HB English <br />Kindergarten<br />Diane, Flora, Nanhee and Seung Tae<br />Dr. Lenard Huff<br />December 4, 2009<br />I. Executive Summary<br />Haeng-Bok English Kindergarten is a unique entrepreneurial venture that our team will set up in Busan, South Korea. HB English Kindergarten brings exceptional English learning environment to the Koreans that are eager to taste “the real world experience”. The English education is very important among Koreans and the English education business will never die in the next several decades. Since English is the international language, people spend a lot of money in this area. The problem is that not many people are satisfied with their ways of studying English. They are also disappointed with the results they get out of their studies. They have wrong purpose and poor method of studying the language. They tend to memorize vocabularies and practice solving exam questions. By doing this they hope to do well on the national exams so they can go to a better college or secure a better position. They only become good at taking exams, but their ability to speak the language is weak and they are often afraid to communicate with foreigners. Our institution will resolve these problems by providing them opportunities to meet with a lot of foreign friends and carry out English conversations with them freely and naturally.<br /> There are many English teaching institutions in South Korea; however, there is no English kindergarten which teaches children classes in English only. There are many institutions that offer Basic English classes. The idea of our institution is that everything we do is going to be done in English just like the ones in the U.S. and other English speaking countries. There are four million people living in the city of Busan, South Korea. Parents are eager to have their children learn English as well as other languages such as Chinese and Japanese. The need of good English education is great. We will take this opportunity and capture attention of the customers by providing a unique service they need the most. We have an excellent curriculum and just the right size of classes. We will also hire those qualified teachers with college degrees from overseas including the U.S., Canada, the U.K., Australian, and New Zealand to teach our students. <br />The target customers are children ages from 5-10 who live in Busan, South Korea. Our first institution will be organized in the Haeundae district. We are planning on expanding it throughout the nation as the business grows in the future. Haeundae is a rich place and most people do not care about spending money on a good education. This enables us to target pretty much anyone that live in the area. However, we will focus certain target group to better reach out to them. Our selected market segments are trade market, service market, education market, and technology market whose family income is $2,000-$2,900, $3,000-$3,900, and $4,000 or more a month. Our positioning strategy will have a competitive advantage over our competitors. We will be known as a place where children can have English conversations freely with classmates as well as with native English speaking teachers.<br />Our product, English educating service, will be distributed by quality teachers from all over the world. We will hire teachers through National Education Association, the Association of American Educators and BYU-Hawaii. We will also conduct interviews with them through Skpye.com to see their qualification and commitment to teach our children. Koreans have a tendency to judge the education quality by price. The higher the price, the better the education and because of this misconception, that price can be the key indicator of quality of education. Those who charge small amount of money won’t survive in the business. We are looking at $700/month per student. If we can get quality teachers, provide excellent curriculums, and charge students a reasonably high price then we will be successful in this business. Our goal is to branch out throughout the nation, and hopefully to have branches in all of the major cities in Korea. We will have a qualified successor to continue this business, so we can improve Korean children’s English education throughout the nation.<br />II. Market Analysis<br /><ul><li>The Marketing Environment
Busan is a city of four million and is the second largest city next to Seoul. The city is located on the east bottom of the nation and is very dense with high-rise apartments. Although there are many foreigners moving into Busan, the majority of them are pure Koreans. The target age group for this institution is from five to ten years old. The estimate number of targeted students is 350,000.
Busan has industrial economies and offers rich markets for many different kinds of products. We can purchase cars, computers, cell-phones, and books at a shopping mall or online. It is a developing city and many international trades are made in Busan. People in Haeundae, the richest spot in Busan, are fairly well off and are willing to spend a lot of money on their children’s English education.
Korea does not have many natural resources like oil, gold, fish, or land. Geographically, it is a small country packed with people. Rich countries like Japan, the U.S. and other European countries are blessed with many natural resources which allow people to have more job opportunities. However, in order for Koreans to survive in this competitive country, they must educate themselves well so they can learn some sort of service, manufacturing, or technology job to provide for their family. This is the reason that they are so interested in getting a great education so they can be compatible. Koreans are not hesitant to invest a lot of money on education because most of them consider getting a good education as their first priority in their lives.
Technology has contributed a large part in developing Korea’s English education. Students are now having one-on-one conversations with their tutors on the phone. They even talk to each other on Skype and discuss about school work, education, and daily events. Seung Tae made many English speaking friends when he served his LDS mission in California, studied Business Management in Hawaii and British Columbia. He is connected with a lot of his friends on Facebook and Skype. We will definitely take advantage of these free online services and human resources as we recruit quality teachers for the kindergarten. Improvement of technology has made it possible for us to conduct an interview with our potential teachers without having to travel thousands of miles. Teachers can also be connected with our students through the technology.
