Marketing Scheme for a New Self Service Laundry in Dubai, UAE - Essay Example

Marketing plan for a new self service laundry In Dubai, UAE Prerequisite for marketing plan Objectives The company is a new venture. Its long-term goal is to become the leading laundry service provider not only in Dubai but also in the entire United Arabs Emirates in the next five years. Its short term goal is to reach out to as many people as possible within its first year of operations in Dubai and earn itself a place in the market for its quality laundry services provided at a low price. The company does not wish to change its objectives even in the coming years of operations. Organization It is a start up business and therefore the company will have a simple structure with less departmentalization. This will ensure that there is low formality and that authority is centralized. There are other organization designs that can be employed to adequately help the company achieve its objectives. One of such organizational designs is the team design where the company is made of different teams who work separately but towards attaining a common goal. It is easier to achieve the company’s objectives as a team rather than as individuals since different people have different skills and expertise. The Marketing Plan Situation Analysis Current Year Analysis The company is new in the market and hence there are no past records to assess its sale of services, costs, market share or even profits. Competitive Situation The company will be competing in a laundry service industry and will therefore be providing laundry services to the people of Dubai. The company competes directly with other laundry service companies such as Champion Cleaners. Champion Cleaners has more than forty outlets in United Arabs Emirates including Dubai. The company offers laundry services to approximately fifty percent of the laundry service customers in Dubai. In the year 2013, the company recorded sales of approximately 1.3 million garments per year. Our company is yet to begin its operations in Dubai hence it has no share of market. The company wishes to earn at least a twenty percent share of the Dubai market within the three years of its operations. The company will be competing directly with the pick-up and door to door delivery services offered by the Champion Cleaners which has seen the company grow at a high rate and even expand its operations outside United Arabs Emirates. Since our company will be beginning its operations in Dubai, we will be competing locally with the Champion Cleaners. The Champion cleaners however compete locally, nationally and even regionally with other laundry service companies. Nevertheless, the growth of the laundry service industry in Dubai can be estimated to around six percent in the last five years with very few players coming into the industry. The demand for the laundry services in Dubai is constant throughout the year. The state of both the local and the national economies are expected to affect the sales of the company services since the better the economies; local and national the more profitable is the laundry industry will be. Nature of the Market Laundry service customers are expected to be both male and females of ages between twenty and forty five years. It is also expected that the most of our customer will be unmarried since most married people own their own laundry machines. The customers are expected to be beyond the basic education since they will be operating the laundry machines on their own. Most of the laundry service customers we are targeting in Dubai are business men and women from different regions of the world. In the recent past, Dubai has grown as one of the world’s important trade centers hence currently there are very many individuals from different parts of the world travelling to Dubai for business matters. Therefore we expect that most of our customers will be business men and women. The customers are also expected to be residents of Dubai who have rented houses with small families and mostly with no children. Our customers will differ from our competitor’s customers. There will also be a social class difference between the industry customers in general and our customers in that we are targeting the medium and the low income earners in Dubai. The general customers of the industry comprise of the low, medium and even the high income earners. The customers will however have common personality traits; cultured and dependable. We will be particularly attending to persons engaging in business activities in Dubai. However, there are no beliefs or options held by the industry’s customers that differ from the general public. Our company aspires to make the laundry services affordable to the medium and low income earners whereas our competitors provide laundry services to only the few who are able and in a position to pay for the services; laundry and delivery services. We have had no past customers but we expect a lot of good comments from our customers in social particularly Facebook and Twitter once we commence our operations. Of course, the media habits among the customers are expected to be similar in the entire industry. According to Twedt (1964), ‘heavy half’ is a situation where a very few number of customers make up for more than fifty percent of the overall demand for a product or a service. In our case, we are yet to assess a definable ‘heavy half’ for our service and therefore it is not even possible to compare our company sales to heavy users to the industry averages. It is not also possible to establish how often the customers will be buying our services. Our services will at first be sold in a single retail outlet. The purchasers of the laundry services will differ in that our company will be offering self service laundry to our customers other companies for example the Champion Cleaners have stores in different places in United Arabs Emirates and even offer pick-up and door to door delivery services to the customers. Basic Position Strategy We will have the following market segmentation for our service; demographic segmentation, behavioral segmentation and attitudinal segmentation with the most effective criterion used to determining these segments being the demographics of the target population, behaviors and attitudes of the consumers. Demographic segment is the largest with a 50 percent of our target population. Behavioral segment is second with a 30 percent of the entire population while the attitudinal segment has a 20 percent share. The demographic segment has enough people to make the market profitable. Not all segments can be reached efficiently and the attitudinal segment may be excluded