Monday, January 26, 2015

Marketing Research Approach to Assess Global Market Potential




The main objective of this marketing research is to assess the level of complexities of global business world with the help of adequate marketing research. So that the company can understand the potential of global market and develop strategies according to that

Table of Contents

Introduction
 . 3Purpose of Marketing Research. 3
Scanning the Environment 4
Secondary Data. 6
Primary Data. 7
Marketing Research Process to Achieve Objective. 8
Problem Definition: 8
Defining Objectives of the Research: 8
Development of an Approach. 9
Research Design Formulation Data Collection and Analysis: 9
Report Preparation and Presentation: 10
Conclusion. 10
References. 12




Introduction


Marketing research is a systematic design, collection, analysis and reporting of data & findings, which is relevant to a specific marketing situation.  It is a form of a business research (Andreas and Cliff, 2007). Marketing research anticipates customers’ future wants & desires and allows organizations to produce and promote their products and services in accordance with them. It emphasizes on the identification of market opportunities (Kotler, 2002).
An effective marketing research involves the following steps:  To define the problem, the decision alternatives, and research objective, to develop the research plan, to collect the information, to analyze the information, to present the findings, and to make the decision (Boone and Kurtz, 2005). By the marketing research, a company may develop the marketing strategy and tactics for its product.

This paper explains the approach of marketing research that should be followed by a company to assess the potential of the global market. Before entering in the global market, it is necessary for the firm to assess the potential of the market. In this concern, the best marketing approach would be the evaluation of past trends, growth and external environment to assess the global potential.

Purpose of Marketing Research

Marketing research is the objective, systematic and exhaustive search for and study of the facts relating to any problem faced by the organization in the field of marketing. With the increase in the complexities of business activities, marketing research too is growing in complexity and has emerged as a highly specialized function of marketing management (Bradley, 2007). Marketing research uses the marketing information as its input and simultaneously generates more of its output. 

Due to the globalization, almost all the business firms are targeting international market to expand the business market and increase the profitability of the firm (Gershon, 2003). The main purpose of marketing research is to analyze the opportunities available in the global market, so that the companies can utilize the advantages and improve the performance of the firm in the new market (Kerin, Hartley and Rudelius, 2003). The marketing research will also give the organization an insight into existing practices adopted by its competitors and the customer preferences.

It will further help the company to know whether the products and services are in alignment with the cultural shifts taking place in the society. It also comes to know about the acceleration in the trends of switchover from simple products to branded products or vice versa. Through MR, the organization can also analyze the requirement of adding any value to the existing product/service or fully replacing the old service with the new one.

Scanning the Environment
 
In order to assess the global potential, it is necessary for the company to analyze the global environment. Scanning of global environment includes numerous factors. A company has to monitor demographic, economic, technological, political-legal and social-cultural factors (macro environment forces) and customers, competitors, distributors, suppliers (micro environment forces), which affect its ability to earn profits and opportunities available in the global market (Kotler and Armstrong, 2007). 

It should establish marketing intelligence system to track trends and important developments. For each trend, management needs to identify the related or associated opportunities and threats. A marketing opportunity is an area of buyer potential interest in which a company can perform profitably (Schroeder, 2007).
Developments in the external environment represent threats. An environmental threat is a challenge posed by an unfavorable trend that would lead to deterioration in sales or profit. These threats are classified according to the seriousness and profitability of occurrence. An ideal business is high in major opportunities and low in major threats (Sheth, 2003).

For example, Nestle has assessed all these factors and trends of the global environment. Company has decided to target the market of China for the marketing of high-end coffee equipments. The Chinese region is appropriate for the development of the business. With the advent of globalization and privatization in the Chinese markets, MNC’s can enter into the Chinese region for the expansion of their business.

Due to an increase in the number of MNC’s in the market, the demand for coffee has increased and the Chinese people are adopting coffee culture. This has assisted many companies to flourish in the Chinese region. Nestle established its factory in China and encouraged the cultivation of coffee in the country (Patton, 2007).
Additionally, for the retail industry, Wal-Mart has also analyzed that global world has high potential due to changes in the preferences of the consumers. Due to the increases in the global economy, living standard of people has been raised. All the people need luxury and lavish products and services with high quality and low prices. Thus, Wal-Mart has numerous opportunities in Asian Countries like, India, China, Japan, etc. due to good economic growth and low political restrictions (Vignali and Zundel, 2003). 

