Marketing Plan for Swimming Pool Company
The world we live in is constantly changing and forces us to adapt along with it. The society is currently broken in two in regard to a major concern: the environment. Whereas some militate for its protection, others indulge in excessive consumerism. The swimming pool industry is market by this trend in the meaning that the consumers desire more and more swimming pools, but the protectionists wish to close them down in order to reduce water waste. This feature must be kept in mind by all those who desire to launch their business into the industry. But aside from this, other major issues must be looked at, such as the economic, technological and political backgrounds, against the market trends and the personal characteristics of the organization.
The swimming pool industry has been extremely profitable, attracting new entrants each year. But resistance in the sector has proved far more difficult than initially expected. The customers are rather pretentious and promote high demands and expectations, which can only be served and satisfied by specialized teams, using the latest technologies. Then, numerous environmental concerns have been addressed, such as the need to preserve the water resources through the reducing of water consumption. To best understand the industry in which the swimming pool company will activate, one should first develop a PEST analysis.
2.1 PEST Analysis
The PEST analysis highlights the particularities of the environment in which the new company will activate. “A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment. Such external factors usually are beyond the firm’s control and sometimes present themselves as threats. […] However, changes in the external environment also create new opportunities” (Net MBA, 2002-2007)
The United States are currently undergoing the pre-election stages and being that this is an election year, some changes might occur. However, the general political stability is not affected. The environment promotes the regulations of free competition and the companies must comply with numerous laws in regard to best practices, customer and employee rights. Some of these obligations include a clean water, free from bacteria and other germs that could spread diseases, as well as the usage of adequate pumps and filters.
The general economic environment within the United States and consequently Florida is currently less stable than in the previous years and it has been severely affected by the real estate crisis, by the record high prices of petroleum as well as by the record high federal debt. However, signs of improvement are obvious and they materialized in a stable dollar. The gross domestic product is following a continuous ascendant trend with an estimated growth of 2.2% for 2007. The labour force is comprised of 153 million individuals, with an unemployment rate of 4.6% (Central Intelligence Agency, 2008)
The authorities promote a free market which establishes its characteristics based on demand and offer and with limited to none intervention from the U.S. government. Companies are free to choose those means of financing their operations which they feel are best, including bank loans or the issuing of stocks.
There are three major characteristics of the social environment which could affect the swimming pool company. The first is an increasing tendency towards luxury and consumerisms, which make individuals desire to own their personal pools within their homes. Then, there is an increasing concern for health related issues, which promote physical exercise and increase as such the number of swimmers and the need for more swimming pools within health centers and spas. Finally, the third characteristic is given by an increased concern over the protection of our natural environment, which materializes in the need to reduce water waste.
During the recent years, technology has become an integrant and crucial part of our daily lives. And the latest technological advancements support the swimming pool companies in adequately conducting their operations. They present the companies with the proper tools to clean and upkeep the pools, such as filters or pumps. They also offer companies the chance to virtually design or redesign the pool according to the unique requirements of each client. A latest technological development in the area of swimming pools is given by the cleaning of pools with the aid of ozone, rather than chlorine (Finney, 2008).
2.2 Company Analysis
The swimming pool company was founded in Charlotte County, Florida by two college students who desired to earn some extra money and support their studies by cleaning pools. With time however, their business expanded and the two received so many orders that they found it impossible to honour them all. As such, they brought in additional help. They now operate with a total of 20 cleaning employees and three administrative staff. Their current strategy is that of expanding their services from cleaning pools to also repairing and remodelling swimming pools. For this however, they will need additional funds and more specialized employees.
The corporate mission at the company is to offer the customers the best services, uniquely adapted to their particular needs while in the same time cherishing and valuing the employees.
The mission statement perfectly depicts the corporate culture promoted by the management at the swimming pool company, which revolves around the complete satisfaction of the needs and demands forwarded by the customers, the respect and valuing on the employees. Also, all activities commenced by the organization are done with the stated purpose of achieving beneficial financial results in the form of profits. The company is not publicly traded and the two founders have equal rights and responsibilities.
Aside from the PEST analysis, the SWOT analysis is yet another important tool in developing a marketing plan. It points out the internal as well as the external forces which might support or prevent the organization from reaching its goals.
