Jack has decided to open a greetings card shop in Hounslow town centre, however similar businesses already exist within the area, and in order for him to be successful and attract customers I am going to design a small scale marketing plan and formal report. Jack is a sole trader and who is setting up a small business and he should be aware of the following advantages and disadvantages of being a sole trader.The advantages are that it is easy to set up, less capital is required, speedy decisions can be made as few people are involved, personal attention is given to business affairs, can cater for local people, profits do not have to be shared and business affairs can be kept private.The disadvantages are that you have unlimited liability this means that there is no limit on the amount of debt the business may run up and you may end up losing personal possessions. Another disadvantage is the difficulty to raise finance, small scale limits discounts, prices are higher than bigger organisations and you will get less holidays as it may affect the running of the business.Market researchTo research similar businesses and produce a marketing plan for Jack I will need to conduct both types of market research, desk and field. To research similar businesses I will need to do some desk research by looking at their websites and shops, such as Jack’s major competitor Clintons. This will tell me how they run and will give Jack tips on how to run and let him know what he’s competing against.To inform Jack about his target market’s behaviour and shopping patterns I am going to conduct a field research in the form of a questionnaire, I am going to ask 20 people in Hounslow high street questions about their shopping patterns, what they like e.t.c. I will analyse the market research and make suggestions to Jack about setting up his business using this. I will look at Jack competitors marketing strategies and see how well they work and see how Jack can be just as, or more successful than them and gain a share in the market.Marketing MixThe crucial factor in creating a successful business is the marketing mix. I am going to investigate the marketing mix theory and what marketing mix Jack’s competitors have concocted and how successful it is. I will refer to my market research as the major indicator in what decisions to make for each part of the marketing mix because each part depends on the customers view. Again I will use the market research to decide on my target market because it will tell me about the market I am setting up in. I will also create a name for Jack’s business by conducting some market research on initial ideas I have thought of. I will also design the interior and exterior of the shop by looking at similar businesses designs and looking for customer convenience and safety and also design ideas that will help boost sales.Product life CycleOnce Jack’s shop has been launched he will have to consider ways of increasing growth and delaying maturity. When his business does eventually reach maturity he will have to decide on extension strategies. I will investigate the product life cycle and ways in which to prolong it such as re-launching. I will also investigate how rival businesses have done this.I will also investigate the Boston Matrix theory and how it will help in making decisions about extension strategies. From investigating these things I will suggest ways in which Jack can prolong his shop’s product life cycle. I will also have to decide on what pricing strategies Jack will use, I will decide this by referring to the market research and looking at what price customers prefer and I will also look at what kind of pricing strategies Jack’s competitors are using and will look to see if they are successful and make decisions about Jack’s shop by looking at their strategies.Promotion TechniquesTo decide what promotion techniques Jack will use I will look at other businesses promotional techniques such as TV adverts and billboard adverts e.t.c. Because Jack is operating in a single area I will see what options are available to him. I will also look at my market research to see which type of advertising people like best and see if Jack could use this advertising to promote his business. I will look at other businesses advert designs and design my own to suit Jack’s business.Channels Of distributionTo obtain and sell goods Jack will have to decide which channel of distribution to use, I will look at which types of channels of distribution there are and which type will suit Jack’s shop the best. I will decide this by looking at factors like cost, space and time to decide which channel to use.’Marketing is the anticipation and identification of consumer wants and needs in order to meet these needs, and to make a profit.’ (Business studies for you)Marketing is more than just selling or advertising. It is the art of making it as easy as possible to get a customer to buy your product.The four P’s in marketingThese are essential in finding out the idea of marketing. If a company gets them right then they will easily sell their product.1. The firm must make a product that people will want to buy. It should fulfil their needs and wants.2. The price must be one that the customer thinks is value for money.3. The product must be promoted so people are aware of it.4. The product must be sold in a place where customers will find it convenient.Markets are segmented into different groups of people. There are four main ways of dividing people into different market segments.1. Age-for example the teenage market.2. Social class-professionals down to the unemployed.3. Location-selling a product specifically for an area.4. Culture or religion-different groups have their own products (curry, noodles).Market research is collecting data and gathering information and analysing and studying it to find out about the market you are may be launching your product in. The company needs market research to study the economic trends and customer views in the market. To find out what a customer wants companies need to do market research in a number of ways and ask such questions as shown below.(‘Business studies for you’, Stanley thornes)There are two types of market research-field research and desk research, a firm can employ either its own marketing department, or an outside specialist organisation.What is field research?Field research is doing your own work and data collection. It is also called primary research or original research. It is useful because it gives you up to date information on the market and tells you about customers views only in the market you are studying. There are several field research methods which are used by businesses. Each method involves using one or more of the following:1. QuestionnairesThese are lists of questions designed specifically for a task. Questionnaires can be completed by holding an interview. This can take place either face to face, over the telephone or through the post.I will conduct a questionnaire in Hounslow for Jack; this will tell him about his target market and how to successfully gain a good share of the market place by serving the customers what they want.2. Test marketingThis is when a product is marketed to just a small part of the total market to see if it is suitable for a wider release.3. Consumer panelsThis is where a selected group of people are given, or test a product and ask to give their views on it.Advantages of field researchThe advantages of field research are that it is up to date and specific to your product. The disadvantages are that is expensive to collect and time consuming and it needs a large sample size to be accurate.What is desk research?Desk research is also called secondary research or published research. It is useful at looking at the whole market and