SWOT Analysis of Online Bookstore

4890 words (20 pages) Essay in Marketing

02/06/17 Marketing Reference this

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INTRODUCTION

The Just Click Book Store is a student-to-student Internet marketplace providing college students with the opportunity to buy, sell and trade college textbooks, participate in auctions, post classified ads, provide teacher evaluations, and buy products for college. The book store will enable students to buy, sell, and trade used textbooks directly to other students, by-passing the university bookstores. By selling textbooks to other students, the seller can receive more money than the bookstore will pay and the buyer can pay less than the bookstore charges. It increases the value of book in terms of money.

The company’s head office will be located in Assam.

The Just Click Book Store will establish itself as the leading online student-to-student marketplace by combining extensive market-specific expertise with Internet technologies to generate revenue while creating a win-win solution for students. The book store will achieve market dominance by utilizing extensive domain experience, a local grass roots marketing strategy, an exceptional management team, superior software, and the formation of strategic alliances, memberships and partnerships with companies within the college market. Book store industry sales rose 3.6% for last few years. It will increase in future.

Main Reasons to choose the Business Plan of “Just Click Book Store” is:

All the students in today’s world face a problem of Purchasing & Selling their Books.

College students are spending a lot on books & they like to avail best price for their used books.

Workforce & investment required is less as compared to other plans.

Opportunity

College students are eager to find ways to get “quick cash” at the end of every semester. One method college student’s use is to sell their old textbooks at the end of every semester; however the re-sell market is controlled by the local university bookstore. Because university bookstores monopolize the market, students receive only a fraction of the value paid for the book. The bookstores then re-sell the books back to other students at profit. The follow statistics indicate that college students are receptive to the Internet channel for the products, services and content offered by the just click book store.

Majority of college students use the Internet

Some of college students use the Internet every month

Some of college students access the Internet at least daily

Some of college students own a computer

Objectives

The College Cafe will strive to achieve the following objectives:

Become the leading Internet student-to-student marketplace.

Attract 200000-300000 registered users in the first year.

Achieve 25000-30000 visits per month.

Establish sustainable profitability within the first year.

Mission

Our mission is to provide used quality literature of all types at the lowest possible prices. The company additionally seeks to provide a comfortable atmosphere for its clients that promotes browsing. Attraction to its customers will be our large selection of books. Our mission is to provide college students a valuable and unique source for products, services and information.

In order to achieve our mission, we commits to the following philosophies:

It’s all about the product.

Our customers are our employers.

Don’t be greedy.

Keys to Success

Our key to success will lie in our ability to execute our business model. In order to achieve success, we need to focus on the following areas to establish the book store as a successful and profitable enterprise. They are:

Recruit an exceptional management and marketing team with extensive domain experience in the college market.

Offer innovative and unique products and services.

PRODUCT AND SERVICES

We will provide shipping policy that means power to order and receive your item at a place most convenient to the customer.

Officially courier service(fedex express,dtdc,xps,ups)

Our live customer care service (With Live Customer Care you get an instant reply and assistance to your queries. You don’t have to send an e-mail and then wait for a reply. Which no doubt saves you time and effort.

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Shopping bag that we will provide (hold all the items that u pick from your online store. It retains these till you place order for them or you save them to buy later or you simply them from the bag.

Your Shopping Bag lets you save an item till the time you are ready to buy it. All you have to click on the “Save for Later” link displayed with the item you put in your Shopping Bag. The Shopping Bag keeps the saved items for 90 days. Once you are ready to buy these, just click on the “Add to Bag” link. We will give 15% discount on the purchase of two books.