Apart from the external environment, scanning of internal environment is also essential to assess the company’s strengths to cope with the changes in the global market. Each business needs to evaluate its internal strength and weaknesses.  These factors may include product, price, promotion, place (distribution channels); as well as personnel, finance, manufacturing capabilities etc. (Wrenn, Loudon and Stevens, 2001). The strength to one objective may be weaknesses for the other. Strength and weaknesses of a company are as follow: customer service, efficiency, infrastructure, quality, management, price, cost, capacity, relationship with customers, strong brand names, ethics etc. (Andreas and Cliff, 2007).

Secondary Data
 
In order to collect the secondary data in the marketing research process through secondary research analysis, the companies should concentrate on the increases in the complexities of the competitive environment, changes in the world economic status, comparison of economic condition of different countries such as, USA, UK, Asia, Australia, etc. (Kotler, 2002).

In order to collect the secondary data, the research on international market should focus on understanding the cultural, political, legal, social, technological and economic environment of the Global market. The research should focus on the business cycle of the product in the international market (Boone and Kurtz, 2005). Furthermore, the companies should also concentrate on the business activities of competitors, emerging technologies global customers, etc.

Secondary data will comprise of information about the political and legal environment as well as government policies of the different countries’ export import records, economical analysis, relations with neighbor countries, etc. Additionally, secondary data also comprise of performance of competitors in the relevant industry, assessment of fast growing market, identification of emerging market, etc. (Bradley, 2007).

In order to assess the secondary data, the company should concentrate on the past record of growth; data and information provided in economic and social development reports, trade report, technological development in the country, etc. (Gershon, 2003). Evaluation of secondary data is less expensive and easy for the company, because of the reliability and authenticity.

For example, with the help of secondary data, a sports company can analyze that how much teenagers spend their pocket money on basketball shoes. The secondary data will assist in understanding the competitors and their strategies for setting up the price of the product.

Primary Data
 
For accomplishing the research of international market, it is necessary for an organization to evaluate the demand for the product in the region which is to be tapped and explored. Primary data of market research comprises of evaluation of target market to identify the segment and understand the needs and preference of consumers (Kerin, Hartley and Rudelius, 2003). It will assist the organization in comparing the demand existing in one region with another region (Kotler and Armstrong, 2007).

It is necessary for the company to focus on the buying behavior of the customers and the trends in the market to evaluate the primary data and understand the potential of global market. In this way, the firm can develop strategies related to the demand and supply in the market of the target region (Schroeder, 2007). Primary data allows the firm to use best promotional method as per the consumer’s behavior and preference to promote the product in the international market by focusing on the target customers and the target markets (Sheth, 2003).

For example, the fast food company can also access which country invites multinational firms or how and why consumers prefer fast food with different flavors (Vignali and Zundel, 2003). Primary data allows the firms to understand the consumer behavior and market demand at the global level (Kotler, 2002).

Marketing Research Process to Achieve Objective
 
There are so many uncertainties, which prevail in the global market. The business organization learns to overcome these problems with experience. Without doing business in the international market, no business organization can handle its business process smoothly. These business organizations can research the global market with the help of an external business service agency (Wrenn, Loudon and Stevens, 2001). In order to achieve the objective of the marketing research, it is necessary for the company to conduct a research process, which comprises of following steps:

Problem Definition:

Here the problem is to select best approach of marketing research to evaluate the global market potential and identify the opportunities available in the market to become successful. 

Defining Objectives of the Research:

The main objective of this marketing research is to assess the level of complexities of global business world with the help of adequate marketing research. So that the company can understand the potential of global market and develop strategies according to that. 

Development of an Approach
As the objective and problem of this marketing research is associated with the global world, the secondary research would be best suitable for this company. The marketing approach should be based on following steps:

Evaluation of Social and Cultural Trend: The Company should analyze the changes in the global trend and cultural environment of different regions. For example, culture of China and India is entirely different from the culture of USA (Wrenn, Loudon and Stevens, 2001). On the other hand, social development in India and China is similar as like of USA. People have become conscious about brand name and luxury goods in China and India due to the economic and educational development. Thus, it is essential for the company to evaluate these areas to understand the global market potential (Andreas and Cliff, 2007).

