Sydney Dry Cleaner Services Marketing Plan - Case Study Example

Table of Contents Table of Contents 1 Executive Summary 2 Introduction 4 Marketing Plan Objectives 5 Major Marketing Problems/Issues 6 Company Description 7 Business Ownership 7 Company Locations and Facilities 7 Products and Services 8 Start-up Summary 9 Industry Analysis 9 Business Environment 10 Target Market Segmentation and Strategy 10 Competitor Analysis 12 SWOT ANALYSIS 14 Competitive Advantages 17 Positioning 18 Environmental Forces and its impact on the business 18 Recommendations 21 Implementation Budget 25 Reference List 27 Executive Summary Sydney Dry Cleaner Services has been the goal of James Gill to establish it as a dry cleaner business coupled with door to door pick-up and deliveries. The keys to success at Dry Cleaner Services including environment, reputation, competitive pricing, competitive pricing, professionalism, customer individual attention, recommendations and customer loyalty, and customer satisfaction. The business marketing plan objectives are to have control of part of market share within the period of 18 months operation, have sales in excess and attain net profits. Just like any other business the major marketing problems and issues faced by Sydney Dry Cleaner services are generating awareness and enquiries, effective targeting and keeping up with marketing strategies and trends Sydney Dry Cleaner Services is a sole proprietor business owned by James Gill who plans to upgrade it to a limited company in the next few years. The business will be a homebased business located in Sydney City along the main road for easy access by both private and public means of transportation. The business will buy vans for picking and delivering customer items. The business main services will be garment alterations, laundry and dry cleaning. It will be managed the owner and funded both by the owner and the bank. Many people in Australia are getting into full time employment. They do not find time to do their own laundry or clean household items. They instead get someone else to do that. However, with increase in personal income, less time to spend at home and the need for more time to involve in leisure activities, there is need for a professional touch on the things they care about including their expensive clothes. This is where Sydney Dry Cleaner Services comes in to fill the gap and meet the need. The main target segment for this business is professionals and working class individuals. The business faces competition from three businesses: Washy Cleaners, Spik & Span and Gil Cleaners. They have been operation in Sydney for quite sometimes and though they are small scale businesses, they have a lot of customers. However they do not provide door to door services and neither do they use modern technology. Sydney Dry Cleaner Services used modern dry cleaning technology, incurs on costs on rent and provides a wide range of cleaning services to the customer to choose. However, it has no market share available since it is just starting and has already established competitors. With the industry promise of growth there is a chance of entry of new competitors, and continuous technology changes is yet to introduce new methods and equipment of dry cleaning. This means the business will need to keep up with the speed. However, with the increase in personal income and many people including women entering into employment full time, business growth is promising. Competitive edge of the business is its ability to satisfy customer needs through providing reliable, quality and speedy services. More of it is the fact that it can provide free pick and delivery services making it convenient for the customer. The environmental forces that may affect the cost, service quality and operations of the business are political, economic, social, technology, environment, and legal forces. Various recommendations are provided for product, price, place and promotion strategies for the business. A promotion schedule is provided to show the promotional activities that need to take place, accompanied by when they need to be accomplished. Implementation budget for the market plan is set to show how much each activity will cost, when it needs to be completed and the success factors. It is the hope of Sydney Dry Cleaner Services that it will executive its services successful and achieve its business goals. Introduction For the past two years it has been a goal to establish a dry cleaner business with free pick up and delivery services. James Gill the business owner has worked closely with a renowned and experienced dry cleaner business man for the past year to develop professionalism and reputation needed to start and run this business. Our vision is “To be the leader in excellency in providing dry cleaning services in Sydney and the whole of Australia” Our mission is “To provide affordable and high quality dry cleaning services coupled with home delivery using the the latest technology for the convenience of our customers.” Keys to success at Sydney Dry Cleaner Services are: Convinience – Providing a wide range of services in a flexible manner and convenient to customers Environment – Providing a conducive environment for both the business, customers and staff. Professionalism – Portraying professionalism in hiring the best staff, handling customers and meeting deadlines Reputation – Build reputation of the business as providing high quality services and professional personnel. Competitive pricing – Provide a wide range of high quality services with fair and competitive price which provides the business with a profit that is fair and reasonable. Customer satisfaction – Meeting or exceeding customers’ expectations by providing high quality and flexible service. Recommendations and customer loyalty – Providing superior services that builds customer loyalty and encourages referral of colleagues, family and friends. Customer individual attention – Tayloring preferences to each customer’s experience. Marketing Plan Objectives The following are marketing objectives of Sydney Dry Cleaner Services: control over 35% market share after 18months of operation have first 18 months sales in