Sample Marketing Plan

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Sample Marketing Plan

  1. 1. Company IMAGE/LOGO *Company Name Charlotte, NC. 28219 Prepared by: Gregory Ballard Rashmi Menon Huong Pham Lee Rendleman Joseph Tieber
  2. 2. 1.0 EXECUTIVE SUMMARY......................................................................................................................................1 2.0 SITUATIONAL ANALYSIS...................................................................................................................................2 2.1 MARKET SUMMARY..................................................................................................................................................2 2.1.1 Market Demographics...................................................................................................................................4 2.1.2 Market Needs................................................................................................................................................4 2.1.3 Market Trends...............................................................................................................................................5 2.1.4 Market Growth..............................................................................................................................................5 2.2 SWOT ANALYSIS....................................................................................................................................................8 2.2.1 Strengths.......................................................................................................................................................8 2.2.2 Weaknesses...................................................................................................................................................9 2.2.3 Opportunities................................................................................................................................................9 2.2.4 THREATS...........................................................................................................................................................10 2.3 COMPETITION.........................................................................................................................................................10 2.4 PRODUCT OFFERING................................................................................................................................................11 2.5 KEYS TO SUCCESS..................................................................................................................................................13 2.6 CRITICAL ISSUES.....................................................................................................................................................13 3.0 MARKETING STRATEGY.................................................................................................................................16 3.1 MISSION................................................................................................................................................................16 3.2 MARKETING OBJECTIVES.........................................................................................................................................16 3.3 FINANCIAL OBJECTIVES...........................................................................................................................................17 3.4 TARGET MARKETS..................................................................................................................................................17 3.5 POSITIONING..........................................................................................................................................................17 3.6 STRATEGIES...........................................................................................................................................................17 3.7 MARKETING MIX....................................................................................................................................................18 3.8 MARKETING RESEARCH...........................................................................................................................................18 4.0 FINANCIALS.........................................................................................................................................................19 4.1 BREAK-EVEN ANALYSIS...........................................................................................................................................19 4.2 SALES FORECAST....................................................................................................................................................19 4.3 EXPENSE FORECAST................................................................................................................................................19 5.0 CONTROLS...........................................................................................................................................................21 5.1 IMPLEMENTATION....................................................................................................................................................21 5.2 MARKETING ORGANIZATION.....................................................................................................................................23 REFERENCES............................................................................................................................................................24 APPENDIX TABLE: MARKETING EXPENSE BUDGET...................................................................................25 APPENDIX TABLE: SALES PERFORMANCE METRICS DASHBOARD.......................................................26 APPENDIX TABLE: CUSTOMER SERVICE PERFORMANCE METRICS DASHBOARD...........................27 APPENDIX TABLE: MARKETING PERFORMANCE METRICS DASHBOARD...........................................28
  3. 3. 1.0 Executive Summary *Company Name is a full service Third Party Logistics (3PL) firm. It provides for its clients the know- how and ability to arrange for the movement of its goods through: ocean and air freight forwarding, customs brokerage, consolidation, warehousing, order fulfillment, information services, logistics and compliance consulting, and (Lead) 4PL and Project logistics. *Company Name uses its' buying power to obtain advantage with shippers and to mainstream the supply chains of its clients. Taking control of their respective supply chains allows for firms to focus on their core competencies rather than attempting navigation through the maze of logistics management. In the next year, *Company Name seeks to enter a new target market, automotive parts. In its past, *Company Name has mainly focused on the furniture industry and general department store merchandise. *Company Name plans to optimize its future position by diversifying its revenue streams and leveraging its core competencies. Given the in-elasticity of price in the logistics industry, *Company Name differentiates itself through exceptional customer service. One of *Company Name's assets that ensures world-class service is iRadar, an in-house developed tracking program designed to give real time information on the locations its customers’ products. There are several marketing priorities that are crucial to ensure a successful penetration into the market. The first priority is to build awareness of its brand within the automotive parts wholesale and retail segments. This will be accomplished through the joining of trade associations, advertising in leading industry magazines, and participation in industry tradeshow events. Secondly, continuing to provide superior service is a must in order to generate positive word of mouth buzz among players in the industry. 1
