OUGD502: Study Task 1 - Research: Advertising

OUGD502 Study Task 1 - Taking Care of Business 

Research: Advertising 

General research into advertising and studying A Level media studies lead me to understand how advertising is a critical component within any magazine. However we didn't want the feel of our publication to be too commercial or overloaded with adverts that it detracts from the actual content. We financially needed to included advertisements within the publication however decided to be quite selective regarding the types of advertisements. As the specialist nature of the magazine if aimed at graphic design and extending to other creative disciplines I wanted to keep this focus within the adverts, this will ensure ensure they are more relevant and appeal to the target audience. Adverts such as GF Smith, Pressision will help keep production costs down, Offering art focused universities such as Leeds college of art and UAL advertising would probably appeal to them as its a student focuses magazine. Other potential advertisers would be material websites such as Fred Aldous and the likes of D&AD YCN could provide a substantial advertising budget for us to work with. 

To get a better idea of costing for this I emailed the marketing department within the college to find out how much they spend on advertising and what would be feasible to charge. They were really helpful in regards to this informing me that they would pay around £1000 for a full page advert. She further enclosed the advertising budget of the End of Year Show held at the college, giving added insight into how much the competitors magazines charge such as creative review and computer arts. With this research we concluded an estimated £1000 advertising budget based on 10 full page advertisements which would offer a nice balance  between content and advertisements. This budget would cover the cost of the production and support the bulk of the business venture so is an essential piece of the business plan in order for the venture to be viable. 

OUGD502: Study Task 1 - Research: Pricing and Production

OUGD502 Study Task 1 - Taking Care of Business 

Research: Pricing and Production

The production of the magazine would ideally be subsidised in return of advertising within the publication. GF smith, fedrigoni and other quality paper merchants would all be contacted with opportunity to use their papers within the publication at a reduced cost for prime advertising placement within the book. Similarly Pressison would be the first choice for printers due to their creative experimental approach I learnt about during a visit to the factory at the end of level 4. Again offering advertising to subsidise the printing costs. 

To get a rough estimate of unit prices for the first edition I contacted a number of retailers to enquire about quantities and experience etc. Due to the specialist nature of the publication I contacted independent creative bookshops for example Village and Colour May Vary both located in Leeds. Colours may vary responded very helpfully giving estimated quantities of a new publication. This helps to but costings into perspective as if each independent bookstore ordered 10 copies this could be generalised to 10 bookstores throughout the UK in the major cities and those with art schools such as London, Manchester, Bristol, Glasgow, Liverpool, Leeds. This rationalised a first run of 100 units that could be sent to independent bookstores then with growing awareness and success this would be expanded in scale and even internationally. 

With a informed decision producing a run of 100 for the first issue, I started to look at pricing estimates, Looking online gave a rough instant quote for initial costing ideas that could later be refined through negation with paper smiths and printers for advertising as mentioned above. For an 80 page publication with a run of 100 I found quotes of £635 and £514 this creates an average of £574.50 dividing this by 100 gives a unit cost of £5.75 per magazine for the first issue. 

With an estimated cost price of £5.75 per issue I started analysing similar magazines to see their retail prices therefore informing our decision to fit within its competitors pricing brackets. Due to the high quality finishes within the publication these specialist magazines retail for more than general interest publication. Examples such as Supplement and Cereal both retail for £12 however this extends upwards into the £20+ for more detailed publications. 

Based on this we decided to market the our publication at a retail price of £14 which is still feasible for the target audience of students. The higher retail price ensures that quality materials, finished and stocks can be used to reinforce the higher price point and further engage the target audience. 

With an estimate of £5.75 per unit, we would sell the publication to the bookstores for £10 resulting in a £4.25 profit on each unit which is a 73.9% mark up for us. This would further result in a 40% mark up for the retailer who would make £4 profit per unit. 

Based on these estimates the first issue would result in a 42.55% profit margin with the actual profit being £425.50. This would then rapidly increase as the publication grows adding more retailers with higher volumes. 

OUGD502: Study Task 1 - Research Distribution

OUGD502 Study Task 1 - Taking Care of Business 

Research Distribution

With a concept and business type identified we then turned our attention to the background considerations that would have to be carefully considered in order to create a successful resolution and ultimately an informed and accurate business plan. The background considerations stated Two/three/four heads are better than one as long as they communicate. You have the luxury of four pairs of hands. How will you use them effectively? You will need to consider the following:

•What skills and services do you have to offer?

•Who is your target market?

•Who is your competition and how will you compete?

•What are your costs, charges and financial considerations?

•How will you structure your studio?

•Who will be responsible for what?

•How will you promote your services? To who? Using what media?

Looking into these we then assigned specific considerations to each member of the team to ensure the most efficient and productive use of time when collating this information. As the financial considerations was an exceptionally large area to cover I volunteered to research this element of the business plan as this covered the workload of two of the smaller research considerations. Having an A in business GCSE I had a small previous experience of business costings and felt I would be able to accurately propose a set of financial considerations for the company. 