excess of £430,000 Attaining net profits amounting to over £75,000 Major Marketing Problems/Issues Generating awareness and enquiries – It is a challenge to get potential customers’ attention and ignite their interest in the services provided. Sydney Dry Cleaner Services is planning to solve this problem by creating more awareness through various channels Effective Targeting – This finding the appropriate prospect for your products and services and who find value in those services. Sydney Dry Cleaner Services will segment its market by demographics, conduct bneeds and behavior identification and develop behavior profiles. Keeping up with marketing strategies and trends – New tools of communicating with customers have been introduced by technology like online media forcing businesses to stay current. Sydney Dry Cleaner Services will tackle this problem through knowing their customers, what value to give them, and the best methods and tools to do so. It will also invest in studying the latest developments in the industry. Company Description Business Ownership Sydney Dry Cleaner Services is designed to be a home-based business. It will start operating initially as a sole proprietor business. The business structure is the most appropriate because it is run and managed by the owner James Gill who will enjoy all the profits and liable for all the losses, debts and taxes of the business. The business will not face any debts or long term liabilities at this stage concerning higher purchase or lease costs. The owner plans to register the business in the fifth year as a Limited company to take advantage of: Franchising the business Provide a structure to allow other professional dry cleaner business individuals in future participation of the company ownership Enjoy lower company tax rates with increase of profits Enjoy limited liabilities on the operations of the business. Company Locations and Facilities Sydney Dry Cleaner Services will be located in Sydney. It is a business operating from home with an extension area of ground floor which allocated to office, reception and cleaning room. Clients can decide to bring their items and clothes in the office or choose to let our staff pick and deliver them to their homes. Home location for business operations was chosen for the following benefits: It is located on the main road making it easy to access the premises by use of both private and public transportation. The insurance policy of households can be amended to include the equipments of the business. Business overheads can be minimized: telephone, power supply and rental of space. The office will be well equipped with a computer, email, telephone and fax machine. Four vans will also be bought for picking and delivering customer items. Products and Services The business’ main services include laundry, dry cleaning and garment alterations. The service is a home-based business offered with regular home pick-up coupled with efficient and effective delivery services. Vans will be used for picking and delivering items. There will be a range of payment criteria customers can choose from: paying during delivery, weekly or monthly by credit billing. Customers in a contract system will receive their billing reports at the end of each payment period. The Sydney Dry Cleaning business aims to provide its customers with a new door-to-door dry cleaning that surely will impress customers and bring in a new dimension in the dry cleaning industry. Customers with tight schedules for work and private business no extra time will find this idea very interesting and will want to try it. With high quality and convenient services, customers are likely to maintain partnership with the company. When the patronage continues for a considerable period, the company will eventually consider them loyal customers and consider offering them discounts. With such services, loyal customers will recommend the company to their friends and thus increasing the business’ customer base. With great inflow of clients, Sydney Dry Cleaningreputation increases and thus translating to greater market share. Start-up Summary The owner of Sydney Dry Cleaner Services is a graduate of Masters in Business Administration and has a full range of skills needed to run the business. He has consultants and other experienced people in the industry to mentor him in case of any assistance needed. He has enough capital from savings and bank loans to meet the business start-up costs. Industry Analysis The Laundries and Dry-cleaners industry is warming up after global warming crisis that saw it experience a washout. IBISWorld reported that strong growth is promising due to the Australia’s strong economy and demand of laundry and dry cleaning services especially in cleaning services and uniform hire. The increasing importance of Government regulation and environmental factors to the industry is manifested specially in areas of energy, water and chemical use, and in relation to factors of climate change and control of carbon emission. According to IBISWorld, industry revenue is expected to increase by 0.6% annually and forecast growth by 2.6%. Price-based competition is forecasted to remain fierce due to the industry’s structure and nature (includes many operators on small and large scale). Spotless and Alsco are the big players in the industry with franchised and small business being the majority operators. The report continues to explain that larget companies operate closer to major clients to take full advantage of potential savings, miminimise costs of transport and enable ease of access. Concentration of market share is medium and has shown an increase in the previous years, and is expected to continue. By 2017 revenue of the industry is forecasted to increase as client companies like government institutions, hospitals and health institutions continue to outsource these service. Steady revenue growth will take continue taking place as a result of stable pricing levels. Business Environment Target Market Segmentation and Strategy Table 1, Labor Labor Market Percentage (%) Males in full time employment 2013/2014 91 Males on part time employment 2013/2014 9 Females on full time employment 2013/2014 61.9 Females on part-time employment 2013/2014 38.1 Table 2, Economic changes Economic change Percentage (%) Individual change in GDP 39 Individual change in average monthly earning (2005-2013 24.1 Total change in employment (2003-2013) 36.9 Table 1 and chart shows the percentages of Australian females and males working full time and part time from the period of 2003-2013. 