BSBMKG501

Assessment 1

Part A

Part A requires you to identify and evaluate two opportunities for your chosen organization.

BBQ fun company is required for the following analysis. As per the information the company

was established in 2009 by current CEO, Pat Mifsud. BBQ fun offers an extensive product

range, incorporating both local and imported goods. Since 2010, the increasingly competitive

retail environment, technological change, changes in consumer buying patterns and consumer

confidence have led to disappointing sales. However, BBQfun intends to return to healthy

sales of $11 million in 2012 through building on its organizational strengths, through targeted

marketing strategies aimed at key segments and through exploiting marketing opportunities.

Currently, BBQfun operates two stores, one in Brisbane (Kenmore), and one on the Gold

Coast. BBQfun is seeking business and marketing opportunities that could lead to interstate

or national expansion if viable and scalable.

Analyze information on your chosen organization's market and business needs to uncover

opportunities, such as:

Comparative market information:

BBQ fun sees its moderate pricing, extensive and high-quality product range, great customer

service, and product guarantees as key offerings to gain traction with a market dominated by

low-quality providers. The basic market need is for quality, fashionable and unique outdoor

lifestyle items that fulfil the house-proud needs of our target marketing 2017, the national

outdoor-lifestyle market reached $300 million dollars. Outdoor-lifestyle sales are estimated to
grow by at least 6% for the next few years. This growth can be attributed to several

different factors. The greater disposable household income from the two income families, the

greater availability of affordable and interesting quality imports with the high value of the

Australian dollar and the marketing by popular TV shows like Homes Beautiful and Better

Outdoor-lifestyles.

Competitors’ performance:

The Yard: has limited selection but significant depth. All Australian made. No significant

marketing or promotion. The price point is high, but the quality of products is quite good. Not

in Brisbane. Mostly in Sydney and Melbourne. BBQ’s R Us: Broad range of outdoor-lifestyle

products including trinkets and furnishings. Lots of cheap imports. Concentrating on

established markets. Strong in the replacements segment. Local competitor: All

independents: these stores are owned by individual owner operators. Ranges vary according

to owner preferences. Very little imports. Mostly retailing Australian manufactured goods.

Collectively their average item sale price is $250, have a market share of 48%, and are

growing at about 8% per year.

Customer requirements:

BBQ fun mission is to provide customer with the most extensive assortment of quality

outdoor lifestyle product available in the market .our after sales service is second to none

supported by our easy to manage long term repayment plans which make unique imported

and high quality outdoor lifestyle customer wishing to purchase product that give our

customer s pride in their homes. Our service will exceed the expectations.

Legal and ethical requirements:

Australian Consumer law ACL 2011.

The ACL applies nationally and in all States and Territories, and to all Australian businesses.

For transactions that occurred prior to 1 January 2011, the previous national, State and

Territory consumer laws continue to apply. The ACL is administered by the ACCC and state

and territory consumer protection agencies and is enforced by all Australian courts and

tribunals, including the courts and tribunals of the States and Territories. The protections in

the ACL are generally reflected in similar provisions in the Australian Securities and

Investments Commission Act 2001 (ASIC Act), so that financial products and services are

treated in the same way.

Intellectual property act 2015 and IP BILL 2014:

The Intellectual Property Laws Amendment Act 2015 ("Amendment Act") amended the

Patents Act 1990, Trade Marks Act 1995, Designs Act 2003, and the ... For detailed

information on the Amendment Act, please see the Explanatory Memorandum to the

Intellectual Property Laws Amendment Bill 2014 .Amends the: Patents Act 1990 to:

implement the Protocol amending the World Trade Organization Agreement on Trade-

Related Aspects of Intellectual Property to enable Australian pharmaceutical manufacturers

to supply developing countries with generic versions of patented medicines; and make

technical amendments; Plant Breeder’s Rights Act 1994 to enable the owners of plant

breeder’s rights in a plant variety with the option to take action in the Federal Circuit Court

against alleged infringers; Designs Act 2003, Patents Act 1990, Plant Breeder’s Rights Act

1994 and Trade Marks Act 1995 to provide for a single trans-Tasman patent attorney

regime and single patent application and examination processes for Australia and New

Zealand; and Designs Act 2003, Patents Act 1990 and Trade Marks Act 1995 to remove

document retention requirements.

