Marketing Plan for Thomson Car - Case Study Example

Marketing Strategy Final Report Student’s Name Course/Number Instructor’s Name Executive Summary Thomson Modern Car Wash intended to be the prominent and modern car wash to deal with cleaning luxury cars within the region. Thomson Peters, a young entrepreneur with a vast experience acquired while working in a family company dealing in car repairs for over 9 years, owns the car wash. Having owned a reputable car repair shop (Thomson car repairs) in the region for over 30 years, the Thomson family remains one of the prominent and respected families within its neighborhoods. The differentiator for Thomson Car Wash will be Peter and the Thomson name, which is a well-established brand. The general belief and idea behind the establishment of the car wash is that car owners will not only come to Car wash to have their luxurious vehicles and detailed cleaning that includes washing and polishing, but also as a social space to allow clients meet and chat with Peter’s father, Thomson, on car maintenance noted from his 30 years automotive experience. It is also intended that the company will provide unparalleled services of high quality with modern technology applied in modern car wash companies. This promise is highly possible due to extensive understanding of automotive industry by Thomson peters due to 30 year experience advantage that outweighs the competitors. This will ensure customer satisfaction and hence customer maintenance and attraction (Cohen, 2005). The intended car wash will be based in the Sydney city of Australia. The choice of the location, just like in any other business is crucial in determining the levels of success or failure of the business. Sydney comes with lots of benefits to the business in terms of the market provided by the many traffic within the city. Research conducted also indicates that Sydney City lacks enough modern premium car wash centers to serve the ever-increasing traffic. Furthermore, over 90% of households within Sydney neighborhoods are individuals of the wealthy class and therefore own luxurious premium cars that need modern washing services. Maxwell is a family friend who has had the opportunity to work with the Thomson family in the car repair shop for 23 years. He has worked with hundreds of small- and medium-sized businesses during his career, from his experience premium car wash business in Sydney will not be a trial and error venture but a well researched and understood business. Executive Summary 2 Introduction 6 Objectives of the Marketing Plan 6 Major Marketing Problem 7 Company Description 7 Core Competencies 7 Environments That Impact the Organisation 8 Technology 8 Government Regulations 9 Legal Changes 9 Social / Cultural Changes 10 Changing preference 10 Demographic changes 10 Advertising techniques 11 Climate 11 Manpower 11 Prompt services 12 Capital 12 Competitor Analysis 12 SWOT Analysis 13 Strengths 14 Weaknesses 14 Opportunities 14 Threats 15 Market Segmentation 15 New car owners 15 Older luxury car owners 16 Sports car owners 16 Lifetime owners 16 Dealerships 16 Local businesses 17 Market conditions 17 Competitive shifts 18 Financial forecasts 18 Resource allocation 18 Proper planning 19 A budget for implementing my strategies 19 Cost of sales 19 Expansion 19 Financial costs 20 Other variable costs 20 Thomson car wash budget 20 Recommendations 21 Distribution 21 Advertising and Promotion 21 Customer service 21 Place 21 Product 22 Price 22 Promotion 22 References 23 Introduction When starting out a new business in a relatively new place, Sydney city of Australia, a strategic marketing plan is very crucial. It will determine the success and failure of the carwash. However, for the Thomsons car wash to be well established extensive research has to be done. Even though Sydney has a lot of traffic within the city and a bigger percentage of 90% are wealthy with luxurious cars, a study of the area is necessary. Areas to research on would be on the environment, technology, competition and the customer base (Douglas C et al, 2010). He should consider how all this factors will affect the business both positively and negatively. The target market and segmentation of these areas will be carefully analyzed. Advertising of the business is also crucial for it will create awareness of the existence of the business. All this can only be accomplished via a well fixed and examined budget to bear fruitful results. Objectives of the Marketing Plan The main objective of Thomson Car wash is to provide an excellent and modern carwash and detailing service to customers within Sydney and its environs. Its aim is to attract customers who parting with money is not a problem but quality is essential to them. To them, quality of the services matter; to keep their machines looking new and well maintained. Thomson wants to use the latest technology available in the market to rival the opponents. Furthermore, young car encaustics are more into technology to keep the machines in shape. This is because machines of today are more technological