SmartShuz Company’s Marketing and Advertising Report

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Updated: Jan 23rd, 2024

Cost of doing business

ExpensesExpected Monthly Cost ($)Expected Yearly Cost ($)
Rent10003,600
Salaries and Wages700084,000
Technological Equipment
and Furniture
150018,000
Advertising and Other Promotions3003,600
Utilities: Heat, Electricity, etc.4004,800
Telephone and Internet2002,400
Insurance1,00012,000
Miscellaneous2002,400
Total11,600139,200

Expected revenue

When all other factors are held constant, the SmartShuz Company expects to generate at least $210,000 within the year from around one thousand customers who are projected to spend $200 in the company products.

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SmartShuz Company: Monthly Income Statement

The period of operation from April 1st, 2014 to April 1st, 2015
ParticularsStartupAprMayJunJulAugSep
Estimated Sales Units500600600700800800
Sales Revenue10,00012,00012,00015,00017,00017,000
Cash Inflow
Accounts Receivable10,00012,00012,00015,00017,00017,000
Initial capital70,000
Long-term Loan70,000
Total (A)140,00010,00012,00012,00015,00017,00017,000
Cash outflow
Accounts Payable2,0001,0001,0003,0004,0005,000
Worker wages7,0007,0007,0007,0007,0007,000
Rent1,0001,0001,0001,0001,0001,000
Electricity and Utilities400400400400400400
Other Admin expenses200200200200200200
Sales Promotion300300300300300300
Interest1,0003,000
Property, Plant and Equipment10,0009,8009,80011,10010,10013,10010,300
Loan Repayment
Total (B)10, 0009,8009,80011,10010,10013,10010,300
Net cash (A) – (B)130,000-3,400-4,200-2,100100010,3001000
Opening balance130,000124, 300123, 400122,300123,100124,300
Closing Cash130,000126,400123, 400122,300123,100124,300124,900
ParticularsOctNovDecJanFebMarTotal
Estimated Sales Units600800100010001200120013,100
Sales Revenue17,00020,00022,00022,00026,00020,000210,000
Cash Inflow
Accounts Receivable17,00020,00022,00022,00026,00020,000210,000
Initial capital70,000
Long-term Loan70,000
Total (A)17,00020,00022,00022,00026,00020,000210,000
Cash outflow
Accounts Payable2,0001,0001,0003,0004,0005,00031,400
Worker wages7,0007,0007,0007,0007,0007,00084,000
Restaurant Rent1,0001,0001,0001,0001,0001,00012,000
Electricity and Utilities4004004004004004004,800
Other Admin
Expenses
2002002002002002002,400
Sales Promotion3003003003003003004,800
Interest4,0006,0009,00031,400
Property, Plant, and Equipment10,000
Loan Repayment5,0005,0006,0008,0006,0007,00024,000
Total (B)12,10015,10016,20016,90021,20016,000142,500
Net cash (A) – (B)-1,700-1,700-1,1008001,200-100070,800
Opening balance107,00094, 30083, 40072,30073,10071,800
Closing Cash105,30093, 40082,30073,10074,30070,800

SmartShuz Company: Balance Sheet As of 30th December 2015

Assets
Current Assets
Cash in Bank2,000
Cash Value of Inventory25,000
Prepaid Expenses (insurance)4,800
Total Current Assets31,800
Fixed Assets
Machinery & Equipment4,800
Furniture & Fixtures7,200
Real Estate / Buildings
Total Fixed Assets12,000
Total Assets43,800
Liabilities & Net Worth
Current Liabilities
Accounts Payable5,000
Taxes Payable4,000
Notes Payable (due within 12 months)
Total Current Liabilities9,000
Long-Term Liabilities
Bank Loans Payable (greater than 12 months)12,000
Less: Short-Term Portion
Total Long-Term Liabilities12,000
Total Liabilities21,000
Owners’ Equity (Net Worth)49,800
Total Liabilities & Net Worth70,800

Competitive Advantage Sustainability

Generic marketing

The shoe industry is competitive. Other many companies offer the same products. The majority of these companies rely on local consumers. Therefore, they do not run promotional campaigns or advertise their products. Consequently, the SmartShuz Company will have an advantage since it will create consumer awareness through its promotions and advertisements. Besides, the majority of the competitors sell their products at high prices, and they run out of stock frequently. To surmount this competition, the company will use strategies like consumer education on how to get the best from the product by using it appropriately.

