Final Project Master

M as t er in A rts F i n a l P ro j e c t P r o f e s s o r : F r a n c a Gr a c e Ca n e p a B y : S o fia Re str e p o Ar a n g o F a ll 2 0 1 4

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Abstract In the spring of 2014, a company was born in Savannah, Georgia as the result of the Final Master Project of a Savannah College of Art and Design student. The student presented the initial idea in spring and developed the business plan for the company during the fall of 2014. This business plan is the result of the long process that started in March 2014, in which the author created a company that allows her to mix her two passions: helping people and fashion.

This report allows readers to submerge themselves into the CODE world, a sustainable ecommerce company that sells Colombian accessories to American Millennials through their website. The report first gives a company overview to the reader, explaining the company’s mission, its products, which are accessories, and its values. The reader will then find a background of the project, how it was created, and the current relationship between the U.S. and Colombia. Next, the author explains the industry and the target customer to give a deeper perspective into why this company will be successful and to support the marketing and company strategy that will follow in the report. Finally, after reviewing all the research, the reader will find a detailed business plan in which the author explains the marketing and operational strategy as well as the company’s financial plan.

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Company Overview

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Business Environment

pg The Market Trends

pg Sourcing Guidelines

pg E-commerce Today

pg Mission Statement

pg U.S.

pg Product

pg Colombia

Operation Plan

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CODE Management

pg Competitors

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Financial Plan

pg Business License and Registration

pg Sales Forecast

pg Buying

pg Balance Sheet

pg Storage

pg Management Summary

pg Cash Flow

pg Distribution

pg Management Team

pg Breakeven Analysis

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The Consumer

pg The Market Global Luxury Market / U.S. Luxury Market / U.S. Luxury Accessories Market

pg Values

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The Research

pg Customer Research Val’s Lifestyle / Bain & Co segmentation / Millennials Behavior trends pg CODE Costumer Profile / Personas

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The CODE Brand

pg Product and Price Product Strategy / Price Strategy / Designers / Prices per Category / Merchandise Mix / 6 Months Line Plan pg Place Place Strategy / Web Map / Web design

pg Promotion Branding / Launch Campaing

Other

pg Appendix pg Glossary pg References pg Biographical Statement

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COMPANY OVERVIEW

Values / Sourcing Guidelines / Mission Statement / Product

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COMPANY OVERVIEW

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COMPANY OVERVIEW

CODE is an online, high-end fashion store that offers premium Colombian accessories to the U.S. market. This company was founded in 2014 to target a specific niche of American Millennials who value sustainability and demand exclusivity regarding products that belong to the premium market. The company will be an online store that sells curated products from various Colombian designers.

Through CODE, these designers will be able to expand into new markets while they support and help the different communities they work with. CODE’s unique value proposition rests in its exclusive offer of premium, sustainable products from Colombian designers. The designers will maintain high quality standards and a high-end classic design line.

SOURCING GUIDELINES Values are the essence of CODE’s business; they ensure that the products offered are made following international laws and that the designers we work with are actually helping the community and the environment. It is because of this that the company adheres to sourcing guidelines when choosing its designers.

• Ethical Standards: We believe in honesty and integrity. As a company, we promise to be honest about our practices and to work only with companies that share this ethical standard.

• Discrimination: We believe in respect and that includes respect for people and their differences. As a company we promise to hire people based on their abilities to do the job. The designers that work with CODE must also follow this policy.

CODE consumers will know that they are not just buying a product; they are becoming part of a bigger change. When consumers buy a CODE product, they are helping company’s to help society. CODE’s strong sourcing guidelines are based on the company values and are the key to ensuring that products are sustainable and of high quality.

• Community Involvement: We will only work with designers who are working with disadvantaged communities and that give back to the communities with fair wages.

VALUES

• Environmental sustainability: All CODE designers must validate that all materials and components are obtained using responsible methods. They also must have a reduced waste policy and energy and water saving practices.

CODE promises to always sell products that are handmade by companies working with disadvantaged communities. CODE’s brands offer the perfect mix between the uniqueness of handmade and the high-end design of the designers.

As a company we promise: • • • • • •

To To To To To To

empower respect be fair help be transparent offer quality

• Zero corruption policy: CODE will not tolerate under any circumstance corruption or unethical business practices within the company or by the designers.

• Health and Safety Conditions: CODE designers must offer their employers the healthcare demanded by Colombian laws as well as a safe work environment free of hazards. A CODE safe work environment assures the safety of its employees.

CODE requires that machinery and tools are safe and only used by people with the proper training.

• Wages: CODE and their designers will provide competitive wages that adhere to local laws.

• Working Hours: CODE promises to only work with designers who adhere to a maximum 40-hour work week.

• Benefits: CODE and the designers provide the employees with financial benefits, including a retirement plan and transportation. Any other benefits are a plus.

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• Child Labor: CODE has a strict zero tolerance policy regarding child labor.

All companies that work with CODE must follow this policy. The minimum age required to work with CODE is 16 years old.

• Human Trafficking and Slavery: CODE has a zero tolerance policy for forced labor; the designers that work with us must respect this policy.

