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Marketing Plan

 

For the businesses of Stiralka

-a shop for laundry services

 

Student: Ida Svensson Southern Federal University

Teacher: Anna Khlebnikova Taganrog 2012-12-18


1.0 Executive summary 3

2.0 Current marketing situation 3

2.1 Market summary 3

2.1.1 Market Demographics 3

2.1.2 Market Needs 3

2.1.3 Market Trends 3

2.1.4 Market Growth 5

2.2 SWOT Analysis 5

2.2.1 Strengths 5

2.2.2 Weaknesses 5

2.2.3 Opportunities 5

2.2.4 Threats 5

2.3 Market competition 6

2.4 Keys to Success 6

2.5 Critical Issues 6

2.6 Macroenvironment 6

3.0 Marketing Strategies 8

3.1 Mission 8

3.2 Marketing Objectives 8

3.3 Target Marketing 8

3.4 Positioning 8

3.7 Marketing Mix 9

3.7.1 Services 9

3.7.2 Place 10

3.7.3 Pricing 10

3.7.4 Promotion 13

3.7.5 People 14

3.7.6 Payment 15

3.8 Marketing Research 15

4.0 Financials, Budgets, and Forecasts 17

4.1 Break-even Analysis 17

4.2 Customer Forecast 17

4.3 Sales Forecast 19

4.4 Expense Forecast 19

4.5 Contribution Margin 20

5.0 Controls 22

5.1 Implementation Milestones 22

5.2 Marketing Organization 22

5.3 Contingency Planning 24

 

Appendix 1.Вопросник: Стиралка 25

Survey evaluation 26

Appendix 2 31


Executive summary

 

The company of “Stiralka” will give the ordinary people an opportunity to wash their clothes in a full-equipped environment for a small fee. The customers have the choice to have the services made by themselves or by professional personnel. These different services will be pointed out to three market segments, which all have the need for washing equipment and saving of time.

 

The segment of greatest importance will be the many students of Southern Federal University in Taganrog, which have troubles to find free, working and cheap washing machines. Close to the campus, where the laundry shop will be placed, there are also families living without water supplies, they will be the second segment. People from the two segments can bring their clothes to the shop, wash, dry and iron their clothes and be charged for the self-services they are performing. They can pay employees for, half-service, which is performing parts of the tasks, such as ironing or moving the clothes from the washing to the drying machine.

 

The third segment will be families or people with high incomes that wants free time after work. They can save time by dropping of their clothes, by themselves or by taxi, and let the personnel at the shop perform full-service, which means washing, drying, ironing and folding the clothes for them.

 

There is no comparable competition within this field that will compete for customers, but since the service is new there will be difficulties in making the market adapt to this new way of living.

 

“The mission is to make life more enjoyable for the ordinary people.”



· To have had over five thousand customers by the end of June 2013.

· To have a total growth of visits by customer with 16% each half year the first two years.

· To have a profit of 1 000 000 Roubles for the year of 2013.

· To have a profit of 1 800 000 Roubles for the year of 2014.

 

To reach the goals and attract the customers a market mix has been planned. As previously described there will be different services to satisfy the different market segments. The prices will also differ for the self and full-service so the money that the high income takers are ready to spend will be utilized. Market-penetration pricing will be used, with lower prices at the beginning that later gets higher, this is done to attract the first customers. The shop will be placed close to the campus in Taganrog, which will be close to where students and families without water supplies live. The personnel will be a significant factor in the value the customer is delivered. They will be thought how to perform the service in the best way and in how to sell to the customer at the shop.

 

To promote “Stiralka” specific campaigns are planned. The Opening Advertisement Campaign will make the brand known and attract the first customers, through billboards and coupons on the street and at the campus. When the first customers have come they will be inspired to bring their friends and come back through the Bring-a-friend campaign. For the main holidays existing customers will be offered to bring curtains and tablecloths for full-service and every start of semester there will be campaigns for students. This will make the washing at “Stiralka” a habit and bring new customers. To attract the students to come more continuously, there will be a campaign where they should collect stamps each time they wash and get a practical laundry bag for free. The laundry bag will also spread the name of the brand.
2.0 Current marketing situation

Market summary

Market Demographics

The major market segments that the company wishes to reach is the students segment or the segment for families with low income that can not afford or doesn’t have the ability to buy their own laundry machine or have water access in their houses. This segment lives within the city and often in crowded apartments or at a compound without water pipes to their houses.

 

Another market segment that will be of importance for the full-service is the high income takers. They belong to another social class but as well have the need of clean clothes. They will find it more comfortable to give away this task and pay for it than do it themselves. They would have the want for extra services such as drying, ironing and folding the clothes. Today they might already be using the services of a dry laundry or housekeeper.

