Business Models as Models - Case Study Example

Running Head: Strategic Marketing Plan Name Lecturer Date Executive Summary A good strategic marketing plan aims at enlisting all the necessary undertakings and requirements of a business. This presetting of the business ensures that everything is at placed at a glance before being put in the real-world of the market. Discussed in this paper are different factors to be put in place as the inception of a business is being considered. The product that is to be let into the market is toys for children play that has been selected as suitable. The different objectives have also been put down as guidelines towards the fruition of the business. On top of introducing the product and the objectives, the hierarchy of the strategy has been put down to create a systematic movement that will put the first things first. The competitive forces that pose a challenge to the growth of business also have been discussed with ways of camouflaging to successfully emerge at the goals. In addition to this, socio-cultural and economic factors have been noted to be key players in determining the market price of the product and have been discussed in detail. Segmentation, targeting, differentiation and positioning have been highlighted and explained as relevant in determining the market prices as well as the diversity of the toys in the market. A keen implementation of the concepts discussed in this paper is seen as ways of emerging with a successful toy business ready to meet the competitors in the market. Table of Contents Table of Contents 3 Introduction 4 Product overview 4 Smart objectives 5 Hierarchy of strategies 5 Competitive forces 7 Significance of segmentation, targeting, differentiation and positioning of the business 9 Conclusion 10 Introduction In any business enterprise, there is a need to have a product and services provided to ensure its services. The sale of the products is the life of the business. A strategic marketing plan that defines the business in general and its prospective operations makes it easier to enact and ensure the survival of the business (Teece, 2010). This is because it gives a foresight on the nature of dealings, difficulties, and benefits of a business at a glance as Baden-Fuller & Morgan (2010) maintain. In this case therefore it becomes an ideal outlook that prepared ready for concretization in the life of the business that is intended to be brought to life. This paper iterates on a strategic business plan with the various facets being brought to light, and a prediction of the development process to the maturity stage of the business. Product overview The products that will be marketed are toys. The product has been chosen because children always need things to play with as well as be kept busy to identify their dreams at their own age as Guyton (2011) and Jadva et al (2010) observe. The toys will be made of different materials, colours, shapes and sizes. Toys on the other hand can be sold to schools, families, religious institutions and so on in the opinion of Sobel & Corriveau (2012). This will make it easy to search for diverse ready markets which will reduce the cost of marketing as well as maximize the sale of the products. Smart objectives The main goal of the toys will be to ensure that the needs of the customers are met through the recreational and educational qualities of the toys. The profitability objective will be to ensure a 75 percent returns on the capital in the first six months. A market share objective of 25 percent of the toys in the country in the first three years To increase the capacity of the business from $100,000 to $500,000 within five years To extend the toy business in different cities by ensuring that it spreads to the main cities with several branches in each city within the first ten years. Hierarchy of strategies Since the development of the toy business will have to move from the development stage to the mature stage, it will require a gradual ascendancy from a single business to several stores at its mature stage. Bearing this in mind, a single business will be started in the city where available there is a large population of people who can buy the products. With the stability of the first business, extra stores will be built depending on the performance of the first toy business. More emphasis on the first phase will be on the enlargement of the toy business to cover as large population as possible. According to Chakravarthy & Henderson (2007), to adapt to challenges of change in a growing enterprise, the corporate, business and functional stages must be creatively and comprehensively analysed to effect a vibrant performance of the projected business. The business strategy will comprise of the survey of the prices of toys in other business investing on this product. Still, the prices of the toys will be relatively lower in prices compared to those in the market in order to attract more customers to buy the product. There will be discounts to those who buy large numbers of toys to maintain their constancy in the taste of the toys. Moreover, the toys will be bought in a way that ensures that people get attracted to them from the different classes. The capturing of classes will ensure that different people depending on their income feel the need to buy toys in the stores. Marketing campaigns will be conducted regularly to ensure that as many people as possible to ensure that many people get aware of the various products. These campaigns will involve promotions of products and advertisements in the media. Official pages in Facebook, Twitter, and Netlog will be opened to have an appeal to the digital generation. Public shows will also be conducted where customers will get chances of knowing the products. To ensure that the business thrives in the market, partnering with different institutions will be embarked on to ensure that more avenues for selling of the products are created. Schools will be conducted for the provision of educational toys for learning purposes mainly in areas of language as well as career identification. Hospitals will also be used for the sake of helping patients working on stress management to be prospective customers. There will be also other promotions targeting families to ensure that they seek means of providing children with play objects. Religious organizations will also be targeted for provisions of toys that can help in the propagation of religion. Values for healthy business among the staff will be emphasized to ensure that they offer good services to clients. This will be achieved through the training of the staff on a regular basis. Competitive forces There are five competitive forces that have been identified by Porter (2006) that need a check for a healthy business. They include the bargaining power of the suppliers, new entrants, and that of the buyers; the rivalry of the competitors exist; and the threat of substitution by other products (Porter, 2006). These five forces will be integrated into the business as springboards and stepping stones for strengthening of the toy business. Turning them into springboards will be done by letting them determine the different