Laramie Wire Manufacturing Case - 1539 Words

Case # 1 Laramie Wire Manufacturing: Using Analytical Procedures in Audit Planning February 18, 2011 Laramie Wire Manufacturing, a medium sized company, is planning an initial public offering of its stock in the next two to three years. Laramie operates in a single 500,000 square foot building complex. Laramie buys copper rod and plastic materials to produce insulated copper wiring. The building complex is composed of 3% office space, 57% production area, 15% shipping and receiving area, and 25% finished goods and raw materials inventory warehousing area. Laramie produces several different types and gauges of insulated copper wire. All the different products Laramie manufactures use the same raw materials, meaning raw†¦show more content†¦Therefore, more testing is needed to see if the copper wire inventory was potentially overstated in the amount of pounds in 2008. Another risk for Laramie deals with the percentage of inventory it has on hand from 2008 to support the current amount of sales. Laramie’s inventory to sales percentage increased 16.4% from 2007 t o 2008. Therefore, this increase shows either that Laramie has trouble keeping inventory accounts down or net sales are slowing relevant to the amount being produced. Also, the increase shows Laramie may have overstated inventories meaning there may be an existence issue. There is a need for further attention to the potential overstatement of inventories because the increase in inventory to sales shows that Laramie is not using its resources efficiently. When calculating the percentage change in inventories, an issue arises when using either the lower cost of market or the market value. When looking at the calculations for finished goods inventory (insulated wire) and copper rod inventory Laramie has applied the lower cost of market. However, the calculation pertaining to plastics inventory reveals that the market value should be used for classification, but Laramie has used cost. The percentage change of the plastics inventory if the $.12 per pound is used is a 27% decrease. The importance of classifying inventory correctlyShow MoreRelatedFinancial Audit and Laramie Wire Manufacturing1230 Words   |  5 PagesCase Study Assignment Prepare written answers to the following case from Auditing Cases: An Interactive Learning Approach, (3rd edition), by Beasley, Buckless, Glover, and Prawitt: Case 8.1: Laramie Wire Manufacturing: Using Analytical Procedures in Audit Planning Requirements 1. 1. Perform analytical procedures to help you identify relatively risky areas 2. indicate the need for further attention during the audit, if any. 2. Focus specifically onRead MoreAnalytical Procedure - Laramie Wire Manufacturing Essay629 Words   |  3 Pagestransactions and events, and amounts, ratios and trends that might indicate matters that have financial statement and audit planning ramifications*. First, the auditors should consider information regarding the industry in which the client operates**. In this case, average machine setup time from start to finish is approximately six hours, which is slightly below the industry average. It means the company is efficient in preparation for production. Also, the auditors should compare client data with prior period

Law Enforcement in the 21st Century - 15936 Words

Law Enforcement in a Democratic Society cha pt er 1 ISBN 0-558-46766-0 Law Enforcement in the 21 Century, Second Edition, by Heath B. Grant and Karen J. Terry. Published by Allyn Bacon. Copyright  © 2008 by Pearson Education, Inc. st Chapter Out line INTRODUCTION The Themes of the Book The Police Function: Social Control and the Use of Force Policing Within the Rule of Law: The Challenges of Discretion The Delicate Balance: Crime Control versus Due Process The Levels of Law Enforcement Municipal Agencies County Agencies State Agencies Federal Agencies Department of Justice Department of Homeland Security Department of the Treasury U.S. Postal Service Tribal Agencies Chapter Objectives ââ€"  Describe the concept of linkage blindness and†¦show more content†¦Grant and Karen J. Terry. Published by Allyn Bacon. Copyright  © 2008 by Pearson Education, Inc. st Introduction 5 agency. Given the complexity of both the intelligence and law enforcement communities and their many overlapping jurisdictions, it was inevitable that key information would slip through the cracks between agencies. The inability to analyze and link critical information across (or even within an agency) is referred to as linkage blindness and will be a major theme throughout this book. In part, the Homeland Security Act of 2002, the USA PATRIOT Act of 2001, and its reauthorization in 2005 were executive and legislative responses to the problem of linkage blindness by organizing diffuse and autonomous law enforcement agencies and strengthening the government’s abilities to obtain information. Stephen Flynn (2001) provides a useful illustration of this critical law enforcement problem, referring to the arrival of a hypothetical ship with questionable cargo and a crew on an intelligence watch list for potential terrorist ties: The Coast Guard would be likely to know about the scheduled arrival of a tanker carrying hazardous cargo. The Customs Service might have some advance cargo manifest information. The INS might or might not know much about the crew, dependingShow MoreRelatedImplementing The President s Task Force On 21st Century Policing Essay1749 Words   |  7 Pagesthe President s Task Force on 21st Century Policing. The Task Force Members sought expertise from stakeholders and input from the public through Listening Sessions, teleconferences and written comments as they worked to identify best practices and make recommendations to the President. 