Profits4U Marketing and Sales Company - Assignment Example

1.0 Executive Summary Profits4U Marketing & Sales Company will be a sales and marketing consulting company specializing in marketing of high-technology products in local and international markets.Profits4U offers high-tech software and hardware manufacturers an alternative to hiring new sales and marketing personnel. It offers all sales aspects i.e. business, market and channel development. Profits4U Marketing & Sales Company is a British corporation based in Dublin, Ireland. It is owned by Mrs. Clara Bauer and other principal investors. The premises will be established in an exclusive office space in Dublin. The reason for having chosen Ireland is that in Ireland many hardware and software manufacturers are located and Ireland is considered somehow the European "Silicon Valley". Profits4U's primary targets are large hardware and software corporations such as HP, IBM & Microsoft. The next target will be the medium-sized companies in multimedia and software, areas that have great development potential. Profits4U's goal is to be positioned as a trustful sales & marketing company. Profits4U's competition is mostly the sale and marketing in - house departments. An indirect competitor could be some management consulting firms such as Arthur Andersen etc. but as mentioned these companies are indirect competitors since they are generalists and they do not implement niche marketing. In addition, due to their sheer size, in many cases their projects are executed by junior consultants and not by their senior personnel. Profits4U in terms of price will be positioned as a brand name company meaning that its prices will be quite high. The high prices can be justified due to Profits4U expertise in sales & marketing and more specifically in sales & marketing of software and hardware product. Mrs. Clara Bauer and the rest of the management team are former executives of high tech companies specialized in sales and marketing. The management is consisted of 3 partners aiming to reach 5 partners. According to the company's estimations the profits will reach the $65,000 by the third year 3 with a net profit margin of 6%. Profits4U plans to ask for bank loan of $130,000 t and ask for an additional one of $50,000 in order to invest it in long-term assets by 2010. There is no anticipation of cash flow problems. 1.1 Mission To provide hardware and software manufacturers a first class solution to business development on a national and international level. The competitive advantage of Profits4U is its expertise, confidentiality, professionalism and contacts. Profits4U can be combined with the internal sales and marketing people and at the same time be a cheaper way to develop new markets. It can be a real alternative to internal resources and it offers senior practical experience, know-how, contacts, and confidentiality. The customers should know that working with Profits4U is an efficient, economical and more professional way to develop new business rather than working solely with internal staff. The focus will be business development in the European and Latin American markets. 1.2 Keys to Success 1. Excellence in sales and marketing. 2. Generate new sales leads. 3. Provide apart from sales expertise market research and project consulting. 1.3 Objectives 1. The sales turnover should be $550,000 in 2009 and $1 million in 2011. 2. The desired gross profit margin will be higher than 70%. 3. The desired net income will be more than 5% of sales by 2011. 2.0 Start-up Summary The initial expenses (among them legal costs, logo design, stationery and related expenses are included) are estimated to reach $18,350. The short term assets (office,furniture etc.) are estimated to reach $32,000 and have as start up cash the amount of $25,000 . The details are included in the following table. Start-up 3.0 Services 3.1 Competitive Comparison The competition comes in several forms: 1. In - house sales and marketing personel. The competitive advantage of Profits4U is that the managers of the internal departments do not have time to pursue new business development activities. 2. Well - known management consulting agencies like McKinsey, Bain, Arthur Andersen etc. They are too general and they have junior personnel implementing the projects since their partners are too busy in selling and get new business to the company. Profits4U offers as being an expert in its field and has the partners implementing the projects. 3.2 Fulfillment 1. The partners of the company will fulfill and deliver the projects. The value that is going to be offered to the customers is the expertise of the company which is a combination of professional experience, top level education and long hours work. 2. In areas that Profits4U can hire outsourcers i.e. the areas of market research and development of report, Profits4U will be addressed to qualified freelancers for offering back-up to its services. 4.0 Market Analysis Summary 4.1 Market Segmentation Large hardware and software manufacturers. Medium-sized growth companies in multimedia, and some other high development areas. Profits 4U offers them a cheap (in relation to expansion of internal sales and marketing staff) alternative to their new business development. Market Analysis (Pie) 4.2 Target Market Segment Strategy Profits4U will focus on few selected potential customers in the areas of interest i.e. USA, Latin America and Europ. These are high - tech customers (software and hardware) and they will the key customers for Profits4U. 4.3 Service Business Analysis The consulting "industry" is segmented and in many cases disorganized. There are many small consulting companies as well as freelancing consultants for each one of the most well-known organizations. There are the high prestige consultants up to many thousands of individuals. Profits4U will try to be positioned as prestigious and real consulting organization. 4.3.2 Main Competitors 1. The well - known prestigious management consulting organizations: Strengths: They are located world wide and they have understanding of various businesses. Their reputation is excellent, they are well known so a manager can easily choose them despite them being very expensive. Weaknesses: They are generalists and not specialized. In constrast, Profits4U is specialized in high-tech marketing and sales. One additional disadvantage is that they are very expensive and the projects are usually implemented by junior executives. 