Books, Videos & Music

The just click book store will offer functionality to allow students to buy, sell and trade their used textbooks with other students. Specifically, the Textbook Exchange functionality allows students to post their textbooks online for sale or trade, upload images, and indicate the condition of the book. Sample textbook categories include:

Accounting Business

Computer Science Engineering

Marketing History

Law Physics

Political Science Market Trends

Electronics and appliances

Calling cards Digital cameras

Mobile accessories Computer and accessories

Flowers & gifts

Flowers bouquets Chocolates

Handicraft

Lifestyle & accessories

Watches Cosmetics

Jewelry Pens& stationary

Perfumes Toys

MARKETING PLAN

Marketing plan is the one of the important plan for starting a business. When we start our business first of all we see the market potential. For knowing the market potential we collect the primary resources and secondary resources with marketing research, after doing marketing research, we see our target market; our customer focus and our competitors in the market .and we see what are the strengths and weakness of our business idea. Our plan is related to open an online book shop which name is ‘JUST CLICK BOOK STORE’. We want to start our business in Assami. For this business first of all we are preparing marketing plan.The components cover in marketing plan is following:

Environmental analysis

SWOT analysis of our business

7’Ps of marketing

Segmentation, targeting, positioning

ENVIRONMENTAL ANALYSIS: – Under the environmental analysis we are covering different analysis as following:

Economic analysis

Industry analysis

Political and legal analysis

Technical analysis

Economic analysis:-

When we are going to start our business at that time economic condition of country is good. At the time of introduce our business the GDP of the country is 7.5%.and this is the good sign for our business and the inflation rate at that time is -1.22 in aug.2009.and the market conditions are stable at this time.

Industry analysis;-

Over the past several years, a new and powerful marketplace has emerged. This ever-changing frontier is known as the World Wide Web. Electronic commerce is increasingly becoming the preferred mechanism to transact business in India. The Internet enables online sellers to boost margins and reach new markets with virtually no restraints or regulation. According to Jupiter Communications, there were an estimated 15 million online shoppers in 1997 and this number is expected to grow to over 60 million by the year 2002. Similarly, online shopping revenues are expected to climb from $2 billion in 1997 to over $40 billion in 2002.

The Indian textbook market is a large, growing, and fragmented business. Textbooks are written and marketed primarily for use in formal educational settings. Much of the demand for graduate level textbooks depends on growth in the population attending institutions of graduate study. In 1997, college textbook sales grew 7.4 percent to $2.67 billion, following an increase of nearly 8 percent in 1996. Based on the current rise in enrolment, sales are expected to remain healthy over the next several years.

Political and legal environment:-

In India political and legal environment is very supportive for entrepreneurship projects .the banks are providing a very low interest of loan on feasible entrepreneurship project.

Technical analysis: – At this time in modern era technology is on the boom .people need latest technology, and now a day’s online shopping is very popular in India. And we are using advance technology in making our website and latest payment facility with PayPal.

COMPETITOR ANALYSIS:-

At the initial stage we don’t have any competitor, but we increase our business at national level we are having some major competitors are as follows:

Competitor

Geographic Coverage

Products/Service

Started

Strengths

Weaknesses

Amazon.com

All world

Books, Video, Music

1997

– Brand equity

– Capital raising

– Portal agreement

– Primary ecommerce provider

– Not education focused

– Minimal user customization

– Limited textbook selection

Varsitybooks.com

60 universities

College textbooks

August 1998

– First mover

– Use of wholesaler

– reduces

Costs and eliminates inventory management

– Use wholesaler;

limits book selection

– Minimal customization

– Focus on undergraduate market

Bigwords.com

California universities

College textbooks

September 1998

– Incentive programs

– Book buyback

Unappealing web design

– Limited schools

– Inefficient search capability

Efollett.com

500+ universities

College textbooks

January 1999

Affiliated with largest campus bookstore chain

– Limited to schools where it has bookstores

– No customization

SWOT ANALYSIS OF ONLINE BOOK STORE:-

Strengths:-

Use of Internet as a Storefront for Books services.

Customer Convenience.

Less Investment & fewer workforces for starting the venture.

Target market.

Minimum physical assets & less overhead charges on warehouses.

Cost effectiveness to the customers.

Post sales service of informing customers about new products & new auctions

Weaknesses:

Supply of Books out of stock.

Confined to Assam only.

Dependent on external delivery services of courier services.

Need Constant maintenance of website.

Opportunities-:

Online Bookstore.

Just a click away.

To develop relationship with Publishers to offer exclusive editions..

Collaborations with public sectors to provide rare & antique books.

Threats:

Local Bookshop vendors.

Price competition/war.

Increase in the Transportation costs by the courier company.

Low consumer confidence to buy using online systems.

Monopoly in Online business held by some players.

