As the figure (Appendix B) shows, roughly one-sixth of the population (innovators and early adopters) are quick to adopt new products and services, and one-sixth of the people are very slow (laggards). The remaining two-thirds are somewhere in the middle. By focusing our marketing efforts at the innovators and early adopters and convincing them to try our new kiddie fun and babysitting services, we can expect a good start to our new venture.
3.2 Pricing
There are some common pricing objectives which must be identified in order to obtain optimal pricing (Appendix C).
1. Survival
2. Current profit maximisation
3. Market-share leadership
4. Product-quality leadership
Penetration pricing is used to gain entry into a new market (Roth, 2006). The objective for employing penetration pricing is to attract and grow market share. The lower price set on products by using penetration pricing is done to entice the maximum number of customers possible to purchase the product in order to increase revenue and profit (Roth, 2006).
Premium pricing is employed when the product or service offered is unique and of very high quality (Roth, 2006). These attributes demand that a high, or premium, price be attached to the product. Buyers of such products typically view them as luxuries and have little or no price sensitivity. Premium pricing can be employed with the profit margin maximisation or quality leadership pricing objectives (Roth, 2006).
Skim pricing is similar to premium pricing, calling for a high price to be placed on the product (Roth, 2006). However, with this strategy the price eventually will be lowered as competitors enter the market. This strategy is mostly used on products that are new and have few, if any, direct competitors when first entering the market (Roth, 2006).
The Honey Bunny Club wants to position itself as a premium family-friendly kids’ club with a strategic location in one of the most attractive tourist destinations. We aim to provide the highest quality childcare and babysitting service to our customers. Hence, our pricing objective is that of product-quality leadership. With that in mind, the Honey Bunny Club will utilise the premium pricing as shown in the diagram (Appendix D).
We will set a slightly higher price for our services to generate substantial profit margins and demonstrate our high level of commitment to the quality of service we provide. This is an ideal pricing strategy for our business as we foresee that most tourist visitors are less price-sensitive and more likely to engage their children in our kids’ club. We believe that our holistic approach to this business will justify our pricing strategy. The table below shows the package prices (subject to 7% GST) for the different categories of customers based on age group.
The prices (Appendix E) include admission fee of child plus unlimited play for a day in all of the allocated play areas at the club at specified time slots. Adults (such as maids, care-givers) accompanying children are admitted free of charge. The club firmly believes that prices charged are reasonable and compare favourably to other forms of family entertainment where both adults and children must pay admission.
3.3 Competitions
3.3.1 JWT Kids Gym
The JWT Kids Gym provide programs that is especially designed by pediatric experts, child psychologists and occupational therapists to enhance a child’s physical skills, fine and gross motor skills, spatial awareness, coordination, balance, agility and flexibility (JWT Kids Gym, 2007).
The programs are divided into two different class which is parent – participation and non – parent participation class (JWT Kids Gym, 2007). Under the parent – participation class, is it participated for children aged between 4 months to 3 years old. The classes are designed to stimulate a child’s imagination and encourage the development of physical skills such as tumble squeakers and crafty creatures with the duration around 45 to 120 minutes.
For the non – parent participation class, is it participated for children aged between 3.5 to 9 years old. The classes are designed to provide a transforming experience to children and their parents, centered around fun, learning, creativity and physical fitness such as stompers, jumpers, crazy crazy creatures and hip hop with the duration around 60 to 120 minutes.
Beside the class participation programmes, JWT Kids Gym also create a kids night out programmes which organise on one Friday of every months and it last for four hours of non – stop fun that include a pizza party, movie, art and craft (JWT Kids Gym, 2007) (Appendix F).
3.3.2 eXplorerkid
eXplorerkid is renovated at a cost of $1 million, the new kids' club is 8,200 square foot of pure entertainment and fun elements specially designed to stimulate your child's imagination and learning capabilities (Explorerkid, 2006). Besides the indoor playground boasting 20 play elements, the club also features a lighted ball pool, a multimedia platform, internet kiosks, making it the coolest hangout for kids, parents and teachers.
eXplorerkid is a club for children 12 years of age and below. The club offers members and the public numerous opportunities for fun and growth through its indoor playground and other areas of interest. Beside the playground featuring 20 play elements, the explorerkids also have toddler area, lighted ball pool, multimedia platform, party room, interact room, nursing room, computer kiosks for surfing (Explorerkid, 2006) (Appendix G).