There were no regulations on selecting English teachers some years ago. This caused many problems in society. People who did not have anything to do in their lives would come to Korea and make easy money. They did not have required experience and skills to teach students other than being able to speak the language fluently. A lot of them were drunk at night and had sex with their students. When the Government found out about these issues, they set a strict regulation on selecting teachers. Now foreign teachers must have either an English teaching certificate or a Bachelor’s degree of any kind. The Government is allowing Koreans to set up any kind of private institution. Therefore, it is easy to set up an English kindergarten as long as we have necessary resources and plans.
The earlier students start to learn English, the better they are able to master it. By offering an excellent English speaking environment, students are able to meet the needs of their educational goal. Furthermore, they are going to better perform in elementary school, middle school, and high school than those who did not have this unique experience at HB English Kindergarten. They are going to have bigger vision about life as they make friends with the international teachers and experience the diverse cultures we offer. They will have desires to be the leaders of the world as they master English at an early age. The vision we have will not only meet the needs of English education goals of students, but it will certainly attract and satisfy many the parents of the children who are enrolled at our institution.
Competitor and Competitive Environment analysis
There are many institutions in business that meet the needs of the students. There are two competitors we have to compete with: Korean kindergarten and English kindergarten. In Busan, there are many Korean kindergartens that teach children basic values of life and a few English kindergartens that teach basic words and phrases. The trend is parents want their children to go to the English one. The cost of attending English kindergarten is a lot higher than the Korean ones since there is an additional cost such as hiring foreign teachers. The average tuition for the Korean kindergarten is around $250/month and $550/month for English ones in Busan. It is interesting to note that one of the most successful ones in Kangman-gu in Seoul charges up to $2,000/month per student. The average number of students enrolled at an English kindergarten in Busan is around 80 while about 120 students are enrolled at a Korean kindergarten. The government will tell the institution the maximum number of students each institution can accept and the decision is made based on the size of the building and other facilities. Our competitor Corem 21 currently has 70 students enrolled at their school, and there are 85 students enrolled at the Kid’s Club. Their curriculums, school hours, and quality of teachers vary from each institution. As we researched on some of the institutions, there were not many that have classes taught in English only. As we come up with an excellent curriculum and charge a reasonably high price, we will stand out among our competitors.
Kangnam-gu is a district in Seoul and is packed with private institutions. Those successful institutions have been expanding their business to other cities such as Busan, Daejeon, Kwangju, Daegu and Incheon. The big institutions are constantly trying to have more students at their school. Smaller ones are also trying to improve their business. Their goals seem to be expanding as much as they can so they have branches throughout the nation. Their most important customers are those who are already enrolled at their institutions. Koreans are not hesitant to change their mind when it comes to getting an education. Parents will transfer their children from one institution to another if they are not fully satisfied. However, satisfied parents are very loyal and will bring more students to institution. We believe that the power of word of mouth is real and it can have a tremendous impact on an English teaching business. In conclusion, our competitors are very focused on keeping the students by providing professional services and unique experience.</li></ul>There are many key success factors for this business to be compatible against others. First, we must have a good curriculum. Parents will know the progress of their children attending our institution. They will judge us by how much the children’s English has improved. Only the good curriculums can improve children’s English. Second, we must have good teachers with love. We need teachers who will not only put great effort and time into this work, but they must know how to deal with children. Third, the size of a class must be 8-10 children. The size of a class is very important. Parents want their children to be in a smaller group where they can get more attention from the teacher. Right now, many institutions have 20 children in a group. However, a group of less than 10 is more favorable among the parents. Fourth, if those success factors are met, reasonably high tuition fee would not be a problem; parents are willing to pay. We have seen many institutions going out of business because they failed to have good curriculum, did not have good teachers, put too many children in a class to save cost of foreign teachers, and did not know how much to charge students. If our institution can satisfy those success factors, we will not only have the students to stay, but they will bring many other students to our institution.<br />Weighted Competitive Strength Assessment<br />KSF/Strength MeasureWeightCorem 21Kid’s ClubHB EnglishKindergartenGood curriculum0.305/1.56/1.810/3.0Quality Teachers0.255/1.257/1.759/2.25Size of Class0.206/1.27/1.49/1.8Tuition0.255/1.255/1.259/2.25Sum of Weights1.00Overall Strength Rating220.127.116.11<br />Rating Scale: 1 = Very week; 5 = Average; 10 = Very Strong<br />First off, we had a hard time completing this assignment. A lot of institutions would not give out information over the phone. Luckily, we had a few that answered our questions. We believe that having a good curriculum is the most important key success factor. Corem 21 and Kid’s Club are doing what others are doing; they have their own text and use it over and over. We gave a little more score on the Kid’s Club curriculum because they are going update next year. All of the institutions had both Korean and foreign English teachers with a Bachelor’s degree. Corem 21 had Canadian teachers only while Kid’s Club had diverse teachers. For that reason, we gave more points for Kids Club. We believe a class of 8 is the most favorable. Corem 21 has a class of 12 and Kid’s Club has a class of 10. We do not know what would be the best tuition fee to charge. The average in the market is $550/month in Busan. However, we feel that as long as we have excellent teachers who teach great program, we should be fine charging $700/month per student. Corem 21’s tuition was charging average amount of $550/month. Kid’s Club was a bit higher than that. We have given high scores to our institution because we are going to have an excellent program, exceptional teachers, a class of 8, and a reasonably high price.<br /><ul><li>Customer Analysis
Korean children start attending kindergarten when they turn five years old. They go to public kindergarten (Korean kindergarten only) or private kindergarten. In the public kindergarten, children are taught values of Korean life, the Korean alphabet, phrases, Korean cultures, music, and art. Private kindergarten has two different types which are Korean kindergarten and English kindergarten. Both types teach children the same thing the public kindergartens teach. However, there is an additional class that the English kindergartens offer. They teach children English vocabulary and phrases. Our institution HB English Kindergarten falls into the private kindergarten category. We will make ours stand out by following our unique concept that “English is going to be the only language spoken at our school.” The reason that the parents send their children to the Korean kindergarten is to have them learn values of Korean life and its culture. The reason for children to go to the English kindergarten is to improve English, so they can be confident in their education pursuits.
