Section 2:

Business Proposal

The assignment that has been set is to investigate ways in which factors such as the media and market research can help a new retail shop become successful in an area with other local competition. We will be planning a small-scale marketing campaign with a marketing plan.

My business idea is to open up a video rental shop. At this shop, people rent or buy videos, DVDs or console games. My proposal will be for opening in the Higham Hill area of Walthamstow. In this area along Higham Hill Road, there is already a shop called 'Hollywood Nites', but as well as being a video rental shop it is also a grocery and only has a small area at the back of the shop containing videos an DVDs. Hopefully my business will be able to expand and eventually chain of shops can be situated across Walthamstow with similar themes.

I have chosen this idea because I believe that people, especially in Walthamstow, do like to watch movies, however I find that my father (and probably other people too) goes to Hollywood Nites only to find that there are no good films because all of the decent ones have been already rented out or the cant find what they are looking for because of the layout. Therefore, we often end up using Blockbuster Video, but the closest is in Tottenham Hale - situated about 2 miles away from the part of Higham Hill that I live and where Hollywood Nites is situated. The videos would be in demand because there is only one cinema in Walthamstow but it only has three screens and it is closing down very soon. Therefore many people of all ages will either have to travel all the way to UCI cinema which is ages away or they will have to wait for films to come out on video or DVD so that they can rent out the film and watch it whenever they want from the comfort of their own home. I am proposing to deliver this service. I also think that selling these items will make a high income, and when renting out new films, lots of profit can be made in the long term. Potentially, this business will be of interest to an audience of all ages, sex, tastes or social class. It is also a market that has a high turnover of products (new video releases are being made all the time) meaning there will be constant demand for the products/services.

Section 3:

Business Name & Logo

After having chosen a business to propose, I now need to think of a business name which will give potential customers the general idea of what the shop is going to provide. Although making a name that is witty is not important, as it could take away the simplicity, people could become more attached to a name they like and are more likely to quote the shop to their friends. By this method, people who live further away and normally use a store like Blockbuster videos might take advice and try my store instead.

Before coming to a conclusion on what the name of my business should be, I have brainstormed a list of different possible names. Afterwards I will come to a conclusion on which one I think is best. My ideas for the name of the business are:-

- Video Rentals - Rent-a-vid

- Home Cinema - DVD Distributors

- Mental Rentals - Cinema Scenes / Sinema Scenes

- Premier / Premier Videos - Video Views

- Home Entertainment - Premium Premiers

From these names in the Brainstorm, I narrowed the selection down further to

- DVD Distributers - Mental Rentals

- Premier Videos - Video Views

After asking a few people for their opinions of which of the four potential names use,

I came to a conclusion. The two most popular were 'mental rentals' and 'premier videos', and as I liked both names I decided to call the company/business 'Mental Rentals', and the shop's name will be 'Premier Videos'. To make it easy for customers to distinguish between the video section, DVD section and console games section, they will be differently themed (e.g. with different colours) and have different names. For the Video section I have decided to use the name 'Video Views', for the DVD section I have decided to use the name 'DVD Distributors' and for the Console games section I have decided to use the name 'Games Galore'.

I have also designed a logo for my business. The logo is shown below:-

Section 4:

Aims, Mission Statement and Constraints

An 'aim' is the long-term intention that a company uses objectives to try to reach. The aim is the main reason that the business is set up, because the aim is the reason why the founder has set up the business in the first place. They are often expressed in the form of a mission statement. An example of an aim would be:-

To be the most popular video company in London, providing all the latest videos, DVDs and console games to buy and rent at a profit.

A business's 'mission statement' is a short statement detailing the aims of the business as a way of stimulating workers and encouraging them to work harder when they see the aims that they are working towards. The mission statement is a general aim describing the core purpose and intention of the business.

My mission statement for my business is:-

"Mental Rentals is a company to be proud of. Our mission is to become the ultimate leaders in the business of video rentals. We will strive to provide access to every video release we can get hold of, and meet all of our customers' needs. Equal opportunities are a policy here, and we know that we have the ability to be financially wealthy, respected and enjoy our work."