3.3.3 The American Club Singapore
The American Club provides kids club for the youth and kids, which is divided to Yankee Doodler, Poolside, Game Zone. The Yankee Doodles Kids Club is designed for 5-year old kids and under (American Club Singapore, 2004). It provides the computers and play stations for the kids to play. The Pool Side caters to the kids under 5 years old. It provides the play area with the colorful toys and there are staffs help the kids. There are train sets, books, puzzles, and tumble mats to keep the kids happy and active. Game Zone is offered for the kids above 5 years old. It provides PC stations, Xbox, flat screen TV, and Internet terminals to give the fun and excitement to the junior members. Furthermore, this kids club often organizes special kids event, such as: Children’ Halloween Party, Children’ Christmas Party. There are youth camps that are arranged four times a year. They follow American seasonal changes, which are Summer Camp, Fall Camp, Winter Camp, and Spring Camp. In addition, the kids club has the recreation classes to offer to the kids and youth. They include bollyjam, jazz, hip hop, speech and drama, soccer, mandarins, basketball, capoeira, etc. Parents are suggested to register their kids to have the membership of kids club to get the privilege services. The services provided at $5 per hour for non-member and $3 per hour for member (American Club Singapore, 2004).
3.3.4 Swiss Club Singapore
In 2001, the Kids’ Club was set up to offer variety activities for the children. The Kids’ Club started well and organized the carnivals. It often organizes the special events for the kids to enjoy. The kids are entertained by a lot of attractions that give a lot of fun. There are programs for the toddlers where the parents are allowed to join, such as Toys Washing Action, Christmas Party at Rifles Lounge. The activities include sport, health and fitness, and games. For example: badminton, soccer, swimming, etc (Swiss Club Singapore, 2001).
3.3.5 Orchid Club
The club provides the indoor and outdoor children’s play area, which are suitable for children under 15 years old. It aims to develop the child’s motor skills while they have fun. It offers a three-storey modular play system with sliders, tunnels, a bumper maze, a ball pit, a suspended net bridge. It provides a waiting area for parents and guardians consisting of a snack bar and n area for LAN games. This lounge area offers a fantastic view of the poll and golf course (Orchid Country Club, 2007).
3.4 Advertising & Promotions
3.4.1 Advertising
The team will have to carefully develop an advertising campaign to promote the Honey Bunny Club as construction gets under way and will heavily promote the unique features of the service facility. The following advertising methods will be the primary avenues used in spreading the word of the new service facility and increasing the public’s knowledge of this form of childcare and babysitting services.
3.4.1.1 Broadcast media
Radio
The Honey Bunny Club will advertise on three local radio stations namely 987FM (English), Class 95FM (English) and Y.E.S 93.3FM (Chinese) on Fridays and Saturdays two months prior to the grand opening of the kids’ club, and on a monthly basis throughout the year (Appendix H).
Television
The Honey Bunny Club will advertise on Channel NewsAsia International and Singapore from Mondays to Fridays in the morning peak period (0600 to 1000) for 30 seconds at US$300 per day for a period of three months after the grand opening of the kids’ club (Channel NewsAsia, 2007). This is to target both local and foreign working parents who may be interested in our childcare and kids’ club services.
3.4.1.2 Print media
Newspaper
To increase public awareness of the kids’ club service, we will run a full-page (54 x 8 col) coloured advertisement from Thursday to Saturday every week on The Straits Times one month prior to opening. It will cost S$28,026.72 per day (Singapore Press Holdings, 2006). Additionally, we will run a half-page (24 x 8 col) coloured ad the first Thursday and Friday of every month to encourage more visitors to our kids’ club over the weekend (S$18,963.36/day) (Singapore Press Holdings, 2006).
Direct mail/flyers
Flyers will be passed out nationwide on a daily basis two months before the grand opening of the Honey Bunny Club. Flyers will be distributed through travel agencies and hotels as well as areas near the IRs. They will also be distributed through primary and secondary schools to promote youth camps at the club. They will be printed single-side in colour on glossy A5-sized paper. The total cost for 10,000 pieces of the flyer is S$800 (iPixel Print Singapore, 2006). Expense for flyers is included in the office supplies expense.
3.4.1.3 Outdoor advertising
Transit marketing
The Honey Bunny Club will advertise on buses and trains due to its high ad recall level and strong ad appeal.
We will advertise on a wholly-painted double-deck (Orchard route) for six months after the launch of the club to increase consumer awareness. The monthly media rate is $5,500 per bus and the production cost is $3,900 per bus (Moove Media, 2007). On top of that, we will advertise for three months leading to the grand opening of the club on the platform doors in specific train stations, i.e. Harbourfront, Dhoby Ghaut and Clark Quay to generate buzz. The monthly media cost per station is $18,000 and the production cost is 3,800 (Moove Media, 2007).
3.4.1.4 Internet advertising
We will run ads on Google four months prior to the launch. When people search on Google using one of our keywords (Honey Bunny, kids club, etc), our ads will appear next to the search results. The activation fee is S$10 and the minimum cost per click (CPC) is $0.02, i.e. we will only be charged when people click our ads (Google AdWords, 2007). In this way, we can effectively target audience who are already interested in our service.
3.4.2 Promotions
We will use a variety of promotional avenues to gain more interest from our target market and increase repeat customer patronage. Promotions to be used are as follows.
