Executive Summary
Laundry Associates Limited intends to produce and market Clothing Mate, a device to assist individuals and institutions involved in laundry work to ease the process and reduce laundry complication. The device is used to hold together and sort the clothes in the same category during the process of washing. The PESTE and Porter’s five models reveal that Laundry Associates Limited is exposed to the favorable external environment. SWOT analysis assists in facilitating a better understanding of the internal strengths and weaknesses, as well as opportunities and threats from the external forces. The developed marketing mix, organizational structure, and personnel plan, as well as budgeting and financial projection, will assist the company to produce and distribute Clothing Mate in the target market. Conclusion and Recommendations provide the recap of the marketing plan and recommendations to the company on strategies to undertake for better performance.
Clothing Mate: Marketing Plan
1.0 Introduction
Developing business ideas, establishing a business organization as well as developing and implementing a marketing plan is not an easy task. Adequate resources, knowledge and skills, time, as well as commitment are required to establish the intended business and run it into a successful venture. Many entrepreneurs have ventured into business, but failed to realize the intended objectives, a situation that necessitate the closure of the businesses before making the profit. Some of the reasons that play a role in the failed businesses include the poor planning and failure to implement business and marketing plans. It is for this reason that I have prepared a comprehensive marketing plan upon which a new product will be developed and distributed to the target market. The marketing plan, in this case, incorporates all the necessary elements including the description of the product, the business environment analysis, the marketing mix, the organizational structure and personnel plan, the finances and the timelines.
2.0 Description of the Business and the Products
The name of the proposed business organization is Laundry Associates Limited. It will be based in London, United Kingdom. The business is a four people partnership; the partnership is preferred because it assists in raising more capital and ideas on how to run the business and implement the ideas them. Laundry Associates Limited intends to produce and market a product known as Clothing Mate, a tool used to keep socks, gloves, inner wears, and other clothes in the same category during the laundry process. Keeping the clothes in the same category together during the washing process makes the process organized and saves time. The Laundry Associates Limited recognizes the fact there are different categories of customers depending on how they would use the proposed product. For this purpose, two models of Clothing Mate would be produced. The first category is larger and stronger to serve the needs of business consumers such as reformatories, resorts, hotels, Laundry service providers, and college dorms among others. The second model is meant for individual customers, including college students, new mothers, house-helps, and homemakers.
3.0. Business and Marketing Environment Analysis
The operations of Laundry Associates Limited in the identified business venture will take place in the environment that can either impede or enhance the realization of the business and marketing objectives. The understanding of the environment, both the internal and external to the organization is an important step towards the development of the effective marketing strategies. The analysis of the environment incorporates some models including the PESTE model, Porter’s five and SWOT analysis. The PESTE and Porter’s five models are important tools used to analyze the external environments, which are beyond the control of the organization. On the other hand, SWOT analysis as a model is used in the evaluation of the external environment. Looking each of the models in the context of Laundry Associates Limited and its product would be an important undertaking because it will enhance better understanding of the business environment.
3.1 The PESTE Model
The model, in this case, looks at the political, economic, social, technological, and environmental, which might affect or influence the operations and performance of the business (Carruthers 2009, 37-39). The political environment in the United Kingdom is stable. In fact, the political and civil stability have been experienced for decades. Therefore, the stable government and the culture of peaceful transition from one regime to the other make the political environment favorable. The important of considering the political environment is to avoid investing in the market where the political and civil unrest can lead to loss of property and poor return on investment (Gupta, 2013, 34-43). The economy in the United Kingdom is stable and developed. The people are likely to have a high amount of disposable income and, hence the target customers can easily afford to buy products. With the low inflation and interest rates in the economy, it implies that the production cost would remain stable, making it easy to undertake financial and costing planning. The economy is characterized by highly developed systems of infrastructure, making it easy for smooth business operations.
