2.5 Tactical plan using the marketing mix.
The normal selling price of a Kebab is;
Vegetarian Kebab - £ 1.29
Chicken Kebab - £ 1.50
Beef Kebab - £ 1.55
2.51 Promotion plan
- For the first two weeks, during the opened hours (10.30 am-9.00 pm) the promotion price will be;
Drinks+ vegetarian kebab - £ 1.20
Drinks+ chicken kebab - £ 1.40
Drinks+ beef kebab - £ 1.45
Drinks- coca cola, sprite, pepsi, milo (iced), milo (hot), orange juice.
- After first two weeks, offer coupons on the promotion price for next 30 days.
The coupons will be attached in youth news papers and will hand delivered by promoting agents. (near schools and colleges).
- Will introduce a fresh vegetable/ tuna mixed/ chicken mixed salad+ mayonnaise, just add £ 0.20 more. This will start after the first one and a half months.
- Displaying an advertisement on news papers. A colourful advertisement on a full page which are selling in all around the area and in all three languages. (Malay, English and Tamil)
- Will issue a card to customers with 10 empty slots for stickers cost only £ 0.20. Each day they order a set of kebab (kebab+ salad+ drinks) the cashier will stamp a sticker. Once all the slots filled, the customer will get a free meal for the day.
3.0 People management
3.1 Staff requirements.
3.2 Staff required.
The restaurant needs 04 types of workers.
- Manager.
- Kitchen staff
- Cashier
- Cleaning crew.
Then the whole working crew will be 09 persons.
Full time workers will be paid monthly basis salary.
Part time workers will be paid according to worked hours. (Maximum working hours per week = 54 hours)
People Management.
3.3 Choosing a leader.
A leader is someone who can set the direction in an effort and influence people to follow the direction. It’s not about being the first or most powerful.
In an organization, there can be few leaders. Leading and managing is quite different from each others.
Managers do “managing”, they do all the coordination, scheduling, organizing and controlling their affairs. But leader is influencing people to achieve goals and they influence the group members by identifying their abilities.
In this case, since Bob & Lloyd want to take some of their existing staff to the new place, I suggest them to choose one person who can manage and lead the group from their existing staff rather than hiring a person from outside to do the job. It will reduce more problems which can occur when they start working as a group.
And in the other hand, it will be easy to continue the rules and regulations of Bob & Lloyd’s, because the already know the rules and the procedure.
When choosing a certain person, here I suggest to use the “Ohio State University Model”.
There are two structural ways that a leader can work;
- Initiating structure.
- Consideration structure.
A person who works under the initiating structure, will focus on getting the work done and approaching goals. They will expect their co-workers to follow the exact rules and work to their full capacity.
This kind of leaders want to get the work done in time and in order. So they tend to take the full capability of the worker to do the job.
In that case, the leader will allocate his subordinates on specific tasks. As I mentioned before, a leader can understand abilities of workers, so they know in which task that they can perform to the maximum.
Since this kind of leaders want their work to be done on time and in an orderly manner, the leader should have to establish standards of job performance.
People can work fast and in a correct way when they know the requirements of the job they are doing. As an example, the chef should know that he has the responsibility of combining tastes and in the mean time he has to be fast as this is a fast food restaurant. And the food must be clean and hygienic enough for human consumption.
When he knows all this requirements, he can work fast and fulfil the requirements on time. An initiating structural leader will schedule the day-to-day work and he will expect the subordinates to follow the exact schedule.
And they will be more concerned about normal procedures of the company rather than adjusting the procedures for worker’s comfort ability.
The leader will influence his workers to approach the goals by leading them through a very systematic way, but workers might have the feeling of distressed. Because the leader wants them to work to their full capacity under a pressure.
But they will make sure, the work will be done in an order and on time.
If you choose a person who is working under consideration structure, he/she will be more sensitive on relationships and social needs of employees. These leaders will take good care of workers and they will express their appreciation towards the subordinates. They assume that workers want to work well and the leader will try to make that work easier.
