The report is going to design a marketing plan that is going to be understood through the exact product description and market analysis. It shall be prerogative to state that a new business venture is going to be supported through an authentic intelligibility of the existing market criteria as well as the supportive documentation of the customer demand. Since this report delves into the market analysis of Australia, it has the possibility of getting into the verge of exact study how the marketing and business plan would be set into the frmae of the existing demand culture (Quezada et al. 2014).
The marketing plan chooses to promote the business venture of digital bag manufactured by the company of choice. The target market is going to be Australia. Australia being one of the largest consumer markets is set have the target for the marketing of the digital bag. This is a new venture from the company that has been under thorough research. The newly designed product will target individual consumer especially the students and the professionals. The innovative digital bag has been named Holder 2.O.
Since the product is an innovative one, the business plan will be designed accordingly. As a matter of fact, there is nothing more interesting a venture than a marketing innovation. Once a marketing and business innovation is planned in a proper way, the success of market through sales shall spur the entire business in the country (Drabas 2016).
This report consists of the analysis of Australian market in terms of retail industry. There is a huge opportunity of the product in the market. The business opportunity lies in this fact that it breaks the chain of conventional approach to the market as well as production (Kim and Mauborgne 2014.).
Australian retail market is one of the greatest ones in the world. Due to constant influx of the people in the country, the demand has risen to a satisfactory level that has created a huge opportunity for the manufacturing companies in the country. The luggage stores industry in Australia has created a huge opportunity due to gradual increase in the market demand. In the last five years the luggage and baggage industry has experienced a certain growth in the business. The performance has been fuelled by different factors such as customer behaviour. A huge portion of the Australian mass has a tendency to travel that has created a scope for the luggage and baggage industry to venture into the increase of production and retail supply to the stores. In the financial year 2013-14, the industry has boomed with the production of suitcases, backpacks and travel goods. In that session the production has increased up to 2.5%. On the other had hand bags and purses are highly demanded by the people on daily purpose. The purses and the handbags are not only fashion statements; but they are also a daily need for the people as they carry cards and cash in them.
A new trend has recently been observed as the bag producing companies have been highly encouraging the customers for reusing the bags that have been recycled. As per the recent market trend in the country the customers are seen to have been using the recycled bags in a huge amount. Thus the newly produced bags have a lesser chance to address the customers. the market for bags is generally based on the luggage. One of the greatest aspects of the market in Australia is that it has the potential of greater market achievement.
As per the authentic study of the purchase and demand for the backpacks in Australia, it can be stated that the demand for the backpacks is quite effective for the producers to manufacture backpacks in a greater amount. In this regard it can be said that the market demand is higher than what is understood in a general aspect. Travel culture in Australia has become quite strong in the recent years thus resulting in the purchase of the backpacks as they are inclined more to the adventure tours than the common trips. Hence, the demand for effective, strong and long- lasting backpacks is responsible for the determination of the manufacturing and supply too the retail market.
Having understood the market demand, it can be said that the market is dependent on the customers’ want of the backpacks. It has wider potential for the producers to implement innovative ideas in the market segment. Companies like Kotaku and others have been focusing on the production of innovative backpacks.
There are two major competitors in the Australian market of backpacks. They are Crumpler and Caribee. They both are the leading backpack manufacturers and marketers in the country. In order to understand the market competition in Australia, Porter’s five forces theory is taken into consideration. The business venture needs to understand the potential of the competitors as they might hinder the marketing success of the existing company. The exclusive bags sold by Crumpler in the Australian market have a huge popularity level thus debarring the other companies from taking part into the competition. As a matter of fact the new business venture needs to focus on strong promotional practice while targeting the customers. Caribee is another company that has captured the Australian retail market for years. The diverse range of Crumler and Caribee bags has attracted the customers from every possible social and economic background. From the students to the travellers, both the companies have been manufacturing quality bags. It has been found that (Kim and Mauborgne 2014)
Teenagers and the students- specifically from the engineering and IT background are considered to be the strongest customers of digital gadgets. College and university students, tech- savvy and the engineering and IT professionals are also the targeted audiences for Holder 2.O. on top of that the business people also seem to be interested in purchasing the digital bags as they have the opportunity to accelerate the use of bags ahead of conventional usage. Holder 2.O is quite useful in securing the password for the chains. The digital password system is going to attract the business people to secure their belongings kept inside the bag. Since the bag is going to address the security issues, it would surely attract greater number of customers in terms of the fair usage. On top of that, adults with the mindset of using innovative products would be interested in purchasing Holder series. Holder 2.O does not only offer backpacks, it consists of digital purses that would automatically count the cash inside it. It also runs in the finger censor of the owner, hence the women with safer attitude toward carrying the cash and the cards would be targeted for the market of Holder 2.O (Merga 2014).
