The Concept of Marketing Strategy - Essay Example

?EXECUTIVE SUMMARY The background gives a clear understanding of the environment in which the firm intends to do business and the target market with in depth understanding of the need to venture into that market. It clearly spells out the business that is purposed to be carried out by Nebraska Sprinkles PLC. The objectives are the set out goals that are achievable with the right human resource, machinery, capital plus any other resource needed to provide the service that is intended to be rolled out by the firm. There is the grand objective which is the core purpose for the firm going into business and subsidiary objectives that are to be conducted alongside the main objective to propel the service provision by the business entity and make it have an impact to the lives of people in that region (Abrams, pg 30). The product section spells out the intended product of trade in this case not just water but clean, treated and safe water for domestic use and any other use deemed necessary and which could be adequately handled. As far as competition is concerned, any business entity has competitors who provide the same product or substitutes. It is this element that aggravates the risk, a component that forms one of the key features of any entrepreneur. Competition itself doesn’t exist in isolation. A market has to exist. The target market is the population that the firm hopes against all hopes to conquer in its bid to get whatever stakes that in play, profit maximization, increasing shareholders equity, social responsibility etc (Abrams, pg 41). The market strategy is all those ways, maneuvers and tactics employed by the management in establishing a brand in the particular market of concern. Penetrating any given market is vital. It is the key to the potential growth of the customer base, the product and/or service and the resultant profits either in the short but in most cases, the long run. Sales refer to the actual amount of the product or service usually in units (with varied units of measurement) that have been acquired by the clientele at a specified amount to which the customers would have the urge to purchase while the seller enjoys the profit (with the possibility of suffering losses). In every circumstance the sales of any commodity, in this case water, is determined by the price, ceteris Paribas. The selling price in itself is a derivative of the manufacturing costs including cost of labor, raw material, processing, warehousing and transportation. A fair price is therefore reached at after taking all these factors into consideration. In this case the storage facility would include the tanks which would be constructed underground as well as some raised above the ground for ease of pumping. After all this is done, the penetration of the market is always a correspondent of the intensity of advertisement and promotion, the more intense, the more customers are reached and this would only be reflected in the sales. The production process involves a proper mix of all the factors of production: labor, land, capital and entrepreneurship; the better the ratio the more, successful the business entity. Therefore the management and staff must also consist of highly qualified personnel (Abrams, pg 43). The financial data would show the projections, that is the available funds for operation at any given period of time and the forecasted estimates for use in the future time, in both the short run and long run. This is a very vital part of the business of any firm as it dictates every decision and action(s) implemented. The appendix will show the diagrams and table in the business plan. Aim The main object To acquire a start-up capital to drill, buy the necessary machines and provision thereof of clean, treated and safe water for domestic use. Other aims: To sensitize the public in the need of using clean, treated and safe water at all times. To educate the public on proper use of the natural resources. To sensitize the public on the need to preserve natural habitats. Interview Questions and Responses Q1What is the name of your business and how was it started? Response: The name of my business is Ambitious water supply and I chose it because of water shortage in the area. Q2 How did you source funds for this business? Response: I got funded by the local government and additional personal savings. Q3: Can you tell me about the business form please? Response: This is a sole proprietorship business since am managing it alone. Q4 How is the business countering competitions? Response: Currently I have no competitor and I will welcome any since water supply is a problem here. Q5 How is your pricing determined, does it keep changing when other competitors come in? Response: Just from what I have told, I don’t have competitors and my main aim was to avail water to this poor local population at the lowest cost possible. Q6: What opportunities do you have for the business growth? Response: It is my plan to extend my service to a larger population with the inclusion of other interested parties or organizations. Q7: What is the main contribution to the success of your business and the risks you have encountered in managing the life cycle of you business? Response: The main contribution I can mention is the attitude I have of empathy and the need for water in the area. The biggest risk I can remember is the interference by the health ministry. Q8 How do you ensure satisfaction of your customers? Response: By ensuring that I meet their immediate water needs. Q9: Can you accommodate competitors? Response: I have no problem with that Q10: How will you perceive them? Response: As good people who have concern for humanity Q11: Do you think you will finally meet you goals? Response: That is my driving force and I believe at some point I will Introduction Ambitious water supply was started by a focused and ambitious youth who did critical analysis of water supply in the area and came up with the idea of taking the initiative. The area for a long period of time had water problems which was compelling them to resort to other unhygienic water sources for their domestic work. This was associated with frequent disease outbreak which was adversely affecting the population. This formed the driving force towards coming up with the business of water supply. Considering the good intention of the business and its benefit to the locals, the business got funded by the local authority and by other like minded health organizations. The funds have been effectively utilized in ensuring reliability, availability and consistency in water supply (Abrams, pg 