looking at the past trends to predict the future. It involves looking at research by Mintel and magazine and newspaper articles and government statistics. A company can study its own sales figures for trends or analyse requests from customer requests for new models or lines. A company can examine its competitors and their success to tell them which popular and unpopular points their competitors have, and develop their own improved products at a competitive price and gain the competitive edge over their rivals. This is the reason why desk research should be the first type of research done by a company because it will give the company a rough idea of what to do to be successful.I conducted some desk research for Jack by using the internet to tell him how his competitors run their business and how their services are welcomed by the end consumer. I looked at the success of competitors operating in the target market and where their major assets lay. The major competitors for Jack are Clintons, WHSmiths, Birthdays and Card fair. According to my field research these are the most popular shops and I will be doing some desk research on them to help Jack gain a market share from these companies.Advantages of desk researchAdvantages are that it is cheaper than field research and quick and easy to find. The disadvantages are that it may not be relevant to your product and it is often out of date.To obtain these desk research results I searched the internet and the websites I used are listed in my webliography. However I could only obtain the assets for Clinton’s cards as WHsmith, Birthdays and Card fair refused to give out information about their market share. These are the results I obtained from my desk research:* Around 2.7 billion cards are bought in the UK per year* The greeting card market is worth approximately �1.2 billion* Clinton’s hold 17% of the greeting card market. 60% of their assets are in Birthday/anniversary/get well cards. 30% of their assets are in Christmas cards and 10% of their assets are in valentine/mother’s/father’s day cards and eater cards.I was unable to find out who held the other 83% of the market, but according to my field research it was likely to Birthdays, WHSmith and Card Fair.Card typeBirthdaysClinton’sCard FairWHSmithBirthday****Anniversary****Get well****Christmas****Congratulations****Father’s day****Mother’s day****Consolation***The table above shows what type of cards each of Jack competitors stock as you can see from the table they stock all the major cards. However Card Fair does not stock any consolation cards, this is quite unusual and Jack could pick up on this business opportunity by stocking consolation cards and taking some of Card Fair’s market share by providing something his competitor does not have thus gaining a competitive edge over them.The results of the questionnaire showed that Clinton’s was the most popular card shop and by looking at the desk research which tells us that Clintons only holds 17% of the greeting card market. This means that if Clinton’s is the most popular shop and only holds 17% of the market, Jack’s other competitors must hold less than this, therefore Jack will be able to easily gain some market share if it is distributed in such small amounts. By selling consolation cards, he may be able to steal some market share from Card Fair because they don’t sell them and by using this gap in the market he can also make profit.This is Clinton’s website, it informs customers about what is in the shop, the upcoming celebrations, jobs, offers and you can also buy online. It has different categories to search in and is very attractive and inviting.Jack should also advertise on the internet through other websites or create his own website, as this will inform customers about his business and attract them to his shop.1. SexMale ? Female ?2. Age range10-16 ? 17-25 ? 30-35 ? 36-45 ? 46-50 ? 50+ ?3. Where do you usually buy your cards?Clintons ? Birthdays ? WH smiths ? Hallmark ? Woolworths ? Other ?4. What type of card do you most often purchase?Birthday ? Thank you ? Anniversary ? Good luck ? Christmas ? Wedding ? Other ?……………….5. Approximately how many cards do you buy a year?1-5 ? 6-10 ? 11-15 ? 16+ ?6. How much do you usually spend on a card?�0.10-�0.50 ? �0.51-�0.99 ? �1.00-�1.49 �1.50-�1.99 ? �2.00-�2.49 ? �2.50+ ?7. What other items do you purchase from your current card shop?Wrapping paper ? Posters ? Mugs ? Key rings ? Toys ?8. What would attract you most to a card shop?Customer service ? Price ? Quality of products ? Appearance of shop ? Range of products and facilities ? Other ?………………9. Which radio station do you most often listen to?Kiss FM ? Capital FM ? Radio 1 ? Radio 5 live ? Magic ? Other ?…………10. Which newspaper do you most often read?The Sun ? Evening Standard ? The Times ? Daily Telegraph ? Other ?………..11. Which websites or search engines do you most often visit?Yahoo ? Google ? MSN ? Ask Jeeves ? Other ?………..To market their product a firm needs to use four things to be successful together these four things are called the marketing mix. These ingredients are called the four Ps (see ‘Marketing page’), Product, Price, Promotion and Place.* The product has to have the right features for it to work well.* The price must be right. Consumers will need to buy in large numbers to produce a good profit.* The goods must be in the right place at the right time. Making sure that the goods arrive when and where is an important operation.* The market needs to be aware of the new product through promotion.The marketing mix varies in different markets so to make the product most successful the four Ps can be altered in amount to suit the market. Financial constraints will influence the marketing activity.ProductThe product is the most important part of the marketing mix, in order for the product to sell it must meet a customer’s need. Before launching a new product you must make sure that it has the right benefits that the consumers require.Product benefitsBenefits are the advantages that the buyers get from the good or service they buy. The benefits offered by a product or service can include:* Convenience and accessibility* Good after-sales technical support and advice* Reliability* Comfort and ease of use* Accountability-the assurance that if something goes wrong the manufacturer will put them right.* Courtesy and helpfulness of staff* Attractive, appropriate and efficient design and packaging* Peace of mind-the knowledge that you can trust the company and the goods you have purchased will not let you down.The more benefits you can provide to a customer the more likely you are able to sell your product and get a ‘good price’ for it. Competition is all about creating more benefits than rival products.It is essential for Jack that he sells the products that have many benefits to the customer; these benefits will help him sell his product. His products must have the right features to attract customers. According to the market research price and quality would attract most people to a card shop so Jack could sell products of good quality; his shop could also stock things apart from cards to give customers the benefit of convenience, according to the market research the most popular things that people bought in a card shop apart from cards were wrapping paper and posters. The market research showed that birthday, anniversary and thank you cards were bought most often so he should stock many of these cards to give the customer the benefit of convenience and reliability.PriceCharging the right is a very important part of the marketing mix. In setting a price for your product you will almost certainly want to cover your costs and make a profit as well.The pricing decisionThe actual price that a business charges for its products will depend on whether they are trying to win a massive share of the market, or whether they want consumers to buy their product because it is different and better than rival products. The main pricing decision for a firm, therefore, is whether to charge:* A low price in order to attract sales. This makes it possible to sell large quantities at a low average cost.