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Policing was considered reactive in nature. This began to change as did society, industrialism and urbanization, brought with it a rise in crime, causing police to shift towards a more proactive approach to law enforcement. In the 1800’s new technologies began another change with better response times and communications. The 20th century brought even more technologies which continue to aid law enforcement today. This era also brought to the attentionRead MoreCriminal Justice and Leading U.S. Supreme Court Cases , Annotated Bibliography1035 Words   |  5 Pagesterms is a source reference with respect to criminal law, constitutional law, and criminal procedure. The major focus of this book includes explained mandates of over 1000 U.S. Supreme Court cases and this book details key terms and definitions. Grant, H.B. and Terry, K.J. 2008: Law Enforcement in the 21st Century. (2nd ed.). Upper Saddle, River, NJ. Pearson/Prentice Hall. 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Just as President Johnson assembled the commission after the rise in riots in the 1960’s, President Obama signed an order in 2014 to establish the President’s Task Force on 21st Century Policing after the Michael Brown incident in Ferguson. In the interest of time and space I’ll try to condense it down to the basics. President Obama stated: When any part of the American family does not feel like it is being treated fairly, that’sRead MoreLaw Enforcement Education And Training1703 Words   |  7 PagesLaw Enforcement Education and Training in the 21st Century and its Relation to Police Professionalization There is a great debate over the question of whether American law enforcement has achieved the status of a profession. In order to answer this question, there is a need to define what a profession is and identify the requisite attributes that qualifies an occupation to be identified as a profession. 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Interest-Bearing Securities and Role in Portfolio Management

Question: Describe about the Interest-bearing Securities and their role in Portfolio Management. Answer: Introduction To explain the terminology of interest bearing securities, it would be simple to say that securities on which a predetermined rate of interest is due to be paid to the security holder or instrument owner. The time cycle of the payment of interest could be anything half-yearly, annually or at maturity. Portfolio management in itself is a vast area of financial market and we will be going analyzing all the areas step by step to ensure the clarity on the concepts. Securities in the financial market are of different nature depending upon their return abilities and risk bearing slots. In this analysis of financial markets, the focus country is Australia To understand the interest bearing securities and their role in portfolio management, there is prerequisite to comprehend financial market, classification of financial market into sub-divisions of money market and capital market. Financial market is all about taking decisions which are based on the information of truth and right equations rather going on hysteria situations. That the financial management issues are diverse and need elaboration and here in our analysis, we are making efforts to present the intuitions and knowledge of financial management in summary exploration. In terms of investors prospective, good returns on investment are expected but no sure shot portfolio could be set in order maximize returns or minimize risk associated with securities. The only reason of suspiciousness over returns is because financial markets are risk filled and imperfections and as output of these imperfections, inconsistency with the expectations is obvious. Risk associated with the securit ies is the crucial benchmark in evaluation of investment decision making as risk is directly proportional to returns. In a nutshell, better returns are expected when risk associated is high and low returns are expected when risk is minimal. There can be different multiplicities of risk such as business risk, interest risk, and market risk. Among them, the market risk is with highly vulnerable because no predictions can work out in situations of recession or market flip-down. In general terms, risk means that actual outcome will differ from the expected outcome and is unpredictable. Portfolio management refers to the process of creating pool of securities with different risk factors and return factors and then setting the overall expected return in combination of all requirements. Under portfolio management, aim is to select right kind of securities to invest and money is directed towards right channels. It can be observed that portfolio management is right and calculative step towards personalized investments i.e. tailored as per financial needs. (Drago , 2014) Importance of portfolio management: 1-It provides better decision making sense to investors and with better returns, decisions prove to be successful. 2- With various securities in the pool, the risk associated is lower. The only condition is not to select all the investments of high risk because portfolio is mix of lower, moderate and higher risk associated securities. 3-It also results in maximizing the control and efficiency of resources invested. 4-It brings sense of accountability for portfolio managers and they cannot easily get away with their decision of selection of certain categories. 5-Investors often are caught with financial resources crunch and PM (portfolio management) is the solution to this problem. 6-Under portfolio management, it is easy to see linkages of returns with market conditions and observation over dependencies in those portfolio which are long term. 7-With the change in business environment and economy holding better grasp over business operations, investors anticipate better decision making from the management. Investors have sole expectation to see growth in their portfolios. 