OUGD502: Study Task 1 - Business types: Research and Conclusion

OUGD502 Study Task 1 - Taking Care of Business 

Business types - Research and Conclusion

As a collective we distributed different business types to research, I was given an 'ordinary business partnership' to research. From this topic I uncovered that in an ordinary business partnership, you and your business partner (or partners) personally share responsibility for your business. It was further identified that you can share all your business’s profits between the partners. Each partner pays tax on their share of the profits.

The serious stuff included: 

Legal responsibilities

You’re personally responsible for your share of:

• any losses your business makes
• bills for things you buy for your business, like stock or equipment

You can set up a limited partnership or limited liability partnership if you don’t want to be personally responsible for a business’ losses.

A partner doesn’t have to be an actual person. For example, a limited company counts as a ‘legal person’, and can also be a partner in a partnership.

You must choose a name for your partnership and register it with HM Revenue and Customs (HMRC).

Tax responsibilities

The nominated partner must send a partnership Self Assessment tax return every year.

All the partners must:

• send a personal Self Assessment tax return every year
• pay Income Tax on their share of the partnership’s profits
• pay National Insurance 

The partnership will also have to register for VAT if you expect its takings to be more than £82,000 a year.

From this research I concluded that this would probably not be the most appropriate business type for our company as coming straight from university we would not have significant capital to invest and feel it would be bit risky being personally responsible for the business with no real business experience. The fact we are legally responsible for any losses or bills re-assures me that this would not be a viable business option for the group. 

CONCLUSION: 
We reconvened and presented our business types to one another. From this we as a group concluded that the most appropriate business type for are concept/business was a ..........

OUGD502: Study Task 1 - Concept Development

OUGD502 Study Task 1 - Taking Care of Business 

Concept development

After our first session which saw the partnership agreement signed and discussing different roles we set an objective to individually brainstorm different concepts for the next session in which we could all present a number of potential ideas for our business that we could then decide on as a group. 

My concept was to create a new innovative platform that showcases student work within the professional sphere. Currently there are not major design blogs/publications dedicated to students. This was identified from personal experience of having limited opportunity for exposure as a student. I have my own personal blog for inspiration and work but it is seen by very few people. Charities such as D&AD and YCN offer student opportunities however these are very labour intensive and difficult to win due to a high volume of entries. The aim of the concept is a blog/publication such as 'its nice that' but with a student focus where students submit work they have produced that that can be featured on the blog/website/app/publication (limitless possibilities) along with a professional review. Obviously there would have to be a filter to review the best works to ensure the venture remains credible to professionals which is the end goal. For professionals and practising graphic designers to look at this website and expose coming talent.  

Each member of the group pitched their concepts and was concluded that my concept had the best potential to form a unique innovative business as all group members agreed there was a gap in the market for a student focuses design platform. This was then opened up to the group for tweaking and adjusting to form the basis of our finalised concept for our business. the next stage of development was to identify the most appropriate business type to set our company under these included; 

• limited company
• limited liability company
• ordinary business partnership
• unincorporated association

We decided to all pick one company type to research we could then present our findings at the next group meeting and present our researched business type and conclude which was the most appropriate to our company/concept. 

OUGD502: Study Task 1 - Intro

OUGD502 Study Task 1 - Taking Care of Business 

Introduction 

Brief: 

Working in groups of up to four you will construct a business plan or business proposal for a creative design studio and present it to your peers and tutors in a feedbacked oral presentation.

Your plan/proposal and presentation should be based on the analysis and content that you have been introduced to throughout the module.

Analysis of The brief:

This brief appears engaging as it gives total creative freedom to pick your partners and mock up a business plan. I feel this will be relevant to my professional practise as I have not yet considered stating my own business however this brief may improve my perceptions of start up businesses and that it could be a viable option for me in the future. I think it will difficult working collaboratively as everyone naturally has different opinions but to ensure a successful resolution there must be a fair democratic tone to the partnership to make sure it doesn't fall apart. 

My Group: 

I have chosen to work with 3 other graphic designers that are also good friends, I think working with friends will not kinder the partnerships performance but improve it as we will all motive each other being the proactive designers we are, and working with friends will ensure the journey of setting up a business plan is fun and engaging not a chore. Each designer I am working with has individual strengths; Jack is strong at poster and web design, Lo works great under pressure and brings an extensive design knowledge to the table and charlotte works well with illustrations and social media, I bring conceptual design and a knowledge of branding to the group. These individual strengths complement one another and cover all bases suggesting it has the making for a strong partnership with an engaging and unique business proposal. 

Partnership Agreement: 

This partnership agreement acts as a legal contract and clarifies equal responsibilities and ownership within the partnership which protects all members and adds a sense of legitimacy to the study task.