The First Five Years of Wash Avenue Incorporated - Case Study Example

Running Head: WASH AVENUE INCORPORATED: THE FIRST FIVE YEARS Wash Avenue Incorporated: The First Five Years In APA Style By Course Name University 1.0. Executive Summary This paper presents a five-year marketing plan for a start-up car wash company Wash Avenue Incorporated. This plan encompasses both internal and external analysis in order to come up with an efficient marketing strategy which will help the company succeed and survive in its current market. After laying out its marketing mix, it also offers an implementation plan, financial projections, and evaluation and control. 2.0. Company Description Wash Avenue Incorporated (Wash Avenue) is a prospective entrant in the burgeoning Boston car wash industry. The company is the brainchild of John Bradley who just received his Bachelors Degree in Business Management from The American University. Having worked in a car wash to support his college education, he has acquired the necessary skills and has always been inspired to put up his own company. To differentiate itself from other players, Wash Avenue will be located in the mall's garage and provide services while the customers shop. The company will officially be opening its first shop in Copley Place but plans to expand into other areas as soon as it gains popularity in the market. 3.0. Strategic Focus and Plan In order to efficiently operate in its chosen market, Wash Avenue has established its mission/vision, goals, and competitive advantage. 3.1. Mission/Vision The mission/vision of Wash Avenue is to provide a convenient and inexpensive place to have customers' car washed by utilizing state of the art technology for best results. 3.2. Goals During its first five years of operation, Wash Avenue hopes to achieve the following: 1. To open three shops in the Boston area; 2. To create customer awareness and to raise it by 5% annually; 3. To show net income during the second year of operation; and 4. To increase revenue by 12% each year. 3.3. Competitive Advantage By locating in the malls, Wash Avenue hopes to develop a core competence in (1) extending quality car wash service and (2) utilizing the best available technologies in the market. In order to translate this into sustainable advantage, Wash Avenue will outline a unique process of giving "car make-overs" and ensure consistency. The company will also partner with the car wash technology expert Seven CarWash Romania Inc (2008) which will design and update its equipment. 4.0. Situational Analysis The US car wash industry is comprised of 14,000 full-service car washes accounting for US$5 billion in annual revenue (International Car Wash Association 2008). This huge market is still highly unsaturated and business organizations are still looking for ways where they can improve their service offerings. In this situational analysis, the PEST model will be used in order to fully understand all the opportunities, challenges, and issues which confront the industry players (Thomson 2002). This strategic management technique will enable Wash Avenue to identify the opportunities and threats in its external environment and respond to this by crafting appropriate marketing strategies. Political. The nature of car wash business makes it as a subject of legislations which varies from state to state. However, the theme of these regulations is often about the preservation of water and environment (International Car Wash Association 2008) . All car wash operators are required to manage and to use only a minimal amount of water during the process. Currently, as customers are also becoming more and more aware of social corporate responsibility, car wash operators are also pressured of rethinking their solid waste management practices in order to ensure sustainable development. Economic. The United States have entered a turning point in its economic history. From long been globally respected because of its economic hegemony, the nation is now threatened by economic slowdown (US Economic Crisis 2008). This situation is expected to make customers more price sensitive as they try to squeeze their money to cover basic necessities. In the case of the car wash industry, this is a bad news because low consumer confidence hinders consumption and spending which also means low demand for its services (US Economic Crisis 2008). Social. The busy lifestyle of the Americans leaves little or less time for car washing. Because of this, customers are constantly seeking ways of maximizing the use of their time through multi-tasking. Taking the car to a car wash is often seen as a hassle especially if the process takes longer than it should. Technological. On the technological side, suppliers of car wash equipment are constantly innovating new products which make washing more efficient. The primary focuses of these innovations are speed and efficiency, safety and durability, and automization. During the past years, product obsolescence has been quite slow as the research and design process is usually long. Companies are also increasingly investing in these new technologies in order to ensure quality service (Seven CarWash Romania Inc 2008). 5.0. Market-Product Focus 5.1. Marketing and Product Objectives Initially, the goal of Wash Avenue is to raise customer awareness and develop a unique image which sets it apart from the other competitors in the area. In order to do this, the following objectives should be met during its first five years: 1. Raise customer awareness to 70% during its first year and increase by 5% every year thereon; 2. Organize promotional activities to introduce services; 3. Create product image through advertising; and 4. Build relationship with customers to encourage repeat transactions. 5.2. Target Markets Wash Avenue will target the working population aged 28 to 50 who barely have time to wash their cars and are looking for a service provider that will enable them to bring and leave their car so that they can do other important things. For these individuals, time is an important factor which should be maximized. Multi-tasking is their lifestyle and getting the most out of their time is the most important. Wash Avenue will also focus on serving the middle to high-end customers. 5.3. Points of Difference Wash Avenue will focus on making two points of difference which will emphasize its strengths: 1. Importance of time. The company understands that time is important to its customers and will do its best to make car wash as fast and efficient as possible. 2. Excellent service. Wash Avenue will take care of its customers and their cars through the extension of excellent before and after services. This will be complemented with the investment in state of the art technology to ensure best results. 5.4. Positioning Wash Avenue will be positioned as an efficient car wash offering high quality services through courteous and skilled staff and quality equipments. For these services, high customer value is provided through a moderate pricing system which is at par with other industry players. 