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Autor: anton 24 November 2010
Words: 4562 | Pages: 19
It starts off with a competition analysis. This gives a good background on the competition of the industry. It goes into detail about key points in the competition at a national level and also at a local level dealing with our own personal competition. The plan conducts a SWOT analysis in detail about how our business matches up with its competition. The SWOT analysis takes me into our business relationships. It goes through the importance of alliances and our relationships with other businesses. Next is our target market. This gives a good description of who we are targeting for our business and who we arenâ€™t so much. After the target market, it guides you through our marketing strategy. This includes pricing, financial, marketing, and promotional strategies involved in the funeral business. After the strategies, it gives a thorough description of the services we provide and the prices. That leads the plan into the promotional decisions. This includes different ways our firm will promote our business to the public. Finally, it concludes with an evaluation of the performance of our business. It measures how well we reached our goals and what we need to improve on.
INDUSTRY AND COMPETITORS
The funeral home industry has been at a steady decrease for the past decade. Not only is this present at a local or regional level, but at a national level. The traditional funeral service and burial are becoming less favored. Instead, across the country, families are preoccupied by external distractions. These distractions have nothing to do with the funeral homesâ€™ capabilities, but with the growing popularity of cremations. â€œOur cremations have tripled in the past 5 years,â€ said Jason Monell, a funeral director in Northern Kentucky. Cremation has been a popular choice in the West for years, but the trend is sweeping the country as cremation gains wider acceptance. â€œIn 2002, arrangements for 22 percent of all deaths in the United States included cremation, according to the National Funeral Directors Association. By 2010, the association expects that to nearly doubleâ€ (Conner). There are many reasons why cremations are going to take over the industry down the road. This causes funeral directors to create other services and opportunities to make their businesses profitable.
The first main reason why cremations are gaining popularity has to do with the environment. This is probably one of the most apparent and obvious reasons. Cemeteries are starting to run out of land causing people to develop a concern. However, there are measures currently taking place to help conserve land. For example, Highland Cemetery in Northern Kentucky has dedicated a whole portion of there land to lawn crypt vaults. These vaults are eight to ten feet deep and keep two caskets in them. The cemeteries stack two caskets on top of each other with a cement vault shelf in between. The lots are often sold to older couples where they may see death occurring in the next ten years. The younger population is hesitant to purchase them due to the uncertainty of their life. Environmentalists are also concerned that rainforests are starting to get knocked out, often providing habitats for some of our endangered species. This is often the case in the South.
Another big reason cremations are gaining popularity is because of money. To most people it seems far-fetched that people think about money in such a tough and vulnerable time, but it is not uncommon. Having a direct cremation is significantly more cost efficient than having the traditional evening visitation and service the next day. The caskets or cremation boxes that are used and the services that are offered are often less expensive. These cremations add up and cause funeral homes to lose serious revenue.
The third main reason is convenience. People are starting to understand and accept the fact that they might not be living in the same area the rest of their lives. In the past decade it has become more common for people to switch jobs and move to different areas. It has become a problem since their loved ones are buried at a location far away from their current residence. Although performing a disinterment, the act of digging up a grave to move it to another location, isnâ€™t out of the question, they are expensive and an inconvenience. In cremation cases, the remains are typically in an urn which can be transported at ease.
There is no doubt that cremations are hurting this industry as a whole, but on a smaller scale, the strengths and weaknesses of my local competition are quite significant. Being in a rural area there is not a wide array of competition. However, the competition that you do have is very tight. Slayback Funeral Home, presently located in Bellefontaine, Ohio, has been around for over 75 years. The community has grown very loyal to their business and has a great amount of respect for it. Being a second generation funeral director, it is safe to say that the name has been around and has been trusted for a number of years. The owner and his employees are familiar with the community and are very involved. Along with the owner, who is well respected, there are four other funeral directors there that are also community supporters and supported by the people. Although their funeral home has some strong strengths, their weaknesses create a huge opportunity for my firm to come in and do very well. Mr. Slayback, the owner of the competing firm, is coming very close to retiring and hired a young man who isnâ€™t from around the area or well known. Although the original name may stay on the sign and keep a loyal part of the market, with time I feel we can gain a big share of the market. My partner and I are already known in the area since we and our families have grew up there. However, I have to capitalize on some of the other weaknesses of the existing business in order for my firm to excel. I have worked for my competing firm and for Johnson Funeral Homes in Northern Kentucky. Slaybacksâ€™ isnâ€™t near as formal or personal as I would like mine to be. I think the opportunities are there for me in the market that could excel my business and detract from my threats.
