Identifying Market Opportunities For BBQ Fun

Market Opportunity Analysis

Discuss about the Marketing Destinations And Venues For Conferences.

The main aim of the assignment is to identify the market opportunities within BBQ fun and assess it at the same time. BBQ fun is one of the lifestyle retailer that caters to the growing needs for furnishing new as well as renovated dwellings in great Brisbane area. In this company, they offer outdoor furniture and by this the company is known for its best in class outdoor lifestyle retailing. The company desire to reinvent the way individuals shop for outdoor lifestyle products. In that case, BBQ fun aims at buildings its reputation by offering fullest assortment of products to the extent possible in wide range of selected fields in terms of local and imported goods with products and will be managing with the long-term payment plans. At BBQ fun, the after sales service is really good as they find traction with a market dominated with low quality items and for this, it is needed to identify the opportunities, analyse the information on the selected market of BBQ fun and related business needs. By this, it can be seen that BBQ fun aims at providing their customers wide range of merchandize from where they can select from the given field. Therefore, BBQ fun believes in fulfilling the various benefits that are significant to their customers. Some of the benefits are listed below:

Selection- BBQ fun aims at providing wide choice of options for their customers

Accessibility- BBQ fun believes in providing easy access to the store with minimum waiting time for their customers

Customer service- BBQ fun believes in helping their customers and provide after-sales services and guarantees at the same time

Competitive pricing- At BBQ fun, all the products or services will be competitively priced relative to high-end outdoor lifestyle lines.

In order to identify opportunities, it is necessary to analyse the information about the market of the organization and its business needs, such as:

In the year 2008, it can be noted that the National Outdoor lifestyle market was able to reach to a level that crossed $300 million dollars. The sale of outdoor lifestyle estimates growth by at least 6% for the next few years. It can be seen that the growth was obtained because of various factors. The greater disposable household income from the two income families is one of the factor where it can be noted that greater availability of affordable as well as interesting quality imports will be having high value of the Australian dollars (Stimpson and Smith 2015). This was done by marketing through popular TV shows such as Homes Beautiful as well as Better Outdoor-Lifestyles.

Customer Preferences and Product Quality

In case of Yard, it actually has limited section but require significant depth of analysis. There is no significant marketing or promotion present. High pricing price can be noted, but the quality of the products is quite good as compared to others. BBQ fun operates both in Sydney and Melbourne. They offer wide range of outdoor-lifestyle products such as trinkets as well as furnishings. There are lot of cheap imports but the company focus on established markets. They even are strong in the replacements segment.

The stores in the area are operated by individual owner operators and the products offers varies based on the preferences of the owner. They have very little imports and mostly dominated by retailing Australia manufactured goods. In addition, the average item sale price is approx. $250 collectively and enjoys a market share of 48% as well as it had been growing with 8% each year.

The Mission Statement of BBQ fun is to render customer with the most extensive assortment of quality in the product such as outdoor lifestyle one and make an effort to offer it in the market. The after sales service of the company is taken into consideration by the company as they aims at managing the long-term repayment plans that make unique imported as well as high quality outdoor lifestyle products (Rogers and Davidson 2015). The products are made available to the customer who wishes to purchase product that can bring pride to their house with the products offered by BBQ fun. The company aims at providing services that exceed expectations of the customers in the near future.

It can be seen that all types of media are bounded by ethical as well as legal values, but at the same time, individual make use of those media that fails to meet either of these requirements such as legal and ethical factors. Some of the issues that are present in the ethics of entertainment media are explained below with proper justification:

• One of the issue noted in entertainment media is depiction of violence and use of strong language.
• Product placement
• Stereotypes
• Taste and taboos

It can be seen that BBQ fun enjoys a market share of 52% as well as it is even growing at a rapid pace at about 7% each year. High level of growth can be noted in new dwellings that has potential increase in customer by 10% in Brisbane area. In addition, renovation growth in potential growth increases by 7% in Brisbane area in the year 2010 and it amounts to 35000.

