The company and its Target Market
The company is DVS Shoe Company. DVS originally concentrated on men’s skateboard specific shoes, but recently DVS have expanded their footwear line with shoes for women, kids, and toddlers. The company will engage in a partnership with a European company that sells luxury brand kids shoes. The partnership aims to develop and establish itself in the Chinese market. The target market of the proposed partnership is Chinese children aged 2 to 5. This target market is profitable because there are many children in China who can be considered as brand conscious. As an individual entity DVS Shoe Company has different marketing strategies that can cater to the taste and appeal of its target markets. The company makes sure that its stores and branches are located in the most profitable places where clients can easily see the store and they can be encouraged to visit the store and buy products. The company also makes sure that competition in the location they want to put up the new branch will not be too heavy.
Source of competitive advantage
The company’s competitive advantage comes from its good relationship with clients. Building competitive advantages can be done through collaborating and integrating with its present and future clients. Maintaining competitive advantage means that the company has made sure that the relationship with the clients is built on trust and confidence. The company makes sure that it knows the needs of their clients and understands the demands of the client.
Mission statement and vision for the company
The company can be defined as an emerging entity that provides excellent products to its market. It is the one that makes products for different large retailers. Its mission statement is focused on providing excellent products that clients find useful and of high quality. The mission of the company is to provide the best service to its clients by creating the best products. By doing this the company not only gains additional profits but it acquires competitive advantage over rivals. The company will make sure that not only its corporate responsibility will be given focus but its social and moral responsibility will be checked. It will follow its corporate social responsibility to create a good relationship with the environment. The company’s vision is to continue to sell in their target market and meet the competitive demands of the new market.
Short term objectives
Long Term objectives
Configuration of Resources
Physical resource
The physical resource of the company includes the equipment they use to create and distribute the products. These physical resources include various kinds of machinery. Another physical resource of the company is their different branches. The company makes sure that the branches will be found on places that people can easily find. The company makes sure that the branches will have low cost of rent but with good chance of attracting clients.
Human resources
In providing excellent service to the clients, a company needs to have a dedicated staff that performs well and knows that the service they give to the client can help the company have a positive or negative image. The staff of the company is well trained to ensure that the best service can be given to the clients. The company makes sure that it hires promising individuals that can assist in the company’s task of reaching their goals.
Intangible resources
The company makes sure that it maintains a good image, positive character and acceptable reputation. The company adjusts its premium pricing and interest rates on the situation on the environment. It makes sure that the core value of hard work, dedication and service is maintained. These intangible traits contribute to the increase in the number of clients and the maintenance of its current clients.
Marketing Mix
From http://alex.edfac.usyd.edu.au
The 4ps meant that marketers sought to produce products that were desired by consumers at a price that would be attractive, the marketers want to use promotion to indicate the advantages they offered over the competition, and make them available at a place of the customers’ choosing (Yudelson 1999). Marketers have to understand cultural values in all aspects of implementing the marketing concept and managing the marketing mix (Proctor 2000). The marketing mix uses the 4P’s to describe the marketing position of a product in a certain marketplace. The P’s of marketing is a way to conceptualize the business, define strategy, format competitive analysis and benchmarking (Collier 1991). Marketing mix helps the company to analyze itself and determine how to market its product to the clients at a limited time and limited cost. The marketing mix categorizes different aspects of the company. Through the marketing mix each aspect of the company can be checked and given consideration with regards to its ability to attract clients. The next part will use the marketing mix to further analyze the company and its products.
Product
Introducing new products is a very good way of achieving differentiation and enhancing a retail identity in an over-subscribed retail market, but without corporate support new products may fail or go unnoticed (Gillooley & Varley 2001). The company’s shoe products are made from high quality components and materials. The materials and components used for production came from reliable and trustworthy suppliers. The suppliers were chosen well and are known in their respective field. The shoe products underwent well tested processes that ensure its durability and comfort. After production of the products the shoes undergo product testing before it is sold to the markets. The company also has consumer response team that can be contacted anytime. This response team provides assistance to clients who have issues with some of the products. The company’s products are one of the main reasons for the company’s success and it contributes to the rise of the company’s profits. The company’s products sets them self apart from the competitors in the new market. The shoe products for the Chinese children would be made of comfortable but affordable materials. The shoe products will be made from light but durable materials. There would be attractive designs on the shoe. For the Chinese boys, the shoes would have action packed themes wherein the shoes would fit the dreams of the child. There would be military inspired designs, space man designs and other eye catching designs. For the little Chinese girls, simplicity would be the main theme. The designs of the girl’s shoes would focus on their imagination. There would also be fairy tale inspired designs.
