Launching a new business - Polystutor (written plan)

Lee Sin Ming 09369162D

ENGL 325 English for Professional Communications

Final assignment – Business report

Report on

the Launching and the Marketing of

PolyStutor

2

Content

Cover 1

Content 2

I. Introduction 3

II. Background

A. Definition of intermediate tutorial service 3

B. Tuition situation in Hong Kong 4

III. Methodology of primary research 4-5

IV. Research findings

A. Experiences of providing tutorial services 6-7

B. Attitudes towards current intermediate tutorial service 7-9

C. Opinions towards our proposed service 9-10

V. Discussion 10-14

VI. Conclusion 15

VII. Recommendation 15

VIII. References 16

IX. Appendices

A. A sample questionnaire of our research on intermediate tutorial service 17-19

B. Special fee for specific cases 20

C. Recommendations on tuition fee for primary students, secondary students 21

and musical instruments

D. Budget plan of PolyStutor 22

3

Introduction

This is a report on the launching and the marketing of our new plan, PolyStutor, to provide

intermediate tutorial service. Our target groups are The Hong Kong Polytechnic University

(PolyU) students who want to be tutors and people who demand tutorial services in Hong Kong.

In this report, the results of a survey conducted regarding the situation of PolyU students

providing tutorial services will be discussed. And the corresponding design of our service and

the marketing strategies will be explained in details.

Background

Before studying the main content of our plan, the following is the background information about

intermediate services.

A. Definition of intermediate tutorial service

The person or the organization that provides intermediate tutorial service is called a middleman.

Middlemen recruit tutors and gather clients mainly through the Internet. They earn commission

by matching tutors and clients according to the information and requests collected from them.

The operation of PolyStutor will be similar. The major differences are that we only accept PolyU

students as our tutors and only 1 week tuition fee will be charged for commission.

Fig. 1 A flow chart showing how the business operates

Application

&

Application

Commission $

Tutorial service

Tuition fee $ Parents

Clientsa

nd

Students

Clients Tu

to

rs

Tutors

Reply

Middlemen

1. Time & place 2. Types of tuition 3. Special

requirement of tutors

Reply

1. Time & place preferred 2. Types of tuition offered 3. Qualifications

* Free registration for both clients and tutors

4

B. Tuition situation in Hong Kong

Academic results have been heavily emphasized in Hong Kong for long and hence employing

private tutors is a common practice among many primary and secondary students.

According to the survey conducted by The Hong Kong Federation of Youth Groups in

September in 2009, among 512 participants, 57% had tutorial classes in past 6 months while

77% did in last year. The numbers increased by 22% when compared to those resulted 13 years

ago. And 28% and 20% respondents spent $500-$1000 and $1000-$1500 each mouth on tuition

respectively. These findings indicate that the number of students who had tutorial classes is

increasing and students are willing to spend money on tuition.

On the other hand, being a tutor is a popular part-time job for university students. Thousands of

registered tutors can be found from various popular online intermediate tutorial service providers,

like Tutorkingdom and HKTA.edu.com, and university students are the majority.

There are over 700,000 primary and secondary students and uncountable tutors in Hong Kong.

The market is so big that it is costly and different for both tutors and clients to search for a

suitable partner. Therefore, intermediate tutorial service is in great demand and deserves high

market value in the society.

However, our new service will face keen competition from similar companies in the market. And

some may worry that whether we can obtain enough tutors and clients to support our business. In

view of this, we have done a survey to acquire updated firsthand information for the design of

our plan to ensure a success of our business.

Methodology of primary research

As we target at recruiting PolyU students as tutors, a questionnaire survey was conducted in the

campus to gather information on their past experiences in private tuition, attitudes towards

related services currently provided in HK and opinions towards our proposed service.

Questionnaires were distributed to 86 subjects in the library, classrooms and canteens in March

2010. Information of the subjects is listed below.

58% of the respondents were female.

