Market Feasibility Analysis - Educational Toys and Programs Industry in Australia - Case Study Example

Market Feasibility Analysis Name Course Name and Code Instructor’s Name Date Introduction The aim of every business is to be feasible be able to achieve a specific goal. Before starting any business, it is important to do research and determine whether the business is viable. Different types of businesses exists and these businesses operate in different environments; environments that have different operational requirements. An example of such business is in toy and program industry. The aim of this paper is to analyse toy and program business industry in Australia. In addition, a feasibility analysis is done to determine whether it is viable to operate an ESL educational toys and program business. Industry Analysis Educational Toys and Programs Industry in Australia The educational toys and program industry in Australia is growing at a faster rate because customers have understood the importance of toys and programs in learning (Gitman & McDaniel, 2008). The schooling curricula in Australia provide an avenue in which the industry would be sustainable because each grade requires unique toys and programs. The most important years are 3 to 5 years whereby it is termed as pre-school. At this age, the pupils utilise toys and programs to understand what they are been taught. This stage can be grouped as kindergarten. Another important market that is important for the educational toys and programs industry is Grade 1, Grade 2 and Grade 3. Therefore, there is a huge market for toys and programs within the Australian education system. To be successful in such a market, positioning of the products and applicability of the product are important. Current and Future Trends Advancement in technology and changes in lifestyles of the Australian population and across the world has demand new and unique products, which allows effective learning (Gitman & McDaniel, 2008). The current trends are coloured based images and products that provide an opportunity for the learners to utilise the toys in their learning programs (Vega, 2001). In addition, few computer based programs have started entering the market. Therefore, the future trends are poised on computer program and technologically based toys and programs ensuring the learners learn effectively. Justification of the Opportunity English as a Second Language is important across the world because it creates a geographical region without physical boundaries (Gitman & McDaniel, 2008). Learning English has been embraced by those learners who want to utilise English in accomplishing different learning requirements. The population of students in Australia schools who learn English as a second language accounts to 25% of the learning population (Studying in Australia, 2013). Therefore, this is an opportunity in which business can be started and utilised in ensuring the business is viable. Key Driving Forces (external factors) Globalisation and flexibility in communication has made importance of learning English as a second language important (Welch, Benito & Petersen, 2008). Moreover, numerous institutions require products that could aid in the learning process. In addition, some learners aim to learn from homes avoiding inconveniences associated with physically going to school (Gitman & McDaniel, 2008). This requirement requires Internet based learning and it is another opportunity to start a business. Therefore, these are some of the reasons and conditions that drive the industry. Product Analysis Target Market for the Products The targeted market for the product is the persons who learn English as a second language. Regarding this business analysis, the important students aimed are those who are less than 9 years old or up to grade 3 (Studying in Australia, 2013). ESL students range from young people to older people but most of the older people may not be comfortable using toys to learn. Therefore, the products suiting these targeted markets are developed for kindergarten (years 3 - 5) and part of primary school (Grade 1 to Grade 3) (Studying in Australia, 2013). Factors that Guide Purchase Decisions Consumer behaviour is important for consumers to choose which product should be bought (Gitman & McDaniel, 2008). The consumer behaviour is shaped by the information available and applicability of the product to the daily life of the consumers. Some of the factors that guide purchase of the toys and programs include: Disposal income – A customer who has buying power should also have enough disposal income. A consumer cannot purchase a product if the consumer cannot afford it (Welch, Benito & Petersen, 2008). The disposal income, according to definition of this assignment is the amount of income left after fulfilling the requirements of basic needs. Psychological factors – Emotions and moods of consumers determines whether they can purchase a given product. There are higher chances of a consumer to purchase a product when the consumer is in a good mood compared to when the consumer is in a bad mood. Benefits of the product – Consumers purchase a product because of benefit of the product. Utilisation of the products determines the chances in which a consumer can purchase the product (Gitman & McDaniel, 2008). LearnToy allows learners to learn English and this is the basis in which a consumer learning English as a second language can decide to purchase. Not only does the market belong to those consumers leaning ESL, but also beginners in English. Knowledge and information – Availability of information regarding a given product increases chances in which a consumer can purchase a product (Speh, 2012). A consumer has to compare numerous products while other information such as promotion drives consumers to purchase a product. Therefore, availability of information determines whether a product can be bought or not. Information on the applicability availability of the educational toy and programs such as the LearnToy educational products. Competitor Analysis Four Major Competitors The competitors analysed and discussed are those that also deals with educational products. Most of the toy shops have both normal toys and specific toys such as those of education (Welch, Benito & Petersen, 2008). In addition, the stores discussed all of them have