Sample RDMPTN 4 SALE Marketing Plan
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Table of Contents Section I. Executive Summary____________________________________________________ 3 Section II. Background Assessment_________________________________________________3 Historical Assessment_______________________________________________________3 SWOT Analysis ___________________________________________________________4 Situation Analysis__________________________________________________________4 Industry Analysis____________________________________________________5 Competitor Analysis__________________________________________________6 Company Analysis___________________________________________________6 Customer Analysis___________________________________________________ 7 Section III. Marketing Objectives___________________________________________________7 Section IV. Marketing Strategy_____________________________________________________7 Mission Statement__________________________________________________________ 7 Marketing Goals____________________________________________________________7 Section V. Marketing Programs_____________________________________________________9 Product Strategy____________________________________________________________10 Price Strategy______________________________________________________________10 Promotion Strategy__________________________________________________________11 Section. VI. Financial Documents____________________________________________________12 Section VII. Monitors and Controls__________________________________________________ 13 Section VIII. Appendices ___________________________________________________________14 Appendix A: Office Operations Projected Budget ___________________________________________14 Appendix B: Staff Biographies____________________________________________________________ 15
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I. Executive Summary
We are proposing to create and manage a clothing line called RDMPTN 4 SALE (redemption for sale). Redemption for Sale goal is to provide clothing with more than a purpose. Our line will be a new contemporary street fashion clothing company made for young adults, who want to express themselves without being classified. The target market for this company will be young adults, age 16-25. The company has recently launched an on-line store for the clothing line and is in the process of creating a buzz, as well as a following, before entering the retail world. Redemption for Sale will be a web based clothing store. Which will allow customers to easily access the product that we are offering and at the same time; allow us to stay in constant communication with our customer base. We are requesting money to manage and expand the online presence in order to gain a share of the market, in hopes to begin wholesale production. The company is already in its beginning processes, having a running online store fully stocked, and ready to ship to customers.
II. Background Assessment a. Historical Assessment
The clothing company, named Redemption for Sale, was created by Mandelson Fleurival and founded in October 2009. The persona for the clothing company took place in January 2008. Fleurival was inspired to start his own clothing line after having trouble finding fashions that he liked. Redemption for Sale was created to be an alternative from the uncreative fashions that are available at most retail outlets. Redemption for Sale’s goal is to provide clothing with more than a purpose. Fleurival recently launched a website which will allow customers to order his products online. The company is selling its products exclusive online at this current time.
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b. Situation Analysis
The situation analysis provides insight into current environment of Redemption for Sale. A SWOT analysis is provided, as well as an analysis of our industry, competitors, competition and the company itself.
SWOT Analysis Figure 1 shows strengths and weakness internally within our company, as well as external opportunities and threats. Figure 1. SWOT Analysis for Redemption for Sale
Internal Factors Manufacturing Offerings
Strengths • Do not have to worry about production and shipping costs.
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Finance
Personnel
External Factors Technological Consumer
Competitors
Economic
Weakness • Do not have control over printing, and
Uniquely designed products. 200+ products are currently at our disposal for printing, allowing us to expand our brand at anytime. No out-of-pocket costs to maintain for web hosting, production and shipping.
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Passionate staff that is determined to make our company a success. • Experienced personnel from Spreadshirt handle production and distribution allowing our company to focus on marketing and promotion efforts. Opportunities
shipment process.
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Limited options with the Spreadshirt website may reduce growth opportunities.
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Spreadshirt has an effect on our product pricing since it takes a cut from the sale of each product (to cover shipping, and production costs). Company staff has no experience in the retail/apparel industry No direct access to the personnel who creates our products at Spreadshirt.
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Threats
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Online retail is expected to grow through 2012.
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As the world becomes more technology inclined, many of today’s youth (our target market) will turn to the internet to do most of their shopping. The designs provided by our company are unique; many competitors offer similar and repetitive styles.
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Convenience of internet shopping will encourage consumers to spend.
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About 3% of consumers actually buy a product when visiting a website; many fill their shopping carts then abandon them. Consumers may be attracted to more established name brands and boutiques.
Many clothing options are available both on the Spreadshirt website, independent online retailers, and other clothing store websites. The downturn in the economy has consumers hesitant to spend money on clothes.
