustainability. HydroPower’s commitment to the environment and people is woven into the fabric of their organizational culture. Their mission to “move the world closer to zero emissions by providing working- and middle-class consumers with affordable and accessible electric car options that suit their every-day needs” is considered in every policy decision and emphasized in employee hiring and training practices.

Operational excellence is achieved through its commitment to environmental sustainability. This is demonstrated throughout their supply chain via a fully integrated system of lean manufacturing and green supply chain management with mechanisms for measuring environmental performance. HydroPower’s lean manufacturing practices encompass “suppliers, customers, setup times, preventative maintenance, employee involvement, statistical processes control, and continuous flow” that are purposefully designed to eliminate all forms of waste during the production process. Lean manufacturing processes are combined with green or environmentally friendly manufacturing. Green manufacturing is only one element of HydroPower’s Green Supply Chain Management which also includes “green product development, green design, green process planning, and green transportation” (Inman & Green, 2018). Costs are kept low by using recycled materials whenever possible and utilizing assisted technologies to keep labor costs low. All offices and warehouses are powered by renewable energy sources, and excess energy is sold to public utilities. HydroPower only partners with investors and suppliers who are committed to sustainable energy. Their leading financial backer, Aspiration Partners, is a financial institution that only invests in green companies and underwrites all in-house car loans offered by HydroPower at reasonable interest rates. These combined lean and green manufacturing practices not only lead to improved environmental practices but also improved operational practices as well, resulting in reduced operational costs.

HydroPower’s customer relationship management sets them apart from other car manufacturers. HydroPower is the only electric car company entirely committed to targeting millennials and younger generations with a vested stake in lowering emissions. Although this cohort did not create climate change problems the world faces, it is the likeliest group that will face the consequences of the overconsumption of fossil fuels. HydroPower’s robust customer relationship management department is dedicated to educating customers about electric car technology and assisting customers in learning about tax incentives and financial benefits to owning electric cars. HydroPower partners with local vehicle recycling programs and offers competitive trade-in values for conventional and electric cars. Their partnership with Aspiration Partners, a progressive financial institution committed to investing in green industries, enables HydroPower to provide consumers with rewards programs and in-house financing at competitive rates (Aspiration Partners Inc., 2020).

Hydropower’s internal weaknesses are found in their low-profit margins and limited production capabilities. Low-profit margins are the inevitable result of efforts to keep prices low. Despite operations practices designed to be economically and environmentally sustainable, HydroPower will find it challenging to keep profit margins above 10%. To address low-profit margins, HydroPower will seek additional investors and partnership opportunities with industries and people who believe in HydroPower’s vision enabling a zero-emissions future so they can increase production capabilities to obtain economies of scale to meet the anticipated surge in demand for electric cars.

External opportunities have been identified in growing social interest in climate change, international, federal, and local laws focused on reducing carbon emissions, and a marketing void not being filled by current electric car industry providers. Public concern about climate change has been rising in the United States in recent years, becoming a top priority in the current election cycle (Popovich, 2020). A 2018 CNBC article reported the number of electric vehicle owners is projected to grow from 3 million to 125 million as a result of policies that encourage drivers, fleets, and municipalities to purchase clean-running vehicles, according to the International Energy Agency’s forecast. The IEA also sees a potential growth of up to 220 million in that same time frame if the world takes a more aggressive approach to fight climate change than current plans (DiChristopher, 2018).

The unserved market of working- and middle-class consumers, and especially millennials provides an opportunity for HydroPower to penetrate an untapped target market. Top competitors in the electric car industry, like Tesla, primarily targeted wealthy consumers. Tesla’s mission to “accelerate the world’s transition to sustainable energy” by proving that “people didn’t need to compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline cars” takes for granted people who simply want a vehicle that is affordable, reliable, and dependable enough to make their daily commute to work or school (Tesla, 2020). The MSRP on Tesla’s cars ranges between $77,000 and $86,000, before options, which does not fit into the budget of most working- and middle-class Americans. Even Tesla’s new “affordable” model has an MSRP of $41,000, but it is a compact sedan that would not be optimal for working people with families (Kelly Blue Book Co, Inc., 2020). HydroPower sees an opportunity to target consumers who would purchase an economical Ford or Chevy and wants to offer them an environmentally friendly option at a competitive price. Additionally, HydroPower will not have to grapple with concerns about internal competition, as was the case with Tesla, who experienced a sharp decline in demand for their more expensive model when the more affordable Model 3 became available (Higgins, 2019).

External threats are the production capabilities of competitors, inconsistent federal priorities regarding climate change that shift with changes in administration, and lack of perceived customer demand for electric cars. In addition to the leading manufacturer in electric cars, Tesla, HydroPower also faces external threats from traditional car manufacturers. Many manufacturers including GM, Ford, Volkswagen, Toyota, Audi, and BMW began producing electric and hybrid cars in response to stricter emissions standards in places like California. These seasoned manufacturers have already achieved economies of scale and have production capabilities that far outweigh the capabilities of HydroPower. However, unlike Tesla or HydroPower, these companies’ profits are still tied to the success of conventional fuel cars, so they are not properly incentivized to invest in the success of their electric car lines. Many of these companies prefer to sell the minimum number of electric vehicles needed to satisfy state mandates and do not want demand for electric vehicles to exceed demand for conventional cars.