These kind of leaders won’t regret expressing their appreciation towards the subordinates for a good job they have done. An appreciation will influence workers to do their job even better next time, because they are feeling satisfied for the sacrifice they have done since the leader is more concerned about his co-workers, he won’t expect them to work more than their capability. He will only expect the workers to be comfortable and make the work to be done. As the leader assumes that workers want to work well, he will make their environment of working better.
When people have personal problems in their lives, normally their performance is getting weak. As this sensitive leader’s concern about workers conditions, he will try to solve or to give a better way out for the problem. Good mental and a physical environment will help workers to do their job even better.
When workers feel that their leader is always there for them and the workers can contact the person at anytime whenever they want him to be there, they feel more confident about their job and they feel secured.
The feeling of confident and security, mostly the workers are influenced by themselves to give their best to the organization.
When people gives their best to the organization, these kind of leaders won’t be backward to reward the workers for their high performance. This rewards can be a raise of their salary or a promotion. People who likes to achieve good positions in their lives will be influenced well in this way.
If Bob & Lloyd choose a person in this category, the workers won’t feel depressed and they will approach organization goals in a very smooth way and mean time they will enjoy their jobs. It will be an additional advantage for the organization.
3.4 Motivating.
“Motivation” is the reason for what people are doing and why they are doing it in a certain way. That’s how they are motivated. To motivate someone to get your job done, you should complete some facts.
Here in this new fast food restaurant, Bob & Lloyd have to motivate their workers. Since they are taking some from their existing staff, they have to motivate the older staff to work with the newer staff without causing problems.
Different people are motivated with different facts. So, the management have to understand worker’s nature other than most common issues. Then they can create a relevant environment to motivate people to do their job in a most effective way.
People will be motivated by different facts. It’s not easy to understand every and each different factors.
Vroom’s Expectancy theory states that, “people only do things when they believe that their action will lead to need fulfilment”
Whereas Maslow and Herzberg look at the relationship between internal needs and the resulting effort expended to fulfil them, Vroom separates effort, performance and outcomes.
Normally people think, if they work hard they will be rewarded back. As an example, a student works hard so he will be rewarded back with good marks, good ranks and he will be praised.
Most of the people can be motivated in this way.
To motivate workers, the management should be sure about the facilities they have to provide. Otherwise the workers will get demotivated rather than motivating. The management have to make sure about following things;
- Having the right resources available.
There should be all the essential equipments available to ease their work. When the owners supplies equipments to make worker’s job easy and safe, they feel that they have to reward the organization back since they are very concerned about workers.
- Having the right skills to do the job.
Different people have different skills. When the management allocating workers in to work, they have to understand their skills and abilities. Then the organization can have a good go. Because people can perform better in their skilled field more than they can do by training and observation.
- Having the necessary support to get the job done.
In an organization, there must be a lead for workers to guide them how their job should be done. Their resource of guiding should be an easy approach for them. As an example, if a co-worker wants to ask or to get to know something regarding his job, the supervisor must be available for them at anytime.
Because normally people don’t like to work without correct information. And jumbled information will confuse them and that confusion will slow down their want to work well.
Whilst fulfilling all this essentials the management should show that they will be pleasantly rewarded for the effort they are putting and for their strong corporation to make the organization’s goals an achieve.
Making targets for a team is very important. Because it gives them something to work towards. This will help to motivate them to complete tasks more efficiently.
3.5 Team working.
An organization is a group of people who works together. They might be doing different jobs or fulfilling different areas of need. But still they are doing the same job to achieve one goal.
For Bob & Lloyd, they must be concerned about the group they are allocating to work. Because first of all the subordinates should agree to work together as a team. Otherwise that group won’t be a successful group since they all are linked together and every and each person is effecting on each other.