52). The business has successfully netted its target of ensuring safe water availability in the area, the locals have been served and great appreciations welcomed from the local community. Due to the future plan of the business, growth of the business will be achieved with the involvement and accommodation of other parties and organizations. Plans were also placed that will ensure that other state organizations are involved to ensure that a bigger population is served. The growth of the business is target an extensive supply of water to a bigger population which is still a challenge. Form the interview session, it clearly came out that there is water shortage in the area which truly need to be addressed. Water is a basic necessity for a healthy population and its shortage posses a great threat to the lives of the affected population. Water shortage in the area is adversely having negative impacts on the lives of the local population and need serious attention. The owner of the water supply blatantly explained the desire for having a constant water supply due to the unreliability of the current water source. He was ready to involve or partner with any interested party for the safety of the local population. Humanity comes with due regards for the well being of others in the community. One is considered human when he is having great concern and empathy for those faced with social problems such as the one affecting the above locality. My business plan was necessitated by the immediate results of the interview with the owner of Ambitious water supply and aimed at making water available for the local community. It intends to ensure adequacy and consistency as it plans to have a reliable water source. My business is coming with programs and plans that will ensure the realization of the needs for clear water as it will reduce the regular disease outbreaks associated with the use of dirty water, it targets the agricultural sector as adequacy stands the tallest of all the priorities. The local population will have an opportunity to venture in agriculture which could not be possible initially. With the future growth plans for this business, any other development plan involving water use. This gives greater opportunities for other developments which may be initiated in the area. NEBRASKA SPRINKLES PLC WATER PROJECT BUSINESS DESCRIPTION Nebraska is a water supply project that is aiming at ensuring constant water supply for the local population. The projects is an initiative taken to ensure that safety is upheld after great health concern was raised due to the unhygienic water being used by the local people. Mission: “To provide clean, treated and reliable water to the poor in Nebraska State” Vision: Provision of water as a necessity to the whole state with a view to promote the welfare of the community at all times without bias. Objectives The main objective To acquire a start-up capital to drill, buy the necessary machines and provision thereof of clean, treated and safe water for domestic use. Other objectives: To sensitize the public in the need of using clean, treated and safe water at all times. To educate the public on proper use of the natural resources. To sensitize the public on the need to preserve natural habitats. Justification Having resided in Nebraska town for some time, the only thing that together with the residents, would strike any would be visitor is the price of water for domestic use. There is an acute water shortage during most periods of the year. A twenty liter container of water costs averagely five United States of America dollars while it shoots up to twenty dollars for the same amount periodically. The scarcity of water, leave alone clean water has been a problem to the natives and the inhabitants of this region for such a long time. Even though the state water department is providing piped water in some parts of the town, the scarcity and the per capita income of the residents make it very difficult to afford this essential product, a basic need. The provision of clean and possibly treated water is long overdue. Nebraska Sprinkles PLC would therefore wish to avail the same to the people of Nebraska, clean, treated and safe water for domestic use through the drilling of boreholes across the district/county to help in getting at least the single most important need albeit at a reduced cost. The firm intends to provide both at the point of borehole collection water for the locals and bottled water that can be used in and beyond the region. The product/service Water is a product that is provided by most states water departments in United States of America as an essential commodity that is under the government through the various parastatals. In this case the product is yet to be offered in the market and a complete research has been carried out on the same. This initiative is expected to be launched at the end of this year targeting the large number of people visiting and the residents during the December holidays. The water that is intended to be provided by this firm will be natural, clean and safe for domestic use provided in environmentally approved standards by the government. The product will be very competitive since it intends to provide this essential commodity all year round and at affordable prices unlike with the other entities. The management of the firm believes that the pricing will be cost effective both to the customer and to the firm itself as only minimal operational costs will be incurred in the product provision. Fig. 1. THE MARKET ANALYSIS Nebraska State is by any extent geographically a sizeable area with approximately fifty thousand residents. This area experiences convectional rainfall and is hot during most months of every given year with the rainy season being between late April and early June. Nebraska Sprinkles PLC intends to provide clean water to the population in the next six years, capitalizing in the fact that there is not enough water supplying entities such as small groups with such initiatives coupled with the slow pace with which the county council has had in provision for the same. The market is large by any standards; there are many households in this area, large hospitals, numerous clinics as well as the many entertainment spots that don the area. There is much need for the product for use domestically and otherwise as such entities as schools also need this precious commodity. Nebraska Sprinkles PLC estimates that an average of twelve percent (12%) of the population would be reached annually. This is due to the fact that most parts of this area still has vast lands in which such projects would