Many factors contribute to the lack of consumer demand, even amongst consumers who show an interest in climate change solutions. One is the price, and the second is a lack of advertising. After addressing the price issue, HydroPower will need to tackle the lack of customer awareness with targeted advertising and a robust customer relationship management program that focuses on building life-long relationships with loyal customers. There has been little effort from automakers to build a market for electric cars. Competing car manufacturers only invest a tiny fraction of their advertising budget into promoting their electric car lines, so many potential consumers are unaware that there are more than 40 electric vehicles available in the United States (Plumber & Popovich, 2020). HydroPower will advertise with the same enthusiasm automakers had in the 1990s when the focus was on building the demand for SUVs and pick-up trucks. HydroPower’s advertising strategy will focus on energizing consumers around the idea of electric cars by getting consumers more emotional and enthusiastic about electric cars and the positive impact they will have on the future. Education will be another tactic used to build demand for electric cars, reiterating to the public over, and over again that the transportation sector is the largest source of climate pollution is pivotal to gaining public support. Most car dealers are reluctant to explain unfamiliar technology to potential customers, which is why HydroPower’s engineers are available to our dealerships via satellite video to answer consumer questions and post weekly videos on social media aimed at providing information to potential customers.

The last external threat to HydroPower’s success is the ever-changing priorities of the United States federal government regarding climate change. As stated in DiChristopher’s 2018 article, government emissions policies are the main driving forces behind the demand for electric cars. The Trump administration’s withdrawal from the Paris Climate Accords, and intentions to scale back federal emissions standards have and will decrease the demand for electric vehicles. HydroPower will need to focus on penetrating markets in states like California and others that have committed to ZEV or zero-emissions vehicle plans (Center for Climate and Energy Solution, 2019). The lack of government action and leadership on climate change will require private corporations like HydroPower to carry the torch and lead the way into a zero-emissions future.

HydroPower’s main target market is millennials, ages 19-38. This age group contains 27.48% of the population which is about 89 million people. Millennials are the second-largest generation and often are called the generation of contradictions with their gender roles and more liberal ideals. The millennials are the generation that getting married and starting families at a later age and are more focused on establishing their careers and personal success first (Marketing Artfully, 2019). Minorities make up 44% of this generation which means this cohort is the most diverse of all other age groups. Millennials were raised during the great recession and experienced how it hurt their parents and nearby families, meaning that they are more conscious when making large purchases and they tend to make fewer committal decisions, such as renting a home instead of buying one. This generation was born into a world of technology and frankly do not know how to live their day to day lives without it (Marketing Artfully, 2019). They believe that the internet has had a positive impact on society and 93% of millennials own a smartphone. Millennials are constantly looking for a way to make a difference and are often super engaged in their community, politics, and environmental campaigns (Marketing Artfully, 2019).

HydroPower plans to target larger city areas, such as the outskirts of Atlanta (Alpharetta or Peachtree City). We chose areas such as this because of their high population and how many citizens own a car for their daily commute. HydroPower sees a need for their product in these areas. This target market is ideal for HydroPower because millennials have a large impact on new technology and its success rates because they are usually the first to buy and try innovative technology for themselves. While the average electric car is much too expensive for this age group that is just beginning to start their careers, an averagely priced electric car with the same cutting-edge technology will be highly appealing to this market. On average, around half a million people commute daily to Atlanta for work, putting large amounts of pollutants into the air. Millennials living in the outskirts of a large city like Atlanta that commute daily to their jobs in midtown will be very drawn to this product because of its convenience, pricing, environmental sustainability, and it meets a need that they encounter every day with their transportation. Millennials, whether they are renting or buying, prefer to live as close to the heart of Atlanta as they can afford (Atlanta. News. Now., 2016).

With HydroPower being a company that thrives on innovation and a futuristic concept, millennials have an automatic tie with the purpose of the company from the very beginning. Studies show that millennials respond best to online advertising, especially across social media which is the primary media HydroPower will use to reach its customers. Communication and distribution efforts will occur online as well, where millennials do their shopping and spend their leisure time. With Hydropower being an innovative company, most sales will be done online and the car itself can be conveniently shipped for pickup. This adds to the convenience factor that every millennial strives in all their consumer transactions. On the opposite end of the spectrum, HydroPower’s low-opportunity segments include the older markets that are set in their ways when it comes to the simple concept of transportation. These segments include “baby boomers,” born between 1944 and 1964 that most likely have the attitude of, “if it’s not broken, why fix it?” (eLearning Industry, 2016). Hydropower will not focus its advertising abilities on this market because of the low opportunity of purchase from this age group.

