3. Business Scenario
3.10. Marketing Plan
3.10.2. Product
committed to deliver practical and efficient business solutions, by providing affordable consulting services and adequate support that give to our customers the tools they need to be successful in running their businesses.
Table 4: ProBiz Business Services Strategic Facilitation Business Process -Strategic management
Project Management Business Management
-Project standards & procedures -Program office &administration -Translation
-Project & program coordination -Business objective alignment
Our business will be doing in Africa especially in Southern and western Africa, because those regions are more attractive for foreign direct investments. However, in case of any existing sales opportunity, we’ll be offering our services in northern and East Africa too where we already have some partners.
3.10.4. Promotion
Since our organization is quiet new in Africa market, moreover we are planning to play a leading role and be internationally known we need to emphasize on its implementation. We need to inform our potential clients and get their involvement for our organization, to remind
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them, persuade them and build good relationships with them. For our intended promotion we’ll mainly use integrated marketing communication (IMC) model.
Graph 6: ProBiz’ Scope for Promotion
Elements of the model:
-Source: our company co-founders individually, our sponsors, all the spokesperson that will deliver or encode our message (radio personalities, celebrity endorsers, actors, real people providing testimonials about our services, animated characters).
-Encoding: A clear and effective communication remains a core element in developing meaningful exchange; then we have chosen to form message which will be clearly understandable for our customers. We’ll base on our experience of doing international businesses; we’ll be using Afrikaans, French, English and Chinese as communication language to elaborate our message.
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-Message: through several communication elements that we’ll try to control and adjust along our product life cycle: Advertising, Sales promotion, Personal selling, Direct marketing, Public relations, Word of mouth, Marketing aliens. In order to be efficient, our company will base on information we got from the market surveys and our value proposition to elaborate our message for each segment. We’ll use any words, music, scenery, celebrities’ people, and visual elements all that can communicate meaning to our targeted receivers. After a brief presentation of our company, we will use sentences like: “You will never miss good business opportunity” “Get higher return on investment” “Get higher profit” “Expand your product lines into international markets with a think globally, act locally model”
“Get assistance along all your business process” “You will never be bankrupt”
To make our message more believable, for our advertisement will choose celebrity endorsers (successful entrepreneurs) as sources.
-Medium: In an effort to reach our target audiences with widely varying tastes and media habits we’ll use several communication vehicle such as traditional medium like radio, television, newspaper and magazine in addition of non-traditional medium like social media to transmit our message. We’ll do promotion through International media like: Radio China International (RCI), Radio Taiwan International (RTI), Radio France International (RFI), TV commercial and brochure. We’ll also advertise through international and intra-continental widely read magazine like: Jeune Afrique, Africa Business Information, Artists Against (AA419), ABN Africa Business News, Africa Alumni, Africa Budget Watch, Africa Business pages, This is Africa, East African Business Week, through different countries local magazines (Ghana Business news), through partners Website: Africacalling.com, AllAfrica.com-Business & Finance and later on our own website. We’ll tend to focus more on word of mouth media and successful accumulated cases.
-Receiver: our messages go to foreign investors, African governments, local entrepreneurs and our partners.
-Decoding: we’ll make our messages as simple and clear as possible to facilitate the process whereby the receivers assign meaning to our messages, then we can get better understanding
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-Noise: Can occur at any stage in communication process, but we’ll put effort to minimize it by treating with well ranked medium in Africa, Europe and Asia.
-Feedback: successful innovation requires a deep understanding of customers, including environment, daily routines, concerns, and aspirations. View the business model through customers' eyes can lead to the discovery of completely new opportunities. After a certain time of communication we’ll get receiver’s reactions to our message. We’ll readjust it and we’ll put a lot of effort to get customers trust and satisfaction. We’ll use our network as a means to develop relationship with the personalities involved in our business and potential customers. We’ll attend international business events as much we can to connect with businessmen. We’ll be visiting potential customers at their business units. We’ll go on places where businessmen go most often to meet them, let them know more about our company and motivate them to use our services. We’ll start on the first year with three (3) consultancies, ten (10) business plans and two (2) capital funds investment. For the coming years, we believe that our business portfolio will grow by duplication of successful cases.
3.10.5. Channel
Our distribution channel objective is to build the image that we share the load of building Africa economic development and foreign investors’ profit. Because our products are not tangible goods, we can’t simply just put it in any physical shop to wait for customers to come and buy. Due to our products are intangible goods, and the consumption happening at the same with the delivery, we don’t need a retailer, wholesaler, broker or intermediate agent.
The length of our distribution channel doesn’t need to be long. The co-founders will directly deliver the services to our customers. We’ll use personal contact, phone, fax, direct mail, email and website as the tools. We’ll keep in excellent touch with our customers to insure of our services quality. The market coverage is broadly over all parts of Africa; we can go by plane when the country location is far from Burkina Faso or go by car when it is nearby to minimize our cost.
3.10.6. Customer Relationship
The segmentation gives us a powerful key factor in creating superior customer contact. We believe that higher customer contact levels will create more demands for our company.