MISSION STATEMENT CODE, the premium online store that helps people help people.

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COMPANY OVERVIEW

PRODUCT

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CODE offers accessories that are designed and manufactured by different Colombian designers. CODE products differ from other products offered online as CODE designs don’t follow the ethnic trend. The CODE design line is sophisticated, clean and classic. This aesthetic is possible thanks to the special care CODE takes when curating the assortment of the products. CODE maintains high quality standards thanks to strict quality processes in place for every product.

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BUSINESS ENVIRONMENT Us / Colombia

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BUSINESS ENVIRONMENT U.S. The U.S. relationship with Colombia is perfect for trade. Between both countries exists a Fair Trade Agreement, which allows both countries to import and export goods without duties. Colombia already exports $148 million in apparel and accessories to the U.S. annually, making it a perfect segment to continue doing business (Major Shippers Category, 2014).

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BUSINESS ENVIRONMENT

The U.S. economy is the largest in the world with a Gross Domestic Product (GDP) of more that $13.6 trillion. It is an economy that has recovered well from the 2008 recession, but it still has underemployment. It is growing slowly but at a constant pace.

COLOMBIA As a country in development, 70% of the Colombian population is poor or belongs to a low-income status, 20% represent the middle class, and only 10% of the population belongs to the upper class. This 10% of the population has the opportunity of studying in other countries before returning to Colombia to implement what they learned in order to help the country to evolve. Those who return to Colombia work in already established companies; others follow the entrepreneurial trend. These young entrepreneurial designers are developing their own design companies specializing in different products, some of them in luxury or premium products made by the artisans or communities in disadvantage.

This trend of designers creating unique, high quality pieces while helping the community is inspiring and allows Colombia to penetrate into new markets.

The Colombian government has seen this potential to grow in exports and is therefore creating entities that help entrepreneurs create their own companies.

These government entities have different objectives and help different types of companies, while Ruta N helps all entrepreneurs to make their projects reality with education, loans and investors; Proexport specializes in helping companies that want to export products outside Colombia. Each of these entities educate the entrepreneurs and offer different options for assistance.

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THE RESEARCH

The Market / Market Trends / E-commerce Today / Competitors 17

THE MARKET

According to the Boston Consulting group managing director, Antonio Archille, “the luxury sector globally will continue growing with an additional $202.5 billion personal luxury growth by 2020.” This means that for 2020 sales will reach $472.5 Billion.

According to an article from Women’s Wear Daily, the demand for exclusive, sustainable products that are handmade is growing in the U.S. The desire for uniqueness as well as sustainability are primary needs of the Millennial generation.

This target, which spends $200 billion annually, is demanding. They ask for products made especially for them, products that will make them look different from others while they help the planet and the community.

Within the 330 million worldwide luxury consumer base, there are 180 million (55%) who aren’t loyal to only the premium brands; they move between premium and luxury purchases all the time. These 180 million represent merely 10% of the global luxury spending while the remaining 90% of the sales are made by true luxury consumers. The true luxury consumers comprise the remaining 45%, or 150 million consumers (D’Arpizio, 2014).

Investigation into this market indicates five aspects that need further research: the general luxury market, the U.S. luxury market, the U.S. luxury accessories market, the online market, and the direct competitors of the brand. Further information on each aspect can be found below.

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THE MARKET

In-depth research on the needs of this emerging target uncovered an important market that is not completely developed. The luxury and premium online, sustainable market that is directed for the millennial consumers, as described above, is a growing market. There are a few brands trying to fill these specific consumer needs, but none of them specialize in sustainable products.

THE GLOBAL LUXURY MARKET The global luxury market has had some ups and downs during history, but in general luxury consumers have tripled over the past 20 years, even with the recent recession.

The market has grown from an estimated 90 million luxury consumers in 1995 to 330 million in 2013, according to Bain&Company’s “Lens on the Worldwide Luxury Consumer” report. The report estimates this number will have grown to 400 million luxury consumers in 2020 and 500 million consumers in 2030. The total sales of luxury goods in 2013 to these 330 million consumers totaled $275 billion.

Consumer Division

THE U.S. LUXURY MARKET While the growth of the luxury sales has slowed in some countries, in the U.S. the luxury market is growing. In 2013, the U.S. was the second strongest market representing 17% of the sales in the market ($46 billion in annual sales). China comes in first place with 28% global annual sales. In 2018, the luxury goods sales in the U.S., according to Euromonitor, will reach $90 billion. The U.S. luxury market is composed of 90 million consumers, from which 15.3 million are between 15 and 35 years old (D’Arpizio, 2014).

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Consumer Growth

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U.S. Luxury Annual Sales Projected Growth (2010-2018) In Billion Dollars

2018

Market Share By country

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THE U.S. ACCESSORIES LUXURY MARKET In the expansive world of the luxury goods market, the fastest growing segment is the accessories segment. With a growth of 4%, this segment represents 28% of the total annual luxury global sales. In 2013, accessories sales worldwide reached $75 billion, from which $45 billion belongs to the leather goods subcategory, making it the fastest growing category within accessories. In the U.S., luxury accessory market sales were $15 billion, of which $12 billion of which came from the handbags and small leather goods segment, representing 21% of the whole U.S. luxury market. The whole accessories segment is projected to grow in sales to $18.8 billion in 2018 in the U.S., and handbags and small leather goods are projected to reach $15.5 Billion for the same year (Euromonitor International).