7, P’S OF MARKETING MIX:-

Product or service;-

We will establish our services in two phases, in first phases we will provide the facility to buy and sell the college books. We will also provide different products may be after one year after getting some profit like: electronics and appliances, flowers and gifts, accessories, stationary etc.

Price:-

In this project we are investing 5 lakh rupees. In this we use 3.5 lakh as initial investment, and 1.5 lakh for the working capital. And our operating margin is 10%. And the discount given to customer is 15%.and the courier charges is 10%.

Place:-

The place we choose for our business is Assami. There is large number of students in Assam. The number of students in Assam is very much.

People:-

It includes the person that involves in this business:

3 members

Courier Serviceman

Publisher house owner

Local books shopkeeper

Target Customers i.e. College Students.

Process:-

We are starting online book shop and we take the order on our website and deliver the books to the customer and the customer do the payment with the card on pay pal. And our distribution possess is:

PHYSICAL EVIDENCE:

Store House

Website

Books

Promotion:-

The overall advertising and promotional objectives is:

“Acquire customers and generate sales”.

The various marketing & promotional strategies to be followed are:

Offer special discount coupons for customers’ next purchase.

College Direct mail marketing.

Posting Flyer in and around colleges.

Sponsorships of campus or community events.

Local newspaper advertising.

Registration with all the major search engines.

Word of mouth or Referral sources.

SEGMENTATION, TARGETING AND POSITIONING:-

Segmentation:-

Dividing a market into distinct groups with distinct needs, characteristics, or behaviour who might require Separate products or marketing mix. On these following bases we are doing segmenting.

Types of segmentation

Geographic Segmentation:

Density Climate

City

Demographic Segmentation:-

Age Occupation

Education Generation

Behavioural Segmentation:-

• Readiness Stag Attitude towards the Product

Targeting:-

The potential segment which we are targeting consists of large no. of college students base enrolled in more than 40 colleges in Assam region. In the first phase we are targeting only Assam region but later on in the coming years we will be expanding our business across the country.

Positioning:-

“Creating a image in the eyes of customer”

For position we provide good and fast services like delivery in 24 hours after placing the order, its create our unique image in the eyes of customer. We provide good quality books at the reasonable prices.

OPERATIONAL PLAN

It is not easy to specify what exactly to be included in operational section of the business plan because many of the operational plan details depends upon the nature of the business itself.

It includes:

Will the company be business-to-consumer/ business-to-business?

Will the business manufacture a product, deliver a service, offer goods for sale, or distribute goods for others?

Will the business offer a product or service, or a range of products and services?

Will the company have a bricks/ physical presence, or sell strictly over the Web?

Will the business be a large company, a medium-sized enterprise, or a small firm?

Formally operation is the process through which resource input are converted into useful output. But today operation is where value is produced. It describes how it efficiently produced. So there is need to understand the process that creates the value preposition and how this process contributes to the success of the business.

Companies should consider:

First Part: Step by Step Approach

Business location.

Operating facilities.

Operating hours.

Purchasing procedures.

Operating procedure.

Inventory management procedures.

Customer service procedures.

Productivity

Management

Second Part: Establishing a Web presence,

Each e-business will have to face following operational aspects:

Web site development (including technology)

Web site operations (including mechanism)

Third Part: Anticipated Expansion

Business location:

As an on-line business, the primary location of our business is the Internet. We will establish a website named as ‘www.justclick.com’ with the help of ZENCART and PAYPAL. We will get the space through the platform of Zencart and payments will be made through PayPal.

Our e-business will also have a physical presence along with web presence from where we will get the supply of the books. It is cost effective because of the less transportation cost.

Operating Hours:

Simply books intend to operate 24*7. We will be operational year round.

Operating facilities and equipment:

The warehouse cum office will accommodate the necessary office equipment such as computers, photo copier, and other engineering equipment. In addition, we will require specialized Office Equipment and Furniture. This capital purchases will increase work effectiveness, enhance professionalism and will prepare the business for the forecasted demand for services.

Operating Procedure:

This subsection outlines the day-to-day operating procedures that describe how the value sold to customers is created.

