Executive Summary
The business of road side services appear to be doing well and then there is a very high possibility that with stable economic conditions the projected growth objectives for the next three years are likely to be achieved. This is as per the books of account prepared and presented above of which the balance sheet shows a negative net worth at the start which is absorbed in the second and third year subsequently (McKeever, 2010).
There are high prospects of profitability as per the income statements; there is increase in income each year with almost a constant margin.
The idea of starting a road side cab services business was driven through our minds due to the fact that it is a highly profitable business based on the fact that many people are becoming very rich in Saudi Arabia due to the existence of oil and growth that is experienced by the country at this point in the economy and most so the region where we have identified as our market stronghold that is on the road sides.
Our target market is also majorly composed of the youth who are still very active and whose population is ever increasing day by day, they love fun hence constant movement and high demand for leisure joints provided by our business.
Our target market is also composed of the older people who are also rich and target leisure joints to enjoy themselves and sped the excess cash at their disposal. The road side cab and cab services business therefore based on the above strong pillars has a very high viability of rapidly growing and widening its market coverage. This in turn has the effect of increasing sales and in future we project that we would control the leisure and fuel services industry by being the market leader.
The most of the advantages that our business have is going to posses is first of all, the proximity of our services to our esteemed customers. Then out restaurants and fuel stations are also located closer to the industries from where we obtain our goods and products hence we are saved from the cost of transportation, this ensures that the costs would incur are narrowly reduced hence high chances that profits would be high signifying prospects of future success in our business operations.
The other competitive advantage that our business is likely to have is that it offers a range of products that are innovatively developed, this ensures that all our customers’ needs are always met and satisfied hence good customer rapport which is extremely good for business.
Therefore, our team of business with all the facts have a belief and in fact acknowledge that the roadside business identified by us if properly and effectively exploited will be a success in the market place and to a further extent become the market leader given the wide gap that is left unfilled by the other market operators.
Business Description & Vision
The main statement of the business is to provide excellent services to its customers and in variety. Also the business is geared towards selling the best and most popular leisure and roadside services at affordable and generally accepted rates.
Road side services will be of most comfort and topmost services that target a rich and top class in the society.
The company vision is to achieve constant and tremendous growth and by far become the market leader within a period of three years with most growth in the first year of operation.
Goals and objectives
The stakeholders’ main objective is to always keep up to date with the most current products and services to their customers. The RSS will also have a company website where the most current products developed in the fun and leisure industry will always be updated by the service providers. Information about the most current models of motor vehicles will also be sought and accessed by the customers.
Goals and objectives to the customers include:
- Provide the highest motor vehicle and leisure joints selection and which are the most popular, exclusive designs and models. Lead free fuel will also be available always to ensure the safety of the customers.
- The RSS will work closely with AAA emergency services of the USA and Touring Club Suisse who are the most established service providers of the same services. The vast experience by the two companies will propel Road Side Services to greater heights in terms of growth targets set to be achieved. Their proximity to industries will also allow them to borrow from the rest in the same business in the local market.
- This will also enable them obtain most of their products from retailers at fair prices.
- Focuses around the lifestyle, culture and tradition of leisure and the perception that the Saudi citizens have on leisure.
- The business also aims to create a comfortable environment offering luxury and comfortable leather chairs and couches, light music mixes of Arabian music reflecting relaxation at the cool shores and road sides.
- The business will employ knowledgeable staff in the entertainment and hospitality industry. This will encourage innovation which is healthy for the business as well as ensuring quality provision of services and products.
Road side services company will only employ staff with previous experience and knowledge in the transport and hospitality industry such as the design of luxury resting points or joints and design of luxurious fuel stations. Also they should be willing to answer the customers’ questions and concern on any particular services provided.
The business in this field has always been very sluggish and has a tradition of poor service provision. This has been found out to be because of the rigidity and lack of innovation that has always existed in the industry.
The operators in the industry have always been discovered to only venture in nthe provision of common and obvious products such as only fuel, this had chased away customers from the market and made them resort to other fuel and fuel products market. The market gap created due to this made our team consider getting into the business and fill the gap by taking care of the customer needs.
The list of the key company principles is a wide range and they run from product and service provision to the products themselves. They include:
- There must be Quality provision of the products and services always.
- It’s also ensured that the right quantity is always ensured.
- Meeting Customer needs is what we do.
- Innovation is what guides us in our path
Definition of the Market
Overall Market
The percentage of Saudi population with vehicles is expected to be on the rise next year, but the recent surge in the industries momentum will increase revenue by 2% to total to more than $50 billion since 2010.
The Market for fuel and hospitality in the Saudi Arabia has also grown significantly in the past decade. They are expected to account for approximately 4% of industry revenue in 2011. Their share of revenue has also increased in recent years, as they accounted for around 2% of industry revenue in 2007.