8- Portfolio management provides big picture of the financial investment opportunities. (Basu, 2014) Now that we have clear understanding over portfolio, its management, uses and benefits that can be short term or long term, it is easy to move to very important divisions of financial markets-money market and capital market. Australian financial markets have by 27% since 2009 and overall volumes are even higher than the percentages itself. The AFMA (Australian Financial Management System) have integrated various reforms since the era of recession keeping the interest of the investors in good faith. With AFMA integrating the financial markets in collaboration with global markets is the initiative that essentially brought regulation and promoted efficiency towards economic growth. Basics about the Australian money market and the capital market: Money market refers to the arcade where money or its equivalent (securities) can be traded. One of the strong characteristics of money market is that here high liquidity securities are dealt and in all market situations, trading is short term. (Short term maturity). Securities such commercial papers, treasury bills, CDs (certificate of deposits), RAs (repurchase agreements) and so on. Capital market is the one where financial securities are created and dealt with the long term maturity period for the purpose of nurturing the long term needs. Shares, debentures, bonds, Euro issues, asset securitization are few examples which are traded in capital market. (Lee, 2015) All investment and securities are controlled and eyed by ASIC (Australian Securities and Investment Commission). ASIC performs the following functions: 1-It ensures right and timely information of the companies is available to the investors so that investors can make calculative decisions with their investments. 2-Prolong, simplify and improve the performance of Australian financial markets. 3- Organize events for consumer awareness and by doing this, it is valuing the hard-earned money of the investors. 4- Supervision of the market regulations and facilitating investors and dealers with minimal process requirements of trading in the financial market. With the clarity over interest bearing securities, following presumptions and facts need to be covered before studying the effect of interesting bearing securities on portfolio. 1-Risk factors affect the market value of interest bearing securities. 2-Market conditions cannot be stable in any scenarios and are volatile because of global events, news and government stability. 3-In the event of market interest rates going up, fixed interest securities will fall because new securities will be issued at higher rate than existing ones. Contrariwise, fix rate securities will increase in their value in the event of market rates coming down. 4-Inflation, business cycles and other domestic or international factors are there in the mind of investors and this become obvious cause of ups/downs of prices and interest rate of securities. 5-Reserve Bank of Australia usually intervenes in the market at the time when market conditions are very volatile either interest rates are digging the ground or touching the sky. It is necessary step to by RBA to ensure money allocations are appropriate. 6- There are also interest bearing securities which are protected against market volatility and therefore, guaranteed returns are expected from the investments with no plus/minus of any events. There are various interest bearing securities which are dealt in financial markets and below is the discussion for few important ones: Bonds Bonds are the debt security which are issued by the borrowers to raise money from the investors and there is timeline of maturity of bonds which is declared at the time they are issued. Types of Australian bonds are as follows: Fixed rate bonds- By the name it illustrates that bonds which offers fixed rate of interest are fixed rate bonds. Though fixed rate bonds are sure shot investments, but they do carry the risk associated with the goodwill of the bond issuer which is directly proportional to financial condition of the bond issuer. Floating rate bonds- Floating term denotes continuous change. Floating rate bonds are those bonds which are issued at adjusted price but that price is not constant over a period of time. The reason of this change is market interest rates which changes as per financial factors. Government bonds- Australian government bonds are issued by The commonwealth of Australia. Since they are government bonds, they offer more security, stable and regular income and the best is choice of maturities. Corporate bonds- Corporate bonds traded on ASX (Australian Securities Exchange) are issued in the multiples of $1000 or $5000 for raising funds for expansion or new projects. They are debt onuses issued by private and public corporations. Salient features of bonds are: Details contained in the indenture. Administered through a trustee. Secured versus unsecured. Mortgage/debentured Senior or junior or subordinated. Call features of the bond Bond rating. Example: Take a bond with three years to maturity, a coupon rate of 8%, and a $1000 face value. If the current market rate is 10%, what is the price of the bond? $80 $80 $1080 P = + + (1.10)1 + (1.10)2 + (1.10)3 P=$80(0.9091) +$80(0.8264) +$1080(0.7513) P=$950.24 Treasury Notes T-Notes are the safest forms of marketable investments and are termed between one to ten years with fixed interest rate and are backed full faith and credit by the government. Characteristics of T-Notes are as follows: 1-They are issued as promissory note at discount and the discount is calculated over the face value of the bond. 2-T-notes are short term and are generally issued to meet short term financial needs of the government. 3-T-notes are negotiable securities. 4- Issuing T-notes is cost friendly because transaction cost is very low. 5-They are investments with assured yields. (Amadeo, 2016) Mortgages: A debt security, secured by fixed asset such as real estate property in exchange of funds with the obligation to pay them back is call mortgage. Over the period of time, interest is paid that gets accumulated as per timeline of the mortgage. 1-The state rates on mortgage is determined by market rates, term of the mortgage and discount factors. 2-The legality of the mortgage is complex and usually protects the lender from losses. 3-Credit ratings play important role in mortgage securities 4-To free cash to be utilized in other projects, most of the mortgages are another investor by the originator. 