Marketing Services Market Feasibility Analysis - Essay Example

STUDENT NAME: LECTURER: COURSE: SEMESTER: DATE: Table of contents 1.0 Introduction ………………………………………………………………………....3 2.0 Overview of the marketing services industry………………………………………3 3.0 Target market for marketing services………………………………………………4 4.0 Competition…………………………………………………………………………..5 4.1 Niche market…………………………………………………………………………7 5.0 Marketing mix………………………………………………………………………..7 5.1 Product………………………………………………………………………………..7 5.2 Price…………………………………………………………………………………..11 5.3 Promotion……………………………………………………………………………..12 5.4 Place…………………………………………………………………………………..13 6.0 Market feasibility of the idea………………………………………………………..14 References ……………………………………………………………………………….15 Marketing services market feasibility analysis 1.0 Introduction The marketing services industry is a very competitive industry with highly professional firms out there to help companies position themselves well in the industry to respond to competition and consumer preferences. The Australian industry has very successful marketing companies like Leo Burnett and The Monkey. The companies have dedicated much of their effort into assisting companies advertise their products and services and also manage their promotion activities. It is a large industry with the main players dedicating their concentration into the big corporates industry. However Joyner (2009) argues that as economic hardships set in, companies are rethinking their strategies and continuously reviewing their budgets to reduce their expenditure in order to fund growth and also keep a check on their expenditure levels. It is the new reality that the advertising and marketing agencies have to deal with. 2.0 Overview of the marketing services industry The business environment is changing rapidly, there is a trend of small businesses being started at a high rate as companies restructure and lay off some of their staff. Small businesses account for about 96% of the businesses in Australia employing at least 4.8 million people. It is estimated that 9 out of 10 small businesses don’t celebrate their 3rd year in business due to a multiplicity of factors chief among them lack of an effective marketing plan. It is this target market that has been ignored by the seasoned marketing services firms. The sector has a very high potential for growth due to flexibility and unique business opportunities. In the near future, marketing firms will have to shift their focus to at least dedicate substantial effort and resources towards addressing the marketing needs of small enterprises. These enterprises are normally run by the owner-managers and a few averagely skilled staff members. The marketing function may not be effective or efficient. This is what impacts negatively on the businesses. The small business are looking for a firm that is specifically dedicated to handling small firms marketing affairs from marketing research, marketing planning, advertising, marketing advice and brand promotion. This provides an opportunity to be exploited and although the profits may not be so encouraging in the short run, the small businesses sector is growing at a high rate providing a wider client base if a marketing firm will consolidate its position in the market as the marketing services firm of choice for the small business. 3.0 Target market for marketing services The marketing services will specifically be targeting the small and medium business in the Australian economy. According to Connolly& Norman (2012) these businesses in 2009 were about 1.9 million, making 96% of all business enterprises in the Australian economy. These enterprises have little knowledge of conventional marketing strategies maybe due to financial incapability or use of unconventional marketing methods to survive in the markets they are operating in. most of the major marketing services companies have dedicated themselves to serving large scale enterprises with massive resources to fund highly expensive marketing plans. The marketing services firms have ignored or have not taken notice of the phenomenal growth of small and medium firms in the economy. According to Rigby (2009) these small and medium size companies have devised their own unique ways of marketing their products and the entrepreneurs have taken it upon themselves to develop and implement their marketing plans due to the uncertain nature of the business environment they operate in. understanding the unique attributes of small enterprises and fitting into their way of doing things is probably the first step into understanding the kind of marketing support you can give a small business. My company will seek to navigate through marketing problems and opportunities with our small business clients and find solutions and strategies together rather than engage in the idea of dictating a strategy to be adopted which has obviously not take into consideration the unique nature of small enterprises. My main services to the small business will be: Marketing function outsourcing Marketing coaching and advice Marketing plan development With all the above tailored services a for the small business , the small business managers will have a lot of reasons to seek the services of my firm since it will also offer affordable services for the clients and work with the firms at their level. 4.0 Competition The companies in the industry that are expecting to provide a tough business in terms of competition for clients include. PMP Limited- has a wide network all over Australia and a big client bas. Click manager- specializes in online marketing Marketing mechanics- offers a wide range of marketing services with no particular concentration Hive marketing and design- specializes in advertising and promotional activities. These business offer a great deal of competition but my company will have a competitive advantage since it dedicates its efforts to helping small business in marketing efforts. We understand the terrain better and offer personalized services. The major substitute to the services my company seeks to offer is the knowledge of the entrepreneur himself. Small business owners take it upon themselves to run all the departments in their business. It is a way of cutting on expenditure. According to Epstein (2006) it also shows how the owners don’t have trust in outsiders to understand their businesses better. What the owners don’t know is that they also need sound objective advice form professional who have a lot of knowledge and experience in the marketing industry. The threat of new entrants is very real considering that the service does not require massive capital investment. The main competitive advantages which could as well work as barrier to entry are: Market domination Professional practices to doing business Business owners don’t like engaging in firms that don’t have adequate experience and understanding in the market they operate in. once my firm has gained substantial market dominance it will mean most of the small business owners will have confidence and trust in us making it difficult for a new entrant to replace us due to the productive working relationship we have had with the companies. 