The targeted market will be the families living in Busan, South Korea. We will mainly focus on those families with children between the ages of 5-10 years old and fit for kindergarten. The parents will be the main buyers. They would be looking at our teachers and how well prepared they are not only to teach, but to be involved with their children and the culture that will surround them. Each parent seeks to know what our curriculum is and what we promise to have their children gain. They will make their decisions upon these known factors and put their full support and trust in our institution. The selected market segments are trade market, service market, education market, and technology market whose family income is $2,000-$2,900, $3,000-$3,900, and $4,000 or more a month. The income level we quoted is substantial to make sure that payments are kept and that parents are able to afford our services. Busan is industrialized and people work in different areas. Our target occupation includes those who work in service, education, trade, technology, and so forth. </li></ul>Parents are buying quality education and unique cultural experience for their children. Those who are in a world-wide trade business will feel the need for speaking English fluently, so they are buying our service to meet the needs of their goal. Teachers have high education and they expect their children to have high education also. They are buying our service to maintain their high standard. Technicians are buying ability to interpret English programs from our school. Those who are in service are buying English communicating skills at our school. <br />Koreans have a tendency to think that they must better perform than other students at school. In other words, they are constantly seeking a great education to make themselves compatible in the competitive Korean society and in the world. We would like to illustrate how competitive it is to get a good education by showing a few examples. A typical Korean student would attend about 3-4 private schools after the normal school hours. They attend math, art, music, English, martial arts, and other foreign language schools. They are not only doing a lot of work in different areas, but they are constantly seeking a better school to attend. For instance, if a student performed very well in a regular school, parents would want to know how he or she studied to obtain such achievement. If the student tells them that he or she went to a certain private institution, a lot of parents will transfer their children to that institution in hopes that they would perform better at the regular school. This unique trend is the main reason that our customers will buy our service. This trend has been a factor in way the private education expense has been rising in the past decades. Even though the government is working on improving the quality of the public education, we predict that the cost of the private education expense will remain high in the next 10 years or so. <br />With information given above, we will now get to the point why each segment will by our service. We are going to be targeting different segments; different occupations with different income levels. Those who are in a world-wide trade business will feel the need for speaking English fluently. It is crucial to be able to communicate with representatives of foreign countries in order to make a successful trade. Students will be beneficial if they mastered English especially since Busan is one of the largest trading cities in the world. For those who are in the technology industry will also feel the need of knowing English. We obtain a lot of information through internet. English is the most used language in programming and online. A lot of useful information is written in English and also you may have to the language in order to set up a program for your company. Service is one of the biggest business areas in Busan. We have many foreingers visit Busan each year. Students will definitely have advantage over others if they spoke English because it is such a big asset for any company that deals with foreigners. <br />Income is also an important factor that parents will decide whether they will let their children to come to our school. The average Korean family earns around $2,000 dollars a month and about $3,000 dollars for households who reside in the Haeundae district. We are going to focus on families that earn $2,000+ a month. For those who fall in the $2,000 - $2,999 category might be hesitant to pay $700 tuition fee. However, we will get their attention by focusing on the opportunity cost they will have to pay if they don’t educate their children well. Once they realize that their children will enjoy learning at our school, they are more than happy to invest $700 in them. Many people who are in service fall into this category of $2,000 - $2,999 a month. Second, those who earn $3,000 - $3,999 a month are considered financially well off in the Korean standard. They will seek our service if they get to know about what we can offer their children. Many of those who are in education fall into this category. Our service charged at $700 monthly will be no hassle for those who make $4,000 and more. People with trading and technology skills tend to make a lot of money and they fall into this category. At this level of income they look for products and services that are at highly priced and classify them as high quality products. At our costs and charges the parents will instantly feel the need to get involved with our institution.<br />Parents are the major participants in the buying in each segment. However, there are many who can influence the children to come to our school. For example, aunts and uncles can refer their nephews and nieces to our school. Koreans want their relatives to be highly educated so they often search for an institution where their nephews and nieces can attend. Another influencing group consists of middle school, high school, college students who wish their younger siblings to learn English at an early age. They all know how hard it is to learn English and many of them wish they started learning it at earlier age. Once they get to know of our program we are certain that they will refer their siblings to our school. Grandparents can be a big supporter of the children. They are concerned about the welfare of their grand children and often pay for their education.