Strategic management

Hafeez ullah

1108-BC- 2015

Class: B.COM

Section: (B)

I verify that I personally conducted the research reported herein, and that this paper is
an accurate reflection of my finding. I understand that falsifying or fabricating information is
fraud. I understand that misrepresenting another person’s material as own is plagiarism. I
further realize that either fraud or plagiarism will result in failing this class, and subsequently
can lead to formal charges. Moreover, I verify that this paper was solely researched, prepared,
and written exclusively for this class by:

------------------------------------------------ (Student’s signature)

1|Page
Table of Contents

B, EXECUTIVE SUMMARY…………………………………………………………………………………. 3
C.INTRODUCTION…………………………………………………………………………………………….. 4

TASK .1…………………………………………………………………………………………………………….. 5

TASK .2 ………………………………………………………………………………………………………………6

PROJECTED INCOME STATEMENT………………………………………………………………………..7

PROJECTED BALANCE SHEET………………………………………………………………………………..8

TASK .3……………………………………………………………………………………………………………….9

3.1 MISSION……………………………………………………………………………………………….9

3.2 VISSION…………………………………………………………………………………………………9

3.3 VALUES…………………………………………………………………………………………………9

TASK .4……………………………………………………………………………………………………............9

4.1 GEOGRAPHIC SEGMENTATION…………………………………………………………….9

4.2 DEMOGRAPHIC SEGMENTATION…………………………………………………………9

4.3 PYSCOHLOGRAPHIC SEGMENTATION…………………………………………………10

TASK . 5…………………………………………………………………………………………………………….11

TASK .6……………………………………………………………………………………………………………12

D. CONCLUSION……………………………………………………………………………………………… 15

E. RECOMMENDATIONS……………………………………………………………………………………15

F.REFERENCE…………………………………………………………………………………………………….15

2|Page
B. Executive summary:

A direct advertising and marketing organization is characterizes by innovative

strategic and idea with efficient in a given duration of time. The business is following:

 Band activation
 Event management
 Direct marketing

Direct marketing offering company is proposed to be positioned at any densely populated cities
like, Lahore, Peshawar, Karachi, Rawalpindi, Multan etc. The employer has a capability of
managing 50 occasions with a preliminary utilization 50%. Total cost estimate is Rs.11 million
with constant investment Rs.754, 300 working capital 353,500. Given the cost assumption, IRR
and payback period are 23% three year and 5 months respectively. The most vital factors for
success of undertaking are:

 Client Relationship & Contract Negotiations

 Service Costing & Delivery
 Market Research

3|Page
C. Introduction:

This is developed to supply entrepreneur’s potential investment chance in putting up and

operating a direct advertising enterprise to emerging desires of the goal audiences. The report
is designed to provide applicable small print together with proposed departmental shape and
hierarchy to facilitate the entrepreneur in making the choice with aid of imparting a 360 degree
view of present market and players. This allows flexibility to change various mission parameters
to swimsuit the wants of the entrepreneur.

i. Product:

A direct advertising and marketing organization is characterizes by innovative strategic

and idea with efficient in a given duration of time. The business is following:

 Band activation
 Event management
 Direct marketing
ii. Location:

The area for the proposed enterprise should preferably be mined metropolises and
inside the proximity clients. The target markets and effortless accessibility are conditions for
success of the proposed business.

iii. Target market:

Potential goal market for the proposed setup is densely populated cities such as Karachi,
Lahore, Peshawar, Rawalpindi, Islamabad, Multan etc.

iv. Employment generation:

The proposed project will grant direct employment to 9 people.

4|Page
Task 1:

1.1 Project title: Direct marketing

“Direct Marketing”

5|Page
Task 2:

Find their financial projected forecast.

