Market Research and Business Plan
Executive Summary:
This business plan focuses upon the idea of a small electrical company with the name of Braze, which distinguishes itself from its competitors upon the basis of providing customers with colourful and designed electronic products. The exteriors of the products are offered in neon colours and a variety of designs and are aimed at attracting fashion-conscious, fun-loving, and generally young consumers who are appreciative of brightly coloured products. The brand will price its products at a slight premium and position the pricing in the midst of Samsung and Sony. The brand will initially open outlets in the cities of London, Birmingham, and Manchester and gradually expand into other international markets once it stabilizes itself and gains a strong customer base.
This business plan conducts a competitor analysis, explains the pricing and marketing strategy of Braze, analyzes its customer profile, and describes its initial start-up costs and payback period. The report concludes with an analysis of the company’s future plans and a summary of all the main points made in the plan.
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Introduction:
The electronics industry is highly penetrated and carries a great degree of competition. However, the industry also holds a vast amount of potential and profitability as new products are invented and upgraded from previous models. Consumers are looking for highly innovative, easy-to-use, and trendy products which add to their style, convenience, and are as much automated as possible. The drawback of investing in the electronics industry is that products have a very short lifecycle and quickly become outdated once they are released in the market and it is essential for producers to ensure that they continue to innovate their products as much as possible to ensure customer retention. Another problem of investing in the electronics industry is that it may require significant investment, continuous innovation and efficiency, and a highly interesting unique selling proposition in order for businesses to set themselves apart from their competitors. Moreover, the electronics industry also has a very narrow and competitive pricing strategy as it is a requirement for them to price their products in line with their competitors (Tidd & Bessant, 2011).
This business plan will outline a proposal for a new small electronics and electric company and will begin with an analysis of the existing competition in the market and how this company can set itself apart from its competitors, commence with an analysis of the costs and payback period estimated for the required project, followed by a description of the staffing requirements for the project, and concluding with a description of the future plans for the company and its expansion.
Business Idea/Unique Selling Proposition:
The business idea is to begin a new electrical company which offers a highly innovative and personalized service, and offers their clients technological products which also add to the customer’s home decor and/ or personalized preferences. The company seeks to offer electrical appliances, such as televisions, tablets, laptops, hair styling and grooming appliances, and other electrical appliances, in the home category or the self-care category. The company’s name will be Braze and this name is suggested because it is short and comprehensive and also has a highly jazzy feel to it. The “z” sound at the end is used to give the company’s name a hi-tech sound while the “br” sound at the beginning of the company’s name is used to signify the “brightness” as those are the types of products that the company is offering to its customers. Moreover, the company originates in England and the “br” at the beginning of the company’s name also gives it a “British” feel which helps the company maintain its identity and helps consumers recognize its country-of-origin.
The main business idea is to offer consumers a variety of electrical products and to differentiate itself upon the basis of providing these products in a variety of different colours. For example, the company may offer LED screen televisions, tablets, hair straighteners, and other appliances in a variety of colours such as blue, green, golden, red, purple, and other designs. Designs such as leopard prints, snake prints, zebra prints, and other colours may be offered in the electrical appliances which may appeal to varying consumer segments and attract consumers who wish to match these appliances with their home decor or wish to match them with their personal preferences. This is also the point that the company will use as its unique selling proposition and its point of differentiation from other companies.
The next section of this plan will conduct a comprehensive competitor analysis of the electronics industry and the types of products being offered.
Competitor Analysis:
As mentioned before, the electronics industry is highly saturated with many companies competing to gain market share and customer loyalty. Most of the companies in the industry seek to gain customer loyalty and market share through competing upon the basis of price, quality, and being the first to introduce updated models of previously introduced electrical appliances. The largest companies in the industry include:
Sony·Slightly premium priced
·Differentiates itself on the basis of high quality and goodwill as it is a renowned company
·Produces a variety of products including mobile phones, televisions, laptops and tablets, etc.
(MIT Technology Review, 2013)
Samsung·Moderately priced but in-line with competitors
·Competes with competitors on the basis of price while also ensuring that it maintains quality
·Produces the same variety of products that Sony does
(BusinessInsider, 2013)
Nobel·Low-priced compared to competitors
·Competes with competitors mainly on the basis of price while it is known for having moderate levels of quality
·Produces nearly the same variety of electrical products as its competitors
(MIT Technology Review, 2013)
Pricing Analysis of Competitor Companies:
Samsung Plasma TV 43”- ?399.00 (Amazon, 2014)
Sony Plasma TV 43”– ?433.00 (Amazon, 2014)
Nobel Plasma TV 43”– ?295.00 (Amazon, 2014)
Brand Positioning and Pricing Strategy for Braze:
As Braze is going to be a small electrical company catering to a market niche which prefers colourful and designed electrical products, the company is likely to have higher costs compared to its competitors as they are all well-established brands who have a well-defined customer base. Thus, the company is going to charge its customers a slight premium price from that charged by Nobel and Toshiba as it aims to position itself as a modern, high-quality, fashionable brand which represents convenience, quality, and style at the same time.
