BBQFun Marketing Plan Sample Assignment

SUBJECT: Interpret Market Trends and Developments

BBQFUN MARKETING PLAN

1. PROFILE

1.1 Executive Summary: Who we are? What we do?

BBQfun is the outdoor lifestyle retailer in Brisbane and offers a miscellaneous collection of BBQs, outdoor furnitures and BBQ accessories. BBQfun aims to be the leading, best-in-class retailer in the market by offering all the possible assortments both local and imported products that can be sold on easily manageable, long-term payment plans.

1.2 Current situation in the market

BBQfun is about to end its second year of operation and opened new stores successfully and now the marketing is essential in order to stay successful and make profits. Quality, fashionable and unique lifestyle products are the main attractions to the market.

BBQfun has good information about the market and knows the loyal customers well. Using these information, BBQfun will find out more about who is served, their needs, and the best ways to communicate with them.

SWOT analysis identifies the main strengths and weaknesses of BBQfun and tells the opportunities and threats of the business.

There are several national and local competitors all with their pros and cons and most importantly none of them are about to change their marketing strategy or product offer in the future.

BBQfun makes a big differentiation for the products such as credit offer is backed by a top tier bank, 3 years of guarantee period and very broad choices and it makes the business superior to the competitors.

BBQfun is located in a new dwelling populations with easy accesses and customer parking counts.

1.3 Current Marketing Strategy

There is a set budget of $250,000 for the advertisement for the year and the advertisements will target mail boxes, radio and magazines.

BBQfun’s previous marketing with BrisNews magazine brought dramatic sales to the business and therefore look forward to get articles on this magazine about BBQfun.

Mission

Providing the broadest selection of quality outdoor lifestyle products that are available in the market is BBQfun’s mission. With the help of our best after sales service, every product that is unique, imported and high quality outdoor lifestyle will be affordable to all of the customers by offering the long-term repayment plans which are very easy to manage.

Marketing Objectives

The main objectives of our marketing is to increase yearly sales in the next two years, increase the loyalty customers list and make our brand recognizable to most of the people in Brisbane. The objectives are in details:

1. Increase sales from $11.000.000 to $15.000.000 per year during the next 2 years
2. Increase BBQfun’s loyal customers count from 10 thousand to 16 thousand
3. Increase brand recognition in Brisbane area. Target is two third of Brisbane residents know about BBQfun brand in the result of a random survey taken in 1 year and a half time.

Financial Objectives

Main financial objectives are huge raise in the yearly rate of growth, lowering the operation costs of every store with tight management of expenses, and to continue increasing the gross profit margins. In detail:

1. The rate of growth with double digit, every year
2. Lower operational costs with the help of tight management expenses
3. Continue to increase the gross profit margin

Tarket Marketing

There are 3 different types of targets in BBQfun’s marketing:

• New dwellings: the ones who want to buy entire set and they shop mostly in couples,
• Renovations: wants to buy the most unique and different products that puts the price second, and
• Replacement: wants to buy the cheapest products who mostly shop in single.

With the combination of many demographic factors, main customers of BBQfun have the following profile:

• House-proud, sophisticated customers
• Shoppers who prefers to drive and wants easy access to the stores
• Payment plans are a requirement to the BBQfun customers to spread the commitment throughout an extended period
• Renovators and new home builders
• The ages of customers are from 20 to 50

Positioning

BBQfun positions itself as a retailer of heaps of choices of quality outdoor lifestyle products that are unique. Buyers of Brisbane who seeks high quality and unique designs will match with BBQfun’s position.  

Main competitiveness of BBQfun’s positioning are:

• Wide range of quality products that are uniquely designed. It triggers the house-proud customers’ wish to buy the products
• 3 year warranty, the only and longest guarantee promise in the market

Strategy Pyramids

The main goal is to position BBQfun as a premier outdoor lifestyle store in Brisbane area, providing to the most of the market share in the next 5 years. In order to do that, BBQfun is planning to make customers aware of their products at first along with the services they offer, then develop that customer base, and then work further to keep its customers loyal to their products and services.

