Report for Cango Company essay

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marketing management that are necessary for CanGo in promoting their company and penetrating their target market on a local and international level. The recommended target market for CanGo is the college students' pool as they require quick searches and purchases based on their curriculum readings. It will also be recommended that CanGo includes the range of books required by the curriculums in the states as well.

The two foremost strengths of CanGo include: ability to compete with other companies global and locally; and, having the ASRS will improve their shipment quantity. The weaknesses of the company include: incomplete Mission Statement; high Consumer Expectations; missing Strategic Management Plan, The opportunities for the company include: global exposure; industry growth; improve business to business structures; use of future technologies. Finally the threats for the company include: federal laws affecting sale prices; privacy concern; and, lack of capital.

Market Analysis

Marketing Objectives

To rapidly penetrate the market in a significant and quantifiable manner

Reduce consumer acquisition expenses costs by at least a minimum of 1.5% every four months in a year as increase to 2% quarterly decrease in the second and third years

Generate the company image inside the operating part of the premium online book stores and retailers (Clancy et al., 2000)

Key Strategies to Success

The secrets to success within this particular industry are:

1. Marketing. CanGo will have a way to market both straight to companies and simultaneously use the services of autonomous retail advisers and stockbrokers. It will then be essential to develop tactics that establish brand recognition among more recognized and penetrated online users and retailers available. This can be done using the following tactics;

i. Manage media expenses so that the closing ratios can be achieved with the sustenance of a minimum of 5% of annual leads

ii. Establish a direct mailing strategy that targets companies, brokers, in addition to consultants iii. Establish a network marketing contacts structure which will be produced using the CanGo professional sales databases (Adams et al., 2007)

2. Product quality. The help supplied by shareholders and retailers could prove to be top-notch when establishing strong penetration within the domain of small-employer companies. The value added connection with the CanGo's employees and its provider service systems will make sure that they are able to attain and sustain client satisfaction over a period of time. To retain client satisfaction, the following tactics could be employed:

iv. Reduce consumer erosion by controlling the overall rate and speed of growth

v. Counter competitive retail distribution plans by consistently monitoring and/or refining the market expansion strategies and use of media services

vi. Surpass renewals by a margin of 80% of the total customers that already exist (Adams et al., 2007)

Tactics

Some of the marketing tactics that will be used to penetrate the online book store and retail target will include the following:

Establish repeat clients at a minimum of 4% rate for each quarter.

Establish repeat shareholders and investors at a minimum of 9% rate for each quarter.

Guarantee absolute client satisfaction by appropriately addressing their needs and demands

Reduce the total consumer acquisition expenses at a minimum of 7% twice in a year

Some of the financial aims will include the following:

Consistent upwards spiral of sales in a year within the industry of online retailing

Attain a double figure growth ration in every 5 years

Ensure increased profitability rates by the end of each year

Competitive Analysis

In this section we will highlight the aspects that give CanGo an edge over their competitors. The recognized competitors of CanGo include brand names like Barnes and Nobles, Amazon and E-bay.

CanGo

Barnes & Noble

eBay

Amazon.com

Books

Yes

Yes

Yes

Yes

E-Books

Yes

Yes

Online Gaming

Yes

Videos

Yes

Magazines

Yes

Yes

Yes

Some other competitors can include:

Company

Business Model

Amazon.com

Online retailer

Barnes & Noble.com

Online retailer

Bigwords.com

Allows student to buy and sell textbooks

Collegebooksdirect.com

Buys and sells new and used textbooks

Collegeclub.com

Integrated media and ecommerce

Online retail

Ebay.com

Online Auction

Ecampus.com

Merchandise

Limited content

Efollett.com

Online textbook retailer

Network of university bookstore for brick and mortar presences

Half.com

Online Auction

JourneyEd.com

Online student discounts on software

Lazystudents.com

Online retail -- various college market merchandise

Online research papers assistance

Studentmarket.com

Online retail -- various college market merchandise

TextbooksDirect.com

Textbook price comparison engine

Textbooksource.net

Buys and sells used textbooks

Offline buy-back

Online sales

TextbooksX.com

Buys and sells new and used textbooks

Varsitybooks.com

Buys and sells new and used textbooks

To strike a competitive balance and edge over these competitors and their phenomenal growth over the years, CanGo must incorporate the following suggestions.

