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Marketing Plan for Jago Bicycle Store - Case Study Example

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Generally speaking, the paper 'Marketing Plan for Jago Bicycle Store" is an outstanding example of a marketing case study. A marketing plan is essential for the success of business organizations. This plan ensures that the organization sticks to the schedule and spends the marketing funds appropriately…
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Marketing plan for Jago Bicycle Store Name Institution Date Marketing plan for Jago Bicycle Store Introduction A marketing plan is essential for the success of business organizations. This plan ensures that the organization sticks to the schedule and spends the marketing funds appropriately. The plan encompasses understanding of the target market, the competitors in the market and how the target market can be reached through tactics. It also entails differentiation of the company from the competitors so as to make sales. According to Luther (2011), understanding what the market wants and what turns them on is essential for the business to make a cut in the market. McDonald (2007) described marketing as the process of providing goods as well as services whose customer demand is existent. With a marketing plan, the main focus of the process is on attaining a competitive advantage over competitors. Therefore, it is a plan where marketing resources are applied so as to attain the objective of marketing. This paper shall present a marketing plan for Jago Bicycle Store, a new establishment by Jane Gould. With her experience in bike riding, she has great skills in servicing of bicycles. Objectives of Jago Bicycle Store The mission of the company is to provide a total solution to the riders’ community locally and internationally. The objectives of the marketing plan are: To create awareness of the products and services offered by the store to 50,000 followers by the end of the first year. To create a large market share among the riders’ community by the end of the first year of establishment To create a platform for effective implementation of the bicycle selling and servicing store Environmental analysis Competitors The store faces stiff competition from their closets rival, Cell Bikes. This is a company that has been well established in the industry. The company is among the leading bike retailers in Australia. The company has a well established technological framework that enables it to market its products and to reach to its clients. In addition, the company has already established its name in the Business Review Weekly’s Fast 100, making it a great competitor whose name and reputation has to be fought in the market. The growth of the company has been great over the past three years, with its market share growing at a steady rate. The company also has partnerships with other companies such as SLI Systems that enable it to introduce new technologies in their online marketing and operations with clients. Phillips (2009) stated that the company’s success has been greatly boosted by its use of e-commerce; hence it has been able to reach to a large number of clients through this medium. Political/ Legal factors The politics of the country shall have little influence on the products. This influence shall be based on the influence of political decisions on taxes and any limitations on the transport sector. Another slender influence of legal factors on bicycles involves policies on the technology used to manufacture bicycles. However, this factor influences the manufacturers of bicycle products rather than sellers. Economic factors Various economic factors play a role in the business. To begin with, changes in prices of commodities such as petroleum influences the business by encouraging purchase of bikes for use as means of transport. In addition, the confidence of consumers depends on their ability to purchase products. When the economy registers a great performance, the financial performance of individuals is high ad this makes them able clients. The targeted group of clients is the group that is either seeking jobs, newly employed, runs their businesses or has been in employment for some time. This depends on the age and ability of the clients. This implies that the clients are capable of sustaining the business through their purchases. The average disposable income by families and individuals has increased over the past few years. This implies that more individuals are capable of purchasing luxurious products such as bikes. Use of bikes for health keeping has the advantage of enhancing fitness of the individual while providing luxury at the same time (Davies and Newsome, 2009). Therefore, the target clients have the capability to get the products. In addition, the number of people from the target group who own private cars has also increased in the country. This has a negative impact on the business because it limits use of bikes to sporting events and luxurious adventures. This limits the number of people who venture in the exercises (Krajsa and Senkyrova, 2008). Social factors Social factors play a big role in the bike industry. The growing number of tourists in the country has created a large demand for bikes for fun activities. These bikes can be purchased by companies that use the bikes for hiring services. The influence of students within the targeted age to their peers shall also promote purchase of the products. In