(Alivan Watch & Accessories Company)
Executive Summary
Recent advancement in technology has led to people innovations in electronics such as mobile phones, television, media players and other electronics. Watches, however, have been neglected in this new era of advanced technology. Alivan identified this gap and came up the brilliant idea of Alivan Watch & Accessories, a company that will deal in the manufacture of designer watches and fashionable accessories like earrings, bracelets, and necklaces for both men and women of all ages. The company will be based in Singapore and is planned to begin its operations in the last quarter of this year. It should be noted that existing companies are dealing in the same business line as Alivan intends to, but Alivan has come up with a strategic marketing plan that will position it competitively in the Singapore market. An analysis of the Singapore PESTEL has been carried out and from the results, Singapore offers opportunities for business growth due to its political stability, government support for economic growth through economy diversification and its strategic position making it the continent's economic hub. The SWOT analysis carried out also indicates that Alivan has a competitive advantage in the target market. The company's main short term goals are; penetrate the market, create awareness and gain a sustainable market share within the first six months of operation. These objectives will be achieved through the implementation of the strategic marketing mix and models that the company has formulated.
1. Company Background
Alivan, the founder of Alivan Watch Company, saw a gap in the watch market in Singapore and came up with a brilliant idea of starting up the company, under his name. Alivan Watch Company will, therefore, start its operations in the third quarter of this year, in Singapore, as a public limited company. The founder, Alivan will raise the Company's initial capital. The company’s core business will be the manufacture, distribution and sale of designer watches for all ages, for both male and female, in Singapore at affordable prices. Distribution will be made on wholesale to related shops and stores in Singapore selling watches, and sales will be made to final customers from Alivan outlet stores. Alivan Company will operate only in Singapore for the first six months, after which it will open its outlet stores in the rest of the Asian countries followed by branches internationally, in subsequent years. Singapore will be the Company’s headquarters after it expands globally.
2. PESTEL Analysis
PESTEL analysis will be carried out to determine the factors emerging from the political, socio-cultural, economic, technological, legal and competitive environments that will affect Alivan’s operations.
2.1. Political Environment
For a business to be successful, political stability must be guaranteed in the country of operation. This is because a country that is politically stable has a potential for steady economic growth and opportunities. The risks of businesses being burned down or destroyed during political riots is also absent. Singapore has the lowest political risk in the Asian continent (Makos, 2015). The country is democratic where nationals elect representatives to lead them. The government is keen on stimulating economic growth in the country and thus has taken measures to diversify the economy. This makes it a suitable environment for business success.
2.2. Economic Environment
An important key factor to the success of a business is the economic environment in which the business operates. Singapore's economy is vibrant and growing at a faster rate. The country is zero tolerant to corruption which boosts businesses. Levels of literacy in the country are satisfactory and therefore skilled labor and expertise are readily available. Many sectors in the country are flourishing as a result of the government pumping money into the economy (Makos, 2015). The country is also strategically located which it makes an economic hub for neighboring countries. Labor costs are relatively cheaper due to readily available labor force from neighboring countries.
2.3. Social Environment
Singaporeans still follow traditional family values where people are expected to work hard to provide for their needs and those of their families (Makos, 2015). This desire to satisfy material needs and do well socially coupled with the hate for blue collar jobs like constructions leads to high productivity in the country. The population is well educated with proficiency in English and Chinese, attracting international trade and foreign investors.
2.4. Technological Environment
Any business' success relies highly on the technical know-how of the company and technical advancement of the country in which it operates. IT infrastructure in Singapore is top notch. The internet is highly advanced which has eased communication and increased connectivity. Social networking is much simpler and conducting business online is much cheaper. This has been an attraction for multinational companies in the economy (Makos, 2015).
2.5. Legal Environment
The government is aware that for economic growth and development, investors need encouragement and incentives through fair business legislations regarding taxes and labor. The Singaporean government launched an E-commerce program in 1996 to support e-commerce. The government supports e-commerce through legislations like Electronic Transactions Act, Intellectual Property Rights and Tax issues (Makos, 2015).
