OLE_LINK1
MARKETING PLAN
FOR
ASIA AFRIC PARTY EVENT RENTAL
(GROUP B)
FOR THE COURSE
MKT 521
COMPANY DESCRIPTION
Name of Company: AsiaAfric Party Event and Rental Services
Name of Owners: Alex Edeigba, Botao Fan and Blessing Ezeugwa
Legal structure of the company: Small Business
Type of Business: Rental of tents, canopies, tables and chairs and other items for weddings, birthdays, anniversaries and all types of parties and occasions.
Reasons for formation of the company:
The main reason for starting this company is to provide a useful and needed service to the community, to fulfill the needs and wants of people, to work towards our economic welfare, and to function at our potential.
TABLE OF CONTENTS
Executive Summary
Situational Analysis
Market Summary
Market Demographics
Market Needs
Market Trends
Market Growth
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
Competitive Analysis
Information Sources
Keys to Success
Marketing Strategy
Mission
Objectives
Target Market
Positioning
Marketing Mix
Marketing Research
Budgets & Controls
Break even analysis
Sales forecast
Contingencies
Implementation
Conclusion
References
Executive Summary
ASIAFRIC Event & Rental Services is a startup company established with the aim of providing party planning services, party rentals and other ancillary services within the industry. The company is located in Mesquite - Dallas area of Texas. We chose Mesquite, because of the economic development objective of the community which is centered on retaining, expanding and improving the existing Mesquite-based businesses, and also to attract and locate new businesses. Mesquite is home to many organizations such as hotels, restaurants, event centers and educational institutions, and is also bordered by the cities of Garland to the North and Balch Springs to the South, affording us the opportunity to reach out to many customers that will require our services. The company is formed and managed by three friends, Edeigba Alex, Botao Fan and Blessing Ezeugwa.
The company’s marketing plan is developed towards developing the three different stages of our company’s planned growth, and that illustrates why the market is segmented to specially meet the demands of our target markets; and also different strategies that will be adopted to actualize our goals which is aimed at building a solid revenue stream that will sustain continuous innovation, growth and development. We are focused on providing the cheapest rates within our business environment, and our unique focus on pricing will gives us the competitive edge over our competitors while not compromising the quality of service that we will be offering.
In view of the foregoing, we have designed our unique product lines and services, putting into consideration the different income levels for both individuals and organizations available, and we are eagerly working towards meeting their numerous needs. The business will be funded through private contribution from shareholders and external loans as well. As a startup business we have a three-phase approach to initiate the business which would effectively lead to its growth, and this focuses on the capital, product designs and service offerings and overall expansion of the business.
Situation Analysis
Our business will be a rental service store in its first year of operation. We are offering planning birthdays, wedding and corporate events for our customers and renting out party rentals of all assortments. We have designed our marketing strategy to introduce our service to our market segment and this is guided by our promotion and pricing strategy which is geared at informing, inducing and securing willingness to try our services. The basic market need is to turn each event and rental situation of our customers into a great reference, by providing high level of service to all seeking quality events and party rentals and ensuring future purchases from them.
Market Summary
The party and event rentals business continues to generate revenue for owners and the economy, and that is reflected in the American Rental Association chart which produced revenue of billion in 2013. Overall 2013 party and event rental revenues grew at a year-over-year rate of percent. Considering this growth rate, we are confident that the business will be successful, as long as we continue to maintain a competitive edge and tap into opportunities available for the business.
Market Demographics
Jobber and Fahy (2006) define marketing segmentation as the identification of persons or organizations with the same characteristics and major implications for determining marketing strategy. The profile of AsiaAfric Event and Rental Services consists of the following geographic, demographic, psychographic and behavior factors.
Geographic
Our geographic area is Mesquite with a population of 143,195 and its surrounding areas which includes Garland and Balch Springs. The Garland and Balch Springs population is estimated at 258,430 (2013).
Total population we are targeting is401, 625.
Demographics
Young and Single Adults, Couples, Older Couple, Older Single Adults.
Age range of 18 to 60 years.
Income Range of $45,000 – and above.
Professionals and Managers in Corporate Industries, Homemakers, Business Owners.
Members of Social Club
High School Students, High School Graduates, College Students, College Graduates.
Africans, African-American, Asians, Hispanic, Jewish.