Data Collection through Analysis of Government Policies and Economic growth: Different country has different policies and regulations to do business. Understanding of these regulations is necessary to analyze the global market potential (Kotler, 2002). With the help of this, it would be easy for the companies that which country and industry have low entry barriers and which have high entry barriers. Analysis of global economy report will help the company to identify the growth of different region (Boone and Kurtz, 2005). In this way, company would be able to assess that which market has high economic potential.
Research Design Formulation Data Collection and Analysis:

This is the blue print to conduct the market research. This would be secondary research. Firstly, the researcher has to collect latest reports about trends, cultural environment, political and social environment. After collecting all the latest reports, the research would prepare different section to put the reports (Bradley, 2007).
It is an important step in any research. This step reveals the information about the potential of global market to become an international firm. The data should be collected on the basis of their geographical distribution according to the different region (Kotler, 2002).

From each section, the researcher would compare reports of different countries to assess, which country has high potential. For example, Economy of China is highly growing, cultural environment of Saudi Arabia is totally different from USA and India, USA has low restrictions to enter for new companies in the market, etc. (Gershon, 2003).

Report Preparation and Presentation:
This is the final step to prepare a report of the marketing research. In this section, the research will present the data in tabular as well graphical format. Graphical and tabular presentation would help to compare different report in easy ways (Kerin, Hartley and Rudelius, 2003).


Conclusion
 
Thus, on the basis of above discussion, it can be concluded that above mentioned approach of the marketing research is based on secondary research methodology. This research approach would help the company to understand the potential of global market. It would surely help the company in expanding its business in the international market (Kotler and Armstrong, 2007). All the important points mentioned in the research analysis should be considered and implemented by the company. It will assist the company in gaining success and growth in the global market.


References

Andreas, B. and Cliff, B. (2007). Marketing mix standardization in multinational corporations: A review of the evidence. International Journal of Management Reviews, 9, 303- 324.

Boone, L.E. and Kurtz, D.L. (2005). Contemporary Marketing (eds.). New York: Thomson South-Western.

Bradley, N. (2007). Marketing Research: Tools and Techniques. Published by Oxford University Press.

Gershon, S.H. (2003). The value of market research. Retrieved November 9, 2010 from http://findarticles.com/p/articles/mi_go1622/is_200305/ai_n7542485

Kerin, R.A., Hartley, S.W. and Rudelius, W. (2003). Marketing: The Core (eds.). New York: McGraw Hill Professional.

Kotler, P. and Armstrong, G. (2007). Principles of Marketing Pearson (eds.). New Jersey: Prentice Hall Pvt. Ltd.

Kotler, P. (2002). Marketing Management (11th Edtiion). New York: Prentice Hall Pvt. Ltd.

Patton, D. (2007, November 25). Continent in a Fix as China Enters the Coffee Market. Retrieved November 9, 2010 from http://craigeisele.wordpress.com/2007/12/02/africa-in-a-dilemma-as-china-enters-the-coffee-market/

Schroeder, J. E. (2007). Critical Marketing: Insights for Informed Research. Critical Marketing: Defining the Field. London: Elsevier Butterworth Heinemann.


Vignali, C. and Zundel, M. (2003). The marketing management process and heuristic devices: an action research investigation. Marketing Intelligence & Planning, 21(4), 205 – 219.

Wrenn, B., Loudon, D.L. and Stevens, R.E. (2001). Marketing Research: Text and Cases (eds.). Routledge.

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Friday, January 16, 2015

Business Plan for Classic Car




Executive Summery

At present time, business plan is an important part of an organization to make success of the firm into competitive market. To make success of launching the classic cars in Ballina, it is important for the firm to make effective and well defined business plan. The lifestyle of people over there allows them to have a classic car. The company is targeting those customers who love luxurious products. The company provides car with several new features along with the old features like huge space, smooth running and more mileage etc. The company is expecting to get 20% of consistent growth year by year. The aim of the company is to get maximum amount of share in a particular period. The company has promoted the car and its features through newspapers, road shows and created awareness among the customers. Company is also known to the fact that it will face competitions from the competitors who are already in the field.

