Guildford Dry Cleaning Service
Strategy and Implementation Summary
The following areas will be monitored to evaluate the business performance:
- Monthly and annual sales
- Monthly and annual profit
- Repeat business
- Customer satisfaction
The business success will depend on quality and convenience of the service, customer opinions, and competitor response.
The business provides a new door-to-door dry cleaning, laundry, and alteration service in Guildford that surely will attract customer attention. Working customers may find this service is convenient for them and want to try it. If they are satisfied with the service quality they will likely become repeat customers. When the patronage happens continuously, they become loyal customers of the service. These customers will recommend Guildford Dry Cleaning Service to their friends and coworkers. As more and more customers use this service, Guildford Dry Cleaning Service’s image is enhanced and we will gain more and more market share.
If we attain monthly and annual sales at least as forecasted, total costs and expenses, including any unanticipated charges, will not exceed our estimates and therefore the monthly and annual profit will be satisfactorily achieved.
Difficulties and Risks
Guildford Dry Cleaning is a start-up and as such has less experience and begins with no market share at all. Assertive, effective initial marketing efforts will be necessary to gain a customer base. If existing competitors see us as a major threat and they resort to overtly aggressive and debilitating actions it will be very difficult for us to become an established player in the marketplace. Risks caused by competitors are possible, therefore the business has to monitor and evaluate its performance frequently, and collect customer evaluations and suggestions in order to continually improve.
Worst Case Risks
The worst case scenario would be that the business cannot support itself on an ongoing basis. The costs of doing business may be under-estimated, or sales and profit may be less than expected, making the business difficult to finance. Moreover, in case of social economic recession, political changes, or inflation, the business may perform even worse than has been forecasted.
5.1 Competitive Edge
As the UK’s economy grows rapidly and quality of life is increased, people tend to spend more time and money in leisure activities rather than doing their house work. They prefer that someone else does the cleaning work for them. Guildford has a population of 129,701 served by three dry cleaning and laundry shops. These existing shops wait for customers to bring their garments in and pick them up later. Customers have to drive cars to town, find parking places, carry their clothes or large items such as curtains, blankets, etc. to the shop, and to queue for being serviced. Then they must repeat this boring process when they come to collect their items. Moreover, these shops are only open from 9am – 6pm, and closed on Sunday, which are almost the same working hours of offices; most inconvenient for customers especially those with full-time jobs.
By understanding and addressing this need, our new dry cleaning, laundry and alteration service will be established, providing door-to-door service free of delivery charge. We make our customers’ lives simpler by saving them time, and eliminating waiting in queues, parking problems, forgetting to collect clothes, missing meals, and going home late.
5.2 Marketing Strategy
Place: Trading directly with customers, conveniently in the customers’ houses in Guildford. We are choosing to not rent a shop in high street in the town centre, thereby reducing costs. Guildford Dry Cleaning Service will receive clothes from and return them to customers’ houses. Requests for urgent situation pick ups and deliveries will be accommodated, and a nominal fee charged.
Product: Free home pick up and delivery service, coming to customers’ house between 6 – 9 pm twice per week. We provide convenience and high quality dry cleaning, laundry, and alteration services.
Price: Normally, new businesses set their initial prices lower than their competitors. In our situation however, the business has higher costs for our delivery service and promotions to increase customers’ awareness and establish our brand name. We will set our prices to match those of our competitors. The pricing scheme is based on a per-service price. Moreover, the business targets working and professional customers who often pay less attention to price than the quality and convenience of service. Kelvin Clancy (in Kotler, 2003) shows that only between 15 and 35 percent of buyers are price sensitive. People with higher incomes are willing to pay more for features, customer service, quality, and convenience.
- Advertise our new service in the Surrey Advertiser, the Internet, public areas such as buses and train stations, shopping centres and supermarkets etc., and drop advertising material into families’ mailboxes.
- Offer 10% discount as an incentive for customers who sign one-year contracts.
- Issue coupons with lower price for loyal customers.
5.3 Sales Forecast
Sales forecast gradually increase over the year 2006 and comprise total sales of £324,700. However, in the last three months, October, November and December the sales almost remains the same due to the demand of this service at the end of years doesn’t increase, and even has a minor decrease.
As forecasted, turnover of total market continues to rise and the price of dry cleaning and laundry services also increases from 5-10% http://www.keynote.co.uk/GlobalFrame.htm. However, to avoid being too optimistic, this sale estimation is calculated based on the turnover of competitors in the year 2002.
Turnover projections of £324,700 for the year were generated in the following areas:
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||Year 1||Year 2||Year 3|
|Subtotal Direct Cost of Sales||£35,652||£46,348||£60,252|