Widget World's marketing plan for senior citizen house cleaning services

¶ … Marketing Plan

The shifts that are occurring in the population demographic are highlighting how a greater percentage of people are becoming senior citizens. This means that a traditional number of everyday services that most individuals take for granted will be in demand. For Widget World, this presents the company with a unique opportunity that will allow us to create a nationally-based franchise that can easily earn gross revenues of $144 million per year. The strategy that we are proposing is illustrating how these objectives will be achieved and the way we will create a unique product that will meet this growing demand in the future.

Situation Analysis

Marketing Strategy

Financial Projections

Implementation Controls

Introduction

Currently, a major population shift has been occurring in America. Where, one of the largest demographics of the population (the Baby Boomers) is quickly approaching the age of retirement. Evidence of this can be seen by looking at statistics that are showing how there 76.1 million people in this age group. Out of this number, 3 to 4 million are turning 59 years old every year. (Huff) This means that these individuals will require the increasing utilization of a number of different services that will assist them as they become older to include: house cleaning, minor repairs and running errands. At the same time, they are helping to take care of their aging parents. (Huff) This is significant, because it is illustrating how there is a potential untapped market that can grow exponentially in the future.

In the case of Widget World, we are focused on addressing these basic needs, while providing services that go above and beyond these expectations. To fully understand how this can be achieved we will look at the potential market that is developing in the future and if it is economically viable for the business. This will be accomplished by conducting: a situational analysis, looking at the marketing strategy, making various financial projections and determining how implementation controls will be utilized as well as augmented to respond to these growing needs. Once this occurs, it will provide the greatest insights as to the potential opportunities and what steps need to be taken to ensure that the company is able be at the forefront of this growing industry.

Situation Analysis

To determine if this emerging market is economically viable we must examine various components of the industry itself and possible challenges that could be faced in the future. The best way to establish this is to study the: strengths, weakness, opportunities and threats (through conducting a SWOT analysis). ("SWOT Analysis") This will offer specific ideas as to if this kind of business can grow in the future and what are the underlying issues that we will need to address. At which point, we will be able to see if Widget World can be able to grow and adapt with the changes that are taking place in this demographic of the population.

Marketing Strategy

The basic marketing strategy that we will be using is to target those individuals who currently need these kinds of services. This will be accomplished using traditional sources of advertising such as: the radio, television, newspapers and direct mail pieces. We will then take this approach one step further, by having a series of different seminars at: retirement communities, businesses, large corporations and community groups. Our main focus will be to reaching out to those individuals who are interested in using the different services that are being provided by: Widget World through a customizable solution. Where, everyone can choose what services they need to use and they change add or change to this without any kind of long-term commitments. These different elements are important, because if we can take this kind of approach it will help to identify those people who currently need what we have to offer. While simultaneously, looking for individuals who could be in need of these services in the future. Over the course of time, this will allow the company to attract a wide variety of senior citizens.

To begin offering these kinds of services the company will focus on select markets where there are the highest number of retirees and potential retirees (i.e. Arizona, Texas, Florida along with California). Once this occurs, we will then expand to other markets that have large number of individuals that we can reach out to. A few of the most notable include: the East Coast, Midwest and the West. Over the course of time, this will help Widget World to build its brand image and reputation. This will improve the marketing efforts, which will have a positive impact upon how quickly the company is able to build its customer base.

Financial Projections

To help maximize the profit margins, Widget World will start out in one area of the country and begin to expand into other as quickly as possible. In the beginning our focus will be to build a unique brand image that has an outstanding reputation for quality and customizable services. The way that this will be accomplished is by having customers leave different comments on a message board and through different surveys. Our emphasis will be on understating how these kinds of services being delivered can be improved and if there are any outstanding issues that need to be addressed immediately.

Once the brand image and reputation of the company has been established, we will focus on growing the business through a series of franchises that can be located around the country. In general, our upfront non-refundable franchise fees will around $5,000.00. Using various financial projections, the upfront fees that the company would receive taking this kind of approach off of having 100 franchises around the country will be $5 million.

Prices

The average pricing structure will be based on: an hourly, weekly or monthly fee. In general, the fee structure will be: $20.00 per hour, $750 per week or $3,000 per month. Those individuals that will sign long-term contract with the company will be given a 20% discount on these fees when they prepay for these services in advance. The below table illustrates what will be charged for the kinds of services that we are providing.

The Fee Structure for Widget World

Duration

Fee

Hourly

$20.00

Weekly

$750.00

Monthly

$3,000.00

Profitability

Based on the current fee structure, if there were a total of 1000 clients per franchise that were paying the regular fee with a 20% discount, each location would earn approximately $2.4 million per month. The company would receive a royalty fee of 5% from each franchise every single month of $120,000 per location. Out of 100 franchises this would total out to $12 million dollars per month. On yearly basis, Widget World would earn $144 million in gross revenues. The below table illustrate what each location would be earning and the amount that the company is making off of the royalty fees from the different franchises.

The Gross Profits for Each Location on a Monthly and Yearly Basis

Duration

Earnings

Monthly

$2.4 million

Yearly

$28.8 million

The Gross Profit Margin for Widget World Based on the Franchise Fees for Each Location

Duration

Earnings

Monthly

$12 million

Yearly

$144 million

These different elements are important because, they are illustrating how having a small number of clients per franchise will help Widget World to make over $144 million per year. If the number of clients increases, this could result in the company making double or even triple their profits margins. As a result, this is a sign that the company has the ability to create a unique brand that will address the needs of this demographic of the population well into the future. Once this occurs, it means that the corporation can become one of the first nationally-based businesses that are offering these different services.

Implementation Controls

The implementation controls are when we utilizing a series of different procedures that will determine if the underlying marketing strategy needs some kind of adjustment. This will be accomplished using various monitoring tools to include: strategic monitoring and periodic reviews. The way strategic monitoring will be achieved is through using different tools that will help us to understand if we are reaching the intended financial objectives of the company. Where, we will look at the total amount of clients that a particular location is serving and if they are meeting the basic requirement for each franchise (1000 clients that they are serving). For those locations that are just entering a new market, they will have one year to reach this milestone. If they have trouble achieving this goal, they will be placed under review to see: if there is a problem with the services they are providing or if they are losing a number of their customers to competitors. At which point, managers will be able to: create a customizable strategy and make recommendations to help all locations meet this basic requirement.

Periodic reviews will take place once a year. In these kinds of situations, the company will be focused on reaching out to different franchisees by looking at: the quality of services they are providing, their underlying amounts of profitability and if there any kind of outstanding complaints against them. At which point, executives could help to offer specific recommendations that will help to protect the brand image and ensure that they are meeting the needs of customers in a specific market. These different elements are important, because if this kind of basic approach can be utilized it will help the company to increase their overall amounts of profitability. This is the point that Widget World will be able to adapt to changes in the marketplace, while addressing the specific needs of each individual client. ("Implementation Control")

Clearly, Widget World has the opportunity to take advantage of a new market that is quickly developing. As, our approach will focus on: increasing the overall bottom line of the company and meeting the specific needs of senior citizens on a national basis. This is the point the company can become the first national franchise to meet this growing demand. Over the course of time, this will allow the organization to become the premiere service for addressing these basic needs of the general public.