While initiating a business venture a company needs to have a clear analysis of the target market. As a matter of fact, targeting proper customers is the key factor for a successful brand investment. However, there are certain setbacks while assuming the demand created by certain customers targeted for a certain n brand. Holder 2.O is has quite different characteristics from the other backpacks. It has certain qualities that would not address the bigger markets. However, certain range of the customers would be targeted for the promotion and marketing of the backpacks. Target market can be segmented in the following categories:
Demographic target segmentation refers to the mode of the population, their age, sex and literary factors. While marketing of Holder 2.O is going to be targeting partilcuar demographic segment in Australia. Australia has a huge range of students belonging to different countries. the diverse student range would help the company market the digital backpacks among the students. Survey says that more than 29% of the total admission tend towards engineering sector. Being tech savvy those students can be targeted as the potential customers who would purchase the digital bag. However, it depends on the affordability of the students. the possible understanding of the student need requires thorough study of their exact movement in the market. On the other hand, Australia has growing rate of the working professionals woh use backpacks in daily office usage for carrying the laptop and files. The ease of carrying through the digital bags is going to help those officials in office use. Hence the company is going to target the officials as demographic market segment.
The marketing policies need proper understanding of the geographical area of marketing or promotion of the chosen product as there is a competitive difference in various places and the mindset of the customers pertaining to the utility of the products. However the marketing of this particular product does not focus on a specific geographical area. On the contrary, the marketing of Holder 2.O is going to be specific in the urban markets and areas and the urban customers are going to be targeted as the potential customers as there is a huge range of students and the tech- officials living in the big cities of the country.
Economic target segmentation refers to the affordability of the customers. Since digital Holder 2.O is quite different from the other backpacks and the manufacturing cost is much higher than the other products of its kind, the price of the product has been set expensive. However, the range of the bags differs according to the size and quality. There is a huge variation in the economic strength in the Australian market. Since the company has targeted the student and the tech- professionals the prices of the bags would vary according to the demographic target segment. For the students, the price is going to be much affordable whereas for the officials the bags would range from higher prices. Hence the company is going to target the middle class and the professionals who can afford to buy the bags. On the other hand, a certain range of the digital bags would target the students as lower middle class economic group that would facilitate them with a cheaper price.
It refers to the customers’ perception of a particular products and tendency to use it. Having a potential survey of the Australian market, it has been assumed that there is a certain change in the mode of consumption. However, the customers are becoming more inclined towards the digital products. The venture of the digital products in the Australian market has positive effect on the customers ‘choice of purchase. Hence the marketing of the digital backpack Holder 2.O is going to be driven through the exact understanding of the product on choice of the customers. In this case the tech savvy customers such as the engineers, IT personnel and the students are going to be targeted.
The behavioural market segmentation depends on the behavioural changes that the customers tend to use the devices in daily usages. As a matter of fact the consumption level of the gadgets has become quite high. As per the survey report Australians use the electronic gadgets more than ten hours a day. Hence, there has been a gradual change of customer behaviour pertaining to the use of te gadgets n daily life. Targeting this particular customer behaviour, the market trend has to be analysed on a positive basis. The market launch of the digital bag is going to address the trendy customers who have a sheer inclination towards the digital gadgets. During the marketing venture the customer will be acknowledged with different facilities and applications inbuilt in the bag. The change in trend towards the positive use of the digital gadgets has been targeted for the marketing and promotional activity of the product.
As per the market analysis in Australai, it has been identified that the primary ned of the customers is to safeguard the products. As per the report published by the Australian Institute of Criminology, it has been studied that 8504 stealing and bag snatching cases has been reported in New South Wales (Aic.gov.au, 2017). Keeping in mind the onging road snatching cases, the backpacks and the purses are being safeguarded and secured with the help of proper security system. Holder 2.O leads the way to make something new happen with the digitisation of security key and fingerprint censorship in the bags. Te peope with the anxiety of their bags being stolen in the cities are being targeted as the customers of Holder 2.O as the bags are highly secured and they have the feature of being recovered due to its inbuilt GPS tracker. Hence, the customer with anxiety of losing their belonging can be considered as potential target for this product.
Product Features:
Holder 2.O is a highly equipped series of backpacks and purses. There are two different sets of backpacks- one is for the students and the other is for the IT or engineering personnel (though there is no clear distinction that only the Engineering and IT personnel can use the bags). The students’ bags have the following features:
Following features are there for the professionals:
The following features are there for Holder 2.O purses:
These features are no doubt useful for the people who carry cash and cards for daily purpose and the officials who can be benefited with the help of the digitisation of backpacks.