online stores and allows consumers to purchase the products online. Moreover, there are shops strategically placed in a manner that creates easiness for consumers to purchase the products. These competitors include: Toy Journey – Toy Journey specialises in toys that tend to move e.g. plane toy and butterflies. The children have to join dots on these planes and also to colour the butterflies and other images on these toys (Toy Journey, 2013) Honeybee – the toys that Wooden Toy Retailers sells include pre-schoolers and toddlers (Honeybee, 2013). Some activities associated with these toys include pulling, pushing, building, and banging. In addition, the children can roll, knock down and spin the toys. Moreover, the company receives these toys from numerous supplies, which includes Haba European toys, Speil & Holz Steiner toys and Voila wooden toys (Honeybee, 2013). My Wooden Toys – My Wooden Toys specialises on toys, which are made from wood. These toys are utilised in learning process. These wooden toys have numbers and letters. Other toys include those that children can sort, count and arrange (Gagel, 2008). Moreover, the educational toy includes puzzles, alphabet blocks, magnetic numbers and letters. Ecotoys – the company sells wooden based products. The toys gather for different requirements of educational learning. The variety of the toys include those that help in learning the tine, the alphabet, about shapes, to count, sizes and colour. According to Ecotoys (2013), these toys help the children to play and at the same time help them to learn. Substitutes to my Products ESL is a sector that is competitive because numerous strategies can be employed to teach the same children. Some of the substitutes to my LearnToy products are: Private teachers and tutors – some parents might decide to employ specific tutors to train their children. The training may not require utilisation of toys since the teacher may utilise his or her own strategy. Online classes - advancement in technology has resulted in introduction of numerous teaching strategies. The online classes may also utilise strategies that may not require physical products. Identification of Manufacturers and Relationship Management The first step is choosing the appropriate manufacture by analysing their accomplishment, understanding their strengths and also analysing their weaknesses. In addition, analyses would be done to determine other customers of the manufacturer. After all important information have been analysed, the next step is entering into agreements (Welch, Benito & Petersen, 2008). The aim of the contractual agreements is to ensure the relationship is effective and incorporates different working conditions. Moreover, the contract places into consideration measures to be utilised in those situations the contract is not followed fully. Easiness of Market Entrance The market has not been embraced in Australia market but it is easier for new entrants. This is because there are developed toy companies that can easily introduce a product line that addresses ESL (Welch, Benito & Petersen, 2008). Therefore to counter this problem, the LearnToy products could be designed and produced strategically. This means it could be difficult for a large toy shop to imitate the products because of the uniqueness. In addition, the LearnToy products would consider different learners requirements and means in which the consumers can access the products easily. Customer Analysis Understanding the niche market is important for strategic planning. An organisation that understands its niche market can produce services and products through maximisation of consumer requirements (Czinkota & Ronkainen, 2007). In addition, customer analyses create background in which marketing plan can be based on and how the consumers could be reached. The niche market is not fully quantified but because the toys can be utilised by both ESL and English as First Language (EFL), the niche market is all students below Grade 3. Therefore, the size of the niche market is large and introducing appropriate strategies could ensure LearnToy get a large market share. The targeted markets are those students who are in ESL learning institutions and all the children from Kindergarten to Grade 3 learners. The two targeted markets are important because they complement each other. This means LearnToy would provide a variety of products and therefore the targeted market should factor these factors. Product Analysis Description of the Products LearnToy would produce products that are aimed at learning words, counting, and dictionary. Learning words – this a chart and pack of cards that have alphabetical order. The words would be pointed and the learners are supposed to shout back. Counting – it contains numerical and the learners could be allowed to count and shout information in the chart. Dictionary – LearnToy dictionary will have numerous words that are grouped into themes. For example, a pack could have a theme of animals and another could have a theme of plants Identification of Various Lines Two types of products could be offered. Program based and toy based strategies in ensuring the customers can access a wider variety of the products. The toy products would be in terms of paper based products in which information in would be written on them. The programs could be video and audio and would utilise animations to provide appropriate teaching aids to the learners. Benefits Associated with Product Augmentation The products provided could be unique since it could be either digital based or toy based. The products could not be packaged to encourage environmental sustainability. This approach could be utilised to inform the learners’ importance of sustainability. The brand names of the product could be inscribed into the toy. Moreover, additional information provided regarding the product includes warranty and instructions for use. In addition, the products would come in different colours reflecting on what it tends to teach. For example, when information is about the environment, most colours could be green. Moreover, the programs and toys could complement each other. For example, the programs could be developed to ensure the toys are incorporated. This means that those programs that have video information, the materials used for the teaching would have the toys