Business_Portoflio

Business Environment, Industry Analysis, Competition As a company we used two of Porters five theory to evaluate the validity of the company. This is the basis of the company’s model however “The task mask facing managers is to recognize how changes in the five forces give rise to new opportunities and threats and to formulate appropriate strategic responses”. (Hill, Jones 2008,2010) Threats of substitution Carriag bar (foam party). The task mask facing managers is to recognize how changes in the five forces give rise to new opportunities and threats and to formulate appropriate strategic responses. Buying power The buying power was poor due to purchasing power being small and low bulk of raw materials meant the materials had to be bought on the high street. Rivalry None. The Bootie Company provided a unique selling point. Degree of rivalry None. Barriers to entry The costs of holding the event. The main cost of the company was the purchasing of the costumes which is a start up investment. Context for firm and business rivalry In terms of rivalry for the company it was limited due to the unique selling point of the company, a ‘Full Monty’ show that provided entertainment for both a male and female audience, due to the comedy value of the show. Other similar products however provided competition to the event, The Carraig bar were running a ‘foam party’ on the same night as the Full Monty however this would have a big impact on our target market as it is a popular and successful bar. We counteracted this threat by running the event earlier and changing the time from 10pm till 9pm as this allowed for the customer to attend both if desired. Demand conditions The Carraig bar created opposition, however we offered a different product, and due to the weather (due to the cold a foam party, getting wet) made our product much more desirable to the consumer. This fact really improved the rate of growth for demand for our product. Related and supporting industries. Supporting industries came in the form of location, raw material and a small support staff. The Argyle provided refreshments for the event, this cost came in conjunction with providing business and also the Argyle bar offered the company a reduction in the cost of the venue if we got a certain amount of people attending. Primark was used to buy costumes, this was relatively costly because as a group we lacked buying power, and due to the small size of the company we could not buy the products at wholesale as we did not need to bulk purchase. Factor input conditions ‘Factor (input) conditions the efficiency, quality and specialization of the inputs that draw on the competing factors; Human resources’ (Quelch et al 2004). Factor conditions in terms of the company were limited. As a team we had good collaboration of skills such as accounting, marketing and interpersonal skills. These aided in the company running a successful event. The company also required skilled performers to provide entertainment for the consumer; this was provided by the lads on tour productions Market Analysis Summary We expect sales of tickets to increase steadily as consumers find that they can purchase the tickets at a bargain price. We intend to tap into the student market with pricing that will encourage quantity buying and our pricing will attract consumers on fixed budgets. Bootie’s market includes students, lecturers, and other staff members at Magee and campus visitors. The company primarily intends to target the lower income portion of the Magee Campus community, specifically students, many of whom are price conscious and looking to find value for their money. This may encourage a secondary market of male and females who do not attend the University of Ulster but my know someone who does attend. Target Market Segment Strategy We focus on the price conscious consumer who is looking for value as well as quality. If we can attract and keep these consumers the word will continue to spread about what Bootie has to offer. Competition and Buying Patterns Operating competitively is essential with customer service, location and product selection being key components. Strategy & Implementation Summary Bootie has adopted a strategy of total customer service, provided through our convenient locations, the event we show and the atmosphere we create. We want to provide the kind of customer service atmosphere that creates a positive experience for our customers, who will enjoy the event. Competitive Edge The location of where the event takes place is a very important competitive edge. The event was located in the Argyle bar which is situated near the centre of Derry City on the exact street of student accommodation resulting in a consistent flow of people. Another competitive edge is our specific service we are offering. We are the sole providers of the Bootie experience and with the addition of staff committed to providing great customer service and Bootie will be an attractive event for the consumer. Marketing Strategy Bootie’s marketing effort focused on the community of consumers at Magee Campus which brought a new and altern, that want a new and alternative Nightlife offering at bargain prices. We will focus our marketing resources around personal sales, continually improving customer service and creating a friendly and welcoming atmosphere. Sales