Houzit

INTRODUCTION
Houzit is a chain of homewares stores in Brisbane that
specialise in bathroom fittings, bedroom fittings,
mirrors and decorative items. They currently have 15
stores spread across the greater Brisbane area, with all
stores being managed and coordinated from their head
office in Milton.
 INTRODUCTION
Objectives
• To increase sales from $15million per year to
$20million per year in the next three years.
• To increase loyalty customers list from 10,000 to
15,000.
• To establish brand recognition in Brisbane so that at
least 1 in 3 people recognize brand in a random
survey taken in 18 months time.
 CURRENT SIZE AND CAPABILITIES
• Houzit currently have 15 stores spread across the
greater Brisbane area, with all stores being managed
and coordinated from their head office in Milton.
• Houzit is close to entering its fifth year of operation;
offering a wide range of homeware items on easy-to-
manage payment terms and supplies a three year
guarantee on every item sold.
 MARKETING OPPORTUNITIES

1. Franchising
A continuing relationship in which a franchisor provides
a licensed privilege to the franchisee to do business and
offers assistance in organizing, training, merchandising,
marketing and managing in return for a monetary
consideration. Franchising is a form of business by
which the owner (franchisor) of a product, service or
method obtains distribution through affiliated dealers
(franchisees).
 MARKETING OPPORTUNITIES

2. Strategic Alliances
An arrangement between two companies that have
decided to share resources to undertake a specific,
mutually beneficial project. In a strategic alliance, each
company maintains its autonomy while gaining a new
opportunity. A strategic alliance could help a company
develop a more effective process, expand into a new
market or develop an advantage over a competitor,
among other possibilities.
 CRITERIA TO EVALUATE
MARKETING OPTIONS
Return on Investment (ROI)
A continuing relationship in which a franchisor provides
a licensed privilege to the franchisee to do business and
offers assistance in organizing, training, merchandising,
marketing and managing in return for a monetary
consideration. Franchising is a form of business by
which the owner (franchisor) of a product, service or
method obtains distribution through affiliated dealers
(franchisees).
 CRITERIA TO EVALUATE
MARKETING OPTIONS
Brand Equity
Houzit brand is one of the most valuable assets a
company has, which can increase the financial value of
a brand to the brand owner. Elements that can be
included in the valuation of brand equity include:
changing market share, profit margins, consumer
recognition of logos and other visual elements.
 CRITERIA TO EVALUATE
MARKETING OPTIONS
Market Share
Market share would help Houzit to indicate market
competitiveness, how well Houzit is doing against its
competitors. This metric, supplemented by changes in
sales revenue, helps managers evaluate both primary
and selective demand in market. That is, it not only
judges total market growth or decline but also
measures trends in customers’ selections among
competitors.
 CRITERIA TO EVALUATE
MARKETING OPTIONS
Customer Satisfaction and Customer Loyalty
Surveys provide one way that managers and business
owners can improve their marketing efforts over the
long haul.
By consistently offering customers and potential
customers the opportunity to provide feedback, future
marketing efforts can be tailored to the needs of the
market segment Houzit is trying to reach.
 IMPACT ON CURRENT BUSINESS
OPERATIONS
Primary activities impacts – Primary activities impacts are
directly involved in transforming inputs into outputs and in
delivery and after-sales support. These are generally also the line
activates of Houzit. They include:
•inbound logistics — material handling and warehousing;
•operations — transforming inputs into the final product;
•outbound logistics — order processing and distribution;
•marketing and sales — communication, pricing and channel
management; and
•service — installation, repair and parts.
 IMPACT ON CURRENT BUSINESS
OPERATIONS
Support activities impacts – Support activities impacts support primary
activities and other support activities. They are handled by the Houzit’s staff
functions and include:
•procurement — purchasing of raw materials, supplies and other consumable
items as well as assets;
•technology development — know-how, procedures and technological inputs
needed in every value chain activity;
•human resource management — selection, promotion and placement;
appraisal; rewards; management development; and labor/employee
relations; and
•firm infrastructure — general management, planning, finance, accounting,
legal, government affairs and quality management.
 TACTICAL MARKETING TOOLS
• Tactical marketing tools are the activities which are used in
coordination and monitoring mechanisms in marketing plan,
same as Houzit’s using to execute marketing plan to meet the
objectives. When Houzit develop or create a product or
service, they design it with specific people in mind who are
likely to need it and use it, and then develop ways to let them
know about it and deliver it to them.
• Monitoring the implementation of strategic plan is important
to assure that Houzit efforts conform to the plan and actually
performing the action steps which are intended. Moreover,
Houzit has got to be sure the results which achieve align with
quantified objectives.
 TACTICAL MARKETING TOOLS

The monitoring activities which Houzit should consider are:

