fau analysis
TRANSCRIPT
1. SWOT Analysis
Strengths:
a) The four partners were deeply interested in Marketing Planning
and Strategy and were committed to work hard to make the project
so successful that it pays for their tuition.
b) The four partners have formed a strong partnership to start a small
business.
c) They performed good amount of analysis on what product to select
for their business.
d) They selected a product which had no competition and the sports
calendar market was untapped in Florida Atlantic University
(FAU).
e) The four partners had good amount of marketing research
available.
f) There was way to advertise the product and also do additional
sales renting booths at FAU events. The success of this work
dependent on partners’ commitment, which was there for sure.
Weaknesses:
a) The product was new in an untested market. There was no
historical guidance on how product would perform at FAU.
b) The time period to sell calendars was short and the duration was
only two months in fall when the semester started.
c) There are lots of questions unanswered about marketing plan.
d) If the students choose to retail the calendars themselves it would
mean they have to put extra hours of work. Also it will be tedious
work since they can carry only 10-12 calendars in their backup and
they have to rely on slow personal contact selling.
e) There was no fair idea about how to advertise the new product.
f) The critical decisions on type of calendar to make and on what kind
of athletes was not made.
g) There was only $8000 available in startup capital. And students
need to make at least profit of $8,000 to cover the startup capital
or break even, and $18,000 to pay for the capital and tuition, which
was the ultimate goal.
Opportunities:
a) There was no official sports calendar at FAU. The product could be
so successful that it would become annual product to sale at the
FAU.
b) The FAU bookstore was selling two types of calendars, and the
existing calendars were themed in way not very attractive to
university students.
c) There was unfulfilled market waiting to be captured for the FAU
sports themed calendar.
d) 76.9% of students as per survey showed interest to buy the
calendar. That showed a possible immense market for 16,700
calendars. (See Exhibit 3: Survey Results)
e) Around 198 students among those surveyed were ready to fork at
least $8 buy the calendar.
f) Sales figures from other University showed realistic expected
revenue per student to be from $1.42 to $1.94.
g) Bookstore was selling 3500 calendars, which generated $31,905 in
revenues which translated to per student calendar expenditure of
$1.45.
h) The FAU book store was ready to buy their product in bulk. That
meant $9,000 in low risk revenues and would possibly pay back the
$8,000 partners investment right way. (
See Exhibit 1: Current Calendar Sales at Bookstore)
i) The printer was willing to give them 30 days credit for paying the
printing bill.
Threats
a) Other groups or organization can think of creating and market
same type of calendar.
b) If the partners go with bookstore then lot of pricing power will be
surrendered to the university bookstore.
c) It is not clear if FAU was going to claim royalty on athletes’
pictures. If FAU does then there will be additional cost.
d) The calendars may not be accepted thus idea could flop and
investment will fail.
e) The survey which showed 76.9% of students will buy the calendar
was highly exaggerated, because it translated to 16,720 calendars.
(See Exhibit 3: Survey Results)
f) How FAU sports team performed in the games and how those
sportsmen behaved in the public could impact calendar sales
unexpectedly.
2. Segmentation and targeting.
These are the variables which can be used for marketing
segmentation:
1. What gender? Male or Female.
2. Which campus? Boca Raton or Davie or Jupiter or other.
3. What is class standing? Freshman or sophomore or junior or senior
or graduate or unknown?
4. Does the student like sports (or will buy Sports calendar)? Yes or
no?
76.9% of students are interested in buying calendar. If
extrapolated to 22,000 students the number of students buying the
calendar will be 16,720 students. But based on calendar sales from
other universities around 20% to 29% will be willing to buy the
calendar. That translates to a realistic count of 4,400 to 6,380
calendars. (See Exhibit 2: Calendar Sales at other Universities.)
Among respondents, 60.87% are females and 39.13% are males.
More females, 68% from cross tabulation data, are interested in
buying calendars. This gives hint about product placement. If booths
are to be rented then the retail stalls should be set up near events and
seminars mostly attended by females. Retail stalls can also be rented
near nursing and education schools.
69.2% of respondents were from Boca Raton campus and they also
comprise 68% of all students. Hence most of the advertisement and
product placement in events need to be done at Boca Raton. This also
reduces the expected count of calendars to be sold. We get count of
3,300 to 4,350 calendars on applying the same percentages that of
other universities again. We need to remember that 18.97 for survey
respondents stay in Davis. This too can be targeted to generate sales
of 836 to 1,212 calendars.
3. The Marketing Mix
a. Calendar Subject
31.24% of students want all female calendar and 42.69% want
all male calendar. Since there is not a big majority in particular
preference, we recommend 40% female athletes and 60% male
athletes. This mix should also attract to remaining 26.09% of
respondents.
Some of the pictures male or female need to be synchronized
with the time when a particular sport is played. For example fall
should depict football players; spring could depict both male and
female basket ball players.
70.36% of students prefer athletes in uniform, so the calendar
should have pictures of athletes wearing the uniform. 24.51%
preferred swimsuits models.
