Perfume Industry in the UK - Business Plan Example

Business Plan Imagine You Have Created A New Product Or Service. Using Relevant Entrepreneurship Models Including Management Techniques And Approaches Develop A Business Plan That Could Be Useful For Launching Your Product And Obtaining Financial And Managerial Support From Potential Backers. Ensure That You Produce Clear Evidence To Support The Feasibility And Viability Of Your Venture Executive Summary An effective business plan is required to be formulated by any particular company while initiating a new business. Similarly, an effectual business plan will be developed for a perfume manufacturing company targeting both men as well as women. In this regard, several aspects will be taken into concern while developing an efficient business plan for the company. The different aspects will comprise the business description of the company, information about the nature of the suppliers, agreements as well as ownership structure and legal considerations. Moreover, the other aspects will encompass business opportunities, marketing strategy, business operations, finances and skills of people management. Table of Contents Executive Summary 2 Overview 4 Business Description 4 Background of the Perfume Industry 4 Goals and Objectives of the Business Plan 5 Information of Suppliers, Agreements, Ownership Structure and Legal Considerations 5 Business Opportunities 7 Geographical Area 7 Potential Customers 8 Business Competitors 8 Marketing Strategy 9 Marketing Plan 10 Costing and Pricing 10 Sales Projection 11 Business Operations Operational Function 12 Services Offered 13 Personnel 14 Finances 15 People Management Skills 17 References 19 Givenchy, 2013. Customer Service. Shopping Online. [Online] Available at: http://www.givenchybeauty.com/info/customer-service# [Accessed March 21, 2013]. 19 Overview The business plan proposes for manufacturing perfume or fragrance products in extensive UK markets with the intention of attracting potential male as well as female members from every section of the society. It is worth mentioning that for starting a business for manufacturing perfumes, certain factors need to be taken into concern such as resources, manpower and technology along with selection of business markets for identifying target customers. Most significantly, in order to manufacture a perfume product in the UK, the aspect of business location can be considered as one of the imperative factors relating to business plan. The background of the perfume industry particularly considering the business market of the UK requires to be analysed before developing a business plan for manufacturing perfume or fragrance products in the business markets of the UK. Business Description Background of the Perfume Industry The companies involved in manufacturing fragrances or perfumes in the business market of the UK have been viewed to be relatively smaller as compared to other perfume companies located in the global basis. This provides a fundamental understanding that there pertains less competition in the perfume industry particularly in the UK business market. Thus, it can be affirmed that the companies linked with manufacturing perfumes are anticipated to generate adequate sales as compared to other products in the UK along global business market. Moreover, it is also anticipated that revenues would be increased in coming years in the national and overseas market for perfume industry in the UK (IBISWorld, 2013). Goals and Objectives of the Business Plan The objectives of the business plan would be to attract the targeted customers from various section of the society in the UK market. Another objective would be to gain productivity and profitability by selling the perfume products to every section of the society at affordable prices. Notably, it has been apparently observed that it is quite required to possess an effective agreement or association between the suppliers along with the distributors in manufacturing different products like perfumes in the targeted business markets. It can be affirmed that effective communication between skilled suppliers and distributors with the management helps in gaining greater productivity and generating substantial profitability in the extensive business markets nationally or globally. Information of Suppliers, Agreements, Ownership Structure and Legal Considerations The selection of potential suppliers and distributors needs to pay utmost attention while manufacturing perfumes and distributing them in the business markets of the UK and other regions of the globe. This is owing to the reason that the suppliers provide the necessary raw materials to the companies involved in manufacturing any sort of product like perfumes and the distributors help the companies to deliver the products in the business markets. It has been viewed that there lays the presence of several suppliers in the UK business market and thus it is indispensable for selecting appropriate suppliers in order to generate greater sales for the perfumes or fragrances. This would enable the company to flourish by a greater level in terms of enhancing the volume of sales along with delivering quality products to the customers. As a matter of fact, pricing