•An Early "Warning" System: Such as in developing a new
homewear product, the R&D department may run into a
technical problem – and slip its schedule by six weeks. The
marketing department needs to know about it. So does the
production department. Through such feedback, Houzit
could improve the implementation of strategies and
reinforce the spirit of cooperation within company.
 TACTICAL MARKETING TOOLS
• Getting "Back on Track": Houzit may run into implementation
problems. Some of tactics may prove ineffective, some
strategies won't work as intended or missing accomplishing
an objective. Houzit then should take one of four corrective
actions.
1. Change the schedule – slip due date
2. Change the tactics which are performing to implement
strategy
3. Change the strategy
4. Compromise the objective
Each of these corrective actions is applicable under specific
circumstances.
 THE EFFECT OF THE TWO
MARKETING OPPORTUNITIES
There are three key performance indicators (KPIs) will help
Houzit measure the progress in achieving its organisation's
marketing objectives:
•Increase in sales revenue: The benchmark of 12% increase
in sales revenue has be set by Houzit's board of Directors. It
can be calculated using growth in sales divided by previous
year's sales.
 THE EFFECT OF THE TWO
MARKETING OPPORTUNITIES
• Market Share: The percentage of an industry or market's
total sales that is earned by a particular company over a
specified time period. Taking the company’s sales over
the period and dividing it by the total sales of the
industry over the same period calculate market share.
This metricis used to give a general idea of the size of a
company to its market and its competitors. For Houzit,
the benchmark has be set by board of Directors of 12%.
 THE EFFECT OF THE TWO
MARKETING OPPORTUNITIES
• Cost of customer acquisition: Houzit's board of Directors has
set a benchmark of 15% of new sales generated as an
appropriate customer acquisition cost. Customer Acquisition
Cost is the cost associated in convincing a customer to buy a
product/service. It plays a major role in calculating the value
of the customer to the company and the resulting return on
investment (ROI) of acquisition. The calculation of customer
valuation helps a company decide how much of its resources
can be profitably spent on a particular customer. In general
terms, it helps to decide the worth of the customer to the
company.
 ENVIRONMENTAL SCAN
ECONOMIC ENVIRONMENT
According to the published report in 2014,
the market price in Australia is higher in
comparison of per capital income. However,
the GDP per capital in Australia is equal to
443 % of the total world. There is a high
possibility that investment on property at a
couple of areas of Australia can give high
returns.
The economic growth rate of Australia is
appreciably higher than other counties. This
continuous growth is mainly supported by
the foreign trade and domestic demands as
the fixed investment is flat. The stability in
interest rate, rise in exchange rates and great
control over the inflation rate indicate the
economic stability of Australia.
TECHNOLOGICAL ENVIRONMENT
Australia is known for its achievement in the
technology field which is one of the biggest
draws for students who wants to make their
career in the technology sector.
The growth of technology in Australia is
responsible for major breakthrough and
development around the world. Scientific and
Research Organizations keep an eye and
support the research and development
activities in various fields of science like
physics and biology.
 ENVIRONMENTAL SCAN
POLITICAL AND LEGAL ENVIRONMENT
•The political environment of Australia is
more stable in comparison to other nations
as the political stability, transparency in the
regulatory system and a strong governance
framework providing the necessary strength
to its economic growth. Due to this, the
country lands among the top five on the
index of Economic Freedom.
•The legal factors existing in Australia has
become the important topic for the business.
The basic wage of workers has been
increased and the obligation of recycling
products has been forced upon business
organizations due to socio-ecological reason.
The agreement at Australia is not a subject to
formal paperwork to be lawfully official.
CULTURAL AND SOCIAL ENVIRONMENT
The Australian society is classified into three
major parts upper class, middle class, and
working class. Whereas most of the citizens
fall under the middle-class category. The
classification of a society can be determined
by the lifestyle of living individuals. Although
the lifestyle can be deceptive. Eating,
contacts, and sustenance can be
characteristic of classification.
However, Australians pay close attention to
their education and irrespective of class,
every parent in the Country focus on
providing the better education to their
children to guarantee better job
opportunities in the future.
 RETURN ON INVESTMENT

Return on Investment (ROI) is a performance measure

used to evaluate the efficiency of an investment or
compare the efficiency of a number of different
investments. ROI tries to directly measure the amount of
return on a particular investment, relative to the
investment’s cost. To calculate ROI, the benefit (or return)
of an investment is divided by the cost of the investment.
The result is expressed as a percentage or a ratio.
 RETURN ON INVESTMENT

ROI (each store)

= (Net Return on Investment / Cost of Investment) * 100
= ((Net Return from Mkt. Opp.*Net Profit Margin)/$7,950) * 100
= ((($442,000) * 20%) / $7,950) * 100
= 1,112%
 SUMMARISING MARKETING
OPPORTUNITIES
TARGET STORES
Region YEAR0 YEAR1 YEAR2 YEAR3 YEAR4 YEAR5
Brisbane Central 15 15 15 15 15 15
Sydney Central   2 4 9 10 10
Sydney Eastern Suburbs   1 2 4 5 5
Sydney North Shore   1 2 4 5 5
Sydney South   1 2 4 5 5
Sydney West   1 2 4 5 5
Melbourne South East   1 4 5 9 15
Greater Adelaide   1 3 5 9 15
Gold Coast   1 3 5 8 10
Perth   1 3 5 9 15

Total 15 25 40 60 80 100
 SUMMARISING MARKETING
OPPORTUNITIES
• Sales strategy is to make themselves known through mailings,
print advertising, and personal contact to architects and
contractors who are primarily involved with the
design/construction of commercial development and luxury
homes.
• Having a showroom/store will be a sales tool in itself. A
showroom/store will give them exposure to the general
public, new arrivals to the area, and construction
professionals.
 SUMMARISING MARKETING
OPPORTUNITIES

Projected Revenue for Each New Branch

  YEAR 1 YEAR 2 YEAR 3

Sales      
Furniture $442,000 $1,000,000 $1,500,000
Cost      
Direct Cost of Sales $301,600 $725,000 $1,087,500
 SUMMARISING MARKETING
OPPORTUNITIES
MILESTINES
Budget Department
Business Plan $2,000 Marketing
Online Research $350 Marketing
Open Accounts with Suppliers $350 Online Marketing (Website)
Door Research $500 Online Marketing (Website)
Design Doors $450 Production
Order Sample Doors $1,000 Production
Design Sales Literature $1,000 Production
Print Sales Literature $300 Production
Make Industry Contracts $1,000 Production
Showroom Feasibility Study $1,000 Production

Total $7,950