From its nineteenth-century roots as a British bicycle company, Raleigh Wheels has developed a worldwide reputation for marketing sturdy, comfortable, steel-frame bicycles. The firm, named for the street in Nottingham, England, where it was originally located, was a trend-setter in designing and manufacturing bicycles. When Raleigh introduced steel-frame bicycles equipped with three-speed gear hubs in 1903, it revolutionized the industry and set off a never-ending race to improve the product’s technology. In the pre-auto era, its bicycles became a two-wheeled status symbol for British consumers, and the brand maintained its cachet for decades. Although Raleigh’s chopper style bicycles were hugely popular in the 1970s, international competition and changing consumer tastes have taken a toll during the past few decades.

Now Raleigh markets a wide variety of bicycles to consumers in Europe, Canada, and the United States. Its U.S. division, based in Kent, Washington, has been researching new bicycles for contemporary consumers and developing models that are lighter, faster, and better. Inspired by the European lifestyle and tradition of getting around on bicycles, and its long history in the business, Raleigh is looking to reinvigorate sales and capture a larger share of the $6 billion U.S. bicycle market.

Raleigh’s U.S. marketers have been observing the “messenger market,” customers who ride bicycles through downtown streets to deliver documents and small packages to businesses and individuals. They have also noted that many everyday bicycle riders dress casually, in T-shirts and jeans, rather than in special racing outfits designed for speed. Targeting consumers who enjoy riding bicycles as a lifestyle, Raleigh’s marketers are focusing on this segment’s specific needs and preferences as they develop, price, promote, and distribute new models.

In recent years, Raleigh’s marketers have stepped up the practice of bringing demonstration fleets to public places where potential buyers can hop on one of the company’s bicycles and pedal for a few minutes. The idea is to allow consumers who enjoy bicycling to actually experience the fun feeling of riding a Raleigh. The marketers are also fanning out to visit bicycle races and meet bicyclists in cities and towns across America, encouraging discussions about Raleigh and about bicycling in general and seeking feedback about particular Raleigh products.

Listening to consumers, Raleigh’s marketers recognized that many had misperceptions about the weight of steel-frame bicycles. Although steel can be quite heavy, Raleigh’s bicycles are solid yet light, nimble, and easy to steer. Those who have been on bicycles with steel frames praise the quality of the ride, saying that steel “has a soul,” according to market research.

To stay in touch with its target market, Raleigh is increasingly active in social media. It has several thousand fans who visit its Facebook page to see the latest product concepts and post their own photos and comments about Raleigh bicycles. It also uses Twitter to keep customers informed and answer questions about its bicycles and upcoming demonstration events. The company’s main blog communicates the latest news about everything from frame design and new bike colors under consideration to product awards and racing activities. It has a separate blog about both the fun and the challenges of commuting on a bicycle, a topic in which its customers are intensely interested because so many do exactly that. By listening to customers and showing that it understands the daily life of its target market, Raleigh is wheeling toward higher sales in a highly competitive marketplace.

Questions:

1. How can market segmentation be useful for producers of bicycles?
2. On what factors does Raleigh Wheels base its market segmentation?
3. How can Raleigh Wheels benefit from the market segment that it pursues?