The existing competitors do not teach the consumers on how to use some of their shoe products. The company will regularly replenish its inventory to make sure that it does not run out of the product. Consumers get frustrated whenever they visit a business only to learn that the product they want is out of stock. This discourages them from visiting the business in the future. Hence, the company will make sure that it has a regular supply of seasonal shoes to encourage consumers to return to its stores.

Brand Awareness

The company’s name, logo, and design facilities to differentiate its brand from its competitors. Marketers ought to establish unique brand features that can draw the attention of the target consumers. To stand out from the competitors, the SmartShuz Company will use the logo to differentiate its shoes from those of the rival companies. It will promote its products by using colorful logos. This will create an impression of brand quality in the minds of the target consumers, hence; help the company to make substantial sales. Colorful logos will also make consumers remember about the brand whenever they come across a color portrayed in the logo.

Multi Brand Strategy

SmartShuz will be dealing in varieties of fashionable and stylish shoes ranging from seasonal to ordinary footwear. As such, the company will utilize its expertise and innovative capabilities to ensure the development and sale of advanced services that offer varied choices for customers. Moreover, the business will be offering auxiliary services as well as customized shoe products to suit the customer needs and bring convenience, which is a mixture of value and quality.

Further, SmartShuz will focus on the differentiation of its products, which is critical amid intense competition particularly in new markets where the business plans to establish. The business will differentiate its shoe products in terms of augmented value, placing and pricing. In other words, the business will ensure that the offered services have added value beyond the expectations of the customers. Moreover, the services will be offered at a place, which is a convenience to target clients.

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Product Pricing

In the presence of increased competition, SmartShuz will ensure that its shoe products are affordable to the target market. Intense competition in the industry requires that SmartShuz enhance its product differentiations through design, timeliness, affordability, form, conformance quality, durability, and style. The main objective of the company product strategies will be to improve the quality of the service by 65%. The brand positioning will be attained through increasing the presence of the business on the company’s website and other social networking sites.

As indicated, SmartShuz faces stiff competition from various companies dealing in the same products. Therefore, a pricing differentiation strategy will provide a critical competitive advantage. Apart from the product range offered by the company, SmartShuz will encourage the purchase by having the right and suitable price for its products so that the business can realize increased profits. In essence, price is a critical element in the business marketing mix since it will primarily be used to create sales revenue. Price is not only used in the marketing mix but also product development. The high-quality low-prices strategy will be applied particularly to outperform the competitors. The main objectives of the pricing strategies will be to attract and retain customers and to make at least 5% net margin.

The actions in the pricing strategies will be aimed at achieving both the objectives particularly price discrimination in terms of place and target market. Essentially, pricing strategies will be aimed at increasing the competitiveness of SmartShuz as well as widening the customer base. In other words, the pricing strategies targeting increasing the market share as well as profit margins.

Advertising and Promotion Plan

The advertising and promotion plan will require the SmartShuz business to spend more than what its competitors will spend to enable it to gain a competitive advantage. Setting a high cost for advertising and promotion in the marketing plan, usually demonstrates how the company will deliver its unique selling propositions to its prospective customers. Advertising and promotion tools are key elements of the marketing mix. Therefore, the company requires making sure that it has the best advertising and promotion strategies for its products. This would enable it to compete with its competitors, as well as to gain a competitive advantage. SmartShuz Company can only compete well if it has enough money to use in advertising and promoting its products.

Media Used and Why

To make substantial sales, SmartShuz ought to communicate its products to a big number of people. This can only be achieved by selecting an advertising medium that is accessible to many people. While organizations have numerous advertisement media to choose from, not all media are accessible by all consumers. Consequently, before deciding on the advertisement medium to use, an organization ought to have an accurate profile of its target customers. In this case, the SmartShuz Company intends to use television as its advertisement medium.

