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Marketing plan for the folding table product Report

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Updated: Jul 15th, 2019


A strategic marketing plan is essential before actualizing the projections of a marketing blueprint for a product.

In order to achieve desired margins in sales and total revenues generated, a proper marketing plan should integrate marketing expansion strategy, comparative advantage, and market segmentation since in most cases, there is always a strong competitor or competitors that passing might prove challenging due to existence of consumer perceptions and household names.

Marketing a new product is even more challenging since the marketer is not sure of the reception of such a product in the market. This analytical paper presents a comprehensive marketing plan for the new folding table product that targets the United States’ furniture industry.

The paper explores a five year marketing plan and provides financial focusing for the same period. In addition, the plan presents a target market analysis as the market penetration strategy.

Increasing the new folding table US market by 15% in 5 years.

Marketing objectives for the new folding table

Financial marketing objectives

Marketing strategy for the new folding table revolves around accomplishing the marketing objectives of gaining 15% of the current folding tables’ market share in the US by 2017, and thus boosting revenues for the company producing it. The strategy should employ the concept of SMART in this market objective.


The new folding table has an existing market distribution channel in the folding table industry. In order to boost the revenues for the company through increased market share by 15% by 2017, it is vital to review latest market data on customer preference in the home and business market segments. Apparently, these segments consist of the largest bracket of users of folding tables.

Thus, through proper branding and good, better, best pricing strategy, this segment is projected to increase their purchase of the new folding table.

Therefore, applying the costing strategy, the company producing the new folding table will reduce the prices to a certain minimum in order to attract customers from this segment and achieve the aim of the quantity maximization by an increasing number of items sold at low prices (Holmes and Alan 29). At the same, the strategy can help in revenue maximization that results from the large amount of purchases made.


Since the target market is specific, the success variable for the market share expansion strategy will be measured through an increase in sales by an eighth of its starting production output. Sale records will be reviewed bimonthly and revised after every six months.

In the first six months, the market share is projected to grow by a quarter of the one-eighth mark. Factoring the current inflation rate and other market dynamics, the same is then projected to follow the normal graph growth as advertisements are expected to sustain the market share expansion for the next five years (Holmes and Alan 41).


Currently, the main competitor of the new folding table is the other ordinary folding table brands. However, ordinary folding table brands lack the elements of easy portability and expansion to different sizes depending on the space available. The starting distribution channel of the new folding table will consist of 20 distributors with each selling an average of 10, 000 table annually.

Thus, an annual addition of 20 distributors will certainly increase the annual turnover by 200, 000 pieces. In five years, the turnover will stabilize at 6,000,000 pieces which is almost 20% increase in market share. Thus, a 15% increase is very viable within five years.


Since the current distribution channel for other folding tables is already developed, the new folding table brand will become more preferred because of ease of transportation and ability to increase its size.

The objective is very realistic since marketing resources are fully operational to facilitate a market exercise on target and segmenting position for the new folding table brand. Besides, increasing production is within the reach since the projected market share growth can support and sustain expanded production (Collier 19).

Time specific

The market share increase is to be realized within twenty four months with periodic updates activated after every month to facilitate progress and success measurement against projections of the market share expansion objective (McLaney and Peter 17).

Within the twenty four month timeframe for implementation of this marketing strategy, the new folding table brand will further penetrate the business and home market segments whose preference for this product is predictable. Specifically, the product will establish a strong niche in the table industry because of its affordability, portability, size, and durability.

Cost Overview

According to Collier (2012), several techniques are used to determine the costs of goods, marginal and absorption costing is the most common methods used. Marginal costing is a technique in which only variable manufacturing costs are considered and are used in valuing inventories and determining the cost of goods sold (Collier 72).

Only additional cost in the form of labor, material, expenses and overheads variables incurred in producing an extra unit is considered relevant in marginal costing as fixed costs are constant in production.

The New Folding Table

Marginal Cost Statement

Particulars Per Unit Five Years Sales
$ $ $ $
Number of Units 50,000
Sales 299 14,950,000
Variable Costs
Direct Materials 100 5,000,000
Direct Labor 10 500,000
Direct Overheads 10 500,000
Total Marginal Cost 120 6,000,000
Contribution 179 8,950,000
Fixed Costs 30 1,500,000
Net Profit 149 7,450,000

The marginal costing statement for the folding table provides a contribution margin of $179 per unit. With the assumed sales of 50, 000 units for the five year period, the contribution margin amounts to $8,950,000. The fixed cost of $1,500,000 is adjusted to get the net profit of $7,450,000 which works out to 20% of the total sales revenue for the five year period.