In my line of business there will be few business to business relationships. My firm will not be big enough for me to have the need for intermediaries. Instead, the manufactures that I will have to deal with will deal straight with me. It is important for this funeral home to establish good relations with a few manufactures and businesses. Batesville, a large manufacturer of caskets will be my supplier for caskets. Reemes are my supplier for burial vaults. It is nice to be in good standing and have a good relationship with these two manufacturers in case I ever get in a bind. The relationship with the local businesses our firm deals with daily is vital. The newspaper, florists, churches, and cemeteries are a few of those businesses. Although these alliances are obvious it is also important to keep a good relationship with your competition. Unlike other businesses, the industry relies on their competition occasional help. There are times when we need a certain product and donâ€™t have the ties that other funeral homes may have. Whether it is a competitor or a manufacturer our goal is to keep a good relationship with all other businesses.
My plan is to market my funeral home as efficiently as possible with the best services to accommodate the market Iâ€™m aiming for. In doing so, it is critical for me to reach out to the appropriate target market. In this industry, the target market is a little different than ordinary retail stores and service providers. My firm is going to concentrate more on demographic variables rather than geographic or psychographic variables.
There are a few funeral homes that are part of a nationwide chain. These have to deal with their markets more geographically. For example, more traditional funerals are more apparent in rural areas than in suburban areas. Wood caskets are generally thought of as more traditional; therefore, the demand for them would be greater. However, in my case, Iâ€™m starting my business in a rural area where the traditions and funerals are typically the same, regardless of what part of the town youâ€™re from.
By demographically targeting my market, the concentration will be mostly on age statistics. Although itâ€™s important to market this business to the community as a whole, it is more crucial to target a certain age group. The target age group to aim for is people between the ages of 45 and 65 years old. The majority of deaths occur to people whose children are between those ages. This age group includes a fraction of the baby boomers. In most cases, elderly people are taken care of by their children, which means that it is important we make a strong effort to market the business to them.
Another variable that is important is religion. It is imperative that you market the funeral business to all religions. When I worked at Johnson Funeral Homes, we were dominantly a catholic funeral home. We were known for doing, if not all, most of the catholic funerals in Northern Kentucky. However, it was apparently obvious that we did better work for the catholic families because we rarely got protestant calls. Itâ€™s important for families to feel like they can trust your funeral home regardless of what their religion is. Johnsonâ€™s werenâ€™t rude nor did they neglect the protestant families. They just werenâ€™t their target market; therefore they didnâ€™t go beyond to catch peopleâ€™s attention. In my case, all religions will be targeted. Business will not be lost because of favoritism. There are some exceptions, however. Jewish people go to a Jewish funeral home in most cases. They have different religious beliefs about the process the body goes through after death. Therefore, there may be a couple religions that wonâ€™t be targeted as intensely.
Income would be the lease targeted market. In the rural area that this funeral home is in, there are all different incomes spread out which makes it hard to target the rich or poor. There would be no reason to market the gender, education, or the household size since they are completely irrelevant.
Alerâ€™s Funeral Homeâ€™s mission is to provide families with a comfortable atmosphere, where families are beyond satisfied with the provided services in their time of need. Families deserve friendly and compassionate care during this difficult time. The goals of Alerâ€™s are simple but meaningful. We want to be able to accommodate families with whatever services they would like or need. We also would like to gain a large deal of trust from the community. Having a competitor that has already earned a great amount of trust and has gained the majority of the market share will make it a little more difficult. Thus, our firm has to make that much more of an effort to stand out. Lastly, Alerâ€™s main goal is to make everyone who walks through our doors feel comfortable and welcome.
A key issue that plays a big role in this industry is ethics. Weâ€™ve taken the liberty to make sure ethics arenâ€™t a question in our firm. There is no question that ethics tend to play a major role in this business. There are always questions on the minds of the families. They want to know how their loved one was treated and if you were completely respectful. It is assured that the bodies will be taken care of properly while theyâ€™re in our hands. Part of our strategy is making sure all employees at our firm are completely honest and open with families at all times.
It is inevitable that we provide many of the same services as our competitor. Therefore, we have come up with a strategy that will put distance between us and our competition. There are different services that we will provide to the families weâ€™ve served. Not only will these services be during their time of need but also down the road. There will be widow luncheons held once a year and also after care programs for grieving adults and kids. Along with the extra services, we will take the time to make the common services more efficient and personable.
Also in our strategy there are service quality issues such as reliability, responsiveness, and assurance. Reliability wonâ€™t be a concern. We will have someone on call at all hours of every day to serve needs. Our firm will also be very responsive. If people have questions weâ€™ll answer them thoroughly leaving them completely satisfied. Assurance is a key quality to possess. After a graveside service the funeral directors often leave the cemetery. This has raised some questions on behalf of families of how the casket will be treated by the cemetery. We assure all families that everything will be properly taken care of by having a director present at the cemetery until the vault is sealed.
