Introduction
The proposed service is a laptop rental service for university students. It will consist of short- and long-term rentals of laptops that would require students to pay a fee for rental of the laptop. The company will have a range of laptops from different brands that students would choose from after applying for the service. Laptops will be set up and pre-installed with basic educational software. Students will pay a set fee based on the laptop selected and time rented. Upon return of the product, the computer will be evaluated, and the student will be billed fully for the full time the product was rented. The service will operate 24/7 for the university so that students can rent a laptop at any time for academic needs in case of emergency situations.
Concept Statement
Concept: A 24/7 service which allows students at the university rent laptops for a set fee, catering to both, short-term emergency leases and long-term needs of students who require laptops for academic activities.
Goal: To establish the business as a primary, accessible solution for students who are experiencing issues with their computers and establish a profitable long-term business model.
Risks: There can be an inherent lack of interest in the business as most students also have mobile devices which they can use or utilize computers free of charge at the university library. There is a risk that initial investment will take a significant time to recoup given the expense of hardware and various costs in upkeeping it.
Target Market
The target market will be students, and potentially staff who are members of the local university. National survey data demonstrates that 80% of students have laptop devices for their college (or higher) education, while 4 out of 5 rely heavily on digital learning tools for a wide variety of activities (Reed, 2016). Therefore, students attending the university will be the target market and preference of the rental service. The laptop rental service will target those who need a computer device for academic purposes. Potentially a partnership with the university can be established to provide favourable rates as well as a liability system for those affiliated with the university as either student or staff.
Service Positioning
Given the target market statistics described above and with an average university population between 20,000 and 30,000 individuals, both empirical and anecdotal data suggests that students may need a laptop rental. The average malfunction rate for laptops is 20% while failure rates are at least 31% within 3 years (Newman, 2009). Given that higher education lasts at least 4 years on average, it is likely that at least a third of the 20,000-30,000 population will experience a malfunction. The nature of college academic studies is that laptops are necessary for most students either for note taking, completing assignments and coursework, and for other aspects such as communication and leisure. In cases of laptop malfunction or failure for students, it may take several days up to a few weeks to receive appropriate maintenance, thus students may need quick access to a laptop that can be used for necessary activities and then transfer the data over.
Therefore, the service positioning of the proposed laptop rental service is to offer this affordable, no hassle rental for laptops which can give students the necessary devices to seamlessly transition in their studies. The service is clear, transparent, and provides choices for students in terms of their rentals that also impacts the price. There will be a wide variety of laptops on offer, as some may prefer the Apple operating system over Windows while some studies such as design and engineering may require additional software or processing power. The service positioning will encompass the comfort, speed, and technical reliability that students may require in such situations where emergency rental or access to a laptop is necessary.
Marketing Objectives
Marketing objectives for the service should be set using the SMART model as will be identified in this section. This structured approach is highly effective in managing marketing activities and determining their effectiveness, thus modifying them as necessary and being able to evaluate their success for the business model (Woodruff, 2019).
Specific – to achieve awareness that the service is available to the university student population and increase traffic flow to the service from those experiencing laptop malfunctions.
Measurable – awareness based on marketing efforts can be measured via randomized surveys on the university campus or quick interviews. Similarly, measuring foot traffic in comparison to laptop malfunctions can be measured via surveys distributed in person or via email through the university networks.
Achievable – due to the availability of mass information resources and communication methods within a university ecosystem, the goal is achievable.
Realistic – The objectives are difficult but can be achieved by a staff of 3-4 part time employees. Most of the marketing efforts are likely to be passive or digital.
Time-specific – It is necessary to spread awareness of the service and maximize marketing within the first 1-2 months of the academic year and monitor the foot traffic on a semester basis.
Financial Objectives
The financial objectives for the service are to cover initial entry costs and achieve at least a 20% revenue growth year over year for the first 5 years of operations. Contribution earnings should range between 150 to 250 per month. Profitability should be increased year over year, but it is necessary to manage margins at a level that would make the business profitable but also be affordable to students. It is hopeful that at least 60-75% of available laptops will be in rental rotation during the academic year. However, there is an inherent limit to growth as local and university populations are commonly stable, and rates of computer failure only decrease with time due to improvement of technology. There is no real alternative to this business other than some computer service shops may offer out temporary rentals on a minor basis. Therefore, the dedicated laptop rental service should theoretically capture the majority of the market share.
Societal Objectives
The primary societal objective is to provide a service that university students may desperately require but have no easy access to. While laptop rental services exist nationally, they often require significant paperwork, fees, and additional shipment times. Most smaller cities associated with universities do not have a robust rental business for computers such as the one proposed in this plan. It will be a service that directly contributes to the academic success of students by ensuring the availability of access to a laptop with all available software to perform their coursework. Localising and streamlining the service to make the process readily available and easy for students eliminates the need for costly rentals and eliminates other elements such as shipping that are not only detrimental to the student population but to the environment as well. It is hopeful that the service model will spread to all universities in the country.
Marketing Mix
Product (Service)
The product for this business is laptop computers which are rented (as a service) to individuals. The service is targeted at those who may require a laptop in emergency or temporary situations. Since laptops are widespread tool and device used for studies, work, and entertainment, this is a viable service to have in a strategically placed location such as a university. The service will ensure a wide availability of laptops for all pricing points and needs of students who may require to rent a computer.
Price
The pricing strategy for the business will be aimed at affordability as much as possible but also helping to maintain profitability. Pricing will be available by tiers of laptop and rental period as seen in the table below. Therefore, those who require laptops for a prolonged period of time, such as several weeks, experience significant discounts in comparison to per day rentals. These are more than reasonable prices for such expensive electronic devices, but is within the ability to pay of the primary consumer market which are students.