The marketing mix in the modern era has added an extra P (the fifth one) that is Packaging. Packaging attracts the customers in terms of creating a perception upon them. as a matter of fact there is a high chance of the marketing through attractive and sustainable packaging system. The packaging design of the bags would be highly graphical and expert graphic designed would be hired in terms of art designing. The branding activity refers to the apt name given to the bags set for the marketing process. The name Holder 2.O has been chosen for the brand name as 2.O illustrates the idea of being digitized with new generation and Holder refers to the capacity of holding the customer belonging. The name has been chosen in order to provide clear idea to the customers about the specific features of the backpacks and the purses. The following design is going to be used in the hoardings and the banners so as to promote the marketing of the Holder series.
In order to confirm the barding of the product, the following logo has been set for the Holder series of the bags:
The logo is going to be attached with every single bag and the package. The logo is set be printed on every side of the backpacks.Marketing Mix:
The product is a tangible one used for daily purpose. Though the usage of the product is advanced with the help of technology and digitization of the baggage system., it will focus on the acceptance of the customers.
In order to promote the chosen product, the retails shops, outlet and the shopping malls will be used. POP is going to be the most lethal weapon for the marketing of Holder 2.O.
The price of th product has been set i different segments. Since Holder backpacks are of two different types, the pricing varies accordingly. The holder 2.O students’ series would cost (for the customers) not more than $ 450. On the other hand, the advanced Holder 2.O is going to cost $ 800 and the purses would range from $ 250 to $ 350.
The promotion of the product is going to be devised through online marketing, social media optimization, television advertising, POP and guerrilla marketing. The marketing and promotion team is going to be responsible to promote the product in the Australian market.
There are risks factors that have been assumed during the marketing and operational plan of the product. The risks lie in the fact that digital bags are completely new in the market. Hence, there might not be a huge acceptance level of the customers. Since the bags are highly expensive in comparison with the other bags, it might take time to put impact upon the market. Having understood the risk factors, it can be stated that the market needs to be addressed with the potency of the product and the brand.
|
BASIC ASSUMPTIONS: |
|
|
Type of Business: |
Company |
|
Nature of Project: |
Digital Bags Manufacturer |
|
Capital Structure: |
|
|
Equity |
55% |
|
Non-Current Debts |
55% |
|
Types of Debts: |
|
|
5 yr. Bonds at Par |
55% |
|
5 years Loan from Bank |
55% |
|
Required Rate of Return on Equity |
12.50% |
|
Interest Rate on Loan: |
|
|
Bonds |
7.80% |
|
Loan from Bank |
9.80% |
|
Tax Rate |
35% |
|
Inflation Rate |
3.50% |
|
Mode of Sales: |
|
|
Cash |
80% |
|
Credit |
28% |
|
Cash Collection Period |
30 days |
|
Mode of Purchase: |
|
|
Cash |
55% |
|
Credit |
55% |
|
Cash Payment Period |
60 days |
|
Wages & Salary Payment |
7th day on the following month |
|
Electricity,Telephone & Internet payment |
10th day on the following month |
|
Other Operating Payments |
Last day of the month |
|
Insurance |
12 months’ Advance |
|
Depreciation Method: |
|
|
Property & Equipment |
Straight Line Method |
|
Furniture & Fittings |
7.5% – Reducing Balance Method |
|
Computer Equipment |
15% – Reducing Balance Method |
|
Amortiztion Method |
Straight Line Method |
|
Break-Even Analysis |
[Tabz Bagz] |
||
|
[5/29/2017] |
|||
|
For the Period: |
Jan 1, 2017 – March 31, 2018 |
||
|
Selling Price (P): |
$ 14.00 |
||
|
Break-Even Units (X): |
85 units |
||
|
Break-Even Sales (S): |
$ 1,178.45 |
||
|
[42] |
|||
|
Fixed Costs |
|||
|
Advertising |