Market Needs

The customers have the need for clean clothes and the want to get them clean in the most comfortable way. What will affect their choice is the ability to buy their own laundry machine or if it is more prize worthy to wash by hand.

 

The market segment with high income has the need for rest and want for free time after work.

Market Trends

The global trend, and also the Russian, is moving towards a society where both men and women are working full time jobs. “For example, about three-quarters (74%) of Russians now say that a marriage where the husband and wife both have jobs and share household responsibilities is preferable, compared with 56% in 2002.” according to a research made by Pew Research Center (http://www.pewglobal.org/2010/07/01/gender-equality/). More information is shown in Table 2.1.3. Because of this trend people will have less time or less want to spend time on household duties such as washing by hand, or taking care of their laundry at all. They would therefore more and more start demanding and wanting the services that “Stiralka” will offer.

Table 2.1.3.a. Trends of both spouses working are shown for Russia and other countries in the world. http://www.pewglobal.org/2010/07/01/gender-equality/

 

There is also a trend among the population to move into cities from the countryside. This trend is also valid in Russia for some of the following years, according to United Nations research on world Urbanization Prospects, the 2011 revision. (http://esa.un.org/unpd/wup/CD-ROM/Urban-Rural-Population.htm, link “Avarage annual rate of change of the urban population, 1950-2050)

 


 

Table 2.1.3.b. The avarage annual rate of change of the urban population, 2005-2025. Made by author of this marketing plan with information taken from United Nations, World Urbanization Prospects, the 2011 revision at http://esa.un.org/unpd/wup/CD-ROM/Urban-Rural-Population.htm

 

 


Major area, region and country 2005-2010 2010-2015 2015-2020 2020-2025
Russian Federation 0,07 0,13 0,08 -0,02

 

Market Growth

With the trend of change of society, as described in the chapter above, the growth of economy within the household and the lack of time will give more and more families the opportunity to use the service at “Stiralka” and in this way the targeted market will grow.

 

When more people are moving in to the cities, the population of Taganrog will grow and with the growth of population there will be growth of opportunities for more customer.

SWOT Analysis

Strengths

The low prices for the services, in comparison with for example dry cleaning, will put “Stiralka” in a superior position.

 

The founder of the business has good insight in the life of a student, which will be one of the important segments targeted.

Weaknesses

Since this service is new for the market the buyers might not understand and get used to the services at the laundry shop. It may even interrupt with the culture to let somebody else handle your personal laundry.

 

The founder and workers at “Stiralka” have no experience in this sphere of business.

Opportunities

Since there are no comparable competitors at the market right now the product might turn into a “star” that will have opportunities to bring high income to the company.

 

In the long run the trend of change of lifestyle might be an opportunity for the full-service, since free time becomes more valuable in families where both parents are working. The gain will concern customers in the segment of higher incomers that, with their lack of time, wish to have full laundry services, including drying, ironing and folding.

Threats

Other people and companies will be quick to copy if they see that it is a good business idea. So even though there are no competitors at the market right now, the company might soon be threatened by other competitors on the market.

 

With the increases of jobs for more family members than one, comes increasing salary for the family. They might afford buying their own electrical washing machine, if they did not have one earlier. Also the fact that electrical equipment seems to become cheaper and develop as time goes it will be easier for people to buy their own machine. This could create losses in the segments of families without water and students.

 

Market competition

The customers concerned for the self- or half-services are those who don’t have the opportunity to buy an electrical machine because of prize or lack of water access. They might consider buying a cheaper “plastic washer” that does not rinse the clothes, or wash by hand, which is cheap but uncomfortable. To wash by hand is very convenient because it can be done almost anywhere and at any time. Students sometimes have the opportunity to wash in coin laundry machines at their dormitories, which is nearby their rooms, but it costs 50-100 roubles and the machines are rarely working.

 

The competing alternative for customers that will use the full-services are dry-cleaners. This is rather expensive, a list of prices are shown in table 2.3. There are not many dry-cleaners in the city of Taganrog, which makes it inconvenient for customers living more close to “Stiralka” to travel there.

Table 2.3. Prices for washing services at a dry laundry are shown. The prices are primary data found at a dry laundry in Taganrog.

 

Service Price
Sheets (1 kg)
Clothes (1 kg)
Shirts (1 piece) 100-150

 

Keys to Success

The most important factors to get and keep customers and in this way gain profit are:

 

- To get the market to understand the use for this laundry service, since it is new. If clients don’t understand they will simply not come to the shop.