than before and only computer scanners may detect the problems. Thomson’s car wash has to insist on quality work from its workers. Major Marketing Problem For an investment like this, efficiency and quality of work is keenly observed by the wealthy customers. Quality work will keep customers coming back. Quality and efficiency will solve the problem of winning the trust of the customers which is critical for an enterprise offering services (Kerin et al., 2006). Apart from that, the company aims at attaining a 21% market share after operating for 12 months. To attain this target, they must capture a certain percentage of customers. This will enable Thomas Car wash to have an encouraging first year total. Company Description Thomson Modern Car Wash Center is a sole trader to be established through a well-structured market survey. It has operated for the last 30 years as Thomson car repairs which has earned the Thomson's' a reputable name. The company will provide modern car wash, detailing, car painting, tire polishing, and filling services to its clients. The company will also offer indoor cleaning services to major car dealers. To facilitate these, the company will have a van to transport washing machines to showrooms. In the event where cleaning equipment will be hired or leased, the management will ensure that the expert maintenance team accompanies the equipment. Starting capital for financing the business will be through the family investment and bank loans (Douglas C et al, 2010). Core Competencies Thomson Car wash seeks to use its core competencies to achieve a sustainable competitive advantage, in which competitors cannot provide the same value to consumers that Thomson Car wash does. Already, Thomson Car wash has developed core competencies in (1) offering a high-quality, branded services whose image is recognizable among consumers; (2) creating a sense of community among consumers who purchase the services; and (3) developing a reputation among retailers as a reliable service provider, delivering the requested number of services on schedule. The firm intends to build on these competencies through marketing efforts that increase the number of services offered as well as distribution outlets. Environments That Impact the Organisation Technology The world has been changed by technology and the impact is more pronounced in business areas. Today, technology is the most effective way of carrying out operations. As a modern car wash, technology will play a major factor of concern. Technology will produce forecasts, budgets and analyze information about the business. Internet as a platform for research helps the Center to tap into any new technology arising in the field. Furthermore, internet and social media will act as a medium of advertisement to aware people of the availability of the Center’s services (Mark, et al., 2006). However, technology has its downsides. It goes without saying, what man invents has a dark and brighter side. Technology helps operations of a business to be much faster eliminating ledgers and manual books. It enhances accuracy i.e. free from human error. The results will be more trustworthy and reliable. On the other hand, technology can be more confusing due to the complex systems the workers will have to cope with. This means employees will have to be trained on how to operate the machines. Since technology is more available, competitors can learn from it which makes it difficult for smaller investors to cope up with the increase of technology. Crime has increased which can lead to hacking of the companys’ data base. This can reveal crucial private data to the advantage of the competitors. Government Regulations Government relations are regulations aimed to maintain ethical business behavior. The Center has the obligation to comply with government regulations such as taxation policy, trade regulations, and unemployment policy. These regulations impact business in different ways. It weakens the competitive position of the venture; uncertainty is increased and can lead to closure of business. To survive these harsh effects of government regulations most business are looking for alternative ways to earn revenue. A strategic plan is developed and executed in accordance to the regulations. Enterprises would even go further to obtain new broader market opportunities to meet their needs. The management team must be right one, with the right skills to carry out their managerial duties. This would greatly help in eliminating and solving hurdles in business (Kerin, at al 2006). Taking into consideration the above steps, it will greatly reduce the costs that come along with government regulations. This will ensure that the business runs in accordance to government requirements of all registered businesses. Legal Changes Changes in the legal requirements touching on business requirements may also affect the operations of the business. This results in the event where the business will be required to adjust to meet the new legal changes. Changes on labor laws for instance may force the management to