Sample Marketing Plan - Hanna Wash Australia Pty Ltd

Hanna Wash Australia

Sample Marketing Plan

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Table of Contents

1.0Executive Summary

2.0Situation Analysis

2.1Market Summary

2.1.1Market Demographics

2.1.2Market Needs

2.1.3Market Trends

2.1.4Market Growth

2.2SWOT Analysis

2.2.1Strengths

2.2.2Weaknesses

2.2.3Opportunities

2.2.4Threats

2.3Competition

2.4Services

2.5Keys to Success

2.6Critical Issues

3.0Marketing Strategy

3.1Mission

3.2Marketing Objectives

3.3Financial Objectives

3.4Target Marketing

3.5Positioning

3.6Strategy Pyramids

3.7Marketing Mix

3.8Marketing Research

4.0Financials, Budgets and Forecasts

4.1Break-even Analysis

4.2Sales Forecast

4.3Expense Forecast

5.0Controls

5.1Implementation Milestones

5.2Marketing Organisation

5.3Contingency Planning

1.0Executive Summary

Hanna Car Wash and Café (HCWAC) will be the prominent car wash for luxury vehicles in East Melbourne, Victoria. The Director of the business is Mr. John Smith, a successful business operator who has worked in the Car Detailing business for over 10 years. Having operated from his workshop in East Melbourne for this time, John has developed a loyal clientele and is well respected by his business peers.

It is envisioned that people will come HCWAC not only to have their cars washed and detailed, but also for a coffee and snack break. Alternatively, clients will leave their cars at the site whilst shopping or at appointments within the vicinity.

HCWAC will be based in East Melbourne, VIC. This area has a number of benefits in terms of the market it will provide for the business. Over 40% of households in the immediate neighbourhood earn over $70,000 annually, providing a large market for up-market hand car washes. John himself has run successful businesses over the span of 25 years, proving very skilled and experienced in all matters relating to management and business operations.

HCWAC will have 35% market share of Hand Car Wash business in the vicinity by the end of year three, and aims to convert a larger percentage of people away from machine and self-serve car washes. HCWAC will maintain a 95% gross profit margin and make 11% net profit margin after 12 months of operation.

Table: Sales Forecast

Sales Forecast

/ 2005 / 2006 / 2007
Individuals
Businesses / $76,086
$6,431 / $123,033
$8,776 / $165,662
$9,988

Total Sales

/ $82,517 / $131,809 / $175,650

Direct Cost of Sales

/ 2005 / 2006 / 2007
Individuals
Businesses / $3,804
$322 / $6,152
$439 / $8,283
$499

Total Cost of Sales

/ $4,126 / $6,590 / $8,783

2.0Situation Analysis

HCWAC is entering their first year of operation. The owner believes that a comprehensive marketing strategy will be key to the success of the business. HCWAC offers a premium hand car washing service within a funky, attractive premises offering coffees and light snacks.

2.1Market Summary

HCWAC possess good information about the market and knows a great deal about their target customers. This information will be leveraged to better understand who is served, their specific needs and how HCWAC can better communicate with them.

Table: Market Analysis

Potential Customers

/
Growth
/ 2005 / 2006 / 2007 / 2008 / 2009 / CAGR
Individuals
Businesses / 12%
1% / 43,000
9 / 48,160
9 / 53,939
9 / 60,412
9 / 67,661
9 / 12.00%
0.00%

Total

/ 12.00% / 43,009 / 48,169 / 53,948 / 60,421 / 67,670 / 12.00%

2.1.1 Market Demographics

The profile for HWCAC target customer consists of the following geographic, demographic and behaviour factors:

Geographics

  • The immediate geographic target is East Melbourne, VIC.
  • A 25 km radius is in need of the service, however 87% of the business will be from within a 7 km radius.
  • The total targeted population is just over 43,000.

Demographics

  • Male:Female – 63%:37%. The reason for this discrepancy in the ratio is generally explained by the fact that men typically care more about their vehicles. Men are more likely to spend money on accessories and add-ons, whereas most women view their cars as a utility. Also, there are more men with company vehicles, that may need to be kept clean as a requirement for their organization.
  • 40% of households earn over $70,000.
  • 73% of the target population have Tertiary Education of some sort.

Behaviour Factors

  • 43% of the target market lease their cars.
  • Individual and family image is personified by the type and condition of the vehicle they drive.

2.1.2 Market Needs

HCWAC is providing the market with a premium hand car wash service for the East Melbourne community. HCWAC seeks to fulfill the following benefits that are important to the customers:

  • Exemplary customer service – The target customers have money and are used to receiving excellent customer service. They will generally not use the wash again if they don’t get the service they are used to.
  • High quality washes – The target market value a higher quality was for their upper-end cars.
  • Convenience – The hours of operation, as well as the time needed to provide the service, must be convenient and fast respectively, in order to gain market share.