After-sales Services and Growth Potential

According to recent market trends, the outdoor lifestyle stores aims at attracting sophisticated as well as informed customer. These customer are well informed about the current market trends of these type of products and ask for good quality products so that it can match up with their personality and stardom (Chow and Chan 2015). The customer look for the following qualitative characteristics in the product offered by BBQ fun and these are mentioned below with proper justification:

• Product quality
• Uniqueness
• Selection

In this report, proper analysis had been done on understanding the industry of outdoor furniture for 10 European countries. After that, evaluation was done in order to gather information about the performance of the sector, understanding the product trends as well as destination types and distribution channels. It is essential to understand the competitive systems as well as its major competitors in the industry as a whole. In this assignment, proper emphasis had been given to collect data on production, consumption of outdoor furniture by country, exports as well as imports at the same time. On analysis, it can be seen that each country imports and exports had been further broken down by country as well as geographical area of origin or destination. In addition to that, an overview of product trends had been illustrated on the basis of materials and colours as well as understanding the distribution system as provided by each specific country by breaking down the sales by the distribution channel as by selected countries. For each country, list had been given about the outdoor furniture distributors (Grace and Cohen 2015).

Profitability	Average price	Gross Profit
BBQ	$600	45%
Outdoor Furniture	$900	50%
BBQ Accessories	$50	60%
Total	$450	50%

Sales figures

On analysis, it can be seen that the first year of plan need to be used for getting the café established and then run in the second year. In this way, it can be noted that there is gradually increase in the sales and the business will earn profits. The profitability will be reached by the initial years and the anticipated gross profit arrives at 50%.

Sales Forecast	2009	2010	2011
Total Sales	11,000,000	12,000,000	15,000,000
Gross Profit	5,500,000	6,000,000	75,00,000

It can be seen that outdoor furniture is gaining popularity as the world economy is on the upswing as well as growing pool of having cosmopolitan customers from the developed countries. From the year 2004 to 2008, it can be noted that the compound annual growth of the global market for outdoor furniture was 4.52%. After that, during 2009, the global market for outdoor furniture was US $23.34 billion. Prediction was done and estimation was done that it will increase by US $28.17 by the year 2015.

Marketing Strategies and Recommendations

On analysis, it can be seen that there is large disparity noted between market analysts estimates used for understanding the proportion of online transaction especially by the Australian consumer who believes in conducting their business on overseas websites. In addition to that, the estimates ranges from 20% to 50%. It is essential to note these difference as it shows the extent to which domestic retailer’s shows interest in embracing online selling. It is even important to look at the probable ramifications especially to view the retail output as well as employment at the same time (Velliaris et al. 2015).

One of the objective of BBQ fun is to increase the markets share and position their company as the premier outdoor lifestyle store in Brisbane areas that commands over majority of market share for a time span of 5 years. In addition to that, the marketing strategy adopted by BBQ Fun will be initiate customer awareness among the customers and provide them with best services while they visit the store. This will overall help in building customer loyalty. If a customer is happy with the service, then they will spread good word of communication with families, relative and friends (Wirtz et al. 2014). The company even aim at increasing sale from $15 million every year to $20 million each year within a time span of 3 years. The company aim at increasing the number of loyalty customer list from 10,000 to 16,000. The company even desire in establishing brand recognition in Brisbane area so that the people can recognize the brand while conducting random survey method that will be taken in period of 18 months’ time.

• New Dwellings
• Renovations
• Unique and exotic over price concerns
• Replacement-basic functional products that will be replaced if the item is found broken
• Single shopper
• Affordable prices products

It is important to consider the fact that new product will be made available on regular basis that aligns with the changes made and in accordance with the customer tastes and preferences as it is targeted for a period of 12 months. The company adopts a plan that will be used for testing the product and make an effort to engage several market research firms for that case. In order to get the feedback from these firms, it will be necessary to look for the changes so that product can be tested as well as making of proven products can be done onto the store assortment list.

On analysis, it can be seen that the one of the corporate strategy will be to increase the volume of sales from the new products as well as new markets at the same time. As far as diversification is concerned, it means to expand into new segment in an industry where business is already present or have presence.