review its employment strategies. Thomson may be forced to pay his workers better with allowances plus insurance. Similarly, health and safety regulations may also have some impacts on the Center’s health and safety policy. The working environment would be cleanly maintained and regularly checked by the responsible health institutions. The washing machines would be required to meet the standards required this would require regular maintenance by the crew. Social / Cultural Changes This is a process of dynamic change in the existing cultures and adopting internal and external forces of change. Enterprises do not operate in vacuums, they have societies that surround them and must adapt to the societal changes. Socio-cultural environment is one of the areas expected to affect the business by a large extend. Cultural changes bring about changes which affect business in the following ways: Changing preference Social-cultural change brings about changes in consumer preference. What was very popular with the society 10 years ago has drastically changed such that it is no longer popular. Different styles, makes and designs of almost everything have changed. Clothing companies have to adapt to the changing fashion world. The socio-cultural factors considered in this case include age distribution, levels of education, income levels, population growth, and expectation of society from the business. Demographic changes Demographic changes widely affect the business in terms of what the newer generations’ needs. For example, the use of more luxury cars may increase. Since the society is like an ever revolving globe, the Center should be ready to accommodate new methods of washing; use of chemicals and long lasting bristles, faster machines and computers. The business’s policy will be to take care of the environment with which it is operating and uphold the culture of the people. Upholding the people’s culture makes the business more popular among the inhabitants. Members of the society will also have the opportunity for employment opportunities. Advertising techniques Changing culture calls for change in advertising methods. The company must interact with its customers in the most convenient way possible. Advertising tends to be the most trend setting media in societies and it has to continually monitor for any new changes in the environment. Moral and fashion changes must also be taken into consideration. Climate Emissions of green house gases due to human activities, is on the increase resulting to changes in the earth climate. Scientists believe an increase by 2° would result to irreversible damage. All over the world, the governments are trying to reduce emissions of toxic waste in to the environment. Most companies are upgrading the polluting facilities to meet up with the standards which are costly. Some companies are allowed to emit a certain amount of gases to the atmosphere. This happens if they have emission credits. It would also result to changes in prices of various commodities. The cost of meeting the standards of emissions is transferred to the consumers. There has been a change of weather patterns all over the globe. Drought, famine and storms are expected to be worse than before resulting to higher loses. Insufficient rainfall will course a shortage of food and in the long ran shortage of man power. Manpower This refers to the amount of labor force required in the business. An entrepreneur needs the right kind of workers to help run a good business. They should be efficient and have the right qualifications to run the business. Trust worthy workers makes the business flourish for they do not loot the business. Good workers who appreciate the customers are a good asset to the business. The amount of man power required will determine how the business fairs. Prompt services Whatever services offered by the business should be done at the optimum best to ensure the satisfaction the customers. Services should be of quality. Customer’s possessions should be handled with care to avoid cases legal suits. If it’s a car wash, cleaning should be well done and on time incase customer is in a hurry. Capital Capital to run the business is a major factor that influences the performance of the business. Plans should be made to ensure that financing the opening of the business and running it is taken care of. Capital must be sufficient to solve the monetary challenges that come along. The venture must be able to fully operate without any hitches so as to return the invested funds. A business that has losses will eventually bring about its closure or even bankruptcy. Competitor Analysis The marketing environment for Thomson Car wash represents overwhelming opportunities. It also contains some challenges that the firm believes it can meet successfully. The SWOT analysis presents a thumbnail sketch of the company’s position in the marketplace. In just three years, Thomson Car Wash has built some impressive strength while looking forward to new opportunities. Its dedicated founders, the growing number of brand-loyal customers, and sound