SmartShuz Company’s Marketing and Advertising

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Table of Contents

Cost of doing business
Expected revenue
SmartShuz Company: Monthly Income Statement
Competitive Advantage Sustainability
Product Pricing
Advertising and Promotion Plan
Advertisement and Promotion implementation

Cost of doing business

Expenses	Expected Monthly Cost ($)	Expected Yearly Cost ($)
Rent	1000	3,600
Salaries and Wages	7000	84,000
Technological Equipment and Furniture	1500	18,000
Advertising and Other Promotions	300	3,600
Utilities: Heat, Electricity, etc.	400	4,800
Telephone and Internet	200	2,400
Insurance	1,000	12,000
Miscellaneous	200	2,400
Total	11,600	139,200

Expected revenue

When all other factors are held constant, the SmartShuz Company expects to generate at least $210,000 within the year from around one thousand customers who are projected to spend $200 in the company products.

SmartShuz Company: Monthly Income Statement

The period of operation from April 1^st, 2014 to April 1^st, 2015
Particulars	Startup	Apr	May	Jun	Jul	Aug	Sep
Estimated Sales Units		500	600	600	700	800	800
Sales Revenue		10,000	12,000	12,000	15,000	17,000	17,000
Cash Inflow
Accounts Receivable		10,000	12,000	12,000	15,000	17,000	17,000
Initial capital	70,000
Long-term Loan	70,000
Total (A)	140,000	10,000	12,000	12,000	15,000	17,000	17,000
Cash outflow
Accounts Payable		2,000	1,000	1,000	3,000	4,000	5,000
Worker wages		7,000	7,000	7,000	7,000	7,000	7,000
Rent		1,000	1,000	1,000	1,000	1,000	1,000
Electricity and Utilities		400	400	400	400	400	400
Other Admin expenses		200	200	200	200	200	200
Sales Promotion		300	300	300	300	300	300
Interest				1,000		3,000
Property, Plant and Equipment	10,000	9,800	9,800	11,100	10,100	13,100	10,300
Loan Repayment
Total (B)	10, 000	9,800	9,800	11,100	10,100	13,100	10,300
Net cash (A) – (B)	130,000	-3,400	-4,200	-2,100	1000	10,300	1000
Opening balance		130,000	124, 300	123, 400	122,300	123,100	124,300
Closing Cash	130,000	126,400	123, 400	122,300	123,100	124,300	124,900

Particulars	Oct	Nov	Dec	Jan	Feb	Mar	Total
Estimated Sales Units	600	800	1000	1000	1200	1200	13,100
Sales Revenue	17,000	20,000	22,000	22,000	26,000	20,000	210,000
Cash Inflow
Accounts Receivable	17,000	20,000	22,000	22,000	26,000	20,000	210,000
Initial capital							70,000
Long-term Loan							70,000
Total (A)	17,000	20,000	22,000	22,000	26,000	20,000	210,000
Cash outflow
Accounts Payable	2,000	1,000	1,000	3,000	4,000	5,000	31,400
Worker wages	7,000	7,000	7,000	7,000	7,000	7,000	84,000
Restaurant Rent	1,000	1,000	1,000	1,000	1,000	1,000	12,000
Electricity and Utilities	400	400	400	400	400	400	4,800
Other Admin Expenses	200	200	200	200	200	200	2,400
Sales Promotion	300	300	300	300	300	300	4,800
Interest		4,000		6,000		9,000	31,400
Property, Plant, and Equipment							10,000
Loan Repayment	5,000	5,000	6,000	8,000	6,000	7,000	24,000
Total (B)	12,100	15,100	16,200	16,900	21,200	16,000	142,500
Net cash (A) – (B)	-1,700	-1,700	-1,100	800	1,200	-1000	70,800
Opening balance	107,000	94, 300	83, 400	72,300	73,100	71,800
Closing Cash	105,300	93, 400	82,300	73,100	74,300	70,800

SmartShuz Company: Balance Sheet As of 30^th December 2015

Assets

Current Assets
Cash in Bank	2,000
Cash Value of Inventory	25,000
Prepaid Expenses (insurance)	4,800
Total Current Assets	31,800

