DIGITAL

MARKETING
ASIGNMENT 1

BUSINESS REPORT
Microsoft Office User

Ace distributors | CAPE TOWN

Table of Contents
2.1Foreword: ..............................................................................................................................2

2.2 microenvironmental characteristics:............................................................................3

2.3 market environmental characteristics ...................................................................................3

2.4 macroenvironmental characteristics .....................................................................................4

2.5 market measurement and demand forecasting: .................................................................4

3 SWOT analysis of Ace ...................................................................................................................6

4.1 effectiveness of its existing plan.............................................................................................8

4.2 use of digital marketing ...........................................................................................................11

4.3 the use of SMS marketing .......................................................................................................11

4.4 potential implementation of SMS marketing ......................................................................12

5 recommendations .........................................................................................................................13

Bibliography .............................................................................................................................14

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Business report for:

Ace: Sports Distribution

Devin Duncan

2.1Foreword:
Ace sports distribution, which will be referred to as Ace from here on is an online store
and distribution centre based in cape town South Africa. The business has recently
started its online journey, becoming a fully functional distributor of sporting apparel
across southern Africa from the year 2019 according to (Ace Sports, 2022). The
business sells anything 2-wheeler related, from motorbikes and bicycles to boots and
sunglasses. Variety is a continuous theme in this company as they push to represent all
brands on their website. Frequent sales discounts and package deals align with the
mission statement of the business in which they wish to make all apparel in their store
easily available and cost-effective according to (Ace Sports, 2022). These factors make
for a very competitive business in this niche which is why I have chosen it as the subject
of my research.

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2.2 microenvironmental characteristics:
The microenvironment of this company involves the intermediaries and the public as the
other variables fall under the market environment as stated by (cant, 2022). although
the company has many suppliers it has just one delivery servicer, DHL, the company
makes use of their services to timeously deliver products to its customers, but this means
that the company is open to manipulation from the intermediary as they have just one,
in the companies favour they have chosen a well-known delivery service who has been
tested for many years according to (Ace Sports, 2022). The last variable in the
microenvironment is the public, the company treats its customers well by offering them
discounts and timeous shipping, these factors lead to a good position for the company
in terms of its public relations. This is important in case the company wished to obtain
funding at any point in the future as investors do not want to align with businesses that
are serving the public respectfully, it is also important for the company as the wish to
bring any new brands to the country and these brands value who their distributors and
how they treat customers buying their products overseas.

2.3 market environmental characteristics

The business sources products from around the world and from multiple different
distributors, this means they are constantly managing multiple relationships with
suppliers but also means that they are not dependent on one supplier according to (Ace
Sports, 2022). The company's founders are ex-2-wheeler racers and are well-linked
within the community this means that they are fully aware of what customers are looking
for and what should be sold it also means that customers are more willing to take the
businesses offerings as the trust they have in the founder's knowledge trickles down to
the products in the stores according to (Ace Sports, 2022). There are multiple south
African companies with online stores selling similar products an example of this would
be “cycle direct”, but none of these companies offers a wide variety of products nor do
these companies sell high-end hard-to-come-by brands such as “100%”. This shows us
that the company has a competitive advantage over its competition and offers a
new/different market offering.

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2.4 macroenvironmental characteristics

There are 5 main macro-environmental variables that influence the business as stated
by (cant, 2022). the first of these is the economic factors, which affect mainly the level
of production of the company and the decision-making process of the customers. After
speaking to Anthony Raynard (founder), I found out that the company orders small
amounts of every item in the store at a time. They do this because the demand for a
specific product is lower when the range of products is so large. This is a result of
functioning in the south African economy as opposed to a larger economy. That brings
us to the demographic factors that play a role in the business. The demographic forces
relate to the age, gender, education and lifestyle of the consumer. As the company
focuses on outdoor activities like mountain biking, cape town has the perfect
demographic for the company as many Capetonians enjoy cycling and being active
according to (Ace Sports, 2022). For this reason, even though the company sells its
products all over South Africa most of its sales come from the cape. The last factor we
will be covering is the technological factor which relates to the new technologies
produced as well as improved modes of delivery or manufacturing. For Ace, this means
that they are constantly updating their product line as new development is one of the
natures of competitive sports such as cycling. When a new bike is released consumers
will want the newest bike and it is the job of Ace to make sure that they stock that new
bike before competitors do or they will lose market share.