6.0. Marketing Program 6.1. Product. The product offered by Wash Avenue is clearly defined in its mission statement. This can be identified as the car washing service which is done through its technologically efficient equipments. There will be two main products offered by the Wash Avenue-hand wash which only takes care of car's exterior and hand and steam wash which includes its interior. The shop will also offer complete interior detailing. 6.2. Price. Recognizing the tight economic situation in the United States which makes customers wary, moderate product pricing will be used. For a regular car wash, $20 will be charged while a premium service will cost $45. 6.3. Promotion. During the start of the company's operation, Wash Avenue will distribute flyers and leaflets to mall goers in order to announce its launching. This will be coupled by the distribution of discount stubs for the first 200 customers who will avail of its services. Seasonal promotions will also be initiated. For example, during Father's Day, Wash Avenue will present free gifts for selected Dads. 6.4. Place. As already indicated above, Copley Place will house the first Wash Avenue shop. The company will initially operate in Boston but will also seek other lucrative states as it gains foothold in the market. 6.5. People. Because Wash Avenue will be offering a service which is intangible, it will invest in its people as its strategic partners in attaining its mission/vision. Thus, the business organization will require an extensive training before a prospective applicant join its team. This will include the basics of car washing and auto detailing as well as treating customers with utmost respect and courtesy. Each staff must be well-versed with the company's credo of customer service and should dedicate himself in the provision of customer delight. 6.6. Physical Evidence. In order to emphasize the aim of Wash Avenue of providing efficient and best car wash, the company will invest in state of art equipment to support its equally able employees. The company will be using the top of the line product of Seven CarWash Romania Inc model Clean 1700 CL. This model "uses high pressure steam (9kg/cm2), produced by pressure adjustable efficient broiler" which "quickly blow-off the dust, smears, and dirt" on automobiles. The machine is reputed to be environment friendly, water efficient, and portable so it can quickly fit into any car. It also has automatic heating sensors enabling it to wash cars without any break. 6.7. Process. Each time a customer drives into Wash Avenue, the company will make sure that they, together with their cars are well taken care of. Courtesy will be taught to every staff. The company will also set out special process during each car wash that the employees would strictly follow. For hand wash, the following processes will be observed: a. Bug targeted with specialchemicals; b. Pre-soaked with fresh water / power wash; c. Soap using soft brush and sponge; d. Rims cleaned with cleaner and brush; e. Dried with leather chamois / air drier; f. Tires dressed; and g. Exterior express wax. Value added services will also be provided in addition to hand wash for the company's other services. 7.0. Financial Data and Projections The following table shows the expected financial results of Wash Avenue Inc during the five-year fiscal periods of 2009-2013. It should be noted that the opening of the new branch in Boston will initially require a funding of US$1.2 million in order to purchase the necessary equipments, hire and train people, and other administrative tasks. This amount will all be acquired using a commercial loan with 8% annual interest paid at the end of the year. Sales are expected to grow by 12% per year as consumer awareness also increase. Table 1. Five Year Projection for Wash Avenue Incorporated 8.0. Organization In its initial operation, John Bradley will be the manager of the first shop of Wash Avenue overseeing all the functional departments. He will hire an assistant manager for marketing, finance, human resource, and operations who will be in-charge in the task of the departments. He and the assistant will be responsible for all the administrative matters and strategic planning. There will initially be seven staff who will undergo an intensive training for car washing processes outlined above. However, their staff will also be empowered to decide on their own when situation arises. The assistant manager will also be in-charge in entertaining customers and answering their queries. 9.0. Implementation Plan A hiring process two months before the shop will be launched which will be initiated by John Bradley will be primary in order to start Wash Avenue's operation. After the staff is chosen, he will personally train them and gear them up for the shop's operation. One month before finally opening its doors to its customers, the company will be conducting a preliminary advertising in order to inform customers about the launching. This advertising strategy will be overseen by John Bradley and his assistant manager. The staff will be in-charge of the distribution of advertising materials such as leaflets and flyers for in order to raise customer awareness. During its operation, the company will come up with the appropriate promotional strategies which will be employed in order to generate more revenue, enhance product and brand awareness, and establish good relationship with customers. These promotional strategies will be seasonal and will be in-sync with the holidays and celebrations. 10.0.Evaluation and Control In order to ensure that the objectives of Wash Avenue are being met, John Bradley will set a monitoring system. In its quest of providing customer satisfaction, each customer will be given a short evaluation form where they will give feedback about the service that they receive. The company will offer discounts to each customer who will provide their feedback. This will be John's basis to judge the performance of his staff. The company will assess customer awareness through brief customer surveys which will be conducted every year to ascertain its popularity among mall-goers. The targeted income will be compared to the actual one in order to ensure that targets are being met. If not, Wash Avenue will identify possible problems and propose possible solutions. References and Bibliography De Witt, B. and Meyer, R. 1998, Strategy: Process, Content, Context, 2nd ed., International Thompson Business Press, Oxford Hill, T. and Westbrook, R. 1997, SWOT Analysis: It's Time for a Product Recall, Long Range Planning, Vol. 30 Issue 1, pp.13-16 International Car Wash Association Inc 2008, Retrieved 22 June 2008, from http://www.carwash.org/industryinformation/industryoverview/Pages/default.aspx Kotler, P 2002, Marketing Management, Prentice Hall, New Jersey Kotler, P. and Armstrong, G 2001, Principles of Marketing, Pearson Education, Inc., New Jersey Lynch, R. 2003, Corporate Strategy, 3rd Edition, Prentice Hall Financial Times. PP. 477 - 488 Seven CarWash Romania Inc 2008, Retrieved 22 June 2008, from http://www.7carwash.net/products_clean_1700cl.php Strategic Management, Strategic Management Journal, Vol. 11 pp.171-195 Thompson, J. 2002, Strategic Management, 4th Edition, Thomson, London US Economic Crisis: Readers Experience 2008, BBC News, Retrieved 23 June 2008, from http://news.bbc.co.uk/1/hi/world/americas/7302485.stm Read More