3.4.2.1 Lifetime Membership
Upon joining the Honey Bunny Kids’ Club membership which is valid for a lifetime, members get to enjoy a 10% discount on all packages and stand to accumulate bonus points in exchange for exclusive member benefits.
There will be a one-time registration fee of $80 and an administrative and replacement charge of $40 for a new card.
3.4.2.2 Early bird discount
Parents who sign up for the package a month in advance will get to enjoy a 10% discount (not applicable on public holidays).
3.4.2.3 Quantity discount
Customers with more than two children in any of the categories are entitled to a 15% discount off the total bill.
Schools or organisations with a minimum of 25 people in the group will get a 20% discount when they sign up for the youth camp package (not applicable on public holidays).
- Operations Segment
4.1 Location
The Honey Bunny Kids’ Club will operate in one of the two Integrated Resorts (IRs), Resorts World at Sentosa. Basically, the IR aims to broaden the leisure and entertainment options to enhance Singapore's reputation as a premium "must-visit" destination for leisure and business visitors (MTI, 2007). It integrates a range of resort accommodation, Meetings & Incentives (M&I), F&B, retail and entertainment attractions, and a host of world-class family leisure experiences (STB, 2006).
Four theme parks will be built in Resorts World at Sentosa, which include Universal Studios theme park and three water-themed attractions (Ying, 2006). It will provide the world’s largest oceanarium with a huge number of fishes (Ying, 2006). Also, it will have six hotels and spa with over 1,800 rooms for both leisure and business travelers (Ying, 2006).
By having such facilities, Resorts World at Sentosa can ensure the resort remains appealing and encourage repeat visitation. It is expected to attract thousands of tourists every day, especially in the peak months (November-February, June and July). In estimation, 30% of tourists will be families.
4.2 Zoning Regulations
Maxim’s Residences will lease its 4,000 square feet land area to the Honey Bunny Kids’ Club. The area will be divided to two floors and located in first and second floors of the hotel. It will include office space (500 sq ft) and indoor area for us to conduct our activities. It will be designed to attract our target market and has full facilities to satisfy their needs.
4.3 Labour Supply
The Honey Bunny Kids’ Club alone (exclusive of office employees and managerial staff) will employ 20 full-time as general members (childcare assistants, babysitters and instructors) and 2 housekeepers. General staff will work for an average of 36 hours per week. These staff members must have at GCE ‘O’ Level qualification and 18 years and above. The housekeepers will work for an average of 28 hours per week. The Honey Bunny Kids’ Club will also employ 4 part-time staff members, with each working an average of 18 hours per week. We do not hesitate to recruit students who are able to work on a part-time basis and have a passion to interact with kids. One operations manager will be hired to monitor the daily operations and make sure the business is on the right track. He/she should be a degree-holder, with at least 5 years of work experience in related fields. As the business continues in operation, two qualified general staff members will be promoted to the assistant supervisor. Two Programme Co-ordinators will be hired to assist the Operations Manager in the operations for events. They should have qualification of minimum “O” Levels with good passes and at least 3 years’ working experience, preferably with Kids’ Club organisation.
For management team, a general manager will monitor and control all the operations. He/she will work for an average of 48 hours per week. To be general manager, he/she needs to have minimum 7 years experience and a bachelor degree. He/she must be able to supervise a minimum of 20 employees. We will recruit a finance manager to manage finance aspects of its fast growing childcare and kids plays. He/she should be a degree holder with at least 5 years experience in finance. One accountant and one accountant assistant also will be hired to ensure day-to-day operations in finance functions. They must have qualification of Bachelor degree and minimum of 3 years experience. Marketing and Sales Manager is included to management staffs and responsible manage marketing & sales aspects to ensure that public is aware of our operations. He/she must have bachelor degree and 5 years experience. In addition, he/she is required to report to Marketing Executive. Marketing Executive is responsible to create the promotional activities. He/she must be a degree holder with 5 years experience. Before that, he/she must show his/her work in the last job and the result of the promotion. Furthermore, receptionist will be hired to provide customer service to guests and members. He/she should have excellent computer skills and qualifications of ‘N’ Level. He/she should be bilingual to handle the local and overseas guests. All staff members should have a strong passion for, and knowledge of caring for the children. This will make the job more interesting, thus the staff can satisfy the needs of customers and make the customers’ experience a memorable one.
4.4 Business Operations
The Honey Bunny Club will open for business in June 2010, soon after the opening of the IR. The normal business hours will be seven days a week, from 9 AM to 9 PM on from Mondays to Thursdays and 9 AM to 11 PM from Fridays to Sundays. The babysitting service is provided 24 hours. For 24-hour babysitting service, the parents need to book at least one day in advance. The number of part time staff can be adjusted to meet changing demands. For example, we will reduce the part time staff during low peak periods in order to save costs and add more staff in peak period. The following personnel schedule shows the workweek’s scheduling.