- To get the market to understand the use for a drying machine.

- To have service minded personnel working in the store which believe in the service and can explain it to the customer.

Critical Issues

The most likely reasons for customers not to come to the store are:

- That people don’t understand the use for the service and therefore have no want for it.

- That students and others will prefer washing by hand.
- That costumers don’t understand the use for drying machine and will not come because they don’t want to carry heavy, wet clothes home.

- That costumers will think it is too far to bring clothes to the washing shop.

Macroenvironment

As already discussed in previous chapters; macro environmental factors such as both spouses working and urbanization will affect the business. The change of the economic environment with both spouses working, and earning more money, will give more business opportunities for the “Stiralka”. The change in demographics with urbanization will probably also grow number of customers within the market targeted.

 

The average perception in the cultural environment might be against the thought of letting somebody else handle your laundry. Even though it is not against the basic values, there can be troubles to explain the service of a laundry shop and make the customers change their view and behaviour.

 

In the macro perspective the economic environment might affect the customers want to spend money on laundry. In times of depression people might prefer washing by hand; therefore to be aware of and adjust the prices after the economic cycles might be needed.

 


Marketing Strategies

Mission

“The mission is to make life more enjoyable for the ordinary people.”

This is going to be done by the business idea:

“To give the ordinary people an opportunity to wash their clothes in a full-equipped environment for a small fee. The customers have the choice to have the services made by professional personnel.”

 

Marketing Objectives

The goals that should be reached through my marketing activities are listed below. They are SMART which means that they are Specific, Measurable, Achievable, Realistic and Time specific.

 

· To have had over five thousand customers by the end of June 2013.

· To have a total growth of visits by customer with 16% each half year the first two years.

· To have a profit of 1 000 000 Roubles for the year of 2013.

· To have a profit of 1 800 000 Roubles for the year of 2014

All numbers are taken from the forecasts described in later chapters.

Target Marketing

To target all wished markets the entire market mix will be carefully used. This is done by differential marketing, which means that the market mix is handled in different ways, with special offers, to attract the different markets.


Students will be a market of importance, with its size, since there are living many students around the campus, with the same problem of finding time and equipment to wash. The market of students will be attracted by the lower prices of self-services and the closeness to the place of the laundry shop. They will also be attracted by the promotion campaigns that are held at the campus of Southern Federal University. They will be offered coupons to try the product for free. Later a campaign of “bring-a-friend” will be held to increase the costumer through the word-of-mouth by costumers who already believe in the service. Every august, when freshmen start, campaigns will be held at the campus.

 

Families without water supply will, as well as the students, be attracted by the lower prices of self-services and the comfort of not having to wash big loads by hand. To target this market segment with promotion they will be handed coupons on the street and billboards will be shown close to where they live.

 

The segments with high incomes will be significant for the income and profit of the company. Even though there might not be a big quantity of customers in this market, it will contribute to the income of the company. The higher prices of the full-services will tell the costumer that it is a quality service that suits their lifestyle. By offering pick-up services and parking lots the place will also attract this market segment. Coupons and flyers will be handed out on the street and billboards will be visible.

Positioning

In the process of positioning the service on the market there are different ways for value propositions. The five value propositions are presented in Figure 3.5. “Stiralka” does not have competitors that offer the exact same service. Because of this the service already has competitive advantage and will be positioned differently than other competitors.

 

Products that are competing to get customers from the sphere of students and families without water supplies are washing machines at the dormitories, cheap washing machines without rinsing function or the plastic bucket for hand wash. These alternatives are either hard to find or uncomfortable to use. Washing machines at the dormitories are often busy or broken. Therefore the services of “Stiralka” will be positioned as offering more benefits for more or about the same price as washing with other alternatives. In figure 3.4 this new business will be positioned as the green colour. That is “more for more” or “more for same”.

Competitors for the full-services are drycleaners, housekeepers or washing by electrical washing machine at home. The services offered by “Stiralka” are cheaper then drycleaners or housekeepers and will therefore be positioned as the blue colour in Figure 3.4 “same for less”.

 

 

    Price
    more the same less
Benefits more More for less More for same More for less
the same     Same for less
  less     Less for much less

 

 

In the chase to become a market leader there are three successful competing strategies, which all are covered by “Stiralka”:
To have overall cost leadership: “Stiralka” offers full-services to lower prices than competitors.

To have differentiation: “Stiralka” have a service line that is not comparable to any competitors.

To focus: “Stiralka” focuses on specific market segments as described in previous chapters.

Marketing Mix

Services

The core service that is offered by the “Stiralka” is a more comfortable life. This is received by the consumer by buying the actual service: laundry services.