4.1 Niche market My company will specifically target small business in Australia although much of my services will be concentrated in New South Wales. In this region we have a big number of businesses in the small and medium scale sector. In total by the end of 2011 here were 652454 small businesses in New South Wales as stated by Gareth & Wilkinson (2012). This is my niche market since they fit the marketing strategy I seek to adopt. I will target to get at least a client base of a hundred of these companies during the first two years of operation in order not to compromise on the quality of service I offer. It should be noted that small business owners value the close relationship a service firm shares with them since they have trust in them and also it gives the services firm a chance to understand the entrepreneurs business better. With time though the company will advance in size and client base and grow organically to dominate the marketing services sector for small businesses. 5.0 Marketing mix 5.1 Product The particular products my company will offer are highly targeted for the small businesses sector. I am seeking to understand the specific conditions existing in small businesses that I will be working with. It is not enough to have a general knowledge of the sector and provide a common product to all the businesses that approach you. It is very important to work extensively with your clients in the small business sector to come up with solution that work for them. These businesses are faced with unique business environments where opportunities present themselves in the not so common ways as noted by English & Moate (2011). With financial constraints and other capacity challenges it is imperative that my firm works with the small businesses to help them find their own solutions and also help them come up with unique marketing strategies that will work for them. To do this I have developed three products that I will offer as service to my clients and I believe the products will really meet he needs of the small business. As highlighted before they are; Marketing activities outsourcing This will be an innovative idea of small businesses completely leaving the marketing related activities such as marketing campaigns, research and promotions to my company. It will be an affordable service considering small firms try as much to cut their expenditure for the sake of funding growth. This does not mean the client will not be involved. My company will extensively work with the company to ensure they approve and support whatever we are doing on their behalf and also to recommend some ideas that can be included. The good thing with our services is that it will enable the business owner to reduce some of the operating inefficiencies and costs associated with marketing. This will actually be value for money we will be delivering to our clients since we will minimize their expenditure and efficiently accomplish marketing activities. This will also give time to the owner to concentrate on other essential concerns of the business like looking for partners for growth. Marketing plan development My company will work with the small firms to formulate a strategy framework that will enable the small firms plan for the future. It’s only through effective planning that opportunities can be taken advantage of and unnecessary costs avoided. My company will ensure that the small companies we are working with have a roadmap to success that they have contributed much into developing while receiving professional support and advice from seasoned marketers. having a clearly articulated plan will ensure that the business will check its progress and adjust appropriately after factoring in the advise and expertise my company will offer. Marketing coaching and advice English (2012) holds the view that the marketing staff in many of the small enterprises in Australia has limited skills in terms of effective marketing practices that have worked for other successful companies. My company will work with the small enterprises to ensure that the marketing staff in these companies is adequately prepared to handle challenging marketing environments and also that they are capable of identifying an opportunity in the market to take advantage of. It is essential that the marketing department is functioning to its level best since it’s through marketing that enough revenues can be generated and the business can thrive. My company will also offer readily available marketing advice to the small business whenever they require it. As it can be seen these services are designed to ensure that the entrepreneurs are highly involved in the whole process. This is how small business owners attach value to the services they receive. The owners are very much in the know concerning everything that is happening in the business. They will want to know how effective the strategies you are to employ can work for them. This is what my companies offer; a personalized service that is result oriented and not just a service that is unnecessary expenditure since the small firms have tight budget requirements. This approach is quite different from that of the conventional marketing firms that apply tried and tested strategies in the industry. In our case the business we work with are not the usual kind of business; they are faced with a unique set of challenges and opportunities requiring unique strategies and that is our unique feature from the rest in the industry. Our price is relatively affordable in relation to the financial ability of small business and that also ensures we are unique from the rest. I am planning to design my products in such way that the clients will completely benefit from to the service delivery features it will offer. Ours is a service that is highly personalized to suit the strict to detail approach by small business owners. English (2012) notes that small business owners have a high sense of self belief and will not entirely trust in somebody’s idea to work for their businesses it is therefore important to involve them every step of the service delivery. This is what we are selling to the small business owners. It is a product that the big service providers are either not willing or not capable of offering at their scale. The quality of the service will be analyzed by the customer feedback we receive and the recommendations we get for good services. We know for certain that the key to success in marketing services and any other service industry is offering a high quality product since any mistake made is not easily rectified. We appreciate that gauging the quality of service is not so easy a task and we will therefore employ various techniques to get the quality of the service we offer by asking for feedback and rating from our clients. We will continuously review the products offered to respond to changing market features. Many business don’t know how to take advantage of the social media marketing idea it is relatively new and low cost marketing option that is being used by big corporates but can as well work for small enterprises. We plan to help small enterprises to keep in touch with their customers through the social media which has proved top be a good platform for companies to know what is the quality and benefits of their products that they can build on. Equally companies can see the complaints being made by consumers about their product and act accordingly, states Evans (2010 p123). Responding to the complaining customers appropriately is important and we as; a company are actually offering a whole range of services from research, customer relations and actual marketing on the social media platform to help the small businesses increase their brand visibility. 