3.0 Target Market (Determination of primary and secondary market)
The target market will be both males and females from the ages of 18-35 years. This will be the primary market since they are the ones keen on fashionable designer accessories like watches. They will buy directly from Alivan outlet stores. The older generation ranging from age 36 and above will be targeted too, to a smaller percentage since the majority of the people in this age group are not fashion aware or are not interested in the latest fashions, especially in the accessories sector (Feubli, 2013). The Secondary market will comprise of shops and stores that deal in the sale of watches and related accessories. These shops will either come for the merchandise at the company premises, or the company will distribute to them.
3.1 Analysis of the primary and secondary target markets
This section will discuss the various marketing mix that Alivan will adopt in marketing its watches and accessories. The tools used in analyzing the market are the 4Ps and the 5Cs as discussed below.
3.2 4Ps of Marketing
The 4Ps are elements of marketing that comprise marketing mix. These four Ps; product, price, place and promotion, are interrelated and therefore a decision made concerning one will affect the rest. The products that Alivan will deal in are designer watches and fashionable accessories for customers who are keen on fashion trends in the accessories sector. Alivan, the founder of Alivan Watches & Accessories, identified a gap in the Singapore market for designer watches and accessories and decided to set up this company to fill the gap (Feubli et al., 2013). The products will be offered at relatively lower prices compared to competitors since the company and the company products are new in the market. Customers will get the products from the various outlet stores that the company will set up in Singapore. For the secondary customers, the company will deliver the merchandise to the shops through various distribution channels that the company will employ. Alivan will adopt the various tools for promotion; personal selling, advertising, publicity, and sales promotion to create awareness and penetrate the target market in Singapore.
3.3 5Cs of Marketing
The five Cs is a market tool analysis that focuses on the company, customers, competitors, collaborators and the climate. The company is analyzed in terms the products it produces or offers the technology it uses in the manufacture and the goals and strategies of the company. Alivan Watch & Accessories will manufacture and distribute designer watches and accessories at relatively low price to gain name recognition and a significant market share. The products will be relatively cheap since the company will use advanced modern technology in the manufacture thus reducing production costs. The company aims at reaching and gaining customers in this new market by providing fashionable quality designer watches and accessories at relatively low prices. It is clear that there are established businesses in Singapore dealing in the same line of business as Alivan, and that is why Alivan will price its products relatively low, without compromising quality, to counter gain a competitive advantage. The company will use minimal intermediaries in distributing its finished products to reduce the costs and eventually, the final products’ prices. Inflation rates are bound to change from time to time, but Alivan will set its products’ prices without necessarily exploiting the customers and adhering to prevailing taxation laws, political climate and inflation rates.
3.4 Segmentation, Targeting and Positioning (STP)
STP is a marketing model that focuses more on the audience rather than the product that is used to deliver relevant information to commercially appealing audiences ("The Segmentation, Targeting and Positioning model", 2013). Alivan will segment its market into the youth, ages 18-35 years, who are keen on fashion and trends, the elders, ages 35 and above, who only want the watches for their functionality purpose and a few will be interested in accessories and the wholesalers who have shops that sale the products. The products' position will be shown on the perceptual map below;
4.0 Main Goals/Objectives
Alivan Watch & Accessories is a new company that hopes to start its operation in the last quarter of this year. The company, therefore, has short and long term marketing objectives as follows;
4.1 Short Term Goals
The short-term goals of this marketing plan are to penetrate the new market in Singapore, create awareness of the company and its products among target audience and gain a market share of at least 30% in the first six months of operation. The company also plans to make sales revenue of at least 50% in the first six months of operation.
4.2 Long Term Goals
The company intends to open outlet stores in the across Singapore boarders in; China, Malaysia, Vietnam, and Japan, after one year of operations in Singapore. The company plans to open branches in the US, the UK and Canada in five years’ time.