from consideration since even though it significantly identifies the needs and beliefs of the customers it is hard to act upon. Multidimensional brand mapping involves positioning brands in the market such that one can easily compare them to the similar products in the market (Verma, 2012). The different products and services are compared to one another by their strengths and weaknesses and also in terms of prices and quality. Price can be used as an ax in the multidimensional brand map. Once we begin our operations our service will fit in the first quadrant; high quality and low price. Competitor’s brands are in the second quadrant; high quality at high prices. Our competitors are aiming at their services to the attitudinal segment since they have clearly established the need, beliefs and the hopes of the customers in the market. In our case, we are trying to reach the demographic segment so as to be able to target as many customers as possible. We should continue aiming at this segment since we need to first define our potential customers and make the market profitable. This segment is the easiest to target for we will be able to split the target market in terms of age, gender, marital statuses amongst other characteristics making it easy for us to further explain the market. From the demographic attributes of our market, it is easy to also to perform a psychographic profiling of our customers. For our services to satisfy the chosen segment, they must be of quality and reliable to our customers. The price of the services has to be made as cheap as possible so as to reach out to most customers. Promotional mix is like a subset of the market mix. It helps identify the promotional variables that a marketer can choose from and help the organization achieve its goals (Harell, 2008). In this case, the most effective promotional mix will be advertising. There are no special distribution requirements for our service since we will not be distributing the service to our customers. Most of the starters who are willing to invest in the laundry industry in United Arabs Emirates are actually targeting the demographic segment with most of them using price as a core element of differentiating their services. They have really excelled since most of the customers in the market need a quality service at a lesser price. Since our service is new in the market, if it was to be placed in a product life cycle it would fall in the introduction stage. It is expected that at first the sales will be low even though the trend is expected to change after a period of six months. Resource Analysis We have a very superior service. All of our competitors in the market; Champion Cleaners and Dry Cleaners-Eastern Rose Laundry amongst other do not offer self-service laundry. The customers are supposed to pay for the laundry services at the point of entry. We are planning to make use of the social media sites to advertise our services to the rest of the world. Other than offering a self service at a cheap price we plan to have the most convenient location for our outlet in Dubai so that it will be easier for the customers to access our laundry services. Inadequate financial resources are one of our key limitations. Champion Cleaners Strengths Has a well established network since it runs more than forty outlets in United Arabs Emirates. The company also offers a door to door pick-up and delivery services to its customers. Weaknesses The laundry services are a bit expensive and therefore no accessible to the low and the medium income earners. Dry Cleaners-Eastern Rose Laundry Strengths The company has a well established network in United Arabs Emirates and is particularly good at what they do. The company has adequate resources to carry its operations. Weaknesses They are not very good at advertising their services and many individuals in other parts of United Arab Emirates do not even know where the company’s outlets are located. Environmental Projection The Gross National Product of United Arab Emirates is expected to grow by a rate of 5.54 per cent to 413 from the current 383.80. The unemployment is also expected to go down from the current 4.2 percent to 3.65 percent. On the other hand, the inflation rate is also expected to reduce to 3.34 percent in the next twelve months. The interest rates are expected to go up in the next one year. In the coming year the value of the US dollar is expected to be 97.32 in the world’s currency market. Our company projects to have over 500,000 garments cleaned in the next one year. In the next six months, the industry wide competition is expected to remain about the same. Within the next one year it is expected that the competition will increase for every firm will be fighting for its position in the market. After three years, the competition will be still increasing as a result of new firms coming into the industry. Digitalization of the laundry machines is the only technology that is likely to affect this industry. This will make the laundry machines cheaper to purchase and most individuals will find it easier to purchase their own laundry machines. This will have a negative impact on the sale of the laundry services. With our company coming into the market, it is expected that some of our competitors will change their services and market segments so as to stay in the market and avoid being driven out of the market since we expect to bring change in the laundry business. It is expected that our service will stay in the introduction stage for just six months after which it will pass on to the next stage. At the end of one year it is expected that our service will still be in the growth stage. This implies that our service will have grown popular amongst the many laundry service customers and the company laundry units will have significantly risen. For the period of the one year, the company will have cleaned 500,000 garments giving us a total figure of 6,805,000 dollars per year with a low market share and a high market growth. We assume that the business market share will increase at a high rate in the first months of operations and therefore the business will begin becoming making enormous profits at the end of one year. Objective The organization should seek to expand its operations in other parts of Unite Arabs Emirates. The objective has been selected because the company has to grow so as to further expand its returns. Marketing Strategy Increased awareness will enable the company expand its operation in United Arabs Emirates. The company will therefore offer self-service laundry services to the low and medium income earners at 50 dirhams flat rate. Through advertisement in the company’s website