Our firmâ€™s pricing strategy is going to be fairly close to other funeral homes. All caskets will be marked up 300%-400% depending on the make and the price. The more expensive caskets will be marked up higher than the lower priced caskets will be. The vaults will be marked up from 100%-200% also according to the make. Our services will always be consistent on prices. However, there will be a discounted price list for people with low income. They will have to show proof of financial troubles. If you are single with no kids with an income that is lower than $25,000, then you will receive the discount. If youâ€™re single with kids and your income sinks below $30,000, then you will also get discounted prices. Finally, married couples with combined income of $35,000 will also be eligible.
There are no online options available for payments. At the time of arrangements, the family must put forward a down payment that at least covers the cash advances. This may include payments to cemeteries, ministers, hairdressers, or organists. There will be no payments monthly or in increments.
FINANCIAL GOALS/STRATEGIES (See graph on page 16)
Starting up our own funeral home, my partner and I plan to spend around $1,000,000 on permanent assets. This includes the land, the building, the funeral coach, the flower van, the office equipment, the operating equipment, and the furniture. Fortunately, my partner and I have saved and invested to put a down payment on the business loan of $100,000 each. This leaves us with an $800,000 business loan starting out. Our monthly expenses include payroll, utilities, advertising, insurance, operating supplies, and vehicles. At the end of our first year my projected expense total is $271,180. This includes all the noted monthly expenses and payments on the business loan. Our goal for the first year, 2005 is to get 50 calls. After casket sales, burial vault sales, and our service fees, our goal is to earn revenue of $292,250. This fortunately turns up a profit of $21,070 in our first year. By the year 2008 our goal is to take 65 calls and turn a profit of $91,970. By 2010 our goal is to take 75 calls and turn a profit of $106,320. All these figures, of course, have the payroll and expense raises calculated in.
There are many services we provide during the visitation and the funeral itself. There are general services that are provided to families. For the service of the funeral director and staff we charge $1200. This includes taking care of the arrangements, paperwork, and contacting everyone involved in the funeral. Notifications often include cemeteries, churches, ministers, organists, and newspapers. The service for embalming will also be offered for $575. Although this isnâ€™t required by law, in certain cases we require it. It will be required if the family plans to have a viewing with an open casket. There also is a $275 charge for other preparation of the body. This preparation includes dressing, cosmetizing, casketing, handling, and caring for the body. We also have a hair dresser on hand that takes care of the hair for a fee of $40, of course unless the family has a different request. For a basic one to two hour, same day, visitation and service there is a $475 fee. This charge includes the use of our facilities and staff during the visitation, setting up the visitation area, placement of encased remains, display of floral arrangements, and supervision of and attendance during visitation. There is an additional charge of $500 upon request of an evening visitation or weekend service. We provide the service of transporting the body to the funeral home from its place of rest. This could be homes, nursing homes, or hospitals. Our removal fee is $240. The use of our automotive equipment is $270. This includes the use of the funeral hearse and the flower van. As part of our services we will deliver all the flowers that were received at the funeral home to one location. If the family wishes to request a family car or limousine there is an additional $200 charge. Depending on the different options the families choose to go with, standard traditional funeral services for visitations and services are between $3000 and $4000.
Our firm also provides the service of forwarding remains to another funeral home. This may be the case if someone passes away in another state and needs to be flown back to their residence. Prices for those services depend on the circumstances. Along with these services, there are more options upon request that we will have available on a price list. There are direct burial options along with cremation packages.
Aside from our services, we provide products that families want or will need for their funeral. These are products that families can only get through us. When buying from us, we can regulate prices, ensure quality and maximize our profits. We would lose a great deal of business if we had outside resources involved.
The first product we offer is a casket. As stated before, our mark up is 300%-400% depending on the price. Typically, casket prices range between $745- $8500. The burial vaultsâ€™ mark up is between 100%- 200% and usually cost the family between $825- $10,000. There will be a complete price list provided for the family of all the caskets and burial vaults. In a case with a cremation, we sell urns. Those prices range between $175- $2065. We also offer memorial merchandise. This merchandise includes acknowledgement cards, visitor register, memorial folders or prayer cards, and cemetery makers. Prices on all this merchandise very between styles and quantity. A family that gets a large marker could pay up to $45,000 versus a little marker for $395.
