BSBMKG609A Develop a Marketing Plan

Assessment 1

Organisation overview

Houzit is a chain of homewares stores in Brisbane that specializes in bathroom fittings, bedroom fittings, mirror and decorative items. It is a growing business. It has 15 stores in Brisbane area, with all stores being managed and coordinated from their head office in Milton. It has 150 staff members. The analysis of each of the aspect of the company overview is provided under the following heads.

Strategic direction of Houzit

Vision

Houzit will be a national retail brand, catering to the needs of home makers with a range of unique, high quality homewares made accessible to all through our easy to manage payment plan.

Mission

By 2020, Houzit will have a significant retail presence in homewares in every Australian capital city, starting with 15 stores in the greater Brisbane area and growing to 100 Australia wide.

Organisational objectives

  1. To bring an annual sales increase of $5 million by moving the sales figures from $15 million per year to $20 million per year during the next three years period
  2. To enhance the list of loyal customers from 10,000 to 15,000
  3. Considering Brisbane as a potential market, brand recognition need to be established so that one out of every 3 people will recognize the Houzit brand in a random survey that is conducted in 18 months’ time.

SWOT Analysis

Strengths:

Excellent staff who are highly skilled and knowledgeable about home wares.

Great retail space that is bright, functional and efficient for a commercial urban district.

High customer loyalty among repeat customers.

Assortment of offerings that exceed competitors’ offerings in quality, range and accessibility.

Weaknesses:

A limited marketing budget to develop brand awareness due to the lack of critical mass and store cover.

The struggle to continually fund the growing long-term repayment plans taken out by our customers.

Opportunities:

A growing market in a high growth area with a significant percentage of the target market still not aware of Houzit’s offer.

Increasing sales opportunities outside of our target area – greater Brisbane.

Threats:

Competition from local independent retailers can drive down prices, as owner operators have lover overhead costs than our staff-run stores.

Competition from national chains moving into the Brisbane market.

A slump in the economy reducing customer's disposable income spent on home wares.

Outlines of the current size, capabilities, resources, strengths and weaknesses.

  • The typical Houzit store has the following characteristics:
  • Location

A commercial, suburban neighborhood, or urban retail district.

  • Design

Bright and functional.

  • Size

1,000 – 1,500m2.

  • Employees

15–20 fulltime, plus several casuals

  • Types of transactions

60% cash, 40% on long-term repayment plan.

  • Store

Wide category of products and services.

  • Resources of the organisation
  • Human resources

Houzit has the valuable assets, which is human resources, 15-20 fulltime employees along with number of casual workers. Staffs work are excellent with highly skilled and knowledgeable about home wares.

  • Physical resources

Especially for a commercial urban district Houzit possesses a great retail space that is bright, functional and efficient

  • Strengths
    • The employees of Houzit are highly trained, skilled and knowledgeable regarding homewares.
    • Increased customer loyalty
    • Variety of deals and offers that are beyond the competitors offerings in terms of quality, range and accessibility.
  • Weaknesses
    • As the organisation comes under the category of small originations it has limited marketing budgets to increase brand awareness.
    • Houzit is continuously funding the developing long-term payment plan.

Gaps between the objectives, and the current capabilities and resources.

Gap analysis serves as the tool that will help to decide between multiple marketing options (Precision Group, 2009). The objectives that are set by Houzit are difficult to be achieved with the current capabilities and resources. It is because company has limited number of employees. In addition, the focus with which company operates to have its stores as bright and comfortable for shopping is not in alignment with the legislations that are put forth by the government. The company has limited budgets; thus, implement the objectives, the company may require a large amount of capital. In order to increased sales, they have to open up new stores and maximize the human resources capabilities. On the contrary, to create brand recognition within a span of 2 years, it has to focus on promotion or endorsement of product (Kronenberg & Bergier, 2012). In addition, the company also has to focus on the quality of products and services, which is again the question of large investment. In this manner Houzit will have a gap between the objectives set for the company and the current strategies, capabilities and resources of the company.

Opportunities

Marketing opportunities that meet the objectives and evaluate the risks and benefits of each opportunity.

  1. Franchising
  2. Joint venture

Explanation of marketing opportunities

1. Franchising

Houzit in a franchising agreement that is providing the right to use the Houzit’s trademarks, associated brands and other proprietary knowledge in order to open a branch. In addition to receiving an annual franchising fee to the, the franchisee must also pay a portion of its profits to the Houzit.

