Benchmarking for Brand Image Photographic Studio - Essay Example

Research Proposal: Business Development and Sales Benchmarking for "Brand Image" Photographic Studio I. introduction This project is aimed at developing a framework that will confirm the feasibility of establishing a photo studio to be called “Brand Image”, where sales performances of industry competitors and general market averages shall be treated as benchmarks. The photographic studio will form part of the market comprising of photographic artists, individual artists as well as those belonging to large studios with advertising agencies, public relations agencies and designers as customers. Major products and services to be offered are Wedding / Portrait photography, Commercial / Industrial photography, Advertising / Fashion photography, and other photographic services. More specifically, the primary activities of the proposed studio will include services for Commercial, Portrait, Studio and Street photography. The project shall be made up of two (2) parts. The first part being the identification of the main consumer groups and target market segments, an evaluation of the photo industry, and the conduct of a brief Political, Economic, Social, and Technological (PEST) and Porter Five Points analyses. The second part, on the other hand, shall be aimed at monitoring the performance of the proposed studio against industry competitors and market averages and improving this performance based on the results of the evaluation process. It shall likewise endeavor to determine which of the industry’s niches the proposed photographic studio can successfully tackle to enable the company to maximize its revenues and make it competitive. 1 II. Objectives The rationale behind this project is to confirm that the proposed photo studio is indeed an economically viable business given the industry’s vast market and growth potentials. This project will enable the tracking, investigation and monitoring of existing variables such as relevant competitors and potential market, before and during the initial process of business development including sales monitoring during the early stages of actual business operations. Sales monitoring will involve the process of sales benchmarking via an assessment of verifiable sales of competitors and vis-à-vis relevant market standards. These approaches will cover a complete monitoring and analytical process over a wider spectrum of the company’s existence while at the same time allowing a differentiated approach to the use of different monitoring instruments and research tools. Both phases will require the collection and processing of data from the market and consumers in order to draw relevant conclusions. The initial business development phase will require both theoretical and practical approaches to determine how the market works, the players in the market, the sales and distribution rules of the photographic market and the terms for approaching new clients and building an appropriate network of contacts. From a practical perspective, the project will require data from the industry ranging from competitors’ most important figures like revenues and costs to help understand market dynamics and the types of business figures likely to be expected vis- 2 à-vis break-even operations to external data such as market share, market size, the size of the competitors and other external forces impacting upon the market. The sales benchmarking phase will basically allow us to monitor the performance of the studio against relevant third parties (other companies operating in the market) and market averages in terms of sales, etc. An important and interesting part of this project will be the future projections of the sales benchmarking mechanism with the end in view pf identifying potential consumer trends and determining how these are likely to evolve in the future. This will establish an appropriate basis for the early identification of potential problems that may hamper sales figures in the future and determining the way in which the business can react to these challenges. Moreover, Interviews to be conducted with potential clients, market players and regulatory bodies will create a framework for the potential evolution of all these variables in relation to consumer preferences. Finally, the project likewise aims to develop an action plan that will put the results of the sales benchmarking process into good use and help determine the next steps to take. As earlier mentioned, this area of research is sufficiently vast to permit a diverse research project, with implications over a long period of the business development process. Research methodology The research hypothesis being that of the market offering reasonable opportunities for new players and providing few barriers to entry, the research will focus on gathering sufficient, relevant data on the existing industry players, the extent of 3 competition amongst these businesses and information on the business’ target market. The results of the data gathering shall serve as basis to draw out plans for the business, monitor growth of the business and address the issues affecting its growth vis-à-vis verifiable results of operations of competitor-companies. The research methodology will include both primary and secondary researches and shall cover two distinct periods: pre-development and early development. Primary research shall be based on less financially-burdensome instruments, such as focus groups, online interviews with may be conducted in specific chat rooms or forums where potential clients could be found, such as photography websites and by way of newsletters / e-mails sent directly to potential clients. During the benchmarking stage, competitors willing to communicate their figures shall be tapped. Other sales figures to be collected shall involve internal data as presented in the studio’s cash flow statement, balance sheet, income statement. Some of these data can be drawn from theoretical research, with much of the data available publicly. Business directories, including Google’s, will likewise be a good place to commence research on competitors, while research on the market can include direct contact with professional groups specializing in the area. Direct contact with one or more potential future competitors will also be a good way to develop a network with some of the industry players. Another secondary research tool such as the systematic review of information gathered by studying relevant articles and materials related to both photography as an art and, especially, to photography as a business as well as other sources of feedbacks and industry publications may be used. 4 More specifically, data gathering efforts will focus on the following: 1. Key Statistics such as industry revenue, industry gross product, employment, establishments, exports, imports, domestic demand and total wages. 