Using suitable methodology like gap analysis, market or marketing analysis or competitor analysis, identify and decide on two marketing opportunities to focus on and investigate furtherConsidering types of market and aspects of the marketing mix like distribution, products and types of promotional activities

Conclusion

Nowadays, Business Corporation are interested in developing online channels for complementing offline shop-front services as more customers prefer to shop online from both stores, be it domestic or international. People who are opting for online shopping are not only interested in cheaper price products but also convenience. Convenience plays major role that make the consumer opt for online retail services.

It can be seen that main purpose of Business to Business Marketing communication will be to support sales effort by the companies in order to bring improvement in the profitability within the company. This type of marketing communication tactics takes into consideration factors such as advertising, direct mail marketing, public relations as well as sales collateral and interactive services like website design and SEO (Search Engine Optimization). Therefore, B2B Marketing Association is one of the trade organization that serves B2B marketing professionals in the most appropriate way (Sharafizad and Standing 2017).

As far as direct marketing is concerned, it put proper emphasis upon promoting a particular product or services as well as call upon their customers where they can act in order to receive information by registering the interest. This can be done visiting the company website as well as making booking or a purchase. In addition to that, direct marketing communication is one of the medium that provide business immense opportunity to promote the products as well as services directly to the customers. Therefore, a good direct marketing campaign will be conducted to enhance the relationships with new customers as well as testing the appeal of products or services. The marketing campaign conducted will tell the consumer about the marketing approaches in order to reach the target market and increasing the sale in the near future.

With the emergence of internet, there are several things that have changed over past few years. It happens that individuals searches for information about any new suppliers with the help of internet and get better understanding of the business, wants of customers as well as how to make use of marketing in order to boost the level of profits or revenues before struggling with cash flow problems.

Business enterprise tries to appeal customer market and take an effort to provide products for them. It is all about marketing the goods and making it available to the target customer segment base.

As far as public sector marketing is concerned, it help in examining the developing the marketing in the public service as well as represent a short discussion about the growth of marketing especially in public service organization for a time span of 20 years. It is necessary to conduct critical analysis of marketing as and how it is applied to the public service as it is adapted to a specific character of the public realm. Therefore, the management of the public sector can be treated as political management who needs to be effective and informed about the marketing or industry at the same time.

As far as service marketing is concerned, this can be further divided into two main areas of goods marketing and these are FMCGs and services marketing. In case of service marketing, it means taking into account both business to consumer as well as business to business services such as telecommunication services, car rental services, health care services and professional services. There are several approaches that are needed to be taken into consideration and give proper expressions of a marketing idea as it is developed with the hope that it will be effective in communicating the ideas to the diverse population who are willing to receive it.

As far as telemarketing is concerned, it is one of the method of direct marketing where a salesperson aims at soliciting prospective customers in order to make purchase of goods or services. This can be done either through phone or through a face to face conversation or in that case conducting a web conferencing meeting conducted during the call. This marketing strategies can be implemented as it works nice for the business.

There are two marketing opportunities that are taken into consideration in this part and these are market share and profitability. Both of these marketing opportunities are explained below with proper justification:

BBQ fun even aim at increasing sale from $15 million every year to $20 million each year within a time span of 3 years. The company aim at increasing the number of loyalty customer list from 10,000 to 16,000. The company even desire in establishing brand recognition in Brisbane area so that the people can recognize the brand while conducting random survey method that will be taken in period of 18 months’ time.

Profitability	Average price	Gross Profit
BBQ	$600	45%
Outdoor Furniture	$900	50%
BBQ Accessories	$50	60%
Total	$450	50%

On analysis, it can be seen that the first year of plan need to be used for getting the café established and then run in the second year. In this way, it can be noted that there is gradually increase in the sales and the business will earn profits. The profitability will be reached by the initial years and the anticipated gross profit arrives at 50%.

Sales Forecast	2009	2010	2011
Total Sales	11,000,000	12,000,000	15,000,000
Gross Profit	5,500,000	6,000,000	75,00,000

It can be seen that the marketing expenses need to be budgeted so that it can be ramped up during the first year of operation.

