Sample Research Proposal on ABC Company Marketing Plan

I. Background             ABC Company is a logistics service provider coordinating the transport of client's cargo with transportation companies. The company does not have transportation facilities but it has established strong links with reliable transportation companies. Currently, the company's service scope is limited to Hong Kong and Southern China. However, based on its present operations, it has the ability to expand its service coverage to the entire Asian region. The marketing plan would provide a thorough analysis of the current situation of the company as basis for decision-making in expanding business operations to cover a bigger regional market through partnerships and regional networks.             ABC Company is engaged in logistics service aimed at efficiently coordinating the transportation, storage and delivery of cargo. As such the company offers efficiency in directing the cargo towards its destination; precision in determining where, when and how the cargo would be transported; and reliability because of its customer focused operations. ABC Company offers added value to its customers by giving them more than what they paid for, customized or personalized service.        Key elements of marketing strategy formulation include: 1) price—price penetrating strategy; 2) strength leveraging—optimizing company capabilities; and 3) defensive planning—addressing potential threats to expansion.       II. Analyzing Market Opportunities Strengths             ABC Company embodies two business strengths. One is its ability to offer expedited service. The company has several options available for transporting a product because it has links with air, water and land transportation companies. The company chooses the transportation plan which would enable cargo transportation at the least amount of time. The company is able to draw customers demanding convenient and expedited service. The other is cost effective operations. ABC Company does not operate its own transportation facilities, except basic transport vehicles to collect cargo from customers and carry these to the cargo transportation company. The expenses of the company are minimized by employing skilled people to plan and coordinate efficient cargo transportation, partnering with reliable transportation companies, and proximity of its freight office to key transportation sites. Weaknesses             The complete reliance of the company to its transportation partners may work to its disadvantage. Although the company allies itself with reliable transport companies, any unsatisfactory service of its partners would reflect upon its reputation.    Opportunities             ABC Company is open to two opportunities: market expansion and network expansion. Its efficient service and links with international transport partners, makes it feasible for the company to expand its service to areas outside of Hong Kong and China and into other Asian countries. To address its weakness, ABC Company has the option to expand its transportation network to other international freight companies to have alternative options in case one company incurs problems in transportation. The company's excellent logistics strategies would enable the company to identify and negotiate with reliable partners.    Threats              Expanding into the Asian market would subject the company to comply with tariff and regulatory costs involved in international operations. This might increase the cost of operations of the business translating to higher service cost. In line with this, the company may not be able to compete with large international freight companies operating within the region and enjoying economies of scale.   Market             ABC Company caters to two market segments: households and commercial/industrial customers, with the latter taking a bigger share of the company's market. In expanding its market to the entire Asian region, the company will focus on commercial/business customers expanding within the region.      Competitive Environment             ABC Company will compete with large international freight companies operating in economics of scale in expanding its market to the entire Asian region but these large companies do not have complete control over distribution channels in Asia because of the spread of their service area or market relative to ABC Company that focuses on Asia alone. The increasing number of companies expanding internationally assures a ready market for the company. The cost or risk of switching from competitor companies to ABC Company is not high especially since the company ensures expedited service through its expanded network. All the company has to do is build value associated to its brands. III. Developing Marketing Strategies Corporate Level             Corporate level strategy of ABC Company involves market development based on Ansoff's Matrix (Harvard Business Review for Strategies on Growth 1998) through focus and then cost leadership based on porter's generic strategies (Porter 1980). Market development is the objective because the company seeks to expand into a new geographic market segment (Harvard Business Review for Strategies on Growth 1998). This involves greater risk than market penetration in the same market segment where the company presently operates. However, this promises growth for the company since the core competency of the company is better linked to its service rather than to its market segment. Core competencies supporting market development are the nature of the logistics service offered by the company which reaches out to the demands of various segments of the market and the significant contribution of the company towards the achievement of quality service to customers. (Campbell & Luchs 1997)             The strategy appropriate to the company is focus. Although, the company is expanding to the Asian market it still becomes a focused company relative to large international freight companies. The particular market segment subject to focus is primarily manufacturing businesses in different Asian countries seeking to expand their market to greater Asia requiring logistics service in transporting their products to their customers. After achieving focus into this market segment, the company can implement cost leadership strategies by minimizing transportation costs through logistics management.       Business-Unit Level             ABC Company, as a new entrant into the Asian market, should position itself as a precision logistics service company catering to the cargo transportation needs of businesses operation across Asia requiring efficiency and reliability offering its service at a lower price because it has profitable links with various transportations companies and because it plans quality cargo transportation in a manner that involves least cost and time. ABC Company should also continuously innovate and enhance its logistics management using industry best practices and technological innovations in the field such as state of the art cargo tracking and monitoring systems.         Functional/Departmental Level             To support its corporate level and business-unit strategies (Mintzberg, Lampel & Ahlstrand 1998) the company has to strengthen its human resource management and research and development plans. Logistics service involves the implementation of policies and processes essential to efficient service. Logistics management then deals with the precise and careful management of the processes involved in the service such as the mental mapping and planning of the transportation process, actual transportation of cargo from its source and to its destination, time allotment and cost analysis. (Ballou 1998) These factors have to be mastered by the company.      