So in this case, Bob & Lloyd must be clear about what’s a “team” and how does this team should be functioned. A team is;
“ a group of people with a certain goal and a group of people who can work well together”
Communication and personal organization skills are very important in any organization. Without these essential skills teams would fall apart and even simple task would prove difficult.
Bob & Lloyd can use the theory of team work which has been built by Bruce Tuckman in 1965, this model is basically effective for team building and relationship. This model suggest that teams grow through clearly defined stages and these stages are,
Farming
Storming
Norming and
Performing
The following graph will give an overview of these certain stages.
Forming is the stage where the development of the team is starting. In this stage group members will be finding their places in the team and seeking for supervisor’s advices.
Storming is the stage where workers begin to see themselves as a part of the team. Sometimes in this stage, workers will start challenging each other and this period will show some slow down.
In norming stage, the group members will get together, establish unwritten rules and they will develop processes. This is called as growing stage of togetherness.
Finally in performing stage, they will work together and they will concern about their task and the team relationship. Combination of these two facts will make a good team and they will work effectively.
4.0 Finance
4.1 Cash flow forecast.
What is cash flow?
“It takes money to make money”. The statement of cash flow reveals that hoe the company spend money. There are two ways of cash flowing. What ever the money spend by the company goes to the ‘cash out flow statement’ and what ever the money company gets, that amount and the description goes to the ‘cash inflow statement’.
This record allows investors to understand how the company’s operations are running. As here we are talking about the new restaurant owned by Bob & Lloyd, the cash flow statement is an essential statement for them to understand how is the company’s health.
How is the cash flow statement operating?
Measuring the cash inflow and out flow caused by main business operations, this component of cash flow shows that how much cash is generated by selling the company’s product. Normally, changes in cash, money got from accounts (accounts receivable), the expenses which have to less (depreciation), stock (inventory) and accounts payable are reflected in cash operations.
The cash flow is calculating by;
Adding or subtracting differences in revenue, expenses and credit transactions, in to net income.
Non-cash items will be calculated under net income and total assets and liabilities.
Cash flow in overall.
Bob & Lloyd can use the cash flow statement to predict future cash flow, which helps with matters in budgeting. Basically, the more cash available for business operations, the better .
By adjusting incomes, revenues, assets and liabilities, Bob & Lloyd can get a very clear picture of how much cash the company generates and particularly how much of that cash stems from core operations.
Here I’m using the straight method to present the cash flow statement for Bob & Lloyd.
4.2 Income statement.
Income statement shows that the company’s financial performance for the coming year. Financial performance is assessed by giving a summary of how is the business operating it’s revenue and expenses through operating and non-operating activities.
This also shows the net profit or loss incurred over the first year of the business.
How does the income statement operates?
Fiscal
2010/2011
Sales xxxx
(cost of goods sold) (xxxx)
Gross profit xxxx
(operating expenses) xxxx
Operating income xxxx
+/- other revenue and expenses xxxx
Income before income taxes xxxx
Income taxes (y%) xxxx
Net income xxxx
- Sales - These are defined as total sales (revenues) during the accounting period. Remember these sales are net of returns, allowances and discounts.
-
Cost of goods sold - These are all the direct costs related to the product or rendered service sold and recorded during the accounting period.
- Operating expenses - These include all other expenses that are not included in cost of goods sold, but are related to the operation of the business during the specified accounting period. This account includes expenses such as selling, marketing, administrative salaries, sales salaries, maintenance, administrative office expenses (rent, computers, accounting fees, legal fees), research and development (R&D), depreciation and amortization, etc.
- Other revenues & expenses - These are all non-operating expenses such as interest earned on cash or interest paid on loans.
- Income taxes - This account is a source for income taxes for reporting purposes.
4.3 Balance sheet.
What is the balance sheet?
Balance sheet provides information on what the company owns (its assets) and what it owes (it’s liabilities). And the value of it’s to stock holders (share holder’s equity) as of a specified date. Here I’m presenting the balance sheet for the next 12 months time, as well as I present the other financial documents.