Fixed Assets
Machinery & Equipment	4,800
Furniture & Fixtures	7,200
Real Estate / Buildings	–
Total Fixed Assets	12,000

Total Assets	43,800


Liabilities & Net Worth

Current Liabilities
Accounts Payable	5,000
Taxes Payable	4,000
Notes Payable (due within 12 months)	–
Total Current Liabilities	9,000

Long-Term Liabilities
Bank Loans Payable (greater than 12 months)	12,000
Less: Short-Term Portion	–
Total Long-Term Liabilities	12,000

Total Liabilities	21,000


Owners’ Equity (Net Worth)	49,800

Total Liabilities & Net Worth	70,800

Competitive Advantage Sustainability

Generic marketing

The shoe industry is competitive. Other many companies offer the same products. The majority of these companies rely on local consumers. Therefore, they do not run promotional campaigns or advertise their products. Consequently, the SmartShuz Company will have an advantage since it will create consumer awareness through its promotions and advertisements. Besides, the majority of the competitors sell their products at high prices, and they run out of stock frequently. To surmount this competition, the company will use strategies like consumer education on how to get the best from the product by using it appropriately.

The existing competitors do not teach the consumers on how to use some of their shoe products. The company will regularly replenish its inventory to make sure that it does not run out of the product. Consumers get frustrated whenever they visit a business only to learn that the product they want is out of stock. This discourages them from visiting the business in the future. Hence, the company will make sure that it has a regular supply of seasonal shoes to encourage consumers to return to its stores.

Brand Awareness

The company’s name, logo, and design facilities to differentiate its brand from its competitors. Marketers ought to establish unique brand features that can draw the attention of the target consumers. To stand out from the competitors, the SmartShuz Company will use the logo to differentiate its shoes from those of the rival companies. It will promote its products by using colorful logos. This will create an impression of brand quality in the minds of the target consumers, hence; help the company to make substantial sales. Colorful logos will also make consumers remember about the brand whenever they come across a color portrayed in the logo.

Multi Brand Strategy

SmartShuz will be dealing in varieties of fashionable and stylish shoes ranging from seasonal to ordinary footwear. As such, the company will utilize its expertise and innovative capabilities to ensure the development and sale of advanced services that offer varied choices for customers. Moreover, the business will be offering auxiliary services as well as customized shoe products to suit the customer needs and bring convenience, which is a mixture of value and quality.

Further, SmartShuz will focus on the differentiation of its products, which is critical amid intense competition particularly in new markets where the business plans to establish. The business will differentiate its shoe products in terms of augmented value, placing and pricing. In other words, the business will ensure that the offered services have added value beyond the expectations of the customers. Moreover, the services will be offered at a place, which is a convenience to target clients.

Product Pricing

In the presence of increased competition, SmartShuz will ensure that its shoe products are affordable to the target market. Intense competition in the industry requires that SmartShuz enhance its product differentiations through design, timeliness, affordability, form, conformance quality, durability, and style. The main objective of the company product strategies will be to improve the quality of the service by 65%. The brand positioning will be attained through increasing the presence of the business on the company’s website and other social networking sites.

As indicated, SmartShuz faces stiff competition from various companies dealing in the same products. Therefore, a pricing differentiation strategy will provide a critical competitive advantage. Apart from the product range offered by the company, SmartShuz will encourage the purchase by having the right and suitable price for its products so that the business can realize increased profits. In essence, price is a critical element in the business marketing mix since it will primarily be used to create sales revenue. Price is not only used in the marketing mix but also product development. The high-quality low-prices strategy will be applied particularly to outperform the competitors. The main objectives of the pricing strategies will be to attract and retain customers and to make at least 5% net margin.

The actions in the pricing strategies will be aimed at achieving both the objectives particularly price discrimination in terms of place and target market. Essentially, pricing strategies will be aimed at increasing the competitiveness of SmartShuz as well as widening the customer base. In other words, the pricing strategies targeting increasing the market share as well as profit margins.

Advertising and Promotion Plan

The advertising and promotion plan will require the SmartShuz business to spend more than what its competitors will spend to enable it to gain a competitive advantage. Setting a high cost for advertising and promotion in the marketing plan, usually demonstrates how the company will deliver its unique selling propositions to its prospective customers. Advertising and promotion tools are key elements of the marketing mix. Therefore, the company requires making sure that it has the best advertising and promotion strategies for its products. This would enable it to compete with its competitors, as well as to gain a competitive advantage. SmartShuz Company can only compete well if it has enough money to use in advertising and promoting its products.