A technological advancement is a tool used by entities and individuals to drive the achievement of their business objectives (Carruthers 2009, 37-39). Laundry Associates Limited is not exempted, in this case. In fact, the company should make use of available technology to reduce the cost of operations and facilitate effectiveness in its operations. In the United Kingdom, technological advancement is highly developed, and the organization is unlikely to face challenges while implementing technology, which will assist in the operations. Failure to make use of technology can lead to poor quality output and service to the customers. Therefore, the management should take advantage of the supportive environment to apply the relevant technology.
The social environment is made up of the people in the market upon which the business operates (Doherty, Steel, & Parrish 2012, 105-121). The cultural beliefs, values and the demographics are important social factors likely to influence the performance. In the United Kingdom, the society is made up of people from different racial backgrounds, but the British are the majority. The co-existence and mutual respect are highly witnessed in the society. The use of English as an official and business language is an important social factor to assist Laundry Associates Limited to communicate effectively with the suppliers, associates, and the target customers. In addition, Clothing Mate as a product does not have any cultural or social affiliations, a situation that makes it easy to market to the target customers from different cultural backgrounds and affiliations. The British respect other peoples’ properties and business establishments.
Environmental preservation is an important concern for individuals, governments, and business entities in the world today. As a manufacturing and marketing organization, the company should consider the proper utilizations of materials and energy and ensure that there is proper waste management (Doherty, Steel, & Parrish 2012, 105-121). In the production and marketing of Clothing Mate, Laundry Associates will acquire the licensing required from the environmental management agency and observe all the environmental care guidelines. In addition, the company will largely recycle its materials in the production process to reduce wastage and destruction of the environment. The steps indicated are important in facilitating the environmental care and sustaining its operations.
3.2 Porter’s Five
The model, in this case, is used in the evaluation of the nature of the industry of operation in consideration with five essential factors. The factors include the buyers, suppliers, competitors, new entrants, and substitutions (Dobbs 2014, 32 – 45). The first element of the model concerns the competitors, in particular, the rivalry existing in the industry. In its bid to manufacture and market Clothing Mate, the company is not likely to face competitive rivalry. The product is unique and innovative, and hence no competitors are currently in the market to challenge its market share. The suppliers to the company are likely to have moderate bargaining power. In fact, the bargaining power arises because the suppliers have a large number of industrial options on which to supply their materials (Lee, Kim, & Park 2012, 1783-1795). Indeed, to reduce the bargaining power from moderate to lower levels, the company can make use of two options. It can establish a strong association with the suppliers and make use of recycled materials.
The threat of new entrants is high. The ideas can easily be used by other entrepreneurs to enter the market with better technology and approaches in operations (Crowther 2008, 78-93). The investment required and the operations cost are not high, a situation that might encourage potential investors to invade the market. Lastly, the power of the buyers and the substitution are relatively low in the industry (Crowther 2008, 78-93). The customers do not have a better option to substitute Clothing Mate; hence, those in need of the product would have to purchase the model and size that fits their needs.
3.3 SWOT Analysis
The SWOT analysis is a tool used by an organization to define the internal environment of an organization. The factors considered in the model include the strengths, weaknesses, opportunities, and threats (Panagiotou 2003, 8-10; Chermack & Bernadette 2007, 383–399). The strengths are internal competitive advantages assisting the company to undertake the operations and serve the target market effectively. The primary strengths of the company include the uniqueness of the product and management undertaken by the owners. Clothing Mate is a unique and innovative product, making it easy to market and achieve the target sales and profit levels. The management and the owners/the partners’ strengths are derived from a high sense of responsibility, commitment, and concerns that are put in place. The owners are also the management; therefore, this is an effective aspect of strength, because it enables faster decision-making. The situation would be different where the management would take the time to consult the owners on such matters.
The weaknesses exhibited by the business include lack of experience and existing business to learn from and limited resources. The weaknesses identified can limit the ability to operate effectively and exploit the large target market (Novicevic et al. 2004, 84-94). Despite the weaknesses, the opportunities provide some potential solutions upon which the operations can be improved for better performance. The first opportunity is to seek external funding to expand the target market for better sales and profit levels. The second opportunity is to undertake market research, an initiative that would identify more customer categories to serve with the product. The knowledge about the categories of the customers would assist in the development of models serving the different customer tastes. The threats likely to impede the successful operations and realization of the objectives include new entrants and rapid changes in technology. These factors can reduce the market share of the company; hence, affect the sales and profits reported.
