Small Business Advisory Group Presents: SPS Spindle Parts and Service Marketing Strategy

1. Small Business Advisory GroupPresents:SPS Spindle Parts and ServiceMarketing Strategy Jess Bermingham Danielle Boxer Stephanie Hartenstein Doug Quaranta Adam Stuart Yadira Vega Genevieve Wilcox Zak Wood

2. Summary The Small Business Advisory Group of Franklin Pierce College, has prepared a marketing plan for Spindle Parts and Service. The following presentation is a brief overview of our research, findings, objectives, analyses and strategic plans.

3. Market Situation • There are a total of 362,829 establishments in the manufacturing industry • This industry has annual profits of $51 billion, which is up $12.8 billion from this same time last year • In New Hampshire the number of manufacturing establishments has been steadily increasing • One downfall is that many of these industries are located on or near the west coast.

4. Macro-Environmental Situation In America • Trends in the furniture industry: • The United States and Canada have a combined furniture production of more than $33 billion dollars • American manufacturing is maturing and changing, towards a more technological age • The furniture industry grows more or less in unison with the overall economy • Many manufacturing jobs have migrated toward countries with lower labor costs

5. Lifestyle Trends

6. Macro-environment in Europe • The macro environment in Europe is similar to ours here in the United States. In Europe they are also trying to find ways to cut down on pollution. • The economy in Europe is in a slump, they are trying to find ways to cut costs. • These could be potentially harmful to starting a new business in Europe.

7. Macro-environment in Europe cont. • Larger countries have more money to take on these projects, while the smaller countries don’t have the resources to bring in these new businesses. • The growth of the market in these small countries can’t handle bringing in these new businesses. • They cannot justify the high risk and the money that it takes to start these companies in the small countries.

8. Competitive Situation in America -Market Situation • Very Competitive Market • Hard to enter the market • Knowledge of the market is very important • High start up costs • All of these reasons will deter new . business into the market

9. Competitive Situation in America -Competitor Outlook • Plenty of competition located throughout . U.S. • The ease of shipping makes everyone in . the industry a competitor • Websites help companies get their name . out to prospective customers • A high customer base and loyal customers . are key for survival

10. Competitive Situation in Europe • Two dynamic forces of our time: Globalization and the online movement • Increased International sales • 338 million Non-English speaking Internet users and nearly half of all Internet users live in Asia and Europe • In 2001-2002, analysts determined that 71% of Internet use and 56% of E-Commerce use came from outside the United States (2/3 of all E-Commerce this year 2003 alone)

11. Competitive Situation in Europe cont’d • Elimination of geographical barriers to entry • Costs associated with online website construction • Global Reach Program: allows a small company to enter several online markets for less than $695, while typical translation costs are $50-$100 for a short page consisting of 200-300 words

12. Past Product Performance -Cost of Sales has been consistently even and have never been higher than Sales. Because of these costs, it has left the firm with a respectable Gross Profit- which has never been negative. • -In March 2003, the expenses were 85.4%; May 2003 69.4%, July 28.0%, and in the most recent month, Sept. 2003, they ended with 33.1% -Profit increased in the month July and then had a significant decrease in the month of September.

14. Financial Analysis • SPS has a Profit Margin Ratio of 1.88%. What does this mean? • The Total Assets Turnover is .55 times or 54.9%, which is low and could be higher. • What this number means is that SPS has $0.55 of sales for every $1 of assets. This is interpreted as the number of dollars in sales generated by each dollar of assets.

15. Cont’d • SPS has more Liabilities than Assets. This is represented by the Debt Ratio. Basically our consultant team recognizes that SPS is borrowing more then they are investing. The firm’s Debt Ratio is… 303,660.43/238,127.00 Total Liabilities/Total Assets 127.50% As the Debt Ratio is rather high, the Current Ratio is satisfactory. Current Ratio is 6.1% What does this mean? ….SPS has $1.61 of assets for every dollar of debt.

16. S.W.O.T Analysis Strengths: -Clean working environment -Cohesive management team, allowing for efficient communication within the company -Equipment is more specialized, giving SPS an edge on precision jobs -Relationship with competitor next door allows for use of equipment without buying it, therefore produces more

17. S.W.O.T. Cont’d Weaknesses: -High dependence on competitor next door could backfire -No general IT personnel, such as an e-commerce specialist -One technician limits amount of work that can be done at one time

18. S.W.O.T Cont’d Opportunities: -Website development -Break into European market -Register on the Thomas Registry. Allows for representation along with SPS competitors -Trends in furniture manufacturing are predicted to grow world wide Threats: -Technology is constantly changing -Acquisition of neighbor company, could bring in a competitor; unfavorable of the current “partnership” situation. -Manufacturing jobs are moving south of the border

19. Financial Objectives • Lower outsource to below 50% • Increase net sales for the next fiscal year • Lower debt (liabilities)

20. Marketing Objectives • Increase market share by keeping an open line of communication with customers, as well as gaining new customers • Utilize web-site links in conjunction with companies SPS services • Maintain a high level of customer satisfaction • Solicit customer feedback through web-site and other methods such as surveys

21. Action Plans • Increase advertising budget by 5% ($) • Create more press releases to send to the local media, as well as the European market • Create e-marketing campaigns • Create an easily navigable website

22. Advantages of increasing your advertising budget -Remind customers of the benefits of your product or service -Establish and or maintain a distinct identity -Enhance your reputation -Attract new customers and replace lost ones -Slowly build sales to boost you bottom line

23. Advantages of e-marketing • Cost effective and if done right, can build brand awareness and loyalty • Typically costs a few cents per message • The business information that customers provide when signing up for an e-mail newsletter is extremely valuable • Response rates are strong, 5-35% while traditional mail averages 1-3%

24. An Effective Website Should: • Have a simple design and be user-friendly • Informative and upbeat. Consistent with other forms of media • Be used as a selling device that promotes the company to prospective customers • Include a homepage with executive summary, address, phone numbers, and e-mail address. • Include links to other pages • Also be used as a recruiting tool for potential employees

25. How to use website to penetrate other markets • Decide which markets the firm would like to target • Build partnerships with U.S. and European Web integrators and translation companies that have locations in the regions where SPS plans to conduct business • Locate firms to assist the firm in all the various aspects about globalizing SPS such as marketing consultants, lawyers, after-sales support teams, etc

26. Thank You for your time…Any Questions?