Marketing Attack Strategies of a New Service in Bakersfield - Assignment Example

? Contents 2 2.0 Situation Analysis Overview 4 2 Market Summary 5 2.2 SWOT Analysis 7 Strengths 7 Weaknesses 7 Opportunities 7 Threats 7 2.3 Competition 8 2.4 Product/Service Offering 8 2.5 Keys to Success 9 2.6 Critical issues 10 3.0 Marketing Strategy Overview 11 3.1 Mission Statement 11 Our Vision 11 Our Mission 11 3.2 Marketing Objectives 12 3.3 Financial Objectives 13 3.4 Target Markets 14 3.5 Positioning 14 3.6 Pricing Strategies 15 3.7 Marketing Attack Strategies 15 3.8 Marketing Research 16 References 18 2.0 Situation Analysis Overview The marketing plan is to introduce a new service in Bakersfield, California. The service will deliver high quality and premium laundry and dry cleaning service to the local residents. The current situation of the market, SWOT analysis, and competitor analysis, product/services on offer, competitive edge and critical issues are explained. Market Summary: This section provides the credibility of entering the chosen market of Bakersfield. Currently people are more reliant on dry cleaning services for being busy and over equipped with the work-life balance. This factor provides the company to enter the market with newer and better facilities, like home deliveries. SWOT Analysis: reveals that currently the company has the resources and abilities to enter this market. There are no strict rules and regulations surrounding this area of business. People are welcoming new and better services with limited time available to them for dropping and picking up their clothes and other items. The strength, hence, lies in delivering the services at their door step, suing technologies to make it easier for them to avail the services and providing better results than others. Competition: Wash N Dry and Today Dry cleaners are the closest competitors with many recurring and satisfied customers. However, the service differentiation of providing home delivery facility is an obvious benefit for the clients. Moreover, the use of technology would enhance the credibility and save clients time to visit the shop. Products/Services: The strategy to capture the working population and save their time will be attractive to the Bakersfield market. Majority of the population is from a working class. Extended hours of work in different shift of employees would be helpful in creating flexibility for the clients to get their laundries done at their ease. Moreover, home delivery would save them time and travelling costs which is an add-on to the high quality services the company offers. Keys to Success: This section provides the key for the success of our business. The main idea proposed is to close the gap between client expectation and actual service delivered. Hence, the idea is to create value for the customer and communicate that value properly. Critical Issues: The critical issues to be considered are discussed in three main points including The Pre-opening marketing of the service, the cost-benefit analysis of home Delivery and The formulation of Promotional Strategy that supports business aims. 2.1 Market Summary The target market of Bakersfield, California is attractive for the dry cleaning businesses. The employment rates among both men and women are high, leaving minimal time for them to perform household tasks. In order to get their laundry done, they opt for the service providers easily and cheaply available. The busy population does not get enough time to visit the self-service dry-cleaning and laundry shops, hence, drop-off businesses like Today Cleaners are introduced. The service provides time-savings to the customers which is highly appreciated and accepted. Figure 1: (Britt, 2006) The population growth rate is about 40.6% since 2000 which is considerably higher than other areas of the US. Approximately 3.5 million people are living in Bakersfield (USA.com). The median household income in Bakersfield shows an increasing trend of approximately 35% which shows their better living standards than before. The employment rate is about 88.5% in June 2013, as reported by U.S. Bureau of Labor Statistics (Bureau of Labor Statistics, 2013). More income shows more disposable money to spend on luxuries and eases of life. Hence, this potential market is increasingly becoming a charm for investors and our business. The psychographics reveal that since their lifestyle does not allow majority of the population to stay indoors, they require better clothing and appearances to visit colleagues, offices and educational organizations. Hence, their personalities and living standards require them to opt for the best clothing and in the cleanest manner. The labor is available for dry-cleaning services, delivery to clients and for night shifts. Hence, the target to achieve a 24/7 service, home delivery and dry-cleaning service are all fee from the labor availability constraints. Since, the market already has people working in different laundry and Dry-Cleaning services, labor rate in this business is stabilized. The bargaining power of Labor is low giving the business strength to control the human resources efficiently (Analoui & Karami, 2003). 