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Complete Marketing Plan (adms2200)

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Department
Administrative Studies
Course
ADMS 2200
Professor
Richard Patterson
Semester
Fall

Description
Marketing Plan November 19, 2012 Rohit Walia, Monika Patel, Jason Finegan, Alex Vysotskiy, Nathaniel Aliester Robertson DreamGift Table of Content Executive Summary………………………………………………….……………………………………………………………2 Company Description..……………………………………………………….………………………………………………….2 Company goals and mission………………………………………………………….……………………………………….2 Core Competencies …………………………………………………………….…..…………………………………………….3 Environmental Analysis: ………………………………………………………………………………………….……………3 Economic Environment .………………………………………………………………………………………….……….………3 Legal and Political Environment .………………………………………………………………………………………………4 Social and Cultural Environment ……………………..………….……………………………………………………………5 Technological Environment …………………………..………….……………………………………………………………..6 Competitive Analysis (5 forces model) …………………………………………………………………………………..…7 SWOT Analysis …………………..………….……………………………………………………………………………………10 Marketing Mix: ……………………………………………………………………………………………………………………13 Product Strategy ………………………………………………………………………………………………………………………12 Pricing Strategy ………………………………………………………………………………………………………………………..13 Promotional Strategy ……………………………………………………………………………………………………………….15 Distribution Strategy ……………………………………….………………………………………………………..……………..16 Facilities Plan ………………………………………………………………………………………………………………………16 Physical Environment ………………………………………………………………………………………..……………….……16 Equipment …………………………………………………………………………………………………………………………..…..17 Human Resources Plan …………………………………………………………………………………………….…………17 The Online Team………………………………………………………………………………………………………………………17 The Marketing Team…………………………………………………………………………………………………………………18 The Sales Team…………………………………………………………………………………………………………….……..……19 Short Term Schedule……………………………………………………………………………………………………………19 Long Term Schedule…………………………………………………………………………………………………………….20 Bibliography…..……………………………………………………………………………………………………………………22 1 Executive Summary DreamGift caters to people who are seeking unique gift options for any special occasion. Established by three entrepreneurs, DreamGift is targeted towards affluent middle to upper class clientele. The company originated in Toronto, Ontario and the following marketing plan outlines the launch of our company, as well as the future expansion – to Ottawa, Vancouver, Montreal and New York City – of the company within the next 3 to 4 years. DreamGift allows gift givers to bestow upon their recipients the privilege of real life experiences and the freedom of choice. It is unique in allowing recipients to choose a gift without fear of the receiver already having something similar. Why purchase DreamGift packages over our competitors? No other company is willing to offer customers the selection and excellence that DreamGift provides. DreamGift experience packages deliver the element of surprise in gift giving that no other company can rival. Company Description DreamGift was founded by Dmitry Zumberov , Alexander Martynov, and Alexander Vysotskiy. They were dedicated to creating a customer oriented company that delivers. Each of our founders is an entrepreneur with a background in business administration. The company holds partnerships with providers of the packaged activities, such as paintball companies and shooting ranges, and is anticipating an increase partnership due to company growth and expansion. The founders of DreamGift have created a unique product that solves the problems that arise when selecting a gift. DreamGift is successful due to the unique and exciting product it offers consumers, as well as its unrivalled status in the industry. Company Goals and Mission DreamGift is an up and coming company that is set to be a leading gift provider in the North American market. Our slogan or mission statement is as follows: “Delivering big life experiences in small packages!” We are devoted to providing quality and focused on customer satisfaction. The brand will be established as a ‘gift to remember’ and will build a loyal customer base, creating a great margin of profitability. DreamGift intends to open a store in a leading mall within Toronto come late 2012. Capitalizing on the Christmas holiday season, DreamGift is expected to generate great profits by the end of the year. Once the company becomes profitable and gains greater financial stability, DreamGift will expand to Ottawa, Vancouver, Montreal, and New York. To maintain our expectations we must have the highest motivation and the strongest spirit to keep striving to improve and offer the best of quality to all our loyal customers. 2 Core Competencies DreamGift seeks to use its unique design and valued gifts to gain a competitive advantage in the gift giving industry. As an aspiring company, DreamGift has developed the following core competencies in providing unique gifts that allows the recipient of gifts to have a choice.  There are a wide range of activities that are available to the gift giver and the recipient.  The concept of gifting “experiences” is largely unique and unprecedented hereby sparking more interest by customers and investors alike.  DreamGift maintains a strong relationship with its suppliers all over the world.  