The biggest competitors in the U.S. luxury costume jewellery market are Pandora, Swarovski and different designers who have costume jewellery lines, such as Alexis Bittar and Ben-Amun. The production cost of the pieces varies between materials used and size, but it normally ranges between $8.00 and $20.00. These products are mostly manufactured in China, Italy and India (Euromonitor Jewellery Report, 2014).

The last segment of the market in which CODE will participate is the scarves segment.

This represents 1.77% of the whole category with $2 million in sales in 2013. This segment works differently than the last two segments mentioned: only 9% of the sales of scarves are made online, and 46% of them are bought as gifts for someone else (Accessories Census, 2014).

THE MARKET

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In addition to the leather goods and handbags segment, there is costume jewelry, which is the second largest segment. In 2013, costume jewelry sales were $1.8 billion in the U.S., and according to Euromonitor, this is projected to grow to $2 billion by 2018. Costume jewelry in the U.S. is also bought for personal use, whereas only 35% of the purchases are for gifts; this is a bigger percentage than that of the handbag segment. Twenty-one percent of jewelry purchases are made online, making this segment the biggest on e-commerce segment (Accessories Census, 2014).

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U.S. Luxury Annual Accesories Sales Projected Growth in Billion Dollars (2010-2018)

Luxury Marget Share By Segment

Millennials are responsible for 27% of the sales in the handbag segment. The brands preferred in this segment are Michael Kors, Coach, Tory Burch and Kate Spade, most of them from North America. These brands manufacture their leather bags mainly in Vietnam and China, while the more expensive are manufactured in Italy. The production cost of these bags varies between the material and the labor costs of the place they are made. The Mulberry Bayswater Bag, for example, cost $333. The leather cost $74, the lining and buckles $24, and the labor $235. This bag sells for $1,300 at retail, leaving the brand a profit of $967 ( Jackson, 2013).

Accesories Share By Product Type

The biggest need the market considers when buying a bag finding a bag that can be used for any occasion. The handbag sales for Millennials is made 7% by Internet and most of the purchases are for personal use; only a 20% is for gifting (Accessories Census, 2014).

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THE MARKET

MARKET TRENDS

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E-COMMERCE TODAY The e-commerce industry is growing globally, with the U.S. representing over half the total of all brands that sell online. According to an e-Marketer’s report (2014) on the global e-commerce industry, the sales in 2013 were $1.233 trillion and are expected to reach $1.471 trillion at the end of 2014. These sales are expected to reach $2.356 trillion in 2018.

The U.S. is a major player in the e-commerce industry, responsible for 60% of the luxury e-commerce annual sales, which in 2013 represented $5.4 billion. The strongest segment in the luxury e-commerce industry is accessories, which represents 41% of sales. In 2013, luxury accessory online sales were $2.2 billion. Following this segment is apparel with 30% of the market, which represents $1.5 billion in sales, and in third place is beauty with 16%, which in 2013 reached $8 million (D’Arpizio, 2014).

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THE MARKET

The luxury market is also following this trend; in 2013, e-commerce was responsible for $9 billion in global luxury sales, which represents 4% of the total luxury goods sales.

For 2016, these sales are expected to grow and represent 6% of the total sales of luxury goods in the U.S. (D’Arpizio, 2014).

U.S. E-commerce market share by segment

The Millennials specifically are the generation spending the most online. About 8% of their income is spent online. Within this generation the percentage of women and men that buy online is similar, but ideally 40% of the men would buy everything online while only 18% of the women have the same statement. The average annual spending online in this generation is $1,999, which is the largest spending among all generations. The category that has a bigger share of the online sales within this target in the U.S. is computers and electronics, which is followed by apparel and accessories (Smith, 2014).

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ASOS www.asos.com

COMPETITORS

THE MARKET

Since its business is unique in the market, there is no direct competitor to CODE at the moment, but there are online retailers that represent a threat for the company.

These strong competitors are sustainable fashion online retailers that sell sustainable accessories to young men and women in the U.S. These companies differentiate from our company because their products have an ethnic design and their prices are higher or lower than ours. The company that represents the biggest threat is ASOS. This is due to the amount of sales they have annually, the products they offer to their customers and their sustainable background, which they haven’t used in their promotion but which they could use in the future. Following is the description and analysis of each competitor.

ASOS is an online store that sells apparel and accessories from their own brand but also from other brands. They also allow small boutiques to sell through them.

ASOS not only provides a unique experience to their consumers in their webpage and through their social media, but they also have a strong social responsibility policy. They have strong sourcing guidelines and initiatives for the environment and for people. Their target market are Millennials with an income bigger than $50.000.

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Expensive

High end

Ethnic

Cheap

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FASHION COMPASSION http://www.fashioncompassion.co.uk/

Muzungu Sisters is an online store created in 2009 that sells apparel, accessories and home decor. This company was created by two women to sell products by artisans from different parts of the world. Their products have a high price point and an ethnic style. Muzungu Sisters was created to support the labor of artisans and to help them sell their products at fair prices. Their prices range between $50 and $1,000. The Muzungu Sisters consumer is between 28 and 40 years old.