Internal strengths for the company are the savings and ease of using an outside company to handle the production and distribution of products, as well as handling customer transactions. Using a more experienced company with a strong manufacturing and distribution system allows us to focus our 4
efforts on marketing and promotion of our company. Opportunities for our company include the growth of online retail. We have established our company during an exciting time where online retail sales are expected to grow through 2012. Internal weaknesses within our company include the limited access our company has with Spreadshirt. While the company does have a US office located in Pennsylvania, our company does not have a personal relationship with our manufacturer and distributor. External threats include the current downturn in the economy. Many consumers are spending less on apparel since the economy isn’t good. Industry Analysis: Trends in Apparel and Online Retail Apparel. According to the Bureau of Labor Statistics, each American household spent an average of $1,881 dollars on apparel in 2007. Spending on men’s and boy’s apparel decreased by 2%, and spending on women’s apparel dropped 0.3%. The average amount spent on apparel per household decreased by 4.3% in 2008 to $1,801, and is expected to decrease again at the end of 2009. The downturn in the economy has had a huge influence on consumer spending in retail, particularly with apparel. As the economy picks up, consumers will regain their confidence and spend more easily. Retailers have been able to offset consumer’s hesitancy to spend through aggressive sales and discounts during peak retail times (i.e. back-to-school, Thanksgiving/Christmas season). Online Retail. Online retail sales are thriving, despite the economic downturn. In 2007 online shopping increased by 22%, bringing in $175 billion and comprising of 6% of retail sales for that year. In 2008 approximately $204 billion was spent online, comprising of 7% of retail sales for that year. Online sales are projected to grow over 200% through 2012. Increased convenience, value and choices that are available through online shopping have contributed to the online retail’s raid growth. Online shopping provides a simpler, faster, and more hassle-free way to shop while also providing more variety and making price comparisons easier.
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Competitors in Online Retail Market Apparel represents approximately $195 billion in total retail sales. During the past decade, consumers have been exposed to a wide variety of fashions including designer couture to urban street wear skater fashion, and humor tee-shirts. As e-commerce continues to grow, consumers have access to these selections right from their home. As an apparel line, there are many clothing companies with more established and popular brands. Sites such as SnorgTees.com and Johnny Cupcakes are popular online clothing stores. However, these companies cater to humor and novelty clothing making their perceived value less than other fashion brands. Since they are successful competitors within our industry, Redemption for Sale will use these companies as a benchmark for measuring our own success. Redemption for Sale wants to be known as a smaller, more exclusive clothing line. The goal is not to compete with larger known name brands, but to break into the circle of underground and exclusive lines.
Company Analysis Mandelson Fleurival, creator of Redemption for Sale, is a third year marketing student at Morgan State University. Fleurvial's interest and expertise in graphic design will be used to create most of the designs for our company's products. Mandelson has had an interest in fashion through the years and has noticed that a lot of today's fashions are repetitive and overdone. Mandelson wants to bring his vision to the fashion world, creating a unique style for those who don't want to be labeled and judged by their clothes. Redemption for Sale is currently using a single outside company (spreadshirt.com) which produces and distributes our product and handles all customer transactions. SpreadShirt doesn’t charge our company for site hosting, but does take a portion of each of our transactions to cover production and shipping costs.
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Customer Analysis
Customers will be men and women ages 16-25. Our customers will usually come from middle to upper class American families who have more discretionary income to spend on apparel. Our customers generally have a tendency to try new things. They are drawn to the perception of exclusivity, and will be attracted to our clothing line as a result. The 16-25 age range is more technology oriented, making it easier to reach them through the internet. Comparing our customers to the customer demographics of our competitors (SnorgTees.com and Johnny Cupcakes), our company will attract both males and females. A majority of our customers will be college educated, and most will not have any children. Our customers will come from a variety of locations across the United States and will be of different ethnicities. c. Planning Assumptions
Online Storefront. While Spreadshirt has been helpful in getting our company off the ground and getting our products to customers in an efficient and professional manner, eventually the company would like to move to a more independent website. Redemption for Sale plans to move to Big Cartel when funds allow so. For a monthly charge, the Big Cartel website will allow you to have your own domain name, customization of your web page, and the use of discount codes among other options. Also, our company will be able to integrate our blogs and other web pages into one site, creating a one stop shop for our products, information, and direct access to the company at once. Big Cartel will not take a portion from our transaction, but the company also doesn’t manufacture or distribute products. Once we move our online operations to Big Cartel, the company plans to establish a small office to operate our business in. See Appendix A for estimated budget of our office operations. Moving to Big Cartel will put increased responsibility and independence on Redemption for Sale. Online Shopping. To combat the issues of consumers browsing our store without buying, Redemption for Sale will establish aggressive marketing promotions and sales. Through the use of social 7
media sites--Twitter, Facebook, blogs, etc.-- we will attract new customers by offering coupons and specials. Our specials and discounts will have a time limit on them, encouraging customers to not only browse, but to buy our products. By offering deals we will also attract more new customers. III. Marketing Objectives
Marketing Objectives 1. Giving an alternative, more personal outlet for expression by offering clothing with
unique underlying meanings 2. Staying in constant communication with customer base through social networks in order
to ensure uniqueness and creativity. 3. Establish an office space and then move to Big Cartel website by the end of year one. IV. Marketing Strategy
Mission Redemption for Sale’s mission is to sell clothes that aim to break the tedium of the current contemporary street fashion by giving an alternative, more personal outlet for expression to
our customers. Goals Non-Financial 1. 2. 3. 4. 5.