Strategy Company owners will voluntarily sell the tickets to the consumers, taking no wages. All customer sales will take place in a timely fashion. Marketing Report “Marketing is the art of attracting a potential customer to your business, while sales is the art of converting your words into money.” Webb et al (2001) Marketing Director Roles: Developing an understanding of the market and customer via market research and consumer observation. A business cannot trade without customers. In this instance a company must try and reach specific customers and satisfy their particular needs. The company must identify those customers and understand precisely what they want. The procedure of finding and observing the potential customers to become a target market for Bootie Ltd is extremely important. This requires the company to find out everything it can about the customers, so it can pursue meeting their requirements. Once this information is gathered, there will be a much better chance of capturing those customers for your business. The factors that Bootie had to keep in mind when searching for their target market were: Demographics: Bootie need to know the population´s characteristics including age, gender, income level, occupation, education and family circumstances. Geographic and lifestyle factors: The Company needed to think about how and where its target customers live. This information will help determine what types of events the company can sell to them, how Bootie can sell the event, and at what price. Customer needs: Bootie must consider all the reasons why people might buy its product. From these Bootie can design and market the company accordingly. There were many ways in which Bootie could have carried out market research to gain a wider insight about the target market and understand what the customers wanted. Market Research “Market Research is a systematic, objective collection and analysis of data about a particular target market, competition, and/or environment. It always incorporates some form of data collection whether it be secondary research (often referred to as desk research) or primary research which is collected direct from a respondent. The purpose of any market research project is to achieve an increased understanding of the subject matter. With markets throughout the world becoming increasingly more competitive, market research is now on the agenda of many organisations, whether they be large or small.” Market Research World (2005) There were two types of market research methodologies that Bootie could have employed. Quantitative Research Quantitative research is numerically oriented, requiring significant attention to the measurement of market phenomena and often involves statistical analysis. This method would provide quantitative information that could be analysed statistically by Bootie. Qualitative Research Qualitative research provides an understanding of how or why things are as they are. Unlike quantitative research there are no fixed set of questions but, instead, a topic for discussion guide is used to investigate various issues in detail. Identifies good markets and product niches within them; defines required product characteristics. “Niche Product is looked upon as a product that is made and marketed for use in a small and specialized but profitable market.” Dictionary.com (2003) Bootie believed that Magee campus had a substantial target market to advertise the company. This niche event required a number of characteristics to attract customer purchases. The main characteristic of Bootie products was enabling the customer to enjoy the local night life whilst experiencing a new event, unseen by local consumers. Agrees product cost estimates and works to maximise profit by deciding with others volume/pricing strategy. The Marketing Director liaisons with the Finance Director about event cost estimates. Bootie were in competition with the local night clubs and event venues, so it was important to keep compete on price. Implementing a low pricing strategy was intended to encourage more returning customers and depending on sales revenues, could be altered throughout the trading period. Develops promotion of product e.g. advertising, PR, exhibitions “Promotion keeps the product in the minds of the customer and helps stimulate demand for the product. Promotion involves ongoing advertising and publicity. The ongoing activities of advertising, sales and public relations are often considered aspects of promotions.” McNamara (1997). Fulfilling the role of Marketing Manager ensured Bootie was promoted throughout Magee campus and the local area. Posters and leaflets were designed and distributed and a Social Network page was created along with a viral advertisement. Bootie designed the posters and leaflets to look appealing and easy on the eye but with a sense of mystery, using bright colours, the company logo and a catchy slogan saying; “Bootie, Ladies Night” The slogan attempted to question potential customers who may then feel inclined to research what the company intended to do. Marketing and Sales directors decided to place posters on university billboards and a pavement sign, informing consumers where and when the event would be held as did the viral advertisements and the Social network page. Devises monitors and updates overall marketing strategy and agrees sales forecasts. Without a marketing strategy Bootie efforts to attract a customer base would have been haphazard and inefficient. The purpose of the marketing strategy was to identify and communicate the benefits of Bootie event offerings to the target market. To achieve this, Bootie created a flexible strategy that allowed responsiveness to changes in customer perceptions and demand. Bootie focused on ensuring the services met customer needs and that sales person – customer relationships were developed. The company concentrated marketing efforts on the community of consumers at Magee Campus wanting a new, innovative event to attend at bargain prices, putting emphasis on personal sales, continually improving customer service and creating a friendly and welcoming atmosphere. 