Costs and pricing strategy in Business Assignment PDF

LONDON BUCHAREST DOOR
TO DOOR

Table of Contents
SECTION ONE ..............................................................................................................................1
Business Summary......................................................................................................................1
Business Aims.............................................................................................................................1
SECTION TWO...............................................................................................................................1
Describing core product/service..................................................................................................1
Explaining USP of product/service.............................................................................................1
Describing any other product/service for selling........................................................................2
SECTION THREE...........................................................................................................................2
Describing typical customer........................................................................................................2
Where are the customers based...................................................................................................2
Explaining the branding and promptness of customers to avail product/service........................2
SECTION FOUR.............................................................................................................................3
Explaining market research.........................................................................................................3
SECTION FIVE...............................................................................................................................3
Competitor Analysis...................................................................................................................3
SECTION SIX.................................................................................................................................3
Marketing strategy......................................................................................................................3
SECTION SEVEN...........................................................................................................................4
Operations and logistics..............................................................................................................4
Premises......................................................................................................................................4
Equipment...................................................................................................................................4
Transport.....................................................................................................................................4
Legal requirements......................................................................................................................4
Insurance requirements...............................................................................................................5
Management and Staff................................................................................................................5
Additional information................................................................................................................5
SECTION EIGHT............................................................................................................................5
Costs and pricing strategy...........................................................................................................5
SECTION NINE..............................................................................................................................5

Financial forecasts.......................................................................................................................5
Build business session......................................................................................................................6
REFERENCES................................................................................................................................9

SECTION ONE
Business Summary
London Shippers is a start-up which will provide luggage transport services to customers
from London to Romania. It requires thorough market research as this business is highly
profitable and there are firms competing for market share. Well-defined strategies will be
implemented by company so that customers are satisfied in the best manner possible by
delivering faster and efficient services. This requires that firm will be able to ship luggages of
travellers from door to their destinations.
Business Aims
The aim of London Shippers is to deliver faster luggage of customers from their doorstep
and reach safely to their destinations. This would be accomplished by offering reasonable prices,
economic sound services by maintaining full satisfaction level of customers.
SECTION TWO
Describing core product/service
London Shippers will be operating on simple idea that travellers must enjoy the journey
as much as destinations. For accomplishing enjoyable travelling experience, it should not involve
carrying luggage. This can also lead to lost of luggage in transit in air plane or by road.
Travellers move to airport for check-in their baggages and end up in a long queue. This can lead
to frustration in start of trip and this can be resolved by London Shippers. The firm will pick up
luggages at the door of customers and sent the same to destination, thus, providing healthy door-
to-door services in effective manner (Chester, Ryerson and Horvath, 2017). This means that
luggage will be shipped to destination even before travellers reaches by. It will provide
satisfaction to customers as faster services will be offered to them which will make them loyal.
Explaining USP of product/service
USP (Unique Selling Point) of London Shippers is “When it is absolute, positively
luggage has to be there even in overnight”. This slogan or USP of firm clarifies that it will
deliver the services to customers in overnight as well as commitment made to customers cannot
be broken. Faster and before-time delivery will be made leading to impart maximum customer
satisfaction in the best way possible. This will provide consumers with enhanced services and
1

firm will be able to attain desired profits with ease. Thus, customers will be imparted with
convenience services at reasonable prices.
Describing any other product/service for selling
London Shippers will provide luggage transport services in order to satisfy customers.
For enhancing customers for more services, bicycle and bike shipping, golf clubs and skiing
sports equipment shipping will also be imparted leading to attainment of higher level of
satisfaction at affordable services. This will be beneficial for customers who can manage luggage
on their own but these type of shipping cannot afford (Zhang and et.al., 2017). Thus, along with
personal luggage services to customers, firm will offer services of shipping like bicycle, bike,
golf clubs, skiing equipments for travellers which will prove to be fruitful for company in terms
of higher profits.
SECTION THREE
Describing typical customer
Customers of London Shippers will be particularly the travellers who wish to travel from
London to Romania. The major cities of Romania will include Bucharest, Cluj-Napoca, Brasov,
Timisoara, Sibiu, Constanta, Oradea and other cities. This means that luggage will be picked up
from the door of customers which will then be shipped to hotels in London. This will eliminate
long queues for check-in on board at the airport and luggage will reach to address of hotel within
stipulated time being promised to travellers. While, for returning to home from London, luggage
will be picked and reach safely to cities in Romania where customers have their home.
Where are the customers based
The customers are based in Romania consisting of all cities.
Explaining the branding and promptness of customers to avail product/service
London Shippers has a distinct brand name that will be build up in a few years of
operations which will make customers to get loyal with it. Branding helps to get major
competitive edge over the rivals which benefits company in a lot for making its sustaining for a
longer time period in the market (Litman, 2017). It can be analysed that brand will provide
customers to get desired services in a better manner. Customers will become loyal to brand.
Promptness will be made and customers will be attracted through implementation of penetrating
2