Population in 2012: 143,195 (99% urban, 1% rural). Population change since 2000: +%
Males: 68,336
(%)
Females: 74,859
(%)
Median resident age:
years
Texas median age:
years
Estimated median household income in 2011: $46,983 (it was $50,424 in 2000)
Mesquite:
$46,983
Texas:
$49,392
White alone - 56,907 (%)
Hispanic - 42,584 (%)
Black alone - 35,742 (%)
Asian alone - 5,695 (%)
Two or more races - 1,290 (%)
American Indian alone - 173 (%)
Other race alone - 183 (%)
Psychographics
Young adults that live a trendy, hip and cool lifestyle.
Luxurious and Ebullient Personality.
Entertainment Oriented Individuals and Organizations
Readers of Wedding and Social Events Magazines such as Martha Stewarts, Bridal Guides, Colin Cowie Wedding Planner, Asiana Wedding International Magazine.
Behaviors
Culture for celebrating events.
Parents who take pride in celebrating memorable family events.
Accustomed to Seasonal and Traditional Celebrations.
Accustomed to renewal of Marriage vows trend.
. Market Needs
AsiaAfric is providing its customers with the most in-demand form of entertainment as we plan their events and rent out our party items. We would support the needs of our clients from the planning stage; through to the delivery; installation and post event take down. We are going to organize events that would conform to the preferences of our customers from outdoors to indoors events, quiet or full of activities. We offer variety of rental items that would make for fun and business, and creating memorable events that would leave our customers with a lasting experience.
. Market Trends
The party rental market is a market that rents out chairs, linens, platforms, canopies, tents, center pieces and other items for public and private parties and events. The steady stream of demand for party rentals and event planning comes from regions that have the greatest concentration of industry operators and high proportion of households. The distribution of party rentals and event companies is based on the number of households and the median income levels by a given region. Therefore given a high proportion of households in the South Central Region of America, there is a high demand for rental supplies and event planning for social and business events.
. Market Growth
IBIS World Forecast have shown that the Party and Event Planning industry is in its maturity stage, hence the industry will continue to grow at an average annual rate of % compared to % annualized growth in GDP. The number of establishment entering the industry, will also continue to grow at % per year on average to 380,070. IHS Global insight, the world’s leading economic forecasting authority, states that the United States Equipment Rental Business will continue to grow four times faster than the general economy.
It also states that the rental revenue of the industry rose to % ($ billion) in 2012, from the $ billion in 2010. The projected revenue is expected to be $ billion by the end of 2014, and it is expected to reach $ billion in 2017 an industry high.
The growth in the industry is being propelled by new market trends that allows companies to rent tents directly from mnufacturers, instead of buying and the growth in the demand for new housing, which was affected by the recession. Population increased during this period hence new households were formed. This prompted the construction of new houses, which have led to the new growth in the industry.
Source: May 9, 2013 Forecast Update by IHS Global Insight
IHS Global Insight also forecasted the following:
• Construction and Industrial Equipment Rental revenue will reach $ in 2013, up % from 2012. By 2017 revenues will reach $ billion, up % versus 2012
• General Tool Rental revenue will grow to $ billion, up % versus 2012. By 2017 revenues will reach $ billion, up % versus 2012.
• Party & Event Rental revenue will be $ billion in 2013, up % versus 2012. By 2017, revenues will be $ billion, up % versus 2012.
SWOT Analysis
Strengths
Expected high gross earnings.
Offering the best price within the Mesquite area
Limited start up risk.
Low barriers to market entry.
Highly experienced managers.
Strategic current location.
Strong relationship with suppliers, social groups and clubs.
. Weaknesses
Funding (start-up cost)
Offering of similar products by competitors.
. Opportunities
Limited competition in the Mesquite area.
An ever increasing demand for rental product and planning services
Strong alliance with related suppliers and vendors, with the prospect for exploration.
Developing proprietary right to property
Ability to develop additional stores and own rental halls, to cater for the needs of surrounding areas and increase in demand.
Ability to acquire additional capital.
Expanding product lines.
. Threats
Products are already sold by competitors.
High financial requirements for start-up
Pricing of product by competitors
High rental costs of office space.
Competitor Analysis
A & E Party Solution is a large rental company, located in mesquite. The company is offering chairs and tables at the rate of $ per item, it also offers to its customer’s snow cone machines, balloons, costumes, deco supply and party planning. They run a 24 hours rental service with free delivery within a 20 mile radius. Payment is made after delivery and deposits are not charged. Their products and services are centered on kids and their parents.