2.5 market measurement and demand forecasting:

Ace conducts its market measurement by use of the basic method of market
measurement according to (Ace Sports, 2022) which was defined by (cant, 2022). This
is done by making use of the information they get from their website. From this, we can
see exactly how many different customers ordered stock from their website, and how
much each product was sold for which we can use to find the average price as well as
in what period it occurred. There are four levels of market measurement the first level is
the consumer level, this gives Ace information about each consumer buying their
products and allows them to segment their customers. This gives Ace a better
understanding of its customer's age gender and purchasing habits. The second level is
the product level, which gives us information about specific products for example how

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many of each product were sold in comparison to other products. This shows us how
well each product is doing, who is ordering each product and how many of the products
each person ordered. The third of these levels is the geographic level which shows us
where the customers are located and which areas are ordering what products. The last
of these levels is the time level, which gives ace information about what is happening at
specific times and for specific lengths of time, the company uses this information to figure
out when for example to run marketing campaigns. Demand forecasting is the act of
predicting future sales numbers. This information helps Ace determine how the
marketing strategies will be implemented in the future (Ace Sports, 2022). After speaking
with Anthony (founder) I found out that the company uses a jury of expert opinions in
determining what the future forecasting of the company will look like. the founders have
been very active in the community of their niche because of this they historically have
been very good at forecasting what the market will do and the price of the products they
are selling.

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3 SWOT analysis of Ace

The following was made in conjunction with the guidelines set out by (cant, 2022) and
information from according to (Ace Sports, 2022) and the companies founder Anthony

Following the format of the SWOT analysis, the first section we will discuss is the
strengths of ace. Ace is recognised as the number one bicycle and motorbike accessory
distributor in South Africa, this means that they are the most successful in their niche.
This leads to it being the first choice for customers. Another strength would be the
company's market share in its niche because they supply a large portion of the market
the company can influence the market in its favour. The company stocks a wide variety
of sock which means that consumers will most likely find the product they need on the
website which leads to them becoming recurring customers. The company does not rely
on a single supplier they use multiple suppliers which means that if one of these
suppliers were to go out of business the company would still have another sock they
could sell. The company also does a good job of ensuring customer satisfaction and
brand loyalty which means that they have many recurring purchasers. The company has
also seen extreme online growth over the past years and is expecting to grow even more
in the coming years the more the online presence of the company grows the more
potential clients it will have.

As for the weaknesses of Ace, the company does not make any of its own products they
rely on suppliers to send the goods to sell the company is not in control over what these
suppliers decide to do with their pricing and whether or not the suppliers will be willing
to supply to South Africa in the future. Ace also relies on a single distributor, DHL. This
means that if the distributor wished to up their prices are something were to happen to
this distributor clients will not get their products on time the company also have to control
how the distributor conducts itself in terms of safe carry and well-trained staff, this can
hurt how the company is perceived by the end user. The company has very competitive
competition so they constantly have to make sure that the offings are better than the
competitors this means that the profit margins cannot be any larger than competitors as
the products they stock will need to be fairly priced in comparison to their competition.
There is no chatbox on the website, which means that there are potential questions that
are going unanswered from clients who need answers relating to their orders timeously.

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As for the opportunities for this company. The company has not fully taken advantage
of there digital marketing strategy. The first reason for this is that they are not taking
advantage of SMS marketing in their strategy whatsoever. The second reason for this is
that the company has been profitable for almost two years now. This profit should be
reinvested into the business by running more aggressive ad campaigns and developing
their digital strategy for further optimization. the company is not on every social media
platform there is a great opportunity to reach new clients who do not use Instagram or
Facebook. The company can expand their operations into new niches closely related to
cycling and dirt biking for example it could begin selling surfboards and kites which are
big niches in the western cape. The company can also consider manufacturing their own
line of products. This could be successful as they have a big recognition in the niche
and have already gained the customer's trust.