How does the balance sheet operate?
In balance sheet,
Total assets = total liabilities + share holder’s equity.
Assets- they are what the company owns and they are supposed to benefit the company in the future.
Liabilities- this is what the company owe for the outside party/ parties. This includes bank loans, debts for suppliers and debts for employees.
Share holder’s equity- this is what the owners of the company will get after they met all the obligations. And if there’s any profit, that will be re invested.
Since Bob & Lloyd have the legacy of £ 100,000.00, that would be their capital for the new business.
As well as borrowing from banks and other sources, the company will receive finance from its owners. This money is generally available for the life of the business and is normally only repaid when the company is heading down to a bankruptcy. To distinguish between the liabilities owed to third parties and to the business owners, the latter is referred to as the "capital" or "equity capital" of the company.
In addition, undistributed profits are re-invested in company assets (such as stocks, equipment and the bank balance). Although these "retained profits" may be available for distribution to shareholders - and may be paid out as dividends as a future date - they are added to the equity capital of the business in arriving at the total "equity shareholders' funds".
At any time, therefore, the capital of a business is equal to the assets which are received from the shareholders and any profits made by the company through trading the goods.
5.0 Relationship between Marketing, Finance and People management.
In any kind of a business, these three parts are playing a mass role. In brief, these three parts give the life to the business.
When we start a new business, we have to be concerned about following facts. They are;
Type of the business.
Where to locate the business place.
Promotion plans.
Budgeting
Staff recruiting.
Above facts are unbreakably linked together as a business can’t run without even one criteria.
5.1 Key roles of marketing section.
First of all, Bob & Lloyd have to choose a place to locate their new fast food restaurant. In that case they have to ask for the help from their marketing section. Because in a business, relocating and analysing the location area and the market is a responsibility of the marketing section of the company.
So the first key role they play is – Business analysing.
Then they have to understand the environment they are going to deal with. In this they have to understand the people living around their market place, their culture and beliefs, the political/ legal environment and as well as they have to re consider about their target market. If they fail to choose the right place for the business, that will less the attention of the target market.
So the second key role they are playing is- Market segmentation.
Since the marketing officers are carrying out analysis on the environment of the area, they can understand the purchasing power of people living around. They know that how to cost out the product. Since Bob & Lloyd have a good reputation in serving customers well, they can be very fare and they can arrange an affordable price for the product.
Then the third key role the marketing section play is- Product pricing.
Even though Bob & Lloyd have their good reputation, they have to introduce their new product to the customers. So they have to do a good marketing strategy to launch their new product. Therefore the marketing section have to plan a good marketing strategy and that must be practical and the brand and the product have to easily reach to the customer.
So the fourth key role they play in the company is- Product/Brand promoting.
5.2 Key roles of People management.
People are most important for an organization. Because people make things happen in the company. Since Bob & Lloyd wants to take some of their existing staff for the new place, they have to build up a good connectivity between the older staff and the newer staff to reduce future problems might can occur when they are working as a team.
People management section has the most responsible job to do.
This is the section which has the power of hiring and firing employees. If they chose a wrong person to do a certain job, the company surely will make a failure. So the main and the most important role they are playing is, making decisions.
This is also called as Human Resources Management.
The Human Resources Management (HRM) function includes various kinds of activities, and the key roles are;
Deciding what the staffs need to carry out their job and whether to use independent contractors or hire employees to fill job opportunities
Recruiting and training the best employees
Ensuring they are high performers
Dealing with performance issues
Ensuring your personnel and management practices conform to various regulations.
Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. However, the owners should always ensure that employees are aware of personnel policies which conform to current regulations.
And the management have to make sure that every part of the company is performing well. Therefore they have to allocate correct people to do certain jobs and the management have to be specified about every and each job, so they can be clear with employees. Because normally people don’t like to work in a confused environment.