91% of men work full time while 9% of them work part-time. 61.9% of women work full time while 38.1% work part time. This shows a large percentage of both women and men in Australia are in full time jobs. This means there are less women and hardly no man to stay at home and take care of their laundry. This creates a need in Australia for laundry and dry cleaning services. Table 2 shows the economic change of Australia between year 2003 to 2013. The individual change in GDP is 39%, individual change in average monthly earning is 24.1% and total change in employment is 36.9%. Income, GDP and employment trends as shown are increasing over the years. Many people’s standard of living has increased as they have money though they do not have enough time available to do their laundry. More often they are tired after work and spend their money hiring someelse to do laundry for them. Additionally, with increase in income comes with it increase in demand for clothes especially by professionals. As they buy more expensive clothes they want to take good care of them by ensuring they are well cleaned. After having a careful research the business focuses its target segment market on professional customers and working class customers. The business’ target will be dominated of male customers than female customers because many men work full time and most of them do not have time to do their own laundry. In Sydney there are 96,786 employed people, 72% of which are full time employed while 26% are part-time employed. From 72% full time employed the business plans to have a market share of 30% from it which is a population of 20,900 professionals.The business will be based in the suburbs of Ashfield. Competitor Analysis The city of Sydney have three competitors in alteration services, laundry and dry cleaning: Washy Cleaners, Spik & Span and Gil Cleaners. Competitor 1 – Washy Cleaners Operates from home Strengths: Have been in the market for five years Have well established client base Specialises in laundry Weaknesses Have limited services Schedules are not flexible Services offered on small scale Do not use modern dry cleaning technology Competitor 2 – Spik & Span Operate at commercial premises Strengths Have established business locations within the area Have experienced support staff Well established client base with repeat business Good reputation and stable business Weaknesses Sometimes have inflexible schedule Have no experience in door-to- door delivery services Customers complain for their high prices. Competitor 3 – Gil Cleaners Operate from home Strengths Zero fixed costs on commercial premises They are not expensive Weaknesses Do not low reputation in quality Do not use latest technology in dry cleaning SWOT ANALYSIS Strength New laundry and dry cleaning service Convinient and quick service saves time No fixed costs Modern dry cleaning technology Weaknesses Already established competitors No market share available Less experience in the market Opportunities Increase in clothing expenditure increase the need to take care of clothes More and more women are working full time and have no time to do laundry The income of Sydney people is averagely increasing Sydney people spend more time participating in leisure activities leaving no time for laundry The laundry service is forecasted to continue growing Repeat business is likely to take place Threats Entry of new competitors Customers’ change in demand and preferences Technological advances and changes bringing a lot new dry cleaning alternataives The table above shows shows the strength, weaknesses, opportunities and threats of Sydney Dry Cleaner Services explained as follows: Strengths The business provides new laundry and dry cleaning services that allows a customer to make a choice. The door-to-door services that involves picking from and delivery clothes from customers’ houses makes it quick and convenient for customers and saving their time in the process. This gives the business the lead in the area in laundry services. The business also does not have a fixed premises where it needs to pay for rent and other premises bills. Instead the business is run in the owners house extension with vans to pick and deliver clothes from door-to-door. Weaknesses There are already established competitors in the market with market share and quite good experience. Contrary, Sydney Dry Cleaner Services has no established market share nor experience in the market. This may become a challenge to the business. However, the business strategy is in the choice of working class and professionals as its target market, and its ability to pick and deliver clothes at their door steps will leverage it above its competitors and increase its market share in the area. Opportunities There are opportunities in the market that Sydney Dry Cleaner Services can explore. With increase in income means increase in spending on expensive clothes especially for professionals. This also leads to increase in the need to ensure that their clothes are well take care of. This means there will be continuous business for Sydney Dry Cleaners. Traditionally, women stayed at home to do housework but today more and more of them are working full time leaving no time to do their laundry. They will find it convenient and less costly to contract the services of Sydney especially saving their time through home delivery services. The income of Sydney people is averagely increasing. This encourages them to spend money by contracting dry cleaning services while they spend the little time they have form work engaging in leisure activities. The laundry and dry cleaning industry is forecasted to grow with more and more people working full time and income increasing. This will mean continuous business for Sydney Dry cleaners. Threats With the forecasted growth of dry