6|Page
 Projected Income Statement

7|Page
Projected Income Statement Year 6 Year 7 Year 8 Year 9 Year 10

Gross Revenues 14,551,989 16,007,187 17,607,906 19,368,697 21,305,566

Sales on Credit 3,637,997 4,001,797 4,401,977 4,842,174 5,326,392
Sales on Cash 10,913,991 12,005,391 13,205,930 14,526,523 15,979,175
Bad Debt Expenses 72,760 80,036 88,040 96,843 106,528
Net (Adjusted Sales) 14,479,229 15,927,151 17,519,867 19,271,853 21,199,039

Cost Of Sales 12,600,147 13,860,162 15,246,178 16,770,796 18,447,875

Project Cost 12,126,657 13,339,323 14,673,255 16,140,581 17,754,639

Other Utilities 473,490 520,839 572,923 630,215 693,237

Gross Profit 1,879,082 2,006,990 2,273,689 2,501,058 2,751,163

Operating Expenses
Salaries 850,349 935,384 1,028,923 1,131,815 1,244,966
Office Miscallaneous Expense 193,261 212,587 233,846 257,231 282,954
Amortization of Preliminary Exp. 0 0 0 0 0
Depreciation Expense 32,731 29,458 26,512 23,861 21,475
Rent Expense 483,153 531,468 584,615 643,077 707,384

Subtotal 1,559,494 1,708,898 1,873,896 2,055,983 2,256,809

Operating Income 319,587 358,092 399,793 445,075 494,354

Financial Charges 34,168 21,526 7,835 0 0

Earnings Before Tax 285,419 336,566 391,957 445,075 494,354

Tax 0 0 0 44,507 49,435
Net Profit 285,419 336,566 391,957 400,567 444,919

Projected Balance Sheet

8|Page
PROJECTED BALANCE SHEET (Rs.) Year 6 Year 7 Year 8 Year 9 Year 10

ASSETS
Current Assets
Cash & Bank Balance 726,067 896,823 1,103,302 1,491,047 1,917,089
Acoounts Receivable 303,166 333,483 366,831 403,515 443,866
Advance Rent 150,000 150,000 150,000 150,000 150,000
Total Current Assets 1,179,233 1,380,306 1,620,133 2,044,561 2,510,955

Fixed Assets
Consolation & Renovation 159,432 143,489 129,140 116,226 104,604
Furniture & Fixture 135,145 121,631 109,468 98,521 88,669
Vehicle 0 0 0 0 0
Total Fixed Assets 294,578 265,120 238,608 214,747 193,272

Intangible Assets
Preliminary Expenses 0 0 0 0 0

Total Assets 1,473,811 1,645,426 1,858,741 2,259,308 2,704,227

Owner's Equity 1,130,218 1,466,784 1,858,741 2,259,308 2,704,227

Long Term Liability 343,593 178,642 0 0 0

Total Equity & Liabilities 1,473,811 1,645,426 1,858,741 2,259,308 2,704,227

9|Page
Task 3:

3.1 Mission:

By targeting the right people with the right information at the right time on the right
page, we compel people to take action. Present their, brand in a compelling manner. Offer a
quality direct selling business opportunity.

3.2 Vision:

We provide our customer with the benefit a full services marketing agency with a personal
approach from educated, knowledgeable consultants who understand business.

3.3 Values:

We provide honest, tried and tested marketing solutions that help improve clients business
with a real results. We always offer advice based on an open and honest approach and have the
client’s best interests in mind. We are dedicated to providing quality service and ensure our
clients see results.

Task 4:

Develop the market segmentation plan for this project.

4.1 Geographic segmentation:

Potential goal market for the proposed setup is densely populated cities such as Karachi,
Lahore, Peshawar, Rawalpindi, Islamabad, Multan etc.

4.2 Demographic segmentation:

Targeting professional and technically, and high educated, and we targeting the young people
whose age above 18 year. Income should be under 10,000:10.001.

10 | P a g e
4.3 Pyscholographic segmentation:

We targeting social class higher level or middle levels people. Personality should be compulsive
and ambitious.