DreamGift allows for a hassle free option which is as easy as picking up a phone and dialing a number on your voucher. It seeks to preserve the gift experience one enjoys while opening a package on that special day. Environmental Analysis Economic Environment: DreamGift commences its operations in Toronto, Ontario. Toronto approximately has a $268 billion dollar economy. Last year Toronto attracted over 10 million overnight visitors who spend a total of $4.6 billion dollars. The company looks at this all as potential profit, as visitors are key investors in activities that DreamGift provides. This does not limit our gifts to be purchased by those simply in Toronto, but rather appeals to others outside the country. Due to the international and domestic nature of DreamGift, the profit margins relatively increase in comparison to competitors. Our internet website helps our services to be more accessible to those with access to the World Wide Web. DreamGift, once financially and virtually established, will expand its business to Ottawa, Vancouver Montreal and New York City. Moreover, we expect to take advantage of Christmas sales by opening a store in Toronto this winter. Although unemployment is not as low as we would hope, the current 8% mark is lower than recent years. Nevertheless, with the clientele we wish to attract – the middle and upper class – we feel that the unemployment rate will not have a major impact on the business. Prices will remain affordable for the target demographic. The core inflation rate is at a low after 2 years, bringing it down to 1.6%. Although core inflation is lower, some essential product prices 1 Invest Toronto. “Business Toronto: Economic Overview.” Invest Toronto. n.d. Web. 12 Oct. 2012. 3 were inflated, such as food which has risen by 2.2%. This may cause a minor decrease in consumer spending on leisure activites. Legal and Political Environment: The legal and political environment is vast and complex, that needs to be paid special attention to. Throughout the years legislation has been added to protect both the customers and the employers within the retail business. For us to be successful within the retail industry there are certain laws that we must acknowledge and become familiar with. The Employment Standard Act (ESA): The employment standard act helps employees to understand their rights and employers to know what is expected of them. In other words it provides the minimum terms and conditions for work. This act covers everything from minimum pay, equal pay for equal work, public holidays, hours of eating, vacation time to parental leave (just to name a few). The ESA is enforced by the Ministry of Labour and runs on a complain system. Meaning, employees must raise their concerns about any wrongdoings of the company. Section 2 of this act requires employers to display workplace posters prepared by the ministry that outlines the regulations of this act, which DreamGift will abide by. If a claim is laid against our company it can be a very long and drawn out process including fact finding meetings and visits from employment standard officers. Any ignorance to the laws on our part can cause major public scrutiny which will affect our overall public reputation and/or profit margins. To avoid such scrutiny it becomes essential that DreamGift operate in accordance with the regulations outlined within this act and prevent unnecessary financial costs that arise with employment claims against the company. Occupational Health and Safety Act (OHSA): The Occupational Health and Safety act is another law in which extensive knowledge on our part is extremely important. In some cases, companies can be fined up to $500,000 or face possible jail time. Unlike other employment regulations, which may only cover certain employees while leaving out others such as individual contractors, the OHSA covers every employee that is paid to perform a service within that company. 2 The Canadian Press. “Inflation Cools to 2-Year-Low.” CBC News. 21 Sept. 2012. Web. 1 Oct. 2012 4 Under this act, as the employer we have many responsibilities that we must perform, however the most important is to ensure that the four major rights of the employee are honoured. Those four rights include the right to: (1) Participate in identifying workplace hazards (2) Refuse unsafe work (3) Stop work (by a certified health and safety committee) (4) Know about hazards that exist throughout the organization. Many retail organizations have a high priority on health and safety, to ensure a safe environment and in turn productivity. These four major rights are essential to DreamGift, as we aim to provide a work place environment which makes workers happy and in turn increases productivity. Health and safety officers enforce the OHSA. If an officer responds to a complaint filed by a workplace employee and deems a workplace as being unsafe they have the ability to issue a work stoppage. It can be extremely costly to our business if we fail to meet the requirements of the Health and Safety act. Human Rights Code: Lastly, the Human Rights Code ensures that employees are safe from discrimination and harassment. This covers issues such as sexual harassment, physical harassment, and discrimination based on age, creed, or religion (just to name a few). All three of these laws are extremely important to us. As stated above, any ignorance on our part can result in both scrutiny towards our public reputation and a decrease in the company’s profitability. Social and Cultural Environment In the past couple of decades, the social and cultural environment has become increasingly important. The social and cultural aspect of marketing was not considered of importance until the 90’s, when firms realized and utilized the evolving trend of building a relationship with their customers. In a city as multicultural as Toronto and New York we have an opportunity to reach communities and different demographics of people that we may have not had the opportunity 5 to otherwise. It is important for us to take this into account when we embark on marketing initiatives. Things that are seen as socially acceptable in one society or culture may not be seen as acceptable in another. We can either gain customers from different cultures or alienate customers from different backgrounds depending on the attention or lack thereof that we pay to this subject. The most important strategy we can implement is to build a healthy relationship with our customers to ensure that our business practice and the businesses that we associate with conduct themselves with in an ethical way. Unfortunately, this results in roadblocks; firstly, the definition of unethical