COMPLETE ASSESSMENT DOCUMENT
BSB51207 Diploma of Marketing
BSBSLS501A Develop a sales plan
The following assessments are to be
(a) completed and
(b) submitted
in accordance with the associated
STANDARD INSTRUCTIONS
ASSESSMENT COVER SHEET
Required Skills and Knowledge
This section describes the skills and knowledge required for this unit.
Required skills
• communication and negotiation skills to determine sales needs, and to refine and modify sales plans in consultation with relevant organisational personnel
• creativity and innovation skills to develop and evaluate new sales approaches • research and data collection skills to gather information to develop a sales plan.
Required knowledge
• identification and overview knowledge of key provisions of relevant legislation from all levels of government that affects business operations, codes of practice and national standards, such as:
• anti-discrimination
• ethical principles
• consumer protection
• contract law
• privacy laws
• Competition and Consumer Act 2010
• industry, organisation, product
• methods for monitoring sales outcomes
• organisational strategic direction and objectives
• principles and techniques for selling
• statistical techniques for analysing sales and market trends.
Assessment Part A Market needs and strategic planning
Performance objective
The student must demonstrate the ability, knowledge and skills required to obtain and analyse an assessment of market needs and strategic planning.
Specifications
You must provide
? written responses with the meanings of each of these terms as used in a sales environment
• unique features or benefits of the product
• customer requirements for the product
• product pricing criteria
• financial and pricing criteria
? a written business report that
• Identifies unique features or benefits of the product
• Establishes customer requirements for the product
• Identifies product pricing criteria
• Identifies financial and pricing criteria in relation to the products and services supplied by BBQfun.
Adjustment for distance-based learners
• Requirements are as per the above classroom-based learners.
Assessment description
For this assessment you are required to apply your ability, knowledge and skills in identifying market needs and strategic planning.
Procedure
Read and analyse the business BBQfun (relevant information in Appendix 1).
Record the meaning of
• unique features or benefits of the product
• customer requirements for the product
• product pricing criteria
• financial and pricing criteria
Use your general knowledge and apply it to the business BBQfun to identify
• unique features or benefits of the product
• customer requirements for the product
• product pricing criteria
• financial and pricing criteria
Assessment Part B Market needs and strategic planning
Performance objective
The student must demonstrate the ability, knowledge and skills required to analyse information on market needs, new opportunities, customer profiles and requirements as a basis for decision making
Specifications
You must provide
? the meanings of each of these terms as used in a sales environment
• market needs
• new opportunities
• customer profiles
• customer requirements
? a written business report that show how you would identify
• market needs
• new opportunities
• customer profiles
• customer requirements ? a sales plan for 2020 in relation to the products and services supplied by BBQfun.
Adjustment for distance-based learners
• Requirements are as per the above classroom-based learners.
Assessment description
For this assessment you are required to apply your ability, knowledge and skills to analyse information on market needs, new opportunities, customer profiles and requirements as a basis for decision making
Procedure
Apply (or re-read to use) your understanding from Part A.
Record the meaning of. o market needs o new opportunities o customer profiles
o customer requirements
Use your general knowledge and apply it to the business BBQfun to identify
o market needs
o new opportunities
o customer profiles
o customer requirements
Appendix 1 BBQfun
1.0 Executive Summary
BBQfun will be the leading outdoor lifestyle retailer in the greater Brisbane area. The product range assortment of barbecues, outdoor furniture and barbecue accessories will position BBQfun as number one in outdoor lifestyle retailing at different price levels to suit different types of consumers.
BBQfun will build its reputation on offering the fullest assortment of products possible, incorporating both local and imported goods with products sold on easy to manage long-term payment plans. In addition, our after-sales service and three year guarantees will be attractive to customers in the current market dominated by low quality items.
At a Glance – The typical BBQfun Store:
? Location: a commercial, suburban neighbourhood, or urban retail district.
? Design: bright and functional.
? Size: 1,000 to 1,500 square metres.
? Employees: 15 to 20 full-time employees plus casuals
? Types of transactions: 60% cash, 40% on long-term repayment plan.
2.0 Situation Analysis
BBQfun is close to entering its 4th year of operation. The initial rollout of stores has been well received, and marketing is now critical to its continued success and future profitability. The basic market need is for quality, fashionable and unique outdoor lifestyle items that caters to the houseproud needs of our market.
2.1 Market Summary
BBQfun possesses extensive information about its market and knows a great deal about the common attributes of our most prized and loyal customers. BBQfun will leverage this information to better understand who is served, their specific needs, and how BBQfun can better market to them.
2.1.1 Market Demographics
The profile for the BBQfun customer consists of the following geographic, demographic, and behaviour characteristics based on a local Chamber of Commerce report:
Overview greater Brisbane area:
? high population growth of 5% per year
? new homes and renovated homes growing from a base of 50,000 per year ? low unemployment of 4.7%.