2. Segmentation i.e. Products and Service Segmentation, Major Market Segments, Industry Concentration and Geographic Spread descirbed as follows: 2.1 Products and Service Segmentation shall detail the key products and/or services provided by the industry, highlighting the most important where possible to demonstrate which have a more significant influence over industry results as a whole. 2.2 Major Market Segments will refer to details of the key client industries and/or groups as well as the indications as to which of these are the most important segments of the industry. 2.3 Industry Concentration will call for data on how much industry revenue is accounted for by top players. 2.4 Geographic Spread will present a guide to the regional share of industry revenue/gross product calculated on the basis of turnover or production, where, when not available, the number of establishments may be used as proxy data. 3. Market Characteristics such as Market Size, Linkages, Demand Determinants, Domestic and International Markets, Basis of Competition and Life Cycle where 3.1 Market Size refers to the size of the domestic market as well as the size of the export market; 3.2 Linkages lists the industrys major supplier and major customer industries; 3.3 Demand Determinants outlines key factors which are likely to cause demand to rise or fall; 3.4 Domestic and International Markets defines the market for the products and services of the industry and provides the size of the domestic market and the proportion accounted for by imports and exports and trends in the levels of imports and exports; 3.5 Basis of Competition details the key types of competition between firms within the industry as well as highlighting competition from substitute products in alternative industries, and 3.6 Life Cycle entails an analysis of which stage of development the industry is at. 5 4. Industry Conditions will cover the Barriers to Entry, Taxation, Industry Assistance, Regulation and Deregulation, Cost Structure, Capital and Labour Intensity, Technology and Systems, Industry Volatility and Globalisation. Specifically, these research areas shall provide the following information: 4.1 Barriers to Entry shall outline factors that can prevent a new company from entering the industry and give indications of the extent to which this occurs. 4.2 Taxation shall enumerate all kinds of taxation that are specific or are particularly important to the industry including concessions. 4.3 Industry Assistance shall refer to government and/or other measures in place designed to improve the performance of the industry or sections of the industry like grants and subsidies; 4.4 Regulation and Deregulation shall include information on the licenses required to operate in the industry providing, where possible, details regarding the degree of difficulty in obtaining a license and other important issues relating to regulation and deregulation; 4.5 Cost Structure shall refer to the average costs a company operating in this industry shall deal with as a percentage of total revenue; 4.6 Capital and Labor Intensity shall provide a guide to the amount of Capital used in producing/providing a service compared to the amount of labor in the total mix of inputs; 4.7 Technology and Systems shall acknowledge the latest technology and/or systems available to this industry within the country where technology shall refer to machinery and equipment, computerization included, which shall make production more efficient and systems referring to methods of production that shall likewise improve production; 4.8 Industry Volatility shall refer to year on year fluctuations, which occur in industry output, where volatility may be classified as Very High, High, Moderate and Low, and 4.8 Globalization shall give an indication of the extent to which the industry is global where the level of foreign ownership, the proportion of demand accounted for by foreign operators, and in the case of industries 6 dominated by domestic participants, the volume of production conducted in other countries shall serve as guide in the determination of the level of globalization. 5. Key Factors shall cover the industrys Key Sensitivities and Key Success Factors. Key Sensitivities shall outline the key factors that are beyond the control of an operator in the industry but which are likely to have significant impact on the business while Key Success Factors are the factors within the control of an industry operator and which should be followed in order to be successful in the industry. 6. Key Competitors are the major players in the industry and shall include a brief analysis of each major players activities and information on market share where possible. 7. Industry Performance shall provide an analysis of both the industrys Current and Historical Performances where a current performance analysis shall involve a scrutiny of the industry over a reasonable period versus key performance indicators while historical Performance shall detail past events that have proved important in the development of the industry. 8. Industry Outlook shall involve an analysis of and an outline of expectations for the key industry indicators over a set period, including forecasts. Action plan Initial pre-development and early development research efforts shall be carried out every month, with benchmarking activities to be conducted once every three months over a reasonable period of time. While the industry is dynamic and data can change easily over this period, the industry looks like one where figures are stable enough for research purposes. The business action plan will thus be as follows: 1. October 2008 – Pre-development primary research and Interview of potential clients, market evaluations and estimates etc. 2. November 2008 – Monthly pre-development evaluation to be performed for three months before the launch of the business. 7 3. December 2008 – Last monthly evaluation. Conduct of final interviews and focus groups. 4. January 2009 – Launch of the business. 5. February to March 2009 – Development of the business. No market research at this point. 6. April to June 2009 – Three (3) months benchmarking evaluation through primary and secondary research. 7. July 2009 – Three (3) month benchmarking evaluation. 8 References Trochim, W.M.K. (2006), Structure of Research, Research Methods Knowledge Base. Bell, J. (2005), Doing your Research Project, 4th ed. Maidenhead: Open University Press. Driscoll, Dana Lynn. (2008). Conducting Primary Research. On the Internet at http://owl.english.purdue.edu/owl/resource/559/01/. Last retrieved on October 6, 2008 Secondary vs. Primary Market Research. On the Internet at http://www.allbusiness.com/marketing/market-research/1310-1.html. Last retrieved on October 6, 2008 IBISWorld Australia Photographic Studios Industry Market Research Report. On the Internet at http://www.IBISWorl.com.au/industry/retail.aspx?indid=6748&chid=1. Last retrieved on November 2, 2008. 9 Read More