Technological development has brought about a rise in internet use, which has significantly impacted the media industry, especially the print media. For instance, a $7.3 billion reduction in newspaper ad revenue was recorded between 2006 and 2007 in the US, due to more people opting for internet advertising. Print media companies have, therefore, found it difficult to maintain the industry’s pace after the rise of internet access, which has allowed more people to access information freely online. To survive in the market, they have been forced to take extreme cost-cutting measures such as decreasing the frequency of delivering printed newspapers to customers, dismissing workers, and trimming newspaper sizes.
Newspaper companies in the US charge high prices for their newspapers, and this has made it impossible for Americans from low-income households to afford the newspapers. Quality Newspaper Company saw this as an opportunity to offer an equal possibility for the low income earners to be informed of what is going on around the world by providing them with high quality newspaper that is relatively cheaper. Therefore, our target market will be mainly low-income earners, who due to the high prices, have been cut off from newspaper readership.
The business will be situated in Dallas (Texas), and our newspaper will be titled The Dallas Weekly News. We will charge $2.80 per newspaper; a price that is much lower than the current market prices of other newspapers. The high quality and reasonable cost of our product is expected to give it a competitive advantage over other newspapers like New York Times, USA TODAY, and Wall Street Journal, thus enabling it to penetrate the market easily. The start up capital of the business will be $155,000; an amount that will be raised via bank loans, microfinance corporations, youth enterprise funds, personal savings, inheritance, and charity. We predict that thesales revenues during the first, second, and third year will be $3,155,000, $4,732,500, and $6,310,000 respectively.
Feasibility Study of Quality Newspaper Company
The modern technological era has brought a lot of changes in various sectors, including the media. Because many people can access the internet, they prefer to get news online on what is happening around the world, as opposed to other communication channels. This is also attributed to the busy schedules of people who have no time to sit down and read a newspaper, or watch a television. The shift to internet services has, to a large extent, affected the print media business, though there are people who still have an interest in reading newspapers (Hooper, 2012).
However, newspapers are priced highly, and this has made it impossible for poor people in the United States to afford them. Our company, Quality Newspaper Company, aims at producing a high quality newspaper that is affordable to all. This will provide an equal opportunity for low-income earners in America to be informed. Quality Newspaper Company will be based in Dallas, Texas, and our newspaper will be titled The Dallas Weekly News. We are well aware of our clients' needs and expectations, and we are committed to offering them the best services. Our vision is to become the biggest newspaper company in the entire United States, providing quality and low cost newspapers that are affordable to everyone. This paper presents a feasibility study for our proposed business in order to evaluate its economic viability. The items discussed include: business description, justification, objectives, product description, market analysis, competitor assessment, marketing strategy, and a projected sales forecast of our product among others.
The main aim of introducing our product into the market is to offer an equal opportunity for the low income earners in the US to receive information of what is going on around the world by providing them with a high quality newspaper that is relatively cheap. Access to Internet has significantly reduced the demand for newspapers as many people opt to read news online. In addition, newspaper companies charge their newspapers highly, making it impossible for the poor to afford them. For instance, currently, other newspapers in America such as The Globe Times and The Dallas Observer are sold at $3.2 and $3 respectively, and their demands are not quite high. This means that a majority of readers would opt for a low-cost newspaper, if it still maintains high quality news production. That is why our newspaper will be charged at $ 2.80, to give low-income earners a chance to be equally informed as their high-income counterparts. The comparatively low price of our product will give it a competitive advantage over other companies, enabling our product to penetrate the market easily and increase our customer base.
1. Produce high quality newspaper at a relatively low price.
2. Attain a 50% increase in sales revenue by the close of the second financial year.
3. Employ additional marketing executives to enhance the company’s current marketing team.
Product/ Service Description
The Dallas Weekly News will have a broad coverage from news, politics, business, entertainment, lifestyle, sports, commentaries, to obituaries. Our Intention is to make our newspaper distinct from our competitors’ products through offering superior quality, lowering cost and providing unbiased coverage.
Producing a high quality product at a lower price than our competitors will give our newspaper a competitive advantage over other players in the market. Consequently, the newspaper will penetrate the market easily, which in turn, will increase our customer base quickly.