Students of Foundation Year to Year 4 filled in the questionnaire while 41% and 38% of

them are in Year 1 and 2 respectively. (From Fig. 2.1)

The respondents were from all the 8 faculties of PolyU. Most of them were from the

Faculty of Health and Social Sciences (29%) and the Faculty of Humanities (20%),

followed by Faculty of Applied Science and Textiles (13%) and Faculty of Construction

and Land Use. Only 2% are from the School of Design. (From Fig. 2.2)

As a result, the findings were objective without bias to students of any gender, year of study or

faculty.

5

Distribution of Respondents (by Year of Study)

1%

41%38%

16%

5%

0%

10%

20%

30%

40%

50%

Foundation

Year

Year 1 Year 2 Year 3 Year 4

Fig. 2.1 The Distribution of Respondents by Year of Study

Distribution of Respondents (by Faculty)

Faculty of Applied Science

and Textiles, 13%

Faculty of Business, 7%

Faculty of Construction

and Land Use , 12%

Faculty of Engineering,

8%

Faculty of Health and

Social Sciences, 29%

Faculty of Humanities,

20%

School of Hotel and

Tourism Management, 9%

School of Design, 2%

Fig. 2.2 The Distribution of Respondents by Faculty

6

Research findings

After the personal information, the respondents were asked about their experiences of the

provision of private tutorial services, attitudes towards the intermediate tutorial service currently

provided in Hong Kong and opinions of our proposed plan.

A. Experiences of providing tutorial services

About 60% of the respondents have offered private tuition in the past or at present.

For the types of private tuition offered, nearly all was academic and 11% was on

musical instruments. Sports, visual arts and handcrafts and, others occupied 4% each.

(See Fig. 3.1)

The subjects got the tuition mainly from friends and relatives (70%) and intermediate

tutorial service providers (39%), followed by tutorial centers (15%) and

advertisements and leaflets (11%). Only 6% obtained the tuition from other ways

including schools and youth centers, and another 4% from job board. Respondents

could choose more than 1 option. (See Fig. 3.2)

Types of Private Tuition Offered

Academic , 96%

Others, 4%

Sports, 4%

Musical

Instruments, 11%

Visual Arts &

Handcrafts, 4%

Fig. 3.1 Types of Private Tuition Offered by surveyed PolyU students

7

Methods of Getting the Tuition

Advertisements

and leaflets, 11%

Intermediate

tutorial service

providers, 39%

Job board, 4%

Friends and

relatives, 70%

Tutorial centre,

15%

Others, 7%

Fig. 3.2 Methods of getting the Tuition of surveyed PolyU students

B. Attitudes towards current intermediate tutorial service

At present, most intermediate tutorial service providers charge commission of 2-week

tuition fee. Near 70% of the subjects found it too high or high. Only 26% found it

reasonable. (See Fig. 3.3)

When choosing intermediate tutorial service providers, reliability (55%) and

commission (34%) were the major factors to the respondents. Factors like amount of

clients and customer service only account for 7% and 5% respectively. (See Fig. 3.4)

Over half of the subjects commented that the current intermediate tutorial service

providers had to improve commission charge and customer service. Reliability and

amount of clients were the areas needed improvement to 35% and 23% respondents.

More than 1 option could be selected. (See Fig. 3.5)

8

Opinions towards Commission Charge of Current

Intermediate Tutorial Service Providers

Too Low, 2%

Low , 3%

Reasonable, 26%

Too High, 31%

High, 37%

Fig. 3.3 Opinions towards Commission Charge of Current Intermediate Tutorial Service Providers

Most important factor in choosing intermediate tutorial

service providers

Commission, 34%

Customer Service,

5%

Amount of client,

7%

Reliability, 55%

Fig. 3.4 Most important factor in choosing intermediate tutorial service providers

9

Aspects of present intermediate tutorial

service providers to be improved

Commission, 57%

Reliability, 35%

Amount of client,

23%

Customer Service,

50%

Fig. 3.5 Aspects of present intermediate tutorial service providers to be improved

C. Opinions towards our proposed service

Near 90% respondents agreed that charging 1-week tuition fee as the commission is

reasonable.

