Essay, Pages 8 (1863 words)
I am going to carry out a feasibility study into opening an arcade. The arcade will be named “Big Money” and will be located in Glengormley, which is a small village on the outskirts of Belfast.
Glengormley is a constantly growing and developing village with an expanding youthful population. An arcade with a variety of machines and snooker tables would be good for the area because it will create a small amount of employment, attract more people to Glengormley and give people somewhere to go.
My reasons for choosing this are because as a young person living in Glengormley I find that there is a lack of decent places especially arcades for people aged 16 to 50 to go. I am also very interested in fruit machines and enjoy playing them as well as playing snooker and pool so I think that by opening an arcade a lot of people could benefit from it.
For my investigation I intend to analyse both the practical and financial aspects of starting a new business.
I will break my report up into three parts: market analysis, financial feasibility, final evaluation and conclusion.
Analysing the market is one of the most important aspects to consider when starting a new business. In my market analysis section, through effective market research I hope to establish that there is a demand for this type of business. I will use both primary and secondary research in doing this. In my primary research I will include questionnaires and market mapping. Under secondary research I will look at web sites suppliers as well as competitors.
I will also visit the local competitors and try to organise interviews with the workers and customers. Effective market research will help to determine the potential of the idea.
I will then analyse the financial feasibility of the business. Firstly I will examine the start-up costs necessary for the arcade and also the sources to finance these costs. I will then create balance sheets and study the profitability of the business through methods such as cash flow forecasting and a profit and loss account among other methods.
In the final section I intend to evaluate the work I will have carried out during the project. My primary purpose of the investigation is to prove that an arcade is feasible for the area and could be managed profitably on a daily basis.
My main overall long-term goal of the business is to become profitable on a day to day basis.
My target market will be people aged over 16 and the principal short-term objective of the business is to obtain a market. The attraction of a business of this group I feel will be essential in the first year to break even. After these first goals have been achieved new targets will be set for the advancement of the business.
Maintaining market share is essential to accomplish the long-term aim of the arcade. For any chance of this machines will have to be updated regularly to adapt to changing consumer tastes and fashions. The greatest objective is to maximise profits Another objective would be to seek to increase the arcade’s market share if not dominate the market.
An ongoing target of the business is to improve the image of the arcade and how the public perceives it. An image of a well-managed established arcade that satisfies the needs of its customers fully would be preferable.
Market research is very beneficial to my business, as I can analyse the market place within Glengormley. This will allow me to see the size of the market, available market share and the competitors located within the market place. I can also use market research to identify particular segments within the market place that other firms have overlooked or not perceived. I can use market research to analyse future trends within the market place, perceive times of recession and anticipate changes within the market that could affect my business. Its most important advantage is that it will allow me to build up a consumer file, discover their likes and dislikes, their needs and whom my firm needs to target most to be successful.
In using market research I will also be able to analyse the potential strengths and weaknesses of my competitors, and in doing so set up benchmarking targets to which the performance of my business can be measured.
Primary research or field research involves collecting data that does not already exist. I will be sending letters and e-mails too different companies, as well as conducting a questionnaire to obtain information. I intend to have mostly closed questions (quantitative). However, some questions will be left open (qualitative) to allow the individual to give their opinion. I will attempt to take a random sample of the target market. Another advantage to questionnaires is that the are quite cheap. Other methods of primary research include personal interviews and postal surveys etc. These however are likely to be expensive and time consuming.
Secondary research, or desk research, involves using data that already exists. This could include market intelligence reports retail audits among various other things. I will be viewing web sites of various arcades and suppliers as well as visiting some local arcades to help gather data.
In recent years firms have started to appreciate how important their image is, many firms have also seen the benefit of showing responsibility to the people involved in the business activity, such as customers, employees and suppliers. This has happened because:
* Legislation has been passed which adheres to consumer considerations.
* There have been changes in social attitudes.
* Competitive pressure has forced businesses to take into account the needs of potential stakeholders.