The following lists are the standard procedures for opening and closing The Honey Bunny Kids Club for each day’s operations.
4.5 General Staff Work Schedule
The 20 full time general staff will be divided in to 5 teams, which are team 1, team 2, team 3, team 4, and team 5. They will have 4 staff each. For teams who have 4 staff, 2 staff will work in morning shift and 2 other staff will work in afternoon shift.
The 4 part-time staff will be denoted as Relief team which will consist of 2 staff each. Every team will work in two shifts, which are morning shift (9AM-3PM) and afternoon shift (3PM-9PM). For relief teams that have 2 staff, one staff will work in each shift.
The 2 housekeepers will be denoted as HK team. They will work in morning shift (8AM-12PM) and night shift (6PM-10PM).
Every team will work in two shifts, which are morning shift (8AM-3PM) and afternoon shift (3PM-10PM).
This work schedule is made based on the forecasted number of visitors and sales. It used to allocate the number of staffs needed to provide the services.
4.6 Suppliers
Suppliers for Hunny Bunny Kids Club include the following:
Star Furniture Industries Pte Ltd is a supplier of Children’s table and chair sets and other product from Singapore. The product categories include children’s bedroom furniture, chairs, sofas, table and chair sets.
Star Furniture Industries Pte Ltd
52 Sungei Kadut Ave
Star Building
Singapore 729675
Interplay OEM, Inc. is a supplier of Children’s learning systems. The products include electronic desktop games, video games, electronic brain trainer.
Interplay OEM, Inc.
58 Koon Seng road
Singapore
Singapore 426694
GYS International Pte Ltd is supplier of Battery-operated toys, radio control toys and electronic toys.
GSY International Pte Ltd
No. 3 Coleman Street
#04-33 Peninsula Shopping Center Singapore
Singapore 179804
Kleen-Pak Products Pte Ltd is supplier of baby toiletries and bath accessories. The products offered are baby bath sets, bed linen, bedding sets, baby wipes, baby diapers, baby toiletries, children’s safety harness, children’s bath accessories, childproofing products, nursery decoration, baby mattresses, pillows, and quilts.
Kleen-Pak Products Pte Ltd
2 Loyang Lane #04-03
Loyang Industrial Estate
Singapore
Singapore 508913
Babywell International Pte Ltd supplies baby healthcare kits and baby and children scales.
Babywell International Pte Ltd
10 Ubi Crescent #05-45
Ubi Tech Park Lobby C
Singapore 408564
Courts supplies PC Computers, telephone and connection equipment, washing machine, dryer, vacuum cleaner and other electronic equipments,
Courts Ltd
50 Tampines North Drive 2 Singapore 528766
- Management Segment
One of the biggest factors to the success of any business is the staff that are employed. Our commitment to deliver the highest quality childcare and kids play requires top quality staff. We will select our team with great care and a commitment to a programme of continuous training and development. Through a process of training and development, core skills are continuously improved and updated. An ongoing training programme will promote excellence in standards and staff that are passionate about the service they deliver. This is the key to the successful delivery of our vision, mission and values. We believe our commitment to staff will mirror our commitment to the child. The Honey Bunny Kids’ Club will employ a total of 30 personnel. The following job descriptions cover all positions that will be hired. The organisation structure will show at Appendix M and an employment contract attached (Appendix L).
5.1 Personnel
General Manager (GM)
Activities conduct in the centre include: Birthday Parties and Indoor Playground. The GM, Evelyn, will be in charge of all HR issues, development of sales force, detailing with all customer services issues, development of all in-house marketing materials and customer account management. Under HR issues, GM need to hire, training and supervising of all staff (approximately 30 staff), give out action plans and dismissals. The GM is to report the business strategies to the Board of Directors. The requirements for GM are a minimum of seven years management experiences, has a good working knowledge of early childhood, able to supervise a minimum of 20 employees, having a degree, strong background in resolving customer issues, ability to manage teenagers and young adults and has strong MS Office. The GM together with Marketing & Sales Manager will be organised to promote to businesses and tour agencies. The GM will receive an annual salary $30,000.
Finance Manager
The Finance Manager, Emy, will be in charge of the day-to-day operations for the finance functions in Honey Bunny Kids’ Club and supervise a team of accounting staff to handle timely and accurate processing of payables and receivables, also include the supervising of the monthly, quarterly and year-end reporting. The Finance Manager will also take charge of cashflow projections, budgeting and fixed asset management. The Finance Manager will implement a billing system to deal the transactional accounting functions. Finance Manager will also prepare statutory financial reports in agreement with the Singapore Financial Reporting Standards. The requirements for Finance Manager are good degree in Accountancy or Finance, at least 5 years of experience in accounts or finance, preferably with knowledge in accounting software and statutory board accounting procedures. The Finance Manager will receive an annual salary of $28,000.