There is very little improvement in the overall customer support section that CanGo could engage in as it already covers quite a few aspects effectively and scores high on them as well. There is no need for CanGo to conduct any changes in their online marketing strategy to increase site promotion or improve design as they are both performing well. Constantly improving and updating is integral for these two aspects to continue to serve effectively and it is recommended that CanGo constantly updates their hardware and software with the changing times (Hackett, Parmanto and Zeng, 2005). The aspects of usability, functionality and accessibility are also above par for CanGo and the user oriented content is also appropriate as all of these are reflected effectively in the evaluations made. The success of all these aspects is also directly reflected in the CanGo user interface, the personalization and customization options for the users, the ease and consistency of navigational keys, the overall download speed, as well as ease of use across genders (Pearson, Pearson and Green, 2007).

The one aspect that CanGo could improve on is the customer relationship management. Minocha, Hall and Dawson (2007) in their study write that "customers are willing to do business with an E-Commerce environment only when they feel that they are receiving 'value' in their exchange with the organization"; this is one aspect that CanGo could definitely improve by increasing online interaction or integrating their tangible services and online services to form one flowing customer experience for their online users and on-site visitors as well.

The importance of CRM is also corroborated by Buttle in his earlier study (2004) where he says that the use of CRM has change the entire idea of marketing. In the study, Buttle (2004) explains that the use of CRM entails the effective use of modern technology, offers creative management for the customer lifecycle, it makes the marketers redesign the four Ps of marketing and the biggest difference is that it makes the companies manage their networks as opposed to their brands. This last aspect of CRM is what CanGo needs to successfully adapt and hence increase their overall customer retention percentage. The integral aspect of CRM is that it will help CanGo increase their overall accountability in the eyes of the customers as well as help them design and execute newer customer management roles (Buttle, 2004).

Financial Analysis

In this section we will focus on current and projected financial breakdowns for CanGo. The projected financial breakdown is the change that is expected after the strategic recommendation of the paper are implemented.

Market Analysis Projections

SOURCE: U.S. Department of Commerce, Bureau of the Census, Current Population Reports, Series P-25, Nos. 1092, 1095, and "National Population Estimates," December 2001, and "Annual Projections of the Total Resident Population: 1999 to 2100," January 2000

Market Analysis

Year 1

Year 2

Year 3

Year 4

Year 5

Potential Customers

Growth

CAGR

18-24 years of age

1%

28,400,000

28,684,000

28,970,840

29,260,548

29,553,153

1.00%

25-29 years of age

2%

17,900,000

18,258,000

18,623,160

18,995,623

19,375,535

2.00%

Male

2%

6,900,000

7,038,000

7,178,760

7,322,335

7,468,782

2.00%

Female

2%

9,000,000

9,180,000

9,363,600

9,550,872

9,741,889

2.00%

Total

1.55%

62,200,000

63,160,000

64,136,360

65,129,378

66,139,359

1.55%

Income Statement

Projected Sales Ratios

Sales Forecast

Year 1

Year 2

Year 3

Sales

Textbook Exchange

$741,000

$963,300

$1,252,290

Classifieds

$596,000

$774,800

$1,007,240

Auctions

$291,000

$378,300

$491,790

Retail

$206,000

$267,800

$348,140

Advertisement

$278,500

$362,050

$470,665

Total Sales

$2,112,500

$2,746,250

$3,570,125

Direct Cost of Sales

Year 1

Year 2

Year 3

Textbook Exchange

$391,000

$430,100

$473,110

Classifieds

$258,000

$283,800

$312,180

Auction

$170,500

$187,550

$206,305

Retail

$193,500

$212,850

$234,135

Advertisement

$170,500

$187,550

$206,305

Subtotal Direct Cost of Sales

$1,183,500

$1,301,850

$1,432,035

Projected Profit Loss Ratios

Pro Forma Profit and Loss

Year 1

Year 2

Year 3

Sales

$2,112,500

$2,746,250

$3,570,125

Direct Cost of Sales

$1,183,500

$1,301,850

$1,432,035

Other Costs of Goods

$0

$0

$0

Total Cost of Sales

$1,183,500

$1,301,850

$1,432,035

Gross Margin

$929,000

$1,444,400

$2,138,090

Gross Margin %

43.98%

52.60%

59.89%

Expenses

Payroll

$411,000

$445,000

$510,000

Sales and Marketing and Other Expenses

$0

$0

$0

Depreciation

$0

$0

$0

Web Hosting

$720

$1,000

$1,250

Utilities

$1,200

$1,500

$2,000

Website Enhancement Projects

$225,000

$200,000

$200,000

Insurance

$1,200

$15,000

$17,500

Payroll Taxes

$59,850

$64,650

$74,250

Other General and Administrative Expenses

$4,800

$7,500

$10,000

Total Operating Expenses

$703,770

$734,650

$815,000

Profit Before Interest and Taxes

$225,230

$709,750

$1,323,090

EBITDA

$225,230

$709,750

$1,323,090…[continue]

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