The primary data that will be included in this assignment is a questionnaire. The secondary data that will be used is information available on the Internet.
Questionnaire
- Do you have a mobile phone?
Yes □ No □
- What is your gender?
Male □ Female □
3) What brand has your mobile phone got or find suitable to your needs?
Nokia □ Phillips □
Samsung □ Motorola □
Ericsson □ Other □
- Are you on pay as you go or line rental or which of the two do you find suitable to your needs?
Pay as you go □ Line rental □
5) Which network have you got or find suitable to your needs?
T-Mobile □ Virgin □
Orange □ Vodafone □
O2 □ Other □
6) What are the main features that you use on your mobile phone or find useful?
Calls □ Calculator □
Text □ Video/Camera □
Games □ Other □
7) Do you think that you have enough mobile phone shops near your local area?
Yes □ No □
8) Do you think that a new mobile phone shop around your area would be a success?
Yes □ No □
9) What are the main things that would impress you in a mobile phone shop?
Friendly service □ Enough employees □
Quick service □ Sales □
Open space □ Other □
10) Do you think that a new mobile phone shop would be a success in East Ham?
Yes □ No □
Location
My business will be located on the hi-street. My reason for this location is:
- It will be easy to get to my shop, as there are many transport links. There are several bus stops and there is a train station near the beginning of hi-street. There are many inner roads to park your car, it is only a five-minute walk from the train station to the centre of the hi-street, and towards the end of the hi-street, and there is a Motorway.
- There are only a few mobile phone shops on the hi-street. There is one near the underground and there are two in the centre of the hi-street. There are not many mobile phone shops near the end of the hi-street.
If I locate my business towards the end of the hi-street, it will not succeed because there is not much entertainment near by. My business will succeed well near a wide range of popular shops. Therefore, I am not going to locate it as far as the end of the hi-street because there is no atmosphere there, or in the central of the hi-street because there are already two mobile shops located there, or near the train station because there is a mobile shop located nearby. Therefore, I am going to locate it in-between the central and the end of hi-street.
The hi-street is located near Ilford, which is another main shopping area. It takes about twenty minutes to get to Ilford by bus depending on traffic. There is also Langdon secondary school near the hi-street and it takes about two minutes to walk there. To get to Romford or Beckton you can take a bus or go by car on the motorway, which will take about fifteen to twenty minutes.
A map showing my located business
An aerial map showing my located business
My business
I am going to run my business by partnerships. There will be two people running the business so we will both get 50% of the profit made whereas if there were more than two people running the business then each person will get a smaller amount of the profit equally. In addition, there are more advantages to partnership than disadvantages.
The advantages of partnership are:
- Each partner can specialize in a particular area so that the firm provides a better service.
- Partners are able to do their own work without having total responsibility for running the whole business on their own.
- The more people involved in a partnership, the more profitable ideas can be produced than an individual.
- It would be easier to raise capital since there are more people to contribute to the initial outlay.
- Partnership can borrow more money more easily than a sole trader can.
- If you are sick or on holiday, there will still be another person to carry on running the business.
The disadvantages of partnership are:
- Like a sole trader, partners have unlimited liability but is usually less likely to be a problem in partnerships as professional partnerships produce large revenues.
- The main drawback is the greater risk of conflicts between the partners. This can be caused by, sharing profits, control of the business or the responsibility of the various partners.
The opening times of my business will be from 9:00 a.m. to 6:30 p.m. every weekday. On the weekend, I will open my business at 9:00 a.m. and close at 4:30 p.m.
My competition will be the car phone warehouse. Other mobile phone shops such as the link, mobile mania and phone frenzy are not located on the hi-street but I will still have competition against them.
Aims and Objectives
An aim is a long-term goal. An objective is a short-term goal, which plays a part in achieving particular aims. It is important for every business to have clear objectives to make a profit. If you do not have any objectives then you will not be able to make any profit, if you fail to make a profit then you will not have enough money to:
- Pay all the wages so you will lose workers.
- Pay its suppliers so you will not be able to buy raw materials and services.
- Pay interest charges so you will not be able to borrow money.
- Pay a dividend (a part of the profits) to its shareholders so the price of its shares will fall.