2.1.3 Market Trends

The market trends for the car washing industry has been a gravitation from hand washing to automatic washing machine facilities. This trend has been fuelled by the progression of technology. The automatic washing machines have become more efficient and less expensive over the past 10 years to the point that it is typically very cost effective to invest in these machines.

Although this can be viewed as perhaps leading to a downturn in the need for hand washing, a good percentage of the general community still understand that a hand wash is a superior method of having their vehicle cleaned thoroughly. Other reasons may include that some people are not able to, or don’t wish to, use the self-serve car washes that are available to them. East Melbourne’s community are considered ‘upper-end’ – more expensive vehicles than the average, and more willing to invest the little bit extra in having them hand washed.

Market Forecast:

2.1.4 Market Growth

The car washing market has seen steady 4% growth for the last six years. 4% growth is forecast for the next four years.

Target Market Growth:

2.2SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing HCWAC.

2.2.1Strengths

  • Good relationships with many prospective customers in the target market.
  • Strong family name recognition in the community.
  • Well trained employees.
  • Director has sound background and understanding of business.

2.2.2Weaknesses

  • The need for reliance on outside investors.
  • The learning curve associated with entering an industry without direct prior knowledge or experience.
  • The requirement to have a constant volume of business to support the necessary service staff.

2.2.3Opportunities

  • Participation within a steadily growing industry.
  • A high likelihood of repeat business.
  • The ability to decrease fixed costs as a percentage of an individual sale as volume increases.

2.2.4Threats

  • Future/potential competition from a franchised firm.
  • A slump in the economy, reducing discretionary spending.
  • The perception that there is not a difference in quality between a machine wash and a hand wash.

2.3Competition

There is one other car wash in East Melbourne. It is quite new and is trying to compete with the automatic car washes by offering low prices. However it is not targeting the consumers who seek quality cleaning.

The customers HCWAC is targeting have their cars washed based on the quality of the job. They do not mind spending a little more each week to have their car washed and waxed in order to keep the paint work in excellent shape. The businesses that HCWAC targets will be more cost conscious, so prices will be approximately 30% less to promote volume usage.

2.4Goods & Services

HCWAC will provide the following goods & services:

  • Car washing – exterior
  • Car washing – interior
  • Car detailing
  • Fully operational Café

2.5Keys to success

HCWAC keys to success are:

  • High quality car wash service
  • Benchmarked customer service
  • Convenience

2.6Critical issues

HCWAC is still in the speculative stages as a start-up organization. It’s critical issues are:

  • Continue to take a modest fiscal approach, expand at a reasonable rate, not for the sake of expansion, but for economic reasons.
  • Build brand awareness, increasing the customer base and developing brand equity.
  • Establish HCWAC as the premier hand car wash in East Melbourne.

3.0Marketing Strategy

The marketing strategy will be to develop brand equity, increase customer awareness of HCWAC, and build the customer base. This strategy will use several different methods to achieve these goals.

3.1Mission

The mission of HCWAC is to provide top-quality washing and detail service for luxury car owners in East Melbourne, VIC. HCWAC will work to keep employees satisfied in order to maintain impeccable customer service.

3.2Marketing Objectives

  • Increase repeat customers by 4% a quarter.
  • Steadily increase market share every quarter.
  • Develop brand awareness and acceptance, quantified by a decrease in customer acquisition costs.

3.3Financial Objectives

  • Increase the profit margin by .5% a quarter.
  • Achieve a double digit growth rate each year for at least the first three years.
  • Develop efficiencies in the delivery of the service through advanced training and workflow analysis.

3.4Target Marketing

HCWAC segments it’s customers by type of car ownership. HCWAC believes that the type of car that a person owns says volumes about their driving and therefore their car washing and detailing requirements.