is regarded as one of the important aspects for the companies involved in manufacturing any product. This is owing to the reason that pricing helps in determining the growth of the business for any company selling the products in national and overseas market. In this similar context, it can be stated that the suppliers are to be selected for conducting number of activities that are needed while manufacturing perfume or fragrance products. The activities might encompass collection of raw materials, chemicals and other important materials relating to the manufacturing of to perfumes. After acquiring a brief idea about the information of suppliers relating to the manufacturing of perfumes in the UK business market and other regions throughout the globe, it has been apparently observed that the companies establish as well as maintain effective agreements with the suppliers in order to implement and control the resources that are required while manufacturing products. The formation of the agreements with the suppliers would certainly help a manufacturing company towards creating superior quality of products and thus raise financial performance by a significant level. The notion of ownership structure plays a dominant part in several aspects for a manufacturing company. The aspects comprise performance management and strategic decision-making among others. It has been apparently observed in this particular circumstance that the idea of ownership structure determines diverse ownerships as well as controlling financial structures that support a company towards manufacturing its product effectually. It is worth mentioning that while initiating a manufacturing business, it is required for a particular company to undertake certain lawful considerations that comprise licensing, rights and government approval among others. It can be stated that it is not possible for a company to manufacture its products without taking into concern the aforesaid aspects. Similarly, in this background, the company would have to consider the aforementioned aspects relating to lawful considerations while manufacturing perfumes or fragrances in the UK business market as well as globally. Business Opportunities Geographical Area Apart from considering valuable aspects like accessibility of raw materials, technology and manpower among others, it is necessary for the company involved in manufacturing perfumes to identify a proper geographical location where the product can be launched successfully. This particular idea i.e. geographical location mainly determines the lifestyle, language and the attitudinal behaviour of the customers that ultimately supports a company to launch its new product or service in its targeted business market. The selection of proper geographical area inculcates effective growth in terms of business and competing with major competitors in the business market. It can also be stated that proper geographical location for establishing business would enable a perfume manufacturing company to enhance its productivity and volume of sales by selling quality products to the customers. This would also help in generating greater revenue through selling products according to the demands of the customers in the targeted business markets. Potential Customers It has been viewed that there often exist inconsistent growth in businesses amid various geographic zones due to alterations in the income and living standard of people. It can be affirmed that the demand for fragrances or perfumes vitally relies upon lifestyle trends as well as demographic factors (Reportlinker, 2013). The potential customers for the perfume manufacturing company can be the individuals whose age groups lies within the range between 18-40 who are quite modernised. This particular age group might comprise different individuals such as college students, office goers including males and females, housewives and business people among others. As the business is intending for attracting both male and female customers, it is necessary for the company to manufacture fragrances or perfumes according to the age groups of customers in the society. In order to recognise potential customers, the perfume manufacturing company can conduct a survey. In this similar concern, surveys are to be conducted necessarily with the motive of acquiring a vivid picture about the demands of the customers and their preferences before launching the products in the UK business markets and globally. Business Competitors In order to recognise the competence level in the perfume manufacturing industry, it has been viewed that there pertain various competitors in the business market belonging to different nations that include United States, China and Korea among others. In this context, it can be evidently viewed that one of the perfume manufacturing companies belonging to UK i.e. J.K. Fragrances could compete in the business markets globally. Moreover, other companies such as Este Lauder & Avon from the U.S. and L’Oral & LVMH from France can provide tougher challenges for perfume manufacturing companies in extensive UK business markets (MarketWatch, 2013). Thus, it is quite necessary for the perfume manufacturing company to maintain the production as well as proper