  4. 4. 2.0 Situational Analysis With over thirty years experience, *Company Name offers high-level expertise in the international logistics industry. Currently, it focuses on providing logistics services in these key industries (percentage of *Company Name’s business noted): •Furniture - 30% •General Department Store Merchandise - 30% •Hardware - 15% •Footwear - 10% •Electronics - 10% •Hosiery - 5% The current breakdown of business services *Company Name provides is 75% Ocean Freight Arrangement, 12% Cargo Consolidation, 8% Customs Brokerage, and 5% other logistics services. Its primary activity, the arrangement of ocean freight forwarding, involves the purchase of container space from various shipping firms based on the anticipated needs of its clients. *Company Name bears the risk for clients by preemptively purchasing space and absorbing the costs of any unused space. Due to its purchasing volume, *Company Name is able to receive reduced rates from the shipping agents but still char*Company Name the prevailing market rates to its consumers. Clients are then able to avoid the additional cost and penalties associated with purchasing excess container space. Due to the recent downturn in housing market, *Company Name's primary source of business, the furniture industry, has declined. US consumers no longer are purchasing the volumes of furniture to decorate their new homes which has resulted in the obvious decrease in the importation of furniture and subsequent movement of goods across US trade lanes. As a result, next year *Company Name intends to pursue the automotive industry in markets in which they already have experience, specifically in China and Canada. While the slowing of the US economy has hurt home and furniture sales, the automotive parts industry continues to grow as US consumers rely more heavily on repairing their current vehicles and opt out of purchasing new cars. Even during the economic boom of past years, in which discretionary income was at an all time high which increased the rate of new car purchases simultaneously, the automotive parts industry still continued to grow. By expanding into a new market, *Company Name will have the opportunity hedge its risk against any future downturns affecting any of the industries in which it works. 2.1 Market Summary The target market groups *Company Name is planning to focus on are Aftermarket Auto Parts Stores and Auto parts wholesalers. The other target market groups under consideration were Original Equipment Manufactures (OEMs) in the United States and auto parts manufacturers in Asia and Eastern Europe. Due to *Company Name’s prior experience in the furniture business, the Aftermarket Auto Parts Retail Outlets’ and Wholesalers’ needs were the most similar to servicing the furniture business. Both these 2
  5. 5. target market groups have large distribution centers to which the goods are delivered. *Company Name would provide third party logistic services for importers and wholesalers across different trade lanes. Dealing with OEMs and auto parts manufacturers is more challenging as it requires a tighter integration with the manufacturers supply chain. The parts are typically directly delivered to the assembly line. Given *Company Name limited experience in the import of auto parts, this would not be a good market to target initially. However, future operations could target these two additional market segments as well The two main markets in which *Company Name will focus are: Aftermarket Auto Parts Chain Retail: Our most important market segment is the provider of retail auto parts, such as Advance Auto, Auto Zone, Carquest, and O'Reilly's. These companies need logistics functions that are better handled externally than managed in-house. These retail stores have stores throughout the United States and typically use centralized distribution centers from which items are housed and distributed. Many of the products in the stores are manufactured in East Asia, specifically China as well as in Canada. Logistics solutions are based on cost, service, timeliness, and ability to track. Auto parts wholesalers: Auto parts wholesalers are also located throughout the United States and in some instances, sell to the after market retail chains. They import their products from East Asia, Brazil, and Eastern Europe. These sellers bulk break items and create assortments to send to various distributors also throughout the United States. They determine logistics needs through cost, quality of service, timeliness, and the ability to track. Table: Market Analysis Market Analysis Projected Revenue Growth (in billions) Potential Customers 2008 2009 2010 2011 2012 CAGR Auto Parts and Accessories Stores in the $46.9 $48.1 $49.0 $49.6 $50.9 2.07% US Motor Vehicle Supplies and New Parts $139.1 $141.9 $145.8 $150.1 $155.2 2.78% Wholesalers in the US Total $186 $190 $195 $200 $206 2.60% 3
  6. 6. Market Analysis (Pie) Auto Parts and Accessories Stores in the US Motor Vehicle Supplies and New Parts Wholesalers in the US Other 2.1.1 Market Demographics Cars initially came to market in the early part of the 20th century. Consequently, the need for car repairs has been in existence for nearly a century as well making the Aftermarket Auto Parts industry a mature industry. The companies obtaining aftermarket parts include large retail chains, wholesalers, and small local repair shops. As manufacturing trends have shifted to increased overseas production, the manufacturing of auto parts has experienced the same move to off shore production. As this transition has occurred, business customers in the United States have had to develop supply chains to ensure success. The logistics of moving parts has therefore become an integral part of auto part retailers’ and wholesalers’ business models. Many of these firms, however, do not have the adequate resources to successfully make these arrangements as their core competencies are helping individual consumers in vehicle enhancement and repair. 2.1.2 Market Needs With the substantial growth worldwide, there will be increasing need for logistics help to move the parts not only to the United States but around the world. The logistics needs will change as the industry grows as well. If *Company Name can be one of the first movers, then in the future, they will be able to take advantage of their increased experience relative to competitors. Clients come to *Company Name to obtain reliable, trackable, and timely logistics expertise. They understand it is difficult to handle logistics needs and would prefer to concentrate on their core competencies. *Company Name's increased buying power and superior shipment control reduces cost and increases the clients' ease with handling worldwide operations. A long term relationship is the result as businesses continue to need additional product movement. 4
