Marketing Analysis Of FTO's Business
The aim of this report is to provide a detailed analysis of Felix’s Taxation Services (FTS) and examine how the allocation of $2000 in marketing investments will attract new clients and increase the business’s net profits. This report will take into account the macro-environment, the business’s internal structure and capabilities as well again an insight into the competitors in the same category (Sharp 2017 p. 590). This report will also evaluate and make recommendations that offer profit growth, generate more revenue and suggest marketing strategies that can be implemented to assist in the overall success of the company’s performance. These strategies can be implemented by creating brand awareness, increasing brand exposure, developing brand loyalty and using customer-based metrics to understand the consumers perception of the business (sharp 2017 p. 92).
Felix’s Taxation Services is a sole-trader business that was established in 2010. Felix had previously worked at the Australian Taxation office for 10 years, although now he is working for his own company delivering taxation services to individuals and businesses. The Business focuses primarily on providing individuals and businesses with a range of taxation services which include a range of tax returns, company audits, statement preparation, book-keeping, ABN registration and partnership returns. Although FTS provides a whole range of services, taking into account their competitors like the Australian tax office, taxtreturn.com and etax.com can give the company an edge in determining marketing strategies that need to be implemented (Tracy 2014, p. 22).
With the allocation of $2000 in marketing investments, Felix’s Taxation Services aims to attract new clients and futuristic prospects in order to improve the overall quality of the business. In this way, Felix’s company intends to expand their consumer base and offer a high calibre of super fund services that can support and manage the super funds of their future clients. The goal of this is to increase net profit and generate more revenue while delivering quality services to their consumers (Sharp 2017, p. 300).
Over the years, taxation services have been growing, due to an increase in tax rates. The cultural environment is a factor that is relevant as it relates to consumer behaviour and needs that help to shape society’s values, perceptions and behaviours (Grewal, Dhruv and Levy, Michael 2014 p.150). A trend that is relevant is the larger proportion of the population being aged between 50-60, which coincides with more services surrounded with the management and return of superannuation funds. This trend is surrounded between the demographic environment and is relevant for FTS as it can lead to new potential clientele which means that if exhausted properly, FTS can attract more clients. When considering the demographic environment, the different age groups can help FTS with the growth of their business. Growing trends in society today is the continuous development of new technologies. New technologies are constantly being introduced that change the way businesses run and the way they communicate with consumers (James 2017, p. 226). Other trends that are relevant to FTS can be the cultural environment that encompasses today’s society. According to the case study, a report showed that many Australians feel rushed and pressed for time, they also reported they feel stressed, have a busy lifestyle and endless interactions with social media. These findings imply that FTS needs to be providing services that can be targeted to a whole range of segments. FTS cannot target one specific segment as there is a whole market that requires a whole range of different services.
Segmentation and Target Market
Felix’s Taxation services focuses on delivering his services on individuals and businesses through his outlet in Norwood, Adelaide. Most consumers are locally based, so to ensure market penetration their needs to be an emphasis on marketing strategies focused on consumers in that area. By maintaining a focus around the geographical location, the company will be better equipped with dealing with consumers in that region (Sharp 2017 p. 248). By using the appropriate target marketing strategies, Felix is able to understand his consumers and cater to their needs as well as devise strategies to meet the needs of different market segments (Cohan, PS, & Capstone, PS, 2003, p. 294).
By using segmentation based on the demographics of potential/existing clients a focus can be directed towards age, occupation, income and geography of the individual (Sharp 2017 p 249). Felix’s Taxation has different segmented groups that can be targeted that can ensure the overall success of the business. According to the Industry wide demographic shown in the case study, males and females aged between 29-40 and 40-50 use a larger percentage of taxation services while the larger percentage of individuals using superfund services are males and females over the age of 50. Due to these findings Felix can implement target strategies that correlate with consumer needs in the segment they belong too (Westwood, J 2013 p. 22). By targeting these segment groups, Felix is able to apply his services to more individuals and businesses that require his services and can market these services appealing to their needs.
Felix’s Taxation Services is positioning itself with a new quality service offering superfund management and planning services to existing and potential clients. Felix is offering these new services in a way that it will generate more revenue and increase his net profit.
When considering FTS, they have prices and services that appeal to the public at a lower rate when compared with other tax agencies. The main competitor that FTS deals with is the Australian Taxation Office who have higher rates when compared to FTS. In contrast to the ATO who charge a fee of $250-$450, FTS has a more affordable fee of $200-$350 depending on the nature of the tax lodgement. Due to the technological changes and advancements that society faces, there are new taxation services that are introduced online which range from etax.com, taxreturn.com and ato.gov.au. These taxation services make it possible for individuals to attain tax services quicker, easier and cheaper (etax 2019). Due to the ability for individuals and businesses to attain tax services online, it foreshadows potential issues for FTS. These online services are available to anyone, from anywhere that are looking for taxation services. Even though these online services can provide an individual and business with fast, cheap, easily accessible taxation services, It leaves FTS with opportunity to provide their clients with quality service, face-to-face communication, ability to build a networking relationship and allows for the completion of complex tax returns.