distribution of quality products especially in the business markets of the UK and other regions of the world. This would assist a manufacturing company which is newly established in the market to comply with the requirements with the customers and sustain in this competitive business market. According to the research provided by the Global Industry Analysts, it has been noted that fragrance or perfume companies are anticipated to rise by a significant level in future (Reportlinker, 2013). Marketing Strategy Marketing strategy can be regarded as an important aspect in initiating a new business. In this similar context, it can be affirmed that in order to initiate a new business in any targeted business market, certain marketing strategies are to be implemented in order to accomplish superior business growth and increase sales extensively. The strategies might include introducing pioneering technological advancements while manufacturing products, reducing the cost of the products, effectively segmenting business markets and adequately utilising the valuable resources among others. Marketing Plan In order to determine the marketing plan for the perfume manufacturing company, it can be stated that the facet of advertising might prove to be much beneficial for the company to successfully launch its products targeting for both men as well as women. In this regard, company can advertise its respective products i.e. perfumes or fragrances in the targeted business markets in the form of publishing leaflets, brochures and giving advertisements in magazines and newspapers among others In this similar concern, it can be affirmed that through the aforementioned different advertising modes, it would be possible for the perfume manufacturing company to advertise its products in the business market and deliver to its targeted potential competitors t. Furthermore, it can also be stated that with the aforementioned modes of advertisement, it would be possible for the perfume manufacturing company to attract various customers of different age groups by a considerable level. Apart from advertising products, the perfume manufacturing company can also offer different flavours of the perfumes as a form of an effective marketing plan especially designed separately for men as well as women. The flavours might include floral, oriental, chypre, green, fougere, oceanic and wood among others. The deliverance of such flavours of the perfumes or fragrances separately for men along with women would ultimately assist the company to enhance its productivity and most importantly to attain superior competitive position in the UK as well as global business markets (Padykula, 2013). Costing and Pricing Pricing is viewed to be one of the significant aspects for the success of an organization. It has been apparently observed in this similar circumstance that if the prices of the products are high, then it can incur losses for the manufacturing companies in terms of attaining substantial competitive position. Thus, it is required for the fragrance or perfume manufacturing company to maintain the pricing of the perfume products in a balanced manner with the intention of attracting its potential customers by a greater level. In this regard, it can be stated that as perfume is considered to be a luxurious product, so pricing and costing is regarded to be an important determinant for a perfume manufacturing company while initiating its new business (Groom, 1997). It is needed to consider the prices of the competitors while distributing the products in the targeted business markets along with to the potential customers. The prices of perfume products needs to be set according to the variable and fixed costs that are to be determined by the management of the company. In order to maintain effective pricing of the product particularly while initiating a business, it is required for the perfume manufacturing company to adopt as well as to follow the strategy of penetrating pricing. This strategy depicts lowering the prices of the products at the initial stages in order to capture the targeted business market by a considerable level (Taylor & Francis Group, 2013). Sales Projection With regard to determine the sales projection of the perfume manufacturing company, it can be stated the estimated sales for the company would be low i.e. nearly 80, 000 Pounds for the first year as the business will be newly started. Moreover, the sales growth of the company for the respective two years would be 95, 000 and 120, 000 Pounds. The sales of the company can be predicted to rise considerably over the next years only if the company follows as effective plan and most significantly implements effectual business strategies. The company can increase its sales and enhance its productivity along with market share by manufacturing quality products and appropriately distribute those products in the targeted business markets and to potential customers. The sales of the perfume manufacturing company are expected to rise not only in the UK business markets but also in other markets like China, Japan and the US. This is owing to the reason that young girls, boys, men as well as women belonging to aforementioned nations are much admired towards fashion