Marketing & Sales Manager
The Marketing & Sales Manager, Stella, will be in charge of meeting or exceed pre-set sales target, implementation of marketing & business strategy for the market, developing the marketing team in the co-ordination of Kids Club activities, develop advertising & promotional programmes with distributors to increase awareness of the Kids’ Club and provides leadership. The requirements for Marketing & Sales Manager are degree in Marketing Business, at least 3 years of experience with marketing, good communication and interpersonal skills, multi-lingual ability preferred and PC competency is essential. An annual salary of $25,000 will be given.
Operations Manager
The Operations Manager, Rena, will take responsibility for the effective operation of a broad range of areas within the Kids’ Club including coordination and supervision of resources and dealing with immediate day-to-day operational issues and needs and to increase retention through delivering new challenges and promotions, ensure all areas of the club are regularly checked and maintained in line with required standards to ensure an effective operation, and expectations as outlined in the agreement and ensure that guests receive an excellent service from all staff. The requirements for Operations Manager are degree in management, experience & knowledge of the leisure industry preferred, ability to work and interact with all levels with the Kids’ Club and excellent communication and interpersonal skills, operational awareness, ability to prioritise tasks according to business requirements and able to work flexibly to suit the hours & needs of the business. An annual salary of $25,000 will be given.
Accountant & Assistant Accountants
The position of accountant is to report to the Finance Manager. The candidate will be responsible for timely and reliable management and financial reports and costing and prepare statutory accounts. The requirements for Accountant are degree in accountancy, minimum 3 years’ experience in service environment, able to lead a team of Accounts Assistants, good interpersonal skills and knowledge of and experience in Kids’ Club will be an added advantage. The Accountant will receive an annual salary of $24,000.
The positions of assistant accountants are to report to Accountant. Two assistant accountants will be hired to assist the accountant in the operations for the finance functions and responsible for maintain accounts and assist in other financial & administrative duties. The requirements are diploma in Accountancy, positive working attitude with minimum supervision, and proficient in Microsoft Office applications. The assistant accountants each will receive an annual salary of $18,000.
Programme Co-ordinators
Two Programme Co-ordinators will be hired to assist the Operations Manager in the operations for events. Programme co-ordinators will be assist in the running of our Kids’ Club, co-ordinate and creating activities, mentoring programme and together with child care assistants and babysitters to work directly with the children. Programme co-ordinators are to organise signature events and to source sponsorship for events. The requirements are must be matured & goal-oriented, have good interpersonal communication & organising skills, minimum “O” Levels with good passes and at least 3 years’ working experience, preferably with Kids’ Club organisation. The Programme Co-ordinators each will receive an annual salary of $19,800.
Babysitters & Part-Time Assistant Babysitters
Eight babysitters will be hired. Babysitters will report to Operations Manager and Programme Co-ordinators. Babysitters are to supervise activities of children in the Kids’ Club area. Babysitters are to provide child care to children including with personal needs (i.e., changing of diaper). The requirements are degree in early childhood is essential, up to date First Aid certificate preferred, with minimum 1 year experience in childcare industry, with motivated, energetic, enthusiastic & positive attitude, strong communication skills and multi-lingual ability is essential (i.e., English, Mandarin, Japanese, Tamil & Malay). The babysitters each will receive monetary compensation of $18,000.
Two part-time assistant babysitters will be hired to assist the babysitters in taking care of the children. Part-time assistant babysitters are to report any incidents to babysitters and to keep area clean and safe. The requirements are diploma in early childhood preferred, must be enthusiastic, excellent interpersonal communication skills and able to speak more than any 3 languages (i.e., English Mandarin, Japanese, Tamil & Malay). The part-time assistant babysitters will receive an hourly rate of $7.50.
Childcare assistants & Part-time childcare assistants
Twelve childcare assistants are to supervise activities of all children in the Kids’ Club area and to make sure child is to remain in selected areas. All assistants are to join and entertain children with games and approved activities in or outside of Kids’ Club. Childcare assistants are to report any incidents to Operations Manager. The requirements are diploma in early childhood, must be assertive & enthusiastic and excellent interpersonal. The annual salary of $16,000.
Two part-time childcare assistants will be hired to assist the assistants in taking care of the children. Part-time childcare assistants are to report any incidents to assistants and to keep area clean and safe. The requirements are diploma in early childhood, must be assertive and good communication skills. The part-time childcare assistants will receive an hourly rate of $6.50.
Instructors & Part-Time Instructors
Honey Bunny Kids’ Club is seeking who are fun, out-going, enthusiastic and love working with children to work as instructors. Five instructors will be hired. The instructors are responsible for the physical play programme (i.e., beach activities and camping) and planning the activities to have more fun. The instructors are required to work in a team and team leader are also expected to lead a team of instructors and to report to the programme co-ordinators. The requirements are diploma in sports and wellness, at least 1 year experience in physical play programme, have cheerful, energetic & responsible, enjoy and take a genuine interest in working with children, strong problem solving and excellent communication & relationship building with guests. The instructors each will receive an annual salary of $16,200.