One fact to note is U of M generates highest revenue of $1.94
per student with all female swimsuit models, followed next by U if O
with revenue of $1.67 per student with all male athletes. We have
already decided to go with mix of male and female athletes in the
calendar. And in light of this fact, we need to have some pictures of
female athletes in swimsuits with other pictures of male only athletes
in uniforms.
b. Calendar Publish Time
77.87 % of respondents preferred the calendar to coincide with
school start year. Hence the calendar should be made accordingly.
c. Calendar Pricing
From data of other universities, we gather that around 27% of
students buy the calendar when price is $7 or $5. . (See Exhibit 2:
Calendar Sales at other Universities.) And from our survey we find that if
the calendar is priced at $8, then the percentage of respondents
buying the calendar is 1.19% + 18.97% + 58.10 = 78.26%. The price
of $8 will also appeal the buyers who preferred $10 and $12 prices.
(See Exhibit 4: Demand Curves.)
From other university data (or the demand graph we have),
when the price is $8, around 20% or 4,840 students will like to buy
the calendar. The price of $8 will also undercut bookstore price of
existing calendars.
As far as the quality is concerned, we recommend heavy stock
similar to that of U of C which has the most attractive calendar and
also to be same as that of U of M which had highest revenue per
student.
d. Distribution Options
There are three ways to distribute the calendars. First is
to do bulk sale to the book store, other one is to rent booth at
important university events and third is to do person to person selling.
The unit sales at U of O were highest. There 28% of students brought
the calendar and the revenue per student was 2nd highest. It had used
multiple distribution systems.
Looking at other universities, it looks like 5000 is achievable
target. U of M has 18,000 students and was able to sell 5,000
calendars. So, 5,000 among 22,000 FAU students will be very
reachable. Out of 5,000 calendars, 3,000 can be sold at the book store
and remaining at event booths and person to person selling. (See
Exhibit 2: Calendar Sales at other Universities.)
Count of 5,000 is quantity selected since that is the minimum
count for printer’s run. And bookstore is also selected as since it will
not be possible to sell 5,000 calendars person to person and through
booth. We estimate using 20 stalls at the cost of $200 with the
expectations that each time, stall will be able to sale around 75
calendars. We estimate around 1500 calendars to be sold through
booths. Remaining 500 can be sold through person to person sales.
That comes to 125 calendars for each partner in person to person
sales. And 125 calendars for period of two months or eight weeks is
like selling 3-4 calendars per working day of the week, which sounds
reasonable.
e. Promotions
We have understood that the booths to sell calendars need to be
set near events where high female students are present. The FAU
newspaper’s editor needs to be contacted and if possible
article/interview about new upcoming FAU calendar need be
published. This will give some free publicity the new calendar. Some
300 flyers need to be printed, and posted and handed out around Boca
Raton and Davie Campuses. The flyers are to be followed with
newspaper advertisement of size eight page, costing $500. The
newspaper advertisement needs to appear a day before launch of the
calendar.
Some of the venues for distribution need to be in the events
attended by most juniors, seniors and graduates. These groups of
potential customers make up 61.26% of the respondents. For example
if there is job related event, then booth can be opened to sell
calendars to seniors.
f. Summary
We suggest the partners to publish large size heavy stock $8.00
calendar with both male and female athletes. The calendar needs to
match the school starting year of August. Both Boca Raton and Davie
campuses are the target markets for the calendar.
4. Sensitivity analysis
a. Break Even Volume Analysis
From the “Exhibit 5: Calendar Costs Calculations”, we find that the
total costs for run of 5000 calendars will be $13,715.
Since the book store will buy 3,000 calendars at $3.00 each, the
sale to book store will generate $9,000. Remaining money to cover for
cost of printing is $13,715 - $9000 = $4,715. At $8.00 each, the
remaining quantity to sell to get to break even is 590.
The break even volume is 3590, in which 3,000 are from book
store sales and 590 are from booths or person to person sales.
b. Profit with 5,000 sold calendars
After 3590 calendars are sold, the remaining 5,000 – 3,590 =
1,410 if sold will be the profit for the partners. That amount will be
$11,280. This exceeds the original goal of collecting $10,000 for
tuition by $1,280.
c. Volume to achieve Target Goal of $10,000 Tuition
To get to target profit of $10,000, the students need to sell
10,000/8= 1250 extra calendars. Adding 1250 to 590 and 3000 the
ones for break even volumes, we get 1840 to be sold at booth/person
to person and 3000 to be sold at book store to cover cost and reach
target profit. Total sales of calendar will be 4840 to cover cost and get
$10,000 for tuition.
If all calendars are sold, then (5000 - 4840)* $8= 160 * $8 =
$1,280 will be extra bonus to the partners.
d. Conclusion
The expected cash flow with approximate dates is shown in Exhibit
7. And the way all 5000 calendars will be disbursed is shown in
“Exhibit 8: Calendar Distribution Channels” and with the help of pie
chart in “Exhibit 9: Distribution Channel Pie-Chart”
Exhibit 1: Current Calendar Sales at Bookstore:
Current Bookstore Calendar
Sales
Hallmark
150
0
$9.9
5
$14,925.
00
American Greetings
200
0
$8.4
9
$16,980.