 

The services are differentiated into two major lines to target the different segments: the first is self-service and service by staff and the second is full-service. These two lines of services are pointed to different market segments and have different price ranges. The first line is formerly pointed to the segments of students and families without water supply whereas the full-service is pointed to high income takers. The services are listed in Table 3.5.1.

 

 

Self-service Half-service Full-Service
Washing Longrun Rush hour Switch from washing to drying machine Sheets & Towels Regular
Washing Shortrun Rush hour Take out clothes from machine Average clothes Regular
Drying Longrun Rush hour Store clothes Shirts Regular
Drying Shortrun Rush hour Hand wash Sheets & Towels Express
Washing Longrun Low hour Ironing: Sheets & others Average clothes Express
Washing Shortrun Low hour Ironing: Avarage Shirts Express
Drying Longrun Low hour Ironing: Shirts Sheets & Towels Low
Drying Shortrun Low hour Mangle Average clothes Low
Ironing   Shirts Low
Hand wash  
Detergent 50 ml  
Conditioner 40 ml  
Detergent+conditioner  

 

With these wide range of actual services presented above, the core service, and the mission of the business, can be reached.

 

Among these laundry services the service of transportation is also offered. This is considered an augmented service. For the price of 200 Roubles clothes can be picked up or left off within the city of Taganrog by Taxi service.

 

To perform these services equipment, machines and staff is needed. The quality of the service is dependent on the quality of these factors. To deliver the core product: “A more comfortable life”, the place for washing needs to be clean, the machines must be working and have good standard. The quality of the service is heavily dependent on the interaction between the buyer and seller. That is how well the clothes are cleaned and how well the costumer is taken care of by employees. To improve this interactive marketing the company will have an internal marketing with its employees. This will be further discussed in chapter 3.5.5 People.

Place

The place where the service will be performed is in a company owned speciality store close to the campus and dormitories of Southern Federal University in Taganrog. In this area both students and families without water supply can walk by and leave their clothes. It is of great importance that it will not be to big of a trouble to come to the store. Since transportation is considered a cost for the consumer this is an aspect that brings down the total value that the customer will receive. If the store is situated to far off the customer will be more satisfied by washing by hand at home.

 

There will be a few parking lots offered for customers that are coming by car. This will especially be customers from the high income takers. The parking lots will give them the opportunity to stop by and leave their laundry for full-service.

 

At the shop there will be functional and clean equipment to perform all needed tasks. There will be space for folding clothes and a small sofa to sit and wait, for those who wish.

Pricing

To convince the market that the service is practical market-penetration pricing will be practised. This is done by putting the prices low at first and then raise the prices. The profit will not be big at the beginning, but the market will get to know the services of “Stiralka”, which is new, and getting used to continually visit the shop. When the prices are raised after a while, the customer will still think that the service is price worthy. They will think this because they have learned that the service is practical and has a value for them. The most popular services will have changed prices: that is the self-service prices for washing and drying machines and half-service prices for changing clothes from washing to drying machine. The new prices will be put after half a year and are marked with green colour in Table 3.5.3.

 

While setting the prices value-based pricing have been used, which means that the estimation is done by estimating the worth of each service for the costumer, how much they are willing to pay. According to this the costs and quality will be determined.

 

The prices of the services will be segmented with much higher prices for the full-service, which is pointed to a different segment of the market than the self-service. This way the ability of paying more, which occurs within the segment with higher income, can be utilized. The higher price of the full-service will not only bring profit to the company, but also tells the customers that the full-service has high quality. This is called psychology pricing.

 

Prices will also be divided into different times during the day. This is done in order to decrease the number of clients during rush hours and make them come during hours with more available machines. The higher prices during rush hours will be the standard prices and during the rest of the day the price is lowered. This is psychology pricing and will give customers the view that the prices are low.

 

As shown in the Table 3.5.3 the price for detergent and conditioner are cheaper if they are bought together. Product-bundle pricing makes customer think that it is cheaper to buy both products rather than buying just one.

 

The prices for transportation are determined as uniform-delivered pricing. Everyone, within Taganrog, gets the same price even though they might live close or far from the Laundry Shop.