or ethical is not universal. As stated above with such a diverse set of potential customers, what can be seen as acceptable is not the same throughout cultures. Secondly, due to the fact that our company acts as a middleman for providing various services we do not have much control over how our partnering companies conduct their business. A conflict with a partnering company can result in the loss of customers and profit for DreamGift. There are a few common conducts that are considered universally unethical. Any activity that misleads the customer in any way, whether it is through false advertising, pricing or product packaging can be deemed as unacceptable. It is imperative that we build and maintain a healthy relationship with our customers and avoid any unethical practices to maintain profit and build a loyal customer base. DreamGift is devoted to providing exceptional customer service. Another important aspect that plays a major role in building a relationship with our customers is through the engagement in philanthropic activities. Just about every major retailer engages in some form of socially responsible activities. It is crucial to show that we are invested in the community that we chose to operate in. We look to invest in causes such as breast cancer awareness and the Sick Kids hospital. When seeking companies for partnerships we feel that it would be important to give extra consideration to companies that provides not only the service that we require but also one with a reputation of being socially aware. As stated before the social and cultural aspect is one that can be either beneficial or harmful to our success and the number of customers we attract. DreamGift strives to not only be market leaders in a very unique service but an organization that can be seen as trust worthy and ethical in our community. Technological Environment: With the growing ease of the internet, customers find it simpler to purchase products that are available online. In 2010, it was found that 51% of internet users purchased goods or 6 services online, generating nearly 114 million orders, which values at approximately $15.3 3 billion. DreamGift has been established online, and can be easily accessed on www.dreamgift.ca. Detailed information about the packages and activities, as well as online ordering is available. Shipping and delivery is included in the package price; express delivery is also available with a minor charge. Packages will be delivered by Canada Post or through FedEx for express delivery. To accommodate to those customers that prefer shopping in store, a small store will be established in Toronto, and later in Ottawa, Vancouver, Montreal and New York City. As mentioned in the facilities plan, television monitors will be needed in store to allow customers to envision the purchase they are making. Furthermore, a Windows computer system will be installed in store to hold customer information. To process cash, debit and credit transactions, a POS (point of sale) cash register will be installed. Additionally, for customer convenience, DreamGift uses a toll free number (1-855- 585-GIFT), allowing those outside of the country to call without a charge. With the advancements and dependency on technology, DreamGift finds it essential for the company to adapt and utilize technology to become successful. Competitive Analysis (5 forces model): Warren Buffett, an American business entrepreneur, investor and philanthropist, when engaged in an intellectual conversation about investing, mentioned the idea of a company’s moat. The moat is a simple way of describing a company's competitive advantages. Businesses with strong competitive advantages have large moats, and consequently higher profit margins. The Porter’s five Forces model give us insight into a company's competitive position and its profitability. The five forces are, as follows: 1) Threat of new entrants to an industry: One of the defining characteristics of competitive advantage is the industry’s barrier to entry. DreamGift has relatively low barriers to entry which means it is relatively cheap for new firms to enter the market. Because threat of new entrants rises as the barrier to entry is reduced in a marketplace, we plan to increase competition by providing a completely unique service. Any firm seeking to enter this market is faced with significant barriers to entry such as:  Competing with the established TryThat, Samba Days, and PerfectDay brand names. At the very least, this requires a substantial amount of expensive upfront advertising and promotion. 3 Statistics Canada. “Individuals Internet Use and E-Commerce.” Web. 2010. 7  With limited initial sales, new entrants in the market will be unable to take full advantage of decreasing short-run average cost or long-run economies of scale.  New entrants have to devise their own production techniques to compete with the patented techniques used by already established competitors. 2) Bargaining power of suppliers: DreamGift’s has multiple suppliers available in Ontario. There are many rock climbing facilities, fitness gyms, skydiving arenas, etc. Because our potential suppliers are producing a commoditized service, DreamGift will make its purchase decision based mainly on price, which tends to reduce costs. On the other hand, there may come a time in the future where some of the “life experiences” that DreamGift offers may only be supplied by a single supplier due to complexity and risk. In that case, the supplier’s will be producing something DreamGift has to have and the company will have little leverage to negotiate a better price. The fewer the number of suppliers for a DreamGift experience, the more power they will have over the price. Size also plays a crucial role here. Since DreamGift is a newly developed business, its size relative to its competitors is petite. This unfortunately gives our suppliers more power over negotiating prices. 