Fashion Compassion is a UK online company that sells accessories made by social enterprises that work with artisan communities from the Middle East, Asia and Africa. Their design aesthetic is ethnic; it varies from one culture to another but maintains traditional prints and silhouettes. Their prices vary between $200 and $500, depending on designer, materials and product. Their target is primarily European women, which is a different target than ours, but they also have shipping to the U.S., which would represent a risk for CODE.

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THE MARKET

MUZUNGU SISTERS http://www.muzungusisters.com/

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IOWEYOU http://iouproject.com/

Modavanti is an online store that sells sustainable products made by designers in the U.S. Born in 2013, this company targets American women between 25 and 35 years old with an annual income between $50,000 and $150,000. They sell apparel, accessories and beauty products from diverse designers and brands.

This company has a similar target to the CODE target but it is only aimed at women. Their designs have different aesthetics, their quality differs depending on the designer’s quality, and their prices vary. Moreover, their products aren’t exclusive or unique, and they have large quantities of products.

IOWEYOU project is an online store that produces and sells unique apparel and accessories made with textiles from India which are later assembled in Europe.

These brands allow the consumer to trace each product’s history to see not only how it was created but also each part of the assembly chain. The fabrics are handmade in India, while the finished product is handmade in Europe. This company works only as an online retailer; like CODE, they have cheaper prices and their products are exclusive. Each piece is made in small quantities, sometimes only one piece per design and in only one size. The biggest difference between IOWEYOU and CODE is their design since IOWEYOU has an ethnic bohemian look while CODE is sophisticated and elegant. Their prices also differentiate both companies, providing each company with different targets.

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THE MARKET

MODAVANTI http://www.modavanti.com/

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THE CUSTOMER The Customer Research / CODE Customer

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CUSTOMER RESEARCH

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THE CUSTOMER

The Millennials or Generation Y (born between 1982 and 2002) represent the biggest actual purchasing power in the U.S., spending $200 billion per year. Since they were children, Millennials have been involved in their parents´ buying decisions.

They have longer life expectations and are more connected and informed than the generations before. They require a different approach than the ones that were used with older generations (Lockwood, 2013).

Millennials are a hyper-connected generation. For them, Facebook, Twitter and social media in general are part of their daily life. Millennials spend 40 hours a week on social media and Internet, according to a survey made by Ipsos Mendolsohn; that’s almost as much as a typical work week (Nickell, 2012). Internet has become such an important tool in their lives that a lot of their purchasing decisions are made based on the information they find there. According to a NetBase 2013 survey, 83% of the Millennials between 18-24 years old consult at least one social media platform before purchasing a fashion item.

Among the largest population of Millennials exist different niches of the market that differentiate them according to their lifestyle. CODE’s consumers are part of one of these Millennial niches. These are American women and men between the ages of 23 and 35 years old. Millennials that fit among CODE consumers are willing to spend more money than older counterparts according to a Pew Research Center study: “Millennials: Confident. Connected. Open to Change.” This target consumer comprises students from college or those who have graduated and are now working. People who come from wealthy families or that are working and have good salaries aren’t afraid of spending it on themselves. They are women and men and can be single or married.

CODE’s target lives in the U.S. There are 80 million Millennials in CODE’s age range in the U.S., representing 25% of the population (Fromm, 2013). From this 80 million Millennials in the U.S., 11.8 million earn an annual income of $100,000 or more, which are really the Millennials that are part of our target (Faw, 2012). They live in the largest metropolitan areas of the U.S. New York, Los Angeles, Chicago, Dallas and Houston are the biggest concentrations of our target (Equifax, 2013).

CODE will consider secondary cities such as Washington, Boston, Seattle, Denver, San Diego, Minneapolis, San Jose and San Francisco since they also have a big population of people who belong to our target.

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CODE’s target consumer belongs to a special niche. They are educated Americans that belong to the upper middle and upper income classes. As a group, this generation asks a brand to be sustainable in order for them give it a chance.

They demand products of high quality that are exclusive and will allow them to differentiate themselves from their friends and others. Even when a product is not necessarily exclusive it’s important that it seem unique and that they can use it in an special way to differentiate themselves from others.

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THE CUSTOMER

This sustainable niche, which is CODE’s consumer, is informed; they are looking at brands and products all day on the Internet and hearing about them from their friends and the media in general. They put more attention into what their friends say about a product than what the traditional advertising says. They are a hyperconnected generation that spends a lot of their day on the phone. According to a Zip Car survey mentioned in The Huffington Post, CODE’s consumers would prefer to lose their car over their phone. They keep their phones close to them every moment of the day, even while they sleep.

CODE consumers are social, adventurous and are always looking for experiences.

Technology and travel are part of this consumer lifestyle. They are the wanderlust generation, one that is constantly connected to a phone as well as to their friends and culture. They always want to know more and don’t stay with the first source of information they find. One friend’s opinion isn’t enough, as only knowing one culture isn’t enough either. The CODE target is curious, demanding, informed and is a difficult target whose loyalty to a brand requires effort from it.