 

 


Self-service Service by staff   Full-service
Service Roubel Service Roubel   Full-service includes:  
Washing Longrun 60 (80) Switch from washing     Sorting    
Washing Shortrun 40 (60) machine to drying machine 50 (60)   Washing    
Drying Longrun 30 (40) Take out clothes from machine   Drying    
Drying Shortrun 20 (30) Store clothes 1 Rub/30min   Ironing/mangle    
Ironing 20 Rub/15min Hand wash 100 Rub/piece   Folding    
Hand wash 10 Rub/15min Ironing:          
Detergent 50 ml Sheets & others 50 Rub/15min   The prices are: Less than 24 hours Express (3 hours)
Conditioner 40 ml Avarage 50 Rub/15min   Sheets & Towels 150 Rub/kg 250 Rub/kg
    Shirts 50 Rub/piece   Average clothes 150 Rub/kg 250 Rub/kg
Detergent+conditioner Mangle 20 Rub/run   Shirts 200 Rub/kg 300 Rub/kg
               
          Transportation of clothes one way: 200 Rub
               
Lower Prices (17.00 – 22.00)   Lower Prices (For 24 hours service)
Self-service Service by staff   Full-service
Service Roubel Service Roubel   Full-service includes:  
Washing Longrun 40 (60) Switch from washing     Sorting    
Washing Shortrun 20 (40) machine to drying machine 50 (60)   Washing    
Drying Longrun 20 (30) Take out clothes from machine   Drying    
Drying Shortrun 10 (20) Store clothes 1 Rub/30min   Ironing/mangle    
Ironing 20 Rub/15min Hand wash 100 Rub/piece   Folding    
Hand wash 10 Rub/15min Ironing:          
Detergent 50 ml Sheets & others 50 Rub/15min   The prices are as follows:  
Conditioner 40 ml Avarage 50 Rub/15min   Sheets & Towels 100 Rub/kg  
    Shirts 50 Rub/piece   Average clothes 100 Rub/kg  
Detergent+conditioner Mangle 20 Rub/run   Shirts 150 Rub/kg  
               
          Transportation of clothes one way: 200 Rub
                       

 

 

 


 

 

Promotion

With the company name “Stiralka” and the logo, Figure 3.5.4, it is clear what type of service is offered. At the store there will always be business cards with phone number that clients can bring home and call and ask if the machines are free.

 

 

In this laundry business it is important that the costumer comes back to the shop and makes washing at “Stiralka” into a habit. The customer lifetime value is of great importance and therefore relationship marketing should be used. At the very beginning nobody knows about the services of “Stiralka”. It is a new service and future customers must be convinced that it is of use for them. The cultural environment, of washing by hand or at home, needs to be changed. This will be done in several steps by different campaigns.

 

Opening advertising campaign

To make the brand and the service known billboards will be designed and put in the area of the campus in Taganrog. A costume, which looks like the logo, will be made and 2 students will be hired to hand out coupons in the surroundings of the store where people walk by and especially at the campus, one of them will wear the costume. By handing out coupons in these areas both students and families will be reached. The costumes will be used at later events, especially at the campus. The coupon gives the right to use the service of washing machine for free one time. This campaign will bring some of the first curious customers to the store. During the campaign the low prices of full-service and the convenience and comfortableness to wash at “Stiralka” will be argued.

 

Bring a friend

To increase the numbers of costumer the ones who are visiting and washing at the store will have the opportunity to wash and dry for free if they bring a friend. This is concerned for the self-service and these coupons will be handed out directly to clients already using this service at the store. These clients have already tried the service and will, with this coupon, explain it to a friend. The once using this service will mostly be students. Students usually have lots of friends in their class or where they are living which makes this campaign convenient. The new client who was brought to the store will be given the same coupon and therefore both come back and bring another friend and this way the clients will be multiplying. Word-if-mouth is a valuable way to get a trustworthy reputation and great promotion.

Easter and New Years Campaign

To attract families to use the service more sales promotion will be used before big holidays. The client from this segment will be handed a flyer at the store that with information about discount on full-service for curtains and tablecloths. This will be done around the big holidays when people are cleaning a little extra. In the window of the store this holiday discount also will be advertised.

Summer campaign

Summertime many students are leaving the campus and original customers may go to other places for vacation. To attract new temporary clients during this low season billboards will be hired with advertisement about the convenience of letting somebody else handle their laundry during their time of rest.

First class campaign

At the start of every semester extra effort to gain students will be made. At this time of year the weather is comfortable to have campaigns outdoors. The approach will be to welcome the first classers to the university. Students will be hired to hand out coupons that are valid by showing your first class identification at the shop. The already made costume will be used to attract people. The reason that students are hired is because they would enjoy getting extra money and by working for “Stiralka” they can also spread its brand through the word-of-mouth to other students.