For Sale:

Customer

Vendor (web) Courier

Supplier

For Resale:

Customer 1

Vendor

Customer 2

For sale our supply chain will move according to figure1. Customer will place the order online at our website for the book he wants to purchase. We, the vendors, will forward the order to our suppliers over phone or email. Courier companies pick up the order from supplier and deliver it to the customer in 24 hours.

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For resale our supply chain will move according to figure2. Customer, who wants to sell their second hand books, will contact the vendor and get the one-third price of the book and the customer, who wants to purchase already used books can place an order on the website.

Distribution:

For distribution, we need not to have any manpower so there is no need of labor employment. Our distribution will be handled mainly by the courier company named as fedex express. Other courier company requirement will depend on the seasonal demand like dtdc,xps,ups .They will deliver our product in 24 hours within Delhi.

Purchasing Procedures:

We will purchase on bulk quantity from our supplier before the commencement of new session. The order will be placed on phone or through email.

We will purchase only those books that will recommend by the major colleges in their syllabi of new session to fulfill the demand of our target college students.

Inventory Management Procedures:

Inventory represents a substantial investment of funds and the ability to effectively control inventory levels.

Initially the books will be stored in a bulk quantity because the demand of the books will be high at start of a new session in the month of July-august. After that we will keep less inventory of it but we will have the enough capacity to meet the requirement. Then we will keep inventory of the books of competitive exam. Inventory of second hand books will be managed with care too.

Customer Service:

This part includes an order fulfillment. When the order will be placed, an immediate action will be taken by the operational department. Courier Company will receive an email each time a customer makes an order. They will further process the order by picking the product, packing, and shipping it directly to the customer’s place in 24 hours. The two courier companies will be hired for this purpose.

Other services includes that the regular customers will be updated about the new books and other related books of their courses. If any book will not be available at the time of request then related e-book links would be refer to them.

Productivity:

Customers constantly demand better services so productivity will only be increased with adequate internal communication. More emphasis will be given on it so that order will be communicated clearly and quickly to the processing department.

Website Development:

Our web site will form the core of our bookstore business and will provide many of the cost advantages necessary to compete with traditional and Internet booksellers.

Initial programming of the web site will require basic SQL, Graphics design and programming of forms processing scripts so that customer will submit an order. The other challenges will be:

Design and develop a fully functional dynamic web site capable of managing the transaction process from initial customer contact through order processing;

Design and develop tutorial aids.

Post online syllabi with university course listings.

Technology:

Webhost and Domain Name: Actual programming of the SQL and scripts for the web content as well as the backend databases will be handled under the management of Zen cart.

Zen cart certified webhosting so it will provide us a webhost that will be specialized in the Zen Cart program and will help our website to run. It will give us the server space as well as providing Internet connectivity. It will maintain high speed Website and dedicated high speed data links and performs required repairs to insure system availability.

Zen cart will help us to register with a global domain name i.e., .com.

Payment:

Payments will be made through PayPal. It is responsible for processing the credit card transaction. If a bad credit card is received, the customer will be called and asked to supply another credit card.

Mechanism:

A database will store simply books product catalog and track customer and order data. Customers will be able to follow a logical progression, which begins when they select their college. Once a college has been selected, simply books display the courses available and a list of books for each class. Book prices, books abstracts can be reviewed by the students before placing an order.

Moreover, students can purchase a bundle of required texts according to the core curriculum of their given program. At checkout, the buyer will be asked for a customer ID number. In the case of a first transaction, the customer will be asked to provide billing and credit card information and a unique ID number will be issued to them.

The site will note each book ordered and at checkout, display the list of books ordered and provide an order total. Once the customer enters a valid credit card and hits “send”, the customer will receive a confirmation, and the order will be forwarded to Courier Company for further processing. The databases will be updated timely with new book lists, syllabi, customer information, and other related data.

Anticipated Expansion:

Our online bookstore will begin its operations by focusing 40 prestigious colleges in New Delhi. It expects to expand its model to include all colleges of major areas of India within five years. With this, number of students and faculty would be increased so we will expand our product line to include the latest innovative educational tools. As just click book store increases its product line and its market penetration in the graduate education sector, economies of scale and the company’s online business model will help reduce operating costs and increase profit margins.