<br />When customers seek for an education they look at different sources such as word of mouth, internet, advertisement and community bulletin board. Word of mouth is the most important factor when customers make decisions. Therefore, we must come up with an excellent program so the satisfied customers will bring their friends to our school. The customers will want to know what kind of curriculum we have, how many students are there in a class, the background of the teachers, and the tuition as they seek information in this area. We will invite all customers to take a tour at our school. We will explain to them what we do and how we take care of our students. After consulting with our representatives, they will come to make a decision whether to have their children to attend our school. We will accept cash, credit card, debit card, and bank transfers as payment.<br />The customers will buy when they see the necessary need for the service we offer. Those who earn $2,000 - $2,999 will buy our service when they see the opportunity cost of not sending the children to our school. Those who earn $3,000 - $3,999 will buy our service when they come to know what we offer will benefit their children. Those who earn $4,000 will buy our service as long as our program meets their educational goals and standards. Trade makers will buy our service when they see the need for their children to be better at English communications. Technicians will buy our product when they are frustrated with programs run in English. Those who are engaged in service will also want to better communicate with foreigners; therefore they will come to our school. <br />The customers are required to make monthly payments to come to our school. Although, we will not discriminate those who don’t make the payments on time, we will encourage them to make the payment at a set date such as the start date of a student taking our classes. We are willing to give 10% discount to those who enroll for the next three months in advance and 20% discount to those who enroll for the next six months or longer. To sum up, the customers can buy our service monthly, every three months, or every six months.<br />Our service will be offered in Haeundae, Busan. We will branch out and put more institutions at various locations throughout the city and the nation when we have enough assets and resources. For now, we will focus on those that live in Haeundae and other areas close by. We will operate shuttles for our customer’s convenience. They will have no problem commuting to school from home because we will pick them up at 8:30 a.m. and take them home at 3:00 p.m. when the school finishes. <br /><ul><li>SWOT Analysis </li></ul>Strengths: <br /><ul><li>High qualified English speaking teachers. One of our strengths is employing the high qualified teachers from overseas. This can be a great asset to the company. This can also be an attractive point to the customers who are the students. Parents really want to spend their money on whatever opportunity that is best for their children.
Curriculum - This is another strength that we have. Providing a great curriculum for all that we teach in school will be a great benefit. We will use the English language to teach all the classes. This can also make us unique and stand out from our competitors.</li></ul>Weaknesses:<br /><ul><li>High Costs - Providing and starting up a new English Kindergarten in Korea will cost us a lot of money. These costs may include rent-building, rent-shuttles, facilities such as tables, school resources, text books, new technologies-computers, etc. This may cost us more than what we have. However, providing a best learning resource for children will help us to attract more children in the school and help us to solve the weakness that we have. Children are going to pay high tuition since our school is great learning place for them.</li></ul>Opportunities:<br /><ul><li>Location - The city of Busan, South Korea is the second largest city in Korea. This is a place for us to start up our business.
Environment or Nature - Agriculturally speaking, the city of Busan is very poor. Busan has a lack of natural resources. Because of this, education became the most important thing in the lives of most Koreans in Busan. Getting good education is the only way they can survive in this competitive country. There will be a greater chance for us to educate more children as the parents really want their children to success.
Population - Providing a great English school for children in this big city will be a successful business. The city of Busan holds four million people. This can be a great place to start up an English school, since people need to get better education in order to survive. Many people in the society means that they really need good education.
Economic - There will be a greater opportunity for us to get and attract more customers (children) because the economic in Busan is great. Haeundae is the richest part of Busan and we have a positive feeling that these people want their children to get a very good education. </li></ul>Threats:<br /><ul><li>Technology - Our major threat is Technology. The improvement of technology might change the learning style of the children. Parents may prefer home schooling or using the internet and other devices to educate their children rather than sending them to private schools. This may affect us and may be hard for us to market our business. However, we have a greater potential of getting more children in our school because we are providing a greater learning resources and employ qualified teachers. Because we are providing a great service, parents can still send their children to our Kindergarten.