* An average price. If you charge an average price, you will need to compete with your rivals by other means, e.g. by having a better quality product or better promotion or advertising, e.t.c.* A higher price. Firms can charge a high or premium price if they are seen as being better than their rivals in meeting the needs of s chosen group of customers.Jack will have to make a pricing decision whether to sell the majority of cards in his shop at a low, average or high price. The market research shows that people usually buy cards at a price of �1 to �2, so jack should aim to price most of his goods at this price or a little less to attract the most amounts of customers. He could also sell some card at a high price to suit the higher end of the market. Therefore Jack should charge an average price on most of his goods and look to improve quality and service to compete with his rivals and give him the competitive edge over them.PlaceIn marketing terms, the place is where the final exchange occurs between the seller and the customer. An important marketing decision is where this exchange takes place and how. For example, at one time, all bank services were provided ‘across the counter’, but in recent years banks have moved to cashpoints and telephone banking.Jack has decided to open up his shop in the town centre, similar businesses already exist in the area, in order for him to be successful he should also look towards selling over the phone and online shopping to increase sales.Target marketWhen choosing his target market Jack must look at different factors such as age, sex socio-economic and geographical. In the questionnaire the majority of people interviewed were young so the rest of the field research applies to them, therefore Jack should try to appeal to these people however should not only limit his marketing strategies to this level only, because to maximise sales he will really need to appeal to all age ranges because cards are not necessarily specified to a certain age range and people of all age ranges buy them.Jack should decide what socio-economic to target according to the market research, according to desk research conducted the majority of people in Hounslow earn high incomes and the field research told us that people preferred cards within a range of �1 to �2, this is a mid-market price therefore by looking at the desk and field research Jack should sell the majority of products at a mid market price but also sell quite a few upmarket products of very good quality because people who have high incomes will be able to afford them.The geographical location for Jack’s business will obviously be situated in Hounslow High Street however whereabouts is important because you will need a good location in the high street to attract lots of customers. It would be advisable to be situated in the centre of the high street or in the treaty centre as these are the busiest places in the street and Jack’s other competitors are situated here such as Clinton’s and WHSmith.Name of shopThe name of the shop is an important part of the shop’s image and must be catchy and attractive to make it memorable. I have thought of several names for the shop, and I conducted some field research to find out which one the customers would most prefer.These are the names that I thought of:* Jack’s cards* Jack in the box* Greetings* Jack’s shack* Occasions* Card shackThese names were put into the questionnaire below and 20 people were surveyed.Which one of these names would best suit a card shop?1) Jack’s cards ? 2) Jack in the box ? 3) Greetings ?4) Jack’s shack ? 5) Occasions ? 6) Card Shack ?The results were as follows:I have decided to name the shop ‘Card Shack’ as it was the name which was most preferred from the survey and when asked to comment about the why they chose it, the people I asked said it was ‘catchy’, which is exactly what I was aiming for.Front of shopFor the front of the shop I needed something attractive and eye-catching. For the shop sign I used orange lettering for the name and a blue background. This made the sign stand out and this will attract customers. Next to the sign I drew the logo so people would be able to recognise the shop by the logo if they saw it anywhere else. Next to the logo, there will be the address, telephone number and email so that people will know how to contact the business for information.Posters are stuck on the door, these posters will be about special offers inside the shop, and this will attract customers to come into the shop. In the left shop window I have put items for sale that are related to the season or celebrations for e.g. in the design I have put on display Halloween items. This will attract customers that are celebrating that event or festivity to the shop, therefore attracting different cultures to the shop for e.g Christmas-Christians, Diwali-Hindus, Eid- Muslims e.t.c. On the right side I have placed some of the products that are on sale inside the shop, this will tell customers what is on sale inside the shop and invite them to go in.Interior of the shopThis is the layout of Jack’s shop; I created it so that it is very convenient and accessible for the customers. I located the tills near to the door so that after customers but their goods they can quickly get to the door, also for security reasons, because thieves can be spotted easily from the front of the shop. The blue shelves are the new and trendy products that have just come out onto the market, these are high quality goods, so because they are in demand they should be at the front of the store clearly visible and easy to access, and these products are usually expensive, so to make larger profits Jack should try and sell lots of these, so it is a good idea to put them at the front of the store. The red shelves are the old and classic cards that never die out, such as birthday cards and wedding cards e.t.c.because these cards are quite old their prices are low but their demand is still quite high so that is why I have given them quite a lot of shelf space, because they will never die out I have put them at the back of the store to make way for high demand but low-life span cards. According to my market research, apart from cards people usually buy wrapping paper and posters, these items are located in the yellow shelf, and they are close to the door for convenience. Other items that people purchase are novelty and toy items, these items are situated in the purple shelves in the far left corner. Another corner is given to ornamental items like statues and carved models; this will also give the shop a slightly upmarket feel as not many of the competitors have these items in store. They are situated in the far right corner of the shop because they are not in high demand, yet are still popular as gifts. This layout and convenience will be appreciated by customer and Jack will be rewarded by their loyalty if he keeps up good customer service standards and ultimately make more profit.The life of a product is the period over which it appeals to customers. All the products go through the same life cycles, they are launched, and sales grow and reach maturity. Saturation is when there is no more room to expand, sales are at their peak. We can all think of goods that everyone wanted at one time but which have now gone out of fashion.The classic product life cycleSales performance and profitabilityThe sales performance of any product rises when the product is