Marketing Channel Research Domains And Methodologies

Target Market and Marketing Mix

Marketing strategy is an important aspect of any business. It enables a product or service to identify with its target market in order to attract more customers thereby increasing the viability and profitability of a business. There are various marketing strategies that can be implemented depending on the nature of the business. A marketing strategy is dependent on a marketing plan that which serves as a blueprint of a how the business is going to resonate with the customers and encourage loyalty to the program (Palmatier, Stern & El-Ansary, 2016). In essence, marketing strategy taps into the features of the products or services by informing the consumers’ how a particular product will influence the needs and wants of the market.

There are two aspects that are important to this marketing strategy which play a significant role in determining the effectiveness of the marketing efforts. These two aspects include the target market and marketing mix which the company will use to sell the services proposed. The target market for this business venture are between the age of 16 and 49. These group represents youthful generation. By targeting this market segment, the marketing strategy should focus on factors that appeal to the target market. For instance, the youthful group will want to watch the movies in locations that appeal to the youths as opposed to the older generation (Krafft et al., 2015). This implies that the marketing strategy should meet the needs of the target market in order to attract customers to the business.

The second aspect is the marketing mix of the company. Marketing mix illustrates the categories that are involved in marketing a product or services. There are four main categories of marketing mix commonly known as the 4Ps. The 4Ps include product, price, place and promotion.

According to the 4Ps, product aspect represents the type of product or service that a company offers to the target market. In this case, the secret location will be provided on the event day. This implies that youthful generation love random events which contributes to the adventure as opposed to planning for a long time. If the location was provided prior to the event, the customers may evaluate options and decide to go for alternative which might impact the sales of the event (Hamill, 2016). As a result, it is significant to understand the life cycle of a product in order to determine the effective marketing strategy.

Marketing Channels

The second aspect is Price which plays a crucial role in the marketing strategy to be adopted. The Price to be charged must consider competitors price, perceived value and supply costs. The price of a particular film event will be determined based on the location of the event, features and other complementary services.

The third aspect relates to Place which in this case refers to the secret location that the films are going to be shown. The place will determine the target consumers through evaluating the most likely people to attend the event.

The promotion aspect which is the fourth mix relates to the method used to reach the customers as well as why they should pay a particular price for the event. In this case, if the secret location is on top of the tallest building in a city, then the promotion strategy will involve the advantages of being in such a building which could include watching the view of the city, the adventure of watching a favorite film in the tallest building and excitement of serene environment derived from the location.

For this purpose, the business venture should use marketing channels that appeal to the specific market. In this case, online marketing strategies such as social media channels and search engine optimization should be used in marketing the secret event. The idea of the secret event is significant in creating the anxiety that would make customers keen on knowing where a particular film is going to be held. Most online users are aged between 18 and 49 based on data provided by Statista an online statistics portal. This implies that marketing the business venture on social platform is likely to reach the targeted customers hence attracting more customers through engagement. More so, the social media channels will provide the company with required feedback in order to optimize the marketing strategy to increase conversion rate. Another significant strategy that can be used is search engine optimization. Through the feedback derived from consumers on social media channels (Beritelli & Schegg, 2016). The company can target specific terms that users use to find related film events and direct traffic to the business website where the customers will be provided with necessary information. The above marketing strategy will work effectively and increase customer base and sustainability of the business venture.

There is a huge market in the film industry as a result of the monotony in going to Cinemas to watch films. As a result, it provides investors with an opportunity to enhance experience to the customers. Common approaches that have been used earlier by Cinemas is surround system, seat reservation, digitization of Cinema and sound technologies. By tapping trend-setting events through improving customer experience through secret location themed venues will significantly improve user experience, attract more customers and increase the viability of this business venture (Finney, 2014).  Therefore, potential investors should focus on ways of enhancing user experience through understanding market demands in order to revolutionize how people experience movies. There is ready market for this business proposal and can be attested by companies such as Rooftop Film Club.