The biggest evolving need that the millennial segment has that we can meet is transportation. While this can be met by any other car company, the advantage that HydroPower has over our competitors is the environmentally sustainable ideas we strive for while still being affordable and convenient. According to Forbes, millennials are committed to implementing sustainable development goals, including equality, climate change, peace, justice, poverty, and prosperity (Forbes, 2019). The sustainable aspect of HydroPower will meet a need that millennials strive for every day while still staying in the budgets that they have set for themselves. Hydropower offers a unique product while still meeting the need of young influential people in a large city environment.

Because the company is a large, one-time purchase, business with its main product being affordable electric vehicles, Hydropower has other lines of profit such as its charging stations around major cities that keep loyal customers that are repeatedly involved in the business. In 2015, around 0.66% of sold cars in the US were electric, meaning the majority of the public is nonusers while the percentage of electric car owners would be considered heavy users (Statista, 2019). These users will typically become customers through online marketing and will learn about HydroPower through social media advertisements and/ or word of mouth. The car buying experience will be a simple one because that is what millennials are attracted to; we aim for the purchasing to be similar to Carvana. Customers can go online and completely purchase the car with simple questions and straight-forward paperwork, then the car is delivered to the consumer in the next few days. This way of purchasing will be extremely appealing to our target market and make us stand out from other competing brands.

While Hydropower will be successful with millennials and appeal to not only their needs but their lifestyle and wants in a vehicle, there are of course objections and reasonings as to why our market might be against the product itself. One of these reasons might be how large a commitment buying a car is; while almost everyone has a vehicle or needs one to get by, millennials in large cities may avoid the commitment of buying a vehicle by commuting using public transport or rideshare services like Uber. Hydropower makes the car buying experience as simple and convenient as possible which decreases this objection. The affordable price and reasonable financing options also soothe protests millennials have against making long-term purchase decisions. Another obstacle that is faced is the niche market electric cars reach; while millennials love sustainability and future-forward ideas, there are still issues with breaking through to any market with such a new idea. Making HydroPower’s prices comparable to prices of conventional cars will combat this obstacle while emphasizing the benefits electric cars have for the environment and daily life, and making the car buying experience as simple, will energize the market for this product.

What sets HydroPower apart from similar competitors is the dedication to innovation and understanding of what is desired of its specific target market. By going above and beyond for the consumer, such as providing satellite video access from engineers in dealerships, the customer will have a better understanding of the technology and features included in the vehicle straight from the sources that implemented it, which would not be as easily accessible to them anywhere else. Since the younger adult audience that HydroPower focuses on is the group most likely to have a greater concern for the future effects of climate change, considering this factor will also prove to be beneficial in the long run as this group will be more receptive to this type of technology.

What will set HydroPower apart most of all will be the more affordable price point. By showing to the consumer that it is possible to be both affordable and sustainable, customers that may have assumed that electric cars were far outside their price point will be able to see that the elements in a car that they desire are more accessible than they may have originally perceived. Since the target market in question will not be as financially stable as an older demographic, the cost will play a major factor in their decision making, regardless of whether or not all members of the market have a desire to be more sustainable in their daily lifestyle. While these consumers may desire advanced technology, they may sometimes make sacrifices when it comes to what features are available in their vehicles in favor of a more affordable price point. At HydroPower, it will be important to show the customer that advanced technology does not have to be compromised, especially in such a specialized market like electric cars.

Another element that will set HydroPower apart from the rest is embracing technology as a tool to further promote not only their product and design but the overall mission of the company to eventually reach a zero-emissions future and communicating how important this future will be to our world. Not only does the younger target market lead a more technology-centered lifestyle, but this is also another way to promote the overall message of sustainability. A more technology-focused method of advertisement can also create a more interactive experience that allows the consumer to be further immersed in what the product has to offer.

While it may initially be challenging to make a significant impact in the automotive market, once it is established it will need to evolve as the market evolves. Remaining stagnant in this type of industry would only prove to be detrimental to the company, as new advances in safety, sustainability, and technology are constantly shaping what is in demand in the automotive industry, and what quickly can become outdated. It will be imperative to constantly stay aware of upcoming trends not only in the automotive market in general but also what changes are coming up in terms of how electric cars can make a greater sustainable impact. By having an internal team focused on researching and identifying upcoming trends in innovation, HydroPower will be able to stay ahead of the curve rather than adjusting after the fact to catch up to an already altered market.

When HydroPower decided to reposition itself from a retailer of used hybrid and electric cars to an electric car manufacturer, it knew it wanted to do more than raise a profit. The company’s core mission of moving the world closer to zero emissions by providing affordable and accessible can only be attained with a market mix that is aligned with HydroPower’s mission and core values. Each component of the marketing mix: product, price, place, and promotion, is designed to best serve the firm’s mission, with the importance of profits deemphasized, and the focus on how to market electric vehicles so they appeal to the target market of working- and middle-class millennials.

