Copyright: Getty Images

Brompton Bikes
Case Study Oluwatosin ‘Tosin’ George
 INTRODUCTION

Photograph: Tobias Hase/dpa

Founded in 1975, Brompton Bikes is the largest British
manufacturer of folding bicycles in the United Kingdom.
There are three (3) core products - the Popular
Brompton, Electric Brompton, an electric variety, and
Brompton Superlight, designed for speed .

Brompton Bikes Stats

800k+ 47 50k+
Customers countries Bikes produced yearly
“The Brompton has become a
staple bike for metropolitan
living, loved by commuters and
1,200 £850 - £3770 casual urban riders everywhere”
parts/bike range of price/bike - Discerning Cyclist
CASE STUDY QUESTIONS

● Following Brexit, in 2021 and beyond, should Brompton reduce the price of its
core product in the U.K. market?

● Discuss the possible price elasticity of demand for a Brompton bike, and support
your answer using theory, the case study materials, and your own research.
 Copyright: BikeBiz
DISCUSSION
Following Brexit, in 2021 and beyond, should Brompton reduce
the price of its core product in the U.K. market?

My answer is No.
Theory: Price is determined by the relationship between demand and supply.
Following Brexit and COVID-19, Brompton bikes has faced a number of challenges that
have negatively impacted bike production, despite the growing demand in previous “Over the past 18 months, the
years. Some of the challenges are highlighted below:
supply chain has retrenched
● Shortage of raw materials leading to an increase in the cost of materials, further and further back and
ultimately impacting the cost of production. now the problem is you simply
can’t get hold of aluminium,
● An increase in shipping/transportation costs
you can’t get hold of steel, you
With the rising costs of raw materials and production, it is unprofitable to cut the price can’t get hold of these raw
of the Brompton Bikes without other means of profit maximization. In order to sustain materials.”
profit in an already competitive market, Brompton bikes should either maintain current
prices or seek to increase the cost of its core product in the U.K. - Will Butler, CEO of Brompton
 Shutterstock/Ferrari Septiano
DISCUSSION
Discuss the possible price elasticity of demand for a Brompton
bike?

Brompton bikes are considered as a lifestyle product. These are goods that are bought
not for the price but for its perceived expression of social status, style and taste. In the
case of Brompton bikes, it is branded as an Innovative British brand.

Customers are often willing to pay a premium price for lifestyle products which is what
Brompton bikes has been able to achieve with its current range of prices. Brompton
bikes have been able to build customer loyalty through innovative brand marketing ““A quirky English folding bike
across social media in addition to their unique array of programs and events such as has achieved cult status with a
World Brompton Championships, Brompton Urban Challenge etc that further specific appeal to urban
increases customer engagement and ridership.
cyclists”
Due to the current global supply chain challenges and increased production costs, an - Quartz
increase in the price of Brompton bikes will not affect demand. Price elasticity of
demand (PED) is lower when customers have strong brand loyalty. It is unlikely that
demand will change drastically even with an increase in price.
 CONCLUSION

● A reduction in the price of Brompton bikes is unfavourable for continued business operations in the
UK due to the increased cost of raw materials, global supply shortage and increased shipping costs.

● The price elasticity of demand for Brompton bikes is likely to be low as the bikes are perceived as a
lifestyle British brand and thus enjoys customer loyalty despite an increase in price.
 References
Brompton Bicycles: Pedalling into the Future. Accessed February 25, 2022. https://uploads.smart.ly/emails/Projects
/Brompton_Bicycles_Case_Study.pdf

British bike maker pedals on, with Brexit deal up in the air. Accessed February 25, 2022. https://apnews.com/article/brexit-
global-trade-coronavirus-pandemic-london-china-25ab08a597a834ca2bd395f0863b55a2

Brexit begins to weigh heavy on Brit bike exporters. Accessed February 25, 2022. https://cyclingindustry.news/brexit-
begins-to-weigh-heavy-on-brit-bike-exporters/

Brompton reels from impact of Brexit and Covid. Accessed February 25, 2022. https://road.cc/content/news/brompton
-reels-impact-brexit-and-covid-282435
Brompton CEO warns of raw materials shortages hitting bike industry. Accessed February 25, 2022. https://road.cc/
content/news/brompton-ceo-warns-raw-materials-shortages-287077

https://www.cyclist.co.uk/news/8285/cycling-has-increased-by-200-since-lockdown-government-report
s
 References
https://www.bicycleretailer.com/announcements/2021/10/01/brompton-bicycle-sees-dr
amatic-growth-us-market-amid-omnichannel-strategy#.Yhj0hejMI2x

https://discerningcyclist.com/are-brompton-bikes-worth-the-money/

https://www.brompton.com/about-us/history
https://www.clickz.com/how-brompton-bicycle-uses-social-media-to-spread-the-word-
about-its-brand/100505/
https://www.globenewswire.com/news-release/2021/03/02/2185186/0/en/Folding-Bike
s-Market-Worth-1-26-Billion-by-2027-A
https://www.theweek.co.uk/culture/107805/demand-for-bikes-has-gone-ballistic-bromp
ton-subscription-service
https://www.theguardian.com/lifeandstyle/2022/feb/25/brompton-bikes-plans-100m-w
etland-factory-on-stilts