Marketing Strategy for A Comsetic Company
Survival and Social Responsibility are the most important aims that my business needs to achieve, at least in the short term; in the long term I will want to include Profit and Prestige into these aims. To ensure survival, I will need financial backing, ensuring that at least for the first year I have enough money to pay overheads, without having made any profit. Also, products should be reasonably priced, around the same as the competition, but by selling different products, there should not be a problem with price wars. Survival is the most important aim of a business, especially as putting a lot of money into a new business is high risk, and therefore I would want to ensure that at the end of the day, I am going to get the money I invested back.
Social Responsibility is also a big factor. To get peoples attention (advertising through this), then hopefully, people will want to come and shop in your business. The money for this however, will have to already exist outside the business, especially in the first year of running the business. After about a year of trading, my objectives and aims in my business will change. Profit will become
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Profit will become important due to the fact that I will have invested all the money I saved into the business and now, I will be relying on the products I am offering, selling well and bringing in a profit. It will be my main source of income. I can try and ensure that a profit is made by, in the first year trying out different ranges of products and seeing which ones sell the best, By doing this in the first year, when I saved money to be able to do this, I can see what products sell well and bring in the most profit and continue to stock them on a regular basis.
Prestige will also become increasingly important to my business as if my business gets a good name for itself, then people are more likely to want to come and shop there, as if my business gets itself a bad name for customer services, then people will go elsewhere (to my competition) with their money. By creating a good name for myself, I will also be able to make a bigger profit.
The External Environment
In this task, I am going to be researching how certain factors in the external environment will affect my business, now and in the long term. I will be discussing economic, social and environmental issues and changes. The economic issues that are going to affect my business are: Competition I could overcome the competition by selling different ranges of products that they stock; things that the public demands. My main competition is Cosmetica as the business is also a sole trader and is in the same market as me. Boots and Superdrug are going to be my financial competition, as they are national companies, and therefore have great financial backing. They can afford to make their prices lower than the competition “at the drop of a hat”.
Interest rates If interest rates rise, then business will become more expensive. The business will cost more to run (i.e. loan repayments will be greater) and this might cause product prices to rise. Consumer spending will go down as people have less money to spend on luxuries and in theory; you should lower your prices for people to be able to afford your products. However, this is not possible as the business if also still trying to make a profit. It’s a vicious circle. If interest rates fall, the opposite will happen.
The decline in population in Seaford is a social issue that is going to affect my business. If the population declines then I may have to sell more specialised products to provide more of what the customer wants, but if the population increases, then I will be able to sell a more varied range of products because of the different tastes that people have. Economic growth is an economic issue and is going to affect my business in such a way as described above in the increase in population. I am going to have to comply with certain regulations, e.g. there are laws about testing on animals, and I don’t want to sell any product that had been tested on animals. Also, the packaging of products and how easily it can be recycled and if it is made from recycled products itself.
My competitors are Cosmetica, Boots and Superdrug. Boots and Superdrug are not as specialised as my business, but they are larger shops with lots of financial backing and it may be difficult to beat their prices, especially during times when there is a recession. However, Cosmetica is my main competitor as it sells more specialised products, and may sell the same ones as I am. However, I can overcome this by trying to keep my prices either equal or lower than Cosmetica. This however, will not always be possible, as Cosmetica is an established business. Social and Competitive issues are the most important to my business because I have to think about what the people want. Also, I need to study the competition closely so I can keep my prices around the same as theirs and also, see what products they are stocking and decide whether I can stock different ranges to them.
SWOT Analysis In this task I will be discussing what SWOT analysis is and why companies use this method in business. SWOT analysis can be used to decide the future of a company and discuss future strategies. SWOT analysis involves looking at strengths, weaknesses, opportunities and threats, internally and externally as part of a business. Internal SWOTs can be changed easily, but external SWOTs cannot be changed, as that is the job of other businesses.
Looking at strengths could involve looking at things like internal structure and management care. You can also look at these things as weaknesses. Opportunities could be things such as chances to enter a new market or begin producing a new product. Threats might include things like taxes and changes in customer tastes. In SWOT analysis you are discussing the future aims and plans for a company.