00
Total Sales
$31,905.
00
Per Student Calendar
Revenue $1.45
% of Students buying
Calendar 15.91
Exhibit 2: Calendar Sales at other Universities:
U of T U of C U of M U of O
Market Size 28,000 36,000 18,000 32,000
Selling Price 9.95 8 7 5.95
Calendars Sold 4,000 7,000 5,000 9,000
Total Revenue $39,800.00
$56,000.00
$35,000.00
$53,550.00
% of Student buying Calendars
14.29 19.44 27.78 28.13
Revenue per Student
$1.42 $1.56 $1.94 $1.67
Type Of Calendar Both (Campus
)
F (Swimsui
t) M(Head)
Female (Swimsui
t)
Male (Clothed)
Size/Heavy or Light 8 ½” X 11” L
12” X 12” H
8 1/2” X11” H
12” X 12” L
Distribution Retail Both Retail Both
Exhibit 3: Survey Results:
Student Survey Results
Question
Cou
nt Out of 329
% in
sampl
e
group
% of total
population
Wants to buy
Calendar 253 253 yes 76.90
Unknown in
each case 23.1
Out of 253
What kind of models
do you prefer? 79 all females 31.23 24.01
108 all males
42.6
9 32.83
66
both males
and females
26.0
9 20.06
What kind of photo
poses preferred? 178
athletes in
uniforms
70.3
6 54.10
62
athletes in
swimsuits
24.5
1 18.84
13
dressed
casually 5.14 3.95
What starting date
preferred? 56
calendar
starting year 22.13 17.02
197
school
starting year
77.8
7 59.88
Would you buy
calendar 144 for self
56.9
2 43.77
76 as gift 30.0 23.10
4
33 both 13.04 10.03
Highest price for
calendar 3 for $12 1.19 0.91
48 for $10
18.9
7 14.59
147 for $8
58.1
0 44.68
55 for $6 21.74 16.72
What is your sex 99 Male 39.13 30.09
154 Female
60.8
7 46.81
Which Campus
attended? 175 Boca Raton
69.1
7 53.19
48 Davie 18.97 14.59
29 Jupiter 11.46 8.81
4 other 1.58 1.22
What is class
Standing 35 freshman 13.83 10.64
21 sophomore 8.30 6.38
58 junior
22.9
2 17.63
66 senior
26.0
9 20.06
31 graduate 12.25 9.42
42 unknown 16.60 12.77
Exhibit 4: Demand Curves:
Calendar Demand Curve
0
2
4
6
8
10
12
4,000 5,000 7,000 9,000
Quantity Sold
Ca
len
da
r P
ric
e
Demand Curve Against % of Student Purchase
0
2
4
6
8
10
12
14.29 19.44 27.78 28.13
% of Student Buying Calendar
Cal
enda
r P
rice
Exhibit 5: Calendar Costs Calculations:
Calendar Printing Costs
Fixed Cost
Estimates
Cost of newspaper
advertisement 1 500.00
Flyers @0.05 300 15.00
Cost of twelve
professional snaps
3,000.0
0
Booth Costs for 20
[email protected] 200.00
Total Fixed Cost
3,715.0
0
Variable Cost
Estimates
Variable Printing Costs
@2.00 5000
10,000.
00
Total Costs
13,715.
00
Exhibit 6: Break Even and Target Profit Volume Calculations:
Break Even And Expected Profit
Analysis
Cost to be recovered
$1371
5
Book Store Sell 3000 @$3.00 $9,000
Remaining Cost to Cover $4,715
Calendars to sell to cover $4715 590
Break Even Sell = 3000 + 590
3590
Money to be made to get to
expected profit
$23,71
5
= cost + expected profit
= $13715 + $10,000
Book Store Sell 3000 @$3.00 $9,000
Remaining money to be covered
$14,71
5
Calendars to sell to cover $14,715
@$8.00 1,840
Remaining Calendars = 5000 –
(4840)=660
Exhibit 7: Expected Cash Flow Schedule:
Approx. Date Credit Debit
Balance
Spring Cash in Hand, Start $8,000 $8,000 Late July Photographer Payment $3,000 $5,000 Early Aug Leaflets $15 $4,985 Mid Aug News Paper Advert. $500 $4,485 Event Stalls $200 $4,285
Late AugBookstore order Supplied $9,000
$13,285
Mid Sep Sale 590 Calendars $4,720 $18,00
5
Late Sep Sale 1250 Calendars$10,00
0 $28,00
5
Late Sep Disburse Tuition $10,00
0$18,00
5
Late Sep Disburse Printer $10,00
0 $8,005 Early Oct Disburse Investment $8,000 $5
Early OctSell remaining 160 calendars $1,280 $1,285
Exhibit 8: Calendar Distribution Channels:
Channel Details
Calendars to be channeled
Book Store 3000
20 Event Stalls
Approximate 75 Calendar sales per stall 1500
Person to Person
Around 125 to be sold by each or the 4 partners 500
Total 5000
Exhibit 9: Distribution Channel Pie-Chart:
Calendar Distribution in the Channels
60%
30%
10%
Book Store 20 Event Stalls Person to Person