HydroPower’s product breadth consists of four main product lines: motorbikes, 2-door coupes, 4-door sedans, and mid-size sport utility vehicles. To keep production costs low, product depth currently only consists of one product in each line, but the product lines are expected to grow as HydroPower’s brand awareness and production capabilities increase.

HydroPower’s 2-weel motorbike, the HP Swift is designed for the young single person who desires a quick, efficient method of transportation for their daily commute to school or work. Though not intended for long commutes, the battery lasts for 200 miles before needed to be recharged. It is ideal for consumers who commute in congested metropolitan areas like Atlanta that has experienced exponential population growth over the last two decades. Public transportation and highway infrastructure have not been unable to keep up with the rapid population growth rate in the region, resulting in longer commute times as the metro-Atlanta region expands outward, and commuters continue to travel into the city for work.

For consumers who want a compact, quick, option that still protects them from the elements, HydroPower offers The HP Sleek which is a sleek, 2-door coup, with options for a moon roof or convertible top. Its battery lasts nearly 400 miles before recharging and is ideal for daily commutes, long drives, or cruising around town on a Friday night. Currently, the 2-door coupe seats four, but the line is expected to expand to include a 2-seat option. The HP Sleek’s safety rating, driver assist, and easy handling also make it an ideal first car for teens. For commuters who like the space and comfort of a mid-sized sedan, HydroPower offers The HP Style. This car is larger than The Sleek and seats five comfortably but has the same battery life. It is ideal for families or individuals who want stylish transportation for their daily commute.

Finally, designed with the millennial family in mind is HydroPower’s midsized SUV, The HP Spartan. For parents who need a little more space for more or older children, the HP Spartan seats seven, with an adjustable backbench. Offering more space and utility than the midsized sedan, The Spartan is a trendy transportation option for their daily commute and with a battery life that lasts 350 miles, it is also perfect for longer trips. It is utilitarian in design with a motion-sensor self-lifting hatch and spacious rear space for groceries, luggage, or sports equipment. Options include charging ports and TVs, all powered by solar panels installed in the moon/sun-roof.

In addition to its main product lines, HydroPower offers a full suite of augmented products and services. Each vehicle comes with a 5 year/60,000-mile bumper to bumper warranty that covers everything except “wear items” like tires, brake pads, and windshield wipers. An extended warranty for another 5 years, can be purchased as an add-on at the time of purchase at a discounted rate or any point before the first five-year warranty as expired. The batteries are under a separate 10 year/120,000-mile warranty to comply with electric vehicle standards in some states, like California (Reed, 2017). To make HydroPower’s offerings more attractive than conventional vehicles, HydroPower also offers augmented services that are not typical for the industry like free roadside assistance, rust and corrosion warranties, covering tire rotation for the first 3 years (Reed, 2017).

HydroPower’s commitment to building brand loyalty and generating positive word of mouth is demonstrated by the associated services offered and their customer relationship management. Associated services include in-house financing backed by our financial partners, Aspiration, at rates that will not burden our target population, even if they have had credit challenges in the past. For those who qualify, we offer $0 down with 0% APR, and for those who don’t we have down payment deferral options, that allow consumers to spread their down payment out over the first few months of their contract. Although electric cars require fewer repairs and maintenance than conventional cars because there are fewer fluids and less moving parts, HydroPower is cognizant of the fact that 40% of Americans cannot afford a $400 emergency, so another service HydroPower offers is repairs and maintenance insurance (Energy Efficient & Renewable Energy, 2020: Youn, 2019). These packages allow customers to pay a small monthly fee for insurance that covers routine or emergency maintenance needed in the future. HydroPower places collected premiums in high-yield savings accounts offered at Aspiration Bank, which enables HydroPower to return portions of unused premiums to customers after a specified time period.

Finally, in addition to the products and services offered, HydroPower adds value to its products by providing excellent customer service. HydroPower’s core goal of zero emissions is driven by the founders’ dedication to people and humanity, and the best way to demonstrate that is through commitments to customer service. Engineering experts are available to answer questions during the purchase process and offer video tutorials about the technology of electric vehicles to assuage customer fears about purchasing a product that is unfamiliar to them. HydroPower also offers an online forum for questions and concerns to be answered in real-time by its experts, as well as an online and phone process for submitting customer service inquiries and complaints. HydroPower’s user-friendly interactive website allows consumers to shop, explore, and design cars to their specifications. HydroPower’s service resolution process is designed to provide both procedural and distributive fairness when addressing customer grievances through an efficient complaint resolution process that empowers employees to offer discounts and rebates to aid in service recovery.

The firm and its products are in the innovation stage of the product life cycle, so low sales and negative profits are expected in the first five years. HydroPower’s typical consumers will be innovators who could not afford to enter the electric car market offered by Tesla and other conventional car manufacturers. The electric vehicle market itself is still in the “early adopters” phase of the diffusion of innovation curve with electric vehicles only making up 5% of new car sales in 2018 (Eisenstein, 2019). HydroPower believes its reliable product offerings at an affordable price will allow it to catch up and surpass the rest of the electronic vehicle market by increasing demand for electric vehicles.