Setting a maximum charge for commission is necessary to 78% subjects.

Over 60% of the students surveyed would you be interested in the rewarding scheme.

Cooperating with other student bodies could improve our reliability according to about

70% of the respondents.

85% subjects expressed that they were interested in our service in general. Reasons for

negative answers included ‘details not known’, ‘I have lots of students’, ‘no time to

participate’, ‘not interested in tutoring’ and ‘I have tutor jobs already’.

As for the promotion channels, 74% respondents paid most attention to emails. Other

methods like poster, leaflet, advertisement materials in canteens and online news board

account for less than a half. More than 1 option could be chosen. (See Fig. 3.6)

10

Preferred Promotion Channels

Poster, 48%

Promotion

Materials in

Canteen, 27%

Leaflet, 35%

Email, 74%

Online News

Board, 30%

Fig. 3.6 Preferred Promotion Channels

Discussions

With the results of the primary research and other relevant information about the current

intermediate tutorial service industry collected, we have done comprehensive evaluation on our

plan and the main points to be noticed are listed below.

Source of clients

From Fig. 3.2, nearly all respondents got their tuition through a third party like friends and

relatives and tutorial centers. We can see the huge demand for intermediate tutorial service.

According to the PolyU’s website, the total number of students in 2009/2010 is 28,702,

including part-time degree, SPEED, Higher Diploma and sub-degree students. With reference to

the percentage resulted from our survey, i.e. 60% respondents have offered private tuition in the

past or at present from Question 4, there will be over 17,000 PolyU students to be our clients

each year.

Together with the uniqueness of PolyStutor, such as our high reliability and low commission

charge, our service is very attractive to them. From Question 14, 85% subjects were interested in

our plan. Thus, we will have adequate supply of tutors although we only target at PolyU students.

On the other hand, PolyStutor has no restriction on the nature of tuition since we have PolyU

students offering different kinds of tuition apart from the academic one according to Fig. 3.1.

Hence, we can accept students of all age groups, from all districts of Hong Kong, demanding for

various types of tuition.

11

There are over 700,000 primary and secondary school students in Hong Kong every year and

employing private tutors is an uprising trend in recent years. It is because parents think that this

is an effective way to enhance children’s results and students afraid that they will be

academically inferior if their classmates have private tuition but they do not. So, there is unlikely

an insufficient supply of students demanding tutorial services. And they need help when

searching for suitable tutors. A faithful intermediate tutorial service provider like us is desirable

as a result.

Reliability

From Fig. 3.4 and 3.5, over half of the subjects regarded reliability as the most important factor

for choosing intermediate tutorial service providers and 35% of them thought it is one of the

things that current providers could be improved. The reason is that there are lots of negative

reports criticizing current providers. Some of them charged tutors high commission fees

unreasonably and there were examples of tutors producing fake qualification certificates.

We ensure our reliability by building our own brand name ‘PolyStutor’. ‘Poly’ contains the

meanings of ‘Hong Kong Polytechnic University’ and ‘many’ while ‘Stutor’ combines ‘students’

and ‘tutors’. The name indicates that we are a trustworthy service provider offering many

qualified tutors who are studying in or graduated from Hong Kong Polytechnic University.

Unlike the existing providers, PolyStutor need to prove the academic and other achievement

claimed by the tutors. To ensure our reputation, when PolyU students register as our tutors, they

have to submit their resume together with a copy of their student card, HKCEE and HKALE

certificates, GPA transcripts and other relevant certificates like the level certificates of any

musical instrument if they want to provide relative tuition.

We will deal with their application and do the pairing up within 3 days. Clients can make

complaints and change tutors when necessary as we are a responsible service provider.

