Electronic Money Card Marketing and Sales - Essay Example

? Creating a Business Plan: Electronic Money Card [Supervisor’s Contents Contents 2 Executive Summary 3 Personnel 3 Product/Service 4 Marketing and Sales 6 Market Research 8 Operations 10 Financials: 11 Exit Strategy 12 Reflection 13 Reference list 14 Creating a business plan: Electronic money card Executive Summary The company E-Solutions will be a limited liability company (LLC) and it plans to start its operation within the United Kingdom. E-Solutions would be launching an electronic money system which would make the travelling and the shopping easier for the general public. LLC protects owners from personal liability and it combines features of both the sole proprietorship and partnership because the company does not have to pay double taxation but instead is considered as a single entity and is taxed only once (Shenkman, Weiner and Taback, 1999). It is considered as the collection of individuals, but if any problems or crises occur inside the organization, then the governing body is held responsible. This type of business structure helps create the credibility of the company in the eyes of its suppliers and customers because they seek the company to be committed to its business. The formation of LLC can be expensive as it requires many fees. The transferability is another issue with the LLC because it requires the consent of all the owners. But the owners of E-Solutions Company have decided to form the company as a LLC which will be offering the electronic money card product. The electronic card could be used as an alternate to physical cash and will enable both online and offline transactions. The purpose of this card is to provide convenience to the customers while focusing on the simplicity of its use, and it will be offered in different currencies. The aim of the company is to become the leading provider of electronic money cards to customers. Personnel The organizational structure will include a chief executive officer (CEO), who will be given the responsibility to manage the company and make key decisions. There will be five key positions under the CEO, which will include marketing manager, operations manager, customer relationship manager, financial manager, and human resource manager. The company will start off with 15 employees at first, which will be allocated to the different retail outlets of the company. The CEO of the company is elected and nominated by the board of directors. Product/Service Electronic money card is an alternative to cash and banknotes, and converting it into a card system will be useful for the small transactions. It is a replacement of physical money and it could be used both online and offline (Hespeler, 2008). The card contains a particular amount of money which is stored in the bank, but it is utilized through the electronic card system. The idea of this product is to provide customers with an ease of travelling or purchasing desired goods. The customers will just have to place the card into a machine that will deduct a certain amount needed for paying the bills. The electronic card will be issued from the bank and it can also be issued from the company’s retail outlets. The company has a unique selling point – it focuses on selling the electronic card with an objective to make lives of the customers simple. The electronic card will be issued at the retail outlets with a certain amount of money on it. There will be different varieties of cards offered that will contain different amount of money. The product offering of the company will be focused on providing convenience to its customers as this card will be possible to use for the travel buses, hotels, off license shops, and the supermarkets. The process of using the card during the transaction of the money is that the customers can put their electronic card in a card reader machine which will deduct a certain amount from the card and will show the remaining amount based on the value of the transaction and the balance in the card. The simplicity of its usage will allow customers to be attracted to this product, which shall create a positive word of mouth and eventually will increase the sales. The electronic card will be easier to carry and handle; in the case of theft, the company will block the use of the card and will offer a new card to its customers. The card will be available in multiple currencies and it could be used in any country if there are card reading machines installed through which the card is detected. This will allow customers to use the card wherever they desire, which will also create a huge customer base throughout the world (Jones and Hill, 2010). The company will be offering three different varieties of cards, which will define the segmentation of the market and profiling of customers. The characteristics of the cards have been described below. Platinum electronic card This card will target businessmen and customers who have access to higher standards of living. The card will have an amount of ?5,000 to ?10,000 installed and customers could additionally pay onto the card in order to bring it in use as per their requirements. These cards will be limited in number as the demand for this card will relatively be lower than that for other economic cards. Gold electronic card This card will target customers who fall under the category of upper middle income people and have the capability to spend a large sum of their money on shopping and groceries. The amount installed in the card will range from ?2,500 to ?5,000. According to a survey that was conducted, robust proportions of respondents were in favor of this card and were reasonably happy with the amount of money installed on their cards. The company has decided to make a higher production of this type of card because it has a greater consumers demand. Silver electronic card This card will target the economic consumers who fall under the category of low income level or the middle income level group. This card will contain an amount of ?1,000 to ?2,500. According to the survey, it was the second option which was very much liked by the customers. Therefore, the production of these types of cards will be increased in order to meet consumer demands. Marketing and Sales In order to enter in the electronic money market, the company will charge a lower price for its electronic money card from its potential customers. The potential customers of the company are those banks to which the cards will be provided at a discount to gain more customers initially. Websites The official website of the company will be constructed that will attract both individual and corporate customers. The website will reflect the nature of the product and will be user-friendly. All the information will be listed on the website that will help the customers gain knowledge about the product. Signature Advertisements The television commercials will be in accordance with the tagline of the company, which is ‘Making Life Simple.’ The advertisements will then be called signature advertisements because they will promote the same identity of the company (Frank, 2000). The reason for the development of these types of commercials is to have customers memorize the nature of the company’s product offerings. If any of the advertisements is displayed by the common tagline, then the customers will recall the product. Availability of Electronic Cards The company will be targeting the customers at strategic locations where the traffic is usually high. Hotels and airports are the locations where most of the tourists can be found and they are the best places to market products and services. An outlet can be installed outside the grocery store so that it could effectively grab the customers’ attention (Rogers, 2001). Online Social Marketing Tool The growing online marketing is the most effective form to attract youth and other businesses to business transactions. Fan pages can be created through different social networking websites, which will help interact with potential customers (Andreasen, 2006). However, after some period of time the company will be evaluating the sales generated from each marketing activities and then the company will focus on the marketing activity. The company will have a contract with the public transportation, grocery stores and the off license stores and the company will be providing them with the machines which can detect our electronic money card. When a card is inserted into a machine, a necessary amount of money will be deducted from it and the user will be informed about the remaining amount. Competitors Debit Card It is an online mode of electronic money card which can only be valid if a person is an account holder of a particular bank. With the help of a card a customer can easily withdraw money from an ATM machine with the use of a PIN code provided to the customer. However, a person needs to be associated with the bank in order to withdraw the money; the card which is provided by E-Solutions is considered both offline and online. The customer does not have to be involved in tiring paper work, which consumes a lot of time. The electronic money card can be bought with easy exchange of the price of the card near any E-solutions outlet. Prepaid Currency cards These are the cards which require to be loaded up with Euros before the money can be spent in a travel or holidays. It assists a person in spending and keeping his or her budget under control. Our company, E-Solutions, provides better services than a prepaid currency card because there is a sufficient amount of loading issues in a prepaid currency cards in which money can only be loaded through bank accounts. There is also a monthly charge associated with the prepaid cards which is unlikely with the E-Solutions electronic cards. Oyster Cards These are the cards which are used as an electronic ticketing in the transport system. It can be used for the railways, buses, trams and for the boat services. Our company, E-Solutions, provides a wide range of services including the transport ticketing. The electronic money card can be used for different purposes such as shopping in the grocery stores, off license stores, and for transportation. Market Research Before starting this venture, a survey was conducted on the large group of consumers who were seen as potential customers. The result showed that about 80% of the respondents believed that electronic card system must be initiated. Many of them also answered that the electronic money card would make things easier for them because carrying physical cash is a burden and entails the possibility of a theft. A group of people were also interviewed and they were asked about the potential of the product, and everyone was positive in this regard. A tourist had a view point that when people arrive in any destination they feel unsecured and are unaware of the currency of the country. He stated that he did not want to handle physical cash because he was not able to understand its value; on the other hand, he claimed that the electronic money card will help him better understand the new currency. Many people were convinced that by the launching of the product, they could travel to some places easily without the problems of handling the cash. When respondents were asked that the card could be used in the travel buses and the grocery stores, 90% of the people were amazed and convinced that they would buy the product now if it is available. They were also told about the card’s characteristics – that it could be used offline and online – and due to them many respondents were thrilled to purchase it. 10% of the respondents believed that the card serves the same purpose as the debit or credit card, so they thought that the idea was not new. The respondents were also asked about the adequate cards prices. The different responses about the prices were saved in the list of the company and will be considered while launching the product. When respondents were asked about the card’s characteristics in terms of benefits, almost 95% of the responses were in the favor of its benefits and wanted desperately to use it. The simplicity of the card was the key for the many respondents and they believed that it was about time that someone could introduce electronic cash. The other question asked related to the difference between the electronic card and the credit and debit cards; most of the respondents answered that the credit card deducts a sufficient amount of money from their account. This made the respondents furious over the other cards because they charge an interest on the amount of expense that is carried out with the particular card. The respondents were happy to know that the product our company was offering did not deduct an extra amount from their banks; instead, it uses the only particular amount which is stored in the bank with no hidden charges. The respondents were also told that the card would have initial amount of money, which they could easily use in grocery stores, hotels, travel buses and many other places. Operations The company plans to operate in the United Kingdom and will open different outlets at the strategic locations in which the traffic of the customers is very high. The purpose of the outlet is to provide convenience to the customers in purchasing the product. The airports, hotels and the grocery stores are some of the options in which the outlets will be necessary. Customers will pay the money, and according to the amount paid, the card will be provided to them. The cards will be different in prices because a high-income customer will want a card that will have a higher amount inserted. The designing of the card will be done by professionals, and then it will be sent to the manufacturing unit which will be installed with the latest equipment. The cards will have an imprint of the company’s logo and the amount of money they contain. These cards will then be sent to different strategic locations in the retail outlets, where they will be ready for sale (Siegel and Shim, 1999). Designing the operation strategy will be the key