Dal- Tex Rental is a party rental company located in the heart of the city of mesquite. It offers wedding supplies to its customers. The business offers customers a fair price, and provides a variety of party rental products. They are known for their excellent customer service, reliability and experienced staff. They are offer the biggest threat to our business, in terms of pricing, location and target market.
Party City is a party rental and event management business that offers a wide range of products to kids, households and students. Their event management product includes kid’s birthday’s party, weddings, baby showers and graduation events. They have an online store that allows them to reach out to more customers. This has increased the demand for their services over time. However, the prices offered to customers are considered to be high.
Information Sources
In order to actualize our mission, vision, core value and marketing objectives, we have put in place the following control measures
We intend to use the Market Share Analysis tool, to measure the percentage of the market that is being controlled by our company over a period of time. We will also apportion a certain amount of the projected sales to every member of staff on a monthly basis, and each staff performance will be measured based on the monthly sales generated.
Since, the plan is to satisfy our customers at all times, we intend to conduct a consumer satisfaction survey, to know what we have done well, and what aspect of the business that we need to improve on.
The company’s projected sales will be based on the information provided by IBIS World forecast and information from our sales force on the party and event planning industry. We also intend to carry out marketing research on a yearly basis, to have an insight into what new trend or development that our customers want.
Keys to Success
To maintain a client base that will enable sufficient flow of revenue from the business, while trying to increase the customer base with qualitative services.
To ensure regular training for all work force, so that they will be extremely knowledgeable on all of the offered tools and equipments.
To maintain strict inventory, accounting and control policies, directed towards reducing overhead while assuring availability of services.
Maintain a good pricing policy, which will stand us out among our competitors.
Marketing Strategy
Our marketing strategy describes how the business will fulfill the needs and wants of our customers (Ferrell & Hartline, 2011). Our marketing strategy consists of two elements, our target market and marketing mix that would help us to create a competitive advantage that is distinct from that of our competitors. AsiaAfric will use its competitive edge to penetrate the market and gain market share. We aim at appealing, and creating interest in our target market. We have concentrated our resources towards developing a marketing strategy that would create awareness for our product offerings and satisfy our customers’ needs. Our marketing mix variables have been executed to convert customers of competing brands, attract new customers and ensure that we have dedicated and frequent users of AsiaAfric services. We have as our strategy the inclination to offer superior performance to our clients in customer service, product quality, excellent event management and planning and excellent product delivery. The proper implementation of our strategy would lead to a successful market expansion and growth into a profitable business.
Competitive Advantage
To be successful, we have decided to do better in the following listed areas which is better than our competitors that gives us an edge in serving our customers needs and maintaining jointly satisfying relationships with important stakeholders (Ferrell & Hartline, 2011).
Variety of Product Offerings – We intend to thrill our customers with a variety of products to choose from, while considering their different taste, income level and concept for the event.
High Quality & Cheapest Price – We intend to offer our customers the cheapest rates for services rendered, while not compromising the quality of services and delivery.
Best Safety Practice – We also intend to implement the best safety precautions and standards within the industry, at the venues of our installation. And if by accident an unforeseen accident happens, we are going to put in place insurance covers for accidents caused as a result of our business.
Benchmarked Customer Service and Training – Administrative and technical staffs will be regularly trained on customer relations and safety, in order to meet with our customers’ needs in any way possible. This includes determining which item is best for the party or event.
Mission
Our mission is to turn each rental situation into a great reference, and ensuring future rentals from clients and their associates. We also intend to be price determinant within our community, while offering varieties of products and ensuring standard in terms of quality.
Objectives
To develop a sustainable start up business
Establish a good relationship with customers that will help retain them.
Reach 30% profitability by the second year of operations.
To control 20% share of the market within three years of operations
By the fourth year, we intend to expand our business to include event planning; acquisition of land to accommodate an office complex with modern hall, storage and well nurtured garden that will be used for outdoor events; and coordination of peripheral services.
Target Market
We have divided the total market into a smaller homogenous segment that have similar needs, wants and characteristics (Ferrell & Hartline, 2011). Our target market consists of the following:
Households: This group constitutes our largest market. It comprises a dominant group within the age range of 18 to 60years. We are targeting the youths, who would always celebrate their birthdays, the unmarried who would require event planners to organize their weddings, the newlyweds and older couples who would love to celebrate their wedding anniversaries. This category of people falls into various occupations and educational backgrounds and ethnic groups. We are ready to meet the economic needs of the students, professionals and the like.