3) Bargaining power of buyers: There are many customers that are attracted to the service that is provided by DreamGift. Prices are fixed at a rate dependant on the package selected and are not subject to change given the bargaining efforts of the customer. Given that there are not many in the industry, customers are limited to the providers available to them. This in turn limits the bargaining power of the buyer. Packages are set at an affordable price, deeming them profitable for the company as well as convenient for customers. As DreamGift targets the upper/middle clientele, customers are more willing to spend money. Furthermore, loyalty clubs and VIP customer cards maintains a customer base. They will also be rewarded for their loyalty with discounts. A factor one must consider is the effect internet has on the bargaining power of the buyer. The internet allows customers to maintain a greater bargaining power as they are able to easily access information such as competing prices. However, as you can see from the table below, compared to our competitors our packages’ price range remains relatively low for the regular experiences. 8 DreamGift $65 to $519 TryThat $19 to $4,950 SambaDays $10 to $5,000 PerfectDay $40 to $40,815 Buyers do hold a level of bargaining power; however DreamGift provides a quality service that is affordable and unique, decreasing the likelihood of customers choosing other expensive alternatives. As you can see, PerfectDay has the “Dive the wreck of the Titanic” priced at a mind-blowing $40,815.00! As profitable it may seem, the truth is, they have the lowest monthly visitors online. 4) Threat of substitute: Substitute products may emerge in different industries, however satisfy the same customer need one seeks from DreamGift. For example, restaurants may provide a discounted rate for the same romantic dinner offered by DreamGift. DreamGift answers to such threats by maintaining a competitive price and quality product and service. The product offered is one that is new and exciting to many. It distances customers from ‘typical’ gift ideas and allows them to provide a variety of options. Additionally, the internet causes threats of new substitutes. As DreamGift is also primarily internet based, information about our product is worldwide. 5) Rivalry among competitors: DreamGift has identified three direct competitors which provide similar products in Ontario: TryThat, Samba Days and PerfectDay TryThat: Among our competitors it has the largest number of monthly visitors to its website: 48,810. Samba Days: Among these three competitors, Samba Days is the only company that places their product in department stores and drugstores such as Shoppers Drugmart, Rexall, Metro, Sears, Hallmark, etc. On the other hand, it is far from the leader for online monthly visitors: 21240. 9 PerfectDay: Given that they have only had 8190 visitors to their website in a month, it can be assumed that they are not performing well or are relatively new in the industry. Maybe their $45,815 expedition to the titanic sink-age point was not marketed well enough. The intensity of competitive rivalry is not very high. In addition, none of three competitors specialize in providing gift experiences in only Toronto. As an emerging company, DreamGift seeks to specialize in a given market (Toronto) before expanding into others. Moreover, the level of customer service provided by DreamGift is higher. We also provide specialized services, such as 24 hour express delivery, which our competitors do not. Additionally, DreamGift provides their products in attractive gift boxes which maintaining the gift giving experience, unlike our competitors. With the exclusion of one, our competitors are solely internet based; however DreamGift will expand in-store in addition to the already existing online ordering system, making the service more accessible. SWOT Analysis Through analyzing Dream Gift’s strengths, weaknesses, opportunities and threats, the marketing environment can be accurately evaluated. It sheds light onto the vulnerabilities and the constraints that may hinder the company’s success. STRENGTHS WEAKNESSES  Provides more than just one good or  Maintaining effective relationship with service. affiliated suppliers—companies from  Customers gain more value for their whom we purchase “experiences” money; the value of the gift packages which we offer to our customers. as a whole is cheaper than the value of  Inability to provide customers with the individual experiences. tangible products. Although tangible  Due to DreamGift’s online operations, it gifts can be bought; they are limited is accessible to all audiences located and not the focus of DreamGift. anywhere in the world at any time.  The majority of DreamGift’s sales rely Customers can access our website, heavily on technology, marketing and learn about our services and place web presence. orders online.  Customers without access to a  DreamGift can reach a world-wide computer and internet may have audience online. It can target online difficult time learning about our users of certain websites and contents services as DreamGift is mainly an due to search engine optimization online start-up. Although customers (SEO) techniques and advertisements. may reach our contacts through  An Oligopoly; since an oligopolistic firm telephone, it should be noted that the 10 is relatively large compared to the particulars of DreamGift can be overall market, it has a substantial properly seen online. degree of market control hereby resulting in very few competitors!  The concept of purchasing and gifting “experiences” is a unique and unprecedented idea. It is an emerging market with prospering potential.  Less competition results in more control over price and hence a substantial amount of market share. OPPORTUNITIES THREATS  Expanding online presence and  This particular market is easy to targeting audiences world-wide could penetrate. Replicating the services of increase revenues. DreamGift can DreamGift can be done easily as there target certain w
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