The company will begin with approximately three outlets in various parts of England, especially in the larger cities such as London, Birmingham, and Manchester. The outlets will be designed differently from traditional electronics shops which usually have plain white interiors or use light colours in their interiors. The shops will have colours, such as pink, green, golden, purple, and other colours, which would add a highly bright and fun-loving image to the shops. The interiors of the outlets will be lit with spotlights and some neon lights, which will extenuate the designs of each of the electronic products.
The staff in the shops will be trained to provide customers with a highly personalized service and keep records of customer preferences and will also be encouraged to take customer suggestions regarding popular product designs that customers may prefer in the products. The staff will be wearing uniforms of bright colours and will be encouraged to display salesmanship which exemplifies the company’s tagline of “We Wish to Brighten Your Day”. The interiors of the outlets will be luxuriously furnished with easy chairs and magazines which show the company’s range of products.
The company is aiming to exemplify a differentiated image which also promotes an aura of luxury, style, fashion-consciousness, and a high level of personalization. Thus, the company will be charging a slightly higher price than Nobel but a slightly lower price than Sony as the company is aiming to break into a highly penetrated and competitive market. The company’s price list may be as follows:
Plasma Television 43”- ?400.00
Tablet-?350.00
Microwave Ovens-?100.00
Set-up Costs and Payback Period:
In its initial stages, the company will need a high amount of investment to develop its products and set up its three outlets. The company will need investment for production costs and then investment for purchasing furniture and other essentials for its three outlets. The company would require approximately ?100,000 pounds to develop and produce a small range of designed and coloured products. The company is advised to rent a small factory area in the suburbs of London or Birmingham to facilitate its production process and also initially rent its three outlets in London, Birmingham, and Manchester as there may be requirements of switching locations from time to time. The company is advised to rent these outlets within malls such as BrentCross in London or Trafford Centre in Manchester in order to help the brand gain maximum exposure. Thus, the company’s initial costs would be estimated to amount to the following amounts:
Product Development Costs: ?100,000
Factory Rent: ?1500 p.m.
Machinery Costs: ?100,000
Outlet Rent in London: ?2000 p.m. (Gumtree, 2014)
Outlet Rent in Manchester: ?1850 p.m. (Gumtree, 2014)
Outlet Rent in Birmingham: ?1900 p.m. (Gumtree, 2014)
During the company’s initial stages, the company is likely to have a small range of customers as it is basically catering to a market niche. Thus, we can assume that the company is likely to sell approximately 50 products in each of its outlets per month during its first year of operations. As the company expands its product range and focuses upon advertising and promotional activities, it may be able to expand its customer base and increase its sales. However, this process is likely to take 2-3 years before the brand can consider itself to be stable in the electronic goods niche market. The firm is likely to recover its investment in approximately 5 years time but is not likely to recover its initial investment before this time period as it will be struggling to expand its customer base.
Customer Profile and Marketing Strategy:
The company will initially be catering to customers of both genders within the approximate age range of 15-50 who would appreciate the brightly coloured electrical appliances that the company offers and also have the ability to pay for the slightly premium priced products. The company’s customers are also likely to be fashion-conscious, fun-loving, energetic, and having an appreciation for colours and designs. The brand is likely to appeal to women more than men as women would be more likely to appreciate the aesthetic appeal of the electronic products offered than men would.
Hence, the company’s initial marketing and advertising strategy will be based on demonstrations and displays within the popular malls of England and through pamphlets dispersed throughout the three cities in the homes of potential consumers. Advertisements will also be made on billboards, radio, and within magazines. The company will initially be located in only three cities of England, thus the company may not initially depend upon television advertisements but may also pursue this medium when it expands its business to other areas as well.
Staffing Arrangements and Position of Owner:
In its initial stages, the company will staff a small number of people to be able to sufficiently cater to the various functions that the business requires to be performed. The company’s factory may employ 3 electrical engineers who will aid in the research and development of the products and guide factory operations. The company will also employ two graphic designers who will create the designs printed upon the exteriors of the products. The factory will be run by approximately 20 workers who will produce the products required for the three outlets. Supervision will be required for the workers which means that two experienced managers will also be hired in order to supervise operations.
The company’s logistics network will be set up via trucks which will transport the finished products to the three outlets of Braze. The company will initially rent three trucks and hire four drivers to transport the products to the required outlets. The extra driver will be employed to cater to emergency situations and the drivers will be required to work on a rotational basis in order to ensure reliability in the delivery and transport process.