Task 05

5.1 Develop the product positioning and perceptual mapping

11 | P a g e
Task 6:

Projected Income and Balance Sheet (Recession, Normal and Boom)

Assumption of Income Statement

Particulars Recession Boom

Sales Volume Increase 2% 10 %
Increase in Cost of Sales 5% 15 %
Increase in Staff Salaries 5 % of sales 15 % of sales

Increase in Utilities 5 % of sales 15 % of sales

Increase in Office expenses 5 % of sales
Depreciation 10 % diminishing balance per year
Furniture 10 % diminishing balance per year
Bad debts 1 % off sales 5 % of sales

Assumption of Balance Sheet

Particulars Recession Boom

Cash & Bank balance Plug Variable Plug Variable
Advance Rent 5% increase 10 % increase
Owner’s equity 5 % increase 15 % increase

12 | P a g e
 Projected Income Statement ( Recession, normal & boom)

Projected Income Statement Recession Actual Year 2010 Boom

Gross Revenue 21731677.32 21,305,566 23436122.6

Sales on Credit 5432919.84 5,326,392 5859031.2
Sales on Cash 16298758.5 15,979,175 17577092.5
Bad debt Expenses 108658.56 106,528 117180.8
Net (Adjusted Sales) 21623019.78 21,199,039 23318942.9

Cost of Sales 19370268.75 18,447,875 21215056.25

Project Cost 18642370.95 17,754,639 20417834.85

Other Utilities 727898.85 693,237 797222.55

Gross Profit 2252751.03 2,751,163 2103886.65

Operating Expenses
Salaries 1081150.989 1,244,996 3179855.85
Office Miscellaneous Expenses 280000 282,954 290000
Amortization of Preliminary Expenses 0
Depreciation Expenses 20525 21,475 22005
Rent Expense 932118.5475 707,384 2663195.85

Subtotal 2313764 2,256,809 6155067

Operating Income 485050 494,354 498560
0
Financial Charges

Earnings Before Taxes 485050 494,354 498560

Tax 49435 49,435 49435
Net Profit 435615 444,919 449125

Monthly Profit After Tax 36301.25 37,077 37427.08333

13 | P a g e
 Projected Balance Sheet ( Recession, normal & boom)

Advance Rent 165000 150,000 190000

Total Current Assets 2557652 2,510,955 2796755

Fixed Assets
Construction & Renovation 124604 104,604 144604
Furniture & Fixture 99.699 88.669 105.669
Vehicle 0
Total Fixed Assets 199272 193,272 245272

Intangible Assets
Preliminary Expenses 0

Total Assets 323975.699 2,704,227 389981.669

Owners's Equity 323975.699 2,704,227 389981.669

Long Term Liability 0

Total equity & Liabilities 323975.699 2,704,227 389981.669

14 | P a g e
D. Conclusion

Integrated marketing communications play a significant role in marketing through minimizing

cost , increasing sales, creating brand awareness, and creating a positive brand image.
Therefore Marks and Spencer would greatly benefit through IMC through advertising and direct
marketing which will offer the business a competitive advantage against its competitors in the
local market. The combination of these strategies would be instrumentation in reaching a wider
target market.

Sales force effectiveness of a company depends on the efficiency of the sales people involved in
meeting the customers. This efficiency is not inherited by these people but are gained and
sharpened by the amount of effort put by these executives.

E. Recommendations:

Every direct selling company thinks of itself as extremely unique. You probably feel that way
about your company too. Your product is one of a kind. Your compensation plan has unique
perks. Your founder offers both special privileges and special challenges. Your culture is special
and unprecedented and unlike anything you have ever seen. And I bet that all true. I just bet its
not as true as you think it is.

My experience has shown me that direct selling companies have a lot more in common than
they think. Especially in the areas that you think are unique to you. Especially in the areas that
you feel are most challenging to your company right now.

F. Reference:

Akhter, S.H., 2009. Niches at the edges: price-value tradeoff, consumer behavior, and marketing
strategy. Journal of Product & Brand Management, 18(2), pp.136-142

15 | P a g e
Consumer Marketing Research Innovation: Assessing New Tools for Understanding and
Communicating with Consumers2013, New York.

Fill, C. 2013, Marketing Communications: brands, experiences and participation, 6th edition,
Pearson Education Ltd.8

16 | P a g e