Three part-time instructors will be hired to assist the instructors in play programme. Effective planning and delivery of activities in a fun, creative and learn through play environment. The requirements are diploma in any discipline, have cheerful, energetic, out-going & responsible to take care of children, excellent communication & relationship building with guests and at least 18 years old. The part-time instructors will receive an hourly rate of $7.00.
Receptionist cum Administrator
Honey Bunny Kids’ Club is seeking for energetic, creative and enthusiastic receptionist cum administrator. The receptionist will provide excellent customer service to guests & members, answering phones, update member’s accounts and maintain an orderly lobby area. The receptionist will receive an annual salary of $15,000.
Board of directors
The board of directors is selected by investors to take the responsible for setting strategic direction and monitoring progress in business and ensure that the GM manage the business well and the company compiles with legal and ethical requirements and communicating with shareholders (Stutely 2007,p.67).
- Critical Risks Segment
Figure 1.1: An analysis of our business’s strengths and weaknesses
Figure 1.2: An analysis of our business’s opportunities and threats
6.1 SWOT
We have analysed our strengths and weaknesses, and the opportunities and threats to our business. The key items are listed below, each with a note explaining how we will cope with, or exploit the issue.
6.2 New technology
As more companies and businesses invest in the latest technologies, the industrial status quo and market shares could change significantly. Companies that do not have effective information technology will not be able to understand their business efficiently and effectively. Therefore, there is a need for us to conduct more R&D throughout the course of our business in order to keep up with IT changes. We will send our staff for IT training regularly to facilitate the online processing system of our club.
6.3 Inaccurate sales projections
No matter how much market research is done, sales projections can never be 100% accurate. If sales projections do not meet expectations due to unforeseen circumstances, the advertising budget can be cut back to help ease expenses, and creative, low-cost advertising techniques can be used instead. The marketing team will explore alternative ways of increasing customer patronage through sales promotions, viral marketing and word-of-mouth advertising.
6.4 New competitors leading to price wars
The entry of new competitors into our marketplace is a risk. They may offer more of the latest technology, provide a wider array of products and services and competitive prices. To overcome this, we will develop and offer value-added services not provided by our competitors. There is also a need to aggressively build a loyal client base by introducing loyalty programmes for customers.
An alternative way is to compete on quality.
- Increase product differentiation by adding features or build greater awareness of existing features and benefits.
- Form strategic partnerships by offering exclusive deals with suppliers or providers of related services.
6.5 Recessionary economy
With the nature of business revolving highly around entertainment and childcare, a weak and recessionary economy could pose a risk. The performance of the economy is a crucial factor which may determine the success or failure of our business. During downturns in the economy, consumers will be more likely to make cuts in the entertainment aspects of their budgets than in any other area. By promptly cutting costs, the business may be able to maintain liquidity. Also more effort and time by the marketing and events teams will be needed in order to meet sales goals. We will be on the lookout for good business opportunities during periods of adversity.
6.6 Administrative blockages and resource constraints
As our business expands, the amount of administrative workload is bound to increase drastically. The state of our office equipment poses a potential risk. Having only two copiers in the office, prolonged mechanical challenges could create problems for our staff. There is therefore a need to implement automated information systems to cope with the heavy administrative workload. In addition, having the service technician easily accessible, performing routine maintenance and obtaining basic service training will help us to avoid unnecessary processing delays due to mechanical failure.
6.7 Injury to customers
Since the nature of our business concerns mainly young children, injury to customers may cause a drastic decline in attendance and a loss of consumer confidence due to fears of safety issues. This could adversely affect the operation of our business.
The Honey Bunny Club takes child safety and toy quality very seriously and ensures the toys, furniture and facilities we have are child-friendly and do not pose any threat to child safety.
To reduce the potential for injuries and lawsuits, the Honey Bunny Club will employ every means possible to protect children from hurting themselves on the play equipment. Several safety measures will be taken in the choice of equipment and furniture. Our products will be designed, manufactured and tested to meet strict safety requirements for children's products.
The nursery and game room will be designed to provide parental viewing on all sides and at all times. In addition, security wristbands will be issued to each person upon entering to ensure the child's safety and prohibit abduction of children. The nursery staff and managers will be thoroughly trained to prevent accidents as well as in the actions to be taken should an accident occur. Medical attention will be called immediately.
6.8 Infections control
We will work with the communicable disease centre (CDC) to handle and cope with any infectious outbreak such as food and mouth diseases, SARS should it occur. We will set guidelines and procedures to control the diseases.