  7. 7. 2.1.3 Market Trends As labor has become more expensive in the United States, auto part makers have increasingly been forced to import products from overseas markets in order to keep costs down. Currently, Mexico, Japan, and Canada are the lar*Company Namet producers of US auto parts totaling $62 million dollars in imports in 2006. China and Brazil, however, are increasing their share of the market. In the past seven years, the markets have grown by 28% and 10%, respectively. It is anticipated that global manufacturing production will shift and grow by almost 15% in Asia and around 13% in Eastern Europe. Market Analysis (Bar) 200 150 Auto Parts and Accessories Stores in the US 100 Motor Vehicle Supplies and New Parts Wholesalers in the US 50 Other 0 2008 2009 2010 2011 2012 2.1.4 Market Growth The Global Automotive Parts industry is projected to be at $1.1 trillion in sales by 2010. Auto parts imports to America have grown by almost 37% since 2001 (from $26 trillion in 2001 to $43 trillion in 2006). The substantial growth within the market and for US imports makes it a great opportunity for *Company Name. It is also unlikely that this growth will slow down in the near future. Growth has been driven by an increase in the number of vehicles on the road, an increase in vehicle usage rates, and greater diversity of vehicle types. Rising oil prices, however, could put a damper on anticipated growth estimates. Revenue growth rates of both Automotive Parts and Accessories Stores and of Motor Vehicle Supplies and New Parts Wholesalers in the US have also been impressive as shown in the tables below. Future revenues growth rates for Automotive Parts and Accessories Stores and Wholesalers are positive as well. The average projected growth rate for both industries is just over 2%. 5
  8. 8. IBIS World Reports: Motor Vehicle Automotive Parts and Accessories Stores in the US September 11 2007 IBIS World Reports: Motor Vehicle Supplies and New Parts Wholesalers in the US December 04 2007 IBIS World Reports: Motor Vehicle Automotive Parts and Accessories Stores in the US September 11 2007 6
  9. 9. IBIS World Reports: Motor Vehicle Supplies and New Parts Wholesalers in the US December 04 2007 With the increases in these industries, logistics needs will obviously increase simultaneously. This will particularly be the case as the United States' labor rates will continue to impede manufacturing. Imports will be necessary to meet the growing demand. The previously mentioned manufacturing growth rates in Asia and Eastern Europe of 15% and 13% respectively provide an opportune market to move auto parts across the Pacific into the States. The growth figures for Freight Transportation Arrangement support this conclusion as seen in the Table below: IBIS World Industry Report (Oct 2007) Freight Transportation Arrangement in the US: 48851 7
  10. 10. 2.2 SWOT Analysis As a mid-size company, *Company Name is able to deliver customizable personalized solutions for each of its clients. It has significant experience in the logistics industry with more than 30 years of service giving credence to its ability to deliver. *Company Name further distinguishes itself by developing its own tracking software, iRadar. *Company Name can accurately give real time responses to its clients about their products' location. Although *Company Name has worked in the industry for many years, it does not currently have any exposure in the auto parts aftermarket arena. Furthermore, *Company Name is not a quot;brand namequot; making it more difficult to gain instant access. Access could also possibly be hampered due to decreases in current revenue segments providing fewer resources for entry into new markets. The automotive parts import industry has grown significantly over the past seven years. As manufacturing in the United States becomes increasingly more expensive, outsourcing will and has become more and more prevalent. US auto parts imports coming from China have grown by almost 30%. Competition within the industry is intense and the barriers to entry are few. On-going technological change and development makes it likely other companies will develop superior tracking tools. Security initiatives both within the US and abroad have created a much more difficult marketplace with a plethora a rules and regulations that must be not be overlooked. 2.2.1 Strengths 1. True expertise. Over thirty years of success within the logistics industry. 2. A customer-driven, privately owned organization with a reputation for exceeding expectations 3. iRADAR’s functionality is a giant step above traditional freight forwarder and carrier applications. A few of the software’s capabilities available include: • Real time P.O & SKU level global logistics visibility • Exceptions based email alerts - iRADAR helps identify, react to and resolve problems such as shipment delays before they may occur. • Shipment milestone email notifications automatically alert users of status chan*Company Name • A flexible and open information architecture to provide integration opportunities with Enterprise Resource Planning (ERP), Warehouse Management Systems (WMS) and other internal systems • Customized management reporting along various performance metrics utilizing built in Seagate Crystal Reports 4. A mid-market company with both a global reach and a local touch, employing multi-national staff and affiliates in more than 75 locations worldwide 5. International Presence with over 15 offices worldwide •An experienced consolidator with corporate offices and an extensive Container Freight Station (CFS) infrastructure throughout China and the Far East. 6. Contacts. Years of industry experience yields word-of-mouth marketing, contacts, and channels that 8
  11. 11. create networks for increased buying power. 7. Customs compliant (AMS 24-hour rule) and security conscious (C-TPAT certified) 8. Non-carrier affiliated to ensure unbiased, customized transportation solutions 9. Good sales coverage in auto regions (OH & MI OEM Tier 2 & 3 suppliers, Southeast parts retailers 10. Good network where parts are imported from (China, Brazil, Turkey, Canada, etc.) 2.2.2 Weaknesses 1. Currently do not have any strong contacts within the automotive industry—retail or wholesale 2. Decreases in revenues from other segments (furniture) creates fewer resources to develop new markets 3. Have not yet attended any trade shows 4. Have bid on but not won any Retail segment contracts 5. Do not have a quot;name brandquot; such as FedEx 6. Not ISO Certified, boilerplate legal requirements 7. Airfreight weakness—little experience and few contacts 8. No Assets (Warehouses, trucks, etc for Just In Time distribution). All relate to the OEM side of the business and working for Big 3 auto manufacturers directly. 2.2.3 Opportunities 1. Auto parts industry is growing by large percenta*Company Name year over year. • Both Aftermarket segment and Wholesale segment 2. US imports of auto parts is growing tremendously due to increased costs of manufacturing in the US. 3. Industry is fragmented with no dominant players making to easier to access the auto parts 3PL market 4. Auto parts manufacturing is growing in China, Brazil, and Eastern Europe: more goods that need to be moved. 5. Outsourced (3PL) nature of supply chains 6. Supports *Company Name’ “global” business model – good volume where freight is from (China, Brazil, Turkey, Canada, etc.) 7. Auto parts hold up well in economic downturns. 9