financial management place the company in a good position to grow. However, as Thomson car Wash considers expansion of its product line and entrance into new markets, the firm will have to guard against marketing myopia (the failure to recognize the scope of its business) and quality slippages. External assessment is a crucial part of the business plan in identifying rival firms in the related field. A contributing factor to success is better competitive business intelligence. A SWOT analysis is also ascertained of the rival business. Strengths are the strongholds of a business while weaknesses are the loopholes in the business which would lead to its poor performance. Strategies plans are developed based on this information. Though collecting this valuable information is difficult; the Internet offers a good option for research and formulation of strategies. The Internet will help gather, organize and process the information of a competitor. Competitive intelligence assists in the understanding of the concerned industry and its competitors. Vulnerability of the competitor is pointed out and strategic actions to be taken are carefully accessed. In return this will lower costs, increase output and enhancement of quality decision making. Thomas modern car wash center has strategically analyzed its Strengths, Weaknesses, Opportunities and Threats in relation to the car wash business. This will help them strategically place themselves in the business world. SWOT Analysis Thomson Car wash is entering their first year of operation. Peter believes that a comprehensive marketing strategy will be a key to the success of the business. Thomson car wash offers a premium hand car washing service provided by a well-known local family. The basic market need is a premium car washing service that is far less abrasive than the traditional automatic car washes. Strengths The Center enjoys an excellent relationship with prospective clients It also enjoys a reputable family name within the region The Center also boasts of its experienced employees sourced from the family’s car repair shop Weaknesses It may need the help of minimal outside investors Challenges of starting a new business are inevitable (Kerin, & Berkowitz, 2006) It may be difficult to immediately attain a fairly constant volume of business to support the Center’s staff Opportunities Enjoyable growing economy of Sydney Large customer base Power to decrease the Center’s fixed costs Threats High chances of future competition from any arising franchised car wash center (Douglas, et al, 2010) Reduced discretionary spending may arise from any economic slump (Homburg, C et al., 2009) Misconception that modern car wash may damage car finishing Market Segmentation This is the creation of small groups called segments within a wide market to identify consumers who have related needs, interests and requirements. A large market is divided into small segments. In product promotion it is the first stage. Consumers in the same segment have similar needs different from another segment. These groupings react to related market fluctuations. For example, students and professionals belong to different segments with diverse needs. The Modern Car Wash segments its market along types of car ownership. It believes that customer’s car type helps in determining the volume of driving and therefore type of washing or any other service. (Homburg, C et al., 2009) New car owners It is a common believe that new car owners embrace new technologies and therefore admire modern car washing technology. Since they have pride in their newly acquired cars, they will most likely bring them to them for washing and detailing. The Center aims to convince such customers that it will keep their cars look as good and new. Older luxury car owners This comprise of people who have been riding on high-end luxury cars for years or bought second-hand luxury cars. The former group need modern car washing services to make their cars look good brand while the later will often want to spend more time on their newly-acquired cars and thus the need to have them look good and in a better shape. Sports car owners Being youthful, such customers treat their cars as luxury and come first than anything else to define their class. Therefore, such customers will often want their luxury cars be washed with a modern technology to always look clean and in form. Lifetime owners Many of these people have owned their cars for more than five or six years, and are more likely to be women. They are attached to their cars as friends and though it may be more sensible for them to purchase a new car, they will bring their car in for a wash occasionally, just when the car is dirty. They like their cars to look presentable, and want to keep it in good shape but are not tied up in the look of their car. For this reason, they will not have a detail carried out on their car unless they are selling it.  