Just click book store also plans to maintain a comprehensive database of customer information and preferences in order to customize our services to each individual, decipher customer interest patterns, and cross sell related products to these customers.

Management and Organization

The strength of management team stems from the combined expertise in both management and technical areas. The just click book store recognizes that additional staff is required to properly support marketing, sales, research, and support functions. Currently, the book store is supported by three people with experience in e-commerce strategy, website architecture and design and graphic design. Additional employees may be required in the areas of senior level management, Web development, marketing, sales, human resources/recruiting, administration, customer support and other critical operational positions.

We will utilize current college students to fill positions in the areas of regional campus marketing, local advertisement sales, administration, customer support other non-critical operational positions. These positions may be full-time, part-time depending on the local market. Using current college students will enable the store to receive inexpensive local employment and valuable market feedback from the target market while also providing real world work experience to college students.

The just click book store will utilize consultants and contractors during website enhancements and development efforts.

Board of directors

At this time we are seeking individuals for a Board of Directors. These individuals will include highly qualified business and industry professionals/experts along with members of the investment team. These individuals will assist our management team in making appropriate decisions and taking the most effective action to be the industry leader. We will make the contract with the directors of 10 years that they cannot leave their post before the specified time period.

Management Team

Our management team consists of three dedicated employees and two technical advisors who have more experience of marketing and internet technology.

ATTORNEY

We will make the registration of this café in notary and try to heir one legal representative of our firm who can easily fulfill all the legal formalities

FINANCIAL PLAN

Financial Aspects:

The just click book store will generate assertive revenues by the end of year one

The just click book store will start earning profits during 5th month of 1st year…

The just click book store will spend Rs3.5 lakh as an initial investment

The just click book store will spend Rs.70000 for advertisement, sales and marketing efforts and Rs. 80000 for general operating expenses (courier service and for working capital need)

The just click book store will provide a student to student market place. Initial investment will be arranged by personal finance and through bank loan. We intend to continue our advances with more unique and effective solutions for college market.

Important assumptions

The financial projections are based on the following assumptions and facts of online bookshop business and our market analysis

As of 2008, a college student spends Rs2000-3000 on books annually.

There are more than 3 lakh college students in kamlanagar, New Delhi.

Our sales margin for books sold will be 15% and vary based on books sales.

We estimate minimum 200-300 students will visit daily our website in 1st year.

General Assumptions

Year1

Year2

Depreciation on furniture

10%

10%

Deprecation on computer

15%

15%

Start up funding

As we know that when we are going to start a new business we have to identify our start up expenses so that we can estimate our expenses and funds needed. So it is an important part for any business plan. In order to implement the online book shop marketing campaign and launch strategy, we are seeking an initial investment of 3.5 lakh and additional investment of 1.5 lakh will be required for additional website enhancements, maintenance and other expenses.

Start-up Funding

Start-up Expenses to Fund

5 lakh

Start-up Assets to Fund

70,000

Other working capital needed

80,000

Total funding required

5 lakh

ASSETS

Furniture

60,000

Computer system

50,000

Development of website

50,000

Inventory

1,20,000

Investment

1,00,000

Advertisement

70,000

Cash in hand

50,000

Total assets

5,00,000

LIABILITIES

Current Borrowing

3,50,000

Outstanding rent of office and warehouse

50,000

Outstanding expenses for courier service

1,00,000

Total Liabilities

5,00,000

Projected Profit and Loss

Pro Forma Profit and Loss

Year 1

Year 2

Opening stock

Nil

10000

Purchases

300000

600000

Carriage inwards

2000

4000

Sales

7,20,000

14,40,000

By closing stock

10000

50000

Gross profit

4,28,000

8,86,000

Gross Margin %

59%

61%

Indirect expenses:

Courier service

50,000

1,00,000

Internet exp

8400

8400

Telephone charges

7200

12000

Electricity

5800

12000

Legal exp

2000

Nil

Rent of office and ware house

60,000

60,000

Depreciation:

Furniture 10%

Computer 15%

5250

4537

Advt. Exp

20000

40000

Interest on loan

28000

Nil

Bank. commission

21600

43200

Bank installments

48000

48000

Net profit

1,91,750

5,87,863

Net profit margin

26%

40%

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