  12. 12. 2.2.4 Threats 1. Significant competition already exists within the auto parts logistics industry 2. There are not many barriers to entry therefore additional competitors can easily enter the marketplace. 3. Economic recession could have a negative affect on auto parts sales due to decreases in discretionary income. 4. Other companies creating more competitive technologies. 5. Maintaining profits under price pressures from customers and consistently delivering cutting edge technology to customers. 6. US and International security initiatives 2.3 Competition The key elements in purchase decisions made by 3PL clients include high levels of customer service, reliability, and tracking ability. Competition comes in several forms: 1. In-house logistics handling. *Company Name’s key advantage in competition with in-house logistics is that managers are already overloaded with responsibilities; they don't have time for additional responsibilities in new market development or new channel development. 2. National and well-known brands such as FedEx, UPS, and DHL. A key disadvantage with well-known brands is brand recognition, reach, additional services, and negotiating power. A key advantage in competition with major players is increased personalized service. 3. Niche providers. A key disadvantage is existing developed relationships and loyalty. Advanta*Company Name include a quot;think outside of the boxquot; attitude and wider breadth of experience. 4. Specialized services. Potential strengths include exceptional know how. However, issues can result from the lack of a larger knowledge base. 1
  13. 13. 2.4 Product Offering *Company Name offers expertise in a third party logistics provider (3PL) specializing in U.S. trade with the Far East. *Company Name offers international supply chain solutions incorporating innovative logistics technology and world-class operational execution. Through past performance in the furniture industry, *Company Name has demonstrated excellence in the following: Ocean & Air Freight Forwarding *Company Name is full-service global logistics solutions provider specializing in U.S. trade with Asia. As such, we offer: Features & Benefits • Leverage our buying power to obtain competitive freight rates • Multiple carrier tiers increase your service options • Superior shipment control through overseas corporate offices, strategic partners, and web- based tracking. A one stop, full-service capability for all your international transportation needs. We cater to your needs, whether you are an importer or exporter shipping via ocean, air or multi-modal. Our forwarding solutions include the best logistics options for your particular situation, such as FCL and LCL ocean transportation, consolidation, airfreight, and inland drayage. Other value added services include: Labeling, bar code scanning, packing & specialized handling Warehousing, order fulfillment, and distribution Documentation & export letter of credit preparation Cargo insurance and claims processing Lead logistics provider and 4PL service Leveraged buying power to increase your shipping options, flexibility and control. As a privately held, non-carrier affiliated freight forwarder, consolidator, customs broker and information services provider, we contract our significant freight volume with various ocean and air carriers to offer you multi-tiered service options and competitive rates. We ensure superior shipment control through a vast network of global offices, strategic partners, and “people on the ground” in your main trade lanes. Web-based tracking, events management and milestone reporting. We’re not your average freight forwarder. By combining the latest I.T.-based cargo management techniques with iRADAR, our proprietary global logistics visibility and supply chain events management platform, we are assured of exceeding your most exacting information needs. Our detail-minded team of logistics professional ensures that each shipment milestone unfolds according to plan providing total supply chain accountability. Consolidation & Distribution Expand your distribution options with flexible warehousing at every origin and destination. Our consolidation and distribution objectives are as follows: Features & Benefits • Reduce your landed cost through consolidation to optimize full container loads • Ship mixed loads (from multiple suppliers and/or countries) directly to your customers 1
  14. 14. • Improved shipment coordination and supply chain communication through iRADAR • Reduce your landed cost through a customized consolidation program. Cargo consolidation is a core competency for *Company Name. Through our extensive network of container freight stations (CFS), we can optimize your container loading capabilities and minimize costly less than container load (LCL) shipments. Let *Company Name provide a customized consolidation program and all the information you need to manage it online via iRADAR. Improve communication within your supply chain. The key to any consolidation program is effective shipment coordination between suppliers and importers. Ours highly trained staff working on your behalf around the world ensures consolidation success through fluid information exchange and proactive vendor relationship management. Empower your consolidation and direct container programs. Take advantage of the shipping efficiencies offered by our Multi-Vendor Consolidation (MVC) program. By mixing multiple suppliers, P.O.s and SKUs in the same container, you can improve your equipment utilization and accelerate your import lead-time. Multi-Country Consolidation (MCC) may also be utilized to load LCL shipments from multiple countries into one full container shipping from a base port, which saves you time and money. Other consolidation options are available for high volume clients, including Overseas Order Fulfillment (OOF) to facilitate direct containers. Utilize value added services including: Bar Code Labeling and Scanning Garment on Hanger (GOH) Inspections Pick & Pack / Order Fulfillment Digital Imaging Palletization & Shrink Wrapping Customs Brokerage & Compliance *Company Name’s seasoned staff of brokers is your link to the U.S. Bureau of Customs & Border Protection. Our expert service includes: Features & Benefits • Full service capability to handle all of your Customs brokerage needs • Increased cargo security through *Company Name’s C-TPAT certification • Regular client updates keep you informed of pertinent Customs issues • Integrated brokerage and logistics services provide a total solution Offers full service capability, from customs entries to compliance consulting. We offer the following brokerage services: Pre-Classification and Clearance Remote Location Filing (RLF) Automated Clearing House (ACH) Bond Preparation & Maintenance Binding Ruling Requests Protests & Petitions Duty Drawback Compliance Consulting C-TPAT, excellent U.S. Customs relationships, and personalized service. Today heightened security is business as usual. We all share a common need to comply with U.S Customs’ initiatives, and *Company Name is certified member of C-TPAT (Customs-Trade Partnership Against Terrorism). 1
