Focus on the following:
• Identify potential real options that might arrive in this firm’s business.
• Are these options industry specific or company specific?
• How would these options affect their capital budgeting process?
Marketing Implementation: Action Plans and Marketing Mix
The goal of this action plan is to ensure that the strategies set in place as outlined in the business plan are achieved. In essence, it will dictate how various market mixes will be implemented, how the marketing strategy will work and the marketing budgets necessary for implementation. It outlines how the activities necessary to make the market plan a reality will be implemented by ensuring that the ear device meant for hands free driving in the city reaches the intended market and brings the intended level of profitability.
In implementing the business plan, there is absolute need to focus on the target market as this will ensure that the projected sales volumes can be achieved (Susman, 2007). The focus market for this product includes the youths and middle aged individuals who are more likely to actively use their phones for conversations, music and other uses while driving or attending ceremonial activities. These are people who want to keep up with their acquaintances both at the social and professional circles and laws limiting their use of mobile phones are the last thing they should be worried about.
Promotional activities will centre on advocating for safe driving. The use of mobile phones highly prevalent in the modern society and individuals are almost always in communication. Promotional activities will therefore dwell on showing consumers need for a solution to ensure that individuals can use their phones while driving without compromising their safety while at the same time avoiding contravening the law. It is however apparent that as much as GM’s free hand mobile device is effective for enhancing communication, it is also relatively expensive at $220, compared to other products such as Nokia Wireless that goes for only $150 and other cheaper options. This means that the marketing strategy should be highly focused on showing why GM is the preferred choice, given its versatility, and why consumers should choose GM over cheaper products (Szwarc, 2005).
Sales persons are expected to sell the uniqueness of GM as a brand and flexible features of the device including safety, power to attract sounds which makes it useful even for people with disabilities, its magnetic system that allows it to stick even on plastic surfaces and ability to enhance hearing in noisy places. This will also be portrayed on print and digital media to create popularity for the brand.
Given the practical use of the hands free device and the fact that the main target market is out and about with their cars, direct marketing to motorists will ensure that the business can reach as many customers as possible. In this relation, direct marketers will be deployed to various cities to distribute flyers, do demonstrations and sell the hands free devices (Susman, 2007). This is besides the distribution of the device through the business’ outlets and selected stores across the country.
The business recognizes that the internet has become part of peoples’ lives and the plan is to reach out to people through the internet. Through online marketing tactics including the use of social media, video sharing and a well organized website, the business will reach a significant number of young and middle-aged clients (Akaur and Medury, 2010). To achieve this, social pages including Facebook, Twitter, LinkedIn and YouTube will be created for the device, and shared widely across the social networks. To promote followership, interesting content including educative videos on safe driving, the importance of having a hands free device and testimonials will be shared (Akaur and Medury, 2010).
| Action | Time frame | Responsible team member | Issues to note |
| Market survey | 3 months | Marketing manager | How do customers perceive hands free devices?Would customers be willing to invest in a hands free device and why?What are other organizations doing in terms of marketing?What are the competitors’ prices and device quality? |
| Budget development and analysis | 4 months | Director and accounting manager | Is the anticipated income adequate to cover business expenses and give projected profit?Are the budget estimates realistic and do they offer allowance for market uncertainties? |
| Hands free device price and supply negotiations | 1 month | Director | Can the price be negotiated? How would the price vary if the business purchased in large quantities? |
| Purchase and order requisition | Continuous | Procurement manager and accounting manager | How fast can an order be delivered following a purchase requisition?Alternative modes of transport to cut on costsWhat is the required period for payment of the devices supplied? |
| Marketing and promotional activities | Continuous; with high impact marketing during the first six months | Marketing manager and sales team | This is a new product requiring vigorous marketingWhat are customer needs and can we meet them?Competitors with similar products are selling at a cheaper price than oursProfitability is a major objective |
| Sales | Continuous | Sales manager and sales team | Which is the target market? Which are the best places to reach customers and how? |
| Monitoring and evaluation of business | Continuous (Each quarter) | Business development manager | Is the business plan working as required?Is the business sustainable?What can be done to improve the process? |
Budget plan
The business has an objective of selling at least 200,000 units within 6 months. Considering the time required for the product to be accepted in the market and the presence of competitors, the hands free device may take approximately 6 months to break-even and start recording profitability. Selling the product at $220 each, the company is expected to break-even at 135,136 units. The returns for the product are expected to rise significantly and the sales forecast can be shown as follows.
Projected budget
| Year 1 | Year 2 | Year 3 | Year 4 | |
| Sales | ||||
| Number of units | 500,000 | 550,000 | 700,000 | 850,000 |
| Sales @220 per unit | $110,000,000 | $121,000,000 | $154,000,000 | $187,000,000 |
| Expenditure | ||||
| Purchases @50 per unit | $25,000,000 | $27,500,000 | $35,000,000 | $42,500,000 |
| Staff | $1,200,000 | $1,300,000 | $1,700,000 | $1,700,000 |
| Office and overhead costs | $2,750,000 | $1,750,000 | 2,320,000 | 2,320,000 |
| Sales and promotion/transport | $40,000,000 | $26,000,000 | $13,000,000 | $9,000,000 |
| Total | $68,950,000 | $56,550,000 | $52,020,000 | $55,520,000 |
| Profit | ||||
| Profit per year based on units sold | $41,040,000 | $64,450,000 | $101,980,000 | $131,480,000 |
This budget is developed with significant consideration for possible uncertainties in the market but it is also an optimistic budget whereby the business hopes to achieve incremental income and profitability (Thornbory and Farley, 2007). The first year is critical to the success of the business and a great level of marketing is required in order to make the product known in the market (Shim and Siegel, 2009). it is for this reason that a huge marketing budget set at $40,000,000 is projected as it will ensure that adequate marketing and promotional services are carried out. As the initial year, a considerable amount is also required in setting up; which denote a higher amount of office and overhead costs (Shim and Siegel, 2009). As shown in the budget above, some entries keep increasing as the years go by and this can be explained by the fact that the company is growing and demand and geographical reach of the product may therefore increase as demonstrated in the larger number of units sold per year. The company is thus bound to spend more on additional staff and office and overhead costs. The promotional budget however reduces as clients become aware of the business’ products (Thornbory and Farley, 2007).
References
Akaur, A. and Medury, Y. (2010) Impact of the internet on teenagers‟ influence on family
purchases, YOUNG CONSUMERS, 12(1), 27-38
Shim, J. K., & Siegel, J. G. (2009). Budgeting Basics and Beyond. Hoboken, N.J.: Wiley.
Sneyd, K.P. & Rowley, J. (2004). Linking strategic objectives and operational performance: an
action research-based exploration. Measuring Business Excellence, 8 (3), 42-51.
Susman, G. I. (2007). Small and medium-sized enterprises and the global economy. Cheltenham,
UK: Edward Elgar.
Szwarc, P. (2005). Researching customer satisfaction & loyalty: how to find out what people
really think. London: Kogan Page Publishers.
Thornbory, G., & Farley, L. (2007). Budget basics.Occupational Health, 59(8), 20-21.