and social sites such as Facebook and Twitter, the company is expected to increase its sale of services. Level of Marketing Effort Our company is a new venture and therefore there are no past records. However, it can be estimated that our company can use up to a quarter of its total profits to cater for the market efforts. The figure has been arrived at by carefully assessing market strategies that the company wishes to undertake. Market Mix Development Product The objective of the organization in regard to the product strategy is to provide self-service laundry services affordable to all people. The company aspires to stick to offering the self-service laundry service. It is therefore estimated that the company will continue growing with a reliably low market share. This is a different case from the competitors since the competitors already have a high market share of the market. The competitors are likely to reduce the prices of the laundry services so as to retain their customers. Our company already provides a service that is decent from the competitors and therefore will not be a need to respond to any reactions of the competitors. There will also be no need of repositioning our service. According to Vashisht (2005), product or service reposition includes changing the perception of the consumers about a brand. The marketer may sometimes want to make the product more meaningful to a certain target market. This is only achieved through product or service repositioning. Our service is new in the market and the company has a lot of faith in it. There are no further modifications needed on the service to make the package more appealing. Our services will first target the demographic segments and the behavioral segments. The unique characteristics of the demographic segment include income, sex, education, age, marital status and family. The unique attributes of the behavioral segment include attitude, occasion, usage rate, occasion, benefits sought and even loyalty of the consumer. Demographic segment was chosen since it is always the simplest to analyze. Our target market can easily be segmented using the attributes of age, sex, income, education, marital status and family. On the other hand, the behavioral segment was chosen since from its special attributes it is very easy for the marketer to analyze the behaviors of the customers. Price Our overall pricing strategy is to charge a flat rate on amount of Kilograms or pounds of garments cleaned at a go. Of course, we have altered our prices as compared to our competitors. Our prices are lesser than the competitor’s prices. The competitors are therefore likely to revise their prices. Our pricing remains constant for the rest of the year and therefore the prices remain constant for the rest of the year. Lowering our prices further means the fact that most people will be able to access our self-service laundry service thus more units cleaned. On the other hand, raising our prices means that several people will be able to access our services. At this point more of our customers will seek alternatives. This will make the company lose its customers and record low units cleaned. Our pricing strategy is consistent with the stage of our service in the product life cycle since products entering a new market have to have lower prices than the already existing products in the market. We will also offer our loyal customers an allowance. Champion Cleaners offer their customers pick-up and delivery services to their places of residence. We are will be charging the laundry service at a flat rate of 50 dirhams. Promotion A quarter of the profits to be realized by the company are to be allocated to service promotion activities. The sales promotion activities are to mainly include advertising and publicity. The allocated amount is to be split equally. The overall promotional objective of the company is to reach out to every person in Dubai; high, medium or even the low income earners. The advertising objective of the company is to adequately exhaust the two market segments; demographic segment and behavioral segment. This will be achieved through the use of media; magazines, newspapers and television and even the social sites. Most of the laundry companies in Dubai do not advertise their services on social media. Our company will capitalize on advertising on the social media. Our services will be advertised throughout the year and regularly updated for the purposes of always ensuring that our customers are informed. The advertising is aimed at reaching to the individual who do not practically reside in Dubai but make frequent business trips to the city and also the potential customers in the rural areas near Dubai. The effectiveness of the advertising will be assessed by the recorded number of garments cleaned in a certain period particularly one year. Sales promotions will be allocated a forty percent of the promotional budget. Sales promotions in a business are quite important particularly in developing customer’s loyalty (Lee, 2009). The company will utilize the use of allowances and discounts to reach out to more customers and develop customer loyalty. The competitors are likely to employ better sales promotion techniques. The contingency plan in this case is to remain consistent with our sales promotion strategies. Testing and Research The start to test the self-service laundry services will be through the use of focus group at interview level. The test will then proceed as a multicity full-scale test marketing program. Research studies are important during the marketing plan period so as to ensure that adequate knowledge will be gathered to help formulate a good market plan capable of directing the management of the company accordingly. Evaluation and Control In order to compare the actual results to the planned, we will need the number of garments cleaned in every month. Further, we would also need to develop a Facebook page and a Twitter handle amongst others. These social sites will help us communicate directly with our customers and help us improve our services by carefully evaluating the views of our customers and attending to their claims. References Goi, Chai, Lee. (2009). A Review of Marketing Mix: 4Ps or More? International Journal of Marketing Studies, Vol. 1, No.1. Harrell, Gilbert D. (2008). Marketing: Connecting with Customers. Chicago Education Press. p. 286. ISBN 9780979830402. Twedt, Dik W., (1964), “How Important is the ‘Heavy-User’?” Journal of Marketing, 28 (1), 71- 72. Vashisht, Kujmish. 2005. A Practical Approach to Marketing Management. ISBN-10: 8126904739. Verma, J., P. (2012). Multidimensional Scaling for Product Positioning. pp 443-460. Read More