Cultural differences - Hiring overseas teachers may be a problem to some other Korean parents. Some parents may have different wants and views of others, especially the Americans and Canadians. This may hold the children from coming to our school. But we will not believe in this. We will try our best to market our product well and make this as a great learning resource for their children.</li></ul>III. Marketing Strategy and Tactics<br /><ul><li>Targeting Strategy</li></ul>The selected market segments are trade market, service market, education market, and technology market whose family income is $2,000-$2,900, $3,000-$3,900, and $4,000 or more a month. <br /><ul><li>Trade: Busan is one of the largest trading cities in the world. Therefore, there are a lot of people who are engaged in this industry. They are constantly communicating with other foreign companies. The need for improving their communication skills is great. They want their children to improve English because they hope to have their children to continue the trading business.
Service: Literally, everybody is engaged in some sort of service industry. They may be selling burgers at a local McDonald’s, or they may be working at a call center directing hundreds of phone calls each day. Most Koreans come in contact with several foreigners daily. This is the reason that their need to improve English is increasing. They want and hope to communicate with foreigners better, so they can increase sales for their company. They investigate a lot of time and effort in learning English.
Education: Those who are in Education business are categorized as lower-upper class by the Korean standard. People look up to teachers and the teachers want to maintain their status. They clearly understand the importance of getting good education. They want their children to be highly educated, so they can also enjoy high status in their lives. They also feel the need of improving English because they are encouraged by other peer group teachers and the government.
Technology: Korea is very advanced in technology. Those who are in this industry must be quick to make adjustments in order to survive in the rapid growth of technology. To better compete against others, they must better educate themselves. They want to stay on top of others and hope to be the best at what they do. Knowing English can help them stand out among others. They strive to spare time to learn English.
$2,000 - $2,999: This group earns about the average Korean income. The characteristic of this group is they are careful about where they spend money. However, their needs of getting high quality education are great. Therefore, they want to invest a fairly large amount of money on education in hopes that they will be better off later in their lives. Their behavior may be frugal in a way that they are careful about how they spend their money, but we will get their attention by providing them better opportunity costs.
$3,000 - $3,999: This group is considered to be fairly well off financially. They earn more than the average Korean households make. They are less concerned about money when choosing a quality education. Their need for an education is great, and they want to find the right additional schooling for their children. They hope to improve their children’s ability to learn subjects and achievements at school. They are quick to make adjustments if they are not satisfied with their children’s performance at school.
$4,000 or more: This group is categorized as upper class by the Korean standard. There are many successful people who live in Haeundae, and we expect this group to take a fairly large part of the membership. Because they are financially strong, they are relaxed and enjoy their lives travelling, golfing, shopping, and associating with high class people. Their need is to better educate themselves because they hope and want to maintain their high qualify life. They are relaxed, but they are good at pursuing the best possible choices such as leisure life, sports lessons, meeting with upper class people, and education.
Overall Positioning Strategy and Value Proposition (or Unique Selling Proposition)
HB English Kindergarten will be known as a place where children can have English conversations freely with classmates as well as with native English speaking teachers. They will also enjoy variety of cultures of the world from our curriculum. Our unique positioning will have a competitive advantage over our competitors. We are offering our customers what other institutions do not have. Korean kindergartens only offer to teach Korean values, culture, alphabet, and mannerism. Existing English kindergartens offer what Korean ones are currently doing, plus English classes that teach basic vocabulary and phrases. A weakness we acknowledge is that we will not be offering what our competitors are mostly focusing on. If customers are seeking to learn Korean values and culture, they may choose to go to other institutions. However, we will certainly grab attention of those who are seriously interested in learning English and experiencing the global culture. We will overcome our weakness by being the best at improving children’s English. We believe that if we can organize an excellent curriculum and hire quality teachers, we do not have to worry about those customers that intend to attend traditional Korean kindergarten and existing English kindergarten. We will have more than enough customers at our institution that appreciate what we have to offer them. In addition, the valued proposition of our institution will quickly spread throughout the city and the nation by word of mouth. The reason that we are choosing this positioning strategy is that by developing a curriculum of an English only speaking Environment, this will not only help resolve Korea’s poor English education system, but our customers will also improve their English faster than any other institutions can help them improve it. The summarized our valued proposition or unique selling proposition is “to improve children’s ability to communicate in English, HB English kindergarten provides an English only speaking atmosphere and global culture because we believe being in an English speaking environment to be the fastest and the most effective way to master the language.”
We will be focusing on selling only one type of product that is English educating service. We have not yet decided whether to include additional charges such as shuttles, lunch, and books into tuition. Most of our competitors only charge students tuition. They do not mention those additional costs to the parents or students. Generally, Shuttles, lunch, and books are either provided for free or they are included in the package. We will research and find out what is the best for our customers and go with their preference. If we decide to include those complementary products into a package, we are willing to give discounts to those who use their own transportation and bring their own food. We will not have to worry about housing and insurance since majority of them will live close by our institution, and they all carry insurance provided by the government. Therefore, it all comes down to one product, English education service and our curriculum.
Core product: When our target customers buy our services they are seeking an outstanding English education, so they can not only improve their ability to read, write, listen, and speak the language, but they will be competent in many areas such as doing school work, taking national exams, and finding a global position. Providing this unique environment of speaking English atmosphere will permit students with many opportunities such as advanced education, better career position, satisfactory salary and higher value of life. This experience is what they seek and is the reason why our customers are buying our services.