and utilised as the examples in the teaching. Marketing Mix Marketing mix incorporate four methods that define on how consumers can be informed of the product and how the consumers can access the products. Understanding marketing mix is important and therefore, LearnToy should incorporate the fundamentals of marketing mix: Pricing Prince is the amount of money in which the consumers would use to exchange for the product (Maeda, 2011). In determining the price of a product, numerous factors come into consideration. Some of these factors include the cost of product, logistics cost, marketing costs and administrative costs. Comparison of prices relative to competitors – LearnToy products would be cheaper compared to other products. This is because the products could address the learning requirements of specific students and this is different from mass market of other type of toys (Burrow, 2011). Moreover, the LearnToy products could specially produced and manufactured to fulfil a specific required of ESL. Margins aimed – The margins for the product are aimed at 25% cost of the product. The margin could be utilised to develop more products and also to generate income for the organisation. Comparable to other competitors, this price would be affordable. Moreover, the urge of learning English would push the parents to purchase the LearnToy products easily. Promotion Advertisement and marketing is an important requirement to provide knowledge to the consumers. Promotion could allow consumers to understand the presence of certain products and also utilised to change consumer behaviour towards purchasing the LearnToy products. The products could be advertised through numerous channels (Barlow, 2005). One of the major means in which the products could be promoted is through visiting institutions that are offering ESL. In addition, marketers could visit kindergarten schools and some private pre-schools to inform them on the importance of the product and how the product could improve and assist in the learning process. In addition, some medium channels could be utilised to inform the consumers on the importance of the product. One of the strategies that could be utilised is social media. Social medium is cheaper to utilise and also provide a means in which consumers and market can exchange and share views. Moreover, the social medium could have a link that redirects the page to the website of LearnToy (Tiffany & Peterson, 2011). Two major social media channels could be utilised which are Facebook and Twitter. In addition, information could be posted on monthly printouts of educational material. Sometimes, some institutions provides printouts and these printouts could have information regarding the LearnToy toys and programs. Generally, the frequency of advertisement would fluctuate and could be based on educational program of the situation. Estimated Budget for Advertisement The following table illustrates the estimates that could cost promotional activities. These are the estimates that are expected to cost to market LearnToy products. Particulars Yearly Transport 24,000 Printing cost 36,000 Online subscription 60,000 Booking and payment for printouts subscription 60,000 Communication cost (e.g. call expenses) 12,000 Miscellaneous 30,000 Total amounts 222000 Place LearnToy products would utilise two strategies. The strategies are indirect and direct distribution. The marketer(s) would take the products directly to the consumers and to the schools (Engle, 2008). This could allow the customer to sample the products and supplied and determine applicability of the product. In addition, the customers could be requested to download images from the LearnToy website and the consumers could print (Rowley & Rowley, 2008). This could provide an easier avenue in which the consumers can access the products at a cost, which is substantially lower than the market price (Burrow, 2008). The other method, indirect, the products could be collected from the manufacturer and distributed to retailers and wholesalers (Oliver, 2012). The responsibility of LearnToy organisation could be to market the products and utilise two marketing strategies, which are push and pull in increasing the number of consumers to purchase the product (Carroll & Buchholtz, 2009). There could be a price structure in which the wholesalers and other distributors could factor their margins. The price structure would provide margins for each distributor and the margins could be similar. Moreover, LearnToy could supply the products directly to competitors and negotiate for a price that is acceptable to both parties. Conclusion The toy and program industry in Australia is promising. The market for ESL toys and programs is open and LearnToy Company can produce products that fulfil the requirements of this market. Some of the products produced by LearnToy include digital programs and also toys. The targeted market could be ESL students and also Grade 3 and lower students. LearnToy’s could utilise both direct and indirect strategies in ensuring consumers receive the toys and programs. In addition, Internet based strategies and visiting institutions could be utilised in ensuring the consumers have information regarding the products and also how to access the products. Generally, the ESL toy and program industry is open and is viable. Through the feasibility study, it is evident that a right marketing mix couple effective administration and production strategy could ensure more consumers purchases the products. Therefore, from the analysis, it is evident there is a market for LearnToy products that are aimed at ensuring ESL learners better and faster. References Barlow, J. (2005). Excel models for business and operations management, 2nd ed. New York: John Wiley & Sons Burrow, J. (2008). Introduction to business: Finance, marketing, operations. Management, 7th Ed. Sydney: Cengage Learning Burrow, J. (2011). Marketing, 3rd ed. Sydney: Cengage Learning Carroll, A., & Buchholtz, A. (2009). Business & society: Ethics and stakeholder management, 7th ed. London: Cengage Learning Czinkota, M., & Ronkainen, I. (2007). International marketing, 8th ed. London: Cengage Learning EcoToys (2013). Educational toys. Available at http://www.ecotoys.com.au/store/eco-toys.php?cat=4 Engle, J. (2008). 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