An 'objective' is a short-term, medium-term or long-term target which gives the people working for the company a direction to aim in. All companies, whether it is a sole proprietorship, partnership, limited company or a plc should have business objective. An objective is a common target for a team in the company, which makes it easier to co-ordinate actions and increase the team spirit. A company uses these objectives as stepping-stones towards reaching their aim. There may be many objectives or very few needed before attaining this aim/goal. Objectives need to be:-

S - Specific - this allows employees to focus on a particular


M - Measurable - this allows the firm to assess performance

against intended targets.

A - Attainable - if an objective is not attainable, it may be de-motivate the work-force.

R - Relevant - the objective must contribute to the achievement

of the overall aim.

T - Time - it is important that to maintain efficiency, time limits

are placed on objectives. It also makes measuring

performance easier.

A short term objective is an objective which the business sets out to achieve within about a year (for example breaking even). A long-term example of an objective is an objective which the business sets out to achieve in the more distant future (for example to be able to open up retail outlet in many different countries around the world). Another example of a business objective is 'to survive competition'.

My business objectives for my business are:-

) Survive competition.

2) To break-even (neither be in profit or loss) within 18 months.

3) To be making weekly sales of 80 and weekly rentals of 100 within 6 months (Including videos, DVDs and video games.

4) To be able to open a new outlet within four years.

5) To increase market share by 1% every two years (Market share is the proportion of sales made by one business in comparison to all the sales in the market).

6) Maximize profits and sales.

A 'constraint' is a factor which limits or prevents to what extent a business can achieve its objectives, and thus its aim/goal. Constraints are split into two different categories:

) 'Internal constraints' which are constraints within the company's control (for example finance, space and experience)

2) 'External constraints' which are constraints that the company have no control over (for example planning permission, competition and consumer tastes).

The internal constraints that my business will face are:-

) The lack of funds (a loan will have to be taken out to get the business started)

2) Limited shop space

3) Available services (for example electricity and communication services)

4) Lack of business experience

5) Location.

The external constraints that my business will face are:-

) Consumer tastes

2) Competition

3) Transport links

4) Population of local area

5) Availability of films and games.

Section 5:

The importance of Marketing

Marketing is the management process involved in identifying, anticipating and satisfying customer wants profitably. It is a function which links a business/company with consumer tastes to produce a product or service which will have the best demand at the right place at the right time. Marketing decisions are made based on the findings of market research, and carried out through the marketing mix. The product will satisfy customer needs and wants, and marketing will help advise what price to set the product or service. It will also ensure that the outlet is in it's most convenient place and will promote the product/service so that people are aware of its existence.

A marketing plan is a report which details a business'/company's marketing objectives and strategy (for example costings, forecast results and contingency plans).

These are the main stages that I will include in my marketing plan. They are to:-

Stage 1 is important to allow my business to grow year by year and expand. Examples of objectives for the coming year based on goals for three to five years time may include:-

) Targets for sales

2) Targets for market share/establishment in the market place

3) Targets for distribution levels

4) Brand image ratings

Stage 2 is important to identify customer wants, and help make decisions on the marketing mix. Stage 3 is important because creating a marketing audit will ensure full knowledge of the business' marketing assets. This could be supplemented by SWOT analysis, to identify the business' marketing strengths, weaknesses, opportunities and threats. I can therefore act accordingly to competition to survive the competition and use the strengths of my business to compete with competition and put them under threat. Stage 4 is important for achieving the objectives that operates within a defined budget and covers:-

) New product development

2) New product launches

3) Going brands

It is important because I need to understand that my budget and available products will limit how many products (videos)I will have and what genre of videos I have. Therefore my ability to maximise profits and sales will be limited.