Tangible product & augmented product: We do not have many tangible products since we are in the English education services. The only tangible products are school with teachers. If there is any augmented product, we will be providing our customers shuttles, books, and lunch. These additional items are going to be either charged separately or are grouped in the package. If they all come in the package, customers will be required to pay onetime fee for coming to our school; tuition. Although we are looking at $700 as tuition, this is subject to change because of those extra products and services. The reason for providing our students lunch is that they will stay at our institution for approximately 5-6 hours each day. They must be fed in between the class hours. We will come up with our own curriculum and it will be organized into a book. There is cost for designing one and printing. Not every parent has time to take their children to school. This is the reason that our school will provide shuttles to our customers.
Values and personality: Our brand and service will stand for real English speaking opportunity as well as experiencing the global culture. Our brand personality will fall into both excitement and competence category. The students will not only be excited to be involved in our program, but they will stay up-to-date with the classmates and teachers. They will certainly be intelligent in their studies with their mastered English skills. They will also be successful in accomplishing their life goals.
Description of our service: We will provide our customers an excellent English education. They will come to our institution by 8:30 a.m. and go home at 3:00 p.m. We will have a lunch break from 12:30 p.m. to 1:20 p.m. The lunch will be prepared by our staffs. Children will experience diverse food from all over the world. The detailed schedule for each class is described as following:
08:30 a.m. – 09:20 a.m.About me: Children will come to recognize their identity as they discuss about themselves such as things they like to do. They will also discuss things they have done yesterday and go over homework.09:30 a.m. – 10:20 a.m.Math, Science: We will teach children basic math and science. For example, we will teach them how to count, and demonstrate daily science.10:30 a.m. – 12:20 p.m.Social studies: Children will enjoy learning what is going on in the country as well as in the world.12:30 p.m. – 01:20 p.m.Lunch break: Prepared by our staffs and teachers.01:30 p.m. – 03:00 p.m.Art, Music, and P.E.: They will draw pictures, paint colors, sing American songs, and play sports with classmates and teachers.</li></ul>c. New product development<br />We do not have any plans for new product development we plan to do over the first two years. However, we will try our hardest to improve what we have. We will talk with our customers, potential customers, and our teachers to see if there is a way to better serve our students. If we feel that we need to develop new services, we are down for it. But for now, our focus will be not only to stay current with our competitors, but we will also strive to better our institution with what we have.<br /><ul><li>Price</li></ul>HB English Kindergarten offers a unique service to our valued customers. The fact is that the cost of attending an English Kindergarten is a lot higher than the Korean kindergarten. Since we have high qualified foreign teachers, use our great curriculums, using English all the time in school, the size of classes (8-10 children per class), and experiencing the global culture, we would definitely price higher than our competitors. Our prices will be based primarily on cost-based. The cost of hiring high qualified foreign teachers and the cost of living in Korea is pretty expensive. Therefore, our prices will be based primarily on those costs in addition to our unique service. Since we are providing a service to our target customers, we will not rely on price discounts and also we would not use everyday low prices strategy. However, we are willing to give special discounts to those who enroll for a long period in advance to maintain loyal customers and their membership; 10% discount to those who enroll for the next three months and 20% discount to those who enroll for the next six months or longer. Our competitors, the Korean kindergarten charges the students only $250/month and the existing English kindergarten’s average in Busan is $550/month. Our kindergarten will charge the students up to $700/month per students based on the children’s age and the number of years they have been studying English. We believe that our high tuition fee would not be a problem to the Korean parents because the parents want their children to get a best education they can get. The tuition is subject to change and we will adjust it as we further research into additional costs of books, shuttles, and lunch. <br /><ul><li>Marketing Communications
Central message</li></ul>Our central message or advertising platform is to provide a unique English learning environment where students can have English conversations freely with native teachers as well as classmates while students develop the global perspectives and diverse culture at our institution. We want to be viewed as a “global institution” or a place where students can actually feel or taste what the real world is like. A lot of Koreans have a tendency to avoid having conversations with foreigners. They are afraid of making mistakes as they speak to foreigners in their second language. Another reason is that they are not used to be around those of other cultures. However, we have seen many Koreans who have had the real world experience in foreign countries and they have confidence as they carry out conversations with foreigners. A lot of students pay a lot of money to go abroad to gain that “real world experience”, so they can be confident in their studies as well as in career pursuit. We will emphasize our summarized central message “the real world experience”. Our customers and potential customers will come to realize that they can get what they seek without having to study in foreign countries. We firmly believe that we have what Korean students need the most in their education and career pursuit. We need to let everybody know what we have to offer by advertising ourselves effectively and successfully. <br /><ul><li>Marketing Communication Budget</li></ul>First off, we have done a lot of research on marketing communication budget. We used both internet and human resources. We have a friend in Korea who is in marketing communications business, so we took advantage of his expertise. Our total budget for marketing communications is $15,352 for the next two years. We assumed that we would have $100,000 in our hands as we start the business. We acknowledged the importance of advertisement and decided to spend about 15% of our capital on it. We believe that our annual revenue will be $420,000 ($700 x 50 students x 12 months) in the first year. Considering how much money we start with, and how much revenue we expect to earn in the first year, $15,352 communication expense is a reasonable cost. We will explain further why we came up with such amount in the marketing communications mix area.