The main factor suppressing the demand for electric vehicles is the price. HydroPower cannot obtain its main objective: to move the country towards zero-emissions by providing affordable electric car options for working- and middle- class Americans, without taking considerable measures to keep prices low. HydroPower’s pricing methodology starts with a sales-oriented objective that keeps prices low to generate new sales by taking away sales from the conventional car industry, even if it loses money in the short-term. Setting prices low as HydroPower launches new products will allow HydroPower to build sales, market share, and profits quickly. This requires some competitor orientation as well, as HydroPower must set its prices against those of conventional cars. Although HydroPower acknowledges Tesla as a direct competitor, the goal of zero emissions will not be accomplished by penetrating Tesla’s market, but by converting Ford, Chevy, and Kia car buyers into HydroPower customers by offering an electric car at prices that compete with offerings of conventional models of Ford and Chevy. HydroPower wants to increase the number of electric vehicles on the road, by reducing conventional vehicle purchases.

HydroPower’s product lines are priced to compete with specific models of Suzuki, Ford, and Chevy as HydroPower believes the consumers of these cars belong to the same demographic that HydroPower plans to target. The Swift is priced at $13,995 which is compatible with the price for the Suzuki Katana. Similar in design and functionality, motor-bike consumers will have an electric option offered at a similar price. HydroPower’s 2-door coup, The Sleek, is priced to compete with the Ford Fiesta, but has a superior and more attractive design that does not look like an economy car; the price without options is $15,995. HydroPower’s sedan, The Style is priced at $25,595, which makes it competitive with the Ford Fusion, and Chevy Impala, and finally, the SUV, The Spartan, is priced at $32,995 making it competitive with any of Ford’s small SUV’s: the Escape, the Edge, or the Explorer (Kelly Blue Book Co, Inc., 2020).

A cost-based method was used to establish prices for HydroPower’s vehicles. Tesla’s “affordable” electric car costs about $28,000 per unit to produce; $18,000 for materials and $10,000 in labor (Coren, 2018). HydroPower knew it would be impossible to make electric cars affordable and maintain a profit margin with $28,000 in variable costs, however, Tesla’s location and use of premium materials keep its variable and fixed costs much higher than HydroPower’s projected costs of production. HydroPower’s use of recycled materials enables HydroPower to save 40% on materials. Having its factory in Atlanta, rather than California, saves HydroPower money on labor as well as fixed costs like rent, utilities, and state taxes. In total, HydroPower was able to cut variable costs in half to $14,000 for the Style; $10,000 for the Swift; $12,000 for the Sleek and $18,000 for the Spartan. HydroPower also controls the costs of production through its operational excellence, a combination of lean manufacturing and green supply chain management. Additionally, HydroPower utilizes digital production software that creates a “digital twins” throughout the value chain and allows engineers to first create a virtual product, using virtual production, that translates to real production of a real product via automation. This software cuts down on production errors and makes design and production more efficient (Siemens, 2020). Low variable costs enable HydroPower to set prices at price points competitive with conventional car manufacturers and helps HydroPower achieve competitive advantage. HydroPower also considers the psychological dimensions of price, and prices each vehicle so it ends in 95, to bargain signal or imply that the price is a great value (BrainStuff, 2016). HydroPower believes the low prices will increase the quantity demanded and combined with strategic advertising and promotion, HydroPower will generate new demand for their electric vehicles.

As brand awareness and demand grows, HydroPower’s prices will also need to increase to reach a production capacity that meets increased demand. HydroPower will have to consider how sensitive consumers are to changes in price and evaluate how much increases will impact the quantity demanded. When examining the price elasticity of demand for cars, it is noted that demand for cars is somewhat elastic when the customer has an immediate need and ranges from 1.2 – 1.5. However, because new car purchases can typically be delayed, and there are many substitutes available in the market, the demand for a specific brand can be highly elastic with an elasticity rating of 4 (Anderson et al., 1997). HydroPower must combat this elasticity and increase demand through a robust campaign that emphasizes both the environmental benefits of purchasing an electric vehicle as well as economic benefits in addition to a low price like tax credits that consumers will be eligible for after purchasing an electric vehicle; savings on gas in states that offer incentives that make recharging less expensive than refueling, and savings on repairs and maintenance (Energy Efficient & Renewable Energy, 2020). Price elasticity can also by counter-acted through creating brand loyalty, which is why the augmented products and services are vital to HydroPower’s marketing mix.

The other purpose served by augmented products and services is to provide additional revenue sources at low or no production costs. Repair and maintenance contracts, in-house financing, extended warranties are ways that HydroPower generates revenue without increasing variable costs. Another potential revenue stream is a 15 day “try before you buy” test drive that is offered to potential customers the rate of a one-month lease and is applied to the down payment if the customer chooses to purchase the vehicle. HydroPower accepts credit, debit, cashier’s check and money-order for down payments, and monthly payments can be made online or over the phone with a processing fee, that covers the expense of accepting credit and debit card transactions.