High quality management and committed personnel
Strong financial highlights
Large numbers of satisfied customers and increasing demands for the company’s services
Lack of previous expertise with remodelling and repairing swimming pools
The new venture would generate additional costs, which cannot be entirely covered by the private funds of the organization
Increased focus on swimming as part of a healthier life
Increased numbers of wealthy individuals who desire to own their personal pools within their homes
Increased demand for more public swimming pools within health centers and spas
Increased environmental concerns over the protection of the environment and the reduction of wasted water
Increased competition within the industry
3. Analysis of Markets and Customers
The market of swimming pools promotes the idea of a healthy life through the practicing of sports. And this idea of health has also led to the incorporation of numerous technologies which make swimming less risky and more enjoyable. Such measures include a better cleaning of the pools as to reduce bacteria and the chances of contagious diseases as well as the elimination of chlorine from the process and its replacement with ozone cleaning technologies. In order to survive in such a demanding sector, the company has to be extremely strong and adaptable to the requirements and new needs. They must also constantly supervise the market in order to identify new strategies implemented by the competition and make as such sure that the services offered are competitive.
Another major characteristic of the market is given by the external trends in the industry and the environment which directly impact the swimming pool company, namely the increased concern for reducing water waste. This could mean that more and more swimming pools will close down and the company would lose numerous customers. “Jobs will be lost and the future of the sector is under threat because of level three water restrictions. Level three restrictions were introduced in mid-December last year, banning customers from filling or topping up new swimming pools without written exemption from water supplier ACTEW. They’re going to lose out on a $40 million industry, and they’re going to put a hell of a lot of people out of work” (Wiesemes, 2007).
But regardless of the threats in the environment, the pool service industry continues their operations in the attempt to increase their revenues by satisfying as many customers as possible. And the needs of these customers are extremely various, differentiated by the type of customers: a simple individual or an organization. The individual represents the swimmer in a public pool or the owner of a pool at his house, whereas the organizational customer represents the owner and manager of public pools, such as hotels, health centers of spas.
The needs of the individual customers could be summarized as follows:
Customers need a place where to spend their hot summer days
Customers need a place where to exercise in order to maintain or improve their health
Home pool owners need high quality services of cleaning, repairing and redesigning the pools according to their unique requirements
The needs of the organizational customer include:
Professional services for cleaning, remodelling, upkeeping and repairing the pool
High quality services using the latest technologies and at reasonable prices
Commitment, dedication and the guarantee of a job well done and a timely delivery
4. Marketing Planning
The marketing planning revolves around three major concepts the swimming pool organization must consider: the segmentation criteria applied to the audience, the identification of the target market, or markets, and finally, the positioning of their products and services.
There are numerous criteria used to segment the market and identify those particular groups of individuals to which to address the service. The most relevant criteria include demographics, income or personal preferences and capabilities of the individuals in the segment (Brown, 2007). But the selection of the most relevant segmentation criteria must be made relative to the type of activity conducted by the organization. In this order of ideas, the segmentation criteria most relevant for the swimming pool company revolve around:
Financial capabilities of the customer – regardless of them being corporate or individual clients, they must all be able to pay the fees for the cleaning, repairing or remodelling of their pools. In this order of ideas, the individual potential customers must register above medium incomes and the corporate clients must have ended the previous year with profits
Then, the customers must be interested in swimming activities
Finally, the targeted audience must be formed from adults who have the capacity to decide and pay
However gender is commonly used as a segmentation criterion, in the present case it does not matter since both men and women can be responsible for the upkeeping of the pool at the workplace or can own their personal swimming pools at home.
Based on the nature of the activity conducted by the swimming pool company and the characteristics of the industry and market and also by keeping in mind the segmentation criteria forwarded in the previous section, the company will mainly address two target markets.
The first target market will be formed from individuals registering above medium incomes and who own their personal pools. The members of this target market are house owners, rather than flat owners, and tend to live in the suburbs of the large cities. The second target market will be formed from corporations who offer swimming services to their customers, such as hotels, health centers of spas.
However the close collaboration with the two target markets is vital for the future success of the swimming pool company, an important specification must be made. The market of individual customers is basically formed from old customers of the company’s, who have been gathered along the years and will not be put aside in favour of corporate clients, even if the latter present more chances of future financial success and a better stability through the signing of long-term contracts for the cleaning and upkeeping of several pools owned by the organization.
Administrators of public swimming pools managed by the state or local authorities will also be addressed, but they do not represent a main target market.