addition, professionals who like to have alternative sources of transport shall also prefer use of bikes, and this shall enhance the viability of this target group. Further, the group between the ages of 20 to 30 is a young and energetic group that seeks to adventure. With the many challenges that bikes can be used for, this group shall be used in promoting the business. Additionally, the number of health concerns among professionals in Australia provides a great target of individuals who would like to keep fit (Risel, 2003). Technological Rapid developments in technology have diversified many business functions. Developments in ICT provide a great platform for marketing of the products. This can be done through the many internet services that are available. This technology can be used for promoting products, enhancing online purchase of products and for making online orders for the products. In addition, technological advancements in manufacture of bikes shall ensure quality products are provided to clients, as well as products that meet their specific needs. SWOT Analysis Strengths The experience in bike industry offered by, and by extension, the employees in the company Provision of branded products that suit the client’s needs for the bike The targeted clients who are a strong, youthful and adventurous male, making the process of marketing specific to the group. Liaising with intermediary marketers in promoting the product Providing bikes and servicing of bikes to clients Weaknesses The centralized management of the company since it is still new in the business. Seasonal nature of the business, requiring diversification of the products and services offered, along with expansion of customer base so as to continuously have clients at the store. Limited number of brands on offer, making the choices by clients to be limited Opportunities The untapped potential of the bike industry in terms of the challenges that can be offered through bikes, as well as the health benefits of bicycles. Threats Competing bike shops with already established customer bases, making it a challenge to draw the clients from them Marketing strategy Target market The target segment of Jago is bicycle riders in Australia. Australia’s diversity makes it to offer countless opportunities for riders across all abilities and disciplines. In addition, there are various riding challenges that are offered in Australia, including epic multi-day tours, alpine road rides, and mountain bike adventures among many other bicycle challenges. Since the company is situated in Belconnen, it will begin its target in the region. The targeted group is the urban male group aged between 20 to 30 years. College students who fall under this group shall also be targeted. This group forms a total of 7,900 people (ABS, 2006). This is the group of people who like to adventure and to venture in exciting activities. With the many activities that are offered by the riders’ community, this group of people is likely to be influenced into venturing into the activities. Furthermore, there is already a group that practices riding of bikes. Other than this group, there is also a group of male aged between 30 to 40 years who would like to exercise so as to improve their health status. This comprises professionals working in many fields. Professionals between this age group comprise 1,355 people. The group targeted is the group of people who are out to keep health fitness as well as adventure during their holidays. A multiple target market shall be used for these groups so as to broaden the scope of the market. This is because there is a group of people who shall be seasonal riders; those who ride during holidays, while there is a group of people who shall be consistent riders. Each of the segments has its own unique requirements and has to be targeted differently. The basis for this segmentation is based on demographic segmentation of lifestyle, age and gender. The age group between 20 to 30 years was segmented demographically because it is a group that is energetic and likes to venture into various sporting activities like bike riding. It also likes to venture into fun activities that involve bike riding challenges. Lifestyle segmentation is used to classify the group of people who like to take some time out and experience the fun activities that include bike riding challenges. Gender was also used in the segmentation because it is the male group that likes to venture in riding activities. However, this does not lock out the female gender from our customer base. The willing clients shall be served based on their needs and demands. Selection of the male gender is used in the plan so as to aid in planning for marketing resources to be used. Marketing mix strategy Product The product offered by Jago is bike services. The company shall provide a whole package that entails selling of bicycles to customers, selling of bicycle parts and servicing the bikes as requested by our esteemed clients. With the experience that the company has in bike riding, we understand the demands of our customers with respect to the types of bikes they need. Various bikes are used for various purposes. There are those that are used for riding competitions, those used for fun riding as well as those used for riding challenges such as mountain riding. The company understands these specific needs and will provide products that meet the specific needs of the customers. The target market shall get value for its purchased products