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International Human Potential Development

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Question:

Discuss About The International Human Potential Development?

 

Answer:

Introduction

The assessment is to propose a marketing plan for the Soft Landing, a recycling mattress company in Australia. The concerned organization is a national recycling social enterprise, which works for the benefits of the society through many initiatives like- provide job operations to community people along with the protection of the environment. The organization has also won the title of “Keep Australia Beautiful ‘ACT Sustainable Community of the Year 2016’” (Soft Landing 2017). This organization is also awarded with “Waste Management and Resource Recovery” and “Dame Phyllis Frost Litter Prevention” award (Soft Landing 2017). At present they are working for overcoming the vulnerability of the community members. Their business procedures already provide environmental and social sustainability practices in Canberra. They also encourage the education institutions, businesses, individuals and governing bodies. There recycled products are sold to every community group and the company also desire to target other customer group.

This assessment also represents the market analysis and impact of their marketing mix on the consumer behavior of the customers. The principal of sustainability, ethics and social justice and the effective methods through which customers are communicated will also be discussed. The proposed marketing plan will suggest the business strategies through which maximum profitability can be attained along with effective brand recognition.

 

Market needs

Soft Landing is a unique company in their business terms that aims for developing a sustainable world. The organization seeks to fulfill the following benefits that are important for their customers:

Selection: Soft Landing is a company, which is proceeded with a creative choice of business objectives. They purchase old mattresses or bed materials from commercial offices or hotels and then recycle the steel into toys or sell them further to leading mattress companies like Dunlop (Soft Landing 2017). 

Accessibility: All the materials are easily accessible and they have connection with other mattress companies. This makes the availability of their recycled products easy to the target audience.

Competitive Pricing: The price is relatively low than conventional newly formulated mattresses as they have to invent in the raw materials. Soft Landing does not have to bear this cost as they just purchase the old products at lower cost and sell the recycled components at lower prices compared to other organization.

Customer service: Since the company follows an ethical business procedures; hence, all the customers are those who are concerned regarding the sustainability of the earth and the society.

Market trends

Cassidy and Kosev (2015) stated that an organization emphasizes on the market trends so that they can headed towards more target audience. Soft Landing is considered as more sophisticated compared to other mattresses organization in number of ways:

Sustainable recycling process: Soft Lifting emphasizes on green initiatives and adapts all the ethical business procedures. A mattress composed of steel, wood, cotton and polyurethane foam. The process of pushing box spring onto a conveyor belt, cutting process of soft materials from the top and bottom of the mattress and separating all the cotton fiber and polyurethane foam from the framework are done with less carbon print. The quality of these components are engaged through modern technology and then sold to the external stakeholder.

Caring for community people: The concerned organization show their care to the community through some simple steps- providing train to the vulnerable community people, protecting the environment, supporting the community and maintaining the sustainability of the same (Soft Landing 2017). They create job and training opportunity for those people, who are struggling to secure a long-term employment. The procedure for protecting the environment is accomplished through recovering the metal, foam and timber from the used mattresses.

Modernized communication strategy: They have adapted all the modern procedures for making people aware of their initiatives. The concerned organization has an effective social presence in social media networks like- Facebook, Twitter and Instagram. They have also developed their communication with the governing body to overcome illegal dumping and the license to utilize these materials for recycling.

Market Growth

Soft Landing has initiated their business established in the year 2010 from Illawarra, Australia (Soft Landing 2017). In present time, the same company has expanded their business from the Illawarra to Sydney (Soft Landing 2017). They have also open multiple processing centers and one such centre is opened in Wanneroo near Perth and Hume (Soft Landing 2017). The company now has direct linkage with leading companies like Dunlop and Featherweight, where they deliver their steel and mattress filling respectively. The organization is now seeking for sales growth by 17% for the next 5 years. This growth can be attributed for the major factor that there are many company, who now adopts sustainable and green business initiatives so that the environment of the earth can be saved. Thus, the probability of linking with more new mattress or steel company with Soft landing is high.

Mission of Soft Landing

Soft Landing’s mission is to provide recycled materials all over Australia in the next 5 years. The company can furthermore target to sell the recycled products to Asian country like China and India. They aim to exceed the expectations of the customers and commercial bodies.

Marketing objectives

  • Provision of training and employment to the unemployed people
  • Supporting the community
  • Protecting the environment through low carbon print
  • Develop an increase in sales while achieving a status quo state
  • Maintaining sustainability

Financial Objectives

  • Double digit growth rate for every year for the next three year
  • Reach 7% profitability in the first year
  • Reduction of the variable cost through efficiency gains
 

Market Analysis

Strength

Weakness

·         Sustainable business procedures allow the company to attract many stakeholders

·         Targeting the unemployed group enhances the chances for great work from the employees

·         Liking with local governing bodies help them to get priority from the authorities 

·         They have to rely on purchasing the old mattresses from commercial offices and hospitality sector.