Expected Income

Break even point in units is computed by dividing fixed costs with contribution per unit (McLaney and Peter 22). From the marginal cost statement above, the breakeven point for the new folding table will be computed as below.

Fixed costs

$1, 500,000

Contribution per unit $179

Breakeven point = Fixed costs/ Contribution per unit

1,500,000/179 = 8,379 units

This would imply that for the costs and the revenues for the new folding table to be equal, the company will have to produce 8,379 units. There would be no profits or losses at this point, the company will just cover its costs.

Break even point in sales value = BEP in Units x Sales price

=8, 379 x $299


Breakeven point as a percentage of capacity = BEP in Units x 100/Capacity in Units

8,379 ×100/50,000


Financial Documents

The financial documents will record the expected financial activities of the proposed new folding table venture. According to Collier (2012), cash budget will give an estimation of the cash inflows and outflows for the business for a specific period of time. Another financial document is the forecast income statement (Collier 46).

This document estimates the expected profitability of the new folding table. Finally, a forecast balance sheet will show the position of assets, liabilities and ownership equity for the new folding table product at any given time (McLaney and Peter 27).

The financial documents of the planned undertaking of folding table are presented below. We shall assume that the operations will commence in January 2014 and the financial documents have been prepared for the five year period beginning January 2014.

The initial capital proposed to be introduced is set at $ 154,000 and the venture will try to arrange for a long-term loan of $ 534,000 with an interest rate of 10% payable quarterly. The repayment of the loan will take place in 5 years time. For calculating the cash flow, sales will be made on both cash and credit and there will be an account payable of 15 days outstanding.

Similarly, for the supplies of materials, the venture will enjoy a credit period of 15 days. The venture will invest $ 348,000 in property, plant and equipments and this amount will include the cost of furniture, fittings and office equipments. The operations will be carried out initially in rented premises. Rental advance of $ 99,600 being 5 years rent in advance is payable. This is presented in the table below.

Particulars 2014 2015 2016 2017 2018 2019 Total
Estimated Sales Units 4000 4500 4500 9000 13,000 15,000 50,000
Sales Revenue
916 1,345. 5 1,345. 5 2,691 3,887 4,485, 14,950
Cash Inflow
Accounts Receivable 102,000 108,305 114,750 133,875 159,375 172,125 1,185,750
Initial capital 154,000
Long-term Loan 534,000
Total (A) 102,000 108,375 114,750 133,875 159,375 172,125 1,873,750
Cash outflow
Accounts Payable 52,450 56,750 58,000 58,000 58,000 59,500 547,400
Worker wages 13,300 13,300 13,300 13,300 13,300 13,300 186,000
Factory Rent 8,300 8,300 8,300 8,300 8,300 8,300 99,600
Electricity and Utilities 1,420 1,420 1,420 1,420 1,420 1,420 17,040
Other Administration
1,020 1,020 1,020 1,020 1,020 1,020 12,240
Sales Promotion 4,120 4,120 20,600
Interest 13,350 13,350 53,400
Property, Plant and Equipment 348,000
Rent advance 99,600
Loan Repayment 154,000 154,000
Total (B) 76,490 80,790 99,510 82,040 82,040 255,010 1,063,880
Net cash (A) – (B) 25,510 27,585 15,240 51,835 77,335 -82,885 431,270
Opening balance 298,650 324,160 351,745 366,985 418,820 496,155
Closing Cash 2,324,160 2,351,745 3,366,985 5,418,820 6,496,155 9,431,270

From the cash flow statement above, it is apparent that sales of the new folding table will generate a positive net cash flow amounting to $ 9, 431,270 at the end of 2019 year of operation. The cash net flow is generated by deducting the cash outflows, resulting from expenses such as wages, rent, administration cost and electricity and sales promotion cost among others, from revenue generated from sales (McLaney and Peter 29).

Further, loan repayment amounting to $154,000 will be made. We can deduce that the company would be in a position to meet its obligations and still have adequate working capital for the operations of business after five years of operation (Collier 15).

The table below is a forecast income statement for the new folding table.