pricing strategy by which customers will become loyal and avail services leading to attainment
of profits.
SECTION FOUR
Explaining market research
The market of luggage transport needs to be analysed so that strategies can be made
according to it. Freight Air Transport Industry and Road Transport of UK is operating on a large
scale by delivering door-to-door luggage services for maximising customers' satisfaction level up
to a high extent. It is required that firm should provide effective services so that profits may be
attained from the market. More reliable and faster deliveries and less damage during transit need
to be make so that London Shippers may be able to accomplish profits without any difficulty.17
SECTION FIVE
Competitor Analysis
Competition has become fierce in the luggage transport industry. It is required to apply
with well-defined strategies for outreaching customers up to a high extent in order to capture
market in the best manner possible (Havenga, Simpson and Goedhals-Gerber, 2017). The major
competitors of London Shippers are Eurosender, Excess Luggage and Luggage Forward which
provides quite effective services at cheapest available prices for attracting customers with ease.
They offer the cheapest shipping of luggages from Romania to London and round-trip as well.
They have partnered with transport and logistics partner leading to satisfaction level of
customers. For getting customer attention to firm, London Shippers will provide services at
lower prices to them for making them loyal to the brand.
SECTION SIX
Marketing strategy
Product-
Firm will offer luggage transport services to customers from London to Romania which
will consists of travel baggages so that they not have to wait for long at a queue at airport (Barry,
2017). Moreover, road transport will be also be done from taking luggage from doorstep to
transit to destination.
Place-
3

Place of firm's office will be in London and making out the services to people of
Romania by which they can enjoy their travelling experience in the best manner possible.
Price-
The price is main element in company by which customers decide to purchase services or
not. Since, London Shippers is a start-up, penetrating pricing strategy will be applied for gaining
customer base and attaining good share in the market (Marketing strategy. 2018).
Promotion-
It is required to initiate promotions so that customers may be able to know services of
firm. For this, use of social media marketing and TV advertisements will be made with the help
of which more customers will come to know about offerings of firm.
SECTION SEVEN
Operations and logistics
Premises
Premises will be based in London and will be an owned enterprise. In simple words, no
rental payments will be made leading to save on costs.
Equipment
The equipments will be needed such as forklifts and industrial equipments which will be
used for transferring luggages to shipping trucks. Double and four axle trucks will be needed
which will provide timely services to customers by reaching luggages at their respective nation.
Transport
The transport will be needed to ship the luggages in a better manner. Air transport and
road transport will be made as per the preferences of customers in the best manner possible. This
will offer convenience to travellers as shipping will be done before-time by keeping promises to
customers (Weske, 2012).
Legal requirements
Legality is required for making uninterrupted operational activities in a better manner. It
can be said that UK Civil Aviation Authority and road transport authorities will be complied
with. This will make sure that all legal requirements are made so that company may be able to
serve to customers without any difficulty.
4

Insurance requirements
Insurance will be provided on the luggages. This is required as during the transit from
Romania to London and back-forth, baggage may go missing or might get damage. Thus, in
order to make insurance of luggages during transit, local insurance company will be partnered
with and insurance requirements will be met quite effectually (Telecky and Cejka, 2017).
Management and Staff
The staff will be employed for providing the necessary services in the best manner
possible (Roberson, 2018). 50 employees would be hired for managing operations, delivering
agent, pick-up personnel from doorstep of customers. Thus, desired productivity will be met and
profits will be attained in a better manner.
Additional information
SECTION EIGHT
Costs and pricing strategy
Product/service name
Luggage
shipping
Number of units 100
Product/service
components
Includes travel
baggages of
customers
Total Product/service Travel luggages
Cost per unit 20
Price per unit 60
Profit margin 40
Profit margin (%) 0.4
Mark up (%) 40
5