On the other side there are the Experiencers. These are the enthusiastic and impulsive consumers. They seek excitement and novelty; as quickly as they become enthusiastic for new things they forget about them. A big part of their income goes into fashion and socializing. They know everything going on in technology and social media and are motivated by novelty and experiences.

BAIN & CO LUXURY CONSUMER SEGMENTATION According to Bain & Company (2013), there are seven types of luxury consumers.

CODE consumers belong to two different segmentations: the Omnivore and the Opinionated. The Omnivore is a segment of people, mostly by women, between the ages of 30 and 40. These women and men have low price sensitivity and buy mostly from monobrand channels. They love giving gifts, and their favorite thing to buy is jewelry. They are influenced by social media, and their biggest purchasing motivators are exclusivity, status and brand name.

The second segment is the Opinionated. This group comprises young men and women. Their purchase motivation is mainly exclusivity and quality. They are informed, shop repeatedly and are tech-savvy. The Opinionated buy mostly leather goods and accessories in general. Most of the purchases of the Omnivore and Opinionated aren’t done in isolation; they prefer going shopping with someone.

These two segments represent a big part of the luxury purchases.

VAL’S LIFESTYLES The CODE target can be identified under two Val’s segments: the Innovators and Experiencers. This segmentation allows CODE to understand their target’s behavior and necessities better. The innovators are the CODE consumers that are successful and sophisticated. They are motivated by the authenticity of a product and the kind of reward that it will give to them. They are leaders who are receptive to new ideas and technologies. They are active consumers that prefer niche and upscale products. For innovators, the image is really important since it’s the way they express their personality and uniqueness.

Purchasing Drivers The Omnivore

Purchasing Drivers The Opinionated

Brand Name

Brand Name

Exclusivity

Visible Logo

Product Fit

Status Quality & Durability

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Exclusivity

Visible Logo

Product Fit

Status Quality & Durability

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THE CUSTOMER

MILLENNIALS BEHAVIOR TRENDS

Word of Mouth:

Sustainability:

For Millennials, the information acquired through traditional advertising is not as valid and important as the information they get from their friends. They trust new products or brands easily because a friend of theirs talked about it or tweeted about it rather than just because they saw a TV spot about it. Most of the Millennial shopping influences come from their friends through social media. In a survey made by NetBase in 2013, it appears that 83% of the Millennials that are between 18-24 years old consult at least one social media platform before purchasing a fashion item; in the older generation of Millennials the percentage is lower, but it is still significant for a brand to see how to gain this type of presence.

The green movement is nothing new or different, but the approach from these consumers is what is new. The generation to which the CODE consumer belongs is one of the most highly educated demographics, one who focuses on the significance of ecological and environmental conditions. Thanks to their connectedness and access to the Internet, they are a generation that has acquired a passion for social and environmental problems, but they aren’t willing to take big effort to make a change. Therefore, these consumers have found a way of helping the world by instead demanding brands be sustainable. Generate Insight 2012 states in their survey that 76% of Millennials emphasized the importance of brands being ecologically conscious. The same survey states that 9 out of 10 Millennials will switch from one brand to another if the second brand is associated with a good cause. This generation, into which the CODE target belongs, is all about the green movement made by the brands they use, and in order to get them as a consumer, brands should approach them with sustainability.

Hyper-connection Millennials are hyper-connected. They spend an average of 40 hours a week between their phone, tablet and computer. They make buying decisions, plan their agendas, manage their social life and get informed through Internet and social media. As part of their hyper-connected culture, Millennials share their thoughts and experiences online. This represents a threat to brands who receive bad critiques since it means that this bad experience will be seen by millions of people all around the globe, but it is also an advantage since a good comment could help a brand to gain market share or gain more popularity.

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Differentiation: These consumers have a big need for exclusivity and customization. They all want to be different and innovative; as a result there are many trendsetters in this target.

Along with the DIY trend, companies are offering limited edition products especially for this target. Research by Ypulse 2013 has shown that 22% of Millennials say that they often modify, cut up or embellish their clothing. This generation is always searching to show their personality and expose what differentiates them from the rest of the world; tattoos are an example of this. Nearly 4 of 10 Millennials have at least 1 tattoo. They want products that also allow them to differentiate from other, unique products made just for them (Keeter, 2010).

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CODE CUSTOMER PROFILE: Demographic: Age: 23-35 Gender: Female and male Marital status: Single, engaged or married Household income: 80,000 – + Education: They graduated from college and some even continued with higher education • Occupation: Professionals

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THE CUSTOMER

• • • • •

Location • Country: U.S. • Cities: Metropolitan areas such as New York, Los Angeles, Chicago, Dallas, Houston, Washington, Boston, Seattle, Denver, San Diego, Minneapolis, San Jose and San Francisco.

