Strategy and Implementation Summary
AuctionShipper’s strategy is to become visible to the targeted perspective customers. AuctionShipper has a strong competitive edge of price and environmental sensitivity and it will attempt to exploit this as much as possible to gain new eBay users customers. Exploiting the environmental aspect of its business is an added marketing bonus because while it does have valuable marketing potential, there are underlying economic reasons to be environmentally sound. The key to the sales strategy will be getting customers to try out AuctionShipper’s services. AuctionShipper has the firm belief that the conversion ratio from a first time customer to a long-term customer will be between 60%-70%. AuctionShipper is confident that this is a reasonable goal to aim for due to its excellent prices and customer service.
5.1 Competitive Edge
AuctionShipper has two competitive edges:
- Convenience: This competitive edge is made up of many different elements such as convenient hours of operation, convenient location and convenience in terms of the overall experience which is based on how quickly customers move through the process of having AuctionShipper package and ship their product.
- Environmental sensitivity: This is a significant advantage because most competitors cannot have the same commitment to the environment. It is rare for a shipper to be able to use 100% recycled materials. Appearance is the main driver to this decision. Recycled products will not have the fresh, crisp look of brand new shipping materials, which is a problem for most shippers as their packaging solution must appear professional. It is more important for AuctionShipper’s products to give off the appearance of environmental sensitivity instead of professionalism. The real customer is the shipper, not the receiver, therefore, there is a significant market population that is willing to accept packaging that is not brand new eBay users in exchange for not having to create extra waste in landfills.
5.2 Marketing Strategy
AuctionShipper will deploy a multi-pronged marketing approach in an effort to generate awareness among potential customers:
- Location: The choice of location was made based on the need to capture walk-by-traffic. Having a convenient, prominent location in an area with significant walk-by-traffic is one method of marketing.
- Participation in bulletin boards/user groups specific to auctions: Being prominent on these community communication tools is a great and inexpensive way for developing awareness of AuctionShipper’s services.
- Advertisements: While not as targeted, advertisements in the city new eBay users paper will be an effective marketing tool.
5.3 Sales Strategy
The sales strategy will be based on the conversion of first time customers into regular customers. This strategy can be successful if AuctionShipper offers a compelling, pleasant service. One way of achieving this goal is adhering to the business philosophy of 100% customer satisfaction. If AuctionShipper is attentive to ensuring that all customers have their expectations exceeded, then it will be easy to develop long-term customers. One method of achieving customer satisfaction is the awareness of the competitive environment. By being aware of the services that are offered by the competitors, it will be much easier for AuctionShipper to stand out as a preferred service provider. This sales strategy is based on the business philosophy that it is less expensive to maintain current customers than it is to attract new eBay users ones.
5.3.1 Sales Forecast
AuctionShipper has forecasted sales to be fairly slow for the first four months. This can be explained by the fact that AuctionShipper is a start-up business and there is a learning curve for new eBay users customers to become aware of the services offered. First year sales revenue are forecasted to reach $120,000 with year three revenue hitting $284,000.
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||Year 1||Year 2||Year 3|
|Subtotal Direct Cost of Sales||$80,896||$131,351||$201,840|
- Completion of business plan;
- Secure building lease;
- Sales in excess of $200,000.
|Milestone||Start Date||End Date||Budget||Manager||Department|
|Completion of business plan||1/1/2003||1/15/2003||$0||John||Marketing|
|Secure building lease||1/1/2003||2/1/2003||$0||John||Operations|
|Sales in excess of $200k||1/1/2003||6/1/2005||$0||John||Sales|