Production Orientation to marketing is adopted by many businesses, and it means that they design and create a product and then attempt to convince consumers to purchase the product. Market Orientation to marketing is where the business does market research to find out what consumers want before creating the final product. Market Orientation is more suitable these days because, although it costs a lot to carry out market research, it dismisses the risk that the business creates a product which nobody wants to buy. Having said that, I shall use mostly product orientation. This is because I can only sell videos/DVDs/games that have already been produced, however, some market research will help me understand what films are most popular so I know what and how many videos to purchase to sell on.

Market segmentation is the analysis of a market to identify the different types of consumer. Examples of these different types of consumer are splitting them into different age groups, ethnic groups and gender. The different parts of each market (e.g. an age market) are known as market segments. Examples of these market segments are:-

) Under 18 yrs

2) 19-25 yrs

3) 25-40 yrs, etc

A market niche is a gap in the range of products/services offered within a market. Market niches are often the openings in a market which allow new businesses to enter the market with products for a market segment.

I will attempt to segment my market by:-

) Age - because of age certificates on films

2) Genre of films preferred (e.g. action, romance, animated etc)

3) Ethnic groups

4) What film-playing device they own (e.g. VCR or DVD player)

With market segmentation, it will allow me to develop a marketing strategy, as it will help me to identify target markets and niches that then can lead to development or improvement of a product. Knowing the types of consumer prone to become customers can allow the business to develop a competitive differential advantage over competitors.

Section 6:

Market Research

Market research is the process of collecting, collating and analysing information about consumers and markets. This could include information about consumers' sex, age, occupation, income, habits, likes and dislikes, where they live, where they go and what they do in their spare time, which newspapers or magazines they read, and when they listen to the radio and watch television.

Stages of Market Research

The market research objectives for my project are:-

) To find out what the best target market for my business is. I need this so that I can aim my products/services at a specific audience so that I can provide a good service to them and maximise the profit.

2) To find out what the general demand of the product will be. I need to know this because I will not want to produce a product/service and put it on sale if nobody wants to buy it.

3) To find out consumer habits. I can find out what they like and what they don't like so that I can alter or completely change products to the likes of the interviewee, creating a better product or service.

4) To find out how much people are willing to pay. This is because I need to know how much to price my products/service. If I charge too much then people will not be willing to make the purchase, however I want to charge as much as possible without putting people off so that I can maximise profits to expand the business.

A company can obtain the market research information in 2 main ways:-

) Desk research involves the studying of information which already exists. Such information is known as secondary data. This may be the internal records of a firm, such as sales or accounting records or salespersons' reports. It can also be information published by someone else, for example newspapers, or government reports, such as the National Census, Social Trends, the Central Statistics Office Digest of Statistics. Libraries are a good source of such information. For my project I will use Mintel reports and Keynote reports to find out about the market ( whether it is growing or in decline), Yellow Pages to find out about the local competition to my business and census data for the income and lifestyle of the local population.

2) Field research involves the collection of primary data or new information, for example, by the use of questionnaires. A list of carefully chosen questions are asked to existing or potential customers by personal interview, by telephone or by post. Initial field research normally focuses on obtaining quantitative data, which means gathering statistical data about the consumers which can easily be collated and analysed to give a general consumer profile. It may be followed up later by more detailed qualitative research through consumer panels or one-to-one interviews. For my project I will use questionnaire results to find out peoples' general tastes habits and situations, and competitor analysis so that I can see how the competition is working and get some ideas and tips on consumer tastes and what the consumers like to finding the market.

I have designed a questionnaire so that I can find out some information about the population. For a copy, please see Appendix 2 in the appendices section.

In my questionnaire, I asked people:-

) What is your gender? - so that I can segment the market to pick a target audience.

2) Which age group do you fall into? - so that I can segment the market to pick a target audience.
Join now!

3) Do you have a child/children? - this will influence the type of films they rent/buy.

4) What area do you live in? - so that I know that if they live in the area close to where the business will be set up, I can see in conjunction with the next question if they are willing to come to the business from nearby.

5) Would you be willing to go to the Higham Hill/Parmerston area of Walthamstow to rent/buy films? - to find out if people nearby will be willing to come to my shop.

This is a preview of the whole essay