The Company has thoroughly worked on the 4P’s of marketing and hopefully believes good response from the target people.  The company has gone through all the weaknesses and threats to the company and worked to sort it out. Company promises to give three year free service if some problems arise out. The company has come up with through market survey and analysis of all potential things necessary for an organization to be successful.




Table of Contents

Introduction. 4
Business Objectives. 4
Business Structure and Legal Requirements. 4
Stakeholder Analysis. 5
SWOT Analysis. 5
Business and Personal History. 6
Insurance and Risk Minimization Information. 7
Product and Services Details. 7
Customer Profile. 8
Market Segmentation Information. 8
Competitor Information. 8
Marketing Plan. 9
Business Location and Image Information. 10
Financial Plan and Cash Flow Summery. 11
Cash Flow Statement 11
Income Statement 12
Balance Sheet 12
REFERENCES. 14




Introduction

In present scenario, business plan plays a vital role in the success and failure of the business in terms of achieving it’s predetermine goals and objectives. This business plan will be developed for “Classic Car”. There will be discussion on various aspects of business plan like, business objectives, stakeholder analysis, SWOT analysis and customer & competitor analysis.

Business Objectives

Business objectives refer to predetermine and clear defined target for a business. Plans can then be made to achieve these targets in terms of business plan. Following are some of the objectives of classic car business in Ballina (Kurtz, 2008).
·         To increase market share of Classic car market in Ballina
·         To increase profitability
·         To survive in the market in crucial condition
·         To grow at a constant rate
·         To create awareness among customers regarding classic car

Business Structure and Legal Requirements

In global era, it is important for a firm to structure the business according to the legal requirement of a particular country. For classic car business, it would be better to enter as a sole proprietorship. The firm will develop or make structure of the business according to the governmental rules and regulations of Ballina. The firm will contact suppliers with a requirement of rare parts and built a portfolio of suppliers to enable one to access the raw materials. There are over 700 types of licenses issued by a federal, state and local government to regulate the activity of any business. Following are some of the legal requirements (Harvey& Hodges, 2007).
·         Registration of Australian Business Number: It is very important for any business in Australia to apply for an ABN which includes all the information regarding the business.
·         Registration of domain name: It will make easier for the government to recognize the type of business.

Stakeholder Analysis

Stakeholder’s analysis is very important for a newly started business as it opens the doors of opportunity for the business. Before starting the business for classic car in Ballina, information will be gathered regarding the needs and wants of the customers in the market. Buyer and supplier for the business will be analyzed. Target customers, potential customers and other aspects for running business will be analyzed. Another aspect of this analysis is to know the way of thinking of stakeholder about the car and project. It will help the organization to communicate and engage these key stakeholders in best possible way within or outside the organization.

SWOT Analysis

Strength:
·         Stylish aesthetic look that have capability to attract customers is the strength of the firm
·         Comfortable for a long drive and have a quite solid body is also another strength
·         Available in attractive colors and have a powerful engine (Böhm, 2009)
Weaknesses:
·         High prices of the car is one of the major weakness of the firm
·         Classic car requires more maintenance that is also its weakness
·         Consume more fuel and a very low mileage is also included in the weakness of the firm
·         Another major weaknesses with this car is the availability of spare parts are not sufficient
Opportunities:
·         There is an opportunity to attract the customers through car shows. It provides world wide appeal through its beautiful look. The resale value of the car is quite good.
·         Use the available part in the market and set the price according to the income of the target group.
Threats:
·         High competition works as a threat for the firm
·         Traffic congestion is another threat for classic car
·         Legal restrictions are another threats coming while import and export of classic cars

Business and Personal History

  The history of the classic car starts from the end of 2nd World War through the 1970s. During this time some of the automakers have made some of the most beautiful and exiting car the world has ever seen ((Leffingwell & Newhardt, 2006). One of the most famous cars of that time was the Tucker Torpedo. It had a top speed of 120 mile per hr very fast for that time (Zuehlke, 2007). As a business point of view there is a wide scope of classic cars in Ballina, NSW because of its consistent growth. Now there are a no of people who can afford classic car there.It has become a matter of prestige for them and in order to increase the standard of living people don’t even hesitate to buy the luxurious cars too. So, having a business of classic car over their can really be explored.