Psychographic • Needs/Motivation: High quality, sustainability, recognition, technology and exclusivity, experiences • Personality: Intelligent, adventurous, informed, environmentalist, wealthy, untrusting, spoiled and demanding • Lifestyle: wealthy, social, friendly, tech-savvy, entrepreneur, healthy, socially conscious and environmentally conscious • Social Class: Middle-Upper and Upper Class

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PERSONAS Thomas Law • • • • • • • • • •

Name: Thomas Law Age: 33 Education: University of San Francisco Degree: Architecture Nationality: American Income: 110.000 Profession: Architect Status: Married Residence: Rented apartment Media: Tech savvy

At 2:00 pm, after having lunch, he goes back to work, but not before checking all his social media platforms for the third time that day and tweeting about the restaurant he tried for the first time. He then realizes it’s late, but still he isn’t in a hurry; he can be 20 minutes late to work and everything will be fine. He goes back to the office so he can assist at a meeting he has in the afternoon, all while watching his Facebook and WhatsApp from time to time to see what is going on in the outside world. After the meeting, he starts searching online for a new bicycle since his broke last weekend while he and his wife were exercising.

After work he goes and has a drink with his wife and another couple and then goes back to his apartment where he decides to watch The Walking Dead on his Apple TV before he goes to bed.

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THE CUSTOMER

• Leisure activities: Travel, photography, going out with friends and exercising • Goals: To continue growing in his own company while implementing sustainable architecture • Taste in appearance: He appreciates quality, uniqueness and clothes that care for the environment and society • Shopping habits: Depending on the product, he buys online or in store. He usually buys technology online and he buys it every time a new gadget he finds interesting appears. His apparel and accessories are a different story; he buys these a few times a month. Normally, when he likes a product in a store or worn by a friend, he will buy it online, but this will also depend on whether he can find it elsewhere at a cheaper price.

• A day in his life: Thomas Law wakes up every day at 7:00 am with an alarm from his iPhone. When he wakes up, the first thing he does is have breakfast while he checks Instagram, Twitter and Facebook. He then brushes his teeth with Crest toothpaste, takes a shower and gets dressed. His Levis jeans are perfect with his Urban Outfitter shirt and his Converse shoes. He puts his Mac in his backpack, picks up the keys to his Fiat 500 and goes to his office. He works until 12:00 pm when he goes to eat sushi with his friends in the small sushi restaurant that they opened in the San Francisco design district, I Luv Teriyaki & Sushi.

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Ashley Taylor • • • • • • • • • •

Name: Ashley Taylor Age: 26 Education: LIM College Degree: Marketing Nationality: American Income: 80.000 Profession: Marketing Communication Specialist Status: Single Residence: Rented apartment Media: updates with latest technology

She then arrives to her office where she has a meeting. She takes her iPad, where she has saved her presentation for the client, and goes to the meeting.

The morning passes quickly: meetings, work and some social media in between.

Then she leaves for lunch with some coworkers; they all go to the new salad bar that opened last week in Nolita. When they finish lunch, they go back to work and continue working through the afternoon. Around 4:30 she finishes her work and starts looking online for tickets for her holiday trip; she and two other friends have decided to go to Indonesia for two weeks. She does some research but still doesn’t think the prices are fair, so she decides to look once again another day.

She finishes working and goes back home to change into her Athleta active wear so she can go to her Pilates class. After the class she goes back to her house, has a light dinner and watches the latest episode of Pretty Little Liars online before she checks once again her social media before falling sleep.

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THE CUSTOMER

• Leisure activities: Shopping, exercising, going out with friends, going to social events and doing philanthropy • Goals: To continue growing in her career and to continue studying • Taste in appearance: She appreciates high-end design, exclusivity, quality and sustainability • Shopping habits: Ashley is constantly looking for things to buy, online or in store. She normally goes to the store, sees what she likes and tries it on so that she can go back home and buy it online. She sometimes also buys in store. She is always looking for new brands, people’s opinions on products and what is trendy.

• A day in her life: Ashley is a 26-year old girl that studied marketing at LIM College. A regular day in Ashley’s life starts at 6:30 in the morning when she wakes up with the alarm that is ringing on her iPhone. The first thing she does when she wakes is check her social media platforms. She then makes her breakfast smoothie and sends a Snapchat to her friends showing all of them her healthy breakfast. She then dresses up with her brand new dress that she bought at ASOS and the high heels from H&M. She puts on sunblock, then make-up and does her hair so she can go out with her Chloe bag, but not before first putting her EOS lip balm in it. She then takes the subway to Linda Gaunt, which is the agency where she has been working for two years. While she is in the subway, she checks once again her social media platforms and sees some news in her iPhone.

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5

THE CODE BRAND Products and Prices / Place / Promotion

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PRODUCT AND PRICES CODE will work as an online store for premium sustainable Colombian designer products made in Colombia. These products will de differentiated because they are unique, handmade pieces made by disadvantaged communities in accordance with CODE guidelines. All products offered are made with the best materials and excellent quality.

The CODE price and product strategy were created in order maintain the company’s integrity while allowing flexibility in the change of assortment and designers.

5

THE CODE BRAND

Product Strategy: The CODE product strategy is to offer exclusive products of high quality and highend designs that are made by sustainable Colombian companies.

Price Strategy: CODE has a premium pricing strategy. The company will offer products at a price range from $70 to $400.