trends and thus is expected to purchase perfumes considerably (International Centre for Aroma Trade Studies, n.d). The sales projection of the perfume manufacturing company can be better explained with the help of the following graphical representation. Business Operations Operational Function For starting a business like manufacturing perfume products, it is important for a company to start from initial level i.e. commencing business operations from one particular store where the business is to be set-up. Here, it is necessary for a perfume company to capture a wider market and increase greater customer base by delivering quality products at reasonable prices. In relation to business operations, the company perfume manufacturing company would require to focus upon the quality along with the prices of the products in the initial stage of starting a business. The business operations for the perfume manufacturing company can be related with the process of value chain management. The process might include procuring necessary raw materials from the suppliers, manufacturing, packaging as well as labelling the products and distributing the products in the business market (DP&C® Enterprises, LLC, n.d). Services Offered It is necessary for the perfume manufacturing company to consider certain imperative aspects that encompass manpower, technology, raw materials and effective implementation of marketing strategy for the purpose of delivering services to the customers in an efficient manner. It is the responsibility of the management team as well as the skilled personnel of the perfume manufacturing company to offer valuable services to the customers that would raise its profitability along with productivity by a considerable level. With regard to determine the deliverance of services to the customers, it can be affirmed that the aspect of technological innovation can play a decisive part in supporting the perfume manufacturing industry to attain its predetermined business targets at large. One of the dynamic services that can be offered to the customers as a form of technological innovation is facilitating the customers to buy the fragrances or perfumes of the company through the mode of online purchasing that would aid the company to generate substantial profits (Givenchy, 2013). In this similar concern, it can be affirmed that the online services that would provide the perfume manufacturing company to its targeted customers will certainly make the customers to purchase its products by a greater degree. Through the service of online purchasing, the customers can be provided with options for selecting the products in accordance with their choices. Through the mode of online purchasing, the customers are able to view the fragrances that they would like to purchase, select and order them online. The customers would be able to view varieties of products that would enable them to shop online by the service offering of online purchasing (Givenchy, 2013). Personnel Personnel are considered to be one of the significant aspects of manufacturing perfume companies belonging to the UK. In this reference, it can be viewed that the personnel that are needed to be included in order to perform different operational functions are to be attractive, dynamic and must possess a greater knowledge about the products to comply with the requirements of the customers by a significant level. Moreover, the personnel involved in the manufacturing and handling process of perfumes are required to maintain effective hygiene care and remain safe from any skin infection resulting in skin diseases. Restrictions in smoking, eating and conducting unhygienic practices are to be maintained in the areas of packaging. Different personnel needs to be selected that would be responsible for performing the different operational functions in an effective manner (SlideShare Inc., 2013). Finances Finance plays an imperative part in determining the monetary performance of the companies by a considerable level. This particular aspect relating to financial management would support the perfume manufacturing company towards raising as well as developing its sales by a greater degree (Skousen, 2008). Both the factors like capital investments and costs can be determined as significant elements that would determine the financial position or the performance of the company (Pearson, 2008). The estimated financial projection for the manufacturing perfume company can be better explained with the help of the following pictorial illustration. From the aforementioned graphical representation, it can be stated that financial position or the performance of the perfume manufacturing company can be determined with the factors like capital investments, costs and net cash flows. It can be apparently observed that the monthly cash flows of the company would be amounted to 380,000, 247,000 and 276,500 Pounds for the 1st, 2nd and 3rd year respectively. Moreover, the total costs depict that the perfume manufacturing company would have to bear the expenditures or costs while performing its different operational functions. Finally, after considering the costs and cash inflow, the net cash flow of the company can be predicted 152,000, 6500 and 78,000 Pounds