5-With securitization of mortgages, risk is lowered and access to national capital is enhanced. Debentures Debenture is a loan instrument which is issued by the companies with the aim of generating long term funds. Issue of debentures help companies to avoid load on their existing share capital. Features of debentures: 1-It can be either category secured or unsecured. 2-No voting rights are given to debenture holders. 3-Debenture holders get paid with interest even in event of loss. 4-After a fixed period of time, debentures is redeemed. 5-Interest on debenture is tax deductible expense because they are charge against profit. (Trisha 2015) With analysis on interest bearing securities and their features, it is easy to analyze the impact of interest bearing securities on portfolio: Risk Free bonds increases value of the portfolio- Those bonds which comes with low risk factors and are immunized reduces the volatility and increases the value of portfolio. Credit risk associated with bonds- Indexed bonds are generally issued after the credit history check and then pitfalls in the validation of credit is negative onto entire portfolio. T-Notes offers stability along with good yield- T-notes comes with short maturity period but offers good value on money invested because of stability against market conditions. T-notes enhances portfolio value using features of negotiability- Bonds are negotiable and this adds to flexibility option for buy/sell. Thus, impact is better bond valuation. Mortgages offers long term financial assistance- Mortgages are long term assets and they offer firmness to the portfolio with the long term financial strategy of investing money in projects with lower payback period and higher NPV. Positive impact of free cash over other projects- In bonds, cash usually is free by changing the ownership from originator to other and thus, cash is used in other projects giving dual benefit of returns. Debentures are paid in case of loss even- Best in portfolio are debentures because they stay unaffected in all market conditions of downfall. Losses by the company do not affect return on debentures. Asset allocation The term asset allocation means diversification of investments over different ranges of assets and geographical reasons with the purpose of reducing the risk, increase the value and maximizing the potential for higher returns. Diversification is always beneficial because there may be situations where asset performance is not backed by current projects but secondary asset value may appreciate to maintain the overall rate of return required to continue the project or use the asset. In a nutshell, the up moving asset neutralizes the volatility caused by non-performing asset. Valuation In financial language, valuation is the process to determine the net present value of the asset. Going briefer on the topic, it is the process of determining the worth of the company or any project or asset. The market value of a company is generally calculated by multiplying number of shares in the market into current share price. The transaction is only concluded when buyer and seller agree on a deal price. Intrinsic value of the company creates an assumption on how l=much worth of the company will grow in future. (Vital, 2013) Duration Duration refers to the process of measuring the price volatility of the bond which is the effect of fluctuating interest rates. With the time period associated with the maturity of the bond, there are certain factors which needs presumptions: 1-All bonds are price sensitive and are affect by market rates. 2-The effectiveness of the bond is associated whether bond is short term or long term. 3-Zero coupon bonds are traded at deep rebate. 4-Duration only records small changes of market linked to bond price. Convexity Convexity refers to the process of capturing the relationship between the change in the market rates and price of the bond. This uneven change of market mechanism can also be carried away if bond issued are premium bonds. When the change in bond price is towards negative, it is generally effect of small market change and it will be more if bond price is positive in change. Immunization A portfolio is immunized when it is unaffected by interest rate changes. It is a technique of making the portfolio immune against the risk and uncertainty. Immunizations is strategized to ensure the good worth of portfolio with the amount of return by the investor. It formulates the cash flow basis to ensure better returns with low cost. Conclusion With critical analysis on managing portfolios, it is clear that results are fruitful only when calculative steps are taken in deciding the securities which are to be invested and other that need to be kept on hold. Portfolio management requires that securities invested must be variable in terms of return yield, risk associated and life span whether those financial instruments are short term or long term. The benefit of going with the diversity is that losses from one can be offset by other instruments of the portfolio and in totality, the goal of portfolio management is sure to be achieved. Recommendations In regard to portfolio management specifically with interest bearing securities, recommendations are as following: 1-Selection of the securities should not be only based on current market situations but historical performance should be considered for making better decisions. 2-Valuation and asset-allocation are beneficial for projects with high payback period and thus must be implemented on such projects. 3-Analysis of historical yield vs current yield can be result of currency fluctuations and investors should never be carried away with market hype. Instead, investors could do market analysis with their portfolio managers to ensure better value of money. 4- Few of interest bearing securities are rating based such as bonds and thus, rating should be should as one of the criteria of portfolio finalization. 