The following subsections outline the marketing, pricing and promotion strategies, and competitive edges for Markam Driving School.
At the moment, the company is focusing on its core market segment, the beginner students. This means creating closer ties with school districts and pursuing those contracts. In addition, the company is focusing on Web, magazine, newspaper and TV advertisements, all with a teen focus. Starting next year, MDS hopes to have some form of advertisements or booths within shopping malls frequented by our target market.
With the company's expansion, we have focused on creating a detailed report on the lifestyles of our target market to further hone our marketing efforts. With this report we will be able to go forward with the best possible client organizations and partnerships to promote sales and to fill our classes to capacity.
MDS prices its services based on the accumulated total cost to provide such services and then adds on a flat profit margin to arrive at a final net profit/sales ratio of 7%. In Washington state, the government regulates how much a company can charge for classes where the student must attend to remove, or reduce, some form of traffic violation. This margin is 4%. Therefore we usually see much lower sales figures for this category.
Currently about half of MDS's sales promotions are through information-related media such as the Web, Yellow Pages, teen magazines, TV, etc. The other half is done through creating a network of referrals and other relations to provide information to prospective students. It is with this latter method that the company uses it own printed literature. Often our strategic partners are passing out our literature or providing discounts on our services. Reciprocity is key here and MDS also provides literature/discounts on its partners to every incoming student. The company collects testimonials from as many students as possible to use in its campaign. Every three to six months, depending on the type of media used, or relationship sought, the company reviews the effectiveness of the promotion tool and determines its viability.
MDS possesses two competitive edges in relation to its rivals. The first one is its excellent ability to create strategic alliances that reduce costs and allow it to become the low-cost provider and create its vision of the one-stop driver support center. In addition the company has a very aggressive marketing executive in the person of Ellen James, who's goal is to proactively discover how best to provide our services, when to provide them, and where to provide them. Ms. James work has spawned new service ideas such as Driver's Ed Housecalls, a program that is now being evaluated where a driver educator could provide hands on teaching at a person's home. Other ideas such as this are also in the works to improve service as much as possible.