Market share:
The company is owned by individual owner operators. Ranges vary according to owner

preferences. There are very few imports. Mostly retailing Australian manufactured goods.

Collectively their average item sale price is $250, they have a market share of 48%, and are

growing at about 8% per year. One important source of market research is competitive

analysis. BBQ fun management continually visit local outdoor lifestyle stores for competitive

analysis, providing BBQ fun with timely information regarding other store’s service offering.

Market trends and developments:

The market trend for outdoor lifestyle stores is headed toward a more sophisticated and

informed customer. Outdoor lifestyles customers are becoming more sophisticated in a

number of different ways:

Item quality – the preference for high quality items is increasing and customers are learning

to appreciate the quality differences.

Unique – our patrons appreciate the opportunity to include outdoor lifestyles in their home

that stand out from the mass-produced and low quality items.

Selection – people are demanding a larger selection of choices; they are no longer accepting a

limited offer in outdoor lifestyles.

New and emerging markets:

There are two emerging market that BBQFUN would like to do in the future:

BBQ’s R Us: Broad range of outdoor lifestyle products including trinkets and furnishings.

Lots of cheap imports. Concentrating on established markets. Strong in the replacements

segment. One store in Brisbane. Mostly in Melbourne and Adelaide. Considering e-

commerce options.
Outdoors marketing: Large operations of only a few stores per city. Mass markets outdoor

lifestyles at good value prices. No imported goods. Extensive advertising. Low to medium

quality. Strong in the replacement segment rather than new and refurbished dwellings.

Gaining strength in Brisbane market. Considering ecommerce options

Profitability

BBQfun has created an outdoor lifestyle range of retail products that is differentiated and

superior to competitors. Customers can see the quality of the product as it is displayed in the

stores. The following are characteristics of the product:

BBQFUN’s credit offer is backed by a top tier bank

Imported products make up 33% of the product range

The three-year guarantee is unique in the marketplace broadest possible range in chosen field

Expert, friendly customer service:

BBQfun prides itself on providing service that is on par if not better than any of the local

independent stores and far in excess of the national chains.

Sales figures:

BBQfun 2012/13 Approved budget by activities to be undertaken

Income:

Sales $11,000,000 Barbecues and related equipment

Investment income $1,567,000 Real estate investment

income and rental of

office space.

Cost of goods sold $5,890,000 Cost of provision goods,

(COGS) of

purchase of stock,

distribution.

Gross profit $6,677,000 Gross profit.

Expenses:

Wages, salaries and on costs $2,567,890 Wages, salaries, superannuation, work

cover

insurance, payroll tax

Consultancy fees $50,000 Project management:

WHS management

system; change management.

Communication $42,000 Telephone, ISP costs, IT support.

expenses
Marketing $800,000 Cost of staff travel and associated costs

for

sales, etc.

Premises expenses $1,000,000 Rent, electricity,

maintenance,

cleaning.

Capital expenditure $120,000 Purchase of new office equipment

(90%),

vehicles.

Depreciation and $177,569 9 Computers capital

amortisation and

equipment that is

depreciated.

Office supplies $65,068 Printing and stationery, postage,

amenities.

Training $62,187 Sales training: leadership, WHS, ethical/

legal

training.
 Total Expenses $4,884,714

Net profit $1,792,286 Net income before tax

Research potential new markets for the organisation, for example:

Export markets:

BBQfun was established in 2009 by its current CEO, Pat Mifsud. BBQfun offers an

extensive product range, incorporating both local and imported goods. BBQfun steadily

increased market share and profitability to 2010 when sales peaked at $10 million. Since

2010, the increasingly competitive retail environment, technological change, changes in

consumer buying patterns and confidence has led to disappointing sales. However, BBQfun

intends to return to healthy sales of $11 million in 2012 through building on its organisational

strengths. Organisational strengths will be built through targeted marketing strategies aimed

at key segments and through exploiting marketing opportunities.