be erected/established plus the area is penetrable. The probable willingness of the community in embracing such project also adds value to its viability. The firms share is considered to rise in the advancing years with an increase in the market because of the necessity or rather importance with which the products exerts to the population. The growth of the market will be satisfied with the penetration and access thereof of the product by the residents. In case of a growth or rise in competition in the market, the firm would try to ensure that the product still reaches the customers by taking into consideration such matters as the reliability of provision of the product, the quality as well as a slightly reduced price if the firm shall have recouped the investment capital by then (Abrams, pg 63). THE COMPETITION ANALYSIS The target market is critical ast is the main focus market in which all such businesses offering the same product are eyeing to maximize their profits among other considerations of any firm. The firm has the numerous households and the many business entities especially the hotels, clubs and restaurants that spread across the township and in the villages as the primary target. Presently the established competitors reach approximately only fifteen percent of this population with myopic investments on the same. The closest competitors are mainly the state water departments that have undertaken to provide water directly to the consumers as well as through certain water kiosks. The competitors mainly provide piped water. The state department tasked with providing water for the residents is mainly concentrated in the town center. Currently, the primary competitor seems to be on a free fall as they have resulted into closing the taps that once were in various places due to due to non remittance of the fees from households and vendors in equal measure. Even though they have been in existence for some time now, they seem to have had ineffective policies and as such, had very little impact and revenue from the same. The only similarity would seem to be the target market with many differences including the mode of provision of the commodity, quality of water among many others. In many ways will the business supersede the current competitor market as the adequate machines and skilled manpower that are to be instituted in place will ensure efficiency and effectiveness in providing the clean, treated and safe water for domestic use and otherwise. The other primary competitors include Coca-Cola and Pepsi which also provide bottled water which a vast amount of resources to stay in the market be it financial, human resource among other resources. Secondary competitors include some young businesses providing water to the residents by way of truck supply, and others with boreholes to sell the water to the neighbors and some local bottling companies with the core advantages of ease of delivery, lower pricing and ability to provide door to door services (Abrams, pg 77). SWOT analysis STRENGHTS WEAKNESSES Due to the rise in technology the lead time in so far as production and delivery is concerned. The existence of good infrastructure including roads and electricity. Ease of commodity access. Availability of highly skilled employees. Risk or reservation in trying a new product. A large region hence an abundant clientele to satisfy their need. Small source of capital base to acquire all the necessary manpower and machines for use. OPPORTUNITIES THREATS The cost of acquiring the customer is quite low. The demand for this essential commodity by many, poor or rich. The possibility of getting manpower cost effectively. Support from the government. Fierce competition in the market may lead to price war. Due to the dip in prices the players are looking to fight to gain volumes. Past failures with other firms makes it difficult not to be associated with failure as the others. Fig. 2. The market strategy The firm intends to use direct advertisement and other promotional strategies such as involving the community in determining the best areas in terms of accessibility though discussion in such forums as the public sittings and committees of schools and other social infrastructure to dialogue with the inhabitants on the best possible ways to provide the commodity. This way, a larger section of the community would be reached in the shortest possible time with an almost immediate response in form of feedback thereof (Abrams, pg 88). Advertising and promotion Nebraska Sprinkles PLC will as part of its advertising and promotional strategy use a mishmash of the various available media in the locality such as the use of the mobile like cinemas and other advertising agents. The firm would also employ the use of road-shows across the entire region to deliver the sweet message of hope for an all season clean, treated and safe water for domestic use as an essential commodity. The radio adverts are deemed most effective if aired just before the prime time news as the target client will be reached in their masses. The road shows would be at the peak during market days and on weekends when most people are in the market for various reasons of purchase and other transactions. The effectiveness of these kinds of media would rely much on the transmission of the right message to the recipients and in its repetition in order to lure customers to make a purchase of the commodity (water) from Nebraska Sprinkles PLC. Better still, we will distribute the bottled water to the various shops and supermarkets and hope that the customer association of the brands in the shelves and daily use of the product will correspond to the market growth for the same (Abrams, pg 109). Sales Nebraska Sprinkles PLC would heavily rely on the use of hired sales representatives for a start who would then be trained to work in other sectors of the firm in its expansionary vision as the management will be keen on an eventual team that is knowledgeable and personable. With the ultimate expansion, strategies such as the partnership with wholesalers and commissioned sales representatives who shall already had an established presence in the target areas coupled with a high reputation by the clientele. Other promotional media options that the firm intends to employ would include the use of: i. Radio ii. Web iii. Promotional materials iv. One-on-one sales and v. Strategic alliances The product would therefore be distributed using, apart from on the point of production collection, such strategies as personal delivery, contracts with the distributors and resellers plus with the sales representatives with the firm. MANAGEMENT