2. Market specific consultants: Strengths: They have expertise in market areas. Profits4U will not compete them in their areas i.e. market research and/or channel management. Weaknesses: They cannot extend their expertise or provide project management. Their experience is very limited. 3. Companies that do internally business development: Strengths: The only additional costs are the travel expenses. The work is planned and done by internal staff. Weaknesses: The managers have too many things to do and they do not have time and people to do additional work that will nevertheless bring profits to the company. Consultants like Profits4U can increase the company's business which in other case that would not be possible. 4.3.3 Business Participants At the top of the ladder there are some well - known organizations in management consulting. They are organized on the basis of partnerships, they are internationally located. Some derived from accountancy expertise (e.g. Arthur Andersen) and some come from the management area (McKinsey). They have very high consultancy fees, their partners do the selling and the junior executives fulfill the projects. At the medium level there are some market expertise consultants i.e. channel development companies like ChannelCorp and, Channel Strategies. 4.3.4 Distributing a Service Consulting is a service therefore it is sold by indirect channels i.e. mouth to mouth advertisement and personal acquaintances. The prestigious companies are members of business and trade associations and it is there where they make new acquaintances and make new business. The second category i.e. market specific consultants usually cannot use distribution as a way promoting themselves. 5.0 Milestones The below table shows the milestones. Milestones 5.1 Pricing Strategy Profits4U will be positioned at the top level of the market and at the same time it will have very competitive prices. The reason for setting up high prices is that Profits4U wants to be established as a brand name company that offer high quality expertise. The project consulting fees will be on $5,000 per day for project consulting, and $10,000 on a monthly basis for retainer consulting. In case a customer would like to have a market research project then the prices will be set on an ad hoc basis and always taking into consideration the customer's specific requirements. 6.0 Management Summary 6.1 Organizational Structure Profits4U has in the beginning 3 partners that they will shortly become 5: Clara Bauer. One, possible two, partners from Boston Consulting Group. One European partner, based in Germany. The partners in the beginning will do their own work and management. 6.2 The Management Team Profits4U is a company that demands top level experience and expertise both nationally and internationally. So, it will not follow the model which is quite common in consultancy companies i.e. having partners and senior executives do the sales and the junior ones doing the projects. On the contrary, Profits4U partners will do the work since this is what is going to be sold to the customers i.e. senior expertise. In the beginning, the partners will be three and very soon they will become five. The initial consultants will be 1-3 and in addition there will be a person that will provide good backoffice support but his/her main job will be editorial/graphic , one talented marketing person, a receptionist/secretary and an office manager. Later, more personnel will be added i.e. partners, consultants and salespeople. 6.3 Personnel Plan The following table describes the annual personnel plan . Personnel Plan 2009 2010 2011 Partners $144,000 $175,000 $200,000 Consultants $0 $50,000 $63,000 Editorial/graphic $18,000 $22,000 $26,000 VP Marketing $20,000 $50,000 $55,000 Sales people $0 $30,000 $33,000 Office Manager $7,500 $30,000 $33,000 Secretarial $5,250 $20,000 $22,000 Other $0 $0 $0 Other $0 $0 $0 Total People 7 14 20 Total Payroll $194,750 $377,000 $432,000 7.0 Financial Plan 7.1 Break-even Analysis The following table shows the break - even analysis. Break-even Analysis 8. Capital resources plan & raising finance The resources needed are the following: renting the adequate premise, buy office equipment (PCs, software, SPSS and market research software). Part of the initial capital will derive from the founders' personal savings. The major amount of money for the start up investment will derive from bank financing. 9. Sources of support for new ventures The future plans of Profits4U include a geographical expansion i.e. covering additional markets such as Far East and product expansion i.e. entering the telecommunications segment of the market (both hardware and software) as well as Internet providers. There is a thought that Profits4U is going to examine after careful consideration to enter the newsletter or electronic newsletter services. 10. Entering the market and launching the business Profits4U is planned to start business in the first quarter of 2009. Prior to the opening, all appropriate market research, concerning the targeted market segments, will be conducted as well as first meetings with target customers (HP, IBM and Microsoft). These meeting will follow an initial well targeted direct mail campaign to the key important managers of the above companies as well as to all those that participate in the decision of establishing new partnerships. References Gray, Douglas A. The Entrepreneur's Complete Self - Assessment Guide. Kogan Pag.1995. Irwin, David. Financial Control for Non-financial Managers.Pitman.1995. Irwin David. Planning to Succeed in Business.Pitman.1995 Johnson, Ron. The 24 Hour Business Plan. Hutchinson Business Books.1990. Kamoroff, Bernard. Small time operator : how to start your own business, keep your books, pay your taxes and stay out of trouble. Laytonville & Willits, Bell Springs Pub, 2004. Richardson, Bill. Business Plans, Kogan Page.1992. Strauss, Steven D. Small business bible: everything you need to know to succeed in your small business. Hoboken, Wiley, 2005. West, Alan. A Business Plan, Pitman. 1991. Read More