introduced into the market, reaches a peak and then goes into decline. Most products have a limited life cycle. Initially the product may flourish and grow, but eventually the market will mature and the product will move towards decline and finally become obsolete.At each stage in the product life-cycle, there is a close relationship between sales and profits, so that as organisations or brands go into decline, their profitability decreases. It is possible to update and relaunch the products when sales decline. This is called an extension strategy.For Jack to boost sales if they start to decline he will have to think about extension strategies which I have discussed on the following page in order to sustain profitabilityInjecting life into the product life cycleThe product life-cycle may last for a few months or for hundreds of years. To prolong the life cycle of a product, an organisation may inject new life into the growth period of the product by adjusting the ingredients of its marketing mix.Ways of altering the marketing mix to inject new life into a product might include:1) Changing or modifying the product.2) Altering distribution patterns.3) Changing prices to become more competitive.4) Promotional campaigns.Due to the type of shop Jack is opening it is presumed his shop will have a long product life cycle because cards are popular items which are bought all year round like birthday cards. However cards such as Christmas cards will obviously only be popular at Christmas and after that the sales will rapidly decrease, but this can be foreseen and Jack can tackle this maybe by using this planned obsolescence to his advantage. To prolong the life-cycle of Jack’s shop he should inject new life into the growth period of his shop. He could do this by changing or modifying the products in the shop by adding value to keep ahead of the competition, for e.g. by lowering prices or doing special deals like buy one get one free, buy this and get this half price e.t.c. He could do promotional campaigns such as advertising and special offers to renew interest in his shop.When the shop reaches maturity Jack could alter distributing patterns to create more attractive retail outlets for consumers, for e.g. he could introduce a mail order catalogue so shoppers can order goods by mail from home. He could relaunch his shop by giving it a new look to attract customers, this was done by WHSmith one of Jack’s competitors. At the start of the millennium WHSmith totally changed the logo and look of their shops to suit the new era, this was very successful and other shops are continuing to do this like Marks and Spencers . Along with the relaunch he could use product differentiation; he could identify what is different about his shop compared to the competition that makes people want to shop there. This might be that his shop has a unique feature( such as a ‘design your own card’ facility’) or a good reputation for quality or a cool brand image. This will be quite important because if Jack does not have product differentiation people will think his business is identical to his competitors and he will not be able to increase his market share and maximise sales.He could open up more stores in the same area just like his major competitor Clinton’s or open up stores around the city because his product is now well known. He could even start a franchise like McDonalds . He could also expand his business through diversification for e.g. he could start making a product range of his own according to what his customers want and also adding value to his exclusive products to attract customers (WHSmith and Clinton’s also have their own product range), or integrate with his supplier to increase efficiency and profit.The Boston Matrix is a well known tool for the marketing manager. It was developed by the large US consulting group and is an approach to product planning. It has two controlling aspects namely relative market share (meaning relative to your competition) and market growth.You would look at individual products in range and place it onto the matrix. You would do this for every product in the range. You can then plot the products of your rivals to give relative market share.This is simplistic in many ways and the matrix has some understandable limitations.DogsThese are products with a low share of a low growth market. They don’t generate cash for the company, they tend to absorb it. Get rid of these products.Cash CowsThese are products with a high share of a slow growth market. Cash cows generate more than is invested in them.Problem childrenThese are products with a low share of a high growth market. They consume resources and generate little in return. They absorb most money as you attempt to increase market share.StarsThese are products that are in high growth markets with a relatively high share of that market. Stars tend to generate high amounts of income. Businesses should keep and build their stars.As Jack’s business grows he should find out which of his products are dogs, problem children, cash cows and stars. We can predict which products will be the cash cows and stars and which products will be the problem children and dogs by looking at the market research. It tells us that people mostly bought wrapping paper and posters apart from cards in a card shop, therefore these products if marketed well, could become cash cows and stars. People interviewed also said that they bought less toys and key rings therefore if not marketed well these products could become problem children.He should then try to find a balance within the product range. He should try not to have any dogs. Cash cows, problem children and stars need to be kept in a kind of equilibrium. The funds generated by his Cash cows should used to turn problem children into stars which may eventually become cash cows. The Boston matrix helps Jack by telling him what products to sell and by the time his business matures most of the products he sells should be cash cows or stars.To decide what pricing strategies Jack will use he must look at various things such as the market research, the type of consumer that shops in the area and his competitors. Because there are many competitors in Jack’s target market it would be advisory for him to use the ‘penetration’ method, this involves setting a low price to guarantee entry into the market, it is used to prevent the failure of the product due to the competition out-selling the new product. According to the market research the majority of the people in the area usually pay �1.00-�1.49 for a card, therefore the prices of most of the cards in the shop should be �1.00-�1.49.Desk research was conducted to find out the average earnings of the people in the area, the results showed that the people in the area are quite high earners, therefore it would be suitable to be an upmarket business, however the market research shows that the price of the cards shoppers will prefer is middle market, so Jacks shop should be a middle market business. The competitors in the area were Clintons, WHsmith and Birthdays, all of theses shops are mid-market/upmarket shops. They are the competitors which Jack will be competing against for the market share; therefore to attract his target market Jack’s shop should also be mid-market.In conclusion, by looking at the three factors (market research, consumers and competitors) Jack’s business should launch off as a mid-market shop using the penetration method as well and start selling most of his cards at �1.00-�1.49 and then as it grows it could progress to mid-market/upmarket to overtake his competitors, this would require a different promotion strategy, he could do this by selling high quality cards which would have quite high prices, this could give his business a good reputation for good