4 Ps Marketing Model “Marketing strategies are implemented through marketing activities of various types which have been summarised as the ‘marketing mix’. Kotler defines the concept of the marketing mix as “the set of tools that the firm uses to pursue its marketing objectives in the target market.” As these tools are numerous, various attempts have been made to categorise them into a manageable form, the most famous being the 4 P’s of product, place, price and promotion.” Stokes (2002). Employment of the four marketing mix components enabled Bootie to reach multiple consumers within the target market. The key was to combine and coordinate the four elements, to communicate a single message to potential customers. The main key to the success of any marketing program is the ability to work effectively in shaping marketing mixes that meet the nature and needs of the specified target market. Product Bootie choose to use a simple service to encourage local consumers to experience a new way to enjoying a night out. Place A local events hall was chosen as the location to operate the event from as it would provide the most passing trade, due to the close proximity of the local companies, city centre and student accommodation. Price Bootie’s method of product/service pricing was simple, attaching a fixed price to the event. Each ticket sold was priced at £3.00 which was seen as extremely cheap and affordable. Promotion Promotion was very important in marketing Bootie making customers aware of the company’s existence and of the event products it had to offer. Bootie advertisements promoting its service were appealing, catchy and cost effective, attracting the target market and enabling business success. ‘Bootie’ was the chosen company name and it was important to create a modern, appealing and eye catching logo to reflect it. Several logos were considered, with the chosen one being bright, recognisable, enticing and fun. The company name and logo were included on advertising posters, leaflets and a standing sign, placed around campus to promote Bootie Ltd. Word of Mouth was also a very effective advertisement technique employed by Bootie, incurring no financial cost. Operating a stall in the hub of Magee campus ensured word spread quickly and effectively. Business Vehicle, Franchise, Internet, Premises/ Stall Business Vehicle The business vehicle is the system used to deliver the product or service a company is selling. Beesley(2009). Within our company the main vehicle was the internet. Social networking was the basis of advertisement campaign, using sites such as ‘bebo’, ‘facebook’ and ‘twitter’. This allowed for delivery of the event to the consumer, then tickets where purchasable from the Argyle bar (where the event took place) and directly from the selling teams, (our group split into selling teams to best increase our selling power). The Argyle ticket selling point provided the customer with an opportunity to purchase tickets at a convenient location. Advertisement posters as well as the social groups were set up so that people realized the fact. Operations Chronology “The operations chronology is a record of a company’s operations presented in the order of their occurrence”. (TheFreeDictionary.com 2003). It describes the processes that we undertook in establishing Bootie and the service it provided. Operational planning is a task that is undertaken by a company when they are creating a business plan. This task involves creating an operational plan. The operational plan explains how our company expects to get their service to our target market. There are two main parts to the operational plan; the stage of development and the production process. “The stage of development section is concerned with how a product is developed”. (Ward 2009). “The production process section explains the daily operations of a company”. (Ward 2009). The Operations Director, Tracey Mc Girr created an Operations Plan for Bootie, which included the following operations: 1. Identifying the service to be provided The first part of the operational plan entailed finding out what resources were needed to develop Bootie and what kind of product or service to provide. It was suggested that we as a company do event management, specializing in student nights and all directors agreed. 2. Establishing service processes The Operations Director determined a set of processes to enable Bootie to carry out their intended service: a. Event night organised. b. Costumers buy tickets or pay at door on night. c. Selected act will perform. d. Afterward a D.J will continue for 3 hours. e. A raffle will take place. 