For tutors, we will charge only 1 week tuition fee or the maximum charge, depending on which

is lower. For clients, we only collect $20 administration fee. After having lessons for a week, if

the clients find the tutor suitable and decide to continue the tuition, they deposit the tuition fee

and administration fee into our bank account directly.

No extra fee will be charged, except the special charges for particular cases like conspiracy to

defraud or deferred payment. We have stated these charging clearly. (See Appendix 2)

For tuition fee, we provide recommendations according to the market situation to maintain a

reasonable pricing of the tutorial services offered by our tutors. (See Appendix 3)

From Question 13, about 70% subjects agreed that our reliability will be enhanced if PolyStutor

cooperates with other student bodies. For this reason, we are going to work with Hok Yau Club,

a well known organization serving local youngsters. We supply tutors to their youth centers for

tutorial classes and they refer private tutorial cases to us.

12

Commission Charge

According to Fig. 3.4, commission was the second most important factor for respondents to

select intermediate service providers. Yet it was the aspect that most respondents found

necessary to be improved (from Fig. 3.5) as almost 70% subjects found it too high or high (from

Fig. 3.3).

From the results of Questions 10 and 11, nearly all respondents were content with our 1 week

commission fee and around 80% found a maximum charge necessary to protect tutors from

being charged too heavily. The maximum charge is set at $500 as it is attractive enough to tutors

but not causing loss to our company. Referring to Fig. 4.1 and 4.2, these two pricing strategies

are really repulsive as almost none of the existing service providers adopt them.

Collect 1 week of tuition fee Collect 2 weeks of tuition fee

NO

1. A Class Tutor Services Centre

2. EC Tutor

3. Kitken Tutorial Centre

4. Go2tutor

5. Sky tutor

6. Tutor group

7. Tutor –HK

8. Tutor OK

9. Kits-tutor

10. Tutor Kingdom

Fig. 4.1 Comparison between PolyStutor with Major Current Service Providers on Commission

Fee

13

Provide a maximum charge Does not provide a maximum

charge

1. A Class Tutor Services Centre

1. EC Tutor

2. Kitken Tutorial Centre

3. Go2tutor

4. Sky tutor

2. Kits-tutor 5. Tutor group

6. Tutor –HK

7. Tutor OK

8. Tutor Kingdom

Fig. 4.2 Comparison between PolyStutor with Major Current Service Providers on Maximum

Charge

Customer service

Form Fig. 3.5, customer service is the second area that most subjects found needed to be

improved. There are complaints from both tutors and clients criticizing the staff attitudes are

poor for intermediate tutorial service providers. They are impolite and impatient when answering

enquiries. And most current providers offer no ways for clients to complain.

To provide better customer service, we will train our staff for the appropriate working attitudes

and correct ways of handling enquiries and complaints. And we will collect evaluation about

their partner from each tutors and clients and solve their problems. For example, if the client is

not content with the quality of teaching provided by the tutors, we will offer him/her another one

free of charge. This helps to maintain our reputation and competitiveness.

Rewarding scheme

PolyStutor is confident in launching a rewarding scheme, which was supported by over 60%

respondents in Question 12. Sometimes PolyU students have to give up their existing tutorial

jobs due to the lack of time or graduation. If they provide these clients to us, $50 will be awarded

for each successful referral and we believe this will be an effective mean to attract more tutorial

cases. And this scheme can enhance our competitiveness as it is seldom used at present. The

following 2 charts show how the scheme works and the provision of such scheme by current

popular intermediate service providers.

14

Fig. 4.3 The Operation of Rewarding Scheme

No Rewarding Scheme Claiming that one has a

CHANCE to get $100

Return half of the fee

1. A Class Services

Centre

2. EC Tutor

3. Sky tutor

4. Tutor OK

5. Tutor group

6. Go2tutor

7. Tutor Kingdom

8.Kitken Tutorial Centre

Kits-Tutor Tutor-HK

Fig. 4.4 The Provision of Rewarding Scheme by Current Popular Intermediate Service Providers

Promotion strategies

From Question 15, the majority of respondents suggested email as their preferred promotion way

and about half suggested using posters. We will send promotion messages to PolyU students’

email accounts, distribute leaflets and post posters around the campus to arouse students’

attention towards PolyStutor.