quality products, and help him overtake his competitors. As Jack’s business moves into the cash cow section of the Boston Matrix, he could also incorporate sales and special offers to give him the competitive edge over his competitors when his business matures and therefore inject new life into the business.There are four parts of the promotional mix: advertising, publicity, selling and sales promotion. One of the best forms of advertising is the product itself. But advertising still plays an important role. There are four main reasons why firms advertise:1) To make consumers aware of new products.2) To remind consumers about existing products.3) To persuade consumers to switch from rival products.4) To improve the image of the business.Advertising is the presenting or promoting of a product to the public to encourage sales. Where the firm will place its advertising depends on three things:1) Your target audience. If you want to sell expensive women’s perfume, do not place your advert in a video game magazine.2) The size of your market. If you are launching a video game nationwide, do not just advertise it in the ‘Isleworth Morning Gazette’.3) The size of your advertising budget. A large profitable firm will be able to advertise in different media while a small less profitable company will only be able to afford one.When advertising, Jack will need to decide how and where to go about it. His target audience will be a wide range of people of different ages and backgrounds. Because cards are bought by all kinds of people Jack’s shop is not age, gender or class specific. Therefore he will be able to advertise in a wide variety of places, however he will need to advertise in appropriate places where his adverts will fit in and be noticed for example he could not advertise that his shop has a half price sale on teddy bears in a rock music magazine as it would not be noticed by a lot of people. If he placed an advert in women’s or girls’ magazine, readers would notice it as girls tend to like cute cuddly toys.Jack will need to advertise according to the size of his target market. Because he is setting up his business in Hounslow High street he should advertise in Hounslow and nearby areas so people visiting Hounslow High Street will know about his shop and come to it.Jack’s advertising budget will initially be small because he is starting up as a sole trader and his investment will not be very big so he will only be able to advertise in certain places, so it is important that he chooses the right medium.Informative advertisingInformative advertising simply describe the product and its features in an impressive sounding way. They leave the customer free to make up their own mind .In the UK, the highest spender on advertising is the government. Most government advertising is aimed at giving information to the public. This passing on of information is a very important part of advertising.Persuasive advertisingMost adverts try to do more than just inform the public. Persuasive adverts try to convince the consumer that they cannot survive without the product. They play on people’s fear and vulnerabilities, and create desires where none existed before .The soap-powder manufacturers spend almost as much money on advertising as the government, and their advertisements are blatantly designed to attract people to buy their products.Advertising Media1) Television- adverts can reach millions and companies can target people who watch certain programmes. But it is very expensive.I don’t think it would be a good idea for Jack to advertise on television because it would be trying to attract a too wide audience. Jack is setting up a business in Hounslow and to advertise his shop nationwide would be inappropriate because most of the people who saw the advert would be too far away to ever visit his shop so it would be wasting money on people who would probably never visit the area. It is also not very practical for Jack because it would be very expensive.2) Radio- is cheaper and you can still target listeners of particular programmes, but it’s sound only and audiences are usually smaller.The questionnaire conducted showed that people mostly listened to Kiss FM and Capital FM. However advertising on these stations would be inappropriate for the same reasons as television. Instead Jack should advertise his shop on local radio, so people who live in the area will hear about the shop. As Jack business grows and he decides to open up store in different area he can then advertise on Kiss and Capital FM because people will have a store near them and will decide to visit it when they hear the advert.3) Newspapers and magazines- know a lot about their readers so it is easy to target effectively. People will often read them more than once.Jack could advertise in the local newspaper, this would be very effective as most of the people in the area would come across the advert and find out about the shop. Advertising in the local newspaper will target the Hounslow area and maximise sales.4) Posters and Billboards- have a high visual impact, stay in place for a long time and can be seen daily by lots of people. But often they are near roads and drivers only see them for a few seconds, so they can’t contain much information. And they are vulnerable to wind, rain and graffiti.Jack should definitely use posters and flyers as an advertising medium because they will grab people’s attention and can hold quite a lot of information. He could stick these posters in many places and gain lots of potential customers.5) Leaflets- are cheap to produce and distribute, however they are easy to ignore.Jack should produce and distribute leaflets through houses in the area, this is cheap and very effective to create awareness of his shop because people will pick it up with their mail and read so nearly everyone in the area will know about the shop. The disadvantage is that people may dismiss the leaflet as junk mail and may easily ignore it.6) Internet sites- can have high visual impact, be interactive, and link directly to buying the product. But the company’s advert is competing with a lot of other things on the net so it has to be very attractive in order to grab people attention.To advertise on other internet sites may be inappropriate again for a business of this size. However Jack could set up his own website and advertise and sell his products online as his business grows and this could be another way of increasing sales and reaching out to target customers. His website could be linked to Google and Yahoo as my market research told me that people mostly visited these search engines.Sales PromotionPromotion is not just about advertising. Sales promotion is another technique. There are six main methods of sales promotion they are also called point of sale promotions and below the line promotions because they do not depend on the media.1) Buy one get one free.2) Discounts- a good way to get people to notice the product is to stamp 10% off on the label.3) Competitions- will produce motivation and hype for a product e.g. win a year’s free supply of crisps by answering the following question.4) Free gifts- Buy a new skateboard and get a free CD player.5) Product trials- Set up a stall and give out free samples of your products.6) Point of sale advertising- Put your products in a special display case at the front of the supermarket.Jack should use sales promotion to boost sales and profit. He could do many promotions such as ‘buy one get one free’ and have yearly sales to offers discounts to customers to maximise sales. Jack could organise competitions and give-aways to customers to promote his company buy getting people motivated about his products. He could also give free gifts in his shop when you buy certain items, for e.g. when you buy a card