Necessary and Key Decisions
When starting a small business there are major factors that should be put into considerations in order to create a lasting business in the market. Nairobi Cosmetics Stores is a small business venture that is being opened by investors from India. These investors have decided to open a business in Kenya in order to supply the country with cosmetics products which are not found in the country. The key considerations that the investors considered included:
Market Research: Marketing research is a very important aspect to be carried out before starting a business or when considering starting a business. The market research enabled the investors to understand the Kenyan market clearly and effectively. Knowledge of the competitors and the customers was well achieved and this also helped the investors to have an idea of the kind of business to start in the particular location. Different customers have different tastes and preferences. Therefore, when starting a business it is very essential to gain full knowledge of the customers on what their expectations are in order to deliver high quality products or services which will satisfy their needs.
Type of Business: It is important to consider the type of business that you want to start in a certain area. Not every business can fit in any location and therefore before starting knowledge of the geographical area allows the entrepreneur to know which is the best location for that particular environment. Before starting the Nairobi Cosmetics Stores, the investors had to consider also other matter such as the suppliers, transport and shipping, taxes and availability of the market.
Money Available: Availability of money is a key consideration when starting a business. The investors had to consider the amount of money available to start the business. This gave them an opportunity to consider certain aspects such as borrowing from financiers if the money required was not needed.
Barriers of Market Entry: There are many barriers to be considered when entering a new market. Some of these include import and export duties, taxes, licenses and others. It is important for the business to consider if these barriers will affect their business in that particular location and look for ways and means of ensuring they do not affect the business negatively.
Competition: It is not advisable to put a business in a particular location which has many similar types of businesses. Nairobi Cosmetics store is retail and wholesale business that was opened in Kenya and it has turned out to be a supplier for other cosmetics shops and stores. Before starting any business it is very essential to have knowledge on direct and indirect competitors in order to gain a competitive and combat the competition.
Financial Plan
When starting a new business it is also important to analyze the various financial plans that are open for the business. There are many ways to raise capital for a business if there were no savings available for the business. If one is not using savings to start a business there are so many sources of financing which can help to get started. It is important to determine whether there is need to borrow from a bank or if you are eligible for grant money. Money can also be borrowed from friends and family members. Also, one can take up a partner who can raise part of the capital needed to start a business.
Location
Choosing a location is a critical part when starting a business in a different geographic area. If the location of the business is hard to find or is out of the way then the chances of success are very limited. It is also important also to consider proximity to competitors and also whether the location will offer room for expansion in future. The reasoning for locating the business in this part of the world is because Kenya is a developing country that has a market which is still growing. Introducing such a cosmetic business in the country gives the customers an opportunity to enjoy more quality cosmetics at cheaper prices. It is well known that African women have great tastes for beauty products and therefore the business will be very successful in this part of Africa. The business is located in the following address:
Nairobi Cosmetics Stores
Moi Avenue Street
Nairobi, Kenya
Nairobi is the capital city of Kenya and it is composed of mixed people from different part of the world. The city is said to contain a large number of people who have great taste for cosmetics and this seems to be a good strategy for the success of this business. Locating the business in the above mentioned street which is in the middle part of the city will give access to all individuals since it is a part of town that is accessible to all clientele.
Guerilla Market Strategy
Guerilla marketing strategy is considered to have exposed a lot of businesses to success. The company intends to follow up on five major guerilla strategies which will help the business success in the market. The business has to be introduced with unique strategies in order to survive in the market for the first days and start making profits. These strategies should also be able to combat the stiff competition from the market and the investors should also put in mind that there are other international competitors in the market as well who are offering high quality prices at a good rate.
Creativity: In Guerilla marketing, it is said that the world is the billboard, the lower third and also the 30-second TV spot. Out of the box ideation is what begins the Guerilla marketing. In order for Nairobi Cosmetics Stores to be successful it should develop unexpected, effective and on-target guerilla campaigns by throwing a convention towards the wind in order to get their creative juices boiling. It is evident that the heart of every successful guerilla campaign is known as creativity. Without these it means you will be conventional and annoying thus allowing the competitors who are more creative to lead the market.