2.2 SWOT Analysis Strengths The availability of resources and manpower to work for extended hours The competitive factor of providing home deliveries which is yet not introduced in bakersfield The use of internet and Call facilities to avail our services would be highly appraised No governmental pressure and burden of laws and regulations The amount of capital required is not too high to be managed. The employed people are more concerned about their dressing and form the major customer base of our service. Since the unemployment rate is 11.5% in June 2013 (BLS, 2013), it is not difficult to hypothesize that the demand of dry cleaning services would be high in Bakersfield. Weaknesses With around 60 similar service providers, the competition is high (Yelp, 2013). Wash N Dry and Today Cleaners already have high market share Difficult to create a differential strategy for the customers due to a risk of increased costs. Offer discounts to capture population may cut profits greatly Opportunities High demand for the service differentiation and time savings offered to customers High growth of population and employment rate calls for more business High profitability in the long run by retaining the customers Threats High chances of replication of strategies by competitors High risk of new competitors entering the market due to low capital requirements High risk of customer dissatisfaction on delayed delivery High risk of losing customers due to employee misconduct 2.3 Competition There are numerous competitors in Bakersfield for Best Wash Dry Cleaners to start up its business activities successfully and effectively. Around 60 dry cleaners are available for the residents. However, Wash N Dry and Today Cleaners are the two main competitors for our business. It must be noted that unlike Wash N Dry, Today Cleaners provide the convenience of drop-off service to its clients. Wash N Dry is mainly running a self-service business, whereby customers may wash and dry their clothes with the machines in good working condition. Today Cleaners, hence, save more time of its customers by providing them same-day service with drop-off facility and savings by providing coupons to the loyal customers. It must be noted that to establish its name high in the list of 60 competitors, Best Wash Dry Cleaners needs to develop a differentiation strategy and communicate it properly with the potential clients (Walker, 2006). 2.4 Product/Service Offering The new business will be named as “Best Wash Dry Cleaners”. Since the services that will be provided include dry cleaning, providing home delivery and availability of the service 24/7, it is of paramount importance to have a wide acceptance of the business. The market situation already suggests welcoming trends by the working class which is around 88.5% of the people living in Bakersfield. For the convenience of working population (that forms our target population), the business will operate on extended hours’ basis, or 24/7. It has ample resources to cover its expenditures in the introductory phase of the business life cycle. Moreover, the potential business demand must be analyzed well before the service is actually launched (Zeithami, 1996). Although the exact figures are unknown, there are high prospects of business’s success for the critical success factor produced in terms of customer ease. The current market shows a few big competitors, but many smaller ones, in the dry-cleaning business in Bakersfield, California. However, the value addition process can ensure success in terms of winning more and loyal customers. To stand out in the dry cleaning market of Bakersfield, the strategy to provide home delivery and extended hours would be a good move. In addition, phone bookings and online order placements would provide a user-friendly environment to the clients. Since the service is highly in demand for employed people, more convenience in terms of time saving and ease of delivery would be an attractive option. The use of internet and telecommunication mediums to order the facility would also be beneficial. For this purpose, a basic and user friendly website for the company would be launched. The website would offer loyalty schemes in terms of memberships, bulk discounts and so on. The customers would be able to select their packages as per their family size and work conditions. 2.5 Keys to Success The key to success is to understand customers’ need (McDonald & Payne, 1996). There is a misconception that a customer purchases a product or service which is being marketed heavily or effectively (Donelson, 2010). However, our potential clients are the ones who have the need which our offering may fulfill. Hence, the key to business success lies in understanding the need of the customers and molding the business plan to attract clients, provide them the promised service and win their trust for future business (Cerasale & Stone, 2004). The main emphasis is to keep the promises made and communicated. The consumer expectations, if not met, leave an extremely bad impact on the future sales of the company. In order to avoid such bad impact Best Wash Dry Cleaners must communicate the value with its clients which they are capable of providing with the availability of required resources. 