As for the threats the company faces. The most obvious of these is what the competition
is doing to get ahead of them, and the company should strive to be the first to stock new
products and implement new ideas before the competition. The suppliers and the
delivery service, the company does not have control over the prices the suppliers set or
what the suppliers decide to produce which means that there is the potential for Ace to
have to stop stocking a successful product. They also have no control over the delivery
company so if something happens with delivery and it is late it can harm how the
company is perceived. As for the external threats, the potential for a recession is
extremely high in today's market which can lead to non-essential products declining in
sales. Fuel price hikes can lead to the delivery service up their prices which means the
overall cost of goods will be higher on the site.

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4.1 effectiveness of its existing plan

Ace uses a multi-platform strategy that involves the use of a website as well as social
media platforms.

The website is well-maintained and up to date, this is important for the company as its
website is the main point of sale. With this in mind, the landing page of the company is
also the products page which means that customers that go to the website are instantly
met with a call to action in the form of the add-to-cart function present on the first page
(Ace Sports, 2022). The business makes use of google ads which means that when
someone searches for any of the keywords that relate to the company it is the first one
to pop us as stated by (cant, 2022), this is important as the nature of google means that
the first option is often the most clicked on.

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The company's Instagram page is very active which means that they are actively making
use of Instagram's algorithm, this means Ace is making sure its content is being pushed
to new users and new potential customers (Instagram.com, 2020). The Instagram page
also makes use of the products function, so the posts have a direct link to the checkout
page on the website which results in more sales conversions according to (Ace Sports,
2022). One issue with the Instagram page is the ineffective use of reels. Short-form
video is the prevailing format in today's world and the Ace has not fully taken advantage
of this. the Instagram page has over three thousand followers which means that the
company has been consistently growing their social media platforms since it began its
journey in 2019.

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The Instagram post relates directly to the products they sell, which means that every
post acts as an advertisement for their products, this is a very effective use of social
media as these posts are seen as free advertising as stated by (cant, 2022). Along with
regular posts, the company makes use of paid Instagram and Facebook ads which Ace
has optimized using data gathered from previous campaigns as well as market research
and measurement. New customers from these adverts are met with the first line in the
Instagram description which proudly states that Ace is the number one sporting apparel
online site in south Africa which for digital purchasers is a very powerful statement as it
evokes trust from the consumer before they have even seen the website or rest of the
Instagram page according to (Ace Sports, 2022). Ace runs giveaways on its Instagram
page, giveaways are an incredibly effective way of increasing your exposure on social
media in terms of watch time and new follower generation. It is also a good way to show
the consumer that you have them in mind and betters the public perception of the
company according to (Ace Sports, 2022). Overall bearing a few weak points in mind,
the company has very effectively made use of social media and digital marketing, by
using both paid and unpaid ads as well as a multi-platform strategy.

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4.2 use of digital marketing

The company uses many different social media platforms. The first of these is the
company's use of a web page. The company uses this website to sell its products. The
website also acts as part of the company’s marketing strategy, this is done using google
ads. The website acts as an easy way for internet users to make first contact with the
business as the website contains information relative to the business and encapsulates
what the business does. The website is always kept up to date as the company
frequently gets new stock it is selling, and this new stock must be represented on the
website. Because of how much the business relies on its website it is vitally important
that the website is well-maintained and well-put together. This webpage is very well
designed as it is a point of sale for the company, the website has been designed around
this idea which is why the landing page of the site is also the products page which takes
you directly to check.

The next of these is the company's Instagram account. The Instagram account is very
active posting at least once every two days. Instagram has done well to connect with
customers as the company has three thousand followers, these followers are seeing the
daily content sent out by the business which acts as free advertising for the company.

