Free Marketing Dissertations - 70 + £ 6.5 = £ 19.2 The Revenue Per One Hour Service Charged From The
70 + £ 6.5 = £ 19.2
The revenue per one hour service charged from the customer = £ 25
Break even point = Number of customers required to accomplish business without loss
= Fixed Costs /(Revenue per unit variable cost per unit)
= (£ 16000 + £ 500 + £ 4996) / (£ 25- £ 19.2)
= 3706.20 = 3706 customers approximately.
Hence to achieve effective return on investment the oxygen bar should serve over 3706 customers since the revenue is generated only from the 3707th customer.
3.2: Design Analysis
The major elements that serve as critical factors for the design process of a new business venture as argued by Mark Davies (2000) are listed below
Location: The location of the bar is a critical element for attracting customers. This is mainly because of the fact that the location of the oxygen bar in a place without enough parking spaces apparently hinders the customers’ approach to the bar thus reducing the market share. This is an essential element that should be considered whilst designing the bar to include ample parking space to meet the demands of the customers.
Hygiene and environmental elements: Since the process of aroma usage with the oxygen is the key ingredient to the products of the bar, it is essential to accomplish ample safety and precautions to avoid emission of any unwanted gas into the atmosphere. Since the inhalation of oxygen rich air will increase the release of carbon dioxide (CO2) at a higher level, the design manager should ensure ample measures are in place to control the emission of CO2 into the atmosphere.
The design manager should consider the emission issue whilst gaining approval from the city council while the location and parking space issue can be addressed during the running of the bar itself since the revenue generated out of the bar can be used for further development of the bar.
4.0: Marketing Mix
The marketing mix as argued by Philip Kotler and Kevin Lane Keller (2005) is the critical element to promote the products in the target market. This is not only because of the increase in the need for marketing to promote the products of a company but also to accomplish the effective communication of the products to the customers in the target market. Alongside, it is also interesting to note that the marketing mix also serves as the key element for the success of the products launch and survival in a target market as argued by Frances Brassington and Stephen Pettit (2003). The fact that the marketing mix embraces the 4Ps of marketing namely Product, Price, place and Promotion, this section presents a brief overview on the marketing mix for the oxygen bar in the light of the 4Ps of marketing.
Product: The product for the company is the oxygen rich aroma services provided to the customers. The product can be customised to accomplish aroma therapy and SPA range of products along with the flagship product of Oxygen bar.
