Riffel Prepares to Enter the Multi-Segmented US Market
Background
Since its founding in 1999 Riffel has been committed to serve the motorcycle aftermarket with quality products for all THE markets it serves. Given its local success in Brazil and reputation as a high quality sprocket producer, management envisioned becoming a world-class producer to serve worldwide markets but realized they needed help to professionalize their business to US market standards. By 2001 Riffel achieved a turn over of 65% for the domestic market and 35% for foreign market, encompassing most Latin American countries south of Mexico. The current objective is to serve the US and Europe markets to reach a foreign market turnover of 50%. For the US market specifically, the challenges were the following:
Knowledge of market
Product development
Worldwide competition
Search for the Best Entry Strategy
Intrix conducted a market study of the motorcycle and sprocket industry in the US that revealed the following findings:
Growing market since 1970's
Japanese brands motorcycles dominate market
Majority of motorcycles are in the high-cylinder range
Highly segmented market
Steel, aluminum and Titanium offering
Brand awareness for performance
Racing: sport, street, drag, motocross
Large spectrum of cylinder size motorcycle availability
Wide range of usage
Range of custom gearing demand
ATV market as large as motorcycle
Wide range of distribution alternatives
Sprocket suppliers both national and international
Private label successful
Intrix recommended Riffel enter the US market under a private-label basis covering the four most important regions (NY, Midwest, Florida and California) within different segments. The most important tasks to implement our strategy included:
Investigate specific segments
Produce new products to serve segments
Test market segments
Develop corporate planning to differentiate product and services
The Results
The market analysis was completed in one month. From the beginning of the project Riffel received the first order in 4 months. After one further month into the implementation phase we have received additional firm orders and another five companies are evaluating future business. New products were developed for the high-cylinder Suzuki racing motorcycle in a gearing range of 42 to 48 teeth in the 520 chains, serving models from 650 to 1000 cc. Furthermore other new products were developed to serve the Honda racing motorcycle in the gearing range of 40 to 49 teeth in the 520 chains, serving models CBR 600F4i, 929RR, 954RR and RC51. All these developments were developed under private label "RRP" in aluminum customized to the specific needs of the market in terms of packaging, labeling and sprocket stamping nomenclature.
Commentary
This project is ongoing. Intrix is supervising the development of new products for the existing customer in the street-racing segment to then enter the motocross segment with the same customer. In parallel Intrix is developing business with new segments for different regions of the United States. We anticipate business development in Canada and also in the ATV markets. Riffel appreciates having achieved the US market entry objectives in a much shorter time than expected, with the highest quality business partners while avoiding any false steps.