directions to take in terms of stocking, marketing and pricing of the products. In coping with the bargaining power of the suppliers, the toys will be bought directly from the manufacturers to reduce the chain of distribution as well as cutting the cost of the products to ensure comfortable prices for the buyers. Secondly, the coping with new entrants will be done by conducting constant market researches to ensure that the company is updated with the latest prices of the toys and that the price margins are adjusted. As for the buyers, just as explained earlier, they will be provided with choices of price that meets their buying capacity. As for rivalry of competitors, there will be an endeavour to make the products as unique as possible. This will go to as much as suggesting particular designs of toys for manufacturers to maintain this uniqueness of products as asserted by De Mooij (2009). Aggressive marketing will also be conducted every time competition arises and moving closer to the buyers will be maintained. Finally, the threat of substitution with new products which is imminent at every moment will be met by the cognizance of providing alternatives or diversifying of the brands that are bought. The brands that can challenge the toy business in this case are the introduction electronics like computers, televisions, radios, and so on. These other appliances may cause a reduction in the number of customers who buy the toys. To catch up with such challenge, some electronic games and toys will be more stocked to compensate for the change. A market is a place where the exchange of goods and services takes place, usually in terms of currency. The change of market is constant and businesses require clear understanding especially of the supply and demand of products (Business Dictionary, 2013). A market research is therefore provides businesses with comprehensive coverage of views of various consumers so as to have products and services developed in satisfying the needs of these consumers (The Times 100, 2013). Market research will be very much relevant in the toy business. Socio-cultural and economic factors will be considered before venturing into the market by bringing the products at the beginning. Social and cultural factors - the people’s way of life is very important in determining the valuing and stocking of products as Ruckenstein (2010) notes. As a matter of gaining cognizance of what are the appropriate preferences of the people from the different regions of the country will be conducted. It will be wise to establish what kind of toys are most needed; for example the preference of plastic toys to fabric ones and vice versa. This will be a way of knowing which toys will be increased in number and which ones not to stock. Economic factors will also be put in consideration because this will determine the population that can opt to toys which are considered a luxury. A low economy will force a limit to the number of stores to be opened because the number of customers expected will be low. On the other hand, high economy will encourage the opening of more businesses and this will help in having multiple stores at the same time (Hanna 2010). The toy business will perform more effectively in a high economy because the rate of buying of toy products will be high. As a result of the factors above, a low taste for toys will require relatively high prices because few people will want to buy. On the same note the distribution will mean more stocking in areas where the buyers are more compared to those with a lower number of buyers as Joseph- Pine & Gilmore (2011) maintain. Still promotions in areas where there is a low turnout of customers will be higher and intensified. Apart from areas of low customer turnout, the challenge of competitors will also be countered with intensified promotion and interaction with customers. Promotion policies will be kept on a regular redefining to make sure that the business is safe from collapsing from poor promotion. Significance of segmentation, targeting, differentiation and positioning of the business The segmentation of the toy business will be a way of diversifying its market in terms of places. This will create an expanded presence and nearness to the customers reducing the costs of travelling far in search of the selected product (Fuller & Morgan, 2010). Targeting on children is much encouraged because of their large number and the need for play-things during childhood. The differentiation which will be characterized by targeting learning institutions, religious centres, families and so on. Moreover, it will be accompanied by the offers of delivering products to the clients just in case they request for that mode of business. This will be a mode unique in the toy business compared to others (Teece, 2010). Finally, the positioning will go with classes; since toys are luxurious compared to other products, having many businesses in areas populated by the upper class will be an added advantage. However, even in low income areas, there will be toy shops that will be having relatively lower prices. Conclusion This paper has discussed the various strategies that are expected in raising a business from its inception to the maturity. It is clear that such a business is only viable if one stuck to what has been laid down in the strategic plan. This means that the business per se will be having the allowances of revision of the areas where overstatements or understatements have been made. This organized plan will be kept well to guide the whole event through the different phases of growth to the fully functional state. References Baden-Fuller, C., & Morgan, M. S. (2010). Business models as models. Long Range Planning, 43(2), 156-171. Business dictionary (2013). Marketing Research. retrieved on July 30, 2013. Chavakrarthy, B & Henderson, J (2007) From hierarchy to a heterarchy of strategies of strategies: Adapting to a changing context. February 2007. De Mooij, M. (2009). Global marketing and advertising: Understanding cultural paradoxes. Sage. Guyton, G. (2011). Using toys to support infant-toddler learning and development. The National Association of Young Children. Hanna, N. (2010). Enabling Enterprise Transformation: Business and Grassroots Innovation for the Knowledge Economy. Springer. Jadva, V., Hines, M., & Golombok, S. (2010). Infants’ preferences for toys, colors, and shapes: Sex differences and similarities. Archives of sexual behavior, 39(6), 1261-1273. Joseph Pine, I. I., & Gilmore, J. H. (2011). The experience economy. Harvard Business Press. Porter, M.E. (2006). The five competitive forces that shape strategy. Harvard Business Review. retrieved on July 29, 2006. Ruckenstein, M. (2010). Toying with the world: Children, virtual pets and the value of mobility. Childhood, 17(4), 500-513. Sobel, D. M., & Corriveau, K. H. (2010). Children monitor individuals’ expertise for word learning. Child development, 81(2), 669-679. Teece, D. J. (2010). Business models, business strategy and innovation. Long range planning, 43(2), 172-194. The Times 100 (2013). Using market research to support decision making. Business case studies. retrieved on July 30,2013. Read More