Executive Summary
Avenue Park Accountants is a small business based in Manhattan and Mott Haven division of the South Bronx. The company was founded in 1990. The company offers a wide range of tax and management accounting products and services for small and medium size businesses in a geographical area covering Manhattan and Mott Haven division of the South Bronx.
The product/services offered include tax services, management/cost accounting services, QuickBooks services, and premium client service (outsourcing service). The company expects to attain higher annual revenue from the bookkeeping services in the next three years. The company is expected to achieve sales of $40000 in the next three years, and net earnings of $60000 in the same period. Also, the company is expected to maintain a 50 percent benchmark performance.
Introduction
Company Background
Avenue Park Accountants is a small business situated in the suburbs of the Mott Haven division of the South Bronx. The company offers a wide range of accounting services for small and medium size businesses in a geographical area covering Manhattan and Mott Haven division of the South Bronx. The company fits the needs of businesses dealing with the increasing agony of hiring staff and expanding operations.
The company will offer attractive prices; both compared to the market and the cost of hiring its own accounting staff. Also, the company will offer very flexible and scalable services to the existing and prospective clients. Avenue Park Accountants will make the bookkeeping services, the core of the company’s business and a source for referrals for other accounting services.
Company’s Goals
Avenue Park Accountant’s goals include individual goals, marketing objectives, business goals, and customer satisfaction goals. Individual satisfaction goal entails minimizing the time spent on the business by the proprietor (Isaac Greenwood) and attainment of professional accreditation.
The core marketing objective is the generation of massive numbers of leads and media coverage. Avenue Park Accountant’s business objective is to increase sales substantially over the next three years. Last but not least, the company aims to attain a high level of client satisfaction.
Environmental Analysis
Generally, accounting and bookkeeping services fit very well with the existing and new businesses. The industry is fairly stable since there are numerous individuals starting their businesses and looking for assistance to manage their finances, records, and tax regime.
The industry is also highly concentrated, with workplaces occupying nearly half of the market. Given a large number of small and medium-size businesses, accounting services are in high demand. Also, most companies offering these services are embracing the current electronic systems geared towards clients with accounting/bookkeeping needs (Smith, 2013, p. 1). The political state of affairs in the US can be described as stable at the moment. The main focus of the current government is the global financial crisis and the reinforcement of the global economy.
According to the US legislation, payroll and bookkeeping service businesses must follow Generally Accepted Accounting Principal (GAAP), as well as the US revenue law. While payroll and booking services are offered throughout the year, income tax is charged every quarter. As a result, these obligations must be met regularly (Smith, 2013, p. 1).
The US economy is at the moment relatively stable and has recovered from the global economic crisis witnessed in 2007/08. However, the country is still grappling with high unemployment and economic uncertainties. The economic situation in the US is a major cause of concern to the company because they are likely to affect other economic factors, for instance, demand for services and profit margins. Since the economic factors are way beyond the company’s control, they will adversely affect its performance and marketing mix (Behr, 2009, p. 63).
The high level of unemployment has led to declining demand for accounting services over the past few years. In 2012, it was estimated that the industry’s revenue declined by nearly 48 billion dollars. The high level of unemployment caused by the recession led to a decrease in payrolls and business dissolutions. As a result, many businesses opted for other cost-cutting measures.
However, the fortunes of the industry have improved in the past two years, with the revenue expected to go up by 4 percent as the economy normalizes. Also, the US service sector has been witnessing an increase in the number of young and vibrant entrepreneurs. These infant businesses prefer to outsource accounting services to cut costs (Smith, 2013, p. 2).
The target market
The accounting service market in the United States is mainly comprised of small businesses. As these businesses grow, they always need assistance from the professionals, especially with the preparation of tax reports, bookkeeping, and accounting services. While a number of these businesses hire these experts directly, many of them outsource these services.
The primary market for Avenue Park Accountants is small size businesses located within Manhattan and Mott Haven division of the South Bronx. The company’s target market can be categorized into three groups: non-employer companies, very small businesses, and other small businesses. Non-employer companies are medium-sized firms with less concern compared to larger companies.
However, the proprietors are very cautious in safeguarding their tax liability and returns. Most of these firms normally outsource QuickBooks and tax preparation services. Very small businesses are businesses with less than ten employees. These businesses normally outsource payroll services, bookkeeping, and tax preparation services.
They cannot afford to hire a full-time expert but can manage to secure part-time assistance. Last but not least, other small businesses include businesses with employees between 10 and 100. These businesses can afford in-house financial management but opt to outsource these services to concentrate on their core business.
Branding Strategy
The positioning of the Avenue Park Accountants brand can be classified into two: customer’s services and advertising (Cravens & Piercy, 2006, p. 16). Based on the satisfaction of the consumers, the main goal will be ensuring that the already acquired consumers are retained. There is a direct relation between the level of satisfaction of the customers and customer royalty (Melewar & Wooldridge, 2001, p. 330).
In advertising, Avenue Park Accountants will rely solely on media advertising than any other medium of promotion. This is because the Avenue Park Accountants brand will be sold in a relatively wide and concentrated market and this is the channel that will be able to reach the largest proportion of the target audience (Rust, Zeithaml & Lemon, 2004, p. 114).
The company’s core branding factors will be based upon a logo-a portrait of a magical wand leaning on a dollar symbol. Instead of using cartoon images or clip arts, Avenue Park Accountants will not be shown in the images, but in the distinct symbol of the magic entrenched in the service, for instance, shinny lines and luminary bursts.