6.9 Construction delays
With the size of the initial investment being made into the Honey Bunny Club, and the monthly costs involved with running the business, construction delays could potentially pose a big risk. Any significant delay will cost tens of thousands of dollars in lost revenues and expenses. The delays may be hard to prevent. However, we can try to minimise this risk by consistently monitoring the construction progress and making any necessary changes to the plan as promptly as possible. We are prepared to hold enough cash to cover two months worth of expenses for the club.
- Milestone schedule
8.0 Financial Segment (Appendix N – R)
8.1 Proposal
The total start-up cost for the Honey Bunny Kids Club will be $ 1,500,000. This includes cost to purchase furniture, computer, equipment, design and decoration and rental fees for one year. The start up period will run from January 2010 to June 2010. Lease signing will be on January 31 and opening day for the facility will be June 1.
8.2 Financing Plan
The Kids Club will require a total of $ 1,500,000 in start-up capital. The following chart will break down the start-up costs and sources of capital.
Sources
Amount _ Source
$1,000,000 DBS Bank (10.5% for 20 years)
$500,000 Private investors
$1,500,000 Total start-up capital
Uses
$161,838 Purchase of assets
$1,054,123.90 Start-up operating expenses
$284,038 Beginning cash on hand
8.3 Financial Assumptions-income Statement
The sale forecast for the company during the 1st year will be $4,189,752.00. Although the sales is very high but the company is still having losses of $572,405 as most of the money is using for paying the company’s advertisement. However, the sales during the 2nd year and 3rd year of the operation are increase by 10% and 15% respectively. With the total sales of $4,608,727.20 and $5,236,875.00. The company net profit for the 2nd and 3rd year will be $334,367 and $1,764,151.
There is a depreciation of 10% from the total assets. The 1st year depreciation will be $15705.80, follow by $14135.22 and $12721.698 for the next two years.
8.4 Break-Even Analysis
0 = (SP-VC) S - FC
0 = (83.13-0) S – (35134 + 4156 + 120000 + 280 + 1000 + 60)
0 = 83.13S – 160630
160630 = 83.13S
S = 1932.27
S = 1933 children (Around off to the nearest whole number)
9.0 Bibliography
American Club Singapore, 2004, Youth + Kids, viewed 30 September 2007, .
Choo J, 2006, Integrated resorts will boost and fundamentally change Singapore’s economy, Channel NewsAsia, viewed 14/11/07, <>
Explorerkid, 2006, Club, viewed 30 September 2007, < >.
JWT Kids Gym, 2007, Welcome to a seriously fun place, Program, viewed 30 September 2007, .
Kids Club, Resorts World at Sentosa Pte Ltd, viewed 14/10/07, <>
Kotler, Adam, Brown & Armstrong, 2005, Principles of Marketing, 3rd edn, Pearson Education, New Zealand
MTI (2007), Integrated Resorts, viewed 20 October 2007, < >
Ong, J. (2006), Genting To Build Sentosa Integrated Resort, Life’s Happenings, viewed 27 October 2007, < >
Orchid Country Club, 2007, viewed 30 September 2007, .
Sahay A, 2007, ‘How to reap higher profits with dynamic pricing’, MIT Sloan Management Review, Vol. 48, No. 4, p. 53, viewed 12/10/07, ABI Inform
STB (2006), Genting International and Star Cruises Wins The Bid For The Integrated Resort On Sentosa, viewed 20 October 2007, < >
Stutely R, 2007, The Definitive Business Plan, Revised 2nd edn, Pearson Education, UK.
Swiss Club Singapore, 2001, What’s Up??, viewed 30 September 2007, .
Ying, W.S. (2007), Genting International, Star Cruises Reveals Plans for Sentosa Integrated Resort, Channel NewsAsia, viewed 20 October 2007, < >
Appendix A
Table of visitor arrivals by age group (thousands)
Source: Singapore Tourism Board, 2007
Appendix B
Appendix C
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Survival
In situations such as market decline, overcapacity or heavy competition, the goal may be to select a price that will cover costs and permit the firm to remain in the market (Kotler, 2005).
2. Current profit maximisation
Companies seek to set a price that will maximise current profits. They concentrate on current financial outcomes rather than long-run performance (Kotler, 2005).
3. Market-share leadership
Companies want to obtain the dominant market share. They believe that the company with the largest market share will enjoy the lowest costs and highest long-run profit (Kotler, 2005).
4. Product-quality leadership
Companies may decide they want to have the highest-quality product on the market. This normally entails charging a high price to cover the high product quality and high cost of R&D (Kotler, 2005).
Appendix D
Appendix E
*Non-peak months are March- May and August- October
^Peak months are November- Feb, June and July
Appendix F
CLASS TUITION:
1 hour class per 8-week session: $312.00 / 45-minute class per 8-week session: $288.00
2nd child enrolled from the same family receives a 10% discount.
3rd child enrolled from the same family is free.
