Campus Laundry is entering heir first year as a start up business. The idea has been well received and marketing will be critical to the success of the business. CL offers a clean, convenient laundry facility for those that do their own laundry as well as those in need of optional services. CL will lure customers in with string customer service, a study-conducive environment, and wireless internet services for the waiting customer.
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CL has captured good information about the market and knows a fair amount about the target customers. The facility offers self-serve laundry services as well as optional services such as full service washing, drying and folding.
CL's market information will be used to better understand who is served, their specific needs, and how CL can better communicate with them.
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| || ||2003||2004||2005||2006||2007|| |
|Potential Customers||Growth|| || || || || ||CAGR|
|Low income customers||5%||6,434||6,756||7,094||7,449||7,821||5.00%|
CL is providing their customers with a quiet clean laundry facility that ensures customer satisfaction as well as providing a clean environment that is conducive to productive activities such as studying. CL seeks to fulfill the following benefits that are important to their customers.
- Top-level customer service- The target customers have a fair amount of discretionary income and appreciate good customer service. Just because they are younger is no reason to erroneously believe that they have lower standards.
- Clean facilities- This is pretty intuitive. Nobody wants to wash their clothes clean in an environment that is itself dirty. Oddly, students have to currently deal with dive laundries as that is what is currently available to the Ann Arbor community.
- Study conducive environment- Because doing laundry occupies a fair amount of time in a person's week, there is value in being able to bee productive while you are doing your laundry. Offering an environment that is supportive of studying as well as high-speed wireless internet access will allow customer to be productive with their laundry and other responsibilities.
The market trends for Laundromats are:
- Increased automation- technology has driven down the costs of equipment that offer technological efficiencies. Using technology reduces the dependence on human labor.
- Industry consolidation- Large corporations are constantly buying up mom and pop operations.
The market growth for the self-serve laundry agency has seen 4% market growth. This growth rate is supposed to be maintained for the next three years.
The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing Campus Laundry.
- Well trained staff to ensure optimum customer service.
- Well thought out business model addressing market demand.
- Differentiated facilities.
- Competition, although there is a significant differentiation between the competitors
- A limited marketing budget needed to create brand awareness.
- Debt required to start the business up.
- Participation in a steadily growing industry.
- Large target market.
- A constant, consistent market demand becasue everyone has dirty clothes.
- A somewhat seasonal market demand due to many students leaving during the summer.
- Future/ potential competition from a large franchised business.
- A large increase in homes builds and sales that will decrease the reliance on Laundromats.
There are several different competitors, all who serve the student and low-income market. The facilities are all pretty similar, not generally clean, noisy, with low-end services. Some of the competitors offer additional services beyond self serve laundry, others just offer self serve machines.
Campus Laundry offers the following services:
- Self-serve washers and dryers. Both large front loaders as well as top loaders are available. Normal size and large commercial dryers are also available.
- Full service washing, drying, and folding is offered.
- Relatively quiet environment for studying.
- Wireless internet access for customers with laptops and wireless cards (WI-FI).
- Coffee bar with light food menu.
Keys to Success
CL's keys to success are:
- Strong customer service.
- Clean, quiet, convenient facility.
The critical issues that CL faces as a start up are:
- To ensure that they are balancing the debt load adequately with the revenue stream, ensuring economic sustainability.
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