Expense	2009	2010	2011
Direct Mail	40,000	50,000	60,000
Magazine	1,10,000	1,00,000	80,000
Radio Promotions	30,000	50,000	70,000
Total	1,80,000	2,00,000	2,10,000

At BBQ fun, the ongoing sales forecast will be to make use of the service of cannon consultants who are ready to provide advice on all the given aspects of the marketing function so that the company can work well with cannons. After working, the company can be given access to the marketing cost data so that they can engage in examining the data on periodical basis as well as validating marketing costs that aligns with the industry benchmarks.

Profitability	Average price	Gross Profit
BBQ	$600	45%
Outdoor Furniture	$900	50%
BBQ Accessories	$50	60%
Total	$450	50%

There are two marketing opportunities as well as real innovative concepts that can be seen while explaining about exports as it allows BBQ fun in reaching the far new markets in and across the world. Franchisees help BBQ fun in making the brands as well as products as their own in order to get identity beforehand.

Exports

At BBQ fun, they will be exporting the products to other regions of the world such as Europe and Asia. The products offered in these countries will be becoming popular especially in Asian countries. The company is going to reach these markets through E-commerce as well telemarketing channels. The strategy used will help the company in increasing export and also increase in sale as well as diversity of products.

At BBQ fun, they will be working alongside with the franchises so that they can create a partnership that will work well in the competitive marketplace. In addition to that, as a franchisee of BBQ fun, the customers will be provided with high quality services as well as best practice systems at the same time. It is all about managing the business and undertake own decisions. The support team of BBQ fun are experienced ones and are always available in assisting in order to operate their business as a whole.

The blank spaces in the BBQ fun sales data worksheet have been filled in accordance with the information provided in the business case study and the information provided under the BBQ fun sales data work sheet under appendix 1.

Market share (Projected*):

Assume market share constant across all products.

Financial year (FY)	Local independents	The Yard	BBQ’s R us	Outdoorz	BBQ fun
FY2013/14	30%	0%	25%	23%	22%
FY 2014/15	30%	0%	27%	23%	20%
FY2015 /16	30%	0%	22%	25%	23%
*FY2016 /17	30%	0%	22%	24%	24%

Sales performance:

Financial year (FY)	Total sales
FY2016/17	8,500,000
FY2013/14	10,000,000
FY 2014/15	9,000,000
FY2015 /16	9,500,000

Estimated total market potential for 2016/17 (SE Qld)

Calculation of Forecasted total Market potential
Particulars	Amount
Sales for FY 2016/17	$8,500,000.00
Market Share of BBQ Fun	24%
Forecasted total market potential	$35,416,666.67

 Total market potential (with potential online sales included)

Financial year (FY)	BBQs	Outdoor Furniture	BBQ Accessories	Total
FY2016/17	25,000	13,000	42,000	80,000
FY2013/14	35,000	15,000	58,000	108,000
FY 2014/15	40,000	17,000	68,000	125,000
FY2015 /16	45,000	19,000	75,000	139,000
*FY2016 /17

Use to calculate potential sales with e-commerce included in FY2016/17.

BBQs: 45,000/139,000*35,416,666.67=$11,465,827

Outdoor Furniture: 19,000/139,00*35,416,666.67=$4,841,127

BBQ Accessories: 75,000/139,000*35,416,666.67=$19,109,712

Own Branded products

Assume market share of 24% for BBQ fun to calculate projected number of units to sell for each item in 2016/17.

	BBQs	Outdoor Furniture	BBQ Accessories
1.                  Number of buyers	30,000	13,000	56,000
1.                  Quantity	1	1	3
1.                  Average price	$600	$850	$50

 Bargain market

Assume market share of 25% for BBQ fun.

	BBQs	Outdoor Furniture	BBQ Accessories
1.                  Number of buyers	40,000	20,000	70,000
1.                  Quantity	1	1	3
1.                  Average price	$500	$650	$40

With E-commerce

Assume market share of 24% for BBQ fun.