The analysis using the three models, PESTE model, Porter’s five, and SWOT, reveals that Clothing Mate has an opportunity to succeed in the target market. The product is unique and large numbers of customers are likely to purchase the product to assist them in improving the laundry process. Both the internal and external environments are clearly supportive with a few challenges and threats. The challenges and threats identified can be handled through the application of appropriate strategies.
4.0 Research
Research is an important undertaking required to gather information, which will be used in the implementation of the business idea. The research, in this case, would be gathering of information about the level at which the target consumers are in need of the product. In this aspect, some the hotels, boarding schools, and colleges, as well as homes will be visited to seek information on whether people involved in the laundry would be wishing to use Clothing Mate as a tool. The research would also be critical in the identification of the best production practices, the channels to reach the target market effectively and efficiently, as well as the best promotional practice, and channels to use.
5.0 The Marketing Mix
The marketing mix is required to assist in the effective marketing of Clothing Mate. It comprises of key elements, including the product, price, place, and promotion (Luan & Sudhir 2010, 444-457). Each of the four elements is critical and should be incorporated in effective marketing. In this case, the product is the Clothing Mate, which is the item upon which the customers are expected to buy. The product will assist the consumers to match and put together clothes in their different categories including socks, gloves, inner wears, shorts, and shirts among other categories of clothes. The product will assist in reducing the time required in laundry and make the process less complicated. Laundry Associates Limited will strive to ensure that the product is of high quality regarding usability and durability (Kathleen, Harald, & Marnik 2013, 58-77). In addition to quality, Laundry Associates Limited will produce the product in different sizes and colors, which will serve the different needs and tastes of the customers. Concerning the sizes, the product would be offered in small, medium, and large sizes according to the needs of the customer.
The price offered to the customers by an organization should be fair and justifiable (Mei 2011, 10634-10644). Customers are sensitive to the price charged, and they use the price as one of the fundamental factors in the decision-making. On the other hand, the organization is keen on the price because it determines the revenue and profits earned. The price charged on every Clothing Mate depends on some factors, including the size of the product, the quantity purchased, the cost of production, and the profit margin targets. The company intends to charge a relatively low price, a situation that is expected to attract a large number of customers. In this case, a low-profit margin would be recorded, but the high demand will lead to multiplication effects. The price for the small, medium, and large sizes is initially projected at $ 25, $ 40, and $ 50 respectively.
Promotion is a tool used to pass information to potential customers and remind the existing customers about the product (Ayed & Majed 2012, 1-14). In addition, promotion communicates about the location of the manufacturing unit, the retail outlets where the products are sold, and the distribution centers for bulk purchasing. Advertising in the local televisions, radio stations, and print media is a powerful way upon which the promotion of the product will take place. The social media, including the Facebook and Twitter, are also important platforms that Laundry Associates Limited intends to use in promoting its proposed product. Lastly, road shows would be carried out in major residential and town areas to meet the potential customers, demonstrate on the usage Clothing Mate, and offer free samples (Bruce, Foutz & Kolsarici 2012, 469-486). Through the road shows, the company will collect information about the perception of the potential customers and answer their questions concerning the product and the company.
The place is also a concern to the company. In fact, this is the location where the production takes place and the point where the customer can access the product. The considerations of this element assist the company in ensuring that the product reaches to the target market and at convenient places where the customer can purchase the products. The company intends to reach out to the target market using multi-distribution channels. The first channel is the direct sale to the customers, where large-scale customers such as institutions, wholesalers, and the large-scale retailer will be supplied directly with the product. The second channel is the selection of official distributors. In this aspect, the small-scale wholesalers and retailer can access the products.