Price
The market pricing approach is used when the environmental improvement under consideration causes an increase or decrease in real outputs and/or inputs (Hussen 2000). A variety of motivations explain the adoption of a new customer approach by global companies. A major reason is the cost of conducting personal visits or customer sales call continues to increase. Firms cannot afford to allow their sales force to make unproductive sales calls. Firms have come to believe that a more efficient method of marketing is to establish and maintain long-term relationships with their customers. When a long-term relationship is established and nurtured, it is less necessary to spend significant amounts of money advertising to make customers aware of the product offering and then employing a sales force to stimulate demand for unwanted products/services to potential customers (Ford Honeycutt & Simintiras 2003). Global customers expect low manufacturing costs, excellent design, and having their needs met (Ford Honeycutt & Simintiras 2003). The company’s pricing will be valued according to the quality of the products. For the clients of the company, the pricing approach for them concentrates on providing them the best product for the equivalent amount of price they pay. The company makes sure that it maintains well made products that will have the same value as what the client pays for it. The price of the product is considered through determining the cost of making the product, the salaries of people producing the product and the other expenses made in the creation of the product. With such price the company maintains the product to be of high quality and durability.
Place
The factors which determine choice of a channel, or channels, of distribution are both external and internal to the organization. These factors show how the options open to organizations are restricted. For example, small companies may not have the resource or expertise to become involved in foreign direct investment; markets with low break-even sales volumes favor low-cost channels such as licensing or exporting. Traditional decision-making techniques can be applied to such decisions. Market size is a primary consideration, together with trends in the market like segmentation and the estimated share of the market that can be achieved in view of the competition. The existing distribution methods will determine whether single or multiple channels are developed. Host country policies are important since any special standards, import quotas or duties will increase the cost to the consumer and disadvantage foreign suppliers in relation to domestic ones (Mccall & Stone2000).
If a company wants to hold on to its technology, there is little point in trying to enter a market by means of a foreign direct investment (FDI) where there is insistence on its transfer. Market structure is important in that the number of competing intermediaries may contain organizations with affiliations to competitors either locally or from outside the market. The economic infrastructure becomes critical when specialized expertise is required or the services are needed for the competent financing, manufacture and distribution of a company’s output. Production costs are critical where these constitute a high proportion of the total costs of a product (Mccall & Stone2000) Place elements of the marketing mix have been changing rapidly over recent decades, and these changes impact in many ways on the marketing operations of the Business (Dennis & Harris 2002).To attain sales, profitability, and customer-satisfaction goals, the products must be available for customers to purchase. The portion of a firm’s marketing strategy that assures customers have access to the firm’s products is known as distribution strategy, and the institutions that take part in product distribution comprise the marketing or distribution channels for those products (Reddy 1997). There are different places of selling for the product. Aside from its branches the company will allow its product to be sold in different non competitor stores. The different non competitor stores will help in making sure that the company is able to sell to various clients in different places. The different channels of distribution will help in strengthening the relationship of the company with the clients. It will also establish some relationship with non competitors. Another possible channel of distribution for the company is an internet website. The company’s website will feature an online transaction function wherein transactions can be made without the buyer being physically present in the company’s store. The company’s website will provide a graphical and written description of the shoes the company offers. The payments for the online transaction will also be done online. Payments can be done through credit cards; the delivery of the product will take a few days for shipping. The places of distribution reduce the travel time for clients and minimize the problem on shortage of cash.
Promotion
Effective marketing communications with the customers are essential for business success. Advertising forms the central plan of most communications programs. The information conveyed in advertisements may be in the form of words or symbols. It can work to educate, persuade or simply to inform. An image can be supported or created, enquiries can be elicited and the functions of a product can be demonstrated. Advertising is far more likely to reinforce rather than create a good image (Ruskin-Brown 1999). A strong image is a function of the positive experiences which people have with a product or company. Attempts to create a positive image, while providing poor products or services, are likely to make customers cynical. A common mistake made in advertising is the tendency to over promise. While a creative advertisement may make a consumer buy a product once to try it, it cannot force them to repurchase. Thus, if a product does not deliver on the promise made in the advertisement this too will create resentment and negative feelings (Ruskin-Brown 1999). The company will promote the new products through various means. One will be through the internet. The internet website will give different kinds of information about the shoe; it will then detail the prices of the shoe and the available sizes. The internet is a good medium because most people use it and the Chinese children may see the products through the website. Another form of advertisement that will be used is TV commercials wherein the product will be given a visual presentation. This will be done so that clients will see the features of the shoe products and how the shoe will look like once their child use it.