5. SWOT Analysis
The SWOT analysis evaluates Alivan's strengths, weaknesses, opportunities, and threats. Need analysis will also be evaluated.
5.1 Alivan’s Strength
One of the strongest points for Alivan's is capital availability. The founder has enough capital to set up and acquire modern advanced equipment and machinery. The second strength is research and development which the company will invest in due to the availability of finances. This will help the company to manufacture products aligned to latest trends and fashion in the market. The production costs will be reduced too. Thirdly, the founder has expertise in the watch and accessories industry. This will guarantee quality fashionable products. The fourth strength is the undiminishing demand for fashion and trendy accessories. New more fashionable accessories are always coming up which will guarantee constant demand for the products.
5.2 Alivan’s Weaknesses
The company’s most weakness is competition. There are established companies in Singapore dealing in the same line of business. The company will have to use a lot of financial resources to gain name recognition in the market. The second weakness is high rental costs for the company premises. Leasing business premises can be costly and hurt a company’s finances especially if it starting up (Cravens & Piercy, 2006). Unpredictable cash inflows are another weakness. Alivan is just starting up and cannot, therefore, predict the expected cash inflows which will hinder certain strategic planning for the company. The fourth weakness is the unstable economic environment. Changes in inflation rates in the company will affect interest rates and demand for Alivan’s products.
4.3 Opportunities for Alivan
The greatest opportunity in this accessories industry is the desire for customers to keep up to date with fashion and trend. The customers, especially in the age group of 18-38 years, are always eager to own the latest most fashionable watches and accessories in the market. The second opportunity is Singapore's strategic location. This will enable the company to ship its products to neighboring countries and beyond long before even it establishes branches and outlet stores in those countries. The third opportunity is low labor costs in Singapore due to readily available labor force from neighboring countries. This will reduce production costs which will also lead to Alivan setting competitive prices for its products. The fourth opportunity is competitors' products are relatively expensive. Alivan's products will, therefore, have a competitive advantage based on prices.
4.4 Threats that Alivan Faces
The prevalent threat in this sector is the production of substitute products. Other companies may imitate Alivan's products and sell them at an even lower price. Competitors may feel threaten and open an outlet right where Alivan Watch & Accessories stores are located. Fluctuations in inflation rates may affect the products' demand downward. Competitors may launch new advertising campaigns to intensify their awareness thereby countering Alivan's recognition in the target market.
6.0 Evaluation
Alivan’s has several objectives that it intends to achieve by the end of the first six months of operation. The company will evaluate how successful it has been in creating awareness and penetrating the market from the customers’ inquiries, feedback, and visits on the company’s website. The company will measure its market share by the sales made in the respective stores that will be set-up countrywide. Value and customer satisfaction will be measured by analyzing the customers gained and retained within the first six months. The adoption rate of the new products and growth will also be measured by sales in respective outlet stores throughout the company.
7.0 Conclusion
A marketing plan is critical to startup businesses and enterprises. The owners need to evaluate the factors that will affect the company's operations, with regards to political, social, economic, technological and legal environments. The owners should also analyze their strengths to capitalize on them, the weaknesses to leverage them with the strengths, the opportunities to explore and the threats that the company will face. For a new company, it must be strategies on marketing and pricing of its products by employing the marketing mix; the 4Ps and marketing models; the 5Cs to achieve the short and long term goals.
References
Cravens, D. W., & Piercy, N. (2006). Strategic Marketing (Vol. 7). New York: McGraw-Hill.
Feubli, P., Gachet, E., Hangii, P. & Kunzi, D. (2013). Swiss Watch Industry. Credit Suisse: Giles Keating.
Makos, J. (2015). PESTLE Analysis of Singapore. PESTLE Analysis. Retrieved 22 April 2016, from http://pestleanalysis.com/pestle-analysis-of-singapore/
The Segmentation, Targeting and Positioning model. (2013). Smart Insights. Retrieved from http://www.smartinsights.com/digital-marketing-strategy/customer-segmentation-targeting/segmentation-targeting-and-positioning/