cleaning and laundry services, increased full time workers and high customer income there is a chance of attracting new competitors to share in the market. Sydney Dry Cleaners will therefore build a strong and loyal customer base and use modern technology to provide its services that it will not be easy for new competitors to breakthrough its market share. Customers’ change in demand and preferences may affect the business where instead of buying expensive clothes they may buy cheaper ones and therefore no need to take special care of them, and decide to clean themselves when they have time. Technological advances and changes may bring a lot of new dry cleaning alternatives rendering obsolute what Sydney Dry Cleaners is using. The business will therefore need to study the changing technological trends and adopt new methods for dry cleaning in order to stay in business. Competitive Advantages Sydney Dry Cleaner Services’ competitive advantage is its commitment to customer satisfaction and customer service. It provides a variety of services to choose from : Laundry, dry cleaning an d garment alterations. The services are offered with regular home pick-up coupled with effective delivery services. The business also uses the latest technology in dry cleaning which makes operations efficient and effective. The ability for customers to pay weekly, monthly or on contractual basis makes it flexible for customers. Positioning Sydney Dry Cleaner services through positioning will instill awareness of their services withing their target market. It will posisiton its business by bringing customers to their understanding that their time is important and still they need to look good and feel good, and that the company understands their busy work schedule and is there to relieve them of some work like doing laundry. It is the reason why the company is choosing to pick and deliver their items at their door steps. This will create a sense of belonging and build a long lasting relationship with customers. The business expects customers to spend on dry cleaning services weekly when they want the items and clothes they used the previous week cleaned. Environmental Forces and its impact on the business Political The Australian political stability will enable the business to operate securely and certainly. The government may intervene the country’s economy in any way which could affect the business negatively or positively. Sydney Dry Cleaner Services will be expected to comply with tax policy, environmental law, tariffs, trade restrictions and labour laws. High taxes would increase the price of vans and laundry machines which would affect the budget of the business. Environmental law could dictate the kind of detergents the business need to use or how the dirty water need to be disposed off. Operating environmental licences could be expensive and thus making it costly for the business. Labour laws could dictate how the hiring contract of employees need to look like and even raise their salary and wage range. This could become costly for the business and it would have to pay more that it budged for. Economic This includes inflation rate, interest rates, economic growth and exchange rates. These have great impacts on how Sydney Dry Cleaner Services operate and make deacisions. High interest rates may affect the cost of capital of the business and thus preventing its expansion and growth, while low interest will create availability of capital to expand and grow the business. Exchange rates affect the price of imported goods and cost of supply or exporting products. If exchange rates are high the price of drycleaner, vans and other supplies used by Sydney Dry Cleaner Services could rise. The status of employment in the country affects personal income and spending. If the rate of employment rises personal income of individuals will rise and thus having disposable income to spend on drycleaning. Social This includes health, cultural aspects, age distribution, population growth rate, class, emphasis on safety and career attitudes. Social trends affect the operations of the company as well as its products and services. If the number of ageing people increases it means there is no enough able workforce to work, making it expensive for the business to hire staff. If the population consists of many people from first class it means they have enough money to spend on drycleaning and believe drycleaning services provide quality care to their clothes. Change in roles may mean many women have decided to persue full time careers and engaging in full time employment. Because of their busy schedule they may not have time to do laundry in their homes and thus leave the work to drycleaning businesses like Sydney Dry Cleaner Services. Technology This includes the rate of technology change, research and development, incentives of technology and automation. This forces can determine if Sydney Dry Cleaner Services can decide to outsource, have efficient or low production level or become a barrier to entry. Technology keeps on changing and bringing in new washing machines that are very efficient and time saving. Technology will also help in easing communication between the company and clients. Customers can also book for services online. Online marketing is less expensive and can promote the services of Sydney Dry Cleaner. Having and using new machines and methods of cleaning could mean becoming an entry barrier in the industry to those businesses which find it expensive. Moreover, shifts in technology may lead to innovation or affect quality and cost of services. Environmental forces This includes climate change, climate and whether. Increasing awareness of climate change affects the production of some products. Sydney Dry Cleaner Services will be forced to comply with the environmental regulations of ensuring that the products purchase in cleaning are fit for the environment. In addition, during snow or rain season many people who do not have drying equipments at home may choose to seek the services of Sydney Dry Cleaner Services to have their clothes and items dried. Legal forces This include health and safety law, consumer law, discrimination law and antitrust law. These