Although keeping prices low results in lower profit margins, HydroPower believes a short-term sacrifice of profit is worth achieving its mission, and that ultimately the low price will increase demand and result in higher profits in the future. HydroPower’s commitment to building brand loyalty will help it retain customers even after increased demand causes prices to increase. HydroPower is committed to gradual increases in price because the underlying mission remains, and that is to provide affordable options. Although the price is the only component of the marketing mix that generates revenue, the key to HydroPower’s success also lies in its advertising and promotion, because without brand awareness, HydroPower will not be able to accomplish its mission to provide affordable electric vehicles and move the world to a zero-emissions future.

The place and distribution for HydroPower are very closely linked. While most car sales take place at traditional car dealerships, purchasing vehicles online is steadily becoming a more normalized method of purchasing within the automobile sector. As the target market is most likely to continue down a path towards online purchases, it is also important that HydroPower is offered in person as well to allow some potential buyers to get hands-on experience with the product. By offering purchasing options online, potential buyers can shop at their convenience. It also allows potential buyers who prefer a traditional car-buying setting to gather more information about the product they are interested in before visiting a dealership to see the cars in person, thus speed-lining the in-person shopping experience. As for actual sales facilities, the greater Atlanta area is the ideal location to reach the desired target market. To determine which areas would be the best for sales and exposure, it would be imperative to assess which cities in the surrounding Atlanta area have larger populations of residents who commute to their workplaces to make the product easily accessible to the desired customer. 

At the actual sales facilities, the atmosphere at the dealership is specially tailored to meet the desires of the potential buyers. The millennial market desires a very different car buying experience than their predecessors, which must be accounted for at HydroPower locations. Since HydroPower is centered around innovative technology, it is important to showcase innovation and technology when buyers visit dealership facilities. By incorporating technology into the physical setting, it will only further reinforce the values of HydroPower to those interested in the product. The overall atmosphere at sales facilities do not make buyers feel as if all that matters is making a sale, but it is instead evident to buyers that what is esteemed most is sharing the values of HydroPower, such as explaining how individuals can combat climate change in their own lives and the importance of renewable energy. Sharing the mission and educating potential customers creates beneficial opportunities to achieve HydroPower’s mission of moving the world towards zero emissions by providing affordable and accessible options to suit their needs. These facilities combined with the online stores are available year-round, allowing buyers to purchase cars or even simply learn about the products offered whenever it is convenient for them.  

Initially, some members of the target market must travel a short distance to visit the sales facilities, but likely no distance greater than they would travel to any other standard car dealership. To counter this, online purchasing is an option to make the shopping experience more convenient for those who do not wish to or are not able to travel to a dealership. Over time HydroPower will open more sales facilities throughout the region but becoming better established among the target market takes priority over opening numerous sales locations. This can eventually be improved upon by studying which other areas would take an interest in the product being offered, and determining what locations have a dense population of the ideal demographic that might not have already been introduced to the type of cars that Hydropower offers. 

A typical customer learns about HydroPower online through social media advertisements, pop-up advertisements, or even through email. Because its product is so innovative and targeted towards the millennial-aged market, it is important to advertise on platforms that will be reached by that age group. HydroPower is advertised as being a new concept that is sustainable, advanced, and reachable with a middle-class income. The target market must not feel as if the product is over their heads when it comes to the price tag, so it is marketed as being reachable with a moderate income. HydroPower vehicles are advertised as being futuristic and top of the line; using words such as these appeal to its target market because they are always looking for the new and best thing on the market. It is important to address in marketing efforts that this product will benefit every aspect of a millennial’s day to day lifestyle and it is not so much a want, but instead a need. Being concise but to the point with advertising to this target market is especially important; they want to know what exactly the product is without having to read too much into it or think for themselves. Hydropower’s advertising efforts will effectively inform without being too descriptive and successfully persuade using the right wording that will make millennials want to get on board with this new innovative technology. HydroPower needs to measure the effectiveness of these advertisements to know what budgets to set aside for promotion itself. HydroPower spends around 7-8% of their gross revenue for marketing and advertising (Nuphoriq, 2019) and tracks their effectiveness and interaction on internet sites to determine if their promotional budget should increase or decrease for the years to come.