Marketing Mix

The marketing mix of BBQfun is consists of the approaches to the following:

• Pricing – However the price won’t be cheap, it’s value and 3 year warranty will be over the price.
• Distribution – Products of BBQfun will be distributed via the retail stores’ chain that will allow easy access to the customers with the help of large car parking spaces.
• Ads and promotions – The advertisements and inserts in the Brizzy and PR campaign of informative articles will be the most successful advertisements.
• Customer service – The main philosophy of BBQfun is that “Whatever needs to be done to make customers happy, must occur”.

Product Development

BBQfun will be working with market research organizations in order to identify the market taste in every year and the products that are made with that tastes can be approved to be sold via BBQfun.

Marketing Research

Many patrons of outdoor lifestyle stores will be in sight by our focus groups that operate during the BBQfun’s initial timeframes of development on marketing plan. The insight of these focus groups will be used in the decision making processes.

1.4 Internal and External sources of information

Getting some assistance from the relevant expertise is important when analyzing statistical data. There are several expertise that BBQfun can get help, and those are:

• Austrade, State departments or Territory agencies, Chambers of Commerce
• Industry or trade associations, private organizations or consultants
• Managers or colleagues working in the same organization
• Statisticians

1.5 Legislations, regulations and codes of practices

• Privacy Act 1988
• Work Health and Safety Act 2010
• Fairtrading Act 1987
• Anti-Spam Regulation
• Do not call register regulation

2. QUANTITATIVE ANALYSIS

2.1 Market Trends

The overall sales of BBQfun is increasing year by year even though it is slightly decreasing in the latest years.

Average sales in a year: 8136 Units

Average sales in a year: 4042.5 Units

Average sales in a year: 47450 Units

After analyzing the data of 2011-2014 of sales, BBQ products sales tend to decrease and Outdoor Furniture and BBQ Accessories sales tend to increase.

2.2 Correlation Analysis

In this correlation analysis, we will identify if the household income is related to the expenditures on their outdoor homewares. Simply, we will find out if the income of a family increase, would they tend to buy more of outdoor homewares. The data we have is Brisbane and Sunshine cities’ 50 customers’ household income and their expenditure amount on outdoor homewares.

I have used the “=CORREL(array1,array2)” formula of Microsoft Excel to calculate the correlations. The result of a calculation on the numbers of Brisbane city’s made on Microsoft Excel shows a solid 1. This means the household income of the Brisbane city’s customers is totally related to their tendency of buying outdoor homewares. Simply, if they get paid more, they tend to buy more outdoor homewares.

The result of a calculation on the numbers of Sunshine city’s made on Microsoft Excel shows the very same result as the Brisbane’s one. So the Sunshine city’s customers are also tend to buy more outdoor homewares if they get paid more.

3. QUALITATIVE ANALYSIS

The BBQ market of Brisbane has increased by 25% in a year from 2013 to 2014, however the market share of BBQfun stayed the same “in the amount” during these years. On the other hand, the percentage of the market share of BBQfun is decreased. It was 50% in 2013, but it became 40% in 2014. It is a huge drop for BBQfun. While the other two brands’ (BBQ’s R us and Outdoorz) market shares increased the same from 25% to 30% each.

In my opinion, BBQfun needs to focus more on the sales of BBQ products and keep the good work of sales of the Outdoor furniture products.

With the help of customer survey results from FY2014, we can clearly see that all the 3 types of customers want to do the shopping online even though they need to pay the delivery charges.

If the BBQfun could increase the customer service quality, the number of loyal customers of new dwellings group could increase, because 70% of them have visited BBQfun in the previous month and also 70% of them bought products in previous month as well. Good news is they don’t care much about the price, however they pay attention to where the products were produced and how good was BBQfun in customer service. So there is a chance for BBQfun to increase the price and increase the loyalty as well, if they could increase the customer service quality and increase the Australian-made products.

The customers of Renovations type is pretty much similar to the New Dwellings types of customers. For them, Australian-made products is not so essential and instead the customer service is critical.

The Replacement type customers require cheap prices. They don’t care about customer service quality and Australian-made products as much as other two types of customers, however they also wouldn’t mind to pay for the delivery if they are available to shop online.

Estimated Brisbane customer numbers in 2015 of new dwellings group is 95,000, renovations group is 35,000 and replacement group is 120,000. Since all these groups are potential customers who would bring much incomes, BBQfun must focus on all of their requirements and preferences.