Industry and Market Assessment
The media industry captures various companies that offer products and services aimed at keeping the consumer engaged on a daily basis. There are numerous segments in the industry, which offer different entertainment forms to consumers all over the world. The segments are television, print media, advertising, radio broadcasting, and film entertainment. Technological development has brought about a rise in internet use, which has significantly impacted the media industry, especially the print media. Print media companies have found it difficult to maintain the industry’s pace following the rise in internet use. Revenues from newspaper and magazine ads have decreased significantly, as many people opt for internet advertising. For instance, in 2006, newspaper ad revenues in the United States were $49.3 billion, while in 2007; the revenues were $42 billion (Wikinvest, 2012). The decrease in ad revenues above is evidence that the print media industry has been struggling against internet advertising.
Currently, there are over 1,500 US daily newspapers, plus numerous other community newspapers that are published either on a weekly or biweekly basis. Among the leading newspapers with top readership are New York Times, USA TODAY, and Wall Street Journal. Increased access to the Internet has reduced consumer readership habits of newspapers, as many of them opt for the free information offered on the internet. The drastic effects of the Internet on the print media is evident by the numerous news reporters and editors who have been laid off, as well as leading newspaper companies which have been declared bankrupt or shut down. As a result, these companies have been compelled to take drastic measures to be able to survive in the market. Examples of such steps include staff reduction, decrease of the size of print newspaper, and reduction in the frequency of delivering print newspapers to subscribers.
Quality Newspaper Company targets mainly low income earners who cannot afford the highly priced newspapers that are currently in the market, yet have an interest in reading newspapers. I believe everyone has the right to be fully informed of what is happening around the world, and that is why, we intend to level the playing field by reducing the cost of our newspaper, while maintaining high quality, so as to make newspapers affordable to everyone. In addition, we expect that our product will attract the attention of all the people in the market who want to be informed. We intend to produce both print and online newspaper in order to increase our customer base.
Being a small company, our utmost problem will be to compete with the key players in the market, i.e. the already established newspaper companies in the industry. Examples of such companies include Reuters, New York Times etc. We believe that, with time, the business will expand considerably and will be capable of competing with the dominant newspaper companies.
a) Our product is expected to have a competitive advantage against its competitors due to its superior quality and relatively lower price.
b) Strong income growth that is consistent (Böhm, 2009).
Our product has a very weak and unfamiliar brand name, which may make it hard to penetrate our larger print media market (Böhm, 2009).
There is an increasing demand for producing low cost newspapers.
a) The presence of newspaper companies that are already established and doing very well such as Reuters, New York Times, etc.
b) Constant changes in customer’s taste and preference.
c) Rise in internet use, which threatens newspaper readership.
The marketing strategy for the business will entail establishing a 24-hour customer service for assisting customers both offline and online. This is created to enable our clients to call or email our business and get immediate feedback. I also intend to set the price of my product slightly lower than those of our competitors in order to attract many customers. It is vital to emphasize that our goal is to produce quality newspapers at a lower cost to make them affordable to all of my customers.
The Dallas Weekly Newswill be the brand name of the company’s product. The product will have a broad coverage from news, politics, business, entertainment, lifestyle, sports, commentaries, to obituaries. Apart from lowering prices while maintaining high quality, we also intend to print the newspapers in attractive colors in order to attract the attention of more readers. The company intends to charge relatively low cost and maintain superior quality, at the same time, employing product differentiation to make our product unique. This latter plan, we will do by printing the newspapers in very attractive colors.
Each newspaper will be sold at $ 2.80. The cost charged encompasses the production process and techniques, materials of production, and technology with a realistic amount of profit (Daly, 2002). Additionally, the prices charged are established on the basis of analysis of the prices of every newspaper by our competitors. For instance, the cost of the Austin Chronicle magazine is $3.5, the Dallas Observer is $3, while Globe Times is $3.2. Therefore, our choice of the $ 2.80 price, which is to some extent lower than the Dallas Observer cost, coupled with the superior production technology, will give the newspaper an upper hand in the market.
In addition, the affordability of the magazine will be extremely supportive in winning a big percentage of the market share (Daly, 2002). Moreover, the business will be capable of meeting the diverse operational costs needed of the business, and the legal requirements binding the business, by utilizing part the earnings gained from sales.
Marketing of The Dallas Weekly News newspaper will entail the use of advertising in television and radio as well as in the social media (face book and twitter). Our aim is to reach a wider customer base and expand our business. Other promotional strategies will include good public relations as well as sales promotions. The newspapers will be mainly distributed through our numerous newspaper distributors and vendors, who will deliver our newspapers to television and radio stations, firms, and interested persons (through door to door delivery). Besides, the newspapers will be also sold within public places, for instance, along the roadsides as well as in different markets. The newspaper will also be accessible online through the company’s website www.qualitynewspaper.com. I believe that taking our newspaper near our valued customers will enhance our customer base gradually and, as a result, positively affect our sales revenue.