in attracting many customers. The core competencies of the company should be highlighted so as to show the company in the better light. The company will be focusing on the cost of the cards. This is the key that will make an impression on the customers. The other operation strategy will be focused on the quality and the convenience of the usage of the cards. At most of the places there is no acceptability of the credit cards, which makes it difficult for the customers to shop. Our company will focus on providing the machines to the different grocery stores and other retailers to make it convenient for the customers (Hayes, 2005). The flexibility of the card will also determine the shift of the consumers from the previous brand to our company’s brand because the company will be providing a greater flexibility to its customers. The transaction in purchasing the card will be made easy and less paper work will be required. In certain banks, the credit card is issued with thorough analysis of the person’s bank account and his or her personal history, which will not be the case in buying our product. The customers will be provided with the card straight away when they have paid required money. Financials: Budgeted Cash Inflows and Outflows Year - 01 Year - 02 Year - 03 Inflows ? GBP ? GBP ? GBP Expected Revenue to be generated 40,000 66,000 92,000 Total 40,000 66,000 92,000 Phase - I       Outflows       Sort land for the retail outlets 10,000 Licensing and registration cost 5,000 Production of the Electronic cards 12,000 Designing of the cards 1,000 Promotional Activities in UK through Electronic Media 5,000     Web based promotional activities 2,000     Social Marketing 4,000     Other marketing campaigns 3,000     Operating/Rental Expense 5,000 Office Supplies 500 Utility expenses 8,000 Total 55,000     Phase - II       Outflows       Promotional Activities in UK through Electronic Media   13,000   Web based promotional activities   8,000   Purchasing a location for the outlets   10,000   Production cost of the Electronic Cards   17,000   Rental Expense 5,000 Utility Expanse 8,000 Total   61,000   Phase - III       Outflows       Promotional Activities through Electronic Media     13,000 Web based promotional activities     10,000 Production of the electronic cards     15,000 Rental Expense 5,000 Utility Expense 8,000 Special packages and discounts for tourists     10,000 Total     61,000 Net Cash Flow (15,000) 3,000 31,000 The investment plan has been divided into two parts: equity and debt which have been given a ratio of 60% and 40% respectively. The sponsorship and the funds can be gathered from the banks and the angel investors, which are individual persons and offer sponsorship to the eligible entrepreneurs. In the first year, losses will be incurred, which will be managed in the second year of the business due to ?3,000 in revenues. In the third year, the company will gain revenue of ?31,000. Exit Strategy The exit strategy of the company will include collaboration with large players or different banks that will be interested in purchasing the company. This strategy is to cash out the investment and the effort that had been made previously. The company has the option that it can also include itself in the initial public offering (IPO) to gain further investment to try its luck by offering other similar products to its consumers. The IPO will provide the company with a lot of investment as people will buy the shares of the company (Peters, 2009). The exit strategy of the company will be the second option but first, it will try to make the product a success on its own. However, the company can gain a sufficient amount of money for its effort while selling the business to a large player in the market that could bid for a higher price. A merger can be the other option which could help save the company from further turmoil, and in that situation it will be best for the company to work under a big player whose products are renowned in the market. This will help the company gain the market share in the electronic money market (Leonett, 2008). The other option available to the company is the management buyout, in which the company sells its shares to the managers and employees of the company. This is considered to be a viable option because this strategy motivates the employees who have served the company and deserve to be offered the opportunity of buying the company. Reflection The formation of the business plan in itself has provided all of the group members with a sense of the practical world and its knowledge. The module has enriched our skills in many ways and it has increased our confidence in compiling the information and presenting it in the form of a business plan. Our research skills have been improved while we were working on the module, and it has helped us make decisions with mutual understanding. However, there were many conflicts regarding the procedures of the business and the way it should be conducted, but it was a positive conflict, which helped us understand the different operation and marketing techniques. The conducting of the surveys helped us communicate with different customers that had different views and ideas, which also helped us lead our business plan to its destination. We consider that if any business has any kind of problems regarding the sales of its product, then this business should consult its customers, which is the best source of solutions. The development of the business plan has improved our skills and helped us identify our key strength and weaknesses. We tried different activities, so some of the group members realized that they were good at something and they would try to put more efforts in it. The module also helped us study the various companies and identify how they market their products. Researching and understanding the concepts of other companies was the key to the formation of the business plan. Reference list Andreasen, A., 2006. Social marketing in the 21st century. Canada: SAGE Publications. Frank, J., 2000. Advertising. New Delhi: Pearson Education India. Hayes, R., 2005. Operations, strategy, and technology: pursuing the competitive edge. New York: John Wiley & Sons. Hespeler, F., 2008. Electronic money and the monetary transmission process. Gottingen: Cuvillier Verlag. Jones, G. and Hill, C., 2010. Strategic management theory: an integrated approach. New York: Cengage Learning. Leonett, J., 2008. Exiting your business, protecting your wealth: a strategic guide for owners. New Jersey: John Wiley & Sons. Peters, B., 2009. Early exits: exit strategies for entrepreneurs and angel investors (but maybe not venture capitalists). Canada: MeteorBytes Data Management Corp. Rogers, S., 2001. Marketing strategies, tactics, and techniques: a handbook for practitioners. New York: Greenwood Publishing Group. Shenkman, M., Weiner, S. and Taback, I., 1999. Starting a limited liability company. New Jersey: John Wiley & Sons. Siegel, J. and Shim, J., 1999. Operations management. New York : Barron's Educational Series. Read More