Initial lifetime registration/membership fee: $60.00
Open Gym for Active Members: FREE
Open Gym for Non-Active Members: $10
Open Gym for Non Members: $15
Open Gym Sessions during non open gym times (Adult Supervision Required and Subject to Availability):
•Per hour -$18 (members) / $20 (non-members)
•2 hours -$27 (members) / $30 (non-members)
•3 hours (drop off) -$45 (members) / $58 (non-members)
Appendix G
Appendix H
Source of timebelt rates: MediaCorp Radio Singapore, 2007
Appendix I
Appendix J
Appendix K
Appendix L
Employment Contract
4 WORKING HOURS
4.1 The Company's working hours are Monday to Friday, from 9am to 6pm. You are entitled to one hour of lunch break every day.
4.2 You may be required to work beyond the normal working hours to discharge your duties at the sole discretion of the Company.
4.3 The Company reserves the right, at its sole discretion, to revise, amend or extend the working hours should the need arise.
5 ANNUAL LEAVE
5.1 Besides the gazetted public holidays, you are entitled to fourteen (14) days paid annual leave upon the completion of one year's service from the date of confirmation of your employment. Pro-rated annual leave before the completion of one year's service is at the sole discretion of the company.
5.2 During the probation period, you are not entitled to any leave.
5.3 You cannot carry forward any unutilised annual leave to the next year. Any leave balance at the end of the calendar year shall be forfeited.
5.4 Unpaid leave shall be granted at the sole discretion of the Company. The Company reserves the right to terminate your employment without notice if you are absent from work on unpaid leave without prior approval from the Company.
5.5 You are entitled to five (5) days of compassionate leave per calendar year upon the completion of the first year of service. Approval for compassionate leave shall be at the sole discretion of the company.
5.6 All leave applications must be made in writing and at least seven (7) days in advance and shall be approved at the absolute discretion of the Company.
6 SICK LEAVE
6.1 You must notify the Company and/or your immediate supervisor as soon as practicable if you are unable to work for medical reasons. Such notice shall be given within the first four (4) hours of the working day.
6.2 You are required to produce, without demand, a medical certificate in all cases where you are absent from work for medical reasons.
6.3 You are entitled to fourteen (14) days of paid sick leave per calendar year, upon confirmation of your employment. Sick leave during the probation period shall be approved at the sole discretion of the Company.
6.4 If you are hospitalised on a doctor's written order, you may get up to forty-six (46) additional days of paid sick leave per calendar year.
7 MATERNITY AND CHILDCARE LEAVE
7.1 You will be entitled to the Maternity leave as per Singapore law. Such leave is to be taken on doctor's written orders. The maternity leave will be on a fully paid basis as long as the Employee has served for at least one hundred and eighty (180) days before the date of first confinement.
7.2 A female Employee on leave because of a miscarriage or abortion shall be considered to be only on normal sick leave.
7.3 You are entitled to two (2) days of employer-paid childcare leave per calendar year if you have any child below age seven (7) in that year.
8 TERMINATION AND NOTICE
8.1 During the probationary period, either party may terminate the contract by giving two (2) week's notice or the equivalent of two (2) week's salary in lieu of notice.
8.2 Upon confirmation of your employment, either party may terminate the contract by giving one (1) month's notice or one (1) month's salary in lieu of notice.
8.3 The Company reserves the right not to give any reasons for termination.
8.4 The Company, however, has the right to give immediate notice before terminating your services if you are guilty of misdemeanour, misconduct, negligence or breach of any of the terms of this Letter of Appointment.
8.5 Upon the termination of your employment you shall return to the Company all documents, records, items and materials in your possession or custody belonging to the Company or its clients and you shall not retain any copies (including electronic or soft copies) thereof.
8.6 During your notice period, you shall handover all documents and materials relating to your work and ensure a smooth transition of your duties and responsibilities. If you fail to complete the handover during the notice period, the Company shall be fully entitled to require and compel you to stay two (2) more weeks after the notice period has ended to complete the hand over.
9 CONFIDENTIALITY
9.1 You shall not disclose to any third party any confidential information obtained during your course of employment unless expressly authorised by the Company.
9.2 Confidential information for the purposes of this contract includes and is not limited to trade secrets, business plans, strategies, financial information and any other information that will affect the Company's competitive position.
9.3 Your obligations to maintain confidentiality and secrecy shall apply after your employment until such time that the information is no longer confidential or has been made public by the Company.
9.4 You shall not without prior written consent of the Company destroy, make copies, duplicate or reproduce in any form the Company's confidential information.
10 GOVERNING LAW This Letter of Appointment shall be governed by and construed in accordance with the laws of Singapore.
Appendix M
Organisation Structure
Appendix N
Sales Forecast
Appendix O
Start-up Costs
Appendix P
Appendix Q
Appendix R
Appendix S
Evelyn, Stella, Emy, Rena Page of