Business format and structure
Organizational structure addresses the questions of what is the best form of organization and why (Dozier, Grunig, JE & Grunig, LA 2002). Organizational structure is seen as an important part of the work environment. An agile company aims to manage change and uncertainty through the entrepreneurial approach, combined with a flexible organizational structure and distributed managerial decision-making authority, which allows for rapid reconfiguration of the human and technological resources in a quest for meeting globally changing market requirements an integration of human resources across departments and at different hierarchical levels in developing the strategic vision should be followed by a strategy to realize appropriate changes within a new organizational structure (Hendrick 2002) In a corporate structure, the entity responsible to the shareholders is the corporation, represented by its Board, which takes responsibility through the corporate center for statutory reporting, dealing with directors and shareholders, and the governance of the corporation. The strategic business units (SBUs), due to the corporate structure, are shielded from direct relationships with the shareholders and this is also a strong reason for centralization of the strategic planning and performance review arenas. There was rather more flexibility in dealing with the other markets for capital, but this function was mainly centralized. The argument for centralizing this arena is pooling of financial needs across subsidiaries in order to gain economies of scale. The corporate structure shields the SBU from shareholder or capital market pressures (Mckern 2003). Organizational structures help the company have a direction and path. It helps the company in determining its goals and it leads the company to reaching its goals and objectives. Organizational structures also provide assistance for the firm to know who takes responsibility for a certain action.
The newly established partnership will be headed by the administrators and the management team. They are the ones that will make all the decisions on what actions will be taken by the company. They are the ones that will decide on the strategies that will fit the company on a certain situation. The branch manager will be the one having hands on experience in dealing with the members of the new branch. The branch manager is the one that will make minor decisions regarding the operations of the firm. The support staff will assist the branch manages. They will give reminders on how the employees should act. The staff will be the backbones and the operating core of the organization. Without their good performance the company cannot reach its goal.
Management/Personnel Qualities and experience
The management of the Chinese market will be those that have perseverance and diligence in making sure that all aspects of the business will push through. The manager needs to have the drive that will help them to achieve the goal no matter what happens. The manager needs to make sure that he can relate well with all the personnel. The manager needs to have enough patience in dealing with various kinds of personnel. The manager needs to plan wisely the actions that will be taken and take full responsibility once there are problems with the firm. The manager should be prepared for the criticisms and intrigues that will be hurled towards him. The manager for the new market should have enough experience in managing a business that entered a new market. The personnel of the new market need to be productive, effective and efficient. The personnel need to be willing to learn and understand the different processes of the company. The personnel will be chosen according to their capacities and capabilities. The personnel will be trained well by the company so that each employee will have an important role to play in the company. The personnel need to be ready for all people that will try to discredit them or the improvements they have done to the firm. The personnel should have relevant experience on the task that will be assigned to them. Some personnel need to have experience on creating shoes. Some personnel need to have an idea on product safety. Some personnel need to know the distribution techniques for the product. Some need to understand how to maintain the company’s finances. While some need to have the capability to create advertisements.
Financial forecast
Economic growth can stimulate financial system growth. Both financial system development, and many individual financing decisions, is driven by attempts to respond to changing demands for funds (Neave 1998). A financial system will usually offer some way of funding a relatively routine deal that is secured by liquid assets or a readily quantified earnings stream. Financial systems vary in their capability to fund innovative or unfamiliar projects backed only by uncertain earnings or illiquid assets (Neave 1998).Adequate financial planning is a key element in the success of any business venture. Conversely, the lack of adequate financial planning is often a key element in the failure of many business enterprises. A short-term forecast and cash budget is simply a plan for the near future expressed in monetary terms (Droms 1997). The company has a funding of about two hundred and fifty thousand pound (£250,000). The newly established firm in the China market made sure that it invested well its funds and through that the company is forecasted to have considerable sales. Through its investments the company has created products that clients would like to buy.
Shoe Company Monthly Sales Forecast, January 2009-FEBRUARY 2010
January
$ 11,000
February
12,000
March
14,000
April
12,000
May
16,000
June
11,000
July
10,000
August
15,000
September
19,000
October
21,000
November
18,000
December
24,000
___________
Total calendar year 2009
3,000
==========
January 2010
,000
February 2010
13,000
The financial forecast shows that the company can have considerable income during months which are perceived as good months for shoes and its related products. The strong months for the company would be the months of September to December. December is perceived as the strongest month followed by October. The good months for shoes includes those months that there are special occasions and events December is the strongest month because in this month is the Holiday season. Children at this month usually ask for new shoes. September and October are considered to be good months because the school year starts in these months. The weakest month would be July; in this month the children are usually on vacation thus they would not want to have new shoes. Other weak months for the company are January and June. The forecast show that even if the company has just started operating it has acquired considerable amount of income. The company will have considerable income at the end of the year; this income may be smaller than what others have. In due time, the company can slowly achieve the financial numbers set by other firms. The forecast also shows that the company has an unstable financial status. To solve such problem the company needs to double its effort on promoting its products on the weak months.
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