Small Business Advisory Group Presents: SPS Spindle Parts and Service Marketing Strategy

1
Small Business Advisory GroupPresentsSPS
Spindle Parts and ServiceMarketing Strategy

• Jess Bermingham
• Danielle Boxer
• Stephanie Hartenstein
• Doug Quaranta
• Adam Stuart
• Yadira Vega
• Genevieve Wilcox
• Zak Wood

2
Summary

• The Small Business Advisory Group of Franklin
  Pierce College, has prepared a marketing plan for
  Spindle Parts and Service.
• The following presentation is a brief
  overview of our research, findings, objectives,
  analyses and strategic plans.

3
Market Situation

• There are a total of 362,829 establishments in
  the manufacturing industry
• This industry has annual profits of 51 billion,
  which is up 12.8 billion from this same time
  last year
• In New Hampshire the number of manufacturing
  establishments has been steadily increasing
• One downfall is that many of these industries are
  located on or near the west coast.

4
Macro-Environmental Situation In America

• Trends in the furniture industry
• The United States and Canada have a combined
  furniture production of more than 33 billion
  dollars
• American manufacturing is maturing and changing,
  towards a more technological age
• The furniture industry grows more or less in
  unison with the overall economy
• Many manufacturing jobs have migrated toward
  countries with lower labor costs

5
Lifestyle Trends
6
Macro-environment in Europe

• The macro environment in Europe is similar to
  ours here in the United States. In Europe they
  are also trying to find ways to cut down on
  pollution.
• The economy in Europe is in a slump, they are
  trying to find ways to cut costs.
• These could be potentially harmful to starting a
  new business in Europe.

7
Macro-environment in Europe cont.

• Larger countries have more money to take on these
  projects, while the smaller countries dont have
  the resources to bring in these new businesses.
• The growth of the market in these small countries
  cant handle bringing in these new businesses.
• They cannot justify the high risk and the money
  that it takes to start these companies in the
  small countries.

8
-Market Situation
Competitive Situation in America

• Very Competitive Market
• Hard to enter the market
• Knowledge of the market is very important
• High start up costs

• All of these reasons will deter new .
  business into the market

9
Competitive Situation in America
-Competitor Outlook

• Plenty of competition located throughout .
  U.S.
• The ease of shipping makes everyone in .
  the industry a competitor
• Websites help companies get their name . out
  to prospective customers
• A high customer base and loyal customers . are
  key for survival

10
Competitive Situation in Europe

• Two dynamic forces of our time Globalization and
  the online movement
• Increased International sales
• 338 million Non-English speaking Internet users
  and nearly half of all Internet users live in
  Asia and Europe
• In 2001-2002, analysts determined that 71 of
  Internet use and 56 of E-Commerce use came from
  outside the United States (2/3 of all E-Commerce
  this year 2003 alone)

11
Competitive Situation in Europe contd

• Elimination of geographical barriers to entry
• Costs associated with online website construction
• Global Reach Program allows a small company to
  enter several online markets for less than 695,
  while typical translation costs are 50-100 for
  a short page consisting of 200-300 words

12
Past Product Performance

-Cost of Sales has been consistently even and
have never been higher than Sales. Because of
these costs, it has left the firm with a
respectable Gross Profit- which has never been
negative.

• -In March 2003, the expenses were 85.4 May 2003
  69.4, July 28.0, and in the most recent month,
  Sept. 2003, they ended with 33.1

-Profit increased in the month July and then had
a significant decrease in the month of September.
13
(No Transcript)
14
Financial Analysis

• SPS has a Profit Margin Ratio of 1.88. What does
  this mean?

• The Total Assets Turnover is .55 times or 54.9,
  which is low and could be higher.

• What this number means is that SPS has 0.55 of
  sales for every 1 of assets. This is
  interpreted as the number of dollars in sales
  generated by each dollar of assets.

15
Contd

• SPS has more Liabilities than Assets. This is
  represented by the Debt Ratio. Basically our
  consultant team recognizes that SPS is borrowing
  more then they are investing. The firms Debt
  Ratio is

303,660.43/238,127.00 Total Liabilities/Total
Assets 127.50
As the Debt Ratio is rather high, the Current
Ratio is satisfactory. Current Ratio is 6.1
What does this mean?
.SPS has 1.61 of assets for every dollar of
debt.
16
S.W.O.T Analysis

• Strengths
• -Clean working environment
• -Cohesive management team, allowing for
• efficient communication within the company
• -Equipment is more specialized, giving SPS an
• edge on precision jobs
• -Relationship with competitor next door allows
• for use of equipment without buying it, therefore
• produces more

17
S.W.O.T. Contd

• Weaknesses
• -High dependence on competitor next door could
  backfire
• -No general IT personnel, such as an e-commerce
  specialist
• -One technician limits amount of work that can be
  done at one time

18
S.W.O.T Contd

• Opportunities
• -Website development
• -Break into European market
• -Register on the Thomas Registry. Allows for
• representation along with SPS competitors
• -Trends in furniture manufacturing are predicted
  to grow world wide
• Threats
• -Technology is constantly changing
• -Acquisition of neighbor company, could bring in
  a competitor unfavorable of the current
  partnership situation.
• -Manufacturing jobs are moving south of the border

19
Financial Objectives

• Lower outsource to below 50
• Increase net sales for the next fiscal year
• Lower debt (liabilities)

20
Marketing Objectives

• Increase market share by keeping an open line of
  communication with customers, as well as gaining
  new customers
• Utilize web-site links in conjunction with
  companies SPS services
• Maintain a high level of customer satisfaction
• Solicit customer feedback through web-site and
  other methods such as surveys

21
Action Plans

• Increase advertising budget by 5 ()
• Create more press releases to send to the local
  media, as well as the European market
• Create e-marketing campaigns
• Create an easily navigable website

22
Advantages of increasing your advertising budget

• -Remind customers of the benefits of your product
  or service
• -Establish and or maintain a distinct identity
• -Enhance your reputation
• -Attract new customers and replace lost ones
• -Slowly build sales to boost you bottom line

23
Advantages of e-marketing

• Cost effective and if done right, can build brand
  awareness and loyalty
• Typically costs a few cents per message
• The business information that customers provide
  when signing up for an e-mail newsletter is
  extremely valuable
• Response rates are strong, 5-35 while
  traditional mail averages 1-3

24
An Effective Website Should

• Have a simple design and be user-friendly
• Informative and upbeat. Consistent with other
  forms of media
• Be used as a selling device that promotes the
  company to prospective customers
• Include a homepage with executive summary,
  address, phone numbers, and e-mail address.
• Include links to other pages
• Also be used as a recruiting tool for potential
  employees

25
How to use website to penetrate other markets

• Decide which markets the firm would like to
  target
• Build partnerships with U.S. and European Web
  integrators and translation companies that have
  locations in the regions where SPS plans to
  conduct business
• Locate firms to assist the firm in all the
  various aspects about globalizing SPS such as
  marketing consultants, lawyers, after-sales
  support teams, etc

26
Thank You for your timeAny Questions?