IV) Planning Marketing Programs Product/Service             Transportation logistics service to businesses in Asian countries expanding their market to the entire Asian region involves precise and efficient technical and support service given by highly skilled efficient employees. Technical service support involves the recording of the characteristics and transportation specifics of the client's cargo, the determination of the viable means of transport and combination of transports, the coordination of the most efficient transportation plan, tracking and monitoring of the status of transportation via electronic and manual updates, determination and assessment of possible and emerging problems in the transportation process, the application of expedient solutions, and recording of the acceptance report of the sender and recipient. Support services cover the communications with sender for the details, schedule and cost of the transportation service, communication with various business units to coordinate their complementary roles, providing an online customer access to track and monitor the progress of the transportation of their cargo, and customer service to accept questions and complaints.    Price             Cost leadership is achieved by offering transportation logistics services with the same or higher quality than similar services at higher prices. ABC Company should implement basic prices relative to adjustment depending upon several factors: type of cargo, route of transportation, time of departure and expected arrival and schedule, available transportation services, and cost. The company imposes a basic service charge for its logistics services and adjusts the price depending upon the above factors. More fragile cargo, longer route, and more expensive transportation means, the higher the incremental increase in price. Customers will be informed of the breakdown of the cost in order to achieve transparency in price. In this way, customers understand the cost of transportation and willingly pay for the amount. Adjustable price also enables the company to offer lower prices for shorter routes and less fragile cargo to customers. Distribution             ABC Company has to strategically establish, as subsidiaries or franchises, freight offices in key cities in various Asian countries to communicate with customers in that country and coordinate with the other freight offices for the transport arrangement and schedules. The freight offices should be strategically located to enjoy proximity to manufacturing establishments such as industrial zones and major transportation venues such as airports and docks. These freight offices should develop and strengthen their local transport network and enhance coordination with international transport partners. Promotion             As an introductory service, the company can implement a discount program for the first 100 customers of each new freight office. The company can also launch price and discount incentives for its constant customers. Depending upon available budget, the company can also develop a promotional or advertising program showing the level of efficiency of the company and price competitiveness.     Strategic Controls             First strategic control is the marketing budget (Hitt, Ireland & Hoskisson 2004). Part of the plan includes the enumeration of the various expenditure areas in expanding the operations of the company across Asia. ABC Company will have to incur expense on human resource development to train its employees to achieve necessary skills in logistics services and acquire technology to support its operations. It will also have to spend on building freight offices, widening its transport network, and promotional activities. The breakdown of costs becomes the measure of the ability of the company to operate within its budget limitations during the implementation of the plan. Second strategic control is performance analysis through measures such as marketing contribution, break-even analysis, and ratio analysis (Hitt, Ireland & Hoskisson 2004). Marketing contribution compares revenue against the expenses incurred by the company within a defined period after the implementation of the plan. Break-even analysis shows the extent of improvement in revenue growth of the company since the commencement of the plan by comparing the difference between the break-even point and actual sales, with a bigger amount being more beneficial for the company. Ratio analysis involves sales cycles, advertising-to-sales and trial to purchase conversions that measure effectiveness of marketing strategies. Third strategic control of implementation schedule (Bradford, Duncan & Tarcy 2000), usually simplified through the Gantt chart, compares task assignments and performance schedules with actual accomplishments and enables the company to determine imminent problems and address these.     Action Program             The initial part of the marketing plan is identifying the countries where ABC Company should establish its freight offices. The countries identified are 1. Japan (3 offices), 2. South Korea (3 offices), 3. Singapore (2 offices), 4. Thailand (3 offices), 5. Malaysia (3 offices), 6. Indonesia (3 offices) and 7. India (3 offices). Succeeding actions involve a two-way program: first is the stabilization of the main operations by promoting a number of qualified personnel for management positions and giving them the necessary training by some senior managers and second is the simultaneous identification of business partners as either franchisees or subsidiaries depending upon the appropriate arrangement in the country. This second aspect involves communication with existing small transport logistics services with potential for growth and wide transport network in the countries and selecting a number of candidates for the negotiation. After concluding contracts with business partners, people from the main office will be sent to the countries to support the establishment of the offices. The sales division is in-charge of organizing and coordinating the process and consulting the necessary people or communicating plans for approval.  Budget Setting             ABC Company is a small but dynamic company with the potential expand despite a small budget. The one year marketing budget of ABC Company [Figure 1, Table 1] involves a $599,000 marketing plan budget for the entire year. The total comprise of expenses in travel to communicate and negotiate with business partners, advertising to draw potential business partners and increase brand equity, and other expenses expected to be incurred by the company in its expansion. The first three to five months involves highest cost due to the expenses required in breakthrough activities. However, as the marketing plan starts to take shape and as all preparations have been commenced the company expects to gradually decrease its cost until it stabilizes at the basic expenses.  Sales Forecast               The one year sales forecast [Figure 2] of ABC Company shows that expected revenue from its twenty freight offices in seven major trading countries in Asia starts to increase within the first few months, followed by a peak value in the fifth month when almost all freight offices have been established resulting to the entry of franchise fees ($150,000) and capital into the company. After all franchise offices have been established, the company's sales levels down to a stable amount representing sales and regular payments of royalty or continuing royalty. Sales comprise of revenue for its subsidiaries, a one time franchise fee for every franchised freight office and the succeeding monthly royalty fee. However, despite the pegged amount in the latter months towards the end of the year, the comparison of the monthly expenses and sales for the one year [Figure 3] shows that ABC Company has already retrieved its actual expenses and even it's expected total expenses for the entire year within the third month. These figures imply that in case every aspect of the marketing plan works, ABC Company expects to derive profit from the expansion into the seven major trading countries in Asia, giving the company funds to further expand the business geographically and in terms of product/service diversity.