  15. 15. Our expert staff of brokerage professionals ensures your best interests and good standing with U.S. customs are always maintained. *Company Name is known for its personalized service, and our brokers take great pride in building trusted client relationships. We continually pass along relevant Customs information concerning your business and provide a support system to guide you through all Customs- related issues. Offer a total solution of integrated brokerage and logistics services. When *Company Name handles both the brokerage and logistics functions, our clients enjoy the convenience of a seamless door-to door service. Our brokers and logisticians work hand in hand to ensure that your products move on time and as planned. And when customs issues arise, you can count on our staff’s expert coordination to keep you informed and compliant. 2.5 Keys to Success 1. Provide a targeted level of customer service through a customer centric approach enabled by technologies such as iRadar in order to generate positive word of mouth buzz 2. Develop visibility to generate awareness amongst Auto Parts Retailers and Wholesalers 3. Leverage current expertise and contacts in order to enter auto parts logistics market. 4. Recognize entering a new market is a long term endeavor • Short term strategies sug*Company Nameted provide ideas for entry but plan will need to be revamped once penetration goals are met. 2.6 Critical Issues Internal Factors: 1. Penetration into the target market: *Company Name should use promotional tools like personal selling, participation in trade shows such as AAPEX, CAPA Expo, etc., and advertising in trade magazines such as Automotive Industries, Automotive Logistics, Automotive News. 2. Customer relationship management: It is vital to manage a good relationship with the clients. Some critical factors for the successful management of client relationships are recommended below: (a) Well-Understood Goals and Objectives of Relationship Perhaps the single, most important factor is for *Company Name to have knowledge of and understand the business needs of the client. *Company Name should strive to refrain from “information hiding”, and focus on developing successful relationships by sharing its goals and ambitions. *Company Name should discuss with clients what will it take for them to achieve their individual objectives. Anything less will result in attempts to make sub-optimal decisions. Only when *Company Name is willing to disclose its true goals and objectives will the relationship benefit. (b) Corporate Compatibility 1
  16. 16. Effective relationships will be facilitated by the extent to which the client and 3PL Organizations are culturally-aligned. Key factors that are relevant to this alignment include: corporate philosophy; management capabilities; and management style. Additionally, compatible relationships are characterized by effective multi-level organizational alignment, in which there are specific roles to be played in the relationship by people at the executive, managerial, and front-line levels of both organizations. Also, the extent to which information systems and technologies are integrated will be of major importance. (c) Ability to Reach Consensus on Matters of Importance. Aside from the fact that in any client-3PL relationship one party is the seller and one is the buyer, it is important for each party to understand the needs of the other and to reach consensus on matters of mutual importance. Although conduct of most relationships will endeavor to be consistent with a formal contract, the use of the contract as a management tool is a symptom that the relationship, and the ability to reach consensus, is having problems. Additionally, successful relationships will be characterized by trust and commitment, effective communications, and a willingness by both parties to share risk and reward. *Company Name should ensure that both parties draw up a protocol for addressing and resolving problems that may arise during the relationship. (d) Effective Measurements and Measurement Strategies. Perhaps the most useful management tool is the availability of agreed-upon key performance indicators and an effective strategy for measurement, feedback, and continuous improvement. (e) Migration Plan Toward Advanced Service Offerings Considering the importance of new product and service offerings to the success of client-3PL relationships, it is particularly useful to have a well-developed strategy for new service development. This strategy should focus not only on functional services (e.g., transportation; warehousing; customs brokerage; freight forwarding; etc.), but also on value added services (e.g., information technology; order entry and customer service). (f) Outlook for the Future Given the increasing competitiveness of the 3PL sector, coupled with the growing sophistication of the buyers of 3PL services, it is likely that we will see further progress in terms of improved relationships between buyers and sellers of 3PL services. Considering the extent to which 3PLs are enhancing the strategic aspects of their businesses (e.g., focus on specific customer segments; industry consolidation; globalization; and availability of information technologies), *Company Name should focus on strategic approaches to customer relationships. 3. Top management support: The management should be supportive of the project, especially in the initial phase. Poor execution can lead to customer dissatisfaction and potential loss of business. 4. Financial stability: Financial stability of customers is very important. *Company Name should take measures to ensure the financial strength of a potential customer. For instance, a thorough evaluation of the credit history of potential customers would help hedge against this risk. 5. Human resource factors: Loss of key personnel would create a delay in being able to achieve the goals of the marketing plan . In fact, adding an additional member to the marketing team would help to ensure success. 1
  17. 17. External Factors: Macroenvironmental factors likely to affect *Company Name include: a. Rise in oil prices: Increase in oil prices can result in an increase in operating costs which would in turn cut into profit margins. b. Threat of counterfeit/ low quality products would cause boycotting of goods and services and could result in increased regulations. c. Tariffs: A rise in protectionist sentiment in the US may result in high tariffs on imported goods Microenvironmental factors likely to affect *Company Name include: a. Competitors: Intense competition exists in the auto supply industry. b. Customers: This includes the client’s perception of the services provided. 1
  18. 18. 3.0 Marketing Strategy 3.1 Mission *Company Name’ mission is to provide customized logistics solutions incorporating the ultimate customer service and latest technology from a professionally rewarding environment. 3.2 Marketing Objectives *Company Name needs to build awareness of its brand by positioning itself as a customer-centric logistics provider within the aftermarket automotive parts industry. Clients should be sought in both the Aftermarket and Wholesale segments. The industry is tight knit--one contact can lead to multiple additional contacts. The personal selling and networking strategies have already previously been proven within the furniture industry. Other activities should include being seen in major trade press, participating in industry events, and gaining recognition. Some measurable and specific objectives are to attend at least one major trade event such as the Taipei International Auto Parts and Accessory Show, place at least one advertisement in an industry publication: Automotive Industries, Automotive Logistics, or Automotive News, and to join at least one auto part association such the Automotive Aftermarket Industry Association, Certified Automotive Parts Association, and Automotive Warehouse Distributors Association. Other possible associations: •American International Automobile Dealers Association (AIADA) •National Truck Equipment Association (NTEA) •Performance Warehouse Association (PWA) •Specialty Equipment Market Association (SEMA) •Automotive Recyclers Association •Automotive Parts Rebuilders Association (APRA) •Auto Engine Rebuilders Association (AERA) •Motorcycle Industry Council (MIC) •National Automobile Dealers Association (NADA) •Motor & Equipment Manufacturers Association (MEMA) •Original Equipment Suppliers Association (OESA) •Automotive Aftermarket Suppliers Association (AASA) Other tradeshow events: Hong Kong International Auto Parts Fair Auto Aftermarket and Tuning Fair China Ningbo Auto Parts and Accessories Export Fair 2008 Global Automotive Aftermarket Symposium 2008 Automotive Aftermarket Product Expo (AAPEX) By completing these objectives, penetration into the market should be possible. 1