2. Joint venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it. However, the venture is its own entity, separate and apart from the participants’ other business interests

Evaluating risk and benefits of each opportunity

1. Franchising

Benefits

  • Access to better talent
  • Easy expansion capital
  • Minimised growth risk
  • Rapid Expansion
  • Market Dominance
  • Franchising puts a “business owner” in charge
  • Franchise locations may operate better and more profitably than “company owned” units
  • Greater Buying Power
  • Increased Name Recognition
  • Increased Advertising and
  • Marketing Budget
  • New revenue streams are created

Risks

  • Less control over managers
  • A weaker core community
  • Innovation challenges
  • Sharing profits
  • Loss of absolute control
  • Lawsuits with unprofitable and/or difficult franchisees
  • State and federal franchise disclosure laws

2. Joint venture

Benefits

  • Access to new and / or complimentary expertise. Staff, skillsets and technology
  • Access to related businesses or new geographic markets or gain new technological knowledge
  • Sharing of financial risk
  • Flexibility
  • Offer the opportunity to move into new, non-core areas
  • The new venture may be separated and sold off at a latter stag

Risks

  • Finding the right people to work with takes time and effort.
  • JV’s can fail if objectives are not clear to all parties imbalance between what the parties bring to the JV e.g. in financial resources, expertise or time incompatiblity - whether cultural or personal poor communication.

Recommend the opportunity that best addresses organizational objectives

The organization Houzit could emphasize on demography. This means while designing the product and services, they could focus on life style of people, their age, income, family rituals and other demography. Thus, the customers could stratify their needs buying those products that are designed based on their life. In addition, to increase the sales volumes, the company could also pay attention to lead the business in global market. By developing a high quality of products and services, the company could enter into global market. In such a case, the initial phase of implementing this opportunity is to focus on digital marketing.

Develop a marketing mix strategy that fits within the capabilities and resources of the organisation.

Effective marketing starts with a considered, well-informed marketing strategy. A good marketing strategy helps organisation define vision, mission and business goals, and outlines the steps needed to take to achieve these goals.

An organisation’s marketing strategy affects the way they run their entire business, so it should be planned and developed in consultation with their team. To increase the sales volumes Houzit could implement 4p’s marketing mix strategy. This strategy helps cover the significant area of business.

Product: The organization should develop and design their products and service aligning with the life style of people (Sampson & Spring, 2012). Thus, the organization should boarder the products category to remain competitive in the market. To make reasonable profits at lower price, Houzit could enhance the techniques that are cost efficient as well as innovative. The company could increase the product category by including “Cooking”, “Dining Room”, “Eating and Dirking”, “Hallway”, and “Home decoration”.

Price: In order to increase the market share, the Houzit should set low price for products and services. The company could design the products effectively and sell them at low price. However, while running the business in global marketing, they should follow and implement the pricing laws imposed in each country.

Promotion: For making the promotion of products, Houzit could pay attention in direct selling and personal selling. Hence, rather than relying on distributors and supplier, they could directly sell the products from their outlets. In addition, at the time of selling the product they could distribute the leaflets that contain the details of each product (Shih et al. 2012). This could increase awareness of customers.

Positioning: As Houzit is a retail brand online shop and social media could help to distribute the details of products and services. Through online marketing, the origination could place the products and services. This is how the company could position its products and services. Online platform is the place where people could purchase their products through an easy way.

Describe how your strategy align with the strategic direction of the organisation, and give justifications of your selection.

The above-recommended strategies are aligned with organizational goals and objectives. The strategy of entering into the global market is aligned with the strategy of increasing sales volumes. By running the business in global market, the company could create brand recognition, which in turn could help to attract the customers towards the products and services.

Detail a marketing performance review strategy using an appropriate tool (competitive analysis, life cycle model, virtue chain analysis, etc.) to review the performance of the organisation against marketing objectives

Competitive analysis:

As the company is running its business over long period, they have multiple marketing opportunities to grow the business. Similarly, the organization has to deal with some major challenges.

  • Houzit tends to differentiate its products and service from competitors. The company increases brand-store promotion to maximize product visibility as well as brad awareness.
  • “Market Share”-The major competitor of Houzit is with the IKEA. Houzit has a national presence and increased number of customers. It is identified that Ikea has a large presence in the market as they vast product category. Conversely, Houzit deals with a small market; the operation of Houzit is only across Brisbane city. However, Houzit gains reputation due to its high quality of products and services.

Life Cycle model:

The business life cycle model is consisting of seven different stages including the initial stage of business to ultimate stage of business.

Seed: This is the first stage of life cycle model. Hence, the organization Houzit could focus on matching the marketing opportunity with goals and objectives.

Start up- In this stage, the organization tend to overestimate the monetary requirement and time to market. Hence, the main challenge is not to burn through the amount of capita it has.

Growth: In this stage, the greatest challenge the company faces is the tendency of dealing with constant series of issues bidding for monetary and time. Hence, the company implements an effective management to build the necessary business plan.

Established: In this particular stage, Houzit has to deal with a relentless and competitive market. In addition, the company faces other risks such as competitors, economy and dynamic nature of environment.