The main idea in positioning a product or service is that of presenting it in the light of its core competencies, its sustainable competitive advantages and the benefits it will offer the customer (Ries and Trout, 2000). It is also based on presenting those features which make the service better than the similar ones promoted by the competition. Keeping this in mind, the services of cleaning, remodelling and repairing of the pools will be placed onto the market as according to the following characteristics:
The company has extensive previous expertise with working with swimming pools
The company numbers a wide array of satisfied customers
The company uses the latest and most environment-friendly technologies
The company employs highly specialized staff, committed to satisfying all needs forwarded by the customers
The organization will offer specialized and personalized solution based on the unique requirements of each client.
5. Objectives and Strategic Direction
Through the expansion of their business operations, the swimming pool company desires to achieve the following goals:
Increase their customer base with both individual as well as corporate clients
Increase the level of satisfaction and the quality of services offered to the customers
Improve their machines by purchasing and incorporating newer and better technologies
Increase their annual net income
The objectives promoted by the organization are SMART, in the meaning that they are specific, measurable, achievable, realistic and time-sensitive (Acuff and Wood, 2004)
Specific – gain more customers, improve the technologies and register superior profits
Measurable – the organization will measure their achievement of the goals through intense internal control, the implementation of adequate strategies and by measuring how the implemented procedures have managed to retrieved the desired outcome
Achievable – the goals established by the organization are challenging in the meaning that they launch the company onto new territories, but are not impossible to meet
Realistic – the goals will be achieved within the specified amount of time and with the resources available, completed with outside resources where necessary
Time sensitive – the goals are set within an approximate time frame, such as end the first year of extended operations with a $50,000 profit after taxes.
In order to achieve these goals, the swimming pool company will have to implement a wide series of strategies regarding the quality of the management, choosing the most viable courses of action, motivating the employees, enlarging the customer palette and a large number of other strategies in regard to the service offered. The strategies related to the service will be further developed within the Marketing Mix section and clearly organized into the four types of decision that need to be made: product, place, promotion and price.
The human resource strategies are necessary to ensure that the staff increases their performances and sustains the organization in reaching its overall goal. To achieve this desiderate, the swimming pool company will offer a wide array of incentives to their personnel, including increased wages, benefits, flexible schedules, more free days or any other type of personalized incentive. Furthermore, the management must support and encourage constant communications with the employees and try to align their individual goals with the overall goal of the organization (Mathis and Jackson, 2005).
6. Marketing Mix
The marketing mix encompasses all decision and consequent strategies that will be implemented in regard to product, price, place and promotion. Product decisions refer to features such as brand, functionality, quality or safety. Price decisions generally refer to the pricing strategy to be implemented and any promotional prices offered to customers. Promotion decisions refer to choosing the appropriate communication channels used to present the service to the population as well as the advertising strategies and campaigns. Place decisions revolve around the distribution channels used and any other logistics decisions that must be made to support the business operations (Net MBA, 2002-2007).
Aside from the already existent pool cleaning services, the company will also offer repairing and remodelling services to both individual as well as corporate clients
The services will be offered under the company’s brand name
The stated functionality of the service is to help customers have a better and cleaner pool
The safety of the services is offered by the usage of the latest technologies and the increased usage of environment friendly procedures, such as ozone instead of chlorine
The services offered will meet superior quality standards and this will be assured by the good reputation of the company
The services will be offered at the place required by the customer, namely at the actual location of the swimming pool
The company will be reached by the interested customers via telephone or email and also at the company’s headquarters
The organization will conduct the operations from its administrative headquarters, where it will also keep the necessary machineries and tools used in the process of cleaning, repairing and remodelling of the swimming pools
For starters, the organization will implement a penetration price strategy, meaning that they will offer their service at extremely low prices in order to ensure a successful penetration of the market and gain the interest of customers (Riezebos, 2003)
Then, the swimming pool company will implement a variable pricing strategy, which will be established based on the costs of offering the service; any change in these costs will be reflected in the retail price to the final customer
In establishing their retail price, the organization will also consider the prices implemented by the competition, trying to lower them the company will also offer promotional pricing, but this will be discussed in the Promotions section
The swimming pool company will offer promotional prices to its first customers consisting in major price reductions
They will also implement promotional strategies such as three for the price of two, meaning that if a customer pays the organization to clean the pool twice, they will clean the third time for free
Up until now, the company has attracted new customers through the word of mouth, however this strategy will be insufficient from now on the organization will hire a specialized team to develop a strong advertising campaign, focused on the core benefits of the service and aimed at attracting more customers
The advertisements will be aired on a large majority of available media channels, including television, internet, radio, street banner and fliers
The two founders of the organization will grant interviews in specialized magazines and journals and will make public appearances, also aimed at increasing the interest of potential clients
7. Budgeting, Forecasting and Tracking Progress
Given that they are a relatively small organization, the swimming pool company is not publicly traded. And engaging in such actions would retrieve reduced beneficial results for the time being. As such, in order to found their investments, the company will use its own economies and the difference will be supported by a bank loan. The total value of the new venture will be of $500,000, with $300,000 coming from the company’s personal funds and the rest of $200,000, coming from a bank loan. The company should encounter no difficulties in accessing the loan as they present steady but constant increase during the past years and great future potential.