  • New car owners – Owners of newer cars are most likely to use a hand car washing service. These owners take great pride in their cars and will bring them often to the wash and detailing service. The aim is to inform these customers that HCWAC will keep their vehicle looking every bit as good as it did the day it drove out of the car sales yard.
  • Older luxury car owners – These people have either owned their high-end luxury cars for several years or are unable to afford the expense of a new luxury car but want the feel of relaxed driving. Both these groups of clientele want to keep their cars in the best shape possible. Those who have bought second hand cars will often spend many hours in their cars, and will place high importance on keeping their cars looking good. These owners will bring their cars in for regular washes and occasional details.
  • Sports car owners – These people are often younger or middle-aged and will regard the look of their car as important. They pride themselves on the look of their car, and will most often have their car hand washed weekly. These drivers will have an occasional detail, but generally keep their cars so clean that a detail is not normally necessary.
  • Lifetime owners – Many of these clients have owned their cars for more than five or six years and are more likely to be women. They are attached to their cars as friends and thought it may be sensible for them to purchase a new car, they will bring their car in for a wash occasionally, just when it is dirty. They want their cars to remain presentable, but are not tied to the look of their car. For this reason, they will generally not have the car detailed unless they are selling it.
  • Dealerships – There are five new and used car dealerships within three miles of the proposed location of HCWAC. These dealerships use outside car wash services to detail their vehicles before they are put up for sale. In addition, there are fifteen other car dealerships located within a seven km radius of HCWAC.
  • Local Businesses – Some local businesses have fleets of cars and small vans that must be kept clean to maintain their company image. These businesses will be looking for a cost effective, efficient car washing service to perform this duty, and will prefer to use a car wash service during the week rather than on weekends, like the general public.

Please note that for analysis purposes in regards to the charts and graphs, the different segments will be grouped into individuals and businesses. This has been done to allow the charts and graphs to have a clean look that will aid in the ability to quickly discern information from them.

3.5Positioning

HCWAC seeks to position themselves as the premier hand auto washing service provider in the East Melbourne area. This positioning will be achieved by leveraging their competitive edge.

HCWAC’s competitive edge will be gained through the reputation of the Director and his name throughout the area. Branding and marketing of the car wash will be a priority, and the Director once again has a myriad of experience in this area, through other businesses he has operated and sold in the past.

Lastly, by purchasing a quality conveyor through a very reputable Australian supplier, HCWAC will place an emphasis on creating a fast, no hassle system for the client.

3.6Strategy Pyramids

The single objective is to position HCWAC as the premier automobile hand washing company in the area, steadily increasing market share. The marketing strategy will seek to first create customer awareness, develop a customer base, and work toward building customer loyalty.

The message that HCWAC will seek to communicate is that their hand washes are superior to a machine wash alternative. The message of convenience will be communicated through several different methods: the placement of advertisements in the local newspaper, which is well read and will reach a large portion of the targeted community; networking and leveraging the Directors substantial customer base from his previous businesses; and lastly a ‘marketing pyramid’ through the use of coupons placed in the local newspaper. The use of coupons will introduce people who are not yet familiar with either the Director or the use of a Hand Wash style car wash.

3.7Marketing Mix

HCWAC’s marketing mix is comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service:

  • Pricing – the pricing scheme is based on a per service price. A HCWAC “Card” can be purchased, which provides volume discount to the user.
  • Distribution – The offered services will be distributed from HCWAC’s facilities.
  • Advertising / Promotion – HCWAC will use different methods for advertising and promotion.
  • Customer Service – Exemplary customer service will be provided.

3.8Marketing Research

During the initial stages of the marketing plan development the Director performed primary market research in the form of a questionnaire/survey. The Director outsourced the development of the survey to a local Professor of Statistics at Monash University’s GRIS. While the Director could have undertaken the development of the survey in-house, the end result was a far more valid and statistically significant product.

The survey was handed to a total of 150 people within the target market. 54 surveys were returned completed. The results of the survey provided valuable insight into the customer preferences as well as the decision making process of the target market. While some of the already held assumptions were confirmed, the survey provided HCWAC with new information that would have been otherwise unavailable.

4.0Financials, Budgets and Forecasts

This section will offer a financial overview of HCWAC as it relates to the marketing activities. HCWAC will address break-even analysis, sales forecasts, expense forecasts, and how they relate to the marketing effort.

4.1Break-even analysis

The break-even analysis indicates that $9,122 is required in monthly revenue to break-even.

Break-even analysis chart

Monthly break-even point – where line intersects with 0

Break-even analysis:

Monthly Units Break-even
Monthly revenue break even / 203
$9,122

Assumptions:

Average per-unit revenue
Average per-unit variable cost
Estimated monthly fixed cost / $45.00
$8.00
$7,500

4.2Sales Forecast

The following chart forecasts sales based on the Market Segmentation Strategy. Sales are seasonal in this industry, tending to be higher in the warmer summer months, and to drop off in the winter. However, HCWAC will aim to flatten sales across the sales cycle by targeting segments that will want to keep their cars clean and looking good all year round.

Monthly Sales Forecast

4.3Expense Forecast

The expense forecast will be used as a tool to keep the marketing on target and provide indicators if corrections need to be made. Additionally it will require long term analysis.

Monthly Sales Forecast