Segments of the market not currently penetrated

BBQ Fun market consists of the following geographic and demographic characteristics.

Geographic:
our immediate geographic target is the area of Brisbane with a population of

2,000,000

a 30 kilometres’ geographic area is the average store market footprint

The total targeted population is estimated at 450,000.

Demographics:

male and female

ages 20–50

high percentage of young professionals who work in the central business district high

percent have completed undergraduate/postgraduate study with an average household

income of over $70,000.

BBQfun’s advertising budget is set at $180,000 for the 2012 financial year. The advertising

program will target local letterbox drops, radio and magazines. BBQfun will use direct mail

and local advertising, with coupon inserts in the Briskness magazine is likely to be the most

successful of the campaigns. BBQfun will try to get articles about BBQfun into the BrisNews

magazine. Previous features in the BrisNews magazine have seen a dramatic increase of sales

immediately after the article was published.

Consider strategic marketing approaches such as:

The various strategic marketing approaches (such as; increasing market share, developing

new markets, developing new products and diversification)that the company should consider

in terms of expanding their business potential and discuss what are the likely options for

implementation.
Strategic marketing approaches

Factors Options Considerations F or

U(favou rable or

unfavou rable)

Market penetration Market share The outdoor and favourable

growth lifestyle market in

(present market,
the UK is growing
present product)
at the rate of 6.6%

per annum.

Therefore, with the

existing line of

products that

BBQfun offers, they

can venture into the

UK markets.
Customer favourabl
USA and

China market

is also

at

growing stage and

it would be

advisable for

BBQfun to

explore the

imported goods

market of both

the

countries.

In today’s

world, the

customers

are only

loyal to
 those

loyalty companies e

improve

ment that offer

good

quality

products at

lower

prices.

Therefore,

BBQfun will

have to

concentrat
e on

manufactur

ing good

quality

products at

reasonable

prices to

attract

customers.

In UK and

USA they

will not

face much

stiff
competition

but in

China they

will have to

find ways

to reach

out to the

customers because

China has a huge

market which

offers goods at

low prices.
Customer value The company needs favourabl e

improve ment to concentrat e

on

providing after

sale services

to its

customers to

create customer

value. They will

have to ensure that

in

each market

they satisfy the

needs and

wants of

their

customers ( Zhou,

2012).
Product Design All the Favourabl e

development( prese
three countries
nt market,
market focuses
new product)
on the

design of

the

product. BBQfun

will have to make

changes in

the designs of

their

goods

according

to the

tastes and

preferences
of the

customers

of the

country

they want

to cater.

Very

market has

different

taste and

preferences

, which

BBQfun has
 to

understand

(Bellandi, &

Lombardi,

2012).

Technolo Technology favourabl

gy used by e

BBQfun will

have to be

advanced

and up-to-

date to

combat the

competition
it will face

from its

competitor

s. If BBQfun

expands its

market in

China then

their

technology

has to be

the best in

the market

because

the Chinese
 market is

Highly advanced

and technologic ally

forwards.

Market Distributi on BBQfun will also favourabl e

development( new have to

market, concentrat e

present product) on

establishin g its

distribution network

to make

sure that

their products

are easily

available in the

market. In

establishin g

distribution
network, BBQfun

will not

face any

issues in UK,

USA

or China as all

these countries

have

an advanced

e- commerce

method o

establishin g

distribution

network.
Exporting BBQfun will gain favourabl e

competitive

advantage if

they

export their
current

products to

USA as the

market for

imported

goods is

not

explored

yet. But in
China the

imported

goods

market is

well

explored

and by

entering

into that

market

BBQfun will

get no

advantage

(Mayer,
 Melitz, &

Ottaviano,

2014).