Expansion: Hence, the company thinks of moving into ne market opening new stores in the existing market. Hence, the Houzit also has to deal with external marketing threats such as pricing strategy of competitors

Mature: in this stage, the business faces the challenges such as dropping of sales and profits. However, the organization looks for the new opportunity for business such as joint venture.

Exit: This is the final stage of business life cycle, which is about getting proper valuation. Here, the organization looks at its business operation, management and competitive barriers.

The metrics used in measuring marketing performance.

There have been certain aspects such as brand awareness, lead generation, customer acquisition, engagement associated with the marketing performance that should be considered while implementing the marketing opportunities.

“Brand awareness”: The organization should pay attention on increasing brand awareness since increased brand awareness could help to make the customers aware of products and services.

“Customer acquisition”: To increase sales volume, it is important to attract more customers towards the products and services. In such as a case, the organization needs to pay attention increasing market share.

“Customer retention/Loyalty”: The organization should provide some tangible and intangible benefits to the potential customers who are using the service for a long time. In such case, the company could provide additional benefits for premium customers.

Tactics

Detail the tactics necessary to implement the strategy you have outlined, including:

  1. Scheduling of activities to enact the strategy
  2. Costing
  3. Accountabilities and responsibilities
  4. A plan for coordinating and monitoring scheduled activities including KPIs.

Marketing strategy

Schedule of activities

Cost

Accountabilities and responsibilities

KPIs (Objectives of the marketing strategy)

Coordinating and monitoring activities

Excellent staff who are highly skilled and knowledgeable about home wares.

offering a wide range of homeware items on easy-to-manage payment

10,000

Increasing sales opportunities outside of our target area – greater Brisbane.

Catering to the needs of home makers with a range of unique, high quality homewares made accessible to all through our easy to manage payment plan.

A new customer’s first purchase is generally of mirrors and decorative items and this gives us the opportunity to sign them up to our loyalty program.

Great retail space that is bright, functional and efficient for a commercial urban district.

People are demanding a larger selection of choices, they are no longer accepting a limited selection of home wares.

10,000

A growing market in a high growth area with a significant percentage of the target market still not aware of Houzit’s offer.

Catering to the needs of home makers with a range of unique, high quality homewares made accessible to all through our easy to manage payment plan.

Competition from national chains moving into the Brisbane market.

High customer loyalty among repeat customers.

Preference for high quality items is increasing as customers are learning to appreciate differences in quality.

10,000

The struggle to continually fund the growing long-term repayment plans taken out by our customers.

Catering to the needs of home makers with a range of unique, high quality homewares made accessible to all through our easy to manage payment plan.

A slump in the economy reducing customer's disposable income spent on home wares.

Assortment of offerings that exceed competitors’ offerings in quality, range and accessibility.

Customers want home wares that stand out from mass-produced, low quality items.

10,000

A limited marketing budget to develop brand awareness due to the lack of critical mass and store cover.

Catering to the needs of home makers with a range of unique, high quality homewares made accessible to all through our easy to manage payment plan.

Catering to the needs of home makers with a range of unique, high quality home wares made accessible to all through our easy to manage payment plan.

Outline of legal and ethical requirements that impact on the selected tactics.

The selected tactics may have both legal and ethical impact on business. For example, if the organization appropriately follows the business ethics, it can gain more reputation. If the organization understands the social value, customers could be reliable to the organization and they may use the service for long time. As a result, the sales volumes of Houzit could increases than the existing volumes. On the contrary, compliance with the regulation may also help the origination to build the organization in new market. The organization receives environmental support from the governments.

Tactics fitting within organizational resources and capabilities

The above-mentioned tactics are quite effective for the organization. The tactics and strategies discussed in the report are aligned organizational resources and capabilities. With the limited budgets, the company could emphasize on meeting organizational marketing objective of increasing sales. By implementing digital marketing, Houzit could target a vast population through the wide reach of internet.

How the tactics fit within identified orgnisational resources and capabilities.

Increasingly being considered as one of the fundamental sources of competitive advantage within the context of strategic management. However, most literature has not clearly linked the resource and capabilities of an organization with sustainable competitive advantage. This paper, therefore, explores and discusses the role of a company’s resource and capabilities in helping business firms to achieve sustainable competitive advantage. Specifically, it deals with how resources and capabilities can be transformed into competencies of an organization that can lead to a sustainable competitive advantage. The main research methods used are interview of the five organisations that were picked as the population of study, also analysis and integration of theories were done to develop a conceptual model. This paper proposes that, through a company’s resources and capabilities a firm can develop hard to imitate core competence that creates value, which in turn leads to superior performance, thus competitive advantage over other competitors in the Nigerian market.

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