Currently, HydroPower uses social media advertising as their primary source of promotion to reach its millennial target market. Other media outlets include emails, mail sent out monthly, or even magazine ads/ articles. Social media will be the most effective with this market because 90.4% of millennials use at least one social media site and 84% of millennials don’t trust traditional advertising (Mohsin, 2020; Sagin, 2016). This means that newspaper articles and magazine advertisements are not effective methods of reaching millennials; social media is the best and most effective way to spark attention with this market. Using social media like Facebook and Instagram to advertise contributes positively to the brand because it adds to the trendy, sustainable, and technology-forward brand image that HydroPower is building. Costs for social media advertisements, like through Facebook, start $0.22 CPC (cost per click) (Karlson, 2019). Social media advertisements are most cost-effective because the company gets the most exposure this way based on their target market and companies are charged based on the amount of exposure achieved. So, costs are not extremely high if the advertisement does not garner much attention. HydroPower schedules their advertisements to broadcast on social media around 9 pm to midnight or early in the evening around 6 to 8 pm; these are the most prominent times that socials such as Facebook and Instagram have the most users on (Tien & Ansley, 2019). This ensures that HydroPower gets the most exposure possible to users on the applications. Several different visuals are used for the advertisements, so the same user does not come across the same ad more than once. Each advertisement contains the same general information: a catchy phrase to draw consumers in; a website to visit and/ or a link; and a small description of what HydroPower is; but has a different look. Another simplistic yet effective way to advertise that will be beneficial to HydroPower is the use of billboards. Using minimal wordage and images that leave a lasting impression on these billboards will keep the consumer interested and willing to go online to get more information on HydroPower. Billboard advertising is paid monthly and is relatively inexpensive which makes it an ideal advertising media for a start-up company. Although billboards are less expensive than other forms of media, monthly costs accumulate so HydroPower must be strategic in selecting when to run billboards. The low cost and broad reach of billboard advertisements make the most advantageous periods to run during brand launches and low sales months. Radio advertising is also a quick, easy, and relatively less expensive way to reach HydroPower’s target market when placing it on the right radio station. Using short, 30-second audio advertisements will be enough to get a consumer interested and willing to look up the company once they get home. Radio advertisements can also be broadcast on music streaming services like Spotify and Sirius Radio. With social media being used as the primary HydroPower’s primary source of advertisement, billboards and radio ads will also spark the interest of a broad branch target market.

HydroPower uses its internal advertising department rather than hiring an outside advertising agency. This keeps everything under the same roof, saves money, and ensures that new advertisements can be produced rapidly and represent the company well. This branch of the firm is in charge of designing ads, discussing with different media platforms pricing/ times, communicating with other branches to stay informed on any promotions that should be included in ads, and anything else an outside advertisement agency would be responsible for. HydroPower will use prominently customer service emails and an online forum on its website to answer any customer inquiries and its customer relationship management department works diligently to answer customer inquiries within 1-2 business days. If a potential customer submits their contact information into the website form indicating interest in a product the customer service branch follows-up via email, thanks to these potential/ repeating customers, and asks if they are curious to know any more about the company or get more information.

Public relations are a large part of HydroPower’s advertising and promotion department; the brand realizes how important it is to maintain positive relations with other similar companies and complementary companies to maintain competition and relationships. HydroPower’s public relations programs respond to negative publicity by being timely and fact-driven; any negative comments in the media are most definitely responded to but in a respectful and humbling manner and facts are used to dispel negativity. If the negative publicity is something the company can learn from, that is stated in the response. HydroPower is a new and innovative company meaning that the brand itself is still working out kinks for the most part, and it is important to be completely translucent with your consumer base. The public relations sector is handled internally, working closely with customer service and the advertisement/ promotion branch as well. It is their responsibility to ensure HydroPower keeps a strong connection with its social media outlets that they advertise on as well as other online outlets such as Yahoo, Google, and other social sites that might bring business is by placing advertisements. This branch is overall very important to keep HydroPower’s reputation and relationships strong. 

The sales force for HydroPower is organized similarly to a basic car dealership. While the company is mainly based online, with only one dealership in the greater Atlanta area, there are still salesmen that work very closely with online and in-person consumers when going through the full car buying process through either face to face meetings, email, or even Skype. Since HydroPower is a national company, it is broken down into regions. Each region has several salesmen who are led by a regional sales director who is responsible for distributing clients, resolving large conflicts and service issues, and communicating information from corporate headquarters to subordinate salesmen. Regional salesmen work closely with customers from the beginning to the end of their car buying experience and follow-up with them multiple times after the initial purchase to make sure everything is running smoothly. Salesmen are compensated with a base wage plus commission of sales, while the regional sales directors are compensated with a salary plus bonuses based on the performance of their salesmen. Performance-based compensation results in eager salesmen who are motivated to cultivate positive and long-lasting relationships so satisfied customers ask for them by name when returning or when making recommendations to friends. When hiring these vital employees that work closely with HydroPower’s target market, it was important to make sure they fit with HydroPower’s corporate culture and that its target market would be receptive to their sales personalities. Because of this, personable and upbeat salesmen that are knowledgeable when it comes to technology and media are more likely to be hired by HydroPower. This fosters stronger relationships between consumers and salesmen, and millennials are more receptive to this personality type when making a large purchase. Customers are made to feel appreciated by the one-on-one connection they make with their assigned salesmen and the frequent follow-ups they receive even after the purchase is made. Our target market is very receptive to our online marketing as well as the full sale being made online because this demographic is most used to making online purchases and appreciate that it is not outside of their comfort zone. Because this is a very large purchase and much thought and conversation are put into purchasing a vehicle, the interactive website is a useful aid but cannot replace the vital one-on-one connection between the salesman and the consumer that is significant to the business model.