Designers:

CODE will start with four brands; this will be the minimum established since it will allow CODE to offer product variety and allow the company to maintain its position as an online retailer. However, this number could vary to a higher quantity of brands in case the company grows. CODE will start its operation with Ballen Pelletiere, Antilope, Jaure and Pajaro Limon. Each of these brands presents a unique product offer and a story behind it. CODE wants to present their history and products to the rest of the world.

BALLEN PELLETIERE: This company was born in 2011 when Ricardo Ballen returned to Colombia after living in Milan during the five years he studied product design. The inspiration collected through his years in Milan was mixed with his passion for the equestrian world to give birth to his bags brand Ballen Pelletiere. The brand represents his knowledge in product design mixed with the inspiration left by his past. Each piece is handmade by skilled artisans and leather goods craftsmen to ensure its high quality. Inputs such as leather and hardware are developed and subjected to durability studies, so they can provide high quality items and endurance.

Ballen Pelletiere works with artisans and leather goods craftsmen who belong to the low class of Colombia and that have problems finding a job to support their family since they don’t have any education. Ballen Pelletiere gives them a job where they get regular payments of more than the minimum wage. The company also gives them and their family health and social security.

BALLEN PELLETTIERE, The Art Of Portability.

CODE’s merchandise mix will be made by the combination of diverse Colombian designers that offer premium accessories. The designers will always be chosen by one of the brand owners in order to maintain the brand integrity at all times. The designers will always need to have these three principal parameters: 1) All products for the brands must follow CODE design line and quality standards.

2) All brands have to follow the CODE sourcing guidelines.

3) All brands must have enough products to allow the company to maintain inventories and never run out of stock.

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ANTILOPE: Camila Restrepo is the Colombian designer who founded Antilope. She is a graphic designer and illustrator with a masters in textile design from Madrid. After finishing her studies in Spain, she decided to come back to Colombia to create this brand where she could translate her passion with the world while she helped Colombia to grow. Antilope designs tell stories; they are colorful and charming. In every piece you can see the handmade illustrations later printed in high quality fabrics. Camila creates each print first by herself and later she makes them digital to print onto the pieces. The pieces are printed on textiles (cotton or silk) made by 120 women that live in Cauca, Colombia. These women are single mothers that depend on this artisanal work to maintain their families. Antilope not only buys from them but also works with the organization Artesanias de Colombia to help these women get more clients as well as healthcare and education for themselves and their kids.

Colombian indigenous culture with a sophisticated aesthetic. They work with the indigenous from this tribe not only to give them fair payment for the work but also as an ONG to help them get education while they maintain their culture and traditions.

5

THE CODE BRAND

PAJARO LIMON:

JAURE:

The sisters Marcela and Natalia Piedrahita created this jewelry company. This brand approaches authentic, natural and strong, yet delicate women with timeless jewelry pieces. The sisters created this company in 2011, saying that they find their inspiration in nature, geometric shapes, uncommon textures and in daily life objects. Their materials are high quality, from 24 carat gold to sterling silver and Swarovski crystals or locally sourced, conflict free gemstones; they carefully select everything. All the assembly and construction of the pieces are directed by them in their studio where they work with 10 women who are war refugees. They design the pieces and work in the production with these 10 women, assuring the quality of each piece.

Jaure is a company created in 2011 by the fashion designer Sara Londono and architect Maria Paulina Arango. They merged their knowledge in different areas and backgrounds to create a jewelry company that allows them to mix their passion for fashion and art with their passion for helping Colombian people.

Jaure, which in the Embera language means soul and spirit, offers unique pieces that are made by indigenous peoples from the Embera tribe in Colombia. The designers work hand in hand with the artisans of the tribe to create pieces that narrate the

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Prices per Category:

5

THE CODE BRAND

Price Range Product Prices Handbags Small $100 - $180 Medium $180 - $280 Large $250 - $400 Jewelry Necklaces $80 - $200 Rings $50 - $150 Bracelets $70 - $150 Earrings $40 - $100 Scarves Small $50 - $100 Medium $80 - $120 Large $100 - $200

Reference

$66

$240

5/$1200

Large

$71

$260

5/$1300

Necklaces

$38

$135

5/$675

Necklaces

$40

$150

5/$750

Rings

$25

$90

5/$450

Rings

$28

$100

5/$500

Small

$20

$75

5/$375

Medium

$30

$110

5/$550

Medium

$30

$110

5/$550

Large

$40

$150

5/$750

Jewelry

Merchandise Mix Product Handbags

Large

Merchandaise Mix Cost Price Retail Price Initial Buy Units/$

Jewelry

Scarves

Small

Small

Medium

Medium

$42

$42

$55

$55

$150

$150

$200

$200

5/$750

5/$750

5/$1000

5/$1000

Total

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90/$12.625

53

PLACE

6 Months Line Plan:

5

THE CODE BRAND

Product Handbags Small Medium Large Jewelry Necklaces Rings Bracelets Earrings Scarfs Small Medium Large Total

6 Month Line Plan August September October November December January Total 27 30 33 45 54 39 228 9 10 11 15 18 13 76 9 10 11 15 18 13 76 9 10 11 15 18 13 76 36 40 44 60 72 52 304 9 10 11 15 18 13 76 9 10 11 15 18 13 76 9 10 11 15 18 13 76 9 10 11 15 18 13 76 27 30 33 45 54 39 228 9 10 11 15 18 13 76 9 10 11 15 18 13 76 9 10 11 15 18 13 76 90 100 110 150 180 130 760

CODE online store will be a user friendly website where users are a maximum of 3 clicks from all the information they need. The website strategy is to have an online store and parallel an information website where costumers can find the stories behind the different designers in their micro sites.