Corporate Organizations: This group would have high discretionary income. We are targeting businesses that would require our service. From all types of business enterprise and firm to educational institutions. We seek to plan memorable events and rent out our party items to this group and remain at their top contract list whenever they need our services.
Social Organizations: We are targeting social clubs, hotels, and restaurants and would like to form an alliance with this group as well. This particular market has a high demand for our products and services and we are delighted to serve them to their maximum satisfaction. We would rent out our party items to this market and offer our services of event planning when desired.
Positioning
We view ourselves as a problem solving business, and that is shown in our business objective. We are planning on making this business a “One stop shop” for individuals and organizations, that usually encounter hitches in planning and organizing their events. Our well trained workforce will also be responsible for ensuring a personalized service, structured to satisfy customer’s specific needs. Positioning will help to place an emphasis on our targeted customer’s perception of our brand in relation to other brands (Sengupta, 2005).
Marketing Mix
The marketing mix is a toolkit of transaction marketing and is the best framework for operational marketing planning (Groonroos, 1994). It is a memorable and practical framework for marketing decision making that has being proved useful in strategic marketing planning (Jobber, 2001).
Product: We are offering corporate, wedding and birthday rentals. Our products would meet the needs of our customers to give them the needed comfort, and utility to their event. They would be offered a wide range to select from, that would suit their preferences. We offer to our customers the following selection:
Tents, canopies and accessories
Lightings
Platform and accessories
Table and chairs with linen covers (a variety of linen to select from)
Ice chest
Public Address System
Fans and air conditioners
Pricing: We are concerned with offering our customers value and quality products and services at lower costs. Setting low prices for long‐term rentals would make renting for our business more attractive than buying equipment. We are concerned with our customers options, and this is what would enable us charge our rentals and avail us with the level of service we need to provide to stay competitive. Pricing on rentals would be based on the supplier’s timeliness, quality of products and convenience.
Distribution: We are located in the downtown square area of Mesquite which serves as a touch point for our customers. Our customers will have no problem locating us, because we are strategically located in the heart of mesquite which is accessible to individuals and other businesses. We intend to serve our customers directly, as this will help reduce additional markup that might be included by middlemen in product price(s). As it is the trend for businesses today, we would introduce an online platform, a website that will enable reach out to customers and meet their demands.
Promotion: As a start-up business, we intend raising customers’ awareness for our products by adopting direct marketing techniques that will include emails, online display ads, interactive consumer websites, text messaging, catalog distribution, promotional letters and outdoor advertising. Websites help to increase the recall of brands people see on the internet which improves customers’ outlook or perceptions of the brand (Goldsmith & Lafferty, 2002). The outdoor advertising will include the use of the print media to create flyers, handbills and posters. The print media have great impact on the emotions of people. Print advertising creates an emotional drive which leads people to purchase (Sashikala, 2007). The print advertisements would be distributed at strategic locations such as local grocery stores, businesses and community offices, hotels, golf clubs and restaurants. Websites help to increase the recall of brands people see on the internet which improves customers’ outlook or perceptions of the brand (Goldsmith & Lafferty, 2002). It is our objective to make our services memorable by providing qualitative services and product, thereby, creating “word of mouth’’ from our satisfied customers.
Marketing Research
Marketing research would be an ongoing process at AsiaAfric. This would give us an insight into what the market requirements are, and also identify better ways of satisfying our customers. Marketing research provides a framework needed to help a researcher to organize the various strategies mapped out, to give it relevance, direction and consistency. (Onwuegbuzie & Leech, 2006). We would continuously seek ways to ensure our products are differentiated from our competitors, through an aggressive market research program. Through the marketing research, we would continue to assess our primary and secondary target markets and identify ways to communicate with them and make them brand loyalist. Mitchell (2002) suggest that marketers need to be spontaneous in preparing models to approach consumers to motivate them towards a brand and marketing research should centre around motivating consumers to buy thereby influencing purchase. As we choose to expand our collection of party rental items, marketing research on what our customers are willing to pay would be examined; and what types of rental items they would like to rent. According to Smith and Dexter (2001), marketing researchers need to focus on the changes in the business environment and the ever changing consumer needs and provide fast solutions information and implementation. Knowing the extent of demand would be important to cover the costs of any initial investment. We would also ensure our customers who visit our online store have the best shopping experience. This effort would go a long way in positioning our event and rental business.