Production and consumption of automobiles and their accessories has increased drastically in the Saudi. Production increased from 2.8 billion in 2003 to 3.4 billion in 2007, and consumption of fuel and fuel products has exceeded Saudi production, causing a spike in segment importation from the neighboring countries that are rich in oil. Likewise, light fuel prices have increased at a stronger rate than that of heavy fuels over the five year period to 2010, at around 6% per annum on average (Kleckner & Phelps, 2004).
On the other hand, Saudi Arabia is one of the countries in the Middle East who are known to be the herb of oil in the whole world and also a home of very rich and wealthy individuals in the society.
Market Segmentation
Road side services is focusing on the high –end market of premium car owners which is comprised of both males and youth between the ages of 25-65years and are mainly professionals with a medium to high income.
This segment of the population is the most profitable one to deal with due to a large disposable income that they command from the economy. Our market segment comprises of value-conscious clients and customers. They are therefore very sensitive and demands that they are treated with the utmost care and skill (McGrath, 2001).
Apart from the customer segmentation our market is also segmented geographically given the size and population of Saudi as well as customer groups available. Regions with those with lesser income are grouped and priced separately and differently as opposed to high income areas.
Target Market
Road side services company business will target mostly males between 25-35 active young adults, 36-65 professionals and executives and 65-on retired residents that live in the posh estates and areas and have very large income to dispose off.
The low income fun lovers who occupy the large customer base of Saudi Arabia is also widely targeted to always ensure some income for the business. This group of customers is a sure customer base (McGrath, 2001).
Market Share
The business is not already established and has a market share of below 5%. Market is expected to increase steadily by 6% yearly for the next three Years from which the share would even increase further.
Description of Products and Services
The Road Side Services is not like the ones that provided the services before. It is geared towards provision of a variety of services apart from just the fuel and fuel products as the others are doing. In areas with demand for automobile, RSS will provide a slot of motor vehicle in different shapes and designs according to the customer’s specifications and needs. Road Side Services also provides luxury by providing resting joints and restaurants where they give quality meals and drinks to their esteemed customers.
At the petrol stations they offer stands where the clients can afford themselves drinks as their vehicles are being refueled. They also offer tourism services which in handy with accommodation services at considerate fee. Our products are very much competitive and that’s why at the start our business already has a market share of above 6% and a projected rapid growth in market share for the next three years. What makes our products that competitive?
Competition’s Advantages of our products include:
- Serving food incentives to our customers.
- Having a variety of products, foods and drinks.
- Having a variety of recreational activities for our clients to enjoy.
- Having a live as opposed to acted music such as piano’s player, live bands and many other exemplary services.
- Our products are also priced in a manner that they are affordable to all our customer categories.
Whatever has advantages must also experience technicalities and therefore our competitive disadvantages, points of weaknesses that if exploited by our worthy competitors then we are likely to be destabilized in business include (McGrath, 2001):-
Competition’s Disadvantages are as follows:
- We are not specialized in a niche market i.e. our unique market.
- We are also not customer specific, we don’t target a specific market segment; we target our clients in a mass.
- Another disadvantage is that we are not alone in the market, there are other providers of the same services.
But all in all our maximization in our advantages is our strength and also our information system controls are so efficient so much our competitors have no access to our information.
Organization & Management
Ours is an organized and efficiently operating venture with a team of qualified personnel headed by an efficiently running management team as well. The business has a well defined structure that is headed by a managing director followed by the heads of various departments who also have personnel working under them. Therefore, information flow doesn’t conflict due to the hierarchy in place.
Operations
Our business is a limited company that exhibits its independent state form the owners who are the share holders. All the employees through the director are answerable to the owners in terms of trying to maximize their wealth as well as helping them meet their profit objectives. It has a certificate or registration from the registrar of companies and therefore is legally allowed to do business.
Fifteen employees including the owner who will take care of the Cigars Heaven business and short/long term of operations. The employee’s positions will be assigned as below:
- One Managing director, who will be the direct contact with the suppliers of the goods and services required for the success of the business. He is the one responsible for all the daily activities and operations of the venture, in case of any shortcoming he will be asked of what went wrong.
- One health professional to ensure the safety in the general environmental health of all the services offered raging through from the food and drinks as well as the hazardous surrounding. He also has two officers to support him or her in the implementation. All questions about the products or services offered are directed to this department.
- Customer relations department is also developed, this department is responsible for creating the awareness of the goods and services so that the consumers and clients are made aware of the services and goods. He or she is also responsible for advertising and sales promotion. He may hire on contract his service men.
- Ten waitresses in each branch of operation, they will be responsible of costumer services and attending to customers’ needs. They do this by offering customers the best service, relationship building and proving a brief about the products offered.
The employee right from the managers is of the rightful skills and qualification and is selected through the normal recruitment process having met the education requirements put in specified.
Marketing and Sales Strategy
Marketing segmentation has already been covered above and therefore our aim now is just to see how pricing is done as a strategy to attract customers and retain them as well as help in sales maximization (Engelson, 1995). Also to be looked at in this case are the sales promotional tools employed or to be employed to bust sales of the products and services.