Promotion on the Internet is another effective way to publicize our service. We will post

advertisements on local popular websites like the websites of Google, Yahoo and Hong Kong

Forum to gain attention from uncountable web users.

As parent is another major target group and they may not have access to the Internet, we will

distribute leaflets listing our service in numerous housing estates in Hong Kong. Hotline number

will be printed on the leaflets for their enquiries.

$50 for successful

referral

PolyU tutors

tustudent

Cases

* No limit for the no. of cases referral

* Not applicable to cases introduced by PolyStutor

15

Conclusion

Our business, PolyStutor, is to act as a middleman linking up tutors and clients according to

clients’ requirements and tutors’ abilities and we earn from charging 1 week tuition fee as

commission. From now on, it will be our preparation period and PolyStutor will starting running

from September 2010. Our survey and the current situation show that the market for intermediate

tutorial service is in great demand and there are many rooms for the existing industry to be

improved and expanded. We are confident that our well-designed and unique service will gain

great popularity and make a huge profit beyond satisfactory.

Recommendations

1. Facing keen competition from numerous similar service providers, public attention

should be drawn on our uniqueness, including the 1 week tuition fee commission, high

reliability and the rewarding scheme. These are also the main focuses of our promotion.

2. To enlarge the market share, we should expand to other local universities setting up

similar brands, such as ChineStutor and LingNamStutor, when PolyStutor is mature, i.e.

earning stable income and having continuous development.

3. We may cooperate with other famous or charitable organizations in providing

intermediate tutorial service in schools and community centers and offer voluntary

education in poor mainland villages. This helps improving PolyStutor’s reputation and

publicity.

4. Further research can be done on the marketing strategies to strengthen our promotion,

which is a key for PolyStutor’s success. For example, promotion methods like discounts

provided to the clients who bring us new clients should be explored.

16

References

10A Tutor (2009). Retrieved March 27, 2010 from http://www.nowcyber.com/projects/tutor/

ectutor.com (2009). Retrieved March 27, 2010 from http://www.ectutor.com/index.asp

Facts & Figures (2010). Retrieved March 27, 2010 from The Hong Kong Polytechnic University, Web site: http://www.cpa.polyu.edu.hk/cpa/polyu/index.php?option=com_content&view=article&id=8&Itemid=43&lang=tc

HKTA (2006). Retrieved March 27, 2010 from http://www.hkta.edu.hk/

Hong Kong Haedline (2009). Retrieved March 27, 2010 from http://www.hkheadline.com/news/html_wnn/html/2009/9/22/wnn89261.html?section_name=wnn

Kits-tutor (2009). Retrieved March 27, 2010 from http://kits-tutor.com/

SkyTutor (2005). Retrieved March 27, 2010 from http://www.sky-tutor.com/

TutorDB.net (2001). Retrieved March 27, 2010 from http://www.tutordb.net/main_aservice.php

Tutor Group (2009). Retrieved March 27, 2010 from http://tutorgroup.hk

Tutor Hong Kong (2002). Retrieved March 27, 2010 from http://www.tutor-hk.com/

Tutorkingdom (2008). Retrieved March 27, 2010 from http://www.tutorkingdom.com/

TutorOK.com (2007). Retrieved March 27, 2010 from http://www.tutorok.com/employ.php

17

Appendices

Appendix 1: A sample questionnaire of our research on intermediate tutorial service

Questionnaire on Intermediate Tutorial Service(導師中介服務)

We are year 1 students of BA English Studies for the Professions. We are now conducting a

research on the intermediate service between tutors and students. Please kindly spare a few

minutes in answering the following questions. All the information collected will be kept

confidential and will be discarded after the research. Thank you very much for your cooperation!