you get free key ring with it.Publicity means any technique or process used to attract public attention to people and products. Unlike advertising, however, publicity is usually free. Any type of publicity is advertising.The advert on the left is for a company which sells movie swords and collectables. The advert says that the company is the official distributor of ‘Lord of the Rings’ merchandise. This will attract fans of the films to the advert and people who like collecting swords. The products are specialist goods and are quite expensive so would only appeal to people who are interested in the subject. The advert was taken out of a film magazine so the company is targeting a certain group. The lettering of the company is cool and metallic, representing the products this will appeal to the reader. Some of the products are illustrated and will catch the reader’s eye and people will instantly know what the company is about. The advert is also informative it gives contact details and payment details.This is a poster designed by me and it is designed to grab a passer by’s attention. The cool colours are attractive and welcoming. The pictures attract the reader and give them a general idea of what the shop is about. The title is in a striking colour to stick out and be memorable. The brief description tells the reader what the shop has to offer and entices the reader by advertising exciting products at low prices. The address telephone number and email tells the person the location and contact details for more information. The website in the bottom right hand corner is in a bold colour to catch the readers eye, this is important because if the person is interested or in a hurry he can look at the website later to find out more about the shop and its products. The advert projects a friendly and warm image with cool colours to appeal to the customer.The advert I have designed and the advert design I have collected have many similarities and have the same desired affect on the customer because they attract and inform by using a combination of text and colours. However the collected advert differs in some ways, the advert shows the products on sale and this immediately tells the customer exactly what the advert is about. This is effective for this kind of company because the products are ornamental pleasing to the eye so it appeals to the reader. However to do this for Jack’ company would not be a good idea because the cards would not have the same effect and make the advert look cheap too squashed up, also the products advertised may go out of production and when the customer comes to buy it, it won’t be available and they will be disappointed. Instead I chose to use pictures to give the reader a good idea about what the shop is about and create a relaxed and cool theme.A distribution channel is the means by which an organisation and its customers are brought together at a particular place and time for the purpose of buying and selling goods. This may be in a shop, office, via a computer ink, or by television shopping.The organisations that are involved in the distribution chain are:* Manufacturers- the firms that make the products.* Wholesalers- the firms that store goods in bulk where they are purchase from manufacturers before selling them on to retailers.* Retailers- the firms that sell goods to final consumers.The diagram below shows the four distribution channels 1, 2 and 3 are indirect channels, 4 is a direct channel.1) Manufacturer-wholesaler-consumerThis happens when consumers buy the product from a cash and carry warehouse. It’s good for the manufacturer because they get bulk orders and the wholesaler takes on the cost of storing the products and the risk of not selling them. The consumer often benefits from lower prices than if they bought form a retailer- but levels of customer services may be lower.This method would obviously not be appropriate for Jack because his business is not involved at all.2) Manufacturer-wholesaler-retailer-consumerThis is the traditional route-it’s still used mainly in the food and drink industry. The advantages to the manufacturer are the same as for channel 1. The retailer also benefits from dealing with a wholesaler- they reduce the risk by allowing retailers to buy in smaller amounts, and giving them a wide choice of goods can take a long time to get from manufacturer to consumer. And manufacturers may be too distant from hearing the needs of consumers.This traditional method would be most suitable for Jack because his business would be involved in selling to the consumer he would also be reducing risk buy buying in smaller amounts and getting a wide range of goods from the wholesalers.3) Manufacturer-Retailer-ConsumerThis route is becoming more common-it’s used in the clothing industry. It’s faster than dealing with retailers through wholesalers, and the manufacturer gets better consumer feedback about the products. But it’s harder for small retailers to avoid having to hold a lot of stock.This method would not be good for Jack as it would require him to buy large amounts of stock. This would be inappropriate for Jack as his shop would not be able to hold such a large amount of stock and if it becomes obsolete or unsold he will run up loss.4) Manufacturer-ConsumerThis is now very popular-examples include factory shops, mail order and internet selling or e-commerce. It’s the fastest channel and often cheapest for the consumer.But it can be more difficult for consumers to shop around and customer service levels may not be as good.This method would obviously not be good for Jack as his business is not involved.These are laws which Jack will need to consider when setting up his business.The Sale of Goods Act 1979 says that goods must be:* Of ‘merchantable quality’- i.e. free from significant faults, except defects which are drawn to your attention by the seller (for instance, if goods are declared to be ‘shop soiled’).* ‘Fit for the purpose’- including any particular purpose mentioned by you to the seller, e.g. if you ask for a jumper that is machine-washables, you should not be sold one that has to be hand-washed.* ‘As described on the package or sales literature, or verbally by the seller. If you are told that a shirt is 100% cotton, then it should turn out to be made out of cotton and polyester.Any good that you can buy from any sort of trader should meet these basic requirements. They also apply to foods and goods bought in sales.Jack must make sure the goods that he sells are of merchantable quality and meet these basic requirements and satisfy the customer.Trade Descriptions Act 1968 says that the description given of the goods forms part of the contract between the buyer and the seller. This act makes it a criminal offence for a trader to describe goods falsely. A type of case frequently prosecuted under this act is turning back the ‘clock’ on a used car to disguise the mileage.Jack should make sure the goods that he sells clearly describe the product and do not give a false impression otherwise he may be prosecuted under this act. He should advertise his shop so that it comes within this act he must not advertise something that his shop or the products do not do and try to mislead the customer. Because the act lays down that goods advertised must be as they are described.Food and Safety act- This act gives Environmental Health Officers powers to shut down premises where food is not being prepared in a hygienic way. Regulation covers such things as refrigeration temperatures.If Jack decides to sell food in his shop such as sweets and sandwiches e.t.c. he will have to make sure that his shop is suitable to do so and he keeps under the regulations of the Act.Consumer Credit Act 1974- This act protects anyone buying products on credit- such as hire purchase. The customer must be given a copy of the credit agreement, the interest charge should be clearly stated and the customer has 14 days to change their mind and cancel the agreement. The interest charge should be calculated to show the Annual percentage Rate (APR) – and that is calculated in the same way by all firms so that consumers can compare credit charges.Jack must make sure he gives his customers a credit agreement and calculates his interest charge to show his APR.In order to complete this task I needed to undertake certain processes that I have outlined below. I came across problems and difficulties in producing and launching the shop and below I will outline how I overcame them.Market researchIn order to find out about jack’s target market and competitors I had to conduct some field research. I did this by creating and conducting a questionnaire to ask people in the target market. From the field research I learned the following:* the most frequently bought cards are birthday cards* Clinton’s cards are the most popular card shop in the high street.