because they shall get products that meet their requirements. Prior to purchase of the bicycle, the customer shall state the need for the bicycle which shall be followed by an analysis of the best bicycle that meets their needs. This shall enable the client to get a product that suits their specific demands. Branded bicycles shall be used by the company. The aim is not to get an edge of the company over our competitors but to make our customers view the company as the only providers of the bicycles sold (Perrey and Splillecke, 2013). The various bicycle brands that shall be offered include Colnago CLX, Felt Single Speed Road Bike, Fuji Track Pro, Jamis Xenith 2013, 2013 Norco Sight Killer B2 and Perkins Track Bike. These products provide a perfect position in the market because they are products that are proffered by riders and individuals who are out to adventure in the bike riding challenges. Customers prefer the bikes because they have been designed to meet the extreme road conditions while providing comfort to the riders. This position strategy enables the products to be accepted by clients since they find products that best meet their demands for a ride. The services offered in servicing the bikes are not limited to our bicycle products only. Customers who have bikes from other stores shall also have their bikes serviced in the store. In addition, bikes from our shops shall be serviced at discounted rates for a period of one year. Attractive packages shall follow after completion of one year of use, including trade-ins of old bicycles for new ones so as to make our clients ride new and well serviced bicycles. This package shall be offered based on the life cycle of the product. For bike in the late stages of their life cycle, the terms of trade-in shall be different from those in the early to mid stages of their life cycle. Whatever the stage, the intention of the company is to ensure that the customers gets services that are worthy of their experience with Jago Bicycle Stores. Price The objective of pricing is to enhance cash flow, to create a great position of the company in the market and to enhance the market share of the company’s products in the market. Various bikes shall have various prices. The prices shall depend on the types of product and the design specifications from the manufacturer. Our competitors such as Cell Bikes offer competitive prices for their products. Our products shall provide value for their prices because they are products that suit the clients’ requirements. In addition, pricing of other services such as bicycle servicing is done based on the requirements of the bicycle. Discounts and incentives shall be given to clients whose bicycles were acquired from the company. In addition, clients who refer other clients to the company shall get added incentives on the services they require, along with discounts when they purchase new bikes and bicycle accessories. By and large, the range of prices offered shall be low and it shall vary with the type of brand selected by the client. Clients shall have the opportunity to understand the benefits of the products they select before they purchase them. While this shall aid in justification of the price accorded to the products, it shall also help the client in understanding why they should spend on certain products and not other products. Sample bike prices Product Price ($) Colnago CLX 499 Felt Single Speed Road Bike 540 Fuji Track Pro 400 Jamis Xenith 2013 459 2013 Norco Sight Killer B2 600 Perkins Track Bike 499 Average price per item 499 Source: The Ultimate Guide, 2010. Promotion Various mixes can be used in promoting the products. In order to ensure that clients are aware of the products offered, advertisements are used to inform the public of the various products offered by the company. The adverts can be placed at strategic places such as parks where people go and relax in town. Bill boards are also used in towns so as to create awareness of the products. For individuals who would wish to venture into bicycle riding, the advert contains information on the advantages of riding as well as the various challenges that riding provides. An advert has to be placed at strategic locations where there is a large group of professionals so that they can view the offer when they leave work. In addition, college students are part of the target group. Therefore, adverts can be placed around the colleges that are in town. The adverts shall be used in creation of goodwill and building a favorable image so that individuals are aware of the products offered by the company. Press advertising and television are also means of advertising. The cost of advertising varies depending on the medium selected. For televisions, the cheapest cost during prime time is $7000. Public relations can be used in promoting the products. In this mix, the company organizes special events, like riding competitions, where the target group shall be encouraged to participate. Prizes shall be won by the winning teams and through this venture; the company shall make known the products it offers. Through this event, the company shall attract the groups that already participate in the bike riding as well as attract new groups by providing education on the importance of riding bicycles. The education shall be targeted towards the group of people who wish to use bikes for health fitness. The company can also provide brochures to other organizations so that information on the products offered by the