In recent decades, companies tend to do business in the international market rather than simply staying in their home country. There are several forces for companies doing business this way. These are such things as the management orientation changes, the world trading systems, the communication and transportation improvement. An another important element to consider which enables international growth and thus the Australian Financial Review (AFR) to expand into the UK market is technology. Technology enables people’s life to be more convenient and comfortable.
(Richard Fletcher, Linden Brown, 2002, p6-9). A review was undertaken in April – May 2003 to determine the feasibility of AFR. The marketing strategy of AFR will be covered in four sections. Product strategy used for electronic publishing of the AFR. Place strategy, is the electronic publishing by NewsStand Inc. The price strategy will be the same as the printed version in Australia. The promotion strategy will be if you buy a copy of the AFR you will receive two weeks free subscription and also some gifts will be provided for subscribers of one year to attract customers.
The total investment required is only fixed cost- salaries and delivery cost. We will employ four executives, which will take care of the all the operations for the United Kingdom market. The salary cost will be $280,000 per year. NewsStand Delivery Charges are directly related to the number of copies sold. We are assuming these charges to be 15 cents per copy subscribed so they are calculated accordingly. Based on the both internal and external analysis of the situation of UK market and Fairfax, the expectation for ROA in 2004 is 1. 6%, and 5.
3% for year 2005, and it will increase to 14% in year 2006. For the Return on sales, it will increase from 17% to 78% from year 2004 to 2006. The revenue we are expecting is $1,246,256. 55 in year 2004 to $3,214,170. 44 by year 2006. The net profit after tax would be $211,580. 11 in year 2004 to $801,317. 67. The market share is also increase from 30% to 50%. This plan can be put in place and ready for an official launch by 2004. This period is recommended so as to reach the most target customers, and so that exposure will be at its highest.
The Australian Financial Review (AFR) is one of major publication under Fairfax business group and is a leading national newspaper in Australian. We believe 2004 to be the time for the AFR to expand and to increase market penetration with the electronic print. The objective of this marketing plan is the reduction of margin and market share erosion. In the other word, we want to attract more customers, and to expand market coverage into the UK market, thus increasing the sales revenue of Fairfax.
Based on previous experience with physical copies (where the Sydney Morning Herald (SMH) is sent electronically to the UK for a small digital print run), it was found to be not profitable. The major reason for this is that newspapers rely heavily upon advertising to make profits. We learnt from this mistake and thus we decided to be one of publisher on www. newsstand. com. The advantages of NewsStand are that customers can view the whole newspaper not just a few sections such as the electronic edition in the AFR website.
Moreover, it can be delivery to you at your convenience via the Internet. This is a new way of promoting the AFR to business companies that will increase sales to this market and further reinforce the loyalty relationships between customers and the AFR. NewsStand Inc. is a digital/electronic partner for premier publishers of newspapers, magazines and printed media. Publications delivered by NewsStand are in demand by paying customers in more than 100 countries. Headquartered in Austin, Texas and it is privately held.
The current population of United Kingdom is 59 million of which 18% are immigrated Australians which totals roughly around 10 million. There is an overall 49 million readers of the newspapers daily, among this 49 million 576,000 weekly readers read the “Financial Times” which is the local paper in the United Kingdom. (Source: www. nrs. co. uk) Finally, the purpose of this marketing plan is to see the current newspaper market situation in the UK and in Australia. Moreover, it will enable us to plan how the AFR will be able to launch itself into the UK market.