  19. 19. 3.3 Financial Objectives The main focus for the coming year is to gain exposure in the marketplace. *Company Name’s annual sales cycle begins in March leaving little time to pursue marketing objectives and therefore meet solid financial objectives. An extremely aggressive goal for 2008 would be for *Company Name to seek to sell 125 containers at an average price of $4000 per container in order to break even with $500000 in revenues and $25000 in marketing expenses. The stretch goal for the end of 2009 is to fill 800 containers at on average price of $4000 per container, generating $3.2 million in revenues. At a 5% margin, $160,000 in profits would be generated. 3.4 Target Markets The target market groups *Company Name is planning to focus on are Aftermarket Auto Parts Stores and Auto parts wholesalers. The other target market groups under consideration were Original Equipment Manufactures (OEMs) in the United States and auto parts manufacturers in Asia and Eastern Europe. Due to *Company Name’s prior experience in the furniture business, it was felt that Aftermarket Auto parts Retail Outlets and Wholesalers were the most similar to servicing the furniture business. Both these target market groups have large distribution centers to which the goods are delivered. *Company Name would provide third party logistic services for importers and wholesalers across different trade lanes. Dealing with OEMs and auto parts manufacturers is more challenging as it requires a tighter integration with the manufacturers supply chain with the parts typically directly delivered to the assembly line. Given *Company Name limited experience in the import of auto parts, this would not be a good market to target initially. However, future operations could target these two additional market segments as well. 3.5 Positioning For auto part retailers and wholesalers, seeking reliable, customer focused logistics solutions, *Company Name Services is a third party logistics provider that arran*Company Name multi-modal forwarding solutions, consolidation, distribution, and customs handling of products. Unlike other competitors, *Company Name customer orientation complemented by their superior technological capabilities (i.e. iRadar) delivers world-class solutions. Using all elements of the marketing mix, supported by marketing efforts, *Company Name will educate the target markets about its 3PL services and motivate these first- time users to use *Company Name’s services over the competition. 3.6 Strategies *Company Name should intend to use a slow growth strategy in entering the automotive parts logistics marketplace. Gaining brand exposure will be an on-going effort supported in large part through referrals. Referrals, especially in *Company Name’s industry, are the best marketing tool. However, gaining customers to provide word of mouth advertising is time intensive. In order to initially attract clients, advertising through Aftermarket auto parts industry publications, joining trade associations, and participation in tradeshow events should be used. Developing partnerships with large logistics industry promoters such as Inboundlogisitics.com is also necessary. Through these partnerships, *Company Name can establish itself as an industry leader by providing articles and gain additional exposure through the partners’ websites and/or publications. 1
  20. 20. 3.7 Marketing Mix As an International Transportation Specialist *Company Name is a third-party logistics (3PL) and application service provider (ASP) specializing in U.S. trade lanes with Asia. *Company Name is an experienced consolidator with corporate offices and an extensive Container Freight Station (CFS) infrastructure throughout China and the Far East. As a mid market company with both a global reach and a local touch, *Company Name is able to pay individual attention to customers. It employs a multi- national staff and affiliates in more than 75 locations worldwide. *Company Name is a customer-driven channel specialist distinguishing itself with operational experience in emerging markets with a reputation for exceeding expectations. *Company Name is a qualified leader in I.T. based cargo management, offering state of the art tracking systems developed in-house, iRadar. By not being carrier affiliated, *Company Name ensures unbiased, customized transportation solutions. The manufacturing of auto parts in China has grown exceptionally over the past seven years. United States' imports of auto parts from China have grown by over 28%, making it an ideal target market. *Company Name's current existing presence in Asia makes expanding into additional industries a natural product extension. Pricing is determined by shipping companies and is typically standardized. Rates are rather price inelastic given there are not many cheaper substitutes or alternatives available. Importers and 3PLs are therefore forced to pay what the market bears. Theoretically, if the ocean freight transportation costs became too high, importers might stop importing and U.S. manufacturing would increase. However, in the current environment, that is highly unlikely due to overseas labor costs – the main component of the overall landed cost of goods – is so low. Pricing is based off the ocean container “base rate” from either Hong Kong or Yantian, China, which is usually the same rate, to the final destination in the U.S. Other import origins (i.e. Shanghai, Bangkok, etc.) are simply add-ons (aka “arbitraries”) to the per container base rate. For example, typical base rate ocean container rates are as follows: •Hong Kong or Yantian to door-Charlotte, NC: $3,500/40’ container •Hong Kong or Yantian to door-Riverside, CA: $1,800/40’ container •Hong Kong or Yantian to door-Detroit, MI: $4,300/40’ container Personal selling, advertisements in industry magazines, and trade show participation are the keys to promoting *Company Name as a new 3PL entering the auto parts logistics industry. Press releases and editorial articles can also demonstrate *Company Name's customer-centric focus as well as expertise and experience in the logistics industry. By positioning themselves as superior channel specialists, credibility and awareness can be established. 3.8 Marketing Research For continuing success in the auto parts business *Company Name should keep a finger on the pulse of the auto industry. *Company Name should continually participate in auto industry associations actively networking at various tradeshows and conferences. In addition, *Company Name should work closely with existing customers for repeat businesses as well as referrals leading to new business opportunities. Subscribing to professional research reports both regarding the auto industry and 3PL providers would help in monitoring industry trends. 1