Collect stamps

This campaign will be done to make the already visiting students come more often. At the shop they will be given a chart where they will collect stamps during a certain time period. After collecting 6 stamps they will be given an advertising speciality: a practical laundry bag, in nice material, to use when carrying their clothes to the store. On this bag the logo and name of “Stiralka” is printed and will in this way be more advertised. The bags that will be left over will be handed out the next year for free to users of the full-service, as a nice gesture to declare that they are important and valuable costumers for “Stiralka”. This campaign will be called Free Bags.

 

People

When the customer enters the store he or she will encounter with an employee. It is therefore significant that the employee is service-minded, can explain the service for the costumer and sell it. To create a stable relationship with the customer is important because they have customer lifetime value, which means that loosing a customer is a bigger loss than only one sale. It is also easier and cheaper to keep an old customer than gain a new one. With personnel always working at the store the clients can call and ask if there are any free machines, the machines and clothes are secure and costumers can ask for help.

 

The personnel do not need to have any technical education concerning the machines. The services of broken machines should be outsourced. This way it will be easier to find personnel, they won’t require higher salaries for their knowledge and they can focus on customers and performing great results in washing.

 

The communication, internal marketing, between the employee and the company is important so the service have high quality at all times. The employees will be educated to wash after “Stiralkas” standards. They will also get teaching in how to interact with the costumer in a service-minded way. Because the company will be at the entrepreneurial stage during the first two years all employees will have close contact with both the manager and the customers which stimulate the motivation. By always having the concrete goals from 3.2 Marketing Objectives fresh in mind, they will feel motivated to work and sell.

 

At the beginning when this laundry service is new for the market the “push-strategy” is applied, which means that the service has to be pushed onto the customer to be sold. The employees are the most important sales force. The sales force will be stimulated by giving bonuses to the personnel if they sell for more than 10 000 during a week.

Eventually the market has heard about the service and will demand it by itself. To increase this demand more effort can be put on and a “pull-strategy” is being used. So after the first year the employees do not work on provision any longer.

Payment

The more way of payments offered the better, it will be easier for the client to come if the payment is not a trouble. At the “Stiralka” the customers can pay with cash, credit-card or, if full-service users, get a bill by the mail.

Marketing Research

To better understand the market and make more reasonable estimations of prices a survey research was done. Primary data was collected through a questionnaire that was handed out to 30 people living in Taganrog. The Russian version of the questionnaire is shown in Appendix 1.

Except from the many language mistakes there are things to improve for a second questionnaire. Some question could be reformulated, for example asking what time during the day they would prefer coming to “Stiralka” instead of when they are washing today. Some questions could be added, for example the interest for services made by staff. The spread between men (6) and women (24) is also not favouring the results. To make a more successful survey research the questionnaire should be handed out in a small scale for a trial, then be redone and handed out to a wide range of inhabitants in Taganrog.

 

The evaluation of the research has been done as described in Appendix 1.

 

The result that can be taken from this survey research is that the prices previously discussed are relevant, and there are costumers willing to pay this price. There is also statistical information for when the rush-ours can be forecasted. See Figure 3.6.a where rush hours can be predicted to appear between 17.00 to 22.00.

 

 

There is also statistical information about the interest in the different products. This has been taken into consideration while creating the break even forecast. For example the service to wash by hand in the store will not be popular, but having personnel changing clothes from the washing to the drying machine will be wanted. See Figure 3.7.b.

 

 

Except from the more specific, measurable, information about times and prices the questionnaire also brought into light the cultural view of washing clothes. Most people dislike doing laundry and would find it more comfortable to let somebody else do it at a “Stiralka” shop. These answers will give some ideas in what approach to market the business.
4.0 Financials, Budgets, and Forecasts

Break-even Analysis

Break-even Analysis has been made to forecast the minimum amount of customer the “Stiralka” services needs each month. How it was established is described in Appendix 2. The result is shown in Figure 4.1.

 

At the first 6 month the prices will be lower in order to attract clients. With these prices 310 customers must come each month so all expenses will be covered. This is approximately ten clients each day, which seems relevant and achievable. The original prices will be put in July and since they are higher fewer costumers will be needed each month to cover the costs. According to this forecasting the businesses has a great chance to survive and make profits.

Customer Forecast

To estimate the size of the sale, the number of customers also needs to be approximated, for the two years that this plan considers. The customer estimation and growth for each half year is shown in Table 4.2.a, Figure 4.2.b and Figure 2.4.c.The numbers for the students are created by calculating how many students are living in dormitories and the knowledge that 60% are interested in the service, taken from the research. After this an assumption that only a part of the interested customers will use the service. And not all of them will start coming at the first half year. Some may use the service 4 times a month. The clients will grow each year as the customers will get used to the service. The clients will especially grow among the students because many students already have washing equipment and washing habits, when new students are coming they will get used to “Stiralka” right away, through advertisement campaigns, and therefore more students will be coming back continuously each year. Students that stay in Taganrog after they finish at the university will hopefully still be used to the laundry services. With their new incomes they will be targeted as the segment of higher income takers, and already being used to the services at “Stiralka”, they will be offered full-service. This will create a growth within this sphere as well.