company, as well as the importance of bike riding is known to professionals and to college students. To better reach out to college students, the company can organize and sponsor some sports competitions, with bike riding being the main sport. This shall create interest among students and the general public. The cost of public relations varies depending on the selected mode. Sales promotions are also used in product promotion. This method can be incorporated into public relations where competitions are set and individuals rewarded based on their achievements. In addition, products can be sold at commissions, and through this, individuals are attracted to the company’s products after trying them out. Another promotional mix is personal selling, where the company sends out individuals to the target market so as to try and sell the product to the market. This involves providing information on the products and then convincing individuals to purchase the product. The costs of personal selling ad sales promotions are minimal. This is because for promotional sales, clients visit the company and they are offered products at commissioned rates. Therefore, the cost incurred is the reduced profit from the products. For personal selling, the cost incurred is that of transporting sales persons to the market to carry out the sales. Online promotions can also be used. With the great breakthrough of internet, sharing of information has been made easy. Original content from the content can be published and made available to the public through the internet, unlike the traditional way of advertising where companies relied on their products being advertised by other people other than the companies themselves. Content marketing has made it easier to pass information to people. Valuable content can be created by the company and this information passed to the target group through online sources. This will enable the company to develop an understanding with its demographic in addition to developing a loyal following. Online marketing is relatively less costly since it involves publishing of content through online sources. It is also a fast way of reaching to people since they can get information through the click of a mouse. In addition to online marketing, social media has also been a great product of the internet discovery. Social media platforms such as Twitter, Facebook, LinkedIn and blogs provide an easy way in which many people can communicate at the same time. Use of social platforms has made it nearly effortless for companies to compose content and post it to potential audience. The audience in question comprises millions of people (Forbes, 2013). This method is faster and less costly as compared to large scale methods of promotion, publishing or customer relations. The platforms require use of writers, application developers, graphic designers, customer service representatives, community managers and strategists who shall all bring their efforts together and pass the relevant information to the millions of people (Funk, 2012). Guerilla marketing techniques can also be used to promote the products offered. The company can use surprise entry to the towns in bikes and through the surprise, pass information to targeted clients on the products. While this method may not be very suitable for the bike products offered, it can be used to pass some useful information to the target group (Creative Guerilla Marketing, 2014). Jago Bicycle Stores shall use online media and social media platforms for promoting its products. This is because the method is a fast way of reaching millions of people and it can be done conveniently. The company has the freedom of communicating as much details as it can to the target groups. In addition, the target group is the group that utilizes the internet and the social media services the most. Therefore, the method shall reach very many people in the fastest way possible. This shall be a promotion straight to the end consumer. Place (Distribution) Shipping of products from the store to the client can be done through an after sales package that is offered by the company. Through this package, products bought by clients can be shipped to their desired places. One advantage with bike products is that some clients may choose to ride their bikes upon purchase. This reduces the cost of distribution. In addition, the location of the company in the center of town makes it accessible to clients and makes distribution of the products easy to do. Clients can reach the company at any time. Surrounding the company are colleges that provide a great target of the group of students who are within the targeted age. For clients who require their products sent to them, the company shall deploy the use of marketing intermediaries so that they can reach out to the clients on behalf of the company. Distributors of sports products can form a great team of marketing intermediaries. Therefore, the company shall liaise with the intermediaries in ensuring the products get to their desired destinations. Warehousing of bicycle products is done by the store. The location of the warehouse at the heart of Belconnen town provides an easy link to the market. It is also a great way to promote the product since the product can be easily visible to individuals in town. The company shall encourage clients to try the performance levels of the bicycle upon purchase by riding them back home. This shall reduce the cost of transporting the products to the