4.3 the use of SMS marketing

Ace does not use SMS (short messaging service) for advertising. The company does,
however, use SMS to communicate with customers of the company they do this by
sending confirmation of order messages to customers who have just ordered products,
this SMS acts as a new-age form of receipt that the customer can keep with them for
extra assurance of their order. Ace has not fully implemented SMS into their marketing
strategy which is great to its detriment. Over 80% of the South African population has
used their mobile phones as stated by (cant, 2022), and a lesser number than that have
data on their phones which is why SMS marketing is so useful in south Africa. The target
market of this company is tailored to high-end clientele, I say this because of the
extremely high average cost of goods on the sight according to (Ace Sports, 2022). Ace
is under the assumption that its target audience has enough household income to use
data on their mobile phones. The company does not take down the phone number of
consumers when they purchase an item this means that the potential list of phone

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numbers they have is quite small. This is how they are not fully taking advantage of this
opportunity according to (Ace Sports, 2022).

4.4 potential implementation of SMS marketing

SMS marketing is extremely effective, especially in South Africa as over 80% of South
Africans use their mobile phones and SMS marketing does not use data to connect with
people this is good because many South Africans are without signal and data as stated
by (cant, 2022). This means it is an effective way to connect with a large portion of the
population. The use of SMS marketing for advertising purposes is greatly effective
because of the short form of text it is easy for consumers to quickly read over the advert
and decide if it is relevant to them or not. The company can register for a specific
keyword for example SMS ACE according to (cant, 2022). This gives consumers a quick
and easy way to make contact with the company. Automated responses are very easy
to program into your SMS marketing which allows you to instantly inform consumers of
new specials and even run giveaways. An opt-out function is recommended with SMS
marketing as it allows customers to decide whether or not they want to take part in this
service, this is good because it means current customers that follow your Instagram that
will not be annoyed by your SMSs. It cost consumers money to respond to your SMS so
it is important to consider this cost for the consumer and minimize it or find a way to
negate an SMS response completely it would be better for the SMS to contain a link to
which the consumer to take action for free. Giveaway codes and other promotional
material are a good way to prompt people to stay on your SMS list and it also shows
consumers that there is good value in reading the SMSs you send them.

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5 recommendations

The business has done a good job at covering the digital side of its operations in terms
of conducting market research and implementing marketing strategies but there are
some key areas that have not been fully coved. The first of these areas is the level of
online presence the company has Instagram and Facebook as well as a website but
does not make use of ass social media platforms for example tik tok and Twitter. My
recommendation is that the company makes use of all other available platforms. It
should also scale its marketing strategy in terms of ad spending and the amount of
content they are putting out on social media. As the company has experienced a lot of
growth from when it started there marketing efforts should be scaled as such. An online
representative is not present on any of the social media, I believe that putting a face to
the company and actively using that to market the brand will greatly increase the views
likes and amount of content the company is putting out and getting, one of the founders
would be a perfect fit for this. The company should also invest more in google ads as
other companies will soon start paying more for ads to rank above them, this will also
allow them to put their ads on new keywords which will give them more exposure. The
company should also start running more giveaways on its pages as it is a good way to
gain new followers at a low cost. Producing its line of products could be good for the
company as they have the resources to do so and this could lead to a completely new
opportunity for ace. The company should begin expanding its target market by stocking
more accessories and equipment for the extreme sport niche, this will increase its total
sales and make them less reliant on one sector in the market. The company can also
look at it. Buying out a company already socking products in the other niches, this will
only happen in a few more years of successful business as of the high cost of purchasing
a company.

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Bibliography
cant, m. (2022). marketing managment . cape town: juda.

Instagram.com. (2020). ACE SPORTS (@acesportssa) • Instagram photos and videos. [online]
Available at: https://www.instagram.com/acesportssa/ [Accessed 10 Oct. 2022].

Ace Sports. (2022). Brands. [online] Available at: https://www.acesports.co.za/pages/brands

[Accessed 10 Oct. 2022].

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