 

 

Tables!

Target Market Forecast        
Potential Customers Growth Jan-Jun 2013 Jul-Dec 2013 Jan-Jun 2014 Jul-Dec 2014
Students 0,2
Families without water 0,1
High income takers 0,15
Total 0,16

 

The clients should not have to wait for a machine, which would be a great and dangerous loss in customer satisfaction. The higher prices during rush hours are helping to spread out the customers throughout the day. 5300 customers in the first half year give 29 per day. There will be most activity during 12 hours of daytime so there would approximately be 2,4 customers per hour. At the last half year there will be approximately 50 customers per day. If they come evenly spread out for 12 hours there would be 4,1 clients per hour. Of course they will not come evenly spread out and they may occupy a machine for longer than an hour. Therefore it would be most safe to have 8 washing machines and 8 drying machines. In this way the same machine park can be used during the entire period of the marketing plan.

Sales Forecast

With all the customers estimated and the approximate income for each costumer, calculated in Appendix 2, it is easy to establish the sales for each half year during the next two years. See Table 4.3. In this table it is estimated that Students and families without water supply only will use the self and half-service while the high income takers will only use full-service. In the table it can be shown that high income takers have importance to the income. For example: the first half year the number of costumers will only be 365 / 5293 = 6,9 %, but the percentage of sales will be 71175 / 624139 = 11 %. As seen in Figure 4.3.b the sales will increase remarkably the second half year, this is due to the change of prices.

Sales (Rub) Jan-Jun 2013 Jul-Dec 2013
  Sales/cus. Nu of cust Total sale Sales/cus. Nu of cust Total sale
Students 512 004 811 505
Families without water 40 960 59 510
High income takers 71 175 81 851
Total   624 139   952 866
             
Sales (Rub) Jan-Jun 2014 Jul-Dec 2014
  Sales/cus. Nu of cust Total sale Sales/cus. Nu of cust Total sale
Students 973 805 1 168 566
Families without water 65 461 72 007
High income takers 94 129 108 248
Total   1 133 396   1 348 822

Expense Forecast

With all the customers estimated the approximate variable costs and fixed cost calculated in Appendix 2, it is easy to establish the variable expenses for each half year during the next two years. See Table 4.4.a. In this table is estimated that Students and families without water supply only will use the self and half-service while the high income takers will only use full-service.

 

Costs (Rub)     Jan-Jun 2013 Jul-Dec 2013 Jan-Jun 2014 Jul-Dec 2014
  Costs/ cus. Fixed cost Nu of cust Total cost Nu of cust Total cost Nu of cust Total cost Nu of cust Total cost
Students   135 251 162 301 194 761 233 713
Families without water   10 820 11 902 13 092 14 401
High income takers   7 118 8 185 9 413 10 825
Total   233 188 262 388 297 266 338 940

 

Contribution Margin

The profit that will be earned for every half year is forecasted in Table 4.5.a. The information is calculated by taking the expected incomes minus the expected costs. The profits will, after some time, pay for the initial investment. Since the expenses remains approximately the same and the incomes increase with increasing costumers the profit will be higher for each period. As seen in Figure 4.5.b the profit will increase remarkably the second half year, this is due to the change of prices without any change of costs.

 

Profit (RUB) Jan-Jun 2013 Jul-Dec 2013 Jan-Jun 2014 Jul-Dec 2014
Total 390 951 690 478 836 129 1 009 883


Controls

Implementation Milestones

The milestones concerning the marketing program are shown in Table 5.1.a. and Figure 5.2.b. The contents of the events are described in 3.7.4 Promotion. They were put in this particular order for a purpose. First the customers will get to know the service through the Opening Advertisement Campaign, and then the students who find the store will immediately be welcomed back by the Bring-a-friend campaign. With this campaign new costumers will find their way to the shop. With the Easter campaign full-services will be promoted and with the Summer Campaign the off peak at summer will be smoothened out. As soon as school starts the new students will be targeted with the First Class Campaign and before this campaign is over the Collect Stamps Campaign will start. This will be done to attract the new customers to come back as soon as possible. By the Collect Stamps Campaign the goal is to get costumers that comes often and makes the washing into a habit and a lifestyle, so this service will be a cultural standard for students. After this it is time to offer discounts for full-service users through New Years Campaign, and hopefully new customers from this sphere will find its way to “Stiralka”. When the semester starts again it is time to attract new or old customers through Bring-a-friend campaign. Further the year of 2014 will be similar to 2013. For 2015 citizens of Taganrog will hopefully be used to hand in curtains for Easter and New Year and discount will not need to be given, but attracting freshmen will be essential every year.