Enhancing the Movie-Watching Experience

The break-even analysis for this business venture will involve calculations of the differences between actual sales and break-even sales according to the revenue generated among other associated costs. Break-even analysis is significant in determining the degree of sales required to cover fixed costs. The purpose of a break-even analysis is to assist management as well as provide basis for decision making to various stakeholders such as investors. It considers fixed costs with respects to profits that will be earned from the sales of tickets for various events that the business will showcase. For instance, the business will break even assuming the variable costs will not be higher than the revenue generated. It therefore implies that if the total fixed cost will be 100,000 dollars, any additional sales after the 100,000 will mean that the business has already broken even (Foxall, 2014).  

The break-even analysis is dependent on the contributing margin of showcasing the films to the consumers. This implies that if the tickets from the events will be 50 dollars and fixed cost plus variable cost will be 30 dollars, the contributing margin for the product will be 20 dollars. The contribution margin reflects the profits which is required in order to cover fixed cost. There are two approaches that can be used in calculating the break-even for the business venture. The first method involves dividing the total fixed cost by the contribution margin. It implies that if the total fixed cost of the 900 dollars and the contribution margin is 20, then the break-even point is 45 tickets for the event. Therefore, by selling the 45 tickets, the business will have made a return of zero. On the other hand, break-even can be calculated by dividing the total fixed costs by the contributing margin ratio (Rombolotti Axelrod, 2017). The contribution margin ratio will be calculated by dividing the 20 dollars which is the contribution margin by the sales per unit which is 50 dollars. Therefore, the break-even point can be calculated by the total number of tickets sold in order to cover total fixed cost.

In our case as indicated by the income statement and balance sheet below, the break-even point for the business would be as below assuming that the company would be targeting a minimum of 1,000 clients who would pay $30 each to watch a movie once in a month.

Cash flow represents the amount of money that moves in and out of a business. A positive cash flow for the business will be significant in creating value for the shareholder and sustainability initiative. The fundamental goal of financial reporting is assessing the amount monitoring the uncertainty of cash flows. The business liquidity position as well as the overall performance is significant in comprehending operating, investing and financial cash flow. The positive cash flow for this business will determine whether the business liquid assets will increase in order to cover for liabilities, growth, provide dividends and provide a cushion for future financial challenges (Rombolotti Axelrod, 2017).

It is often challenging for most businesses to manage their operating activities efficiently for purposes of having liquidity. This is normally the case especially when the business will have most of its money tied to inventory, accounts receivable or the company will have huge expenditure. The cash flow statement will be significant to the shareholders in determining whether the company has enough liquidity to cover short-term liabilities. Free cash flow will be used by the business to determine the true state of profitability. Free cash flow is significant in providing financial performance when compared to net income. Free cash flow for the business can be determined by deducting capital expenditure and dividends from operating cash flow (Noreen, Brewer & Garrison, 2014). The gross free cash flow for the business will be measured by unlevered free cash flow before interest payment.

From the above calculations, if the business achieves the intended sales target, the business would have a positive cash flow from the first month. This can be attributed to the bank loan and capital inputted into the business. The positive cash flow can also be supported by the nature of the business which is cash rather than credit based.

References

Beritelli, P., & Schegg, R. (2016). Maximizing online bookings through a multi-channel-strategy: Effects of interdependencies and networks. International Journal of Contemporary Hospitality Management, 28(1), 68-88.

Finney, A. (2014). The international film business: A market guide beyond Hollywood. Routledge.

Foxall, G. (2014). Strategic Marketing Management (RLE Marketing). Routledge.

Hamill, J. (2016). 17 The end of marketing as usual. The Marketing Book, 415.

Krafft, M., Goetz, O., Mantrala, M., Sotgiu, F., & Tillmanns, S. (2015). The evolution of marketing channel research domains and methodologies: an integrative review and future directions. Journal of Retailing, 91(4), 569-585.

Noreen, E. W., Brewer, P. C., & Garrison, R. H. (2014). Managerial accounting for managers. New York: McGraw-Hill/Irwin.

Palmatier, R., Stern, L., & El-Ansary, A. (2016). Marketing Channel Strategy: Instructor’s Review Copy. Routledge.

Rombolotti Axelrod, A. (2017). Financial Ratios: An Integrated Framework for Making Choices.

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