<br /><ul><li>Marketing Communications Mix</li></ul>i. Sales: The maximum sales revenue we can generate in the first two years is $420,000/yr since we are considering taking only 50 students. We will expand our business when we feel it’s necessary, but we assume that it will be in the next 3 years or so. Shuttle advertising, fliers delivered by local newspaper companies, subway advertising, and free internet service will help to get our customers to come to our school. We plan to distribute fliers and put advisement in the subway about 2 months prior to the opening. We will also take advantage of free internet service to promote sales of our service. We will describe more in detail in the following section. <br />ii. Advertising: The following table helps explain how our marketing communications budget will be distributed:<br /> 6 months12 months18months24 monthsTotalShuttle advertising$4,800 $0 $0 $0 $4,800 Fliers$1,600 $1,200 $800 $400 $4,000 Newspaper advertising$480 $360 $240 $120 $1,200 Subway advertising$1,338 $1,338 $1,338 $1,338 $5,352 Internet blog$0 $0 $0 $0 $0 $8,218 $2,898 $2,378 $1,858 $15,352 <br />We have selected advertisements that are effective and cost-efficient. We will have about 3 shuttles running in the first two years. We will paint and put advertisements on the shuttles. The cost of painting each shuttle is $1,600, and this will last for the next two years. We will print fliers and have local newspaper companies deliver them. We will print 100,000 copies and this will be distributed to residents in the Haeundae area where our target customers live. The cost of printing 100,000 copies is $4,000 and an additional $1,200 for distribution by the local newspaper companies. We school will be located by subway line 2 or the green line. With the amount of $1,338 per 6 months, we get 4 frames, 4 walls, and 2 stickers (this goes to the door) on each train for the green line. We will also use free online services such as naver.com, cyworld.co.kr, Facebook and Skype services.<br />iii. Sales promotion: We will use special sales promotions giving 5% discounts to those who enroll for 3 months in advance and 10% discounts to those who enroll for 6 months in advance. We feel that giving such discounts to our customers is a great deal, and many will take advantage of our special offer. We might also consider giving out backpacks and hand towels with our logo on them to our very first 50 customers to promote the sale of our service. Unless we decided to offer backpacks and hand towels, the only cost of Sales promotion is 5 and 10% discounts.<br />iv. Public Relations and Publicity: Shuttle advertisement and subway advertisement will build our public image among those that live in Haeundae. We will make sure that the drivers drive shuttles safely. Each staff will be accompanied in the shuttle to ensure that all of our students travel home and school safely. This will not only earn trust of the parents, but it will also build public image. People will know that we care about the children’s welfare as they see the advertisement on the shuttles. Subway advertisement will also help build our public image. We will design an excellent subway advertisement and place it where it is most appropriate. We will also work with the government with regarding to increasing children’s English education. <br />v. The Internet and other social media: We have decided to not to spend money on internet advertising because we find it very costly and we are only targeting people in Haeundae in the first two years. However, we will use free services such as naver.com and cyworld.co.kr blogs. These blogs are most recognizable free online service among Koreans. We will have our Korean staff create and maintain these services. We will also use Facebook and Skype so the students and teachers can stay in contact at all times. We believe Facebook and Skype will make a great advertising effect for no additional cost. We understand that internet is a very useful tool to promote our sales and build public image. We will certainly take advantage of free online services as a way of advertising ourselves. We will also keep in touch with the parents of students by email, free text messages, and telephone. <br /><ul><li>Distribution/Supply Chain Management</li></ul>a. Suppliers<br /><ul><li>Our main suppliers toward receiving our teachers would be from the many American Teachers Associations working through the National Education Association (NEA) and the Association of American Educators (AAE). We will also be working directly with the BYU-Hawaii TESOL as a way of recruiting our teachers. We will also be providing some internship opportunities for BYU-Hawaii students who are willing to gain the experience from us. We will work with their School of Education Administrative in getting this program along, in this way we already know what their values are and easier for them to accomplish our school’s vision and mission. We need to provide good qualified teachers who are willing to go the extra mile to provide love and support to each student. We have to conduct many interviews, background checks and teaching experience to give us the confidence that we are providing the best English teachers needed for our Kindergarten. Through the NEA and AAE we would get referred to teachers who are interested in investing their time and skills to our institution. Also through direct advertisements we will be able to attract the required teachers. </li></ul>For our curriculum and needed textbooks we will work with the two known associations NEA and AAE to provide us with the support to