Insurance and Risk Minimization Information

In globalization, every business involves some sort of risk in it and classic car business is also not an exception. The best way to tackle these risks is to get insurance of the offered products or services from any insurance company. But it is not possible every time so best possible way is to perform the risk analysis which includes the following steps (Reuvid, 2005).
Identify threats: First step of risk analysis is to identify the threats faced by the organization. These threats may be political, technical, natural or financial. Analyzing these risks is very important as to know where the company is lacking (Kaye & Graham, 2006). The firm will identify these risks.
Estimate risk: The firm will find the livelihood of threat being realizes and assess its impact. One approach to this is to make best estimate of the probability of the event occurring.
Managing risk: Once the risk have been estimated the organization will start looking at the ways to manage them. These can be managed through following ways. Existing resources can be used to counter risk. The organization will change responsibility and internal controls. Contingency plans will be made to fight against these (Sadgrove, 2005).

Product and Services Details

The classic car provided by the company would include all necessary features of a classic car. Apart from this a survey would be done among the target customers about any additional features they would like to include. There would be enough space inside the car for at least six persons. The engine would be small but very powerful and wheels used will be very wide so as to minimize the chance of any accidents. There would be un-crushable passenger box and a padded dashboard which will protect during accident to inside persons. The company would provide free maintenance up to three years from the date of purchase.

Customer Profile

The company would target a specific consumer who can afford such luxuries. The firm will target high class of families with high income, professional like doctors, lawyers etc. The target customer for classic car would be the persons who are passionate about classic cars Dissatisfied customers from other cars will also recognize to know about their extra needs and wants about the cars (Leland& Bailey, 2006).

Market Segmentation Information

            Market segmentation is the process of identifying the key groups or segments within the general market that share specific characteristics and consumer habit. As the company provides classic car with great abundance of ease and comfort so its target segment will be the psychographic segmentation. As this segment will contain consumer with social class, lifestyle and personality so it would be easy for the company to sell its car within this target segment (McDonald& Dunbar, 2004).

Competitor Information

There are a huge number of competitors for classic car in Ballina market. Some of them are as follows.
Ford Motor Company: Ford motor a multinational corporation is one of the largest automaker companies in the world. Ford motors have a different variety of classic car such as Ford Mustang Fastback, King Cobra Mustang Rumble, Mercury Cougar Eliminator kapaki, Lincoln Continental Mark III Kapak. (Bingham& Robson, 2001). It is the biggest competitor of classic car.
GM:  GM is another big name in the field of classic cars. It’s Cadillac has captured the heart of the classic car seekers since 1902. During 1999 its sales fell down to 47 percent. Some of its models are Opel, Pontiac, Saturn (About GM, 2010)
Volkswagen: One of the largest manufacturers of automobiles in the world is also having a great variety of range in classic car. Volkswagen with its beetle entered into the car market and soon it become the leader in the market. Now it has a wide range of classic cars such as Volkswagen Scirocco, Volkswagen Jetta, and Volkswagen Polo etc (About Volkswagen, 2010).

Marketing Plan

The marketing plan for classic car will involves the analysis of 4P’s as product, price, place and promotion. These are as follow:
The Product: (Classic car)
The marketing related definition of a product is anything that can be presented to a market which may satisfy the needs or wants of the customers. The products are two types physical and non-physical. The classic car is a physical one but it is also non-physical as it provides after sales service (Lancaster & Reynolds, 2005). The classic car will have all the necessities of comfort and comfortable for the long drive. The car will have wide wheels to have a better grip on the road and along with this it will also having a tool which would help during accidents. In this car six persons can sit at a time.
Price:
Price refers to the assigned monetary value of a product or services. Choosing right pricing strategy is crucial in the market. Many factors will keep in the mind before deciding right price which includes cost of production, competitors pricing analysis, demand of target market and consumer demand. Being a classic car, the price would generally focus for a specific group and it would be very reasonable in comparison to its competitor.
Place:
Place refers to the market place where the company wants to sale its products. Here the company will target the market place of Ballina in NSW where it would sale it car through dealers.
Promotion
The classic car would be promoted through advertising, personal sales representatives and various campaigns. The features and benefits of the car would be promoted in several ways through internet, social media, newspaper, press release, broachers and posters (Lancaster & Reynolds, 2005).