Budgets and Controls
Starting up the business will require a $250,000 financing. The business is expected to be financed through a private owner’s equity and external funding. As owners of the business we will provide 51% of the funds required to start up, and the remaining 49% is expected to come from loans from a bank.
Break-even Analysis
Considering the initial investment of $250,000, the company hopes to breakeven in the second year. With a monthly sales of $24,000 in the first year, and an expected $37,500 on a monthly basis the second year the company wishes to actualize this goal. The third year is also expected to generate sales of $70,000.
Sales Forecast
Contingencies
Risk Analysis and Mitigants
AsiaAfric provides personalized solutions to help reduce business risks during an emergency or to quickly and effectively solve issues as they occur. Our reliable and highly skilled work team will work closely with the customer in order to guarantee continuity and reduce risk in the course of doing business. We place value in our workforce, equipment and our image, and that is why we have insurance cover on all identified, who are involved in ensuring total satisfaction of our customers. We also have a technical and medical team unit for technical and medical emergency, that involves our team and customers, and they will be with our customers from the beginning till the end of the event. Our online portal is also available 24 hours, for products and services viewing.
Contingency Plan
Low demand- Should there be low demand of our service, we plan to offer discounts to our customers. This would be a tool designed to accelerate our selling process (Lusch, 2001). We would also embark on aggressive marketing campaigns to stimulate demand.
Exit Strategy
In the case of a future exit of the business, the company will adopt a takeover strategy, which will allow it to be acquired by a bigger brand. A takeover is a growth process which involves taking over and developing joint measures with an obtainable company (Dransfield, 2001). Although the company does not intend to sell out its investment, it could also explore the possibility of diversifying into other lines of business.
Implementation
This involves the strategic implementation of developing our strategies, policies, procedures and operational plan that would translate our strategy into action steps that would thereby be carried out for the desired actions (Dransfield, 2001). We have the following set up for implementation:
Program
As a startup business we have a three-phase approach to initiate the business which would effectively lead to its growth which includes:
In stage one; we are proposing Two Hundred and Fifty Thousand dollars ($250,) initial capital, which is made up of 51% owners’ equity and the balance of 49% to be sourced externally. The initial capital will cover rent for office space, procurement of equipment and necessary operational cost.
In stage two, we hope to expand the business to include event planning and coordination of peripheral services such as hall rentals, limo rentals, and caterers. This stage does not require financing and will be implemented, as it becomes viable.
In stage three, we hope to acquire a much bigger space where we can build an office, an ultra-modern hall, and a well nurtured garden to accommodate the various taste, seasons and finances of our customers. The project will be capital intensive, but we intend to plough back 30% of our profit towards the project, and the remaining funding will be sourced externally.
Organizational Structure
The organization consists of four major departments created to implement our overall marketing strategy and objectives. These include Marketing and Sales, Accounts, Administration and Technical. These departments are assigned further roles. The marketing department is in charge of research, promotion and Sales. The accounts department is in charge of creating budgets, keeping financial records and handling purchases. The administrative department coordinates the activities of all the other departments, and ensure that the business is up and running. Finally, the technical department manages the technical aspect of the business that involves installations and repairs.
Management Team
The management team is made up of the Managing Director, Mr. Alex Edeigba, Director of Finance, Mr. Botao Fan, Director of Marketing, Miss Blessing Ezeugwa, and Corporate Secretary, Miss Bizzle Wong.
Personal Plan
We have personals in the field of marketing, administration and finance. The company employs the services of sales executives, service technicians, marketers, accountants, and drivers as members of their staff.
Conclusion
At AsiaAfric event and party rentals, we have positioned our business to serve our clients. From our marketing strategies and financial plans, it is quite certain that we would generate revenue from this business and this would help us to cover initial investments. The business has the prospects of growth and profitability as we float it. We would work hard to satisfy our current customers and keep working hard to expand our market share. We would be flexible in our business, by constantly adapting to the changes in the environment that would affect our business; to meet the demands of our customers. We would also be willing to work as business opportunities present themselves and likewise we shall continue to survey our customers’ needs and wants and adjust our rentals and event planning to actual demands. This competitive edge would enable us thus to be relevant in the business sphere.
From our analysis and findings, this business is technically feasible, financially viable as seen from our cash flow, sales forecast and economically desirable. The business is offering good investment benefits. We would therefore proceed in recommending the project for funding and implementation.
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