As a result, making online-shopping possible to the BBQfun products is essential to the business success. 

Analysis of Competitors

Existing National Competitors:

BBQ’s R us

Outdoorz

Potential National Competitors:

The Yard

Local Competitors:

4. FINANCIALS, BUDGETS AND FORECASTS

It is the overview of BBQfun’s finance which is related to the marketing plan.

Break-even forecast

BBQfun is estimating that 8 million dollars in sales per year will be the break-even point. 4.8 million dollars of this is estimated to be the fixed costs and 40% of the tales is estimated to be the variable costs.

Sales forecast

Expenses forecast

Overall expenses budget for the marketing is planned to be increased over time.

Here are the detailed expense budgets for marketing sectors:

5. ANALYSIS OF THE MARKETING ACTIVITIES

With the help of Marketing Expense Budget table, we can clearly see what marketing activities were successful in its previous years and what was not very good for bringing profits to the business of BBQfun.

Direct Mail

This activity is about placing the printed advertisements in the local letter boxes of all the residents in Brisbane. As we can see on the Marketing Expense Budget table, the budgets are increasing by $10,000 each year. This indicates that this type of advertising brought dramatic increase on the profit and the marketing department decided to increase to spend more on mailing in order to make more profit.

Magazine Advertisement

According to the Marketing Expense Budget table, during the financial year 2014 to 2016, the budget for magazine advertisement is getting lowered from 110,000 to only 80,000. When the marketing department of BBQfun was making the marketing plan, they forecasted that these magazine advertisements will be one of the main triggers to bring profits, because they previously tried the advertisement on several magazines and it brought dramatic increase in sales. However, it is now clear that the forecast was not right at this moment and therefore they have decided to spend the budget more on different types of marketing activities.

Radio Promotions

This was the least budgeted marketing activity in FY2014, however it increased in FY2016 by 230%. Looks like this marketing channel turns out bringing more profit than direct mailing now and it is the most successful marketing activities of BBQfun so far.

6. PERFORMANCE OF PRODUCTS

We have the sales data of 3 main types of BBQfun products that are sold during 2011-2014. These types are BBQ, Outdoor Furniture and BBQ Accessories.

We also have the Profitability budget table for these products as below:

BBQ

The sales data of BBQ products from 2011 to 2014:

As we can see from above, even the prices were little higher than targeted prices, the profit was decreasing year after year. This means the COGS were increasing year after year and therefore BBQ products are performed not good in the last two years. BBQfun needs to focus more on lowering the cost of good of BBQ products in order to increase the profit back to 45% as planned.

Outdoor Furnitures

As we can see from above, this product is performing very good. Even though the average price of the Outdoor Furniture products increased up to 228% more than targeted price, the gross profit kept growing year after year and most importantly, the number of units sold is also increased dramatically from 3100 to 4500. On the other hand, this product is performed very well and BBQfun needs to keep its performance as it is.

BBQ Accessories

Except the year 2011, BBQ Accessories performed very well. But in 2014, the average contribution decreased by 8.2% and BBQfun might need to look for the reason for the decrease in the contribution and find the way to increase it back. Also BBQfun might review the target gross profits.

However, the overall gross sales targets were achieved in every year from 2011-2014, the BBQ products performed very bad. BBQfun needs to identify the COGS of BBQ products and needs to manage the decline. Otherwise, BBQ products’ sales is about to decrease more in the future.

BBQfun also might need to review the profitability outcomes budgets for Outdoor furnitures and BBQ Accessories in order to forecast more realistically and prepare for the market needs in the future.

7. MARKET ANALYSIS METHODS

Projection

Financial projections forecast how the business performance result would be in the future if the business keep operating as it is now. In order to project the forecast, this tool uses the previous performance data. One or more assumptions can be used to get a clear idea about organization’s future.

Delphi technique

This technique uses the opinions of questioned group to develop ideas and opinions. Researchers prepare questionnaire and ask the them from the questioned group. After the answering is done, the researchers summarize the answers and prepare further questionnaire with a feedback report. After the questioned group review the reports, they are asked to evaluate their initial answers. This process is repeated until the questioned groups come up with a set of agreed ideas. Then these ideas are used by the researchers to make a final summary and then the decision-makers can make use of the researchers’ findings.