In order to promote the image of my business I must use the necessary and most effective advertising, to promote both what the arcade provides and also show how it is competitively better than other rival firms. The image that I would like to be promoted of my arcade is one of high quality at competitively low prices. As well as providing a friendly service to build up a high customer loyalty.
In order to achieve this desired image my advertising must be effective, and this can be achieved by primarily above the line promotions. Although it is more costly, it is more effective and incorporates such methods as television, radio, newspapers and magazines. I believe the best method would be weekly advertisements in the local newspapers with special offers and also advertisement on a local radio station. I will also distribute fliers in the first few weeks of the opening of the store.
The main image I want to pursue is of a friendly store that takes most adherently the needs and views of the customer; this will allow the arcade to build up good customer relations and a good reputation within the community.
I also want the arcade to project an aspect of modernisation, and I hope to achieve this by having up to date machines an on-line website. Through the website members will be able to access hints for most of the fruit machines and there will be downloadable games as well as prizes and special offers.
The marketing mix refers to those elements of the firms marketing strategy which are designed to meet the needs of the consumer, and the necessities of the business.
The marketing mix falls into four main parts: Product, Price, Promotion and Place.
When producing the marketing mix I will need to consider the following factors:
* The types and number of services offered;
* The market I am selling into. i.e. my target market;
* The degree of competition;
* The marketing mix of my competitors.
Product: A product is something that is offered to the market. In the arcade my product is the machines and snooker tables. In my arcade I will have 10 poker machines. I will also have 50 fruit machines, twenty 20p play-ï¿½15 jackpot, twenty 5p play-ï¿½5 jackpot, eight 30p play-ï¿½15 jackpot and two 25p play-ï¿½200 jackpot. All these fruit machines will be replaced with up to date and new machines every few months. I will have two skill win prize machines: ‘Who wants to be a millionaire’ and ‘The Weakest Link.’ There will be three twin sit down racing games and ten arcade games that will be changed on a regular basis. I will also have 6 full-size snooker/pool tables, 6 small coin operated pool tables and 2 air hockey tables.
Promotion: This is an important aspect of a businesses marketing strategy. It will allow me to present the right image, what the business offers and to show the consumers that my business is competitively better. It will also promote the business as a reputable, recognised name and strengthen its position in the market. There are two types of promotion: above the line and below the line. Above the line is more costly and you have less direct control, but it is more effective, reaches a larger consumer audience and includes such methods as radio, television and newspapers. While below the line promotion is less expensive, you have more direct control over the area you wish to promote to, and it includes fliers and direct mail advertising. I have decided that it would be beneficial to use elements of both types of promotion. I will place weekly adds in the Belfast Telegraph, have a small advertisement on the local radio station ‘Cool FM’ as well as distributing fliers through out Glengormley.
Price: This plays critical part in marketing activity. An incorrect pricing policy could reduce the number of customers and lose revenue. The poker and fruit machines already have set prices but can be changed if necessary i.e. 30p play-ï¿½15 jackpot. The pool tables, air hockey and video games etc. will match competitors prices and the full size snooker/pool tables will be slightly cheaper than competitors prices.
Place: This is the term given to the distribution of the product. My outlet of distribution is an amusement arcade building, situated in the centre of Glengormley. It needs to be safe and kept clean. An attractive sign could further attract new customers.
LOCATION AND PROPERTY
Choice of location is one of the most important long-term decisions owners have to make. There are a number of factors that have to be taken into account when choosing a suitable location for the business.
Size of premises: A large amusement arcade is necessary to offer more machines than the local competition. Therefore a large building is inevitable.
Street visibility: In order to attract new customers a building that is easily visible and accessible could be beneficial, preferably overlooking the main road through Glengormley.
Parking facilities: A quite large car park would be useful for the convenience of those customers that drive. It could also be of use to members of staff.
I have decided to locate my business in a big disused building in the centre of glengormley, it is easy to see, easily accessible and is across the road from Mc Donald’s and the Movie House . I will be renting this building for ï¿½800 a month.