Licensing Obtaining unfavour

/ trade able

franchisi license in

ng China is a

very long

drawn and

difficult

process.

BBQfun can

obtain

trade
license

easily in UK

and USA to

start their

trade

operations

there.

Franchising

will also be

more

convenient

in UK
 and

USA but it

would raise

the cost for

BBQfun.

Joint The joint unfavour

venture venture able

option is

also

available

with

BBQfun but

coming to a

consensus
for both the

companies

will be

problem

owing to

their

difference

in culture

and

methods of

carrying on

trade (Acur,

Kandemir,
 & Boer,

2012).

Direct UK, USA favourabl

investme and China e

nt are inviting

foreign

direct

investment

s to their

countries

and so this

is a

favourable

time for
 BBQfun to

enter into

foreign

markets.

Diversification Related BBQfun can favourabl

(new market, diversific diverse e

new product) ation their product

portfolio

according

in lines

with their

current
portfolio

of

products.

They will

have to

first

identify the

needs,

wants of

the

customers

in the

market,

and then in

alignment
 with that

diversify

their

products

range.

Unrelate Unrelated Unfavour

d diversificati able

diversific on can

be

ation an option

for BBQfun

to enter

into a new

market. But

this will
increase

their cost

of

operations

with no

guaranteed

return as

all the

investment

s will be

made in a

new
 market.

Using a suitable methodology, such as gap analysis, market or marketing analysis, or

competitor analysis, identify and decide on two marketing opportunities to focus on and

investigate further.

A gap analysis is a method of assessing the differences in performance between a business'

information systems or software applications to determine whether business requirements are

being met and, if not, what steps should be taken to ensure they are met successfully. Gap

refers to the space between "where we are" (the present state) and "where we want to be" (the

target state). A gap analysis may also be referred to as a needs analysis, needs assessment or

need-gap analysis.

According to BBQFUN the goals of the company are to provide the great value outdoor

lifestyle products and second-to-none customer service, so let have a look on the gap

analysis.

Gap analysis

Strategic Current Deficiency Action plan

objective standing
Market It is selling more BBQfun is

penetration number of not being

products able to get extra

in the market share by

existing markets. market penetration

Product It is selling new BBQfun is A proper market

developme products not being research will help

nt in the BBQfun to
able to
existing markets. understand the types
innovate its products
of products that the
according to
market needs.
the

needs of the market.

Diversificati on It is selling new The diversificati

products on is

in the
increasing the
new
cost of BBQfun,
markets.
which they are
 not

being able to

meet in the

new market.

Market It is selling The existing BBQfun will need to

developme nt existing products products are conduct a market

in the not research of the new

new market. according to the market to

new markets’
understand the market
tastes and
needs and demand so
preferences
that they can

.
introduce relevant

products in

that

segment of the

market.

In your analysis, consider types of markets and aspects of the marketing mix such as

distribution, products and types of promotional activities

Types of marketing & markets

Ranking( Most

favourabl e =

lowest number

while least

Types of Mark et unfavoura ble

marketin g to serve =
Considerati ons

highest number)

USA The e- 1

commerce market

for

outdoor

and lifestyle

products

in USA is

very

advanced and

developed and
 more profitable

then UK and China

market. Hence,

BBQfun should

focus on

online market

in

USA by either creating

their own

e-commerce e-

commerce site or

by tying

up with the

other online

websites of

USA

(Purkayastha,

Manolova &

Edelman, 2012).

business-to- China For a foreign company 7

business it is difficult to

enter into the Chinese

markets.

Hence, BBQfun

can

use the

options of joint

venture, strategic

alliances or partnership

to enter the

Chinese market.

The only

drawback

in this

case will be

that

due to

the

cultural and trade

difference, the
 two

companies may

not be able to

reach a consensus

(Chen, Reilly, &

Lynn,

2012).