  21. 21. 4.0 Financials *Company Name' current plan does not anticipate closing sales in 2008 as its main focus is penetrating into the automotive parts logistics industry. In order to gain exposure, the allocated marketing expenses are $25000. If sales were achieved during the penetration period, $500,000.00 in sales would be required to break even against the marketing budget. $500,000.00 in sales equates to selling 125 containers at $4,000.00 per container shipping from China to the United States. The plan assumes two important trends: First, a steady increase in sales as *Company Name's customer base grows. *Company Name will have to take on additional risk in order service the needs of its new clients, auto parts wholesalers and retailers -- if the plan is implemented due to the increased securing of container space from its shippers. Second, as *Company Name gains transaction in this new market, marketing expenses should decrease as word of mouth and referrals become the primary source of marketing. Initial marketing expense must be quite high comparatively given that we are building a reputation and marketing without the leverage of past marketing, starting from zero. 4.1 Break-even Analysis In order to recoup the marketing costs associated with pursuing the auto parts industry, *Company Name must ship 125 containers at an average of $4,000.00 per container. This will generate $500,000.00 in revenue and $25,000.00 in income, which will cover the marketing budget. For each additional container shipped will realize *Company Name a profit. It should be noted that *Company Name bids for container space with the shipping companies each March. The costs that *Company Name incur both fixed and variable are incorporated into the Request for Proposal (RFP) bids made to the shipping company based on the amount of container space purchased for their annual sales cycle. The cost of pursuing business with the aftermarket auto parts is a non- standard cost will not be accounted for in the RFPs in 2008. 4.2 Sales Forecast Unknown 4.3 Expense Forecast As previously mentioned, *Company Name has an annual not a monthly sales cycle. The budget for sales and related expenses were already incorporated into last year’s RFP to the shipping companies. The 1
  22. 22. marketing expenses are additional expense not accounted for in last year’s RFP and will be used to promote brand awareness for the upcoming sales cycle. The total budget is $25,000.00 which is the marketing budget to promote and gain entry into providing third party logistic services to the aftermarket auto parts industry. *Company Name is not likely to significantly increase their sales and marketing expenditures over the next 3 years. The current budget for this endeavor is $0. The increase in the budget would be effective January 1, 2008. The marketing budget will be spent on advertising and attending trade shows to promote *Company Name’ services. Currently, *Company Name does not provide third party logistic services to this industry and must introduce its product to this industry. The lar*Company Namet marketing expenditures are in magazine advertising. In order for the Aftermarket and Wholesale segments to gain awareness of our service, *Company Name must promote itself in industry publications. Attending trade shows is the second most costly marketing expenditure. These trips are vital to gain face time in front of prospective clients. Expense Budget 2008 Design Advertising Taipei International Autoparts and Accessory Tradeshow $6,000 Magazine Ad - Automotive Logistics $4,000 Magazine Ad - Automotive Industries $2,000 Magazine Ad - Automotive Industries $0 Trade Association Fees - Automotive Aftermarket Industry Association Promotional Items Auto Aftermarket and Tuning Fair (Tradeshow) Table: Marketing Expense Budget Marketing Expense Budget 2008 2009 2010 Design Advertising $1,000 $750 $500 Taipei International Auto parts and Accessory Tradeshow $2,500 $2,500 $2,500 Magazine Ad - Automotive Logistics $5,000 $5,000 $5,000 Magazine Ad - Automotive Industries $6,000 $6,000 $6,000 Magazine Ad - Automotive Industries $5,000 $5,000 $5,000 Trade Association Fees - Automotive Aftermarket Industry $1,000 $1,000 $1,000 Association Promotional Items $2,000 $1,500 $1,000 Auto Aftermarket and Tuning Fair (Tradeshow) $2,500 $2,500 $2,500 Total Sales and Marketing Expenses $25,00 $24,25 $23,500 2
  23. 23. 5.0 Controls Stringent control activities must be in place in order to monitor quality and customer service satisfaction so *Company Name can respond immediately to any problems. Once contracted, customer relationships will be managed using reviews, customer satisfaction surveys, problem resolution, and continuous improvement. The following performance metrics should be implemented involving key performance indicators reported on a regular basis: Sales Metrics Customer Service Metrics • • Number of retained customers On-time delivery • • Number of sales calls On-time pickup • • Amount of new revenue Orders shipped • • Amount of recurring revenue Space utilization • • Number of proposals given Claims ratio • • Competitive knockouts Rating and billing accuracy percentage Marketing Metrics • Cost per shipment vs. historic cost • Cost per interaction by campaign per shipment • Customer retention rate • Monthly optimized cost savings • New customer retention rate • Customer satisfaction 2
  24. 24. *Company Name should aim to embrace a top-to-bottom quality management approach to keep its customer retention rate above 95%. *Company Name should ensure that all the stakeholders involved in the implementation of the contracts are kept informed with daily updates via the tracking system. Executive summaries are to be sent regularly. The daily updates would help minimize phone calls coming from higher-ups inquiring about the progress of the contracts undertaken. 5.1 Implementation The sales cycle is typically yearly from May 1 to April 30 of the following year. *Company Name purchases container space from the shipping companies. The sales team makes calls to renew contracts beginning in January and signs new clients to gauge amount of space needed. Contracts, however, do not have to be signed in January; they can be done at anytime. In March, Request for Proposals (RFPs) are sent to the shipping companies based on anticipated space needed. *Company Name assumes the risk for unused space. Any clients that do not use the space they requested are not penalized by *Company Name. However, *Company Name may face additional penalties from the shipping companies for not using the contracted space. *Company Name does also have the ability to obtain more space if needed. The first four bullet points will happen immediately between January and April • Create prospect list of 10 potential clients, wholesaler/importers & retail chains • Generate sales calls to these prospects. • Create/design advertisement that can be used for trade publications and brochures that target the aftermarket auto parts. • Attend trade shows • Ink one to two contracts, not necessary immediately, this is longer term goal Longer term goals • Increase prospecting follow up with prospects met at trade show -- six months • Within 1 year meet breakeven for marketing budget.—125 containers • Ideal target is 800 containers signed for the 2009 RFP • Year 2 leverage relationships built with clients to increase client base and containers.