better our curriculum and also to solidify it. Our textbooks will mostly be shipped from here in America either through Harcourt or Amazon. We know that there are some good English textbook supply shops in Busan like Youngpoong, Kyobo Books and the Englishplus in Haeundae which will be helpful to us if time is our contender. If our textbooks can be provided by our local markets in Busan then we will deal with them, otherwise we will ship from America. For other school supplies like pencils, markers, scissors and so forth, we can obtain them from our suppliers in Busan and the cost will be affordable. <br />As the students will be spending most of the day with us, we will be providing lunch for them. This will be included in the student’s tuition. We will receive our necessary supplies from E-mart which is the largest retail store in Korea. We will also be providing our students with a shuttle service for pick up and drop off. The cost will be $50/month per student. Our service will be contracted through a shuttle service company within Busan. We will look at experienced drivers who know the route and are good at their job to ensure safety for each student. <br /><ul><li>Distributors
We will distribute our products directly to our customers (students). As they pay their school fees they automatically receive textbooks and needed materials for school. These materials will not be distributed to the individual but will be left in at HB Kindergarten to prevent any loss. As we are hoping to provide transportation services, we will be renting shuttle services. We plan to distribute them in the Haeundae are and throughout the city of Busan as the business grows. We will make an agreement with our providers and give them a route so that all our students are cared for. We make sure to provide a comfortable traveling experience for our students in order to attract more students to travel with us and for parents to entrust the safety of their children to our services. Through this service we hope to attract new customers as well.
Customer Service and Relations</li></ul>Our teachers will work closely with each student to attain their trust. As they build this trust we hope that students will feel comfortable to approach their teachers if help is needed. We want to create a name as providers of a fun, loving and friendly learning atmosphere where parents are drawn to bring their children and where students have the desire to learn English. As parents visit we want to show that we care about our students and their progression and success means a lot to us here at HB Kindergarten. Parent - Teacher Conferences will be held beginning and end of every school term. We will work closely to have our focus on our student’s improvements and developing our services. We will always make time for our parents if they want to meet with us to stress any concerns. As for our transportation services we hope to bring safety to our student s. We will make sure that at least one teacher is on the bus to ensure that each student returns home safely. If at all our students are absent from school without any notification from parents, we will contact parents immediately. <br />IV. Budget and Action Plan/Timeline<br /><ul><li>Budget
To begin, our total budget for everything related to marketing is $45,352. This budget is relative for two years. This total budget is divided into several marketing related elements such as marketing communications (as discussed above), marketing research, customer service and new product development. As mentioned earlier, we are going to spend $15,352 of our capital on Marketing Communication, since we acknowledged the importance of advertising our business. Marketing Research will definitely help the growth of our business in Busan Korea. Therefore, based on the Quantitative Marketing Research Method, we would definitely spend 10% of our capital on performing all the steps for effective Marketing Research. Customer Service is one of the most important elements that we will also be focusing on. Everything that can satisfy the needs of our target customers will be more crucial to us. With this in mind, we are going to spend 12% of our capital on Customer Service. This is $12,000 in total for two years. All we want is to make our customers happy and do everything we can to keep them. We will occasionally give gifts to them and plan field trips to various parts in beautiful Korea. Our management would develop a new product during the first two years of our operation. This new product may include a new class being added to the existing classes or it can be anything that would improve our Kindergarten. We just put aside the amount of $8,000 (two years) for that new product development.</li></ul>Marketing ActivitiesYear 1Year 2Total Marketing BudgetMarketing Communications$11,116$4,236$15,352Marketing Research$5,000$5,000$10,000Customer Service$6,000$6,000$12,000New Product Development$4,000$4,000$8,000Total $26,116$19,236$45,352<br /><ul><li>Action Plan Timeline
Start MonthPlanning topics and TasksCompletion DateJanuary 1Organize meeting: preparation of the supporting documents, project structure, calendar of activities, setting up of project governing bodies. Start up of the mapping phase.April 1FebruarySet the standard of the school. Revise the regulations and rules of the kindergarten.February 30MarchCreate new ways of marketing communications. Create a school television channel specifically for HP Kindergarten.June 30AprilAnalysis of existing environment and the potential market offer in order to verify the characteristics necessary for the creation of a “English Kindergarten” specifically dedicated to facing local needs in the area of adding value to the all private Kindergartens.July 31MayMaking sure that security is okayMay 31JuneMake a list of all the needed technology such as computers, the use of the internet, phone lines for the staff members and so forth.November 1JulyGet more supplies such as tables, chairs, and the teaching supplies for our teachersSeptember 1AugustAlso provide more supplies for the students. More books and other supplies.August 31SeptemberMaintenance should be available for fixing electricity, cleaning the classrooms and doing other assigned work.September 30 OctoberSelect SuppliersOctober 30NovemberMake sure to have enough teachers. Get ready to open our new serviceNovember 30DecemberProvide Service to the target customersJanuary1