Marketing Strategy: Child Care Business
The essay focuses on the marketing strategy of a child care business that will be located in Canberra, Australia. The business will provide a wide range of child care services that will include long day care, family care, outside school hour school-hour care, and vocational cares. Therefore, the essay focuses on the external environment, competition analysis, consumer behavior trends, and the geo-demographic data of Canberra. Finally, the essay looks at the marketing strategy of the child care business.
Economic: The level of income of parents is the major economic factor affecting child care services in Canberra, as it determines whether their ability to pay the services. Employment rate is another factor, because an increase in employment leads to increase in demand for childcare services and vice versa. The relative economic growth and reduce level of unemployment in Australia has led to demand on child care services (Parr & Guest, 2011). In addition, there is increasing number of women entering the workforce.
Political: Increased government support through Child Care Benefit Program is making the services affordable to many households (Schofield, Polette & Hardin, 1996). Strict government regulation, especially on high-staff-to-child ration is increasing the cost of operation of child care service providers.
Social: The population of children below ten years is expected to increase in Canberra, which will have positive impact on demand (McDonald & Kippen, 2000). The increase of middle income earners in Canberra will also lead to demand of services. There is also increasing single-parent families in Canberra.
Technology: Child care service providers are now being forced to use the latest technology that can enable them to be in touch with parents almost all the time. Consequently, service providers are now using “in touch” technology to enable parents to bond with their children (Nupponen, 2005).
Analysis of Competition
The child care business in Canberra is dominated by both profit and non-profit organizations that include community-based providers, private providers, and corporate chains providers (Weaven & Grace, 2010). At the same time, there are many people seeking for child care services in Canberra. Therefore, the child care business in the city is facing perfect competition where there are many buyers and sellers. Consequently, there is stiff competition in the child care industry in Canberra. However, the Canberra child care market is currently dominated by GoodStart that controls about 7% of the market. Other major competitors include Canberra Childcare Centre, YWCA, and Honey Tree Early Childcare Centre.
Consumer Behavior Trends
There are four main factors behaviors that influence consumer behavior towards child care services and they include affordability, flexibility, diversity of services and strong reputation (Davidoff, 2007). Economic challenges are forcing parents to look for affordable child care providers who offer quality services. Consumers also prefer flexible service providers that can allow the changing the days a child can attend child care services. In addition, consumers demand also varies because some only prefer their children to be taken care of while they are at work while others need mix of services like education and specialized services for the disable children. Finally consumers are looking for child care providers who can safely take care of their children.
Geo-demographic Data of Canberra
According to 2011 census result, Canberra has a population of 356,585 people, which is 1.6% of the total Australian population. Its population density is 443.5 people/Km2. The top three most populated districts in Canberra are Belconnen, Tuggeranong, and North Canberra with population of 92,444, 86,900 and 48,030 respectively. About 71.4% of people living in Canberra were born in Australia. In addition, the income in Canberra is relatively high with a weekly wage of $917. The residents of Canberra are also highly educated with 4.5% having a postgraduate degree. Between 2010 and 2011, the number of children aged 0-14 increased by 44,600 while those age 10-14 decreased by 1,700 (Harrison et al., 2010). The unemployment rate of Canberra in 2014 was 3.8%.
The primary objective is to admit 300 aged 1-12 years by December 2016
To persuade 25% of the target market that Emily’s child care services are the best in the whole of Canberra by June 2017.
To control 2.5% of the target market through comprehensive marketing by the end of 2017.
The core products will be long day care, family day care, outside-school-hour and occasional care. The expected services will child care special needs and augmented will be emotional services for disable and mentally ill children.
Emily’s child care services will be different from the alternative in the market because it will be offered by highly trained child care providers.
The business will be positioned as a business that offers safe and secure care environment at a close personal attention.
Due to the stiff competition and large number of players in the market, the business will use pricing for marketing penetration strategy to penetrate the market (Spann, Fischer & Tellis, 2009). Although the strategy may not lead to profit in the short-run, it will lead to long-term benefits because the business will be able to stand out. However, the business will charge average prices to convince customers that it offers quality services.
All services will be offered at the Emily’s child care centre
The business will use advertising and sales promotion to attract customers. It will use mass media, especially the TV because almost 98% of Canberra residents own TV. It will also use radio, print media, and social media to attract potential customers. It will also use sales promotion where the first people to take their children to the child care centre will be given a discount of 10% for the first month.
The campaign is expected to be implemented with the first one year and it is estimated to cost about $330,000. The campaign is expected to start on July 2016 and ends in July 2017. The budget is summarized in the table below.
Print media (Magazines and newspapers:
The success of the campaign will be evaluated based on the number of children enrolling at the child care centre. It will also be evaluated based on the number of parents inquiring about the services that the business offers. The number of children enrolling is expected to increase every month.
The external that are likely to affect the business include income of consumers, the level of employment, child care assistance from the government, population increase, and the changing technology in the child care industry in Canberra. There is also stiff competition in the industry due to the saturation in the market at the same time, consumer consider affordability and quality of services before selecting their appropriate child care service providers. Therefore, the primary marketing objective is to increase the number of children enrolling for the services through the use of mixed marketing strategies that involves both traditional and modern media.
Davidoff, I. (2007). Evidence on the child care market. Economic Round-up, (Summer 2007), 67.
Harrison, L. J., Ungerer, J., Smith, G. J., Zubrick, S. R., Wise, S., Press, F., & Waniganayake, M. (2010). Child care and early education in australia-the longitudinal study of australian children.
McDonald, P., & Kippen, R. (2000). Population futures for Australia and New Zealand: an analysis of the options.
Nupponen, H. (2005). Leadership and management in child care services: Contextual factors and their impact on practice.
Parr, N., & Guest, R. (2011). The contribution of increases in family benefits to Australia’s early 21st-century fertility increase: An empirical analysis. Demographic Research, 25, 215.
Schofield, D., Polette, J., & Hardin, A. (1996). Australia’s Child care subsidies: A distributional analysis. National Centre for Social and Economic Modelling.
Spann, M., Fischer, M., & Tellis, G. J. (2009). Skimming or penetration? Strategic dynamic pricing for new products. Working Paper.
Weaven, S., & Grace, D. (2010). Examining parental and staff perceptions of childcare service quality across competing business structures. Australasian Journal of Early Childhood, 35(2), 54.