Geographic:
? our immediate geographic target is the area of Brisbane with a population of 1 million
? a 30 km geographic area is the average store market footprint ? the total targeted population is estimated at 250,000.
Demographics:
? male and female
? ages 20–50, this is the segment that makes up 50% of the Brisbane new and renovated house markets, according to the Chamber of Commerce
? high percentage of young professionals who work in the central business district
? high percentage have attended college/graduate school ? an average household income of over $130,000.
Behaviour Factors:
? target market has no concerns about debt; will borrow on the future to enjoy today
? looking for security in purchasing
? looking for the ‘house-proud’ factor in outdoor lifestyle purchasing.
2.1.2 Market Needs
BBQfun is providing its customers with a wide selection of products. BBQfun seeks to fulfil the following benefits that are important to their customers:
? selection – a wide choice of options
? accessibility – the patron can gain easy access to the store with minimal difficulty in finding parking within a reasonable distance from the entry
? customer service – the patron will be impressed with the after-sales service and guarantees
? competitive pricing – all products/services will be competitively priced relative to comparable high end outdoor lifestyle lines.
Above all, BBQfun believes that easy access to stores with extensive choice in products that are sold on an easily managed payment plan and a three year guarantee are the keys to satisfying our customer’s needs and wants.
2.1.3 Market Trends
The market trend for outdoor lifestyle stores is headed toward a more sophisticated and informed customer. The outdoor lifestyles patron today, compared to the past, is more sophisticated in a number of ways including:
? item quality – the preference for high quality items is increasing as customers are learning to appreciate differences in products’ quality
? 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 furniture and accessories.
The reason for this trend is that within the last couple of years there has been an explosion of media in the form of TV shows and magazines that have promoted exotic and different outdoor lifestyles. Consumers no longer need to accept a limited number of options. With more choices, patrons have become more sophisticated. This trend is apparent in other parts of Australia as you can observe a more sophisticated patron in larger city markets such as Sydney or Melbourne where there have been more choices made available.
BBQfun strongly believes that customers are more interested in range and quality of products, aftersales service and easily managed payments than any other issues. These are the reasons that they will shop with us and become loyal patrons.
Technological developments with the broadband rollout across greater Brisbane and Australia have opened up significant opportunities for internet shopping and for providing information for our customers about our product range.
2.1.4 Market Growth
In 2010, the national outdoor lifestyle market reached $300 million dollars. Outdoor lifestyle sales are estimated to grow consistently by at least 6% a year for the next few years. This growth can be attributed to several different factors. The greater disposable household income from 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’.
2.1.5 Economy
Based on economic forecasts, BBQfun assumes that interest rates are staying steady and will have little to no affect on disposable income. The same assumption is made about employment levels, where BBQfun assumes that unemployment levels remain the same at 4.7%.
2.1.6 Political
From research carried out, BBQfun identified that the Government focus in future legislative direction will be about ‘growing the economy’ and ‘population base’, which BBQfun sees as a positive for their business model. There is also a strong push for environmentally sound business practices in the legislative framework. BBQfun, as a business operating in Australia, will abide by the law in all its dealings and comply with all legislation that impact on its business activities.
2.2 SWOT Analysis
The following SWOT (strengths, weaknesses, opportunities and threats) analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing BBQfun.
2.2.1 Strengths
? Excellent employees who are highly skilled and knowledgeable about outdoor lifestyles.
? Retail space that is bright, functional and efficient for a commercial urban district.
? High customer loyalty among repeat customers.
? Assortment of products that exceed competitor offerings in quality, range and accessibility.
2.2.2 Weaknesses
? A limited marketing budget to develop brand awareness due to the lack of critical mass and store cover.
? The struggle to continually fund the growing long-term repayment plans taken out by our customers.
2.2.3 Opportunities
? A growing market in a high growth area with a significant percentage of the target market still not aware of BBQfun’s offer.
? Increasing sales opportunities outside of our target area – greater Brisbane.
2.2.4 Threats
? Competition from local independents that can reduce prices as operating costs are lower than in our staff-run stores.
? Competition from national chains moving into the Brisbane market.
? A slump in the economy reducing customers’ disposable income spent on outdoor lifestyles.
2.3 Competition
2.3.1 National Competition
? The Yard – has a limited selection but with significant attraction due to the fact that all products are Australian made. No significant marketing or promotion. The price point is high, but the quality of products is quite good. Not in Brisbane.
? 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 furniture replacements segment. One store in Brisbane. Mostly in Melbourne and Adelaide.
? Outdoorz – Large operations with a few stores per city. Mass markets outdoor lifestyles at good value prices. Extensive advertising. Low to medium quality. Strong in the furniture replacements segment rather than new and refurbished dwellings. Gaining strength in Brisbane market.