	BBQs	Outdoor Furniture	BBQ Accessories
1.                  Number of buyers
1.                  Quantity	1	1	3
1.                  Average price	$620	$880	$55

The calculation of the e commerce market opportunity is provided below:

BBQ e-commerce buyers: 11,465,827/620=18,494

Outdoor Furniture ecommerce buyers: 4,841,127/880=5,502

BBQ Accessories e-commerce buyers: 19,109,712/55/3=115,816

Opportunities and profit figures for calculation

The number of buyers from table of market potential is used to calculate the volume of unit sales for the e-commerce and calculating the bargain market opportunities:

E-commerce: BBQs: 40,000*25%

Furniture: 20,000*25%

Accessories:70,000*25%*3

Bargain Market: BBQs: 18,494*24%

Furniture: 5,502*24%

Accessories: 115,816*24%*3

The calculation of estimated total revenue and gross profit:

Own brand: 7200*600+3120*850+10320*50= 7488000

E-commerce: 10000*620+5000*880+52500*55= 13487500

Bargain market: 4439*500+1321*650+83388*40= 6413670

The calculation of net profit for opportunity:

Own brand: $7,084,800-2,000,000

E-commerce: $6,150,000-600,000

Bargain market: $2,012,300

	Own brand	E-commerce	Bargain market
1.                  Sales volume (units)	BBQ: 7200	BBQ: 10000	BBQ: 4439
Furniture: 3120	Furniture: 5000	Furniture: 1321
Accessories: 40,320	Accessories: 52500	Accessories: 83388
1.                  Price	BBQ: $600	BBQ: $620	BBQ: $500
Furniture: $850	Furniture: $880	Furniture: $650
Accessories: $50	Accessories: $55	Accessories: $40
1.                  Unit contribution margin	BBQ: $500	BBQ: $300	BBQ: $200
Furniture: $600	Furniture: $420	Furniture: $220
Accessories: $40	Accessories: $20	Accessories: $10
1.                  Total revenue	$7,488,000	$13,487,500	$6,413,670
1.                  Total gross profit 2016/17	$7,084,800	$6,150,000	$2,012,300
1.                  Additional fixed costs	Add lease: $1,000,000	Add training: $50,000	See approved budget (no change in fixed costs)
Add labour: $500,000	Add online store development:
Add plant (depreciation): $500,000	$100,000
	Add new plant and equipment (depreciation): $150,000
	Add labour: $250,000
	Add reconfiguring of warehouse/office: $50,000
1.                  Total net profit 2016/17	$5,084,800	$5,550,000	$2,012,300

The gross profit figure and the amount of total fixed costs are used to calculate the profitability index from each opportunity:

	Own brand	E-commerce	Bargain market
Cash flow 2016/17	$7,084,800	$6,150,000	$2,012,300
Opportunity cost	8%	8%	8%
Present value of future cash flows
Present value of initial investment	2000000	600000	4884714
Profitability index	3.54	10.25	0.41

After consulting with the management team at BBQ fun, you determine:

• High risk of customer service quality problems for online customers
• High risk of staff misunderstanding changes and considering online sales as threat to jobs
• Eight online sales and customer service people will be needed to manage increased online customers
• Since stores are overstaffed, need for online people could be met from drawing from existing employees at the two stores
• Currently no staff have online customer service skills
• Management would like to develop people through retraining rather than hire new staff to handle online sales
• Six delivery trucks needed to enable distribution
• Website will take 50 days to develop
• Three forklifts needed
• Four additional warehouse workers needed
• Six additional drivers needed
• Office space may need to be reconfigured.

Resources	Costs	Amount
Additional staff	$25,000-year average	Additional staff costs:
200000
Plant and equipment depreciation	•      Delivery trucks	Plant and equipment costs:	120000
($20,000 each)
•      Forklifts ($10,000 each)	30000
Promotional costs	$500,000	$500,000
Website developers	Contractors ($2,000/day)	Website development cost:	$100,000.00
Staff training	$ Online customer service training $3,000 per staff member	Staff training cost:	$24,000.00
Management change leadership training for store managers and team leaders	$3,000 each	Management and leadership training cost:	$6,000.00
Warehouse and office reconfiguration	Reconfiguration cost:	$1,500.00
Total		981500

The first option that is available with the company is to engage in the manufacture and the retailing of its own products under its own brands. The manufacturing of the products will have to be conducted in India as the company at present doesn’t possess any manufacturing capability and the manufacturing costs of the same within Australia is way more expensive.

