Marketing Objectives Analysis Flashcard
Our marketing plans are defined by our marketing objectives and marketing plans. Marketing Objectives Our strategic objectives are as follows: • Annual sales volume of $10 million; • Production of unique, simple and durable designs of traditional non-motorized bicycles; • We aim to establish a market share of 25% within the next 3 years. Marketing Strategies Our market analysis on indicated that we can take advantage of an unexploited market niche – manufacturing of traditional non-motorized adult bikes for males and females, children’s bikes, specialized mountain bikes and racing bikes for sporting purposes.We were the first to spot the gap in the market and although we lack exclusive license for the traditional non-motorized bicycle, we plan to lock out the main competitors through production of quality products and intensive marketing campaigns.
We estimate that upon launching our unique products, there will be a 15-month time lag before our competitors pose any threats of competition, by which time we will have achieved critical mass following from the populations in New Zealand and the market will be unattractive to them for cost reasons. We will also use the revenue from the first sales to develop marketing and customer care networks.In essence our strategy is to work with local communities in order to enable fast deployment of our peddle bicycles using their relationships and resources. We intend to pursue the strategic sales objectives with the aim of gaining critical mass most rapidly and lock out the major competitors. Selling Goals Our selling goals are influenced by our desire to recover in 10 months the company’s entire initial investment used in setting up of the company, buying the production materials, labour costs and implementation of the marketing system and infrastructure.The set sales objectives will be determined by the sales volumes, production costs and pricing.
Sales Volumes The limiting factor in our sales volumes might be our ability to manufacture enough units of our products in a given time period. We intend to overcome this problem by manufacturing enough peddle bicycles that will satisfy all the orders from our customers in the pilot stages of our business in New Zealand. We will achieve average but upward sales through close partnership with the local advertising and distribution agencies and using their technical staff to recommend our products to the end-users.This will in turn reduce our distribution resource allocation requirements and reduces the sales cycle since close cooperation with local distribution agencies will leverage existing customer relationships. Moreover, we will provide incentives for our partners and agencies to re-sell our non-motorized traditional bicycles by allowing them to earn a high margin on the product while also earning from sales of their consulting and implementation services. We have already appointed seven agents and distributors and we expect to add seven more by the end of the year.
We will continue to add agents and distributors until we have 25 in year 5. We are working with the current agents and distributors to develop specific prospective sales. Production Cost We will keep the production costs at the minimum levels so that our products can be affordable to a wide customer base. We plan to outsource the production of some of the parts and spares for our bicycle so as to keep the production costs at minimum.
We will take full advantage of economies of scale to keep achieve competitive production costs. New Zealand Rubber Company Limited will produce rubber tires for us.This will reduce the resources that we will require and limit our manufacturing risks Pricing Our long-term sales will average a little over $250 per item. Pilot sales aimed at establishing a market presence will be of lower values. Promotions Our company will conduct full scale advertising and sales promotions activities before, during and after the launch of our traditional non-motorized bicycles into the New Zealand market.
Advertising We will adopt a multi-faceted and simplistic approach in our advertising efforts so as to reach as many prospective buyers as possible.Because our traditional non-motorized bicycles can be used by people of different ages, gender and different economic abilities, we will advertise both through the electronic media and print media. We will advertise our unique product through direct mail advertising, yellow pages, newspapers, magazines, radio, posters, business cards and the internet. The advertising budget will take 5% of the gross sales in the first year and increase to 7% thereafter with the expansion of the target market.
Sales PromotionsSales promotions will mainly consist of the company’s collateral material in the form of brochures, press releases, videos and recordings of the company’s past activities and events. Risk Analysis Different business projects face different risks and challenges and our business is no exception. There are numerous probable situations that portend operational risks during the start up phase of the business, like for instance, the probability of a competitor launching a similar product to ours before we hit the market.Therefore, our business plan seeks to cushion our expansion project through providing probable responses to different risk scenarios.
The SWOT analysis provides our company with the best guidelines for confronting risks and challenges. SWOT Analysis We have analyzed our strengths and weaknesses, and the opportunities for and threats to the business. Our management believes in SWOT analysis as an effective tool for auditing the company and its environment.The SWOT analysis represents the first stages of planning that enables our managers to focus on key issues. Identification of key issues facilitated the transformation of the issues into measurable objectives. In our SWOT analysis, strengths and weaknesses represent the internal factors while opportunities and threats represent the external factors affecting our company.
The key steps adopted by our organization in assessing risks are as follows: • Step 1. Risk Identification – Analyze the project to identify sources of risk• Step 2. Risk Assessment – assess risks in terms of severity of impact, likelihood of occurring and controllability. • Step 3. Risk Response Development – Development of strategy to reduce possible damage and subsequent development of contingency plans. • Step 4.
Risk response Control – Involves implementation of risk strategy, risk monitoring and adjustment plans for new risks. Critical success factors We have determined that we must achieve the following targets in order to move our strategy forward.The most critical factor for our company at the moment is the need to source for adequate capital. Limiting factors There are two things which could limit our sales in year one. First, there is a constraint of the amount of funding that we can source until we stabilize in the market.
Second, the customer response of our target markets may take quite sometime to adjust to full scale business opportunities. However, these limits are way beyond the sales volume that we can reasonably hope to achieve.