5.3 Key roles of Finance section.
Finance section keeps the business alive.
As financial strength is most essential for the smooth running of the business. A business can’t be started without the finance adequate.
It is operational and risk focused, in conventional view. Because the finance section have to be very efficient and reactive.
And it is all about lateral and forward thinking skills in innovation view. Because this section is focused on opportunities and growth of the company.
Financial section has the total responsibility of the money which is in the company.
They have to keep records to show that how the money does has been used. And the results they got by spending the certain amount.
Furthermore, the financial section have to keep records and they have to analyse it as they have to produce the certain financial documents to the management to show how the company is performing so far and what owners should do to keep the company going.
5.4 The relationship between three units.
If we consider the business as a tree, it needs the earth to hold on and water to keep alive.
Without these essentials, the tree cannot survive and it may not be able to serve the world.
In an organization, the earth is the staff that is working in it and working for it.
People hold the business and they give the strength to stand, as the earth gives the strength and the space to stand.
For a tree, water carries all the essentials and in a business, the water is finance section. Finance section gives all the essentials to keep the business alive and going. And the tree with its trunk and leaves is the marketing section.
As a tree gives the power of sun to creatures, and builds the bridge between solar power and human, the marketing section builds the connectivity between the internal of the business and the community outside.
Even though Bob & Lloyd have enough finance strength, if they couldn’t hire the correct people to do their job, the whole company will be messed up. Because there won’t be any efficiency in work as the employees are not ready to fulfil their responsibility.
Since the owners want to allocate some of their older staff in to the new place, they must be consider about their relationship with the newer staff. Because when they start working together, they must be agreed to work as a team since they have goals to achieve.
Even the management found the suitable people to work for them and they have the financial power, still if they fail to do a successful marketing strategy, and if they fail to make the strategy a reality, still the company is heading to a down town.
As the marketing section have the power and the ability to connect with the outer world. And this outer world is the main target of the business as they are the consumers.
Failure in marketing plan means, there will be a huge loss for the company. Because this fast food restaurant is depending on its consumers.
What will happen if the company is lacking the finance power?
If they lack the monetary power, they may not be able to hire enough people and may not be able to do a good marketing plan. Not enough people to do the job means no efficiency and there won’t be any employee who is satisfied with his job. Because due the lack of money, the company won’t be able to pay enough to its employees.
Lack of money will not allow the company to do a successful marketing plan. Unsuccessful marketing plan will not help the company to grow and may be cause a damage to its reputation.
Since in this case doesn’t have any shortage of financial background, hopefully it won’t create a problem.
So, there should be the three units of marketing, finance and people to help the business to exist and to grow.
A failure of either one will effect the other two sections badly and that won’t be a healthy business to do.
Reference.
Reference for marketing.
-
About.com marketing 2010. [online]. Available at:
[Accessed 21st April. 2010]
- Marketing [M.O] 2006. [online]. Available at:
[Accessed 21st April 2010]
- Xe. Universal Currency Converter 1995-2010. [online]. Available at:
[Accesses 23rd April 2010]
Reference for managing people.
- Free management library [online]. Available at:
[Accessed 30th April 2010]
-
Free management library [online]. Available at:
[Accessed 01st May 2010]
-
Changing minds 2010. [online]. Available at:
[Accessed 01st May 2010]
- Arrod.co.uk 2006. [online]. Available at:
[Accessed 02nd May 2010]
- The happy manager 2009. [online]. Available at:
[Accessed 3rd May 2010]
Reference for finance.
- Investopedia 2010. [online]. Available at:
[Accessed 3rd May 2010]
- Tutor 2u [online]. Available at:
[Accessed 5th May 2010]
- Altius directory 2006- 2010. [online]. Available at:
[Accessed 6th May 2010]
- Teen business forum 2008, [online]. Available at:
[Accessed 7th May 2010]