The marketing budget for the first year of extended operations will be based on the expanses with market research, promotional sales and the advertising campaigns and will look as in the table below:
Street banners and fliers
Other marketing expenses
Aside from these expanses, the organization will have to allocate sufficient funds for other operations, including the payment of the employees’ wages or the purchasing of newer and better technologies. For the future, the company might also have to look for a bigger facility from where to operate.
The company expects to retrieve a minimum net profit of $50,000 after the first year of extended operations and to make a full return of their investment in five years. The management will implement a strict internal control in order to track the progress made.
8. Implementation and Control
In order to ensure that the initially stated goals are achieved, the organization should implement their strategies based on the following eight steps:
Conduct market researches to identify the need for the services, the customer and competition features
Allocate the budget and apply for a bank loan
Purchase the newer and better technologies
Hire specialized staff and train the existent staff
Promote the corporate culture based on respecting and motivating the employees and satisfying the customers
Contract marketing specialists to develop a strong advertising campaign
Launch the campaign to inform and attract customers
Offer promotions and commence delivering the service
Given that the company is a relatively small one, they will not afford specialized assistance to control the operations and the implementation of the strategies. The control is however crucial and it will be ensured by the company’s management, who will focus on the actual implementation of the strategies and how these strategies manage to retrieve the desired results. They will also identify any shortages and come up with solutions to the problems identified.
If the company encounters major difficulties in achieving their goals and successfully serving both target markets, they will continue by focusing on only one, relative to the income generated. For instance, if the corporate customers generate more revenues and the individual customers are rather expensive to serve, the company will further focus on offering their services to the corporate clients.
The swimming pool company was founded by two college students and is now turning into a major business, activating in a changing and demanding industry. Their operations are influenced by the features of the environment, but they base their future success on the high quality of the services offered, the commitment of the staff, the high quality of the managerial act and the increased number of satisfied customers.
However up until now the organization has attracted its customers through word of mouth, their expansion towards corporate customers generates the need for more specialized marketing procedures. The future operations will be founded from both the personal funds of the organization as well as a bank loan and the organization hopes to make a full return of their investment in the next five years.
Acuff, J., Wood, W., 2004, Relationship Edge in Business: Connecting with Customers and Colleagues when it Counts, John Wiley and Sons Incorporated
Brown, a., 2007, What is a Market, University of Delaware, http://www.udel.edu/alex/chapt9.html, last accessed on March 10, 2008
Finney, a., 2008, Alternatives to Chlorine for Swimming Pools, About.com, http://swimming.about.com/od/allergyandasthma/a/cl_pool_problem_3.html. Ast accessed on March 10, 2008
Mathis, R.L., Jackson, J.H., 2005, Human Resource Management, South-Western
Ries, a., Trout, J., 2000, Positioning: The Battle for Your Mind, 20th Anniversary Edition, the McGraw Hill Companies
Riezebos, R., 2003, Brand Management: A Theoretical and Practical Approach, Financial Management Times
Wiesemes, M., 2007, Water Restrictions Anger Swimming Pool Industry, ABC News Online, http://www.abc.net.au/news/newsitems/200701/s1826507.html. Ast accessed on March 10, 2008
2002-2007, Marketing Mix (the 4 P’s of Marketing), Net MBA, Business Knowledge Center, http://www.netmba.com/marketing/mix/last accessed on March 10, 2008
2002-2007, PEST Analysis, Net MBA, Business Knowledge Center, http://www.netmba.com/strategy/pest/last accessed on March 10, 2008
2008, the World Factbook – United States, Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/us.html#Econlast accessed on March 10, 2008
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