Unit washing machines. Target market According to www.entrepreneur.com target

Unit 19 B

P3.
Explain your marketing plan for a selected micro business.

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As was discussed in Unit 19 learning aim A,
my micro business is Three Repairs Men (TRM) which is an appliance shop where customers
can bring their small electrical goods, which are lighter to carry, to the
store to repair, such as clocks, hairdryers, irons, radios and toasters. Therefore,
customers can also request an engineer or a handyman to their address who could
repair large electrical goods which are heavier and more difficult to bring to
the store, such as fridges/freezers, microwaves, dishwashers and washing
machines.

 

Target
market

 

According to www.entrepreneur.com target market is a specific group of
consumers at which a company aims its products and services.

In other words, target market means a
specific group of people, who are potential customers, that a business aims its
good and services adjusting them to their needs and wants.

 

Target market for Three Repairs Men are local
people living in Uxbridge who will need repairing services from a local
appliance shop that can attend customers’ homes repair electrical goods at
their place. There is also other business that can be customers, such as
restaurants who can have a contract with my business in order to have a
reliable support in case they will have any problems with their kitchen
equipment.

 

Expectation

 

TRM’s customers would expect an excellent
level of service from the business, either it is a repairing service, which
means providing good quality repairs to customers’ goods or a customer service,
which means being polite, truthful and fair with customers. Customers would expect
being treated fairly so that they wouldn’t be afraid of being scammed by my
business. My customers would also expect Three Repairs Men to be quick in
providing services. For example, if a customer has an emergency situation, like
a washing machine broke down and the water has leak everywhere from it, so everything
is wet. The customer will need a call-out engineer to come as soon as possible
in order to deal with that problem, that’s where my business would be the best
appliance shop that can provide that opportunity and service to the customers.
That will help to gain customers’ trust, respect and loyalty to TRM. Customers
will also expect my business to operate online whether it is for communication
purposes, booking purposes or just to learn more about the business.

 

Shopping habits

 

Customers do not require repairing services
for their electrical goods as it is not a daily thing for them to face. For
example, a fridge can break down once in a couple of years, moreover, if my
business does excellent quality repairs then the fridge might be functional
even for longer. Most likely customers will need repairing services only in
emergency situations, like if there is something that’s been broken and needs
to be fixed instantly. So it is importance for an appliance shop, like my own,
to be the biggest business in the market in order to receive the highest number
of customers’ requests or to have contracts with restaurants who can become
long term customers that need repairs.

 

Demographics

 

Three Repairs Men will be located in
Uxbridge, so the customers that will need the business’s services the most will
be the local people that live in the area. The customer in the area are living
in different types of properties sand depending on the type of the property and
the size of the house, there might a different number of electric equipment and
goods that will potentially need repairs. The types of properties are flats,
detached and semi-detached houses that are usually big houses that have 2-5
bedrooms and terraced houses that are usually located in high street and will
be the easiest to get to as they will be in the centre if the area.

 

Segments within the target market

 

The target market can be segmented by
demographic segmentation which is by age, religion and family size. As a result,
I will be able to segment the target market by age and family size like if there
are young adults who have just gotten their first house and have a small family
or it is middle aged adults who have a family with 2-3 children. The market can
also be segmented by the location of each customer, as there will be some that
live closer to the Three Repairs Men Shop and some that live far away. There is
also a Behavioural segmentation that can be used in order to differentiate the
market. That involves considering the reason of purchase of my services, if it
for usual domestic use, like to repair some of the electrical goods or it is
for more frequent use like some small restaurant who needs regular repairs of
their kitchen equipment.

 

Primary
and secondary research

 

What is it?

Primary research is collecting first hand
data that was not collected or did not exist before and

Considers to be original data. It also
involves conducting surveys and questionnaires where people can express their
opinion about business, product etc.

Secondary research is a research that has
already been collected by another person or organisation

and, therefore, already exists. That involves
requesting statistics from government bodies.

 

Benefits?

Primary research:

·      
Cheap way of conducting research.

In order to conduct primary research there will be needed:
surveys, questionnaires, interviews and focus groups. These are not difficult
to arrange if there is time available.

·      
It is new, fresh data that no one has.

Primary research is usually used
to find out customers’ opinion on a new product/service or on their opinion on
a business, where customers can suggest ways of improvement. This is a unique
type of research as fresh and new information can be collected from customers
that live locally, for example, people that are passing by the shop. That gives
an opportunity for the business to identify customers’ needs, wants, their
opinion on business or product/services.

·      
The data is up to date.

After the research being done, all the information that has
been gathered is recent as the research had questions of what customers think
about the business or its offers right now, which makes the research being up
to date.

·      
The research can be adjusted specifically to my
business and services.

If
there are products or services in the business that are falling in sales, the
primary research can be focused on those products and question can be adjusted
upon those products/services.