clients. However, clients who would wish their products delivered to them shall have their requests adhered to. A prior request with all the specifications is appropriate for the company to prepare for delivery of the products to the clients. Through use of multiple distribution channels, more clients can be reached. For this reason, wholesalers can be used in promoting delivery of products to clients. In addition, the company website shall also be used for direct online clients. To better enhance the quality of services for clients, bikes that have had breakdowns shall be carried to the repair store by the company. This shall be done upon customer request. Ultimately, distribution of bike products shall depend on visits made by clients who have been drawn to the company’s store. This shall depend on the promotional efforts that have been made to draw clients. The company shall control the quality of service delivered to clients who visit the company by ensuring they are attracted enough to come back and by ensuring they refer other clients to the company store (Cycling Australia, 2005). Budget Task Cost per annum ($) Investment in ICT 3,800 Rent 4,200 Transporting Vehicle 11,600 Salaries 4,900 Total 24,500 The competing firm, Cell Bikes, sells over 10, 000 bikes a year. Jago Bicycle Stores has a target group of 7,900 people in one town, Belconnen. The company intends to extend its operations in the whole of Australia. For this reason, it has a target of making about 6,000 sales a year, with the opportunity to expand its sales with the growing market share. The average price of one item is $499. The average profit made from one item is $67. This implies that the company shall break even after making sales of 50 bikes. Promotional activities shall be through social media and online sources. The cost of this activity shall be incurred through investment in ICT and use of the employees’ salaries. The online employees shall be required to create social media pages and they shall have targets of reaching at least 40 followers daily for the first six months. Implementation Implementation of the marketing plan shall be accomplished through action plans that shall involve reaching out to the market and making the products and services offered by Jago Bicycle Stores known to clients. The strategy used by the company in marketing is online marketing. Information on the products offered by the company shall be reached to clients through the internet. Social media shall be used in delivering information on the company. The company targets to have at least 50,000 followers on its social media pages. All three social media pages, including Facebook, LinkedIn and Twitter should contribute at least 50,000 followers by the end of the first year. This go to market strategy is simple and easy to handle since the role of the agents is to get the target market to know about the product. The small initiatives and targets shall enable the marketers have an easy strategy of getting the numbers in terms of product awareness by clients. Another strategy that shall be used by the company is the new product launch strategy. With the knowledge of competitors, the company shall work to get the target market know about the product and the special features that are offered by the store. The main competitors only sell the bikes. This has limited their operation to one product. For Jago Bicycle Stores, a wide variety of products is offered because in addition to selling the products, the company offers servicing of the bikes. The company also services bikes from clients of other stores. This strategy shall be used to convince the clients on their next purchases of bikes. The service offered to these clients shall be used as a tool of convincing them into purchasing bikes in their next purchase. To ensure that the marketers add value to the company, their action plans shall be used as guidelines. Proposed action plans Action Who Why By when Create social media pages IT department To be used for online marketing During the first week of the company’s establishment Generate followers in the social media pages Online marketing agents To make as many people as possible aware of the products offered by the company To follow the monthly targets Set up partnership with a wholesale retailer Marketing department To enhance the ability to distribute and to promote the products offered by the company After the first three months of establishment The first step shall be setting up of online media pages. This shall be used as a platform of interaction between the company and the target clients. The online marketing agents shall use the platforms to reach out to clients. The agents shall be required to reach out to at least 50,000 followers by the end of the first year. From this large follower base, the number of prospective clients is increased. The company intends to make sales of about 6,000 per annum. This implies that the customer base and the number of people who have information on the product have to be wide. To better enhance knowledge on the company’s products to the target clients, the company shall use the social media platform to advertise a promotion on free servicing of bikes. This shall attract a large number of people to the store. The promotion shall be followed by a discounted servicing of bikes. The control that shall be used in ensuring the marketing process is within target is the number of people recruited into the company’s social media pages. This shall give an