5.2 Price We are planning on offering affordable yet quality service. Small businesses are locked out of accessing professional services by the mere costs of the services. In response small businesses prefer to come up with their own unique ways of addressing problems and matters concerning their businesses. Having a price that is half the price offered by the mainstream marketing a services firms average will mean that I will be able to capture this lucrative market. We can in the future adjust the price to reflect the quality of service we are offering and also we will have captured a small manageable yet profitable market share. Perhaps the concern here will be how my company will be bale to operate with the minimal revenue being realized by the services we are offering. This issue will be addressed by careful composition of my staff body to ensure it is lean enough to reduce unnecessary costs of paying unsustainable salaries. My operating costs are also not very high since I will most of the time work at the premises of the client we are working with to ensure we understand their business as much as possible. These two strategies will ensure my services are priced reasonably to attract the cost sensitive small business owners. 5.3 Promotion The small businesses sector is a close knit family with many small firms relying on each other for cooperation and several network benefits including sourcing raw materials, essential advice and marketing their products. The best marketing approach that we believe is going to work for the company is the word of mouth. We believe that if we will offer excellent services to several small business owners, they will spread the “good news” to others and we will actually be dealing with a big client base than the one we started with. This brings me to the obvious question, how are we going to get the first clients? This is simple; my company will embark on a spirited advertising campaign of the services we are offering. The mainstream media maybe very expensive for us but we are planning to advertise our services through newspapers, and small business magazines which are popular with small business managers. We will therefore be targeting a specific market that we want to notify of our services. We are also partnering with small business exhibition and conferences organizers who will give us a chance and a platform to advertise our services to the small business owners who grace the occasions. This promotion strategy is very effective as we will get a good chance of convincing our potential customers by answering any question they may ask and also clearly explaining how our product is unique and useful to them. It is a fairly inexpensive strategy that may be budgeted at $200,000 for the first year in business. We plan to advertise through newspapers and magazines at least twice a month for the first year and attend at least twenty events in the first year alone since this is the time we require much effort and energy to penetrate the industry and get our first clients. 5.4 Place We appreciate the tight schedules by the small business owners who work for an average of 60 hors per week to run all the aspects of their business. As a matter of fact our service is designed to be delivered 70 % at the premises of the client we are working with since this is the only way to understand the complicated nature of management and operating environment of small enterprises. Our offices will be easily accessible in major cities of New South Wales such as Sidney and Newcastle. Our presence will largely be within the premises of our client as and when they require our services. This way we will be delivering additional value to clients since they will not have to travel distances and waste so much valuable time looking for services. The actual delivery of the service is what matters in this case since we want to navigate through problems and opportunities of the business together with the client where we will be at the actual environment they operate in to ensure hands-on approach to problem solving other than theoretical approach that is not very popular with small business owners. 6.0 Market feasibility of the idea From the extensive research I have done both in the field and from relevant literature materials. I am totally convinced that this is viable business idea that is attractive therefore easy to get partners and funding into the business. The small business sector is just starting to be appreciated by authorities and business analysts as a vehicle that is going to deliver economic development and much needed employment to the masses and I believe offering support to these businesses is a great idea if a good study of the intricate details of the sector is implemented. The fact that our model is cost cutting means we have a very good competitive advantage if we implement it since the small businesses are majorly hindered by costs to seek advice and professional help from marketing services firms. The approach of cost cutting to gain a competitive edge is also supported by Ferell & Hartline (2010). References Connolly,E., & Norman,d. (2012). Small business: An Economic Overview, RBA Small business finance roundtable English,J. (2012). How to Organise & Operate a Small Business in Australia: how to turn ideas into success, Allen & Unwin English,J., & Moate,B. (2011). Managing a small business in Australia: The complete Handbook, Readhowyouwant.com *Epstein, K. (2006). Marketing for small businesses made easy, McGraw-Hill Companies Incorporated Evans.D. (2010) Social Media Marketing: The Next Generation of Business Engagement. John Wiley and Sons Ferell.O., Hartline.D., (2010), Marketing Strategy, Cengage Learning. Gareth, G., & Wilkinson, J. (2012). Small business in NSW: statistical snapshot and recent development, parliament of NSW briefing paper 16 [PDF] available online at: http://www.parliament.nsw.gov.au/prod/parlment/publications.nsf/key/SmallBusinessinNSW:Statisticalsnapshotandrecentdevelopments/$File/Small+Business+in+NSW+4.pdf. Joyner,m. (2009). Integrating Marketing: How Small businesses Become Big Businesses and Big businesses Become Empires, John Wiley and Sons Lewis,K. & Weber, P. (2011). Entrepreneurship and small business: An Asia Pacific Perspective, John Wiley and Sons Rigby,G. (2009). 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