5-Risk management is must for interest bearing securities because market fluctuations affect them in most prominent ways. References: Drago, H. (2014). Why Project Portfolio Management is more important than ever, Decision focus, accessed on 13 August 2016 https://www.decisionfocus.com/why-project-portfolio-management-is-more-important-than-ever-2 Trisha. (2015). Debentures: meaning, features, advantages, disadvantages, your library, accessed on 13 August 2016 https://www.yourarticlelibrary.com/financial-management/debentures-meaning-features-advantages-disadvantages/43834/ Basu,C.(2014), The Importance of a PMO in Portfolio Management,Chron, accessed on 13 August 2016, https://smallbusiness.chron.com/importance-pmo-portfolio-management-36411.html Lee, S. (2015). What is difference between money market and capital market, Quora, accessed on 13 August 2016 https://www.quora.com/What-is-difference-between-money-market-and-capital-market Amadeo, K. (2016). What Are Treasury Bills, Notes and Bonds, About money, accessed on 13 August 2016 https://useconomy.about.com/od/bondsfaq/f/Treasury_Bonds.htm Vital, A. (2013). How Startup Valuation Works Measuring a Companys Potential, FF, accessed on 13 August 2016 https://fundersandfounders.com/how-startup-valuation-works/

Sales Marketing Plan free essay sample

Marketing is one of the most important aspects of a business. According to Peter Drucker â€Å"There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customers so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available. † (Peter Drucker, Marketing Management, Philip Kotler). In this report, we have planned to market the service ‘Hair care’ by opening an Hair Salon in Silver spring, USA. We have analyzed different marketing strategies and designed a marketing plan for the same. SLP 01 1. NAME, LOCATION amp; NATURE NAME: â€Å"Looks† Location: Silver spring, Montgomery County, Maryland, USA Nature: ‘LOOKS’ will be one stop solution that will allow the entire family to have their hair needs satisfied in one convenient location. We will write a custom essay sample on Sales Marketing Plan or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It will serve men, women, and children and it will accept appointments as well as walk-ins. ‘LOOKS’ will also sell premium hair care products. It will focus on serving the entire family in one quick, convenient visit. It will excel due to its attention on their clients, so as to build a long term relationship. Through unheralded customer attention, ‘LOOKS’ will slowly but surely gain market share as it services the entire family, creating long-term relationships. Being on one of the best location of Silver Spring, it will attract a lot of traffic. 2. SELF-ANALYSIS The US salon market accounts for approximately 60 billion dollars. Looking stylish, trendy and beautiful is one of the major concerns of the people in US today and providing this, forms the strength of â€Å"Looks†. As the mission of â€Å"Looks† aligns with this need of the market and as it has comparatively higher competency in the world of fashion it is a strong player. 3. CUSTOMER ANALYSIS The population of Silver Spring is 78,488, with a growth of 2. 5%. The population of Silver Spring consists of 48% males and 52% females. The immediate geographic target of LOOKS is Silver Spring and its neighboring communities of total 250,000 of population. Approximately 12 miles geographic radius is in need of the offered services. The total targeted population 100,000. Baby boomers, Gen-Xers and baby boomlet and the young generation are the groups that are targeted by ‘LOOKS’. 4. ANALYSIS OF  PRIMARY COMPETITORS The location chosen offers very less competition or no competition. Though there are two major competitors which LOOKS has to compete with. Ebony Barbers Unisex amp; Fenton Barber Shop are the two major competitors of LOOKS. As Silver Spring is one of the biggest hub for business it may likely to be hurt by emerging competition. LOOKS will have to face Monopolistic competition, as its competitor is able to differentiate their offerings. 5. MARKET RESEARCH The demographic segregation of Silver Spring is displayed in the graph displayed below: Age Group| %| Under 18 yrs| 23%| 18 – 24 yrs| 9. 3%| 25 – 44 yrs| 37%| 45 – 64 yrs| 21. 2%| Above 65 yrs| 9. 6%| Silver Spring is a ‘Salad Bowl’ society with ethnic group maintaining their ethnic differences, neighborhoods and culture. The Silver Spring population comprises of different racial people which are 46. 61%  white, 28. 07%  African American, 0. 44% Native American, 8.22% Asian, 0. 06% Pacific Islander, 11. 55% from  other races and 5. 04% from two or more races 22. 22% people of the total population are of Hispanic or Latino race. ‘Looks’ will concentrate on the needs and wants of all races as each group has a specific want that need to be satisfied. The Household pattern in Silver Spring is ‘diverse’ as maximum people in Silver Spring are adult live together, single parent family and single live out. 6. MARKETING ENVIRONMENT a. Political and legal factors This environment comprises of laws, government agencies and pressure groups. Business Legislation protects companies from unfair competition, customers from unfair business practices, and interest of the society. Consumer Protection is one of the most important aspect that had to be followed by the business legislation in Silver Spring, maintaining the product quality and disclosing the facts about the product is very important. Anti-competitive agreements among competitors are restrained in Silver Spring. Agreements such as price fixing and customer and market allocation agreements are prohibited in Silver Spring. Economic factors Economic environment helps in determining the strength and size of the market. LOOKS need to analyze the economic environment as the available purchasing power in an economy depends on current income, prices, savings, debt and credit availability in the economy. So its important to analyze the major trends in income and consumer spending patterns. Income Distribution The total number of household in Silver Spring is 30,374. Average household income of the area is $51,653 and the average income of the family is $60,631. The per capita income of Silver Spring is $26,357. 