Pricing Strategy
Pricing is just one of the four components of the marketing mix elements. The others are product, place and people. Pricing dictates the direction that is likely to be taken by the mix of the four i.e. the prices of products will dictate the kind s and quality of products to be produced by the manufacturers to fit in the needs and affordability of the consumers.
It’s the prices that are dictated by the costs that will determine the extent to which distribution will take place and then again it’s because of price that we will identify and categorize our customers (Engelson, 1995).
Pricing is a complex and sensitive decision making procedure that should be handled with greater care and skill since it is the component that if handled with care result into success and if mishandled can cause the business to fail. A good and workable plan therefore has to be put in place using the required and well placed down strategies (Engelson, 1995).
In strategy development several steps are always taken care of and that is the marketing mix elements apart from pricing itself, the behavior of demand and supply of the product to be priced, also the costs associated with the business to be undertaken must be keenly looked into and most importantly the pricing objectives must also be mentioned in scrutiny.
The pricing strategies
The strategies to be employed now include;- cost plus pricing where the costs are categorized in total and then a percentage margin is added on top of it to determine the profits. Profitability in this case can be predetermined or focused and achieved under normal market conditions.
The second type of pricing is the psychological pricing and this depends so much on the intelligence and the knowledge that the person pricing is able to employ in determining the prices. It’s the best for this kind of business since it augers well with fluctuations. Absorption pricing strategy may also be applied and here fixed costs are normally used to absorb the other costs so that a fair price can be arrived at for the consumer (Engelson, 1995).
Other strategies that could be employed include; penetration pricing, product line pricing and most of all economy pricing which is used mostly to fix prices at the times when the economy is not stable, that is at hard economic times when costs need to be extremely minimized so that prices are just low enough to accommodate the buyers.
Pricing Plan
Given that all the strategies cannot all be employed at the same time, there comes the need for a plan on when and where and to which groups of people to employ which form of pricing. A plan again is just to ensure that there is no conflict in price determination and that prices arrived at are the right ones most so to the targeted stakeholders. For example its in order that a plan is made so that a strategy like the economy pricing is made and used at times when the economy is turbulent and not any other strategy.
Pricing Objectives
The reasons as to why pricing is done are many and diverse if not just accommodative. Pricing may first of all be done so that the goods and services offered are just acceptable to the customers and also affordable to them depending on the class to which each and every customer belongs, the acceptability will only ensure that enough sales are always made (Kleckner & Phelps, 2004).
RSS major objectives in pricing are to ensure maximization in return on investments. It also has the objective of maximizing the shareholders wealth through the issuance of bigger amounts of dividend. The biggest objective is to ensure profitability through maximized sales. The noble objective is to also facilitate the achievement of both social and ethical objectives. Since cigar heavens aspiration is to be a price leader the other objective therefore is to apply the best strategy to obtain the best and competitive prices.
Product and sales Promotional Program
Advertising
- Print media
- Include advertisement ads in trade publications targeting hospitality fans and vehicle owners, nightlife entertainment, lounges, etc like; Monthly entertainment magazine are also used as well as the dailies.
- Social media
- Website is created featuring venue, location, directions of the business venture.
- Create Face book, Skype and Twitter pages and invite people for friendship with your business.
- Create promotion video of the venue and upload them in YouTube for viewers to watch, they can also be watched in face book.
- Online advertisements can also be used through the purchase of banner ads in local electronic newsletter linked to linked to RSS website.
Sales Promotions tools include
- Participation in community events and activities.
- Offer loyalty programs and incentives to frequent consumers
- Create referral program for members for directional and informative needs.
Public Relations
This can be done through:
- Distribution of press release to the media houses featuring the the newly designed products to be unleashed in the markets.
- Distribution of monthly press releases to maintain the highest achieved profits and sales and also maintain the top brands and designs in the market.
Direct Marketing
This method always proves to be the most effective measure because it involves dealing with the consumer or client on one on one basis, hence able to judge their reactions and whatever they need. This can be done through the purchase databases direct mailing postcards to targeted possible customers in the given geographical area.
Channels of distribution
Our products and services are mainly distributed to the consumer on a personal basis through our personnel. This is due to the sole reason that our products cannot afford moving through (Kleckner & Phelps, 2004) long chains for the sole reasons that they may as a result be very expensive to the consumers of the products hence discourage business. Transportation to our premises is majorly done by the manufacturers due to the sole fact that we purchase in bulk hence transportation is an incentive.
Financial Management plan (Nugus, 2008)
Reference list
Engelson, M. (1995). Pricing strategy: an interdisciplinary approach. New York : New York book publishers.
Kleckner, M., & Phelps, J. M. (2004). Wham! Bam! Publishing: The Strategic Marketing Plan For Authors. Oxford: Oxford publishers.
McGrath, M. E. (2001). Product strategy for high technology companies: accelerating your. McGraw-Hill: Library of Cogress Cataloguing-in-Publication Data.
McKeever, M. (2010). How to Write a Business Plan. Sydney: Princeton Press.
Nugus, S. (2008). Financial planning using Excel: forecasting planning and budgeting. Canada: CIMA.