These core elements will be used in stationeries, business cards, business forms, e-mail format, print adverts, direct mails, and signatures. Non-visual catchphrases “at your service” and “can do” will be used in telephone conversations and customer care service. The catchphrases will vary according to customer needs.
Possible brand extensions
The concept of brand extension refers to the application of a brand beyond its initial range of products or category (Pitta & Katsanis, 1995, p. 56). This is made possible where the image of the brand and attributes influence consumer perception. In this case, the brand and not the product is the decision driver. In the current business world, brand extensions are considered to be ways of leveraging the value of the core brand assets (Aaker, 2004, p. 8).
Avenue Park Accountants will be able to extend the brand into many other services. Some of the possible viable brand extensions to Avenue Park Accountants are credit card processing, auditing, tax advisory services, business valuation, sustainability and crisis management, and performance improvement, among others.
Performance Analysis
The company’s performance will be based on several leads generated. The leads will be based on referrals, website visitations and downloads, and others (testimonials, Direct mails, and PR mention). A considerably high number of leads must be generated to achieve the targeted conversion rate of 10 percent and maintain a 50 percent benchmark (200000 dollars in revenue). The company expects at least one referral per each client. Therefore, monthly billings will be used for the tracking purpose. The company’s performance (taking into consideration the key metrics) is highlighted in Appendix.
SWOT Analysis of Avenue Park Accountants
SWOT is an abbreviation for Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis is commonly used in business studies to explore the existing conditions to come up with possible solutions or strategies for addressing both internal and external challenges. Internal analyses are covered under strength and weaknesses, whereas external analyses are under opportunities and threats. In this case, SWOT analysis is used to audit the target market.
The long-term experience of the proprietor in the accounting and bookkeeping industry gives the company a competitive edge in the market. Also, the proprietor has been undergoing constant training to be updated with the current accounting systems and programs.
As a result, the company can provide high quality and reliable services to its clients. Avenue Park Accountants major weakness is attributed to its low status and inadequate publicity. Also, the company still has a low contact network. Even though the company aims to explore social media to increase network coverage, it is still not sufficient to attain a high number of accountancy clients.
Nonetheless, the company’s opportunities lie in the advertisement of high-quality accounting services on social media and print press. The company can enhance its network contact and market its services online by simply creating a Facebook and Twitter profile. This will create additional value for the customers. The company can also increase its client base by offering competitive prices.
Last but not least, Avenue Park Accountants’ major threat is the high number of companies within the target market offering similar services. As a result, competition is very stiff. Other threats include global financial crisis/recession and unhealthy competition from the large established companies like PricewaterhouseCoopers. These companies have forced the prices to go down to the extent that it is hurting the small companies with low volume capacity.
Marketing Strategy
Avenue Park Accountants’ marketing strategy will involve direct contacts with clients and promotional activities. Promotional activities will encompass referrals, mass/print media, web marketing, and social networking. The promotional activities will also entail the provision of brochures and newsletters to enlighten potential clients.
The newsletters will contain a brief cover letter, case statement, description of the ideal client, services offered, several case studies, testimonials, frequently asked questions, and a list of clients. Also, the company’s sales strategy will principally be based on personal interaction with potential clients and internet marketing. The company representatives will regularly meet clients to assess their needs and requirements.
Positioning Statement
The company will provide accounting services to small size businesses based in Manhattan and Mott Haven division of the South Bronx. These services will be beneficial to clients who cannot afford to hire accounting experts directly or afford in-house financial management.
The company’s service will not only help these businesses save money and comply with the existing tax regulations but also in making rational decisions. The services will be scaled to meet the client’s needs. The key metrics will be averaged for each month and posted on the Gap control panel. The measurements will be used to keep track of the company’s goals.
Marketing Science of Customer Behavior
According to Rust, Zeithaml, and Lemon (2004, p. 114), it is cheaper to maintain the existing clientele to a brand than acquiring new ones. Therefore, the satisfaction of these clients should be on top of the company’s priority. The theory of electronic propinquity introduced by Korzenny (1998, p. 5) describes the psychological feeling of nearness aroused by the use of diverse electronic media. The theory posits that interaction through electronic media tends to enhance closeness than physical interaction. This explains the current popularity of internet marketing and online networking.
References
Aaker, A.D. (2004). Leveraging the Corporate Brands. California: California Management Review.
Behr, P. (2009). Outline of US Economy. Washington, D.C: Bureau of International Information Programs.
Korzenny, F. (1978). A theory of electronic propinquity: Mediated communications in organizations. Communication Research, 5, 3-24.
Cravens, D.W., & Piercy, N.F. (2006). Strategic marketing, Boston: McGraw Hill.
Melewar, T.C., & Wooldridge, W. (2001). The dynamics of corporate identity: A review of a process model. Journal of Communication Management,5 (4),327-340.
Pitta, D.A., & Katsanis, L.P. (1995). Understanding brand equity for successful brand extension. Journal of Consumer Marketing, 12(4), 51-64.
Rust, R.T., Zeithaml, V.A., & Lemon, K.N. (2004). Customer-Centered Brand Management. Harvard Business Review,14 (3),110-118.
Smith, G. (2013). Payroll and Bookkeeping Services in the US Industry Market Research Report from IBIS World has Been Updated [web log post].
Appendix
Table 1: Key Marketing Matrix.