Forecast Income Statement of new folding table
for the year ending 31stDecember 2019
Expenses $ Income $
Sales 14,950,000
Less: Cost of Sales (6,000,000)
Gross Profit 8, 950,000
Fixed Expenses:
Worker wages 186,000
Factory rent 99,600
Electricity and Other Utilities 17,040
Other Administrative Expenses 12,240
Sales Promotion 20,600
Total Expenses 335,480
Operating Profit 8,614,520
Interest 53,400
Depreciation 23,200
Interest and Depreciation 76,600
Profit for the year before tax 8,567,520
Less: Taxation (30%) (2,570,256)
Net Profit carried over 5,997,264

From the above income statement for a new folding table, net profit before tax is $8,567,520 is arrived at by deducting costs of sales, fixed expenses, interest and depreciation from sales revenue. This is 26.7% of sales while net profit after tax is $5,997,264.

The profit margin for the five years of operation stands at 18.72% while the gross profit margin for the same period is at 59.06%. The above ratios indicate that five years of operation offers a good return to the potential investors. The table below will show the forecast financial position of the new company in terms of assets, liabilities and capital (Holmes and Alan 41).

Reflectively, cost-volume-profit analysis involves determination of that volume at which the firm’s cost and revenues will be equal. It captures the relation of fixed cost, variable cost, the value of output and sales mix prices to the profitability of the company.

Overall costing belief is a way of comparing the amount of income value than an organization needs in order to serve its customers by delivering outgoing value of an equal amount.

The concept of contribution in marginal costing allows for analysis of break even point in accounting at any business level. Therefore, the company manufacturing the new folding table should have a sound understanding of cost accounting practice as it would have an impact on the profits of the organization.

Target Market

Home user segment

The home user target market for the new folding table consists of the mid aged persons who form the bulk of middle income earning adults within the US. Besides, this group has high demand for affordable, modern and unique furniture just like the folding table product.

Reflectively, this group consists of 60% of the total households besides having a relatively more disposable income. However, it is worth noting that each of the target users mentioned is unique and requires different marketing and pricing strategies that can be adjusted in accordance to prevailing market conditions (Barringer and R. Duane 25).

Since this product come in different models, the segment is influenced by differential quantification, competitive pricing, efficiency, and portability of the folding table. In addition, this product is likely to win the mid income earners who would appreciate high quality at affordable cost (“Cyberbooth: The amazing folding table”, par. 3).

Therefore, the company should internalize these aspects to position itself in this segment which forms the largest percentage of home buyers of the folding table across the regions of the US.

Business segment

The targeted business segment of the folding table is the Small and Medium Business Segmentation. This market captures small and medium businesses that use tables in their production activities. The standard folding table destined for this market is less customized and easily modifiable to fit the demands of each and every client depending on the space and the size of their stores.

A potential company intending to introduce the standard folding table to this business segment should promise diversity in the types, price, and sizes. As an incentive, such a company should offer free delivery to these businesses that purchase large quantities of the product (“Cyberbooth: The amazing folding table”, par. 3). Therefore, this segment is influenced by competitive pricing, quality, and safety for optimal benefits.

The emotional perspective of consumer behavior represents an effective view on consumer behavior. For example, emotions are caused by exposure to a particular stimulus. Emotion is positively related to consumer attitude.

This is the general evaluation that consumers engage in before deciding to purchase a product. Attitudes are direct personal experiences that are influenced by the personality of consumers, advertisement, family, and friends. For example, a bad experience with a product may generate internal reactions by the consumer such as displeasure.

Perceptions are unique ways through which consumers internalize and interpret information about a product. The perception could be in relation to price, quality, and quantity (Collier 33). Therefore, marketers of the new folding table have to introduce the aspect of appealing to the ideals of the target market through catchy advertisements that display the practical operation of the folding table.


Essentially, the success of the marketing plan depends on proper alignment of a functional team who is responsible for the creation of flexible but quantifiable measurement tracking tools for reviewing results periodically. Reflectively, this team should have the essential knowledge in social media and tools used in marketing. Besides quality in service delivery and customer satisfaction depends on the support team.

Therefore, customer retention is achievable through the creation of reliable, informed, and passionate support team in the dynamic US folding table market. From the above financial projections, investments in the new folding table product will pay off within the first five years of introduction in the market.

Works Cited

Barringer, Bruce, and R. Duane. How bringing its business plan to life helped a social enterprise get off to a strong start, New York, NY: Free Press, 2009. Print.

Collier, Paul. Accounting for managers, London, UK: John Wiley & Sons Ltd, 2012. Print.

2013. Web.

Holmes, Geoffrey, and S. Alan. Interpreting company reports, New York, UK: Harlow, 2005. Print.

McLaney, Eddie, and A. Peter. Financial accounting for decision makers, London, UK: Harlow, 2008. Print.

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