Business Location and Image Information

The company would establish its business at a prime location so that it would be easy for the company to target the specific group. The location could be such that all the necessary things would be available nearby. It would be at the heart of Ballina, so, that customers can easily reach there. The company would try to reach maximum number of customers through its prime location (Zuehlke, 2007).

Financial Plan and Cash Flow Summery

Financial plan is the document setting out the objectives of the company, the forecast income and expenditure. It is a budget plan which will allocate future income to meet future expenditure. The financial plan of a company can be made through preparing income statement, balance sheet and cash flow statement. Following is the financial plan of classic car company.

Cash Flow Statement

For the month ended January 31, 2009         
Operating Activities
            Net Income                                                                                               $       7000
            Plus Depreciation Expense                                                                                1000
            Less Gain on Sale of Stock                                                                                (500)
Less Increase in Account Rec.                                                                                  (10000)
           Plus Increase in Account Pay.                                                                          20000
            Increase in Interest Pay.                                                                                       500
 Cash Flow from Operating Activities                                                               $     18000
            Investing Activities
            Purchase of Equipment                                                                                  (60000)
            Purchase of Securities                                                                                      (3000)
            Sale of Securities                                                                                              3500
Cash Flow from Financing Activities                                                                $    (59500)
            Financing Activities
            Insurance of Stock                                                                                    $    200000
            Increase in Note Payable                                                                                  50000
Cash Flow from Investing Activity                                                                    $    250000
Total Cash Flow                                                                                                    $    209000
Beginning Cash                                                                                                                     0
            Ending Cash                                                                                             $    209000

Income Statement

For the Month Ending 31 March, 2009
      Total sales                                                                                                     $ 450000
       Less
                Cost of goods sold                                                                                 248000
                Selling expenses                                                                                       32000
                 Bad debts                                                                                                    600
                Rent and electricity                                                                                    2700
                Insurance                                                                                                   12400
                Wages                                                                                                       22300
                Repair and maintenance                                                                             1200
                Advertising and promotion                                                                         3200
        Income before tax                                                                                           127600
        Taxes 20%                                                                                                         25520
        Net Income                                                                                                      102080

Balance Sheet

As on 31st March 2009
ASSETS
Cash                                                            34000
Cash at bank                                               23000
Inventory                                                    43600
Accounts Receivable                                  24400
Land and Building                                     132000
Total Assets                                               257000

LIABILITY
Capital                                                          34000
Supplier                                                        31000
Accounts Payable                                        22500
Long term debt                                            89500
Bank loan                                                     55000
Profit                                                            25000
Total liability  & Equity                           257000

                                    

 












References
Bailey, K & Leland, K (2006).Customer Service for Dummies. For Dummies.
Böhm, A (2009). The SWOT Analysis. GRIN Verlag.
Dunbar, I & McDonald, M (2004). Market segmentation: how to do it, how to profit from it. Butterworth-Heinemann.
General Motors (2010). Home Page. Retrieved 03 November, 2010 from http://www.gm.com/
Graham, J & Kaye, D (2006) .The Rothstein catalog on disaster recovery. Rothstein Associates Inc.
Graham, G & Bingham, P (2001).Illustrated Directory of Classic Cars. Motor Books International.
Hodges, J & Harvey, J (2007). Business Organisation and Management for Queensland. Aus: Macmillan Education.
Kurtz, D (2008). Contemporary Marketing. Cengage Learning.
Lancaster, G. & Reynolds, P. (2005). Management of Marketing. Burlington: Butterworth-Heinemann.
Newhardt, D &  Leffingwell, R (2006). Muscle: America's Legendary Performance Cars. MotorBooks International.
Reuvid, J (2005). Managing business risk: a practical guide to protecting your business. Kogan Page Publishers.
Sadgrove, K (2005).The complete guide to business risk management. Gower Publishing, Ltd.
Volkswagen (2010). Home Page. Retrieved 03 November, 2010 from http://www.volkswagen.com/vwcms/international_portal/virtualmaster/en.html
Zuehlke, J (2007). Classic Cars. Lerner Publications.

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