The second option that is available with the company is to sell the products online with the help of e-commerce websites. The stock of the company will be stored in the existing stores of the company and no additional expenditure will have to be incurred by the company in this respect. The delivery costs will be recovered from the customers (Mack et al. 2015).

The third option that tis available with the company are to provide the products to the customers of the company at a very cheap price. This would ensure that the entity is able to garner a huge chunk of the market with its increased appeal to the consumers.

As per the data sheet pertaining to the year 2016/2017 the sales revenue that is recorded by the entity and the net profit that is earned by the company will increase significantly over that period. The market share that is enjoyed by BBQ fun and the for the year 2016/2017 has increased significantly over the years. This increase was accompanied by the increase in the number of buyers and the profitability of the company.

The risks that is faced by BBQ Fun in respect of the business that is to be carried out by it comprises of two factors they are the failure on the part of the management to deliver the requisite quality and the possibility that the competitors of the company can replicate the product that is offered by the company.

For the purpose of mitigating these risks the company must ensure that the quality that is served by it in terms of its products to the customers is always maintained. The reason being that the application of all the three opportunities is dependent on the quality of the product that is being offered by the company to its customers. The company will also have to ensure that the methods that are being implemented by it in respect of the marketing strategy of the company, is innovative and fruitful in nature. the reason for this being that the competitors of the company for sure going to replicate the marketing strategies that are being implemented by the entity in the future. Hence the company should ensure that it is delivering some custom products too to their customers.

The return on investment that is going to be earned by the company from the e-commerce websites is going to be very slow. The reason being that the advertisements that are being conducted take time to have impact on the sales of the product and the customers to know about the product of the company. It is also very financially demanding to use Google for the purpose of advertisement. But once the effect of the advertisement are realise the growth that will be experienced by the company will be immense. 

The method of reducing the costs of the products to conduct the business will increase the sales that are made by the entity but the margin earned by the entity will be reduced significantly. But, it is a good way for the company for the purpose of ensuring that the cash flow positon of the company remains healthy.

If the company engages in the production of its own brands then it will result in the improvement of the reputation enjoyed by the company.

First rank is given to the manufacturing of the products under its own brand name, and then the second rank is allocated to the sale by cutting down the selling price and lastly selling via e-commerce platforms.

Estimation of the resource required by the entity and the costs that are going to be incurred by the entity:

The human resource and the technological requirements of the entity will have to be recognised for the implementation of the project. Equipment’s will aloe is required for the purpose of conducting the manufacturing activities of the entity.

Conclusion and summary:

The various business opportunities and the various methods that can be adopted by the company for achieving them have been listed out. After that proper ranking has been allocated to the options that are available with the company and then an assessment is being made for the purpose of ascertaining the costs that are going to be incurred by the entity and the equipment that are going to be purchased by the company.

Reference

Chow, B.M. and Chan, F.K., 2015, July. Student Learning Experience in the Blended Learning Project of a Marketing Module at HKUSPACE Community College. In Educational Technology (ISET), 2015 International Symposium on (pp. 63-67). IEEE.

Grace, D. and Cohen, S., 2015. Business ethics.

Mack, O., Khare, A., Krämer, A. and Burgartz, T. eds., 2015. Managing in a VUCA World. Springer.

Rogers, T. and Davidson, R., 2015. Marketing destinations and venues for conferences, conventions and business events(Vol. 14). Routledge.

Sharafizad, J. and Standing, C., 2017. Determinants of relationship marketing by women small business owners. Journal of Small Business & Entrepreneurship, 29(4), pp.271-291.

Stimpson, P. and Smith, A., 2015. Business Management for the IB Diploma Coursebook. Cambridge University Press.

Velliaris, D.M., Willis, C.R. and Pierce, J.M., 2015. International student perceptions of ethics in a business pathway course. New voices in higher education research and scholarship, pp.234-253.

Wirtz, J., Tuzovic, S. and G. Kuppelwieser, V., 2014. The role of marketing in today’s enterprises. Journal of Service Management, 25(2), pp.171-194.