2.6 Critical issues The critical issues that must be kept under view include: The Pre-opening marketing of the service: Without communicating the offerings to its potential customers, the business can never succeed. Hence, the differential offerings and ease of use must be properly communicated with the customers. As a result, there is a need to decide the budget of Pre-opening Marketing of the service. The cost-benefit analysis of home Delivery: Since Best Wash Dry Cleaners is providing home delivery service as an add-on to the previously proposed services by the competitors, cost-benefit analysis of this unique offering needs to be assessed. The labor and fuel costs, specifically, will be increased with the initiation of home delivery service. The formulation of Promotional Strategy that supports business aims: There is a need to promote the newly started business. The promotional strategy must not ignore the basic aim of the business, i.e. to generate profits. Hence, the promotional strategy must be carefully formulated. The basic questions, in this regard, might include: Should the home delivery be charged or should it be offered for free? Should there be an online ordering system? Who would pay the cost of picking clothes from the clients’ place? How to reduce the costs without compromising quality of the services? 3.0 Marketing Strategy Overview The marketing strategy for Best Wash Dry Cleaners is goal oriented and integrated concept and the basic focus is upon the satisfaction of needs of the consumers, over needs of the company. The marketing concept says that the needs and the desires of the target market should be determined and fulfilled so that the goals of the company can be achieved successfully. The major role of marketing is to assist in the identification, satisfaction and retention of the customers (McCarthy, 1960). The loyalty of the customers can be gained by constantly delivering the competitive advantage and this is the strategy round which the marketing of Best Wash Dry Cleaners revolves. The main aim of the company is to focus on the satisfaction of the customers by collecting data from them in forms of surveys in order to know their previous experience with laundry and how they want it to improve. The mission statement, marketing and financial objectives, target market, positioning, pricing and market research sections below, provide a detail insight into the company’s marketing strategy surrounding the knowledge of customer needs and satisfying it. 3.1 Mission Statement Our Vision Best Wash Dry Cleaners will be one of the dominant organizations of world class service quality being passionately committed towards improvement of laundry operations for its customers and clients every day. Our Mission Best Wash Dry Cleaners aims at being one of the recognized leaders in development, innovation and delivery of laundry solutions and also value-added services. The strengths of the company include things like competitive value, commitment towards service excellence and attitude of doing-it-right. Relationships are kept and won as the company aims at serving the clients and the customers exceptionally well, responsiveness towards the needs of the market, and winning labels like as reliable, fair and honest. The company aims at hiring a high performing team which includes motivated, engaged and accountable experts committed towards excellence in creating and delivering uncompromising service and also an operational support that leads the industry (Kotler, and Armstrong, 2007). The company aims to be result-oriented by using customer satisfaction, client retention, employee satisfaction, market share, shareholder value and profitable growth as tools to measure the performance. 3.2 Marketing Objectives The Marketing objectives of the company include the following: “To maintain a steady and controlled growth” It is really important for Best Wash Dry Cleaners to grow in the market at a specific steady rate. It should not try to go and aim for some big bang theory. It should rather be working below the radar and keep a strict ck=heck on its growth without actually trying to grab the attention of everyone. By going slow and steady it is meant that keeping things smooth and not getting observed by the big competitors in the start up of the business as the company does not have a strong financial position and will not be able to cope with the big companies after being noticed (Fletcher, 2004). Second marketing objective is: “To steadily increase the market penetration” The company should constantly think about increasing the market share by penetrating into the market and by creating the need. There are two things either the company can penetrate it the existing marketing or can think of moving to markets where there is less competition but will take more time for people to accept your idea. So the company needs to keep a strict check on this too. 3.3 Financial Objectives All the businesses in the world exist to make profit and so is the case with Best Wash Dry Cleaners. There are a few financial objectives that the company has in order to improve and make its financial position strong as soon as possible as it is the financial position of any company that shows how long the company is likely to survive in the harsh competition it is facing or is to be facing (Ferrell et. al, 1998). “To reach double digits growth in the first three years” Another financial objective is “To hold spending, as a percentage of revenues, at a steady level” The Company aims at reaching a point where it can enjoy a strong financial position but at the same time the company is well aware of the fact that it takes time to reach that state so the company aims at showing a regular and steady growth in the finances at a slower pace. 3.4 Target Markets Targeting is basically when a business decides and chooses a customer group to put in its marketing efforts at and it is a good targeting policy that serves as the main element for a successful marketing strategy (Borden, 1964). Targeting the market is something really important as it gets really difficult to focus if you do not know the market that you plan to