laws dictates workplace halth and safety rules and regulation, the standard of services that need to be provided to consumers and equality practices in hiring employees. These legal changes may affect the costs of the business, its operations and demand for its services. Health and safety laws my force the business to spend resources on purchase safe equipments, supplies and working uniform for employees as well as training them. Discrimination law may allow equality in hiring and workplace equality and thus creating diversity of skills in the business. Recommendations Product Sydney Dry Cleaner Services quality services that the residents of Sydney have never experienced before:laundry, dry cleaning and garment alterations.. For this matter: The business should position itself as providing reliable, speed and quality services. Clothes and items will be delivered to customers packaged in boxes or laundry bags. These boxes and laundry bags will be branded with the company logo for product positioning. Laundry, dry cleaning and garment alteration services should have the following features: Free pick-up and delivery Delivery will take place between 1 to 3 business days Provide services to customers within 300 mile radius Provide full laundry service including, sorting, washing, drying and folding Services include washing clothes, cleaning carpets, cleaning duvets, cleaning curtains, shoes and bags, wedding dress cleaning and rug cleaning, and ironing. Garment alterations and repair include trouser or dress shortening, zip adjustment and button replacement. To provide laundry bags Price The business will use the current market price to charge its services. The value that is being sold in the services of Sydney Dry Cleaner Services is time saving, convenience and quality. Though the market price will be almost close to competitors the added value of picking and delivering to customers will attract more customers to the business. The business can also use bundle pricing to attract more purchase. For example the price of washing clothes only could be $ 200 and for cleaning the carpet $ 150, but if the customer brings both clothes and the carpet for cleaning she can only pay $ 300 instead of $ 350. Place Sydney Dry Cleaner Services operate from home along the mainroad. Since it is easily accessible by both private and public means customers can drop their items and clothes for cleaning at the premises. For those who are not able to come by the drivers should pick and deliver their clothes and other items at their door steps. Pick-up and delivery of clothes will be done between 6:00am to 9:00am and 5:00pm to 7:00pm on weekdays because during the day they are at work. However, picking and delivery of customer items on weekends will be between 7:00am and 6:00pm because most customers will will be at home. Customers with urgent orders will have to pay slightly more. Promotion New customers should be provided with a 10% discount on the services in order to attract them to try the services and have them as full time customers. Advertising is the most prominent way of creating awareness of the company products and services. Sydney Dry Cleaner Services will advertise through: Television Local radio Local daily newspaper Local Magazines Distribution of fliers in malls, trading centres and residentials Online marketing; emails, blogs, company website and social media (Facebook, MySpace, Twitter, Youtube, and so on). Posters Have a recommend a friend or relative scheme to build up discounts. This program allows customers to distribute company discount cards to their friends and relatives so that if the new customer comes he or she gets a discount, and the customer who recommended builds discounts upto 80% depending with the number of people recommended. Promotion Schedule Item By When Design and print posters 21stNov Print fliers 21stNov Create Website 14thAugust Create social media accounts and post information 30th Nov Send first emails to prospective customers 15th Nov Run radio and television campaign 30th Nov Conduct flier distribution 30th Nov Pin up posters in public malls and trading centres 30th Nov Design and print of banners 20thAugust Conduct Search Engine optimization 1stSeptember Create Newspaper and magazine advert and place advert 30th Nov Overall Recommendations 1. The business should plan to extend its target market to students who are busy with work and school as well as to organizations like hospitals, children orphanages, elderly homes, and so on. 2. For future expansion the organization should expand its services to other parts of Australia in order to extend its market share and tap into the untapped market. 3. The business should invest in customer service and train the staff on how to handle customers effectively and professionally 4. A customer database should be created and well management to follow up on customers when sales are low and to use it to market new services and new prices or discounts available. Implementation Budget What is the size and source of budget allocation for this plan and how was it determined? Item Date Completion Cost Measure of Success Business website 14thAugust $ 3,000 Total number of hits per month, 3,400 Search engine optimization payments 1stSeptember $ 6,000 Whole information and sites carrying the website link Printing enough flyers and posters and banners 21stNov $ 8,000 5000 people accessing flyers and posters Advertising through magazines 30th Nov $ 4,800 Monthly slot accepted Acquisition of vans 16thDec $324,000 Four delivery vans acquired Advertising in radio and television 15th Nov $150,000 Receive 50 enquiries per day Site hosting costs 1st Jan $3,600 Featured in first pages of all search engines Cost of washing materials 25thFeb $38,500 Acquisition of 10 washing machines Constructing production industry 25thFeb $ 100,500 A spacious production industry acquired Grand Opening 1stMarch $ 1,500 4000 people in attendance TOTAL $ 639,900 Reference List DevChekitan, S & Don, E 2005, In the Mix: A Customer-Focused Approach Can Bring the Current Marketing Mix into the 21st Century, Marketing Management, 14(1), p. 34-89. 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