Out and about plc have appointed a new chief executive Lisa Coates who has proposed a new marketing plan to enable the business to achieve a rapid improvement in profitability. A marketing plan is a report outlining a firms marketing objectives, strategies and tactics including costing, timings and forecast results. It is part of a businesses overall corporate plan and should take into account the businesses corporate objectives, its internal capabilities, external opportunities and threats. Out and about plc must decide whether this new plan should be adopted.
Case for out and about plc’s proposed plan
The new proposed plan could lead to an increase in profitability due to the new ‘extreme sports’ market they will be diversifying into, and lead to an increase of the company's net profit margin which is 48%. They will be selling high quality fashionable merchandise which they will be able to charge a premium price for which therefore will increase profitability instead of being known as a discount store. Due to offering high quality products this could produce more sales due to more new and repeat customers as the consumers needs will be fulfilled due to the very high quality of the product. Quality could become the company's new unique selling point which will enable to get a competitive advantage over their rivals for example JJB sports and therefore enable the company to become closer to achieving its marketing objective of achieving a market share of 25%. Out and about plc could then gain a reputation for quality and may gain good publicity from consumer pressure groups which will lead to an increase in sales and it will be easier to establish their new products into the market as the new plan states out and about plc will be bringing out new products regularly. The new plan also states that the staff will be offering high levels of customer service which backs up the quality image they will be trying to establish. It also shows that the company has high quality standards throughout their company not just in their products which will enable the company to build a whole brand image around quality and this should therefore again lead to an increase in sales also happy customers will pass on through word of mouth which is free publicity.
The new plan also contains the new hard human resource approach the company will operate instead of their current soft human resource approach. This hard management approach will enable the company to save time and money as workers are paid as little as possible and the company will get rid of their current profit sharing scheme which will save further money. This means that the company will have more money to spend on other functional areas of the business such as marketing which will be important when the plan is implemented as the company will have to make consumers aware of the change in the business and what they are offering. Also it means more money to be spent on research and development to develop innovative products which will differentiate the company from the rest of the market. Having a hard human resource approach also means the workforce will be more flexible as staff are on temporary contracts which means that the company can meet variations in demand more easily and save money by only having the necessary amount of staff needed so there is no waste which again saves money. This approach will be essential in times of crisis for the business when deadlines need to be met. With the new human resource approach the employees will still receive bonuses if their store achieves their profit targets which will increase motivation and productivity.
In the new plan the company will also be operating effective stock management and implementing lean production principles. This means the company can minimise waste, become more efficient and therefore save money. Also frees up storage space for a more productive use...