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Submitted by: Joanna Marie A. Lopez Submitted to: Dr. Alfredo Durante
MARKETING PLAN EXECUTIVE SUMMARY: JM Bookstore is a retail store specializing in workbooks, educational games, teaching aids, school supplies and many others. It primary costumers are teachers who wants additional resources for the classroom and teaching aids for their students. And also parents seeking educational resources to supplement their children learning in school and during the month of May to June they start buying school supplies for their children. Also students who want to buy materials for their project in school. It’s best selling products includes includes workbooks, science experiment, classroom, decorations such as bulletin board art and posters. The store has been in operation since 2005. For the first three years of its operation, the store has exceeded its revenue projections. The business is expected to post its first profit for the year 2008. to achieve its sales, the store has relied primarily on recommendations among teachers and weekly advertisements in the local newspapers. Because the store has little direct competition, it has been able to maintain an average 48% gross margin avoiding price reduction except to clear out seasonal items. The retail space adjacent to JM bookstore became vacant in February 2010, when the jewelry store occupying the space relocated this vacancy presents an attractive opportunity, given the strong sales. JM bookstore has experience within minimal advertising. The remainder of this marketing plan details how the owners intend to take advantage of this feasible expansion opportunity. In response to the opportunity presented by a vacancy in the retail space next door. The store seeks to expand in year 2010. Technical Aspect Expanding into the existing space will increase square footage by approximately 80%. The space from the expansion would be used to provide a much broader selection of educational toys and games. This product selection of mix is designed to generate more sales among “active parents”. In addition to draw more active parents into the store, JM bookstore plans to increase its budget foe marketing communications. The additional funds would be used to double the frequency of advertising and to sponsor public relations activities such as speakers at the public library. The owner will be responsible for implementing this plans which calls for opening the new space by July 15, 2010. Success will be measure in items of meeting the schedule and achieving the sales and profit objectives.
CURRENT MARKETING SITUATION AND DEMAND ANALYSIS
The target market for the store has been teachers working with in 20 mile radius of the store and active parents living with in a 10 mile radius. By active parents, we mean parents who devote a relatively great amount of time and money to their children’s growth and development. Active parents are the target market for the stores planned expansion, not only they are interested in the kinds of products sold by JM Bookstore, they are willing to spend heavily on such products. They tend to be less budget conscious than the teachers who shop at the store. Baguio is middle to upper class community of mostly professionals. With Saint Louis University and other Universities and many research oriented employers nearby, the people of this community place high value on learning and education. A major environmental opportunity is that this area is a strong supporter of educational resources for parents and teachers. We believe that we have only begun to tap the demand for the types of products we sell. Our sales have so far been limited by small budget for advertising and public relations, as well as space constraints that prevent us from stocking as broad a selection as would interest most costumers. The focus will be on topquality, high-margin items that are hard to find. We do not expect major competition from new stores over the near term. Because Educational Resources has operated for ten years without expanding or even, to all appearances, updating its interior. We believe that aggressive expansion is not in its owner’s plan. Thus, the major sources of competition for JM bookstore are other types of retailers and big companies of educational products. Despite this environmental threats, we believe that our major strengths – the year- round availability of the store and the expertise of the owners and sales staff.
Revenue and Expense for a person of 4 years
SALES REVENEU EXPENSES: COST OF GOODS SOLD ADMINISTRATIVE COSTS SALARIES RENT AND UTILITIES ADVERTISING AND PR OTHER EXPENSES INCOME BEFORE TAXES 2005 P 86000 P 44000 P 5000 P 50000 P 20000 P 1500 P 1000 (P 35000) 2006 P 177000 P 94000 P 2000 P 66000 P 21000 P 1500 P 1500 (P 9000) 2007 P 232000 P 119000 P 2000 P 68000 P 22000 P 2000 P 1500 (P 7500) 2008 P 321000 P 165000 P 3000 P 84000 P 40000 P 7000 P 2000 P 20000
THREATS AND OPPURTUNITY ANALYSIS: JM bookstore sells to parents, teachers and student. By offering teachers a free subscription to a company-produced, two –page monthly news letter, the store can identify which sales to go which category of buyers. The marketing plan targets its expansion efforts at parents. Thus, sales to teachers are expected to follow the historical trend of increasing at an average of 5% per year. We anticipate that more intensive communications will live to approximately 45% increase in sales to parents. OBJECTIVES: Our objective is to achieve 50% increase in sales by the end of year 2010. The increase is to be achieving by expanding the total square footage of the store to include the vacant space next door, for a total of 200 square feet. The increase in sales is to be measured on monthly basis in comparison to the previous year. In spite of the cost associated with increase size, we intend to keep our profit margin above 6% in year 2010. we seek to return to our current pretax profit margin of 7.5% by the end of 2011.
MARKETING STRATEGY: To attract the target market, JM bookstore will use most of the additional space to expand its offerings of educational toys and games. The strategy to build revenues depends on increasing sales among parents and teachers who visit the store and attracting more customers who live with in a 10 mile radius. The primary means of increasing sale among current costumes is the expanded products line. To attract new costumers, we will rely on several types of communications. First, we will increase the frequency of display advertisements, to build awareness; each ad will feature a different product line available at the store. To supplement these regular communications activities, the store will seek to take advantage of other opportunities to receive publicity. This will include events at the store, such as writing contest among students. BUDGETS:
MARKETING EXPENSES SALES STAFF ADVERTISING, NEWSPAPER SEMINAR SPEAKERS OTHERS TOTAL MARKETING EXPENSES COST FOR ADDITIONAL SPACE PREPARATION OF SPACE ADDITIONAL RENT AND UTILITIES P 1500 PER MONTH P 40000 P 7000 P 500 P 300 P 47800 P 30000 P 18000 P 48000
The budget of this marketing plan has shown above. The additional sale person would cost p 20000 per year, bringing the total cost for sale staff to p 40000. The additional communication expenses would be P 4000 bringing the total budget for promotion to P 7000. The total cost to expand into the new location is P30000, to prepare the space plus an additional P 1500 per month in rent and utilities.
IMPLEMENTATION AND CONTROL: The owners of JM bookstore will be responsible for implementing this marketing plan. The time able for implementing the plan involves occupying the new space by June 1, 2010 and opening for business there by August 15, 2010. We expect to achieve 50% increase in sales by the end of May 31, 2011. Success in carrying out this plan will be measured in terms of completing activities according to the schedule in meeting to objectives of plan. If cost should be higher the projected, our contingency plan is to proceed as long as we can keep cost with in 15% of the projected amount. This will delay our ability to profit from expansion until year 2011. If the adjacent retail size of the store at the present time end to reevaluate the mix of products offered in the current stores. We may be able to increase sales and profits by replacing some current offering with more of the kinds we are planning to sell in the additional space. In adjusting the product mix, we will avoid changing in ways that detract from fulfilling our mission of serving teachers as well as parents in their efforts to promote learning.
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