 

Marketing Organization

All the special marketing campaigns described above will be planned and put into action by Idas responsibility. But to serve the market mix for the costumer more obstacles needs to be organized.

 

To have a good internal marketing and keep the personnel motivated they will be given bonuses for how much they are selling during the first year. If they sell for more then 10 000 Roubles during a week they will get 1000 Rouble as a bonus. If the forecasted sales for the first year are divided into weeks and then divided into three parts, for the three workers, 10 000 Roubles for one person is reasonable but still challenging to reach. Through personnel meetings each quartile they will have a natural chance to give feedback and ideas on how to make the service better. At these meetings they will also be reminded about the concrete goals for “Stiralka”. These goals will also be put on the wall in the back room.

 

To make sure that the service has high quality the employees will be trained in how to wash and iron after “Stiralka” standards. They will also be trained in how to handle different fabrics with temperatures, for fewer accidents in the store. The standards will be written down and the employee can read it in the store and check that he or she has done everything right. There will be schedules for cleaning the shop, to offering a presentable place to the marketing mix. These schedules tells when and what to clean and there will be a place for signing after cleaning, so it easily can be controlled that the task has been done. The schedule for cleaning will be put visibly in the shop.

 

 


Milestones Start Date End Date Budget (Rub) Resp. For whom Where Type of service
Opening advertising campaign 13.02.01 13.03.31 Investment Ida Students+Families Close to campus Self+Full
Bring a friend 13.03.01 13.04.30 Ida Students To customers at the shop Self-service
Easter campaign 1 13.04.01 13.05.10 Ida Families To customers at the shop Full-service
New prices 13.06.01   Ida Students   Self-service
Summer campaign 1 13.06.01 13.07.31 Ida Families Close to Petrovskaya Self+Full
First class campaign 1 13.08.20 13.09.30 Ida Students At the campus Self-service
Collect stamps 13.09.01 13.12.31 Ida Students To customers at the shop Self-service
New Years campaign 1 13.12.01 13.12.31 Ida Families To customers at the shop Full-service
Bring a friend 14.02.10 14.03.31 Ida Students To customers at the shop Self-service
Easter campaign 2 14.03.20 14.04.20 Ida Families To customers at the shop Full-service
Summer campaign 2 14.06.01 14.07.31 Ida Families Close to Petrovskaya Self+Full
First class campaign 2 14.08.20 14.09.30 Ida Students At the campus Self-service
Free bag 14.10.01 14.10.31 Ida Families To customers at the shop Full-service
New Years campaign 2 14.12.01 14.12.31 Ida Families To customers at the shop Full-service
Totals            


Contingency Planning

This marketing plan only considers the first two years. Before they end a new marketing plan will be constructed for the future. Calculations and evaluations to open one more store will be made.

 

When evaluating and planning for the future the product life cycle, shown in Figure 5.3, needs to be taken under consideration. The service is, at the moment, new for the Russian market and is now in the product developing stage of the life cycle of the service. As soon as the marketing plan starts getting implemented the introduction stage has started. In this stage a big amount of money needs to be spent and there will be no income, but afterwards the service will reach the stage of growth and start generating profits. After the product/service has reached maturity it will soon or a later start declining. The services might have to be modified so they better suit the need of the people at new times. That might involve adding more modern and updated technique into the equipment or change the place of the shop.

Since the relationship to the costumer also is a lifecycle times of decline can be a result of costumer leaving the targeted segment. For example the student might graduate and move out of Taganrog. The customer life length for a student will therefore be 5 years. In order to prevent these kinds of declines new students are being attracted every year. The old students that are staying in Taganrog, now having a job, will be given offers to try the full-services. These are all problems and opportunities that need to be considered by making the new marketing plan at the end of these first two years.

 

 


Appendix 1. Вопросник: Стиралка

пол: женщина  мужчина 

возраст:15-20  20-25  25-30  30-35  35-40  40-50  >50 

Сколько денег Вы тратите на продукты питания в течение недели на одного члена семьи? (Рубель)

0-500  500-1000 1000-1500 1500-2000  2000-5000  >5000 

Вы живете недалеко от корпуса университета в г. Таганроге?Да  Нет 






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