Media Used and Why

To make substantial sales, SmartShuz ought to communicate its products to a big number of people. This can only be achieved by selecting an advertising medium that is accessible to many people. While organizations have numerous advertisement media to choose from, not all media are accessible by all consumers. Consequently, before deciding on the advertisement medium to use, an organization ought to have an accurate profile of its target customers. In this case, the SmartShuz Company intends to use television as its advertisement medium.

The main reason for using television as the advertising medium is that it will facilitate to capture a vast target audience. The majority of the homesteads own televisions. Hence, using television to advertise the SmartShuz’s shoe products will allow the company to reach a wider consumer base. Apart from reaching a wider consumer base, television conveys messages in both audio and visual form.

Therefore, through this medium, the company will be able to pass the information even to those consumers that do not know how to read. Advertising the product in both audio and visual formats will also facilitate information retention. Once people watch and hear an advertisement, it becomes hard for them to forget it quickly. Audiovisual communication facilitates the retention of the message. Therefore, the SmartShuz business opts to use television since it will facilitate the retention of the information, thus, making sure that consumers do not forget about the product.

Promotions used

The SmartShuz business chooses to use sales promotion. This choice was made since it helps the company to increase its sales volume within a short period. In this case, the company will apply a sales promotion strategy such as push-up sales. This will facilitate in attracting and retaining new customers by issuing them with free samples and gifts. Sales promotion will ensure that consumers return to the company whenever they need different shoe products. Despite sales promotion being expensive, the promotion strategy facilitates in creating a good rapport between a company and its consumers. In response, the company benefits from return customers.

Advertisement and Promotion implementation

The marketing plan will comprise a detailed calendar of the promotional events for a whole year. The year will be divided into three segments January-April, May-August, and September-December. To create customer awareness about the product, the SmartShuz business will carry out an aggressive advertisement and promotion program during the first segment. It will run daily advertisements on the television to make sure that consumers know about the various shoe products. As consumers get to know about the products, SmartShuz will relax its advertisement program.

The second segment will entail running the advertisements thrice per week. This will aid in keeping the clients aware of the product. Besides, it will target those consumers that might not have heard about the products. The last segment of the calendar year will involve running the television advertisement once per month. By this time, the majority of the consumers will have known about SmartShuz’s products. Besides the advertisement, the company will also conduct some promotional campaigns, especially during the first segment of the calendar year to recruit more consumers. With these events running throughout the year, the company is guaranteed that it will keep its target consumers aware of the product.

Advertisement messages

Advertisements are very manipulative and use tactics that directly and involuntarily appeal to the mind of the target person. Despite the ignorance of the same and disbelief in their effects, advertisements remain complex and significant in the choice of products owned by an individual. Usually, advertisements appeal to memory or emotional response. As a result, it creates an intrinsic motivation response that triggers the mind to activate affiliation, self-acceptance, and feign community feeling. In the end, advertisements succeed in appealing to emotions through capitalization on biases and prejudices of people. Therefore, response to an advertisement will emaciate from the bandwagon technique which heaps pressure on the mind to follow the perceive crowd.

Reflectively, the successes of SmartShuz promotion messages will be entrenched in the principle of keeping a reliable and professional reputation in exchanging ideas and convincing customers. Therefore, through timely appeal to emotions and self prejudice, the SmartShuz will skew its advertisement messages towards embracing the ‘perceived goodness’ and need to identify with ‘the ideal’ in the packaging of the shoe products. These pop-up memories will actively reminisce and provoke an involuntary response when noticed in an advertisement. For instance, the SmartShuz will succeed in implementing this aspect of ‘jumping the queue’ ahead of other competitors through visible and inducing signs all over the UAE region.

Upon noticing the signs, the mind will perceive them to belong to the SmartShuz Company, irrespective of the physical geography at the moment. These advertisements erected signs will endeavor to cue the visual mental aspect of a person into a particular brand of the different brands of the SmartShuz Company.

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