$ 1,000.00 |
||
|
Accounting, Legal |
|||
|
Depreciation |
|||
|
Interest Expense |
|||
|
Insurance |
|||
|
Manufacturing |
|||
|
Payroll |
|||
|
Rent |
|||
|
Supplies |
|||
|
Taxes (real estate, etc.) |
|||
|
Utilities |
|||
|
Other (specify) |
|||
|
Total Fixed Costs (TFC) |
$ 1,000.00 |
||
|
Variable Costs |
|||
|
Variables Costs based on Dollar Amount per Unit |
|||
|
Cost of Goods Sold |
$ 1.00 |
per unit |
|
|
Direct Labor |
per unit |
||
|
Overhead |
per unit |
||
|
Other (specify) |
per unit |
||
|
Sum: |
$ 1.00 |
||
|
Variables Costs based on Percentage |
|||
|
Commissions |
8.00% |
per unit |
|
|
Other (specify) |
per unit |
||
|
Sum: |
8.00% |
||
|
Total Variable Cost per Unit (V) |
$ 2.12 |
||
|
Contribution Margin per unit (CM) = P – V |
$ 11.88 |
||
|
Contribution Margin Ratio (CMR) = 1 – V / P = CM / P |
84.9% |
||
|
Break-Even Point |
|||
|
Break-Even Units (X) |
X = TFC / (P – V) |
85 units |
|
|
Break-Even Sales (S) |
S = X * P = TFC / CMR |
$ 1,178.45 |
|
|
Targeted Net Income |
|||
|
Targeted Net Income Before Taxes (NIBT) |
$ – |
||
|
Units required to reach targeted NIBT, X = (TFC + NIBT) / (P-V) |
85 units |
||
|
Sales required to reach targeted NIBT, S = (TFC + NIBT) / CMR |
$ 1,178.45 |
||
|
Rate of return on sales before taxes = NIBT / S |
0.0% |
||
|
Tax Rate (T) |
27% |
||
|
Net Income After Taxes (NIAT) = (1-T)*NIBT |
$ – |
||
|
Rate of return on sales after taxes = NIAT / S |
0.0% |
||
|
Fixed Cost |
Total Cost |
Total Revenue |
Profit (Loss) |
|
1,000.00 |
1,000.00 |
– |
(1,000.00) |
|
1,000.00 |
1,018.02 |
119.00 |
(899.02) |
|
1,000.00 |
1,036.04 |
238.00 |
(798.04) |
|
1,000.00 |
1,054.06 |
357.00 |
(697.06) |
|
1,000.00 |
1,072.08 |
476.00 |
(596.08) |
|
1,000.00 |
1,090.10 |
595.00 |
(495.10) |
|
1,000.00 |
1,108.12 |
714.00 |
(394.12) |
|
1,000.00 |
1,126.14 |
833.00 |
(293.14) |
|
1,000.00 |
1,144.16 |
952.00 |
(192.16) |
|
1,000.00 |
1,162.18 |
1,071.00 |
(91.18) |
|
1,000.00 |
1,180.20 |
1,190.00 |
9.80 |
|
1,000.00 |
1,198.22 |
1,309.00 |
110.78 |
|
1,000.00 |
1,216.24 |
1,428.00 |
211.76 |
|
1,000.00 |
1,234.26 |
1,547.00 |
312.74 |
|
1,000.00 |
1,252.28 |
1,666.00 |
413.72 |
|
1,000.00 |
1,270.30 |
1,785.00 |
514.70 |
|
1,000.00 |
1,288.32 |
1,904.00 |
615.68 |
|
1,000.00 |
1,306.34 |
2,023.00 |
716.66 |
|
1,000.00 |
1,324.36 |
2,142.00 |
817.64 |
|
1,000.00 |
1,342.38 |
2,261.00 |
918.62 |
Conclusion:
Australian market for venturing new product and business has always been comprised risks in terms of the future success. As a matter of fact, the company ought to construct a bridge between the customers and the company through effective service provision. If the customers are not provided with proper service, there is a high chance for the product to be eliminated from the market. Effective and strategic intervention through proper market analysis and regular customer feedback needs to be invigilated by the company so as to ensure the customer engagement with the product. On top of that, there needs to be personal customer service to secure the customer loyalty with the company. The first year of the product launch is quite crucial to comprehend the exact mode of it to the market.
Reference:
Aic.gov.au. (2017). Effective crime prevention interventions for implementation by local government | Stealing from person. [online] Available at: https://www.aic.gov.au/publications/current%20series/rpp/100-120/rpp120/13_person.html [Accessed 22 May 2017].
Drabas, T., 2016. Practical Data Analysis Cookbook. Packt Publishing Ltd.
Kim, W.C. and e Mauborgne, R., 2014. Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press.
Merga, M.K., 2014. Are teenagers really keen digital readers?: Adolescent engagement in ebook reading and the relevance of paper books today. English in Australia, 49(1), p.27.
Quezada, G., Grozev, G., Seo, S. and Wang, C.H., 2014. The challenge of adapting centralised electricity systems: peak demand and maladaptation in South East Queensland, Australia. Regional Environmental Change, 14(2), pp.463-473.
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