2.3.2 Local Competition
All independents. These stores are owned by individual owner operators. Product range varies 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 steady market share of 30%.
BBQfun do not see the competitors changing their marketing strategy or product offer in the foreseeable future.
2.3.3 Growth and Share Analysis
In the following points, ‘new builds’ refers to people who are looking to buy outdoor living items for a newly built home. ‘Renovations’ refer to people looking to purchase outdoor living products for a renovated home, and ‘replacements’ refers to customers looking to replace the items they already have.
? New builds – growth in potential customers 10%. Estimated Brisbane customer numbers in FY2011/12 is 95,000.
? Renovations – growth in potential customers 7%. Estimated Brisbane customer numbers in FY2011/12 is 35,000.
? Replacements – growth in potential customers 5%. Estimated Brisbane customer numbers in FY2011/12 is 120,000.
2.4 Service Offering
BBQfun has created an outdoor lifestyles range of retail products that is differentiated from and superior to competitors’ product range. Customers can see the quality of the product as it is displayed in the stores. The following are characteristics of the product:
1. BBQfun’s credit offer is backed by a top tier bank.
2. Imported products make up 33% of the assortment.
3. The three year guarantee is unique in the market place.
4. Broadest possible range in chosen fields.
BBQfun prides itself on providing service that is on par with, if not better than, any of the local independent stores and far in excess of the national chains. Customer satisfaction will be achieved by emphasising the four characteristics mentioned above.
2.5 Keys to Success
Location, Location, Location
BBQfun’s site selection criteria are critical to success. Scott Bremmer, former partner of an international chain, helped us identify the following site selection criteria:
? new dwelling populations
? shopping patterns requiring easy access ? high availability of customer car parking.
2.6 Critical Issues
BBQfun is still in the speculative stage as a possible franchise concept or joint venture. Its critical issues are:
? committed to sales growth which allows for greater options in import assortments and in reduced price with volume buys which will promote our uniqueness and contribute to improved profit margins
? continue to finance the easy to manage long-term repayment plan for customers
? to be located in easy access sites close to the growing markets in new dwelling development.
3.0 Marketing Strategy
BBQfun’s advertising budget is set at $1.8 million for the 2011/12 financial year. The advertising program will target local letter box drops, radio and magazines. BBQfun will use direct mail and local advertising, with coupon inserts in the Brizzy magazine likely to be the most successful of the campaigns.
BBQfun will try to get articles about BBQfun into the Brizzy magazine. Previous features in the Brizzy magazine have resulted in a significant increase of sales immediately after the article was published.
3.1 Mission
BBQfun’s mission is to provide customers with the most extensive assortment of quality outdoor lifestyle products available in the market. Our after-sales service is second to none and supported by our easily managed long-term repayment plans which make unique, imported and high quality outdoor lifestyle affordable to all. BBQfun exists to attract and maintain outdoor lifestyle customers wishing to purchase products that give our customers pride in their homes. Our services will exceed the expectations of our customers.
3.2 Marketing Objectives
? increase sales to $12 million in FY2011/12 and to $15 million per year by end of FY2013/14
? increase market share to 25% in FY2011/12
? increase our loyalty customers list from 8,000 in previous financial year to 12,000 in FY2011/12
? establish brand recognition in Brisbane so that at least two in three people recognise brand by end of FY2011/12
3.3 Financial Objectives
• A double digit percentage growth rate in sales for each future year.
• Reduce the overhead per store through disciplined management of expenses.
• Continue to increase our gross profit margins.
3.4 Target Marketing
The target market comprises three segments:
? New builds– generally want to purchase entire suites. Typically shop as couples. Price sensitive to a point but co-ordination is the highest priority. Live in all areas of greater Brisbane.
? Renovations – demand for high quality and different items. Unique and exotic overrides price concerns. Live in affluent suburbs such as Clayfield.
? Replacement – basic functional products that replace and broken or worn item. Single shopper. Cheap price required. Live in less affluent suburbs.
The BBQfun customers are mostly aged between 20 and 50. Outdoor lifestyle stores have been very successful in standalone stores that have extensive car park access where they are close to new housing estates being established. These areas have families who have household disposable incomes of over $40,000 per year.
Combining several key demographic factors, BBQfun arrives at a profile of the primary customer as follows:
? sophisticated people who are house-proud
? shoppers who will drive to an easy to access store
? customers who require payment plans to spread their commitment over an extended period.
? renovators and new home builders ? 20–50 year olds.
More information is sought regarding specific target markets.
3.5 Positioning
BBQfun will position itself as a unique outdoor lifestyle retailer that offers a broad assortment of quality products. Brisbane consumers who appreciate high quality and uniqueness will recognise the value of offerings provided by BBQfun.