for the 1st, 2nd and 3rd year respectively. People Management Skills People management skills are regarded as one of the other significant aspects while starting a new business. It will be the responsibility of the management team along with the senior management team of the perfume manufacturing company to identify the skills relating to people management and mitigate any sort of complex issue linked with people management. In this similar context, the people or the workforce of the company mist understood as well as value the indispensable aspects that are required to make a company successful after initiating a new business. The management team of the company would be held responsible towards making its people or employees and other stakeholders performing according to the demands of the customers in the business market. Furthermore, the management team of the company is also held liable for motivating the employees and inspiring them to perform their respective operational functions extensively for the betterment of the company. Relating to the determination of skills linked with people management, it is also their duty to handle situations of conflicts that occur amid the employees which would eventually hamper the organizational effectiveness and the whole operational process might get destructed at large. It can be evidently said that trust is viewed to be one of the important factors that is required to accomplish organisational success. It can be said that better the skills or performances of a company, greater the operational effectiveness of the organisations. A better association between the management team and the employees can support the perfume manufacturing company to maintain greater productivity and at the same time profitability by delivering quality products to the customers in the extensive UK markets as well as in overseas. The employees are needed to be motivated by proving them with attractive rewards as well as compensation packages in order to improve their operational performance and most importantly to accomplish the predetermined objectives of the business (Burley Allan, 1995). In relation to people management skill, it can broadly be affirmed that both the management team and the employees belonging to the perfume manufacturing company to work much harder in order to achieve the desired business targets concerning the deliverance of quality products in the business markets and comply with the demands of the customers accordingly. It can also be apparently affirmed that greater teamwork amid the employees within the perfume manufacturing company can enhance productivity, raise profitability along with market share, augment business reputation and accomplish superior competitive position (Corporate Coach Group, n.d). References Burley Allan, 1995. Managing Assertively: How to Improve Your People Skills: A Self-Teaching Guide. Wiley. Corporate Coach Group, No Date. People Management Skills. Home. [Online] Available at: http://www.corporatecoachgroup.co.uk/blogDetail.asp?blogid=41 [Accessed March 21, 2013]. DP&C® Enterprises, LLC, No Date. Global Fragrance Creator and Manufacturer. Dp&C®S Solution Re-Invents Chester Plant and Processes [Online] Available at: http://www.dpcellc.com/belmay.html [Accessed March 21, 2013]. Givenchy, 2013. Customer Service. Shopping Online. [Online] Available at: http://www.givenchybeauty.com/info/customer-service# [Accessed March 21, 2013]. Groom, 1997. New Perfume Handbook. Springer. International Centre for Aroma Trade Studies, No Date. Perfumery education and training for the Aroma Trades industry. Home [Online] Available at: http://www.icatsaromaeducation.com/ [Accessed March 21, 2013]. IBISWorld, 2013. Perfume, Cosmetics Manufacturing in the UK: Market Research Report. Industry Report - Industry Analysis Chapter [Online] Available at: http://www.ibisworld.co.uk/market-research/perfume-cosmetics-manufacturing.html [Accessed March 21, 2013]. MarketWatch, 2013. Perfume and cosmetics companies – World. Press Release. [Online] Available at: http://www.marketwatch.com/story/perfume-and-cosmetics-companies-world-2013-02-11 [Accessed March 21, 2013]. Padykula, J. 2013. Types of perfume: Finding the right Fragrance for you. Sheknows. [Online] Available at: http://www.sheknows.com/beauty-and-style/articles/825299/how-to-choose-a-fragrance [Accessed March 21, 2013]. Pearson, A. 2008. Perfumes On Trial: The Truth about Our Scent Industry. Article. [Online] Available at: http://www.dailymail.co.uk/femail/article-550511/Perfumes-trial-The-truth-scent-industry.html [Accessed March 21, 2013]. Reportlinker, 2013. Fragrance Industry: Market Research Reports, Statistics and Analysis. Global Fragrance Industry. [Online] Available at: http://www.reportlinker.com/ci02149/Fragrance.html [Accessed March 21, 2013]. SlideShare Inc., 2013. International Fragrance Association. Personnel [Online] Available at: http://www.slideshare.net/mctoom/perfume-organizational-structure [Accessed March 21, 2013]. Skousen, M. 2008. Economic Logic. Regnery Publishing. Taylor & Francis Group, 2013. Pricing Strategies. Product Life Cycle. [Online] Available at: http://cw.routledge.com/textbooks/9780415553476/data/chap_5_web.pdf [Accessed March 21, 2013]. Read More