6.0 Organizational Structure and Personnel Plan
The operations of Laundry Associates Limited will take place through four departments, including human resource, production, accounts and finance, and marketing. The organizational structure and the personnel plan is critical in that it determines how the operations take place, the duties shared, and the authorities undertaken. The organization will have five seniors, one employed as the production manager while each of the four partners takes up the CEO, Human resource, accounts and finance, and marketing management roles. The following is the organizational design showing the departments and the personnel requirement.
7.0 Budgeting and Financial Projection
According to Lalli (2012) the financial matters, including the start- up cost, the projected revenue, and income are significantly important for a business venture such as the one that Laundry Associates Limited targets to exploit. The start- up cost and a 3- year projected income statement are used to demonstrate the expectations of the financial affairs of the business. The budgeting, in this case, is important in that it assists the company to determine the amount required and the gap that investors are expected to provide as external funding.
7.1 The start- up costs
| Item | Cost $ |
| Rent | 7, 000 |
| Business licensing | 1, 000 |
| Utilities: Electricity, Telephone, & Postage | 4, 000 |
| Stock And Materials | 20, 000 |
| Production tools and machinery | 30, 000 |
| Insurance | 1, 000 |
| Computers And Office Equipment | 10, 000 |
| Travel Expenses | 10, 000 |
| Salaries | 40, 000 |
| Recruitment and training | 12, 000 |
| Miscellaneous | 10, 000 |
| Total required amount | 145, 000 |
| Available from partners contribution | 120, 000 |
| Deficit required from external borrowing | 25, 000 |
The total start-up capital required is $ 145, 000. The partners would raise $ 30, 000 each adding up to $ 120, 000. The amount required for borrowing is $ 25, 000.
7.2 The three years projected Income Statement
| Year 1 | Year 2 | Year 3 | |
| sales | 100,000.00 | 120,000.00 | 144,000.00 |
| manufacturing cost of goods sold | 40,000.00 | 48,000.00 | 57,600.00 |
| gross profit | 60,000.00 | 72,000.00 | 86,400.00 |
| advertisement | 6,000.00 | 3,000.00 | 2,000.00 |
| Rent | 8,000.00 | 8,000.00 | 8,000.00 |
| salaries | 40,000.00 | 44,000.00 | 48,400.00 |
| Insurance | 1,000.00 | 1,000.00 | 1,000.00 |
| Equipment maintenance | 1,000.00 | 1,000.00 | 1,000.00 |
| utilities | 4,000.00 | 2,000.00 | 2,000.00 |
| Cost for license | 1,000.00 | 1,000.00 | 1,000.00 |
| depreciation | 1,000.00 | 1,000.00 | 1,000.00 |
| total expenses | 62,000.00 | 61,000.00 | 64,400.00 |
| operating profit | -2,000.00 | 11,000.00 | 22,000.00 |
| Interest charged (9%) | 2,500.00 | 2,500.00 | 2,500.00 |
| earnings before taxes | -4,500.00 | 8,500.00 | 19,500.00 |
| Tax (25%) | -1125 | 2,125.00 | 4,875.00 |
| net income | -3,375.00 | 6,375.00 | 14,625.00 |
The business will operate at a loss during the first year, but the performance will improve in the following year.
8.0 Conclusion and Recommendations
The marketing plan and analysis conducted reveals that the business idea of Laundry Associates Limited to produce and sell Clothing Mate is a viable and potentially successful venture. The description of the business and the product, the marketing mix, the research and business environment analysis are important components upon which the business idea and plan can be realized. The organizational structure and personnel planning shows how the operations will be organized, the flow of information, the exercising of authority and number of employees required to support the operations. The budget and projected income statement are important financial management tools used to guide on the capital requirement, the sources of capital, and the projected performance.
The marketing plan and the analysis lead to a conclusion that Laundry Associates Limited, should carry on with the plan to invest in the business idea. It is recommended that the business owners should take the time to plan, undertake research, and raise the required capital before starting up the manufacturing and marketing of Clothing Mate. It is also recommended that the company should invest more on research to gather information on another market apart from the United Kingdom where Clothing Mate would be in demand. The knowledge gathered in the research should be used to expand the business into new markets in other economies across the world.
List of References
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