BBQfun’s positioning will leverage their competitive edge:
? Product – the product will be wide ranging, quality and unique. It offers the ‘house proud’ customer a different option from the cheap mass-produced products prevalent in the market.
? Service – BBQfun offer the only three year guarantee in the market. Our easy payment scheme is just what our mortgage paying customers want. Our experienced staff can assist with product knowledge second to none in the industry.
By offering a superior service in range and uniqueness, BBQfun will excel relative to the competition and achieve our objectives.
More information about specific target markets will allow BBQfun to write position statements for each of the three target market segments.
3.6 Marketing Mix
BBQfun’s marketing mix is comprised of these following approaches to pricing, distribution, advertising and promotion, and customer service:
? Pricing – while BBQfun will price at comparable prices for comparable quality, it will not be cheap. We emphasise quality over affordability and back this up with a three year guarantee.
? Distribution – BBQfun products will be distributed through a chain of retail stores which customers can access easily via the large car parking arrangements.
? Advertising and promotion – the most successful advertising will be ads and inserts in the Brizzy magazine as well as a public relations (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.
? Customer service – BBQfun’s philosophy is that whatever needs to be done to make the customer happy must occur. It is believe that investing in high quality customer service will pay off with a fiercely loyal customer base which will lead to recommendations within the target market.
3.7 Product Development
It is envisaged that new products will be developed or sourced on a regular basis in line with changes in customer taste which is expected to occur in approximately 12 month cycles. The plan for product testing is to engage market research firms. By getting feedback from these firms, changes can be made or products discontinued so that only tested and proven products make it onto the store’s product list.
3.8 Marketing Research
During the initial phases of the marketing plan development, several focus groups were held to gain insight into a variety of patrons of outdoor lifestyle stores. These focus groups provided useful insight into the decisions, and decision-making processes, of consumers. An additional and more dynamic source of market research is a feedback mechanism using an in-store suggestion card system.
Access to ongoing market research will also be achieved via the publications from the Outdoor Lifestyles Association of which BBQfun has recently become a member.
Cannon’s Consultants will advise on all aspects of marketing and provide sales forecasting services.
4.0 Financials, Budgets, and Forecasts
This section will offer a financial overview of BBQfun as it relates to its marketing activities.
4.1 Break-even Analysis
The break-even analysis indicates that $10 million in sales per year will be needed to reach the breakeven point.
Fixed costs are estimated at $4 million. Variable costs are 60% of sales; therefore sales of $10 million will be sufficient to cover fixed and variable costs.
4.2 Sales and Profit Forecast
Sales have gradually increased with profitability being reached by the end of FY2010/11.
Sales Forecast
FY2011/12 FY2012/13 FY2013/14
Total sales $12,000,000 $13,500,000 $15,000,000
Profit Forecast
FY2011/12 FY2012/13 FY2013/14
Net profit $800,000 $1,200,000 $1,700,000
4.3 Expense Forecast
Marketing expenses are to be budgeted to increase in 2012.
Marketing Expense Budget
Expenses FY2011/12 FY2012/13 FY2013/14
Direct mail $400,000 $500,000 $600,000
Magazine adv $1,100,000 $1,000,000 $800,000
Radio Promotions $300,000 $500,000 $700,000
Total $1,800,000 $2,000,000 $2,100,000
Cannon’s Consultants will advise on all aspects of marketing and provide sales forecasting services. Cannon’s will also be given access to the marketing cost data so that they can periodically examine and evaluate marketing costs in line with industry benchmarks. They have always been the preferred consultants because they are locally based, unlike the national group of consultants, Brown & Holingsworth, based in Melbourne.
5.0 Controls
The purpose of BBQfun marketing plan is to serve as a guide for the organisation.
5.1 Implementation Milestones
The following milestones identify the key marketing programs. It is important to accomplish each one on time, and on budget.
Milestones
Advertising Start date End date Budget Manager Department
Total radio advertising budget July 2011 June 2012 $300,000 Marketing Manager Marketing
Total magazine July 2011 June 2012 $1.1 million Marketing Manager Marketing
Total direct marketing budget July 2011 June 2012 $400,000 Marketing Manager Marketing
Totals $1.8 million

5.2 Marketing Organisation
BBQfun’s marketing manager is primarily responsible for marketing activities and has the authority and responsibility over all company activities that affect customer satisfaction. This is in addition to his/her other responsibilities.
Cannon’s have been engaged to provide marketing services as required, and some outside resources for graphic design work, and creativity are also to be utilised.
Feedback will come from in-store feedback forms and local customer surveys.
5.3 Contingency Planning
Difficulties and risks faced by BBQfun:
? problems generating brand visibility
? overly aggressive and debilitating actions by competitors
? an entry into the Brisbane market of another already existing, national chain.
Worst case risks may include:
? determining that the business cannot support itself on an ongoing basis ? having to liquidate equipment or intellectual property to cover liabilities.