3. Searching for the entertainment A search for possible and suitable entertainment was then undertaken by the Operations Director. Some of the entertainment that was considered was, karaoke nights, Country and Western, Pop and Dance etc. The board of directors then met to decide on what act to choose. The company was looking for an act which was low cost and offered quality entertainment enjoyed by all. Furthermore the members of the group had to help find a suitable D.J for the event management night. 4. Hiring of the act After the entertainment had been chosen, the Operations Director organised the hiring and booking. The Finance Director was provided with a copy of the order and its costing. 5. Selecting premises for the act The Operations and Marketing Directors had to select premises from where the event could be held. The Student Union and great hall, both in the Magee Campus and Duncreggan Student Village were considered. However it was a local establishment close to the duncreggan student village which was deemed most suitable because of by company members as it was the best location to reach the company’s target market and had none of the space limitations of other venues. 6. Booking premises A telephone call was made to the Argyle Bar to book the event for the 26th October 2010 and a fee was negotiated of £70 however the Argyle Bar offered the company a deal where if there was a certain number of people that attended the fee would be reduced to £30. 7. Establishing the ticket price The Marketing Director created posters which made potential customers aware of what the company were organizing, its location, and dates and times. These posters were placed on notice boards around different parts of student accommodation these included Shac Housing Association, Duncreggan Student Accommodation, Argyle Bar, Off Licenses and the housing accommodation around the Argyle area. As a group it was then decided because of the target market that £3 would be sufficient cost and be enough to recover quickly our costs. . Meeting Minutes Minutes were recorded at the weekly meetings by the Company Secretary, covering all issues proposed, discussed, and decided upon. The minutes from each meeting are included in Appendices. Finance Each member of the group invested in the company and owns 40 shares at 50p each, the share capital of Bootie amounted to £100. In order to calculate the selling price of the tickets for the event the group calculated the costs. The variable costs per ticket sold were estimated at 90p, the selling price of the ticket was set at £3.00 which left a mark-up of £2.10. In order to consider fixed costs and to see how much the company would need to sell in order to break even, the group undertook a breakeven analysis. The analysis showed that in order to breakeven Bootie would need to sell 68 tickets at £3.00. The fixed costs were calculated at £142.22 were variable costs consisted of 30% of the selling price which was 90p per ticket sold. Booties total sales for this period was £659.15 where the company sold 200 tickets at £3.00 each and made £59.15 on the raffle. The cost of sales amounted to £152.22 and the total expenses amounted to £144.43 which included the registration fee, rent of the premises where the event took place, marketing costs and administration costs. The company made an operating profit of £362.50. A total of £80.95 of YE VAT, due to be paid to young enterprise was calculated for this period. The YE VAT has been calculated by the VAT collected on the sales minus the YE VAT paid on purchases. Corporation tax has also been calculated for this period and is owed to young enterprise, this has been calculated by a rate on 10% on the company’s profit. During this period Bootie made a profit of £253.40. Bootie’s current assets are £462.50 and the current liabilities are £109.10. The company is in a good position to pay of its liabilities and the shareholders funds have increased to £353.40. The cash flow statement of the company has been calculated for the four week period running up to the week of the event. This is to ensure that there are sufficient profits made in order to finance the business activities and so that sufficient cash funds are available when needed. In week one the company had minus £32.00 as the registration fee needed to be paid however in week two sales of the tickets started and the company had a steady income for the rest of the period. From the cash flow of this period it shows that profits have brought a flow of cash into the company. As the company made a profit during this period, it was decided a dividend would be paid to the shareholders. This included: £253.40 distributed to 5 shareholders Holding a total of 200 50p shares Dividend out of profits 1.26 per share x 200 Shares £253.40 As the company sold 200 shares which means that each 50p share has a £1.26 dividend. (£253.40/200) All shareholders own equal shares in the company they will each receive a dividend for this period of £50.40. The shareholders funds remains at £100 and as the company has made a profit, we are going to continue running the company and are planning more events for the months up until June 2011. Booties break even analysis and record of accounts to date are included in appendicies.