* The majority of card buyers are aged 10-16, however there may have been a number of factors which lead to this outcome such as time, day etc. These have been outlined in my market research analysis.* Most customers prefer cards within the range of �1-�2.* The major factor that would attract customers is the price of the products in the shop.* Kiss FM is the most popular radio station.* Apart from cards, wrapping paper is the highest purchased item.This information that I obtained tells Jack about what his target market buys and how it operates. It tells him what his potential customers like and dislike and about their market behaviour e.g. where they shop and what they buy. This will give him an idea of what to sell and how to sell it. However one of the problems I faced with these findings is that they were affected by social behaviour patterns and economic factors. This meant that the target market may not have exactly reflected my research, for example, one possible reason why the majority of card buyers were aged 10-16 is because I interviewed people at midday and this is the time young people tend to go shopping because they get up late etc. and there were not many middle-aged people because they tend to shop early. The age range of the people interviewed affected the economic factors of the target market also. For example the reason people preferred a card price of �1-�2 maybe because of their age, younger people may not be able to afford expensive cards and because the majority of people asked were young that may be the reason for the preferable price of the card. Other socio-economic factors are outlined in my market research. However I still feel that the field research conducted still gives an accurate view of the target market because it is clear to see a general pattern between all age groups despite the socio economic factors.Marketing MixIn order to find out how to make Jack’s firm successful I had to make the right marketing mix, this consisted of the four P’s: product, price, place and promotion. I came to a conclusion for each of these by looking at my market research.The market research told me that people preferred products within a price range of �1-�2.Jack should sell products that have many benefits for the consumer such as quality and convenience.For Jack to be successful his business has to be in the right place to attract the largest amount of potential customers. I concluded that he should set up in the centre of the high street or in the treaty centre to attract large amounts of customers.For promotion I researched similar businesses which are in competition which Jack to see what types of promotion strategies they used. I have shown this research in my promotional techniques.From investigating the marketing mix I also identified my target market, I found that because Jack’s shop appeals to such a wide range of audience it should not be aimed at a certain age range or gender, however Jack could aim certain products that his shop sell at different age, social, and cultural groups.I also designed the inside and outside of Jack’s shop for his launch, I did this by researching his competitor’s layouts and taking ideas from them and adding my own. I designed it taking into account convenience for the shopper and safety for the shopper, I also took into account the importance of visual display which attracts customers and used this marketing technique to attract customers to new items in the shop.Producing the right marketing mix proved quite tricky and if the mix is not successful Jack will be at a loss. Therefore Jack will need to adjust his marketing mix and his shop grows or his market changes.Product Life cycleTo prolong Jack’s product life cycle he will need to re-design and re-launch his products and use updated marketing campaigns, this will increase his shops growth and delay maturity. This will maximise sales and profits and limit loss.The main problem I found was what would be done when the shop eventually reached maturity because it would be hard to predict what kind of situation the shop would be in, depending on how well the marketing mix was working and how well the products were selling then Jack could decide what decisions to make about expansion and re-launching.To decide what pricing strategies to use I looked at the market research which told me that people preferred cards ranging between �1-�2 therefore Jack should aim to us this price on most of his products. This is quite al low price and Jack could use the penetration strategy which sells at low prices and gains a market share quickly. This would be effective as it would give him a market share and guarantee him entry into the market when he launched.However these low price make people of the quality of the goods so Jack should sell middle market products to attract the largest number of customers. And as Jack’s shop grew he could start to sell up upmarket products which have high prices to attract customers who are looking for high quality and take these customers away from his competitors because he has now gained a large market share and can appeal to different socio-economic groups.Promotional TechniquesTo inform and attract the public to Jack’s shop, Jack needed to use promotion and advertising. To decide what promotional techniques Jack should use, I investigated promotional techniques of other businesses as shown in the promotional techniques chapter. I also looked at Jack’s competitors promotional techniques to give me ideas on how to promote Jack’s company. Because Jack is a sole trader and he owns a small single shop it would be advisable for him to advertise to the local area, in which his shop is located, which is Hounslow. I decided the best way to do this would be by putting up flyers and distributing leaflets in Hounslow. The leaflets would be sure to come into the public’s eyes but may be dismissed as junk mail; therefore flyers around the area would be the most effective and eye catching way to attract the public. By looking at other company’s flyers, adverts and posters I designed a poster that is eye catching and informative that meets the objective of attracting passers-by.The problem I encountered in launching Jack’s promotional campaign was due to the nature of Jack’s shop. Because it is a small single shop most of the promotional techniques are unsuitable for it because they would appeal to a too wide range of audience that would be very unlikely to visits Jack’s shop and so advertising such mediums such as TV and radio would be expensive and inefficient. Therefore local advertising would be the most effective however this ruled out the most effective advertising mediums so Jack could only advertise through leaflets