·         There are more unemployed people than employed one and thus targeting all these community people cannot be possible

·         Not all old mattresses are utilized. Some materials are still wasted and need more money to recycle them.

Opportunity

Threats

·         Personalized training to all the employees so that they can understand the business objectives.

·         A growing market with a significant percentage is still not aware of the business procedure adopted by the Soft Landing.

·         People or companies that are more concerned regarding the environmental sustainability will prefer the products of this organization.

·         The ability to lower variable costs through efficiency gains.

·         Competition from leading mattresses companies as they have strong customer base from many decades.

·         A huge percentage of Australian community is not aware of the importance of recycled products. Moreover, commercial companies often doubt the durability of the recycled products.

Table 1: SWOT Analysis

(Source: Created by Author)

PEST Analysis

The concerned organization is serving their services in Australia and the following are the analysis of the political, economical, social and technological aspect is illustrated. This allow the concerned organization to assess the market condition and their market position.

PEST Factors

Analysis of the factors

Political

In this case, Soft Landing have the benefit that the governing bodies also support this company in Australia as they not only targets the recycling process but they also focus on development of the human community.

Economic

Soft Landing also help in overcoming the unemployment problem as they majorly targeting the people who are unemployed and have low experience in professional field. However, they can improve their business by diversify their business like selling the final products under their brands. This approach helps them to attain more customer gain.

Social

In terms of social aspect, the concerned organization is benefited in Australia. The reason is that they are not harming environment, rather they protect the environment through the recycling initiatives. They also timely pay their employees and treat them as important asset. In content of social communication, business link with stakeholders like bed accessories company like Dunlop and government bodies is present.

Technological

Throughout the years, Soft Landing has improved in their technology. This can be witnessed through their online presence through social media sites like Facebook, Twitter and Instagram. They have also adopted new technology in recycling.

Table 2: PEST analysis of Soft Landing

(Source: Created by Author)

Competitor’s Analysis

Fleisher and Bensoussan (2015) stated that direct competitors are those, who are selling the same products. In case of social enterprises, the direct competitors for Soft Landing are Mission Australia Mattress Recycling, Pioneer Waste Management Australia PTY LTD, Newcastle Mattress Recyclers, Bed Collect, BedWorks and MrMatttress Recyle. These companies are also liable for recycling the mattress products and resell to the mattress companies.

Strength: All these direct recycling mattress companies have established many years ago compared to Soft Landing. Thus, they have firm presence in the market and they have more connection with other stakeholders, who purchase the products from them. Competitor like BedWorks are serves for several category ranges like- bed frames, bed heads, bedroom furniture, pillows and bedding, luxury range and other bed accessories for direct purchase from their companies (Bedworks 2017). This provides them the strength not to rely on third parties for revenue and they can direct earn the profitability from customers.

Weakness: The weakness of all these indirect competitors is that they are not linked with the governing bodies. Moreover, apart from the recycling of the mattress products, these direct competitors are not concerned with the job development for the employees.

Indirect competitors

According to Fleisher and Bensoussan (2015), indirect competitors do not sell the same products but serve the same final products and target same customer group to meet their requirement for the same products. In this case, the Ozmattress, Town and Country mattress and beds, Australian Bedding Company and Sleepmakers are the indirect competitors. These competitors sell the products that are newly formulated and people have a belief that these products are more durable.

Strength: These indirect competitors are selling the final products. They have a strong customer based compared to the Soft Landing. They are directly earning revenue from their customers. Anther strength that these indirect competitors have is that they are more exposed to community compared to a social enterprise.

Weakness: Not all indirect competitors follow ethical business approach of recycling and reusing. These companies do not also focuses on the low carbon printed business procedure. In addition to that, these competitors do not give job opportunities to vulnerable community. These competitors are suffering from the weakness to provide training development to these people as these companies are focused more on their profitability and productivity.

Marketing mix- 4P’s strategies

It is proposed that the concerned organization can also formulate products of their own brands. Thus, they can target more customers and attain profitability to continue their work in future. They can sell a range of bed frames, pillows and beddings along with bed heads. Other categories of products that can be selling by the company are:
  • Light weight yet durable steel frame for the bed
  • Steels to the toy factories for manufacturing toys
  • Bedroom furniture

Price

All the prices of the recycled material are set according to the competitive pricing strategy or even lower as they do not have any manufacturing costs. Taken for instance, the indirect competitors like Australian Bedding Company sell their bed frames to $2999/ that can be selling to only $699 by Soft Landing. Cupboards in furniture organization costs $999 in Australia; however, those products can be sold in the price range of $749 to $800. Thus, by keeping a $200 to $500 gap help them to enhance their brand position and sales.