Place
The point of sale will be a location on or near university grounds that is easily accessible by foot to all students. This strategic placement will ensure that the primary target customers have an ease of convenience to use the service, particularly in emergency situations and will not have to travel far. Furthermore, it is important to consider the digital space as a point of sale. Although the laptop rental will be done in person, consumers will be able to fill out the application online and immediately pick up their product. Digital points of sale will consist of the website created for the service.
Promotion
Promotion will occur online, print advertisement, and digitally. Print advertisements may be taken out in university newsletter as well as posting posters around the campus. In-person advertising may occur by placing an information booth during university events and handing out flyers. Digital advertisement will include links on university resources such as the library website as well as advertisements on university-associated social media groups. This promotion mix will be effective in covering a large population on the university campus and gradually increase awareness of the service.
Physical Evidence
The rental service is meant to be a smooth and no hassle experience. Although the physical environment is likely to be small, but it will be streamlined so that the customer can fill out their information, provide identification and receive the laptop quickly. The service will have a website with an intuitive from and a catalog of laptops with pictures and specifications for the customer to choose from. The designs both in the physical space and the website will be modest but modern and sleek as appropriate towards the target audience.
People
The marketing will be done by the business owner and one other employee who will be hired with knowledge of marketing skills and strategies. It is a small business so there will be no dedicated marketing team. There will be two major responsibilities for marketing, developing the marketing material and implementing the marketing, including in-person advertisements. It will be important to select an employee who has the ability to be creative, multitask and have a high level of customer support or sales experience.
Process
Process is the flow of activities or mechanisms in the interaction between a customer and business. When a customer would like to use the laptop rental business, they can either fill out an application with their personal and contact information online or come in and do the same in-store. The service representative will ask for an identification document and make a copy. The customer will be provided with rates and a list of available laptops. The customer will choose the laptop and either short or long-term rental. At which point they will be asked to make the deposit equal to 1 day of rental. At which point they can leave and use the rented laptop. Upon completion of the rental, they return. The laptop condition is examined to match that when it was provided. The time of return is noted, with 12pm considered the cut off point from which an additional day of rental is charged. The customer signs a document that the laptop is returned, making the payment using cash, card, or digital transaction, and the rental process is complete. At this point, the employee checks the laptop, deleting any files from customer use, cleans it and re-enters it into the rental rotation.
Financial Evaluation
Sales Forecast
The sales projections were based on the cost per unit using the service costing discussed in the next section and estimating revenue based on number of rental units expected. Year 1 demonstrates relatively modest sales since the service will be new, and only a small number of individual customers is expected. However, by year 5, the business will be well-established, well-integrated into the college system, and have a large awareness on campus. Combined with predicted 20% annual growth, it is likely to assume that the customer base will increase by approximately six-fold, thus significantly increasing expected sales.
Financial Evaluation
The service costing was based off taking the core costs of running the business and providing an estimate per year. The prices are assumed on the premise that collaboration with the university will be established, thus allowing for cheaper rental and utilities prices than a typical private business. The marketing budget remains small for year 1, assuming the costs of basic print materials, in-person advertising, or minimal digital advertising (also largely done through university platforms). The net contribution was calculated by subtracting the total costs from the estimated sales revenue for year 1.
Time Plan
Monitoring and Control
Monitoring
Monitoring of the business will be done using key performance indicators (KPIs). As a rental business, there is a constant necessity to monitor the strength of the industry and demand and react quickly to market changes in order to reinforce the value of renting to consumers (Wenham, n.d.). The primary objectives for the business that will be constantly monitored is long-term profitability and new sales through rentals to new and returning customers. Some of the KPIs that will be monitored include:
- Financial utilization – true amount of revenue per individual laptop.
- Time and physical utilization – maximize types of laptops available based on their rental popularity.
- Rental rate – average change in rental rates between time periods, calculating rental amount to meet revenue goals.
- Maintenance-to-income ratio – tracking maintenance costs compared to revenue from each individual unit – prioritizing maintenance on popular products to improve availability and customer satisfaction.
- Customer acquisition rate – the costs of attracting new customers and their retention with the business.
Control
Annual control will be exercised through management of key objectives. First, monthly and quarterly goals are set, as described in the time plan, which should be met. Performance in the market is monitored at all times. If there are deviations in sales and rental figures, corrective action will be taken such as increasing marketing or adjusting rates. This ties in with profitability control that will monitor the earning capacity of the various laptop units for rental within the firm’s products and target consumer groups. The business does not have significant operations to implement productivity control, but processes such as tracking rentals, maintaining equipment, and database control should be optimized. Finally, strategic control will be implemented to execute strategic plans in terms of growth of the business. This includes managing the market, building partnerships with the university, finding new ways to attract consumers.
Contingency Plan
The biggest risk in operating a laptop rental business is ensuring that the electronic devices are maintained in safe and operating conditions. As a contingency plan, all laptops will be insured upon purchase. Furthermore, consumers will have to sign a liability waiver upon rental promising to upkeep the laptop in proper condition at which it was received. If a laptop needs to be fixed, the contingency plan will have various options on how this can be done at the most price-effective point. Collected data on customers must be securely protected, so it is necessary to establish IT protections in order to secure all data. The business staff and rented space will have to be insured as well.
References
Newman, J. (2009). Report: A third of laptops fail within 3 years. PCWorld. Web.
Reed, T. (2016). New survey data: Four out of five college students say digital learning technology helps improve their grades. Web.
Wenham, E. (n.d.). Best KPIs for the equipment rental industry. Web.
Woodruff, J. (2019). Example of a smart objective for a marketing plan. Web.