SECTION NINE
Financial forecasts
Month 1 2 3 4 5 6 7 8 9 10 11 12
Sales forecast
Product/service 10 20 25 30 40 45 50 60 70 80 90 100
Costs forecast
Product/service 2 4 3 2 4 3 4 5 4 2 2 3
Total profit 8 16 22 28 36 42 46 55 66 78 88 97
Break Even Analysis
Particulars Amount
Fixed cost 20000
Price per unit 60
Variable cost per unit 10
Contribution per margin (Price-Variable
cost) 50
BEP in units (Fixed cost/Contribution
margin) 400
Cost Table
Cost Item Inclusion Total cost (Per unit)
Labour Includes salaries of employees 5
Trucks Cargo shipment trucks 7
Fuel expenses From doorstep to destination 6
6

Insurance expenses Transit safety 2
Total cost 20
Build business session
Business concept
London Shippers is a start-up which will provide luggage transport services to travellers
without hassling upon their luggages during trip.
Marketing Plan- Concepts
1. What is the market for product/service?
The market is cities of Romania such as Bucharest, Cluj-Napoca, Brasov, Timisoara,
Sibiu, Constanta, Oradea and many more.
2. How big is the market and potential customers to reach?
Romania has over 1.96 crores of population and customers will be reached to all cities.
3. Is product concentrated on specific customers?
The product is concentrated on specific customers.
4. Who are main competitors?
The competitors are Eurosender and Excess Luggage etc.
5. Is product/service easier to use than competitor's ones?
Yes, they are cheap.
6. Does additional benefit be provided to customers at same price?
Additional benefits of shipping of golf clubs, skiing equipments and two-wheelers etc.
7. What is it about customer service which will cause customer to give it a chance to buy?
Cheap services with higher quality of services.
8. How down costs will be kept for beating prices for competition?
Market penetration will be used for keeping prices down.
9. What makes product/service preferable to rivals?
The route of Romania to London as competition prevails.
7

10. What methods are used by competitors to market their product/service?
Word of Mouth advertising method is used by them.
11. What marketing methods will be chosen for making customers aware about product/service?
Social media marketing method and TV advertisements will be chosen.
12. Writing an Elevator Pitch for firm
We are London Shippers dedicated to provide luggage transport services to customers
from Romania to London for satisfying people during trip. Passion is to help people for hassle
free trip.
Marketing Plan
1. What problem does product/service solve for potential customers?
The problem of waiting in queue for check-in baggages at airport.
2. Why product/service solve problem better than competition?
Convenience of providing services solves problem for customers better than competition.
3. What is emotional impact that product/service has on customers?
Loyalty by offering services as per the commitment made to people.
4. What methods will be used for promotion?
Social media marketing, TV advertisements etc.
5. How much profit is expected to make single sale?
Profit of 40 will be made on a single sale by incorporating fixed, variable costs.
6. How many items are needed to be sold for getting back the money spent on promotions?
Break even sales is 400 units for getting money.
7. What is the initial time frame for promotions planned for running?
The initial time frame is of 3 weeks for promotions of business.
8

REFERENCES
Books and Journals
Barry, W. S., 2017. Airline Management: Business Management in Transport 3. Routledge.
Chester, M., Ryerson, M. S. and Horvath, A., 2017. Uncertainties in the Life Cycle Assessment
of High-Speed Rail’s Energy and Environmental Impacts. High-Speed Rail and
Sustainability. pp.278-298.
Havenga, J., Simpson, Z. and Goedhals-Gerber, L., 2017. International trade logistics costs in
South Africa: Informing the port reform agenda. Research in Transportation Business &
Management, 22, pp.263-275.
Litman, T., 2017. Autonomous vehicle implementation predictions. Victoria, Canada: Victoria
Transport Policy Institute.
Roberson, Q., 2018. Client Diversity: Understanding and Leveraging Difference to Enhance
Financial Planning Practice. Client Psychology.pp.203-220.
Telecky, M. and Cejka, J., 2017. Assessment of Financial Health of Selected Transport
Companies Conducting Business in the Public Line Transport. Periodica Polytechnica
Transportation Engineering.
Weske, M., 2012. Business process management architectures. In Business Process
Management (pp. 333-371). Springer, Berlin, Heidelberg.
Zhang, A. and et.al., 2017. Low-cost carriers in Asia: Deregulation, regional liberalization and
secondary airports. In Low Cost Carriers (pp. 55-69). Routledge.
ONLINE
Marketing strategy. 2018 [Online] Available Through:
<http://www.businessdictionary.com/definition/marketing-strategy.html>
9