Dealerships There are five new and used car dealerships within three miles of the proposed location of Thomson car wash. These dealerships often use outside car wash services to detail their vehicles before they are put up for sale. In addition, there are fifteen other car dealerships within a seven-mile radius of Thomson car wash.  Local businesses Some local  businesses have fleets of cars and small vans that must be kept clean to  maintain their company image. These businesses will be looking for a cost effective, efficient car washing service to perform this service, and will prefer to use a car wash service during the week rather than during weekends, like the general public. Targeting is the process of devising different promotional and marketing strategies to meet the needs and preferences of a specific segment. This happens after segmentation of the different consumers. Organizations can now target the various segments in relation to their various needs. Organizations would start to establish themselves in the segments by making the consumers aware of the image their product. This is called positioning. Consumers create perceptions about these products in their minds. They would then buy the product know to them and which will satisfy their needs. The Car wash center can easily achieve its positioning through leveraging its competitive advantage (Homburg, et al, 2009). The Center seeks to position itself as the modern machine car auto-washing center in the Sydney city in Australia. Its competitive edge will be Peter Thomson and the quality brand brought by the family name in Sydney since it has engaged in this type of business for the last 30 years (Van Auken, 2002).The following factors may affect the strategic positioning of the business. Market conditions Market conditions do change depending on the seasons. This can have a negative effect on the business if it gets one unaware. Brands that had established themselves in the resent downturn of the economy, they had to strategize themselves in a new way so as to meet the needs of the customers. If they had positioned themselves very high, they opted to reconsider that and come down to the level of the customers. (Kerin, H & Berkowitz, R 2006) Competitive shifts The company’s strategic position can be determined by how competitive your company is. A company can strategically reorganize its positioning plan and occupy a position occupied by another company. This will force the older company to look at new positioning options to meet up the competition. In terms of products, they may need to fully differentiate and even pack them afresh for the consumers. (Cohen, A 2005) Financial forecasts Financial resources are very important. A business may miss out of a strategic position due to lack of funds. If the financial forecasts of a business look unpromising they may not strategically position themselves. Creating awareness of the product will require more funds due to the advertising and promotions. What more can be more frustrating than not occupying a well identified position due to lack of funds? Resource allocation Strategic positioning requires resources to maintain and meet up the desires of the customers in that location. A lowly forecasted budget may frustrate a company when the location turns out to be too expensive than expected. Allocation of the resources must be properly formulated to accommodate any unexpected eventualities and changes. (Kerin, H & Berkowitz, R 2006) Proper planning Fruitful poisoning is due to proper planning and research. The outcome of the business will greatly depends on the strategic plan put in place by the management. A budget for implementing my strategies A budget is the most important in business. Its goals are to set income targets and expenses. It helps in forecasting future expenses and revenues. To analyze the progress of the business, the actual results are compared with the original to evaluate the variance. Management should make sure cash flow is enough to keep the business going. Profits realized from a budget can be used to expand the enterprise, acquire more machinery and paying of the labourers (Mark, C, et al., 2006). The following factors can affect a budget: Cost of sales During the sales process, more costs will have to be incurred outside the sales. These would include travel cost, transportation of goods, food, lodgings and entertainment. An increase of sales would increase these expenses to new heights. When revenue is generated, it is not immediately reflected in the income statements. Companies planning to expand the scope of sales will have to ensure that it is reflected in the cash budgets while planning. Expansion A good budget should include any planned expansion of the business. A new branch would require new offices, machinery salaries for workers as well as new furniture for offices. These factors will come along with expansion of the business which must be well addressed. They should reflect in a budget. (Cohen, A 2005) Financial costs A company without sufficient funds may opt to acquire from loans, sale of assets or acquire materials on credit. Loans will come along with other expenses to maintain it. The payment terms and interest outlay