It is important for Felix’s Taxation Services to recognise their strengths, weaknesses, opportunities and threats. Conducting a swot analysis is important as it takes into consideration the constant changing environment and gain an advantage on how to deal with these changes (Baker, Michael J. 2006 p. 47).
- Expertise in the industry: Felix and his team members have undergone proper training and have the appropriate licenses to work in the industry
- Wide range of services: Range of services available to both individuals and businesses.
- Rising segments and target markets.
- Introduction of new services that can assist existing and potential clients.
- Lack of Advertising: FTS has no advertising (except for signage above the agency entrance)
- No social media presence: only online presence is a website maintained by an employee of FTS.
- Location of outlet: The location of the outlet can propose issues as it is in a busy shopping centre with limited car parking. The location can impact a consumer’s physical availability.
- No advertising and limited signage: lack of advertising and signage impacts mental availability for consumers
- Low website traffic
- Service demand: The constant growth in the proportion of individuals aged 50-60 can result in more business for FTS.
- Using social media to build a bigger client base can reach a new targeted segment.
- Expanding services that can be useful for the targeted market.
- Technological changes: Internet applications and online taxation agencies that make is easier for consumers to retrieve tax services easier, quicker and cheaper.
- Brand recognition: failure for clients to recognise FTS can impact client loyalty
The main objective of FTS is to grow its customer base by implementing new strategies and services that appeal to the segmented market. Implementing new marketing strategies that apply to the segment will help consumers be more attracted to the proposed services (Tracy 2014, p. 37). Marketing strategies that can be implemented to execute the business’s objective include:
- Develop brand loyalty
- Build brand awareness
- increase brand exposure
- Attracting new customers and growing net profit
Marketing strategies enables FTS to implement marketing methods to achieve the business objective. To execute these strategies, the consideration of the marketing mix can provide maximum results (Tracy 2014, p 37).
The implementation of managing and planning superfund services for existing and potential clients that will help to generate more consumer activity. Leading the industry with their expertise skills and services will help generate more consumers which will allow for FTS to generate new clients and increase the businesses net profit.
A range of taxation services will be available from FTS’s outlet located in Norwood, Adelaide. Establishing new outlet stores can attract more individuals and businesses from different locations and establish physical availability to consumers as well as increase brand exposure.
FTS charges consumers a lower rate of $200-$350 compared to other agencies who charge between $250-$450. Lowering the price point and introducing sales creates potential to attract clients as well as maintain and develop brand loyalty.
Introducing promotions and sales can create excitement and generate more client activity. Investing more money in advertising to attract new clients and using social media as a way to communicate with clients and update them on any changes the business is undergoing will increase FTS’s brand awareness and allows for advertising.
ItemMetric2017201820191Sales Revenue$122,200$138,000$157,7822Customers/Clients3764004573Costs—4Staff$15,000$16,000$16,4805Rent of the office$30,000 $31,000$31,9306Equipment lease or repayments$6,000$6,200$6,3867Other (insurance, IT, utilities, and WordPress)$6,000$6,200$6,3868Marketing spend00$2,0009Net profit$65,200$78,600$94,600
The implementation of the strategies needs to be constantly monitored and updated to keep up with the constantly changing societal economy. This will help the business to constantly prioritise certain tasks and avoid poor performance. Controlling the marketing strategies enables the business to have an edge over the standards of the strategies being implemented and can also allow for corrective decisions to be made if required (Westwood 2013 p. 133).
- Sharp, B, 2017, Marketing: Theory, Evidence, Practice, 2nd Edition, OUPANZ, ProQuest eBook Central.
- Cohan, PS, & Capstone, PS, 2003, Capstone Encyclopaedia of Business: The Most Up-to-Date and Accessible Guide to Business Ever, John Wiley & Sons, Incorporated, Somerset, ProQuest eBook Central.
- Westwood, J 2013, How to Write a Marketing Plan, Kogan Page, London, ProQuest eBook Central.
- Grewal, Dhruv, and Levy, Michael, 2014, Marketing. Fourth edition, Mc-Graw Hill, New York
- Baker, Michael J., 2006, Marketing: An Introductory Text. 7th edition, Westburn publishers, Argyll, Scotland.
- Tracy, B. 2014, Marketing (the Brian Tracy Success Library), AMACOM, Saranac Lake, ProQuest eBook Central.
- etax – 2019 Tax Return Online. (2019). Tax Return 2019 – Tax Returns Are Easy at Tax – Etax.com.au. [online] Available at: www.etax.com.au [Accessed 17 Nov. 2019].