To reach a wider audience by redesigning our current website and online store front. To expand our clothing line to street fashion retailers. To increase our production to wholesale. Provide a new channel for our customers to express their individualism. Establish Redemption for Sale as a leading trend creating brand.
Financial 1. To fully pay off all debts by the end of year three. 8
2. Gain 5% of the market within our industry. 3. Become a multimillion dollar company. V. Marketing Programs
Product Strategy Branding. Redemption for Sale brands itself as clothing line that provides clothing with more than a purpose. Our company provides consumers with a product that stands apart from the common product. We hold our standards for quality and creativity to a high level and do not sacrifice either for profit. We currently do not serve customers directly but exist as an international clothing brand. Logo. Redemption for Sale's logo is text based and incorporates our company symbol that is used on our clothing as well. The color schemes are subject to change but only serve to better our final product, and do not reflect change in the company. Figure 2. Brand Logo
Figure 3. Company logo
Brand Name (Fig.2). The name Redemption for Sale was chosen in order to directly relate to the overall purpose and story of the company. The concept is that the “Sale” and purchasing of our products is to represent buying back ones “Redemption”. It is a satirical reference to the Indulgences of the ancient Catholic Church which were sold to patrons. The sale of which depending on the amount paid would buy back ones sins, and redemption in order to get into heaven. The name of our product was also chosen to show the depth and meaning behind the brand as a whole, and the clothes we make. This in turn would give the consumer and increased sense of value and pride when wearing the product. Thus the brand name “Redemption for Sale”. 9
Products. We currently create and sell tee-shirts, hoodies, and other garments. We have 12 products available for sale and in the future will replace our older products with new designs. This will ensure ever changing demand for our products, and keep our line fresh and new. We will have seasonal exclusives and limited edition products. We make clothing for both men and women; some products will be available in both men’s and women’s sizes, while others will be male/female only. Figure 4. Product Examples
‘Can You Feel Me?’ Tee-shirt
‘Just Did It!’ Hoodie
‘RDMPTIN’ Sweatshirt
(Men sizes only)
‘Conceited’ Tee-shirt (Women’s sizes only)
SpreadShirt.com provides us with over 200+ different products to print our custom designs on. These products range from tee-shirts, hoodies, pants, and miscellaneous pieces, available in different cuts for men, women and children. This variety allows us to serve a wider range of consumers in the future. Price Strategy The average price of all our products is $35. Our tee-shirt prices range from $25.90 to 29.99. Our sweatshirts/hoodies range from $37.40 to $45.99. Our prices are right within range with our direct competitors. As compared to the average tee shirt price of Johnny cupcakes. Tee shirts on their website range from $25.00 to $35.00 and hoodies range from $45.00 to $70.00.