should be considered and incorporated in the budget. Other variable costs Increased sales and production will increase variable costs of production. As the sales increase, total production of goods and services will go up thus cost of goods should be well analyzed. Moreover, material cost, shipping, packaging and rent will increase simultaneously as sales. Actual sales should be reviewed regularly so that appropriate adjustments can be done in the budget. (Kerin, H & Berkowitz, R 2006) Thomson car wash 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 31st Dec $ 4,000 Improving number of hits per month SEO payments 4th Jan $ 8,000 Website optimized Automatic conveyor 8th Jan $ 16,000 Acquisition of 45’ ECW-450 conveyor handling approximately 80vehicles/hour Foamers 12th Feb $ 10,200 Acquired 2 modern foamers Car wash machine 15th Feb $324,000 Four machines delivered Site hosting costs 28th Feb $3,600 Featured in first pages of all search engines Cost of dryers 1st March $40,500 Acquisition of adequate dryers Constructing tunnels 3rd March $ 100,500 Fours spacious washing tunnels achieved Grand Opening 9th March $ 8,500 Over 200 people in attendance TOTAL $ 515,300 Recommendations Thomson Car wash marketing mix is comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service. Distribution The offered services will be distributed from Thomson's facilities. Advertising and Promotion Thomson’s will use several different methods for advertising and promotion. Customer service Exemplary customer service will be provided Place Direct trading and interaction with the customers in the Center and in their business’ showroom is the place of service. Precisely, individual drivers will be attended to at the Centre while car dealers will have services delivered to their showrooms. (Ziethmal & Bitner 2003) Product We provide convenient and high quality car wash and detailing services to our esteemed customers. Services are delivered on time for the convenience of our esteemed customers. Price As usual, new business sets lower prices than that of competitors to attract customers and create customer awareness. However, our prices will match the prevailing market prices as we target to work with customers who pay little attention to price but consider quality as a priority. According to Kelvin Clancy (Kotler, 2003), few individuals consider prices and are willing to pay even more for quality services rendered. Promotion This is a process taken by the staff of the company to encourage the sale of products offered by the company. It aims at increasing the sales of the product. For the portion to be successful the company ought to take the following; the message of the product should match the brand image and how it’s presented to the customers (Ziethmal & Bitner 2003). High quality images and adverts should be shown for high branded products. The product image should be worth the time and money to invest in. Photographers and pictures should be professional. Product description should match the contents of the products.The product can be of different designs, colors and sizes. The product should stand out from the competitors. This will make it noticeable to the customers thus promoting the business We shall advertise our new service through billboards, major radio and television networks, the Internet, petrol stations, and public places (Kotler & Keller,). Customers who sign one year contract will be offered a 10% discount (Michael D., & David B, 2012) Loyal customers will be given a low-price coupons 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 31st Dec $ 4,000 Improving number of hits per month SEO payments 4th Jan $ 8,000 Website optimized Automatic conveyor 8th Jan $ 16,000 Acquisition of 45’ ECW-450 conveyor handling approximately 80vehicles/hour Foamers 12th Feb $ 10,200 Acquired 2 modern foamers Car wash machine 15th Feb $324,000 Four machines delivered Site hosting costs 28th Feb $3,600 Featured in first pages of all search engines Cost of dryers 1st March $40,500 Acquisition of adequate dryers Constructing tunnels 3rd March $ 100,500 Fours spacious washing tunnels achieved Grand Opening 9th March $ 8,500 Over 200 people in attendance TOTAL $ 515,300 References Cohen, A 2005, The Marketing Plan, 4th ed. Chicester, John Wiley & Sons. Douglas, C et al, 2010, Strategic Marketing: Creating Competitive Advantage, New York, Oxford University Press Homburg, C et al., 2009, Marketing Management - A Contemporary Perspective, 1st ed, London, Thomson Kerin, H & Berkowitz, R 2006, Marketing.8th ed, NY, McGraw-Hill. Kotler, P & Keller, L 2012, Marketing Management 14ed, Upper Saddle River NJ, Pearson Education. Mark, C, et al., 2006, The Oxford Handbook Of Entrepreneurship, New York, Oxford University Press. Michael, D & David, B 2012, Internal Relationship Management: Linking Human Resources to Marketing Performance, New York, Routledge. Van Auken, B 2002, The Brand Management Checklist, London, Kogan Page. Ziethmal & Bitner 2003, Services Marketing: integrating customer focus across the firm, New York, McGraw Hill. Read More