Unexpected: In most parts of the world, a billboard is always expected as a part of the advertisement. Every day on our way to work there is always same billboards that we find on the same spots with maybe bright colors and catchy lines which make us smile. However, for Nairobi Cosmetics Stores they have decided to do something different that is not expected by many people. The company can do a screen with a repeated video of the show showing their cosmetics or any other unique notion of advertisement that most of the people would not have expected. A good example of unexpected advertisement is that of Milele (the German House wares Manufacturers. Their advertisement transformed a typically flat surface of static billboard to demonstrate the power of their vacuum suction by draping over a billboard the actual hot air balloon with their new vacuum cleaner which was seen to suck the balloon into the billboard.
More with less: It is easy to become impractical and fantastical when brainstorming a guerilla initiative. The business is not a very big start and therefore since it will have budgetary constraints for starters they have to consider intelligent, unexpected and reasonable stretches. The advertisement should be reasonably considered in order to stretch their creativity for development of effective guerilla campaign without a budget that is exorbitant. In order to have a superman idea, it is a fact that you do not have to be superman. The business should come up with simple strategies that will help the company yield more and acquire a large market share.
Maximize your surroundings: While trying to create a name for your company, it is important to take note of the environment and the people in it in order to avoid irritating and annoying them. It is not intelligent to abstract people. Therefore, utilizing the environment in an unexpected intelligent manner there is high probability of being successful in the market more compared to competitors. Maximizing your surroundings is a guerilla campaign strategy that has helped many successful businesses acquire admiration from their competitors because of their smart way of carrying out activities to seek success. Folgers is a company that is seen to use this strategy successfully when they used the steam from the manhole covers to show their coffee steam and this made more meaningful impressions to the eyes of many.
Interactive: Interactivity is not a staple in all campaigns of Guerilla strategies but it brings the relationship of companies and consumers to a more meaningful space. Creative activities while introducing a product in the market are very essential and they help in the success of the company. Creating activities that are interactive with the clients while trying to introduce your products or services in the market boosts the sales of the company since it’s also a way of creating a good name in the market for the company. A good image of the business towards the public helps in getting more sales since it portrays the good deeds towards the society and thus people are attracted to buy the products and increase the sales of the company. Nairobi Cosmetics Stores intends to use this strategy of interactive display by for example maintaining bus stops through putting up nice seats which are decorated with displays of their products in a nice styled way.
Plans for Securing sources of Debt Financing
Debt financing consist of both unsecured and secured loans. The security that is involved in secured loans is a form of collateral giving the assurance that the loan is going to be repaid with interest as per the agreement with the financier. In order to acquire debt financing, the business intends to visit various banks in order to compare their interest rates and decide on the best one that fits their interests for financial aid. Some of the securities that the business can offer for the loan include the guarantors, endorsers, lease payments, co-makers and savings account. The business can either take a short term loan or a long term loan which will be paid from the business cash flow. Long term loan is advisable when staring a business in order to avoid a lot of pressure for payment. The company can borrow from the bank or lines of credit.
Conclusion
In conclusion, for the Nairobi Cosmetics Stores to succeed in its market in Kenya, proper guerilla strategies have to be utilized so as to combat the competition. Theses strategies will also enable the business to attain sales and survive the market as it starts and in the long run acquire profits. Kenya is a developing country with a lot of demand in cosmetics products and the clientele will be highly attracted by the low prices that the company will offer. The country’s cosmetic industry is not very active and therefore this might prove to be a nice business venture.
References
Levinson, J. C. (1998). Guerrilla Marketing: Secrets for Making Big Profits from Your Small Business. California: Houghton Mifflin.
Lyon, E. (2009, June 22). Top 5 Guerilla Marketing Strategies. Retrieved February 26, 2013, from http://sparxoo.com/2009/06/22/top-5-guerilla-marketing-strategies/