- Invest money to allow your business to grow and expand; so it will not do very well against rival businesses
I will need to make sure that I have insurance on my business and have permission so that if my business goes bankrupt, I will be able to pay off any debts.
If my business is not succeeding then I will need to make a bigger attraction such as changing my pricing strategies. I will use price discrimination (two for the price of one, 50% off) so that my business will succeed.
The aims of my business will be:
- To be number one in the market
- Expand the business worldwide
- To give customers their needs
I will make some attractions to my business such as putting balloons outside my shop so that it will be noticed from a far distance and the balloons will have my business logo on it so people will know where it is from. In addition, balloons will attract children who are with an adult and will promote them come to my shop.
Marketing
I carried out a questionnaire, asking males and females my ten questions. My questionnaire will give me an idea of what people like the most about mobile phones and I will be able to find out the most popular features on a phone that are suitable to peoples needs.
Using the information from my questionnaire and the specifications of the final business, I will evaluate the possible ways on marketing. I will be focusing on the marketing mix, the four P’s.
To obtain my marketing strategy, I need to mix the four P’s in the right proportion to achieve the best marketing mix. It is no good getting one P right. It would be a total waste of time for a business to open up a business, which no one has heard in the world. Each of the four P’s is essential to a marketing success. They must be properly mixed so that the whole package appeals to the target market in the chosen market segment.
The most important one is product. Without the product, there would be no price, place or promotion. The product is the basis of the whole marketing process. My business is going to be on a mobile phone shop so for me to start the business I have to make sure that I have an enough number of mobile phones to sell.
The next one is price, which involves many different types of methods. These include complementary price, penetration price, promotional price, competitive pricing and skimming price. For my business, I will have to choose one that will be suitable for my business. I will choose a price to charge, state how I came to a final price and which pricing strategies I will use. I will also link the price to the other P’s.
The next one is promotion. A business draws attention to itself and its products in this way. There are three main methods, which are:
• Advertising
• Public relations
• Merchandising
I will look at what needs to be done at the current stage of the product life cycle and what needs to be done later. I will look at my target audience, the size of the market, the size of my advertising budget and state which mediums I will choose. I will conclude for my chosen advertising mediums. I will state the public relations involved including public demonstration and the company logo.
The last P is place. This deals with how a business distributes its products. There are four main channels of distributions, which link the producer, seller, consumer or buyer. For my business, I will have to choose the channel of distribution, which is most suitable for my business.
At the introductory stage of the product life cycle, a lot of advertising is required. I will focus on television, radio and newspaper advertising at first because it will create awareness to a large audience, which is essential at this stage of the product life cycle. I will focus on other types of advertising later on in the product life cycle.
The advantages of advertising on T.V are:
- Emotional impact
- Huge audience
- Life-like
The disadvantages of advertising on T.V are:
- Ads can’t be kept
- Expensive
- Targeting is more difficult than with the press
- Viewers often turn ads off
The advantages of advertising in the press are:
- Easy targeting of market segments
- Ads can be kept
- Colour available
The disadvantages of advertising in the press are:
- Not as dramatic as T.V or films
- Ads often unread
The advantages of advertising on the radio are:
- Relatively easy targeting
- Low cost
The disadvantages of advertising on the radio are:
The advantages of advertising on cinema screens are:
- Very great impact
- Very life-like
- Good targeting
The disadvantages of advertising on cinema screens are:
- Audience often miss ads
- Limited audience
The advantages of advertising on the internet are:
- Global coverage
- Low costs
The disadvantages of advertising on the internet are:
- May be security problems
- Great competition
The advantages of advertising on a billboard are:
- Big enough to see
- Something to read or look at while waiting in on traffic
- An attractive picture would be eye-catching
The disadvantages of advertising on a billboard are:
- Vehicles often drive past especially on the motorway
The company will also have a logo so that it can easily be recognized and will create a corporate image.
Merchandising will be used to attract customers and persuade them to come to my mobile phone shop. A display stand will be made and will be used to attract customers in all of the main stores where mobile phones will be sold.
I would plan to market my product through every possible outlet including catalogue companies and the internet. However, by analysing the results of my survey, I will focus on selling the majority of my product in phones and electrical retailers.