Secondary research:

·      
The research has already been done.

If a business wants to collect some information that involves
statistics, such as reports or previous market research, the business can use
secondary research which is based on research that has been done before.

·      
A quick way to obtain results.

As secondary research is based on data that has been gathered
before, the business only has to review the information and take the parts that
are important. That means there is no need on conducting research again as it
has already been conducted.

·      
Covers a wide range of issues.

If
the secondary data collected from government bodies, then those kind of reports
are usually covering large amount of issues that are affecting people, city or
some areas.

Limitations?

Primary research:

·      
Time consuming.

In order to conduct primary research, like giving out
questionnaires to people in the street, a lot of time will be required. For
example, it takes time to design the questionnaire and pick the most suitable
questions, as well as it takes time to print them out, give them to people, let
them answer the questions, then collect all of the questionnaires, read them
and evaluate all the information that has been collected.

·      
Inaccurate feedbacks.

Many people do not want to be stopped in the street and then
being sked to answer a questionnaire, so there are high chances that people
will give any feedback, which might be not correct as they want to finish it as
quickly as possible and get going.

·      
Requires a large number of resources.

Conducting
primary research requires a large number of questionnaires’ copies because
large number of people needs to be questioned in order to get some kind of
information.

Secondary research:

·      
Not specific.

The fact that the secondary research has already been done,
doesn’t mean that the research will be very specific to a business. Usually
secondary research is done in general by somebody, however, it is a
disadvantage to my business as a general research might not be enough.

·      
Old data.

The
data collected from secondary research can be done a long time age, for
example, in 2010, however, it is 2018 now, which makes the data 8 years old and
inefficient in terms of reliability.

An
example?

 

Business
environment

 

Porter’s
Five Competitive Forces

 

PESTLE analysis

Political:

Brexit is affecting a lot of businesses
including start-up businesses and large industries. Three Repairs Men will have
to pay an increased charge for shipping any equipment or electric spare part
from abroad. For example, TRM will have regular spare parts supplies from
abroad countries like Germany, France etc. by using shipping services like
FedEx, Amazon or UPS. However, due to Brexit, which means that UK is leaving
EU, shipping company will charge high rates that my business will have to pay.
That will increase the total expenses that TRM will have and that will decrease
the Net worth and Net profit of the business, because with increasing costs
there are less profit that my business will make due to Brexit and higher
shipment rates that shipping companies will charge.

Economic:

Britany is currently facing a 3% of inflation
in the UK’s economy which means that it will affect my business’s capital
expenditure. That is because the higher percentage of the inflation, the lower
value the currency or money have. That leads to increasing prices for
everything that the business uses, such as energy supply, fuel cost, shipment
charges etc. As a result, my business will have to increase prices for the
repairing services that the business provides, and customers might not like
that and may stop using TRM services. Or TRM can keep the same prices but
instead the business will have lower profits as there is an increased
expenditure on energy supply, fuel and shipment from other countries.

Social:

Technological:

Legal:

Environmental:

Marketing
mix

 

Product

Three Repairs Man will be offering repairs of
small electrical goods, which customers can bring to the shop and are lighter
to carry, such as wall clocks, hairdryers, irons, radios and toasters.
Therefore, customers can also request an engineer or a handyman to their
address who could repair large electrical goods which are heavier and more
difficult to bring to the store, such as fridges/freezers, microwaves,
dishwashers and washing machines.

Place

TRM’s shop will be located in
Uxbridge and will be providing repairing services around the local area. I am
planning to start at very slow growth of business’s performance by building
small but strong customers’ so
that my business could provide the best quality services and
receive positive feedback from customers which is based on well completed work.
The business will have a relationship with local constructors in which “Three Repair Man” will become the
go-to person for installing in new constructed building, flats or houses.

Price

 

Promotion

Three Repairs Men will use billboards, social
media and newspaper advertising.

Progress

 

People

Three
Repairs Man is micro business and only has 4 employees and myself counting as
fifth. 3 of them will be call-out engineers and the 4th will be in-store if
there are customers that need something to have fixed. I will be dealing with
the business
itself in terms contacting suppliers, negotiating prices with and running
business overall. I also will be dealing with issues if any of my employees
have.

Physical evidence

 

Unique
selling points (USPs)

 

P4. Explain how legal and financial
aspects will affect the start-up of the business

 

Legal aspects

 

Legal
form and liability insurance

 

Sole trader

Three Repairs Men will be a sole trader, which
means that I will be the owner and I will be responsible for all aspects of my business.
There will be a financial risk during the business start-up, because I will
come up with my personal budget in order to start the business and I will have
to find extra funds while business is starting up, in case if the business
needs extra income. I will also be bound to pay to the creditors or trade
payables at the end of a fiscal year, even though if my business has not
received the sufficient6 income to cover the businesses’ debts. As well, if the
business faces criminal charges, I will be at the help of summoned and being at
the court and serve whatever sentence the court passes. 