Braze’s outlets will require three salespeople each and one manager for each outlet initially to cater to inventory management, sales, and outlet maintenance. The skills required for the salespeople will include a high level of persuasive ability, excellent communication and management skills, high levels of creativity in order to help in putting products on display and presenting them in front of customers in a unique manner. Moreover, the salespeople will be required to have a pleasant personality and will preferably have degrees in communication and/or marketing.
The managers employed in the outlets will be required to have experience amounting to approximately 3-5 years and have degrees in management, leadership, marketing, or other business disciplines. The owner of the business, being an electrical engineer, will aid the production process with fresh ideas and will work in collaboration with the other employed electrical engineers to create innovative products and attempt to re-design products frequently in order to remain in coordination with customer demands. The owner will also facilitate operations by supervising the outlets on a rotational basis and ensuring that the brand is being promoted appropriately and keeping any potential problems in check.
The company will also additionally need to hire an accountant and make use of a cleaning service once a week in order to keep its outlets clean and presentable for customers.
Company’s Future Plans:
The company’s future plans will consist of expanding the business within other areas of the United Kingdom. The company will initially aim to expand its outlets within Wales and Scotland and will also open outlets in Edinburgh, Glasgow, Sheffield, and other areas. The company will also aim to increase its research and development investment and try to make a breakthrough invention in the market and be the pioneer introducer of a new product. This will eventually enable the company to grow in size and capture a larger percentage of the electronics market.
Further, the firm will also plan to purchase its outlets and factory area in order to reduce its monthly costs and to increase the value of its fixed assets. The company may choose to raise finance for this expansion through bank loans and/or by adding partners to the business and converting it into a partnership or a private limited company.
Within about ten years time the company may aim to go international and may expand into the areas of Ireland and Europe. The company’s initial targets may be France, Belgium, Netherlands, and Germany before it attempts to expand into other markets of Europe. The company will then aim to target the markets of the USA and Canada followed by the markets of Asia. Braze will also have to expand its staff and employ more experienced and competent managers who can handle international operations.
Conclusion:
Braze is a small British electrical company which aims to differentiate itself from its competitors on the basis of providing them with personalized, colourfully designed electronic products which are likely to appeal to their aesthetic sense and are likely to attract fun-loving style conscious customers who appreciate brightly coloured products. The company initially aims to enter the market with a small factory area located in the suburbs of London or Birmingham and three outlets ideally situated in mall areas of London, Birmingham, and Manchester.
Braze aims to cater to the tastes of fashion-conscious, young and middle-aged customers who would like electrical appliances which can add a sense of style to their home decoration or their accessories because of their unique colours and designs. The company aims to initially rent all of its premises and employ a small number of employees. The company’s initial marketing strategy will be based upon promoting the products via demonstrations and through pamphlets distributed in the homes of potential customers, radio, billboards, and magazines. Later on, once the company stabilizes itself, it will aim to expand into other markets of Europe, USA and Canada, and then later on pursue the markets of Asia.
References
Amazon (2014) Nobel Televisions. [online] Accessed on January 4, 2014 Available at: http://www.amazon.co.uk/Televisions-Sound-Vision-Projectors/b?ie=UTF8&node=560864
Amazon (2014) Samsung Televisions. [online] Accessed on: January 5, 2014 Available at: http://www.amazon.com/Samsung-UN40EH5300-40-Inch-1080p-Black/dp/B0074FGR74
Amazon (2014) Sony Televisions. [online] Accessed on: January 5, 2014 Available at: http://www.amazon.com/Sony-SGPT111US-Wi-Fi-Tablet-16GB/dp/B005FXYJZY
Business Insider (2014) Samsung Corporate Strategy. [online] Accessed on January 3, 2014 Available at: http://www.businessinsider.com/samsung-corporate-strategy-2013-3
Gumtree (2014) Birmingham Rental Rates. [online] Accessed on January 4, 2014 Available at: http://www.gumtree.com/
Gumtree (2014) London Rental Rates. [online] Accessed on January 3, 2014 Available at: http://www.gumtree.com/
Gumtree (2014) Manchester Rental Rates. [online] Accessed on January 4, 2014 Available at: http://www.gumtree.com/
MIT Technology Review (2013) Sony. [online] Accessed on January 4, 2014 Available at: http://www.technologyreview.com/article/416848/sony/
Tidd, J., & Bessant, J. (2011). Managing innovation: integrating technological, market and organizational change. Wiley. com.
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Market Research and Business Plan. (2019, Feb 23). Retrieved from https://phdessay.com/market-research-and-business-plan/
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