Our funeral home offers a service and opportunity that not many do. We own a reception hall that families may rent out following their services. Often times families like to gather and share memories of their loved one who has passed on and they are sometimes limited to where they can do so. This gives them an option to rent out a place where there house wonâ€™t get cluttered and their dishes wonâ€™t get dirty. There will be catering offered along with a furnished kitchen area. However, if the family wishes to have catering, they must go through us. We wonâ€™t allow outside catering to come in and serve the family. The fee for renting this depends on the time of day and the length of time you plan to stay. There will also be funeral home staff member present to assist with any needs.
Our firm provides the option of prearranging. This will be promoted by our funeral home on a regular basis. This service allows families to come in and prearrange a funeral before their loved one has passed on. This makes it nice for families who are expecting a death in the future. It gives them one less thing to worry about during their difficult time. Sometimes elderly couples will come in and preplan their funerals in order for them to be similar to each others. Our firm will keep all records of funerals on file for convenience. Not many funeral homes due this, but we feel it will be beneficial to provide the most relevant service to the family. If a person has passed away and their family chose to go with our firm, then we would have a record of that funeral to coordinate with their loved ones. The funeral director would bring the past record to the arrangements and they could plan their funeral accordingly. There are many cases when widows would like to have a similar service as their spouse had but canâ€™t remember all the details.
Following the funeral, our firm will make a phone call to the family we have just served. This usually takes place 2 weeks after the service. During this call, we offer an aftercare program for adults and kids. We have counselors that are trained and specialize in treating grieving adults. The aftercare program offers gatherings and support groups. At these meetings, youâ€™ll meet with other people that have lost their loved ones. As a group it makes it easier to cope with the loss and move on. There is a separate program for kids. Young children often have the hardest time dealing with death. Counselors will talk them through it providing different activities helping them understand death.
Our firm has several promotional objectives. First, we want to establish a name for ourselves not only in the market but in the community. We want people to be mentioning our name when the topic of funeral service is brought up. Secondly, being a new business in the area, we want to provide information to the community of what all services we provide. Although our website will have information about our funeral home staff, past obituaries, and the services we provide, it isnâ€™t our main tool for promotion. Online promotions are used more for the nationwide chains. However, one of the promotion strategies we will take advantage of is our local radio. There is a good audience that tunes into the local radio throughout the day to catch the news. We will also run ads in the local examiner newspaper. If people see our name on paper it will stick in their head and theyâ€™ll remember our name. We feel these promotional tools would be great to use to promote our pre-need arrangements, aftercare programs, for both children and adults, and the opportunity to use a reception hall after the conclusion of the service. Our promotional goal is not to tell people to come to our firm over our competition. Instead, we simply want to promote our services we provide and express the fact that we are a caring and respectful funeral home.
The biggest part or our promotion strategy is public relations. Weâ€™ll go by the motto, â€œlead by exampleâ€. Therefore, when our staff is out trying to make the community better, people see that and gain a sense of respect. One of the big public relation activities is joining local clubs. This may include the Elks, the Lions Club, the Rotary Club, or the local sports boosters. While at club gatherings, weâ€™ll promote our business more indirectly. We wonâ€™t be out telling people to come to our funeral home for business, but rather getting to know people and be trusted. After all, people want to go to someone they feel comfortable with and trust during their time of need. Another big public relation strategy is attending different church activities. In the funeral business, youâ€™re dealing with churches on a constant basis. It is a good idea to keep a good relation with the people involved.
Overall, this is probably the most critical part of our marketing plan. We want to start off by seeing if we reached all of our goals, not only our financial goals, but also our marketing goals. In this business, there would be no surprise if we didnâ€™t see a big share of the market for the first couple years. However, we do plan to hit our profit goal of $21070. If we donâ€™t hit that we will look at different parts of our performance and see what needs to be changed. One of our main concerns is our reception hall. This will be closely watched. Being a new service in the area, weâ€™ll have to see if it was successful or not.
Our short term goal is to get 50 calls the first year. If we fail to reach that, we will make sure our pricing is relative and fair, and we will check and make sure the families that we have served were satisfied. When we make the phone calls a couple weeks after the service, hopefully that will help us monitor and meet our customerâ€™s wants and needs. Unlike many businesses, it is hard to ask a family what they thought of your business and services. This isnâ€™t an industry that technique works in because people really donâ€™t know what exactly to expect unless your service was very poor. So we will have to monitor our customerâ€™s support through our business. When we make improvements for long term, they will be significant. For example, this could be changes to our facilities. We could also add a second location in another nearby city to try and attract more business. We will keep bringing new ideas to the table for families to choose from and try to keep ahead of the competition.
Conner, Deirdre. â€œRoanoke, Va entrepreneur anticipates demand for cremation boxes.â€
Roanoke Times. 7/06/2004. Newspaper source
Monell, Jason. Personal Interview. 8/15/2004.