Part 1

1. Sex _______

2. Faculty:

□ Applied Science and Textiles □ Business □ Construction and Land Use □

Engineering

□ Health and Social Sciences □ Humanities □ Hotel and Tourism Management □

Design

3. Year _____

Part 2

4. Have you ever offered any private tuition(私人指導)?

□ Yes □ No (Please go to question 7)

5. What types of tuition have you offered? (You may select more than 1 option)

□ Academic

□ Musical instruments

□ Sports

□ Visual arts and handcrafts

□ Others (Please specify: ______________________________)

6. Where did you get the job from? (You may select more than 1 option)

□ Intermediate tutorial service providers

□ Advertisements and leaflets

□ Friends and relatives

□ Tutorial centre

18

□ Job board

□ Others (Please specify: ______________________________)

7. Most intermediate tutorial service providers charge commission(佣金) of 2-week tuition fee.

What do you think?

1

Too low

2 3

Reasonable

4 5

Too high

8. Which factor is the most important in choosing intermediate tutorial service providers?

□ Commission

□ Reliability

□ Amount of clients

□ Customer service (e.g. handling complaints, staff attitudes)

9. Among the present intermediate tutorial service providers, which aspect(s) can be improved?

(You may select more than 1 option)

□ Commission

□ Reliability

□ Amount of clients

□ Customer service (e.g. handling complaints, staff attitudes)

Part 3

We are planning to launch an intermediate tutorial service in PolyU. All tutors would be PolyU

students. There is no restriction on the nature of tuition and the number of cases. Interested

students can register as tutors in our website without paying any administration fee.

Tutors Only PolyU students

Commission 1-week tuition fee

Maximum charges Yes

License Yes

Others Tutors will be proved by certificates and

transcripts

Rewarding Scheme will provide $50 reward to

tutors for each successful case referring(補習

出讓)

19

10. Is charging 1-week tuition fee as the commission reasonable?

□ Yes □ No

11. Is setting a maximum charge for commission necessary?

□ Yes □ No

12. Would you be interested in the rewarding scheme?

□ Yes □ No

13. Do you think the reliability can be enhanced if we cooperate with other student bodies?

□ Yes □ No

14. Generally speaking, are you interested in our service?

□ Yes □ No (Please specify your reason:

__________________________________________)

15. Which promotion channel(s) would you pay special attention to? (You may select more than

1 option)

□ Poster □ Leaflet

□ Advertising materials in canteens □ Email

□ Online news board

Thank You!

20

Appendix 2: Special fee for specific cases

21

Appendix 3: Recommendations on tuition fee for primary students, secondary students and

musical instruments

Grade Market price (per hour)

Primary 1 $50 - $60

Primary 2 $50 - $60

Primary 3 $50 - $60

Primary 4 $70 - $80

Primary 5 $80 - $90

Primary 6 $80 - $100

Grade Market price (per hour)

Secondary 1 $110

Secondary 2 $120

Secondary 3 $130

Secondary 4 $140

Secondary 5 $150

Secondary 6 $160

Secondary 7 $170

Grade Fee(30-min) Fee(45-min) Fee(1-hour)

Grade 1 $100 $130 $150

Grade 2 $110 $140 $160

Grade 3 $120 $150 $170

Grade 4 $ 125 $160 $190

Grade 5 - $180 $210

Grade 6 - $180 $230

Grade 7 - $220 $260

Grade 8 - $260 $300

22

Grade 9 - $320 $360

Appendix 4: Budget plan of PolyStutor

Budget Statement of PolyStutor

Dr. Cr.

Expected Income

Commission

720000

Advertising

8000

Administration fee

48000

776000

Expected Expediture

Salaries

483840

Legal Fees

2450

Rental of web hosting 600

Registration of web

200

Reward Scheme

30000

Advertising

20000

Promotion materials 7500

Repairs and Maintainance 5000

Telephone

1800

Miscellaneous Expenses 2050

553440

Net Income

222560

Payback period: 2.5 years