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According to Kellogg & Chase (1995), the degree of customer contact is determined by three factors: communication time (the length of the interaction), information richness (the value of information shared between the two parties), and the level of intimacy (mutual trust, confidence). Since business consulting services in strategic mimetic and long-term sustainable competitive advantage are hard to achieve as it can be easily copied by our competitors, a central issue in our business model is what type of drivers is able to create superior performance verses our competitors. We’ll focus on two perspectives: the microeconomic (operations/marketing) and the macroeconomic (strategic management).We’ll focus more on elements such as service quality, customization and customer interaction. We’ll use adapted software and adequate information management systems to elaborate customer contact database. We’ll use PARETO law 20/80 to manage our business portfolio, and analyze the degree to which, each customer segment influences our business performance. We’ll take care of every single customer no matter the segment he owns but we’ll tend to give more advantages to foreign investors. As contact, proximity, reliability and efficiency are key elements for our organization, changes in three key variables can mainly affect our business evolution: service production complexity, information asymmetry and customers satisfaction;
so we’ll take much care about that. With good customer relationship we can better adjust our services to customers’ needs, and then they will be willing to use our services, to have more confidence in and to pay good prices; which also will help to create our company good reputation.
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4. Operation
4.1. Operation Process
Our business has a multi-side market; our business model will be as shown on the model canvas below.
Figure 8: ProBiz Business Model Canvas
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Graph 7: ProBiz Business System Flow Chart for Foreign Investors
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Graph 8: ProBiz Business System Flow Chart for African Governments
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Graph 9: ProBiz Business System Flow Chart for Small and Medium Enterprises (SMES)
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Graph 10: ProBiz’ Operations Support Processes
4.2. Project Breakeven Analysis
To review our project profitability we analyzed the breakeven conditions and related financial indicators. The results show the project payback year is the third year and a positive Net Present Value (NPV) of NT$9,980.59 and the Internal Rate of Return (IRR) is 28%.
Table 5: Breakeven Analysis
Item Amount Balance
Start-up investment -8,000 -8,000
Net income
1st year -532 -8,532
2nd year 1,935 -6,597
3rd year 3,897 -2,700
4th year 6,570 3,870
5th year 10,160 14,030
Investment's internal rate of return on after four years (IRR)
12%
Internal rate of return after five years (IRR) 28%
Net Present Value (5% Interest rate) $9,980.59
Payback year 3.1
All the figures are in NT thousand dollars
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The five year sales forecast shows that the revenue is slowly grown from the second year, and then keeps growing year after year as shown below.
Table 6: Five-year Profit
All the figures are in NT thousand dollars
Graph 11: Revenue Growth Rate Forecast
4.4. Cost Structure
Our cash flow projection shows that there is no cash outflow from the beginning and start to generate cash in the second year. The major cash spend is on the labor cost, equipment related expenses and business trips. Those expenses will remain in a constant range.
100%
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Table 7: Cash Flow Statement (All the Figures are in NT Thousand Dollars)
Year 1 Year 2 Year 3 Year 4 Year 5
Cash flow from operating activities
Revenue 750 3,880 5,030 8,350 10,000
Cash flow from financing activities
Investment by owner 8,000
Note: Interest paid*: Prime interest rate 2.025%, 10-year loan offer from government Table 8: Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5
Operating revenue 1,500 4,100 6,077 9,560 12,885
Operating expense
Advertising 0 0 0 0 0
Website domain, Google Ads,
Interest: prime interest rate 2.025%, 10 years loan offer from the government All the figures are in NT thousand dollars
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4.5. Project Balance Sheet
Our capital is mainly intangible assets such as skills, consultants experience and good reputation. For tangible assets we only have little equipment for services production. The nature of our business helps us to keep our cost low. The balance sheet shows an increase of Net from the second year that means we’ll have good financial backup for future expansion and investment.
Table 9: Balance Sheet (All the figures are in NT thousand dollars)
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Current portion of long-term debt
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4.6. Exit
Once we are about to start our project, we expect that adequate resources utilization and a careful debt management, in addition with International organizations help and African government’s contribution and adapted billing will produce very soon a good profit and valuable company.
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5. References
1. http://www.geopopulation.com/category/economie/
2. http://www.geopopulation.com/pays/
3. http://www.worldatlas.com/webimage/countrys/af.htm 4. http://en.wikipedia.org/wiki/Africa
5. http://unctad.org/en/Docs/iteiia20071_en.pdf
6. http://makesyouthink.co.za/business-consulting-services/
7. http://www.agri-africa.co.za/
8. http://purchgro.com/aboutus
9. http://s2-gmbh.com/services_business-consulting.html 10. http://africa-consulting.wozaonline.co.za/products
11. http://www.regal3.com/index.php?c=our_services/business_consulting 12. http://www.bearingpoint.com/fr-fr/
13. http://www.linkedin.com/company/nyansa-african-business-consultancy-limited 14. http://www.eighty20.co.za/databases/launcher.cgi?to_launch=/databases/abouteighty2
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15. http://www.bcg.com/about_bcg/offices/johannesburg.aspx 16. http://dmcafrica.com/consulting.php
17. African Journal of Business Management Vol. 6(21), pp. 6324-6330, 30 May, 2012