Böhm (2009) stated that a good public image substantially contributes to any business’ success. Consequently, as a fresh company, we will put significant investments in public relations to promote our product and company. In addition, our company will hire PR and customer relations professionals to market our product. We also plan to produce print company products such as T-shirts and caps that we will provide to customers for free as appreciation for purchasing our newspaper.
The facilities that will be required in the production of our newspaper include cameras, printers, page makers, and binding machines, among others. Our product will be produced on a biweekly basis for 6 months, during which we will assess its performance in the market. Should the demand for our product increase, we will increase production to once a week.
Despite being a company that is just starting, our business has high expectations and immense dreams for our clients. The company will comprise of a CEO, a general manager, 4 departmental heads, 5 script writers, 5 news editors, 20 sales and marketing agents, and an IT expert. Our team will be truly dedicated to keeping our clients informed on the happenings around the world, so they should expect only the very best from our company.
In the run-up to the launch of the company, the MD will procure the following items to aid in the facilitation of the production process of the business. To begin with, 10 computers will be bought from the Hp Company, specifically at its outlets located in Dallas Streets, Texas. Simultaneously, 3 printers, 2 cameras, 2 paper cutters, 3 staplers, as well as staple pins will be bought in well-known and trusted outlets of stationery and electronic devices within the Dallas Streets, Texas. All the production facilities will be procured 2 weeks before the launch of the business.
In addition, our business will employ the services of Intelwise Technologies to install the production facilities, as well as, repair and maintenance them. Consequently, the company will program the maintenance of its production facilities two times a year, which it will be done on the initial weekend of the 6th month, except for the rise of a necessity prior to the elapsing of the specified period (Dickie, 2006).
When the business begins its operations, its objectives, goals, vision, and mission will be the key guide towards the growth of the business. Therefore, the company will put in place growth strategies such as boosting of production facilities, devolution of production, as well as reinvestment of profits back into the business. We are certain that these measures will both augment the steadiness of the production processes of the business, and boost customer confidence (Dickie, 2006). In order to enhance the business’ production process i.e. the quality of production, the company will take into consideration the possibility of recruiting competent and highly experienced workforce to help accomplish the process.
Besides, the business has plans of creating a favorable working environment for all its employees to make it easier for them to implement the production process. This will be accompanied by proper incentives and motivational trips. In addition, the business will employ production equipments that are capable of multi- tasking, to lessen the chain within which the newspapers will pass prior to the production of the final copy. This will help reduce the cost and time used by the business in production (Dickie, 2006). The below table presents the business’ operation cost.
Production Facility and Capacity
|Business facility||Number||Cost ($)|
|ComputersPrinters (3 in 1)CamerasPaper cutterStaplersStaple pinsMiscellaneous/glossy papers||103223-10 rims||20,0009,0004,0004,000500901005,000|
The capital for staring up the business is expected to amount to $155,000. The company plans to raise the capital via bank loans, personal savings, microfinance corporations, charity, small business enterprise, inheritance, and youth enterprise funds. The money will be employed in purchasing equipment, machinery, rental and renovation, and meeting marketing expenses (Rattiner, 2008). The sources of funding sources will be as shown in the table below.
|Friends and family members||$5,000|
Sales Revenue Forecast
Quality Newspaper Company predicts that the revenues from sales during the first, second and third year will be $3,155,000, $4,732,500 and $6,310,000 respectively. Below is the forecast of our projected sales based on our penetration into the target market, given the proposed pricing for the next three years.
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Quality Newspaper business will have a positive impact on the US economy by creating jobs to twenty people that we intend to recruit to the company. As indicated in the management team section, the business has plans of employing a CEO, general manager, departmental heads, script writers, news editors, marketing representatives, and IT experts. Unemployment remains a key problem in America, with an unemployment rate standing at 7.8% by September 2012 (TradingEconomics.com & U.S. Bureau of Labor Statistics, 2012). Therefore, by providing jobs, we hope to enhance the living standards of our employees, and contribute to bridging the gap between the rich and poor people in America.
The rise of Internet use brought about by technological development has significantly affected newspaper readership, as numerous people opt for the free information and news available online. As a result, newspaper companies have reported declining revenues, especially from print ads, as more people prefer to advertise on the internet. Newspaper companies, therefore, charge high prices for their newspapers to cover their losses. This has made it impossible for Americans from low-income households to afford the newspaper. Quality Newspaper Company decided to offer an equal opportunity for the low income earners to be informed about the latest occurrences in the world by providing them with high quality newspaper that is cheaper