UK Direct marketing 2

is a

way by

which the

company can advertise

its

products

by sending emails

or text messages

to

the customers or by

distributing catalogues
direct marketing
and websites. This

way

of
 advertising will be

helpful for BBQfun in

the

UK

market.

ideas marketing UK This will be 4

more favourable in the

UK

market as the

customers in
UK are more

accepting when

it

comes to

trying new

brands or products.

Therefore, if BBQfun

uses the correct

method of advertising

in the UK

market and

makes the consumers

aware of their line

of

products, their

sales might

increase (Uhlaner,

L. M,

Duplat & Zhou,

 2013).

USA Due to United States 3

Free Trade

Agreement between

USA and Australia,

the trade relations

between both the

countries are

very good.

Therefore, the

USA government

would help
public sector

marketing BBQfun to reach out

to the local

customers.

services marketing China Services marketing 6

 refer to both B2C and

B2B services.

Since entering Chinese

market is

difficult due

to its

stringent trade

laws, service

marketing will

be

beneficial in the

Chinese market

(Morgan, Katsikeas

&

Vorhies, 2012).

USA The telemarketing will 5

be most beneficial

in the

USA market as

the people

out
 there are easily

induced
telemarketing
into purchasing

products

by viewing

advertisemen ts.

Estimate the effect of the two marketing opportunities on the business, for example:

-Effect on sales volume

-Growth

-Market share

-Profitability.

Impact analysis

Marketin g Factors for How does it affect Action plan

opportu nity considera tion BBQfun?

Product Effect on sales The sales The company needs

developm ent volume volume to

will increase
maintain the sales
as the
volume.
company’s product

portfolio increase.

Growth Introducing The company needs

new products to launch new

ascertains growth products according to

the the needs of the

product portfolio and market.

sales of the company.

Market share The market share of The firm has to

BBQfun will increase. increase its

market share by

attracting more

consumers.

Profitability With increase in sales The profit level

volume, the needs to be

profitability will maintained.

also
 increase.

Potential The potential The analysis of the

competitors competitors of competitors products

BBQfun will also try and sales needs to be

to launch new products done.

in the market.

Market Effect on sales The sales figure will The company needs

developm ent volume increase. to attract more

customers by means

of advertising.

Growth Emerging The penetration into

into new markets new market

will

ensure growth of the has to be done after

company. proper market

analysis.

Market share The company In the new

 will need to capture a market, the

share of the market in

market share needs to
the new country.
be established.

Profitability In new markets, the Profitability needs to

profitability cannot be be ensured after

ensured in the a few years in the

formative years. new market.

Potential The company needs to The market research

competitors do a proper market will help analysing

research about the the rivals.

rivals in the market.

Use numerical analysis or statistical methods to forecast effects. For example, use the least

squares method to estimate demand. Use estimated demand to calculate the effect on sales

and profitability.

The BBQFUN are using the cross section data, as the company wants to predict the value of

the sales that the marketing team are observing; according to the information on the cases

that we have observed. Examples of cross-sectional data include of; New Builds Renovation

and the replacement;

 New Renovator Replacement

builds s s

Have visited 70% 70% 50%

BBQfun

in

previous month

Have bought 70% 65% 50%

BBQfun

product in

previous

month

Customer 90% 95% 60%

service

is

essential

Price is most 10% 20% 95%

important
 Australian made is 80% 65% 55%

important

Will buy online 100% 100 100%

Will pay for 30% 100 100%

online %

delivery if chosen

Loyalty customer 30% 20% 10%

Explore and develop entrepreneurial, innovative or creative options (one for each

opportunity) to apply the marketing opportunities in the context of the organisation.

The chosen option is E-commerce opportunity. The benefits of applied the e commerce to the

BBQFUN could be varies such as:

Get deeper on the customer behavior

As the BBQFUN creates the Online feedback for the customer this could be the best thing for

the company to get to know the customer deeper; By satisfying their needs constantly, you

can improve your ongoing relationship with them and build long- lasting relationships.
Personal service

The company isn't just guided or influenced by price. Providing a personal service, albeit

online, is both appreciated by the customer and can prove to be very beneficial in increasing

sales. How can the customer provide a personal service via your online presence, etc.