target. So talking about Best Wash Dry Cleaners the target market is mainly going to be the students of all the schools, universities and colleges in the city. Students need to get their uniforms cleaned everyday and there are a lot of students in a single house as generally there are more than one siblings so there is a lot of market for this business and the target market is relatively quite big. The larger the target market the challenging it is to achieve the marketing goals as different ways are required to reach the market as the target market can be divide into different segments. Like in this case the target market is divided into different age groups. The broader target market can also be divided into day scholar students and the hostel students. So altogether Best Wash Dry Cleaners has a large target market and can reach them easily too. 3.5 Positioning Positioning in marketing is a process through which marketers keep trying to create images and identity in the minds of the target market for their product, organization or brand (Kelly, 2002). It is very important for Best Wash Dry Cleaners to position its services well in the mind of the customers. The Company should keep its promises and provide excellent services, at reasonable prices with on time service provision. This will help the company occupy a strong position in the customers mind and once the service is positioned correctly then things will start getting quite easy. 3.6 Pricing Strategies It is very important for Best Wash Dry Cleaners to keep a strict check and critically analyse the way the existing competitors are pricing the services. The reason for this competitive pricing strategy is that as there is a lot of competition already available in the market and also there is not much innovation that can be brought into this business so the company does not have a lot of margin to play with in the beginning but after it has established its name then it can obviously price its services higher as people will be ready to pay for them then. As laundry is something that everyone needs almost every day so it will be a really good thing if the company can come up with some memberships and discount packages for its loyal and repeat customers. This will increase customer satisfaction and thus the customer loyalty (Smith, 2001). 3.7 Marketing Attack Strategies The marketing attack strategies include discount offering, loyalty based discounts, memberships, bulk demand offers and other packages. The information regarding these packages and offers will be delivered through the website and brochures. The business will further use trained staff to communicate and deal with the customers in a manner that leaves a pleasant effect on them. The higher the customer satisfaction is, the higher is the sale. A customer satisfied with the employee dealings is more likely to use the service again. A friendly atmosphere will deliver a good message regarding the business being responsible and conscious to customers’ needs. Moreover, relationships with the customers would avoid disputes and disagreements in case of any mistake on the company’s part. Friendlier environment is more likely to absorb the negative attitudes and prove healthier for the organizations’ success. 3.8 Marketing Research A general term that is used for describing the various kinds of options that are available to the company for bringing their service or product into the market is known as marketing mix and this marketing mix is an extremely important thing of any products marketing plan. There are four Ps that come in this marketing mix that mean product, promotion, price and place. For Best Wash Dry Cleaners it is suggested that while in the phase of developing its marketing mix the company should involve the customers and ask them what they want which would ultimately provide them with satisfaction. Then the company should also do a research and try to find out where the customers search for Best Wash Dry Cleaners service. Let them know that the company is also available online. Then comes the pricing, it is very important for Best Wash Dry Cleaners to let its customers know the services’ value. Let them know if you have discount packages and schemes coming up, get an insight that whether the customer is price sensitive or not. Let them know the reason for difference between you and your competitors pricing. Promotion relates to the understanding of the right time to get across the marketing messages to target the market. The channel of promotion that you will be using is an important decision to be made. The strategies and the promotional techniques of the competitors cannot be ignored in such a competitive world. Marketing research plays an extremely important role on the success of any business and same is the case with Best Wash Dry Cleaners so the company needs to spend time on it and also critically analyze the data it collects from the research. Implementation of the finding of the research is also one very important factor (Roe, 2004). It is very important for marketers to keep all the above mentioned things in mind. A critical analysis of the market is something that is extremely important for the success of any product or service and so is the case with Best Wash Dry Cleaners. References Analoui, F., & Karami, A. (2003). Strategic management in small and medium enterprises. London [u.a.: Thomson. Borden, N.H. (1964) Concept of marketing mix, Journal of Advertising Research, 4, pp.2-7. 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