9. 3%(7300 people) of the population are below poverty line. The cost of living in Silver Spring is 40. 12% higher than the US average and the unemployment rate is 5. 10%. The recent job growth trend is negative. c. Social factors Silver Spring people are looking for services and products that provide them ‘Self realization’. Customers have become more value driven in choosing their products or services. Silver Spring organizes several ethnic festivals, musical and entertainment events. One of the most famous film festival i.e. Silver docs Documentary film festival is held every year in the month of June. Silver Spring also organizes Silver Spring Jazz festival which is one of the biggest musical festival which attracts more than 20,000 people. This festival is held on the second Saturday in the month of September. It also hosts American Film Institute Silver Theatre and culture, which showcases American as well as different foreign movies. Silver Spring is one of the major area of Montgomery County, the revitalization of Silver Spring has beckoned diversity of people wide variety of ideas. Thus, Silver Spring had a wide variety of culture. SLP02 7. COMPETITIVE ADVANTAGE ANALYSIS SWOT Analysis : Strengths : * Location, centrally located * Well-trained employees with excellent styling, hair care skills * Customer focused business practice * Wide range of services * Low cost * A powerful strategy supported by competitively valuable skills and experience in key areas * A strong financial condition; ample financial resources to grow the business * Product innovation skills * Wide geographic coverage Weakness : LOOKS will cater to a diverse variety of people of different culture and races i. e. whites, African American, Native Americans, Asians and people of other communities and culture. The Social class which LOOKS will target will be Middle class, upper middle class, Lower upper and upper uppers. Psychographic Segmentation: ‘Lifestyle’ and ‘Style statement’ are one of the priorities of people of Silver Spring. LOOKS will target the audience who are straights, swingers and long hairs having different personality traits. LOOKS will personify the personality of its target audience, by giving a style to their living. 9. SERVICE DESCRIPTION Silver Spring organises lots of cultural festivals, film festivals, and musical events. So LOOKS will cater the need of style needed by the target audience during these occasions. LOOKS will provide a quality service so as to keep the customers satisfied. With the trained and specialized staff it will also be able to speedy service to the client. As people look for quality, convenience and speed. LOOKS will focus in making hard core loyals, through its customer service, quality and style. 10. BUSINESS MISSION LOOKS is committed to provide the best services to its customers, it will provide its customers best professional services in the field of Hair care and styling. With the changing environment, the company will acquire new trends and will upgrade its services to provide best services to its customers. 11. GENERAL OBJECTIVES or GOALS Financial: 1. To reach the breakeven point within two years of the business operations 2. Growth of 10% profits from the base year. Nonfinancial: 1. Expand the operations of business by including new hair care programs within five years. 2. To become one of the best hair care salon in Silver Spring 3. Attracting the customers from the areas near silver Spring 4. Providing best services all round the year. 5. Provide professional services in affordable price. SLP03 12. DISTRIBUTION, LOCATION amp; TIMING The primary base of any beauty hair salon is to provide basic hair cut and other hair styling. LOOKS will be one stop solution for all the hair care needs. LOOKS provides hair styling for the entire family. The services of LOOKS will include Haircuts, Formal Styling of hairs, Casual hair styles, coloring, highlighting, perms, deep conditioning treatment, hair care treatment, hair spas, relaxers, massage, hair extension. Service is offered on a walk in basis or by appointment. LOOKS will emphasize a customer-centric service where the customers needs are always the priority. Highlighting is one of the essential services that is demanded by the customers in silver Spring. Coifed hair is one of the famous dress code that is followed by many women at their workplace. Customers not only just look for getting their hairs highlighted, but also prefer the services as cut with waving and smoothing. The main focus of customers in today’s time is quality of service that is provided at the hair salon, they aspire quality services as work place appearance code is one the important aspects of people in Silver Spring. Colouring and highlighting of hairs helps is transforming or changing the look and appearance of the person. Hair straightening and smoothening is also one of the major services that is demanded by the customers. LOOKS will also follow the new trends of hair styling just as blowout styling. LOOKS will also provide therapies and spa treatment which will help in recovering the damage hairs, hair loss and thinning hair treatments. 13. VARIATIONS IN TARGET MARKET LOOKS will tailor its services so that it caters the needs and wants of local customer group as well as immediate neighbours of Silver Spring. People in Silver Spring are of different races and culture so the customers will have diffused preferences, the consumer preferences will be diverse. LOOKS will operate in Silver Spring and its surroundings and will cater all the local variations. It is a suburban area. With the connectivity with two major cities, Washington D. C and Biltmore, it will also target the people residing near Silver Spring. SLP04 14. INFORMATION NEEDS Information on segmentation and competition are essential. Marketing Segmentation is an effort which helps in increasing company’s precision marketing. LOOKS will practice Segment Marketing as it will help in creating large potential market, as LOOKS will provide its services at low cost, it will be able to attract customers and the low costing can help gaining higher margins in future as LOOKS will cater a large market. The main aim of LOOKS will be to create and retain customers, keeping in mind the tastes and preferences of the customers. LOOKS can also create a few fine toned services and can price them accordingly for a high class segment. 