Therefore, the customer.

PART B

Prepare a 15–20-minute presentation for marketing peers explaining and supporting the two

marketing opportunities you have identified. Ensure you complete the following:

Describe two marketing opportunities and how you identified them. Describe the process you

undertook to analyse your organisation to identify the marketing opportunities. Refer to

current organisational marketing plan and products/services

The marketing opportunity of the BBQ FUN are:

A growing market in a high growth area with a significant percentage of the target market

still not aware of BBQ fun value proposition.

Increasing sales opportunities outside of our store locations – south east of Melbourne.

Growing opportunity for online sales.

Support your choice of marketing opportunities with reference to market information such as

market trends and sales figures.

To gain more market share, customer services are very important. In most BBQ FUN stations

franchises are not very competent to some extent. For example, language would be the main

problem because these franchises are from overseas. They could not fully understand
customers’ requirements and the instructions from head office. So the training courses are

necessary for customer services.

On the other hand, developing new products will be helpful for the company. The most

products in BBQ fun are not produced by BBQ fun self, except BBQ FUN milk and bread.

So it will be a good chance to produce more home brand products such as chocolate bars

and hot foods which are good for breakfast and lunch.

Describe the effect of opportunities on the business, for example:

Sales volume:

Sales volume is the number of units sold within a reporting period. This figure is monitored

by investors to see if a business is expanding or contracting. Within a business, sales volume

may be monitored at the level of the product, product line, customer, subsidiary, or sales

region. This information may be used to alter the investments targeted at any of these areas.

A business may also monitor its break-even sales volume, which is the number of units it

must sell in order to earn a profit of zero. The concept is useful when sales are contracting, so

that management can determine when it should implement cost reductions. This can be a

difficult concept to employ when there are many different products, and especially when each

product has a different contribution margin.

Growth:

BBQfun’s advertising budget is set at $180,000 for the 2012 financial year. The advertising

program will target local letterbox drops, radio and magazines. BBQfun will use direct mail

and local advertising, with coupon inserts in the BrisNews magazine is likely to be the most

successful of the campaigns. BBQfun will try to get articles about BBQfun into the BrisNews
magazine. Previous features in the BrisNews magazine has seen a dramatic increase of sales

immediately after the article was published.

Market share:

Represents the percentage of an industry or market's total sales that is earned by a particular

company over a specified time period. Market share is calculated by taking the company's

sales over the period and dividing it by the total sales of the industry over the same period.

Profitability:

Profitability ratios are a class of financial metrics that are used to assess a business's ability to

generate earnings compared to its expenses and other relevant costs incurred during a specific

period of time. For most of these ratios, having a higher value relative to a competitor's ratio

or relative to the same ratio from a previous period indicates that the company is doing well.

Describe innovative or creative options (one for each opportunity) to apply the marketing

opportunities in the context of the organisation. Refer to aspects of the marketing mix, i.e.,

product, price, promotion, place (distribution). Refer to principles of marketing that apply to

your approaches to realising the proposed opportunities.

Pricing

While BBQfun will be priced at comparable prices for comparable quality, it will not be

cheap. We emphasise value over price and back this up with a three years guarantee.

Place:
BBQfun products will be distributed through two retail stores which customers can access

easily via the large car parking arrangements.

Promotion:

The most successful advertising will be ads and inserts in the Brizzy as well as a PR

campaign of informational articles and reviews also within the Brizzy. Promotions will take

the form of in-store entertainment and competitions with prizes to exotic overseas

destinations. Social media is considered not viable or practical considering low participation

among targeted segments.

Product:

BBQfun’s philosophy is that whatever needs to be done to make the customer happy must

occur. This investment will pay off with a fiercely loyal customer base which will

recommend BBQfun to friends.