The main reason for using television as the advertising medium is that it will facilitate to capture a vast target audience. The majority of the homesteads own televisions. Hence, using television to advertise the SmartShuz’s shoe products will allow the company to reach a wider consumer base. Apart from reaching a wider consumer base, television conveys messages in both audio and visual form.

Therefore, through this medium, the company will be able to pass the information even to those consumers that do not know how to read. Advertising the product in both audio and visual formats will also facilitate information retention. Once people watch and hear an advertisement, it becomes hard for them to forget it quickly. Audiovisual communication facilitates the retention of the message. Therefore, the SmartShuz business opts to use television since it will facilitate the retention of the information, thus, making sure that consumers do not forget about the product.

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Promotions used

The SmartShuz business chooses to use sales promotion. This choice was made since it helps the company to increase its sales volume within a short period. In this case, the company will apply a sales promotion strategy such as push-up sales. This will facilitate in attracting and retaining new customers by issuing them with free samples and gifts. Sales promotion will ensure that consumers return to the company whenever they need different shoe products. Despite sales promotion being expensive, the promotion strategy facilitates in creating a good rapport between a company and its consumers. In response, the company benefits from return customers.

The marketing plan will comprise a detailed calendar of the promotional events for a whole year. The year will be divided into three segments January-April, May-August, and September-December. To create customer awareness about the product, the SmartShuz business will carry out an aggressive advertisement and promotion program during the first segment. It will run daily advertisements on the television to make sure that consumers know about the various shoe products. As consumers get to know about the products, SmartShuz will relax its advertisement program.

The second segment will entail running the advertisements thrice per week. This will aid in keeping the clients aware of the product. Besides, it will target those consumers that might not have heard about the products. The last segment of the calendar year will involve running the television advertisement once per month. By this time, the majority of the consumers will have known about SmartShuz’s products. Besides the advertisement, the company will also conduct some promotional campaigns, especially during the first segment of the calendar year to recruit more consumers. With these events running throughout the year, the company is guaranteed that it will keep its target consumers aware of the product.

Advertisement messages

Advertisements are very manipulative and use tactics that directly and involuntarily appeal to the mind of the target person. Despite the ignorance of the same and disbelief in their effects, advertisements remain complex and significant in the choice of products owned by an individual. Usually, advertisements appeal to memory or emotional response. As a result, it creates an intrinsic motivation response that triggers the mind to activate affiliation, self-acceptance, and feign community feeling. In the end, advertisements succeed in appealing to emotions through capitalization on biases and prejudices of people. Therefore, response to an advertisement will emaciate from the bandwagon technique which heaps pressure on the mind to follow the perceive crowd.

Reflectively, the successes of SmartShuz promotion messages will be entrenched in the principle of keeping a reliable and professional reputation in exchanging ideas and convincing customers. Therefore, through timely appeal to emotions and self prejudice, the SmartShuz will skew its advertisement messages towards embracing the ‘perceived goodness’ and need to identify with ‘the ideal’ in the packaging of the shoe products. These pop-up memories will actively reminisce and provoke an involuntary response when noticed in an advertisement. For instance, the SmartShuz will succeed in implementing this aspect of ‘jumping the queue’ ahead of other competitors through visible and inducing signs all over the UAE region.

Upon noticing the signs, the mind will perceive them to belong to the SmartShuz Company, irrespective of the physical geography at the moment. These advertisements erected signs will endeavor to cue the visual mental aspect of a person into a particular brand of the different brands of the SmartShuz Company.

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IvyPanda. (2024, January 23). SmartShuz Company's Marketing and Advertising. https://ivypanda.com/essays/smartshuz-companys-marketing-and-advertising/

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"SmartShuz Company's Marketing and Advertising." IvyPanda, 23 Jan. 2024, ivypanda.com/essays/smartshuz-companys-marketing-and-advertising/.

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IvyPanda. (2024) 'SmartShuz Company's Marketing and Advertising'. 23 January.

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IvyPanda. 2024. "SmartShuz Company's Marketing and Advertising." January 23, 2024. https://ivypanda.com/essays/smartshuz-companys-marketing-and-advertising/.

1. IvyPanda. "SmartShuz Company's Marketing and Advertising." January 23, 2024. https://ivypanda.com/essays/smartshuz-companys-marketing-and-advertising/.


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