HydroPower uses sales promotions such as advertising abundantly that they provide financing and/ or leasing options. Affordable financing and leasing options appeal to HydroPower’s young target market because it reduces the threat of personal finances hindering consumer purchase ability. The sales promotion is directly targeted towards the final customer that will be purchasing the vehicle. The specific purpose of this sales promotion is to attract the customers who may not have the best credit or best finances, to show them that they are not out of the running for our product because of those reasons. This expands HydroPower’s target market and makes the firm appeal to a larger consumer base than it would if the promotion were not offered.

As for the objectives of HydroPower, customer satisfaction is prioritized above reaching as many customers as possible. To retain customers in the long term and have those customers recommend HydroPower cars to others, HydroPower knows that meeting, satisfying, and exceeding the customer’s needs will prove to be more beneficial than widespread outreach that does nothing to satisfy what the customer is looking for from its product.

To achieve this overall objective, the three primary marketing objectives of HydroPower include increasing the lifetime value of a customer, increasing brand awareness, and engaging with the target audience. Each element of these objectives is supported throughout the marketing mix. Providing a variety of products that meet the varying needs of customers ranging from older-aged millennials who have families, or young adults entering the workforce for the first time. As each of these specific groups will have their own unique set of product needs, it is important for HydroPower to recognize what they can offer that will exceed the expectations of the customers within these groups, ultimately making these customers more likely to become lifetime buyers.

HydroPower determined the best way to successfully engage with the target audience was to saturate areas with the greatest population of the target market’s demographic. By doing so, customers would see HydroPower as an easily accessible option, rather than something that is located too far away to be obtainable. Both, engagement with the target audience and increasing brand awareness would also be closely connected to the promotion of the product, as certain avenues of promotion such as social media can simultaneously achieve both goals of engagement and awareness. Ultimately, the main objectives of HydroPower are in place because of their central focus on the customer over all else. Educating customers about how their daily automotive needs can become more energy efficient makes HydroPower’s goal of a zero-emissions future is more attainable than many would expect.

According to the Alliance of Automobile manufacturers, there were 509,087 new car sales in the state of Georgia in 2018 and 96% of new sales were conventional cars, while only 1.29% were hybrid or electric vehicles (2019). However, according to the Wall Street Journal, Atlanta is the second largest metropolitan market for electric vehicles (Ramsey, 2014). HydroPower’s goal is to achieve 0.5% market penetration in Georgia in the first year and to reach all innovators by the end of its 5th year. Based on purchasing patterns of American consumers reported by the Associated Press and The New York Times, 0.5% market penetration would require production capacity and sales of 50 cars per week and would yield 2,545 cars sold allocated between the product lines as follows: the Swift would account for 3% of sales; the Sleek, 8%; the Style, 29%; and the Spartan would account for 62% of sales (Krisher 2020; Ulrich 2019). HydroPower completed a cash proforma based on these assumptions that indicated HydroPower would earn $74 million in revenues the first year, with variable costs totaling $41 million. Operating expenses were projected at an additional $9 million consisting of the following: salaries for nonproduction employees (i.e. salespeople, marketers, and engineers) estimated at $2 million annually, for twenty employees. Executive salaries and benefits projected at $600,000 for the first year. Annual rent is projected at $64,000 for a 16,000 square foot space Fulton Industrial Blvd. in Atlanta, GA based on an annual rate of $4.00 per square foot (Akimoto Ventures, LLC., 2019). Utilities are estimated at an annual average of $2.16 per square foot for $34,560 (Davies, 2019). These operating expenses also include payments on a working capital loan used to cover start-up costs like production equipment and enough cash reserves to cover 3 months of operating expenses. The largest cost, outside of variable production costs, is allocated to HydroPower’s promotion and advertising budget. HydroPower has budgeted 8% of gross sales for advertising and promotion, $6 million. After expenses and taxes projected at 24% of net income before taxes, it is projected that HydroPower will end the first year with a 25% profit margin provided HydroPower reaches its sales goals. The profits will be invested in increasing production capacity and advertising for the next year.

The founders of HydroPower Electric Cars want to make efforts today that will ensure a zero-emissions tomorrow by providing affordable, dependable, and stylish electric vehicles that suit the needs of the unserved target market of working- and middle-class millennials. HydroPower’s conscious marketing strategy is integrated throughout the organization’s culture and reflected in each phase of the marketing mix. It is demonstrated through HydroPower’s commitment to customer excellence, operational excellence, and environmental sustainability. HydroPower strives to keep prices competitive with conventional car products without sacrificing quality. Its business practices aim to foster life-long relationships with customers, build brand awareness, and create the demand for electric vehicles. HydroPower will engage with its target market via a robust promotional plan that will incorporate emotional and rational appeals across multiple mediums including social media, radio, billboards, and television. This comprehensive marketing plan will ensure HydroPower achieves its goal of 0.5% market penetration in Georgia in the first year while maintaining a healthy profit margin.