Being a sole trader means paying taxes. I will be
required by law to register the business and submit self-assessment tax returns
every year. The tax payments have to be on time and be honestly paid,
otherwise, my business will receive penalties or even imprisonment. I will also
be required to register for Value-Added Tax once my business receives revenue
of £79,000
in one fiscal year. That will help to prevent heavy penalties for small
businesses that result from undeclared income and late registrations.

 

Employers’ Liability Insurance Act 1969

It is a UK
Act that requires employers to carry and provide insurance against personal
injury to employees. As well, as
being insured employers have to provide all details of the insurance to the
employees so that they would be aware. This act applies to all businesses and
companies including micro businesses like Three Repairs Men.

 

Consumer
Protection Legislation

 

Consumer Protection is a legislation that
protects customers from being treated unfair in terms of buying products or
services. The legislation also protects customers from being lied of the
products and services purpose or making incorrect discounts that are

 

Credit and store cards

Faulty goods

Counterfeit goods

Poor service

Problems with contracts

Problems with builders

Rogue traders

 

Employment
Legislation

Equality Act 2010

This an act
that legally
protects employees and employers from discrimination in the work placement. The
act has replaced previous anti-discrimination laws with only one Act, which makes the
law much easier to understand and increases protection in some situations that
may occur in the work placement.

 

Equal Pay Act 1970

It is an act
that doesn’t
allow any less treatment between men and women in terms of payment matters and conditions of employment in the work placement. This act has been superseded by Part 5, chapter 3, of
the Equality Act 2010.

 

National Minimum Wage Act 1998

It is an act that states a minimum
wage across
UK which is currently £7.50 per hour for employees aged 25, £7.05 per hour for
employees aged 21 to 24 and £5.60 per hour for employees aged 18 to 20.

 

The National Living Wage 2016

A similar
act to National Minimum Wage Act 1998, which states that states a minimum
wage across
UK residents who have got full-time employment which is currently £7.50 per
hour for employees aged 25, £7.05 per hour for employees aged 21 to 24 and
£5.60 per hour for employees aged 18 to 20.

 

The Working Time Directive 1999

This is an
act that forbids
employees to work more than 48 hours a week. However, employees can choose to
work more house by opting out of the 48-hour week.

 

Health
and Safety Legislation

Provision of toilets, drinking water and a
H&S guide if more than 5 employees are hired

 

Data
Protection Act

 

Correct use of data

 

Ensure data is up-to date

 

Delete/ destroy data immediately after its
use is over

 

Environment
Protection Legislation

 

Pollution Control

 

Waste Disposal

 

Statutory Nuisances and clean air

 

Financial Aspects

 

Pricing
policy

 

Market Penetration

It is a way of selling goods and services to an
existing market in order to receive a higher market share and become the
largest and most profitable business in the market.
For example, my business could reduce prices on fixing small electrical goods
like toasters in order to start a price war with competitors and encourage more
customers to come to my business and receive a greater market share.

Market Skimming

That means setting very high prices for
products or services that a business offers until customers are ready to pay
for them and once they purchased, start to reducing prices in order to attract
a more price-conscious market.

Neutral Pricing

It is a way of setting a general price for
products and services in a general market. It is usually used for stable sales,
and the business would most likely not increase profits or revenue as
competitors use similar pricing.

 

Three Repairs Men will use neutral pricing
because the business provides repairing services and these types of services
are used as necessity rather than desired. That would guaranty the business
stable sales for the same price as competitors, however, in the area where my
business will be operating, there will not be much competitors.

 

Sales
forecast

 

A basis for sales forecasts

It is a starting point for businesses to
forecast as it is taking into account business’s last year’s sales. That
involves reviewing sales reports, numbers of sales made, products/services
purchased the most, report on expenses. It is perfect for a start-up business,
like Three Repairs Men after one financial year, my business can review its
performance and improve some aspects regarding the business’s performance in
the future, however, it is not possible to do in the first year.

Sales assumptions

That involves during the business’s
performance to make assumptions of the market place and targeted customers as
every year is different for the business, for example, one year can be very
successful and profitable for the business and another year can be a failure
where the business makes a loss. Business like my own have to think about any
changes that may occur in the future and possibly predicting them by having a
back-up plan just for those situations.

Avoiding forecasting pitfalls

 

Projected
Cost

 

Set-up costs

 

Fixed costs

 

Variable costs

 

Break
even cost

 

Components

 

Graphical depiction

 

Cash
flow forecast

 

Components of the Cash flow

 

Forecast
opening and closing statement of financial position, capital structure to show
investment necessary from potential investors.

 

Forecast
income statement for trading period.