indication of the number of people who know about the product. A key milestone shall be reaching 30,000 followers within the first six months of establishment. This is because the main competitor, Cell Bikes, has a total of 29,000 followers on Facebook. Evaluation Initial investment in the store shall encompass purchasing of infrastructure, obtaining a retail store, purchasing ICT equipment and recruitment of personnel. Purchasing of inventory shall also form part of the initial investment. From the investment, it shall be expected that the company gets a return on investment. The annual costs of operating the company shall be used in determining the stage at which the company gets its returns. The sales made by the company should pay back the investment. Since the company is new in the market, a key strategy would be to ensure customer satisfaction through quality services. The services offered shall be up to the expectation of eh clients. This can be achieved by listening to the needs of the clients and advising them on any further needs that the company feels shall be suitable for them. However, it is the client’s final choice on the service to be offered that shall determine the type of service offered. The number of people visiting the company shall be a guide in determining progress of the target clients reached. The company has an average expectation of 14 bicycles sold per day. When the number of sales does not meet this figure for a prolonged period, it shall be an indicator to change the strategy. This shall also be used as a key performance index for the sales and marketing team. Therefore, evaluation of their selling strategies and techniques shall be done. Revision of the plan shall entail incorporation of other methods of promotion that could include public relations, where events shall be used to publicize the company’s product. Conclusion and future recommendations Marketing of the bikes by the company shall prove a challenge to the team. This is caused by the stiff competition offered by the competing retailers. However, the strategy of the company positions it in a great place for competing with the competitors. Jago Bicycle Stores intends to offers servicing of bikes as an after sales service to clients. The services shall also be offered to clients who own bikes from other retailers. This strategy shall be used as a way of promoting the bicycles sold by the company. Through the services, clients shall be enticed to make future purchases with the company. In addition, the clients can be used to refer other clients to the company. The targeted group of clients is a strong group of clients that likes to adventure. It is also a group of people who are willing to learn. This shall be used as an opportunity to entice new bike riders. In addition, the other group of clients who would like to ride for health fitness forms a sensible back up target to the marketing plan. The riding industry has a huge opportunity for growth. This has been boosted by the growing cases of health concerns among people (Rissel, 2003). Therefore, the marketing plan should be approved for implementation so that the number of riders is increased in Australia. References ABS, (2006). 1996 Census Data: Belconnen. Retrieved on April 26, 2014 from: http://www.abs.gov.au/ausstats/abs@.nsf/DetailsPage/96bcp805101996?OpenDocument &tabname=Details&prodno=96bcp80510&issue=1996&num=&view=&#Basic Community Profile. Burrow, J. (2008). Marketing. 3rd Ed. USA: Cengage Learning. Cycling Australia, (2005). 2005 Annual Report. Australian Cycling Federation Inc., Australia.   Creative Guerilla Marketing, (2014). What is Guerilla Marketing? Retrieved on April 26, 2014 from: http://www.creativeguerrillamarketing.com/what-is-guerrilla-marketing/. Davies, C. and Newsome, D. (2009). Mountain Bike Activity in Natural Areas: Impacts, Assessment and Implications for Management. Western Australia: John Forest National Park. Funk, T. (2012). Advanced Social Media Marketing: How to Lead, Launch, and Manage a Successful Social Media Program. USA: Apress. Forbes, (2013). The Top 7 Online Marketing Trends That Will Dominate 2014. Retrieved on April 26, 2014 from: http://www.forbes.com/sites/jaysondemers/2013/09/17/the-top-7-online-marketing- trends-that-will-dominate-2014/. Goi, C. (2009). “A Review of Marketing Mix: 4Ps or More?” International Journal of Marketing Studies. Vol. 1, No. 1. Pp. 2-15. Krajsa M. and Senkyrova S. (2008). “CityRail: Current Issues & How to Get Back on Track.” The Australian Journal of Business and Informatics. Vol 4, No. 1. Luther, W. (2011). The Marketing Plan: How to Prepare and Implement it. 4th Ed. USA: AMACOM Division American Management Association. McDonald, M. (2007). Malcolm McDonald on Marketing Planning: Understanding Marketing Plans and Strategy. UK: Kogan Page Publishers. Perrey, J. and Splillecke, D. (2013). Retail Marketing and Branding: A Definitive Guide to Maximizing ROI. 2nd Ed. UK: John Wiley & Sons. Philips, C. (2009). Cell Bike’s- Riding to e-Commerce Success. Retrieved on April 27, 2014 from: http://www.powerretail.com.au/multichannel/cellbikes-riding-ecommerce-success/. Risel, C. (2003). “Ride Your Bike: Healthy Policy for Australians.” Health Promotion Journal of Australia: 14 (3). Pp. 151-153. The Ultimate Guide, (2010). Shopping for Bicycles and Shopping Gear Online. Bicycles Network, Australia. Retrieved on April 27, 2014 from:    http://www.bicycles.net.au. Read More
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