Place

At present the service is only available in Australia. The effective distribution system collects the material directly from the seller. However, at present they do not have the service to collect used mattress residentially in Sydney but in future they can make the communication process more transparent and direct by starting pick up services directly from the users. Thus, it can be proposed that all the products will be distributed directly from Soft Landing.

Promotion

Soft Landing can target promotion through the business magazines in Australia like- Business Review Weekly, Money Market, Smart Investor and Times magazine Australia. Digital hoarding will also be utilized so that people in urban areas can get aware while on the way to their homes or offices. Another promotional aspect that will be used is to conduct a social crusade or charitable campaigns for greener Australia. Partnership from several NGO, who are also working with the same aim for sustainability of the earth can also promote the brand image in the community.

 

Recommendations for the strategies:

  • All the strategies need time to conduct and hence it is crucial to manage the time and develop short-term or long-term goal to attain each decided goals.
  • Skilled people for managerial position are required so that they can identify the required resources or facility and provide them to the employees.

Sales Forecast

The first two months will be used for planning all the necessary business strategies like process for enhancing the distribution process, initiating the manufacturing process of the new bed materials from the recycled materials. The third and the fourth month is required to set more psychology location, hire personnel, plan for their training and establishing vendor relationships. The fifth month is the month from where the direct distribution system started and apart from the business of only bed components, formulation of the complete bed accessories are also started from this month. During this month Soft Landing will also target for 15% more customer base that they already have and by the sixth month it is forecasted that sales will steadily grow. The total sales are forecasted to reach $20,000,000 sales individually from the last months and onwards.

Budget plan for three years

 

2018

2019

2020

Total

Total revenue

10,138,535

12,385,438

16,299,394

38,823,367

 

Collection Costs

992,765

2,127,012

3,121,612

6,241,389

Transportation Cost

778,927

812,785

850,123

2,441,835

Processing Cost

392,900

400,500

512,600

1,306,000

Incorporation of Communication Media

359,670

378,564

450,000

1,188,234

Employees Training

204,698

214,789

255,670

675,157

New Equipment for Manufacturing of the Final Products

1,303,906

3,300,000

4,250,000

8,853,906

Government Oversight Expenses

1,698,000

600,000

600,000

2,898,000

Administration, Research & Advisory

547,451

588,475

610,444

1,746,370

Total expense

6,278,317

8,422,125

10,650,449

25,350,891

Net Accumulated

3,860,218

3,963,313

5,648,945

13,472,476

Table 3: Budget plan for the next three years

(Source: Created by Author)

 

Conclusion

In this assessment, it is conclude that for a social enterprise like Soft Landing, it is necessary to expand their business. The major aim of this organization is to recycle the use mattresses and sell the bed or steel components to other leading bed accessories or toy factories respectively. The total sales are forecasted to reach $20,000,000 sales individually from the last months and onwards. During the development process of the three years, some components have to be considered- transportation cost, collection costs, processing cost, communication media cost, cost of employees training, cost for new equipment for manufacturing of the final products, government oversight expenses and administration, research & advisory cost. According to the planned budget plan, in the year 2018 the net accumulated cost is found out to be $3,860,218 and the same for year 20119 and 2020 is $8,422,125 and $10,650,449 respectively. It is also suggested in the assessment that the concerned organization should start selling the final products. In this way they do not have to rely on other organizations for process their business. The pricing strategy that is suggested here is to maintain a competitive pricing strategy which will help them to attract more customers as they are preceding their business by considering the sustainability of the earth. In context of the promotion, Soft Landing will fcs on business magazine to attract more stakeholder for their business.

Review Reflection

The company that is taken into consideration is Soft Landing that is a mattress recycling association. The company have also won awards like- Waste Management and Resource Recovery, Dame Phyllis Frost Litter Prevention and Keep Australia Beautiful ‘ACT Sustainable Community of the Year 2016. According to the strength and weakness analysis of the direct and indirect competitor analysis, it is found that indirect competitors, who are liable to sell bed accessories directly, attained stronger customer base and high profitability. Thus, I suggest this company to initiate manufacturing the final bed accessories products. I think that this process help them to maintain a string brand recognition and customer base. They are already associated with a sustainable business process and this will attract more people to use their products. Another risk that I have identified is that most of the people living in Australia do not agree that recycled products can be durable and lasts long. This can be a reason that makes a significant percentage of people not to buy their product. In such circumstance, the suggested strategy of offering competitive pricing may not work. Thus, I have also suggested enhancing their promotional strategy. The concerned organization at present has a social presence through social media sites and thus apart from this business move, I have suggested to promote their brand and business procedures in leading business magazines so that more stakeholders or business people can get aware of their business and can order final bed products or bed accessories from them. Another strategy that I have suggested in this assessment is to direct take the delivery of the used materials from the customers. In this way, customers can assure that they are giving their products to right company. Another benefit that the concerned organization can get is effective communication with the community people and customers as the suggested process ensure business transparency.

 

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