These are the four main channels of distribution.
The advantages of selling to an agent or broker are that the agent would deal directly with a number of retailers and they deal faster. The disadvantages are an increase in price because the agent would take a cut of the price and the agent may not deal with all of the retailers.
The advantage of selling directly to customers is that the profit margins are cut from the wholesalers and retailers. The disadvantages are the huge costs of setting up high street stores and shops and a customer is not likely to trust a brand new company straight away.
After researching existing mobile phone shops on the market and my survey, I decided to mark my price at a similar and competitive rate. By having my price lower than I have stated I would not be breaking even for a substantial length of time, which could jeopardise the company. By having, the price higher might make the product out of range for most of the consumers.
I considered the following pricing methods for my business:
- Complementary price – The hardware may be sold at a relatively low price so that I can make profit on the long-term sales of my high priced software items.
- Differential price – The mobile phones may be sold cheaper in the city because of the increased competition and more expensive in small towns.
- Discount price – A discount may be given for a large order of mobile phones or for cash payments.
- Two for the price of one – Selling two mobile phones for the price of one.
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Critical point price – the product is priced at £299.99 rather than £300 because customers think it is cheaper although there is only a penny difference.
- Skimming price – the product would be initially charged at a high price because it is of novelty value.
A sole trader is when you own your own business. The advantages of a sole trader are:
- You get to work your own hours
- Get to make up your own decisions
- Keep all the profits
- Control your own business
- There are no complicated legal procedures
- It is very easy to set up the business
- You only need a small capital to start with
The disadvantages of a sole trader are:
- If you are sick or are on holiday, there will be no one to run your business therefore you will not be able to make any money.
- There is often no-one to help if things go wrong
- There is usually great competition so the risks of failure are high
- The business may collapse and it cannot be passed onto another person after the owners death
- It is often difficult to raise money to expand a sole trader’s business as banks are sometimes not too keen to invest in small businesses
- The person will have to pay all their debts
- Skills are limited
Accounts
I will need to keep accounts in my business because I will need to make sure I know about the past, present and the future of my business. I will need to keep a record of my business’s financial history. I will need an up to date description of its present financial situation and an indication of what is likely to happen in the future. In addition, it is by law that every business need to keep accounts and retain them for six years.
Human Resources
Human resources will be needed in my business. It is in charge of everything to do with employees, including recruitment, training, wages, and salaries. Employees may be needed when the business expands, targets a new market, new skills may be needed because of technological advances, employees are dismissed, retire or leave to join other firms, as the success of any business depends to a large extent on the quality of its employees.
Running the business
For me to run a business I will have to have a production department. It controls production process and purchasing of parts, maintains quality of goods, keeps costs low and maintains production schedule. I will need to make sure the product is that of a good quality so it will sell well.
If my prices are too high, consumers will refer to other mobile phone shops for cheaper prices. A production department will keep costs low.
Conclusion
In conclusion, the typical consumer to buy a mobile phone would be male or female between 13-30 of age and above. There will be a lot of advertising because the product is at the introductory stage of the product life cycle. I will sell the product directly to the retailers. I will set up the business on the high street. I will use a price skimming on my products. The price will be reduced after the breakeven point has been reached.
Diary
January
I did not have many sales because it was just after Christmas and customers had already spent money last month. I Might change my pricing to price discrimination so that my business will start to make profit.
February/March
My business was going better than last month but only a few customers came to look at my products and only a few brought my products.
April/May
Profits were beginning to rise because of Easter and I gave out vouchers worth 25%. My business was starting to make much more of a profit.
June/July
Business is picking up and thinking of sales for summer because of end of last season so business will start to make a higher profit.
August
Had quite a few customers and many of them were buying my products so profits were increasing but were not high enough to be satisfied.
September
This was not a very good month and the downfall was that profits were decreasing due to start of schools so I did not have many customers. The mistake that I made was that I did not have more sales.
October/November
Business began to run smoothly due to Christmas coming up, I had quite a few customers come to my shop and buy my products so I had a three for two offer.
December
This has been the best month of the year for my business due to Christmas; a high number of customers came at the last minute and profit most made this month.