  25. 25. Table: Milestones Milestones Milestone Name Start Date End Date Budget Department Create Prospect List 1/1/2008 1/31/2008 $0 Sales Sales Calls 2/1/2008 2/28/2008 $0 Sales Design Advertising 1/1/2003 1/15/2003 $1,000 Marketing Taipei International Auto Parts & Accessory 4/9/2008 4/12/2008 $2,500 Marketing & Sales Show Auto Aftermarket and Tuning Fair 4/15/2008 4/20/2008 $2,500 Marketing & Sales Magazine Ad - Automotive Logistics 3/15/2008 4/15/2008 $6,000 Marketing Magazine Ad - Automotive Industry 2/1/2008 3/1/2008 $5,000 Marketing Magazine Ad - Automotive Industry 1/1/2008 12/31/2008 $5,000 Marketing Promotional Items for Tradeshows -- Key 11/15/2008 12/15/2008 $3,000 Marketing Chains & Pens Totals $25,000
  26. 26. 5.2 Marketing Organization There are several layers of management within *Company Name. As a privately held company, the ownership is more heavily involved in the day to day operations. Tony Bikhazi is President of the Americas and one of three owners. David Bennett reports directly to Tony and is the Vice President of Sales and Development heading the U.S. sales and marketing function. Karim Azar is the Director Sales Administration and Planning and reports to David. Philip Wolfe is the Sales & Marketing Coordinator but primarily focuses on inside sales and reports to Karim Azar. Bill Smith is the Director Supply Chain Management whose central focus on marketing role and reports to David. Jason Manganaro is the Marketing Communications Specialist and reports to Bill. Lindsey Heiden is a Marketing Intern and reports to both Jason and Bill. Given the multiple levels, *Company Name’s entire marketing organization will be involved in the effort. Specific roles are as follows: Bill Smith will be responsible for the marketing plan implementation, working closely with sales management (David, Karim) to guide the sales force effort (sales calls). The actual marketing effort (press releases, advertising/promotion, execution, campaigns) will be conducted by Bill and Jason. Critical issues to the success of the marketing effort include hiring a 3rd quot;Full Timequot; marketing employee in 2008 to help Bill and Jason.
  27. 27. REFERENCES Automotive Aftermarket Industry Association 2008 Schedule of Events. http://www.aapexshow.com/. Retrieved December 4, 2007 *Company Name’ website. (2007) www.*Company NameExpress.com. Retrieved throughout the semester. *Company Name. (2007) *Company Name MKTG MBA Project Overview UNCC 9_17_07 presentation. *Company Name. (2007) *Company Name Marketing Department. Segment Analysis: Auto Parts presentation Gordon, Benjamin. (2006) State of Industry and Opportunities. http://www.eyefortransport.com/3pl2007/ knowledge_center_download.shtml. Retrieved November 20, 2007 IBIS World Industry Report. Freight Transportation Arrangement in the US: 48851. https://connect2.uncc.edu/industry/,DanaInfo=www.ibisworld.com+default.aspx?indid=1209. Retrieved October 27, 2007. IBIS World Industry Report. Automotive Parts and Accessories Stores in the US: 44131. https://connect2.uncc.edu/industry/,DanaInfo=www.ibisworld.com+default.aspx?indid=1012. Retrieved October 15, 2007 IBIS World Industry Report. Motor Vehicle Supplies and New Parts Wholesalers in the US: 42112. https://connect2.uncc.edu/industry/,DanaInfo=www.ibisworld.com+default.aspx?indid=914. Retrieved October 15, 2007 International Trade Administration website. (2007) http://ita.doc.gov/td/auto/data/index.html. Retrieved October 22, 2007 The North American 3PL Market – A brief analysis of eyefortransport’s recent survey (2007). http://www.eyefortransport.com/3pl2007/knowledge_center_download.shtml. Retrieved November 20, 2007
  28. 28. Appendix Table: Marketing Expense Budget Marketing Expense Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Budget Design Advertising $1,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Taipei International $0 $0 $0 $2,500 $0 $0 $0 $0 $0 $0 $0 $0 Auto parts and Accessory Tradeshow Magazine Ad - $0 $5,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Automotive Logistics Magazine Ad - $0 $0 $6,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Automotive Industries Magazine Ad - $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,000 $0 Automotive Industries Trade Association Fees $1,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 - Automotive Aftermarket Industry Association Promotional Items $2,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Auto Aftermarket and $0 $0 $0 $2,500 $0 $0 $0 $0 $0 $0 $0 $0 Tuning Fair (Tradeshow) Total Sales and $4,000 $5,000 $6,000 $5,000 $0 $0 $0 $0 $0 $0 $5,000 $0 Marketing Expenses
  29. 29. Appendix Table: Sales Performance Metrics Dashboard Sales Metrics January 2008 - December 2008 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Sales Metrics Number of retained customers Number of sales calls Amount of new revenue Amount of recurring revenue Number of proposals given Competitive knockout
  30. 30. Appendix Table: Customer Service Performance Metrics Dashboard Customer Service Metrics January 2008 - December 2008 Jan- 08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 On-time delivery On-time pickup Orders shipped Space utilization Claims ratio Rating and billing accuracy percentage Cost per shipment vs. historic cost per shipment Monthly optimized cost savings
  31. 31. Appendix Table: Marketing Performance Metrics Dashboard Marketing Metrics January 2008 - December 2008 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Cost per interaction by campaign Customer retention rate New Customer retention rate Number of customer referrals Customer satsfaction

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