Executive Summary
Successful introduction of a new product in the market requires research and critical analysis of the product, its competitiveness, relevance and acceptability among the targeted clients. Specifically, the successful introduction of the M.U.S.A Magic Pen product requires a balanced mix between marketing and strategic positioning in the expansive market. This business plan covers market segmentation, and various properly researched marketing strategies that should be employed so that the product can cut a niche in the stationary market in the UK and beyond. To jumpstart operations, the introduction of the product will be at very competitive prices. This paper reflects on the market mix, SWOT analysis, competition analysis, and market analysis, positioning strategy, product analysis and financial analysis in the business plan for the newly invented M.U.S.A Magic Pen product in the UK market.
Introduction
Brief background and feasibility
M.U.S.A Company is a private limited company that has four board members as the shareholders. The company operates in the stationary industry of the UK. The company plans to launch the M.U.S.A Magic Pen product. The product has three unique features that its competitors lack. This forms the rationale for introducing this product. This business plan explores the best bundle of marketing techniques that would facilitate the successful introduction of the M.U.S.A Magic Pen product in the UK market and beyond.
Aim and objectives of the business
The aim of formulating this business is to sell the M.U.S.A Magic Pen product to college students and other relevant clients. The key objectives of this business are:
- To boost its profit margin per year by 8% and to develop other versions of the product from the second year of the business operation.
- The owners will allocate 10% of the total profit for the marketing activity as it plays vital role to increase sales revenue within the first year of operations.
Business environment
Competitors analysis
Industry
The market size for the computerized pen in the UK is estimated to be worth two million pounds. The company targets to capture 25% of this market within the first years of operation since competition are still not very stiff.
Porter’s five forces
Threat to market entry
It is not difficult for any aspiring business to enter into the UK stationary market and manage to break even easily. Given the perpetration strategy proposed for this business, it will have the capacity to offer affordable and reliable magic pens to its customers (Anderson, Raffo, Hall, Jones 2008). The business is well position to survive in the competitive market through gaining form economies of scale, competitive price tags, and strong customer base in the UK since its product is more unique than those of its main competitors (Birdsall and Johnston 2010).
Threat of substitutes
E-Pens Ltd, Shenzen Ltd, and Livescribe Ltd pose the greatest threat to M.U.S.A’s existence and business performance. These businesses have been in the industry for longer period and are well established than the M.U.S.A. The E-Pens Ltd, Shenzen Ltd, and Livescribe Ltd have the same products and sometimes offer big discounts to customers. Therefore, E-Pens Ltd, Shenzen Ltd, and Livescribe Ltd have the ability to offer an alternative perfect substitute to customers who may be unsatisfied with the M.U.S.A pen (Roberts 2005).
Power of suppliers
Suppliers in the UK stationary industry have more power owing to the existence of many stationary businesses. This leaves the suppliers with the power to dictate on proceedings in the industry such as prices for the pen products. However, the M.U.S.A business will endeavour to use its deep reservoirs as a strategy for balancing the supply forces in the UK pen market (Wright 2007).
Power of buyers
Reflectively, the amount of output in terms of turn over sales depends on the buyers’ purchasing power. The higher the purchasing power, the better the turnover in total sales realised over a definite period of time. The management of the M.U.S.A business must therefore do everything within their means to ensure that product delivery and quality meets the expectations of customers (Parente, 2006).
Rivalry
There are several businesses operating in the same industry with virtually all of them dealing in a variety of the pen product. For instance, the E-Pens Ltd, Shenzen Ltd, and Livescribe Ltd provide the biggest competition to M.U.S.A due to their big market share and expanded network. All the players in the industry are putting measures in place to ensure they attract more customers and therefore expand their market share. Therefore, the size, in terms of space occupied by business premises, defines the temperature of competition. In line with this, the M.U.S.A’s London production plant will be the biggest (Wright 2007).
SWOT
Strengths
The stable and management team comprising of four directors are instrumental towards providing necessary support and guidance in production and distribution of the M.U.S.A Magic Pen to customers. Besides, the business has the Unique Selling Point (USP).
Weaknesses
M.U.S.A is a start up business so it has a higher chance of failing because of the difficulties in start up businesses. Furthermore, the lack of variety in products might also be a factor for the business to fail. As a result of these weaknesses, the business may not be able to efficiently penetrate the small business segment in the UK.
Opportunities
The business has an opportunity to expand since it is working with other MNC’s such as Cannon and Bose. Therefore, M.U.S.A has experienced suppliers.
Threats
Since the business is a threat to its competitors, they might retaliate by providing the public with a similar product at a lower price. This will hurt the revenues of the M.U.S.A venture. Besides, conglomerate diversification would be a threat to our company should the business decision environment conspire against its goals.
Product description
The M.U.S.A Magic Pen product has a 720p Cannon lens camera that can zoom for up to 50mm, as well as a video recording capacity for up to 3 hours per charge. Besides, the product has a voice recording that can last for up to 3 hours with the 720p video recording or up to 6 hours without video recording. In addition, the products has a memory writing feature that can remotely capture text and transfer it digitally throughout a USB port to all kind of laptops and androids. Therefore, the product touches on the way of life for the target college students (Wright 2007).
Under promotion, the business will be offering a 20% discount to students who are currently studying in a university or students who are in advanced systems in high school. On pricing, the business will adopt the physiological pricing strategy. Since the cost of production of 1 pen would be 180 pounds, the selling price would be 249. Concerning the place, M.U.S.A is planning to advertise its product in universities and major corporations upon the estimated release date of its product in mid 2014. Moreover, the business can enter into strategic partnership with other companies to advertise the products (Parente 2006). Finally, the company can reach the target market segment via the internet.
Marketing area
M.U.S.A is planning to target it’s product to students, teachers and businessmen. Since this product come in different forms, the segment is influenced by differential quantification and competitive pricing. Therefore, the company will internalize these aspects to position itself in this segment.
Financial plan
The business targets to sell 1000 pens within six months. Since the cost per pen will be $249, the business targets to collect revenue of $249, 000 within the six months of operation. This is summarized in the table below.
Conclusion
From the above calculations, the business is likely to breakeven within six months. A properly researched marketing plan determines the success and sustainability in penetrating a market with a new product. To increase credibility and maintain professionalism, product processes and features should flawlessly facilitate a healthy and lifetime relationship between the company and its clients. A properly designed market plan should be practical in presenting brand knowledge, awareness, penetration strategy, and passing information to target audience.
Reference List
Anderson, A., Raffo, C., Hall, D., Jones, R 2008, Business Studies for Aqa: As Level, Pearson Education, London.
Birdsall, C., & Johnston, N 2010, “Achieving brand-driven business success,” Design Management Review, vol. 19 no. 2, pp. 67-74.
Parente, D 2006, Advertising campaign strategy: A Guide to Marketing Communication Plans, Ohio, Thomson South-Western.
Roberts, J 2005, “Defensive marketing: How a strong incumbent can protect its position.” Harvard Business Review, vol. 83 no. 11, pp.150-210.
Wright, P 2007, “A refinement of Porter’s strategies,” Strategic Management Journal, vol. 8 no. 1, pp. 93-101.