I am considering whether or not to open an all-terrain vehicle dealership in the Greater Toronto Area. All-terrain vehicles (ATVs) are three- and four-wheel motorized vehicles intended for use on various types of unpaved terrain. The use of ATVs in Canada has grown rapidly in recent years. They are predominately used in rural settings for work and recreation. Marketing is a key component of the dealership’s profitability and success in the short and long term. As a part of the marketing plan and strategy, the marketing environment requires analysis including the direct and external market environment. We have analyzed the external market environment as follows: Economic environment
The demand for ATVs is affected by consumer’s incomes, economic growth, and inflations. The economy is always shifting, affecting consumer spending habits. ATVs are not a necessity; people will easily cut back on purchasing pricy items and luxuries very quickly. At a time when the economy has been gradually recovering, with people regaining employment and increasing spending, consumers may still be facing some uncertainties that will affect their decision to buy. If the bank of Canada decides to increase interest rates, then for the cost to borrow money will also go up affecting consumer decisions to buy ATVs on credit. If the interest rates remain low, borrowing rates for loans to purchase ATVs may also continue to be low, encouraging consumers to buy now. We will strategically have to price our models to attract consumers.
According to The Motorcycle & Moped Industry Council, which accounts for 90% of ATV sales, sales in Ontario have been steadily declining since 2004. However, as the Canadian economy rises out of recession and with low interest rates, large item purchases may be considered. Canada is also considered the second largest market for ATV`s. At this time, the Canadian dollar is doing well against foreign currency. As a result, it is likely foreign countries...
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