Promotion Strategy Online Coupons. In order to attract more customers and to entice them to buy our products we will use promotional coupon codes to be used on our site. These codes are at times provided by 10
SpreadShirt directly, but there are also options of buying the discounted rate ourselves and making them a limited in uses. This will make consumers more aware of our sales, and they will be more likely to look for more promotions and revisit our site to get them. These codes will range from; Free/Discounted Shipping, Sales Discounts, and a free gift with purchase. Advertising. Currently we have been advertising on Facebook, Twitter, and blogs. We also have put up posters at Morgan States campus targeting the median age group of our overall target market. We have begun research on getting a contract to promote in the University Student Center, using the available television screens as a medium to place advertising images, and playing advertising videos. Figure 5. Current Advertisements
The company plan on expanding our promotional and advertising campaigns to the local
Baltimore, and Washington D.C. Areas. We plan on buying advertising space on Comcast Networks targeting our market through the channels and show times they are viewing. This will allow for direct marketing to consumers offline. For example we will advertise our products on networks like; MTV, BET, and VH1.
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Figure 6. Region Breakdown *Comcast Spotlight (cable advertising program)
To better focus our air time we will air mostly between the hours of 4pm – 9pm. This time frame will allow us to reach both the lower and upper halves of our age groups.
VI. Financial Documents
Since our debut in October 2009, Redemption for Sale has been making considerable profit, as well as making its presence known on the internet for its casual yet stylish clothing. However, in order to expand and reach a wider customer base, a significant amount of funds are required. Due to the rapid increase in sales for the past year, we are very confident that Redemption for Sale is not only ready for expansion, but can and will attain a breakeven point much earlier than what any other clothing line can guarantee. Each head team member of Redemption for Sale will be placing a personal investment into the company. These investments will total around $25,000 and will contribute towards the total amount need to begin expansion. The expense total is $166,325, including the costs of our on-site supply and insurance. Redemption for Sale is not taking out any additional loans to reach the amount needed. The following is a map of how these funds will be used, what expectations we have for our investments, and where our income will stand over the course of the next couple of years. It also includes a breakdown of the individual investments which is located in the balance sheet alongside the expenses. Figure 2. Sales Projections for Redemption for Sale Year 1
REDEMPTION FOR SALE PROJECTIONS PROPOSED AMOUNT = $166,325 10,000units X $35avg price LESS:10,000unitsX$10unitcost
$250,000
Year 2
10,000units X $35avg price LESS:10,000unitsX$10unitcost
$500,000
Year 3
10,000units X $35avg price LESS:10,000unitsX$10unitcost
$750,000
Year 4
10,000units X $35avg price LESS:10,000unitsX$10unitcost
$1,000,000
VII. Monitors and Controls 12
To assure the success of our company, we will annually monitor our sales. The first year, we will mark sales per day, charting the amount made at the end of the day. This will be important for sales the following year. We will also monitor actions taken that day to make the sales (rather seasonal effects, associates customer service, pricing, etc.) the following year we will use the sales from the first year to set goals for the day, keeping a major note of what actions were taken to assure that we either make our goal, or exceed it. VIII. Contingency Plan
Website failure- If the website fails, or is down, we will have a backup site (our blog) that will be available for order until the main website is up. This includes expected failure and unexpected failure ( site maintenance, or URL failure). Product failure- If problems occur with the product during shipment we will request that the customer resend the product back, to get another product, no refund will be given, only exchange. Shipment failure-If product gets to customer after the expected shipment time, customer will be given a 10% discount on their next purchase. Customer will have to enter a onetime code in the payment box of their online cart. Company Failure. In the event that the company fails, all profit from existing accounts will be used to pay off debts. All equipment and remaining on site stock will be sold to support any debts as well. The company also invested in a limited liability license which covered all public investors; however all persons who privately invested will not receive any return of initial investment.
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Appendix A: Office Operations Projected Budget Below is an estimate of how much it will cost to set up and maintain an office for our company in downtown Baltimore. Expenses Equipment Copier Projector & Screen
$4,000 1,500
Dry Erase Board
683
Conference Phone
330
Mailing Style Cabinet
189
Offices Supplies (pens, pencils, staplers, etc)
900
Apple Desktop Computers (6)
7,194
Office Style Desks (5)
6,780
Phones (6)
780
Chairs (20)
3,340
Printers (2)
1,100
Wall Divider (4)
3,858
Conference Table
800 $30,864
Salaries Employee Wages
$125,000 $125,000
Website Operation Cost (once moved to Big Cartel)
$240 $240
Utilities Internet & Phone Needs Utilities (water, electricity)
$1,560 600 $2,160
Insurance Health Care
$7,392
Limited Liability
430
Public Liability
300
Property
$1,024 $9,146
Miscellaneous
$1075 $1075
Total Proposed Amount
$166,325
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