and flyers. However as Jack’s business grew and he decided to open up more branches in other parts of the UK he could use radio and TV to promote his shop.Channels of DistributionIn order to decide which channel of distribution Jack should use I researched each channel to decide which one would suit him best. I decided the best method of distribution for Jack would be through the ‘traditional’ method because it is the only channel which involves his business and does not rely on the business’s ability to sell products in order to buy in bulk. It allows Jack to buy products in small amounts and sell them on for a profit. However the problem with this channel is that the maximum profit on an item will not be made as a percentage goes to the wholesaler.Consumer lawIn order to fall within government guidelines and to be consumer friendly Jack had to follow certain consumer laws which applied to his business. To find out which laws applied to him, I researched business law. The laws that apply to Jack have been identified in the consumer law chapter and Jack must follow these laws to run a successful business.In order to make Jack’s business successful and give him the best chance of entering the greeting cards market I have made recommendations that jack can follow to achieve this goal.Market ResearchBy looking at the market research, I believe that Jack should generally aim his product at people aged 10-25 as they tend to buy the majority of cards, however he should also aim products at middle aged people because of the condition in which the questionnaire was taken (see market research analysis). Jack also price the majority of his products at �1-�2 as this is the preferable price of the customers, this is an down-market mid-market price which will attract younger people, however quite a few people were prepared to pay up �3 for a card so Jack should also have an upmarket range of products in order to attract older customers who are looking for quality, this will help him reach out to the maximum amount of customers and increase sales.The most popular cards were birthday and anniversary cards, so Jack should stock a large and wide range of these cards to appeal to the largest amount of customers.The most popular products apart from cards that people would buy from card shops were wrapping paper and posters so Jack should sell a wide range of these to pick up sales from products apart from cards. If Jack has an attractive and popular range of wrapping paper and cards customers will come to him instead of his competitors even if they stock better cards because he will have better wrapping paper and posters.The factor that attracts people to a card shop is the price and the quality of products so Jack should stock products within the preferred price of �1-�2 which is a mid-market price, these goods should be of good mid-market quality to please the majority of shoppers and Jack should also sell some upmarket products of high quality to please shoppers who are willing to pay high prices for high quality products.By looking at the market I have made these following recommendations and is Jack follows them he is likely to please the majority of customers and maximise sales.Marketing MixTo make the right marketing mix I looked at the market research and Jack’s competitors. Below is an initial marketing mix that I suggest however as the shop is launched, Jack will see how well the mix works and he can adjust it due to the market’s response to it.* Price-Jack should aim most of his products to be within the �1-�3 price range to suit the majority of customers.* Place- the shop will be located In the centre of Hounslow high street to attract the largest amount of customers from both ends of the high street.* Product- The majority of the products should be of mid-market quality and price to suit the majority of customer, however Jack could sell some up-market goods to attract other customers who are looking for quality.* Promotion-Jack should use local advertising as the most effective way to appeal to his target market. He can use the flyer I have designed and display it around Hounslow; he can also distribute leaflets directly to potential customer and even advertise on the local radio station.Jack should aim his products at all age ranges, but also at younger people specifically according to the market research. He can also sell products that appeal to certain cultural groups such as Diwali, Eid and Christmas cards, this will appeal to certain groups which have not been targeted by his competitors and therefore take some market share away from his competitors.Jack should also get my interior and exterior plans for my shop in blueprint to make the design official and start to plan a scale version of it.Product Life CycleTo prolong the life cycle of Jack’s shop and delay maturity, he must decide on two things, price and promotion. If Jack decides on a suitable price which generates profit and also makes enough revenue to fund an advertising campaign he can maintain his companies growth and delay maturity and the eventual decline. The advertising campaign will create and sustain interest in the company for a long period and will inform people who have not heard of the company.He can also delay maturity by re-launching his shop with a new look every ten years to boost interest in his company which has worked for other companies such as WHSmith. According to the market research the most suitable price to launch the majority of Jack’s cards would be �1-�3 because most consumers prefer and buy cards at that price. The advertising campaign should be launched at the same time as the shop to inform and attract people to Jack’s new shop. The advertising campaign could be renewed when there is a drop in sales.Promotional TechniquesThe most effective methods of promoting Jack’s shop would be through local media and local advertising such as flyers and leaflets. He could advertise through local newspapers like many of his competitors and through the local radio station directly to his target market. He can use the flyer I have designed in the promotional techniques chapter as an attractive and informative method of advertising.I rejected the advertising mediums of T.V. and the internet due to the size and scale of Jack’s shop. Jack is a sole trader setting up a small single shop in Hounslow, if he advertised on the television and the internet it would be very expensive and broadcast to people who live extremely far away from Jack’s shop and would be very unlikely to visit it, therefore Jack would be wasting a lot of money on people who would never visit his shop, that is why I rejected these mediums. As Jack’s business grew and he opened more shops across the country then national T.V. and radio could be used as advertising mediums as they would appeal to his target market and would be fairly close to his shop to visit it.Channels of DistributionI would advise Jack to use the ‘traditional’ channel of distribution where products are delivered to Jack via a wholesaler. I rejected the other methods because they did not involve Jack’s business and Jack is setting up a small business and would not be able to buy in bulk because of space and he there is not a guarantee that he will sell all that amount of stock because of the size of his business. However as Jack’s business grew and he opened up more store he could consider the ‘direct’ channel of distribution however he will have to maintain sales and require many large shops to make this method work productively.Consumer LawFor Jack to stay within the business he needs to fall within government laws and guidelines. Therefore he needs to carefully consider these laws, and he must choose which manufacturers to trade with and what products to sell to abide within these laws.