Marketing strategy and market penetration for CanGo online bookstore

¶ … 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

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

Interest Expense

$275

$63

$0

Taxes Incurred

$60,738

$191,615

$357,234

Net Profit

$164,218

$518,072

$965,856

Net Profit/Sales

7.77%

18.86%

27.05%

Projected Cash Flows

Pro Forma Cash Flow

Year 1

Year 2

Year 3

Cash Received

Cash from Operations

Cash Sales

$2,112,500

$2,746,250

$3,570,125

Subtotal Cash from Operations

$2,112,500

$2,746,250

$3,570,125

Additional Cash Received

Sales Tax, VAT, HST/GST Received

$0

$0

$0

New Current Borrowing

$0

$0

$0

New Other Liabilities (interest-free)

$0

$0

$0

New Long-term Liabilities

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

New Investment Received

$150,000

$0

$0

Subtotal Cash Received

$2,262,500

$2,746,250

$3,570,125

Expenditures

Year 1

Year 2

Year 3

Expenditures from Operations

Cash Spending

$411,000

$445,000

$510,000

Bill Payments

$1,290,342

$1,883,557

$2,068,700

Subtotal Spent on Operations

$1,701,342

$2,328,557

$2,578,700

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

Principal Repayment of Current Borrowing

$3,600

$1,400

$0

Other Liabilities Principal Repayment

$0

$0

$0

Long-term Liabilities Principal Repayment

$0

$0

$0

Purchase Other Current Assets

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

Dividends

$0

$0

$0

Subtotal Cash Spent

$1,704,942

$2,329,957

$2,578,700

Net Cash Flow

$557,558

$416,293

$991,425

Cash Balance

$559,873

$976,167

$1,967,591

Strategic Planning Recommendations

The three critical secrets to success for the new regional air travel are:

Firstly, employing a skilled, extremely professional management team that mixes vision; practicality; financial capability; solid understanding of the online retail process; knowledge of and conviction in the employment and advantages of the most recent software, electronic, and communication technologies; on-the-ground understanding of the region and target marketplaces; realization of the vital need of an highly effective workforce to its success; along with a total knowledge of and resolve for the entire mission and goals of the online book retail business (Joshi, 2005).

Secondly, wise, forward-looking, and assertive marketing that promotes CanGo like a different type of performer, one that is not only sharper but also wiser, with a greater degree of professionalism, reliability, operational benchmark than may be the custom within the target region. Focus on safety, with experienced, devoted, and qualified workforce, taking care of the customer and also his/her wants and needs, the benefits provided by the simple, comprehensible, highly cost-effective products, all will shape vital support structures of the marketing plan (Joshi, 2005).

Thirdly, utilization of highly developed electronic and communication technology to lessen staffing along with other operational expenditures to expand the market base; enthusiastically close sales possibilities; simplify and speedup the process of ordering and distribution of products as well as enhance customer ease and comfort (Joshi, 2005).