Entrepreneurship theory to practice - Essay Example

Market Strategy The perfume targets English women in the ages between 40-60 years old. These are mainly career or business oriented women who are wealthy. The perfume is designed for women who appreciate quality. The perfume is manufactured using quality products to ensure that it reflects the true English scents. This will help women identify themselves with the English culture as well as create a new fragrance that is unique for our costumer. Every woman has her own preferences, when it comes to a perfume.

Therefore, it is imperative to design a fragrance that is unique for our customers. Unlike other products, a perfume is a want rather than a need. Women who purchase perfumes seek to create an identity by their scents. A woman who wants to maintain a public image will buy quality perfumes that identify her as such (Day, and Liam, 1988). Currently, the perfume will face competition from established perfumes, for example, Rebelle by Rihanna, Flora by Gucci the Garden and Miss Dior by Christina Dior SA.

These fragrances are popular among women in UK. However, unlike these products our perfume will be sold at a cheaper price. Low developmental cost of the product will ensure a price advantage. This is because the perfume will enjoy goodwill from the already established boutique (Kariv, 2011). It is also because there are no other retailers who offer a similar perfume in the region. However, launching a new product in an established business may result in some risks. The customers may not be willing to try the new product as it is not developed by the owner of the business (Kuratko, 2008).

Services offered in the boutique may also mask the perfume and thus customers ignore the product. The perfume will be differentiated from other perfumes from the package, unique English fragrance and quality. The package will be carefully designed so as to attract potential customer. The display of the perfume in the shop will also enable customers to identify the product. Aggressive advertising will be done to ensure that the population is aware of the product. The price of the perfume will be determined by the total cost of production, expected revenue for the product, the competitor’s price range and the expected demand for the product (Kariv, 2011).

The total cost of production is inclusive of the total fixed and variable costs incurred in production, marketing and distribution of goods. The perfume will be sold at £70 per unit. In the first year, the gross revenue is expected to be approximately 64% of the cost per unit. This is expected to increase in the subsequent years to 70% in the second and 78% in the third year. This is because as the business expands it is expected to benefits from economies of scale as well as specialization (Day, and Liam, 1988).

In the first year, about 200 units are expected to be sold. This is projected to increase in the subsequent years to 300 units in the second and 450 units in the second years. An effective market strategy enables the business to utilize their scarce resources on significant opportunities so as to increase sales and sustain their competitive advantage (Baker, 2008). In order to create an effective market strategy, it is crucial to carry out a research to determine the buying trends, as well as preferences of the target customer.

It is also imperative for the business to consider the internal as well as the external environment that will influence the sales of the product (Kuratko, 2008). Information on the external environment includes evaluation of the economic, cultural, legal and political factors that will influence the product. Internal environment analysis includes information on marketing mix, strategic constraints and performance analysis. It is also essential to include information on how to evaluate progress.

It is also crucial to indicate how the business will handle unforeseen pitfalls that emerge during the implementation of the plan. Bibliography Baker, M. 2008, The strategic marketing plan, London: Routledge. Day, G., and Liam, F. 1988, “Valuing Market Strategies,” Journal of Marketing 52 (3): p. 45-57. Kuratko, D. 2008, introduction to entrepreneurship, NY: McGraw Hill. Kariv, D. 2011, Entrepreneurship: International edition, London: Routledge.