15. PERSONAL SELLING LOOKS will adopt Full Market coverage strategy, it will serve all customer groups with all the products they might need. The services and marketing will be designed in such a way that it will appeal the broadest number of buyers. It will aim to endow its services with a superior image in people’s mind. It will try and win price sensitive market by keeping low cost to the services provided. 16. TRAINING * Gap between management perception and service quality specification: This gap occurs when management correctly perceives the requirement of the client but it is not able to provide that service because of the specified performance chart. There are several guideline that a company has to follow. LOOKS will use the products of latest technology so as to serve its clients with the services and style needed. Gap between service quality specification and service delivery: This gap occurs when the personnel is not trained properly and is incapable to meet the standards. LOOKS will focus on training its stylists from few of the top styling professionals, so that LOOKS is able to deliver the specified service required by the client. * Gap between perceived service and expected service: This gap occurs when the customers misperceives the services that is to be provided by the company. LOOKS will minimize the gap between the perceived service and the expected service. It will cater to the expected needs of the clients of LOOKS. LOOKS will give importance to reliability, responsiveness, assurance, and empathy so as provide the determined service quality. 17. INCENTIVES * Gap between customer expectation and management perception: This gap occurs when the management is not able to perceive correctly the requirement and wants of the customer. LOOKS will consult the clients to know their expected needs and wants. The stylists will be trained in the way, that they work in accordance with the expectation of the clients so as to reduce the gap between customer satisfaction and management perception. Gap between service delivery and external communications: This gap occurs when customer satisfaction are affected by statements made by company personnel. LOOKS will focus on meeting the requirement of the clients, the clients who are decisive about the style or the service needed by them will be consulted by our consulting professional who will specially focus on understanding the requirement of the client. 18. EVALUATION OF SELLING PERFORMANCE LOOKS is a customer centred organization. LOOKS has to differentiate its services from its competitors to emerge as the best Beauty Hair Salon in Silver Spring. LOOKS will provide high Performance Quality to its customers. It will provide its customers the style and services as per their specifications. LOOKS will focus on customer satisfaction; the services that will be provided by LOOKS will enable the customer to feel good. LOOKS will provide the adequate and demanded quality to its customers by consulting the customers, the stylist will provide the services as needed by the customer. LOOKS will earn a strong competitive advantage through Personnel Differentiation. LOOKS will train the employees by the best stylists to cater to its customers. The physical space of LOOKS will be another powerful image generator. 19. COMMUNICATION OBJECTIVES LOOKS will help women in balancing their lifestyle, taking care of their hairs. It will be a treat for women who have time. It will be one of the places where men and women can get pampered by the hair treatment, spas and other hair styling and hair care services. LOOKS position itself as â€Å"one-size-that -fits-all†, and â€Å"A mirror to your Image† 20. COMMUNICATIONS STRATEGY The main objective of LOOKS is to build trust in women, once LOOKS is able to gain the trust then they tend to be loyal. Objectives of LOOKS: * Visual excitement environment * Fashion authority * Above average quality and value for money * Customer dedication * Providing unrevealed value to our customers in the quality of services provided by LOOKS * A commitment to putting customer first at all times. LOOKS will focus on building awareness, attracting traffic or eyeballs, turning first-time buyers into loyal repeat customers as it is the Holy Grail of marketing strategies. It will provide new innovative colors as well as style to their clients. As the customers in this industry have diffused preferences, the preferences of the clients will be considered and worked accordingly. The salon will focus on satisfying both Employees as well as customers because if the employees are happy they will keep the customers happy. A Fun to work environment will be adopted to add a spark in the working environment. 21. MEDIA LOOKS will follow the cheapest mode of advertising . i. e word of mouth as it will focus on customer satisfaction. Other modes of promotion will also be followed like advertising through banners and hoardings. LOOKS will position itself as ‘Mirror to your image’. * Newspaper : One page advertisement will be displayed in the leading news papers of Silver spring as Silver spring Gazette, and Mondotimes. It will help in targeting a greater audience as it covers large geographic area. * Front store Display: As these displays are visible by the pass by, it will help in attracting customers. * Banners: these displays will also help it attracting huge customer base. * Radio :Radio is also one of the most effective mode of promotion, In Silver spring there are huge number of radio stations that operate. It will also help in attracting huge customers as radio also targets huge geographical area. AM station like WACA, (1540 AM), W7OP (1500 AM), FM stations like WWDC (101. 1 FM), WCSP (90. 