AND STAFFING The firm intends to hire few personnel for a start and increase the number of employees as the company expands in leaps as anticipated by the proprietor due to the high demand of this commodity through Nebraska State. Those to be employed would include: A manager S/he should be a bachelor’s degree holder in business administration, management or commerce from a recognized University, must have had previous sound background with a medium company, self motivated with a strong desire to succeed and have strong desire to succeed among other desirable qualities. HR Manager Have relevant knowledge and laws on hiring including knowledge of the minimum knowledge and so on. S/he should be goal oriented and with enthusiasm. Hydrologist Be qualified personnel with a certificate in hydrology from a chartered college. S/he should have at least two years experience in the same. PR officer S/he should be good decision maker, good relationship with the people, good communicator and a leader. S/he must have the experience of having worked with a big group or company. Accountant Be honest, good track record, dynamic and goals oriented. Marketer Be honest, highly motivated, aggressive and dynamic personality. He should have good track records, have leadership & decision making skills and be able to work under pressure. Sales representatives They should be of majority age having cleared their forth form with good communication and writing skills. The firm envisions starting with a minimal number of employees before increasing them as it expands and grows over the years in line with the sales of the core product. The relevant skills and job descriptions are set out clearly in the agreement documents with the firm obtainable at the Manager’s office. With the United States of American market robust of highly trained personnel in various fields, there is no doubt that the qualified individuals are readily available even within the region. The management will be paid salaries that correspond to their qualification and expertise while the sales representatives will be paid wages and on commission above the expected sales. They will also be paid for having worked overtime. There will be recognition for hard work with such benefits as possible permanent employment, school fees and small capital to start own initiatives among others (Abrams, pg 88). Structure of the Organization OPERATIONAL PLAN The production process would involve a myriad of operations in as so far as the drilling of adequate boreholes deep enough to provide fresh water for the target clientele to such operations distribution i.e. delivering the water to the households for consumption purposes. This whole process would include: 1. Acquisition of land. This should be in various places across the region. 2. The acquisition of the services of any renowned firm that would sink the boreholes in due times through a competitive process. 3. Purchase of pumping, purification and bottling machines. 4. Securing and hiring of qualified manpower e.g. hydrologists and sales representatives. 5. The purchase of storage and bottling containers, together with facilities for branding. 6. Provision of such amenities as concerns CSR. 7. Purchase of water meters, enough pipes for piping and tanks. 8. Construction of reservoirs. 9. Purchase of computes and necessary software for management as well as communication gadgets. All this has been considered after an extensive research that involved the locals and other residents including the various government departments that lay as stakeholders in this industry. There was a link with the ministries of water and that of health in the entire process too. All the purchases are intended to be carried out through a competitive bidding process to ensure clarity and transparency as United States of America is known to fair well in procurement matters and has all the necessary mechanisms to prevent corruption and such like evils. Likewise the staff would be qualified members in the relevant positions of posting to ensure the quality as concerns efficiency and effectiveness in the provision of the sole product which would be clean, treated and safe water. The equipment and facilities therefore will be up to date in line with the goals of the firm. All this is expected to be rolled out at the end of the year so that operations start in earnest in January the following year. The firm is currently in touch with would be vendors through the provincial administration and other private stakeholders who would help in rolling out the intentions of the firm to the potential large customer base. This is so, so that the target group would be reached faster and cost effectively. All these functions are supposed as a matter of fact to be spearheaded by the management of the firm. With the qualified staff, the operations are to be run with such expertise that would ensure that quality among other many virtues in honored, at least to the clientele as the firm seeks a firm grip in the market and brand name therefore. This way, the firm will outdo its competitors in the shortest possible time and even invest more in the basic element of human resource in line with the objectives and goals of the firm. The firm intends to have a logo that corresponds to its operations, a logo that would obviously relate to the community as a trademark. FINANCIAL PROJECTION Financial data NEBRASKA SPRINKLES PLC BALANCE SHEET AS AT 1ST DECEMBER 2013 Fixed Assets $ (‘000) $ (‘000) $ (‘000) Land and buildings 45,000 Plant and Equipment (NBV) 12,000 Current Assets Raw materials 20,650 Finished goods 23,615 Debtors 15,500 Cash 14,300 45,465 Current Liabilities Creditors 606,800 Taxation 14,500 (621,300) (575,835) ( 518,835) Financed by 150,000 Chase Bank loan 490,000 Retained profit/Founder’s 28,835 518,835 Income statement Sales (40,000 barrels) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000 Variable expenses: Variable cost of water sold . . . . . . . . . . . . . . . . . . . . . . . $80,000 Variable selling and administrative expenses . . . . . . . . . . 30,000 $110,000 Contribution margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000 Fixed expenses: Fixed construction overhead . . . . . . . . . . . . . . . . . . . . . 75,000 Fixed selling and administrative expenses . . . . . . . . . . . . 20,000 $ 95,000 Net operating loss $ (5,000) Appendices Fig.1. The product growth life cycle. Fig. 2. The SWOT analysis table. Fig. 3. The balance sheet as at December 2013. Work citations Abrams, Rhonda M. The Successful Business Plan: Secrets & Strategies. Palo Alto, Calif: The Planning Shop, 2003. Print. Read More