1 FM) * Pamphlets: To increase more awareness, printed pamphlets can be distributed near schools, shopping places, amusement parks. * Specialty advertising: In this LOOKS will advertise by few useful, low cost items bearing the company’s name and address, on few of the items advertising message will also be displayed. This will include ball pens, calendars, memo pads. Maintaining ongoing contact is essential for building relationships. It is the extension of engaging and focuses on keeping a customer. The objective is to increase the customer base, and retaining customers and engaging them on an ongoing basis results in increased product service opportunities and provides the opportunity to learn more about the customer, and forge closer relationships. 23. SALES PROMOTIONS LOOKS has to build effective communication strategy so as to capture maximum market. LOOKS has to work to develop an insight in people. LOOKS will be positioned in the mind of people as â€Å"one stop solution for hair care and styling†, one-size-that -fits-all†, and â€Å"A mirror to your Image†. LOOKS has to follow â€Å"learn-feel-do† model for determining its communication objective as the target audience has high involvement with a service provided to have differentiation. 24. ADVERTISING AND PROMOTIONS EFFECTIVENESS Competition and Buying patterns of people of Silver Spring LOOKS competitors include: 1. Traditional Barbers: 2. Franchised Quick Salons 3. Independent Salons Ebony Barbers Unisex amp; Fenton Barber Shop are the main competitors of LOOKS. The buying patterns of men and women are quite different. Men are more sensitive towards pricing and convenience. Women are concerned and conscious with their styles and trends that are being followed. Monitoring needs to be carried out effectively, and that the feedback gained is useful and appropriate, it is also imperative that feedback is considered in any future decision-making SLP05 25. OVERALL COSTS The average price that we will charge for the styling of hairs will be approximately $100. The fixed cost will be approximately $100,000 per year including the equipments and the variable cost will be approximately $25 which will mainly include the electricity expenses, employee cost and other miscellaneous cost. Calculating the break even point: BEP = [FC ? (P – UVC)] BEPQuantity = [$100,000 ? ($100 – $25)] = 1333 customers BEPRevenue = 1333 customers ? $100 = $133300 The above figures are tentative and subject to change with the market conditions and demand. LOOKS will follow super value strategy, it will provide high quality of service in low price, so as to attract maximum customers. LOOKS initial focus is to attract maximum customers. It will follow Market penetration pricing, this will allow LOOKS to win the largest market share. New and quality product range of the hair care products will also be kept at the salon as many people prefer these for home use as well and it will turn out to be one of the channels for sale for high premium brand products. 27. TEMPORARY PRICE PROMOTIONS A new style of services will be provide to the client, all their requirements will be considered so as to provide them with the best result, the salon will give a total new look to the client keeping in mind the texture and the nature of his hair using best products and giving best services. The salon will follow distinctive strategy for positioning. The price will be on a lower end, as main motive of LOOKS is to give customers the value for the product and their satisfaction, as Customer value and customer satisfaction are very important for any company or a brand to sustain in the market and capture the market share. LOOKS will be focusing on price-quality effect . i. e. providing high degree of quality product. 28. PROFITS LOOKS will also keep premium  hair care products  for sale as they are one of the important revenue generator, they help in providing 5% to 40% of revenue. These professional quality supplies will include shampoos, conditioners, hair colors, reconstructions, brushes, combs, and other styling aids. 29. LEARNING Attract The critical first step of the customer experience is to attract customers to LOOKS. After attracting, it then need to engage customers to obtain their interest and participation. Engage The key factors at this stage are Convenience combined with interesting and innovative services. Learn Building up a knowledge database on each customer – is an important aspect that needs to be done at LOOKS as it can create value for the customer and help build the brand-customer relationship. Relate By leveraging the multidimensional data gathered from ongoing interactions with individual customers, LOOKS can create value by providing a personalized experience. Customization and good Customer Care help to erect switching barriers and encourages customers to return and repeat the cycle. LOOKS has to focus on generating high customer loyalty by delivering high customer value by designing superior value proposition backed by superior value delivery system. LOOKS success depends on the way it creates and deliver the value which is superior than its competitors, which is develops following capabilities : * Understanding customer value * Creating customer value * Delivering customer value * Capturing customer value * Sustaining customer value LOOKS will focus in making their customers their ‘True Friends’ i. e. it will bbuilding relationships with the right customers Conclusion: The marketing strategy will seek to first create customer awareness regarding the services offered, then develop the customer base, and finally work toward building customer loyalty and referrals. The message that LOOKS will seek to communicate is that the entire family can be served quickly, professionally, with superior customer service at reasonable rates. The message will be communicated through various methods. The first is in-store and storefront displays. This will be a convenient method to attract people that walk past LOOKSs store front. The other method of communication is advertisements in two local newspapers.