The approach is to create a whole online universe for the brand that goes with the lifestyle of the consumer. First, we will sponsor a new brand each month. There will also be other designers’ products and information. Then there is an “about us page” where consumers can find the information about CODE, including our values and sourcing guidelines, and feel connected with our work. The third page will be the online store, which works as a selling platform for the designers. The fourth page will be about the designers. In this there will be a micro site about each one of our designers, showing how they work, how the pieces are made, and how the designers work with the communities.

Place Strategy: CODE distribution strategy will be to sell only online.

Web Map:

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5

THE CODE BRAND

Web Design:

URL: www.connectingdesigners.com

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Promotion

• Stationary:

Branding: CODE created an image that could reflect not only the brand elegance and sophistication but also its sustainability. For this they focused on creating a brand image that could work in the American market and that was organic and seemed friendly and young. Every detail, from the colors used to the logo and packaging, was designed to maintain the brand identity and integrity.

BRAND POSITIONING:

5

THE CODE BRAND

CODE, the cool sophisticated brand passionate for fashion and sustainability.

BRAND STRATEGY: • Brand Essence: Design, Sustainability and exclusivity.

• Brand Pillars: Mindful, authenticity, transparency and elegance.

• Brand personality: Sincere, passionate, friendly, cool and sophisticated.

BRAND IMAGE: • Logo

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Launching and Positioning Campaign

COMMUNICATION MIX:

As part of its promotion strategy, CODE will have a lunching and positioning campaign that will last 6 months. In this the company will first have a small digital launching in the month of August and then a bigger event in September. During the first two years, CODE will plan their campaign every 6 months; this will provide the company flexibility and a faster response to market changes. After the second year the company will analyze if this should continue every 6 months or will be planed for a whole year.

Launching campaign: 1. PR: Free press, press release and blog promotion.

2. Digital: Social media, Social Media Ads, Contest and SEO.

COMMUNICATION OBJECTIVES:

5

THE CODE BRAND

General Objective: Launch CODE in the American market as a brand for affluent Millennials.

Specific Objectives: • CODE will have 20% sales of inventory monthly for the first 6 months.

• To have 500 visits on the website in the first month and continue increasing to 5% of visits each month during the first 6 months.

• To have a minimum of 100 unique visitors each month.

• To have a bounce rate of no more than 60%. (40% is considered normal) • To get at least 20 new subscribers to the blog monthly.

• To have a conversion rate of 0.1% after the first month of launching.

• To Launch the brand for the month of August.

COMMUNICATION OBJECTIVES: The launching campaign will have two different stages: the launching will last one month and will be during the month of September and the positioning campaign will last 5 months. The strategy will be explained monthly.

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Positioning campaign: 1. PR: Event, blog promotion and free press.

2. Trade show: Pop-up stores.

3. Digital: Social media, Social media milestones contests and Social Media Ads

TASKS: Parallel During The 6 Months: • Free Press: CODE will hire a PR company to manage the free press and press release of the company during the launch month and the following months.

• Press release: In the appendix you can find the Press release. It is an example of the press release that will be given to the PR agency who will then correct it and send to different media.

• SEO: This will be managed by the company managing the website but it requires an extra cost.

• Social media: CODE will have 3 or 6 weekly posts in Twitter, Facebook, Pinterest, Instagram and Google +. Snapchat will have a weekly snap, Youtube and Vimeo one monthly video and Soundcloud a monthly soundtrack. The blog will have 2 weekly posts; these will cycle between the three different segments unless there is an special date or occasion.

• Social media milestones: CODE will give a prize to the 1000th and 5000th follower in Facebook. In Twitter and Instagram, the milestones will be 1000 and 2000.

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Launch Campaign: August • Blog promotion: With PR we will chose 2 bloggers to negotiate with so we can send them products as a gift in exchange for talking about us on their blogs and social media sites.Negotiating with bloggers normally has a high cost; the idea is to approach them by explaining our work and what we are doing.

5

THE CODE BRAND

• Social media: CODE will have weekly posts in Twitter, Facebook, Google +, Instagram, Snapchat and Pinterest and periodic posts in Youtube, Vimeo and Soundcloud. For the launching of the company, CODE will publish all their social media pages and will create a contest to invite people to talk about CODE in their social media. During the month all the platforms will work around the launch of the brand and the contest.

• Social Media Ads: CODE will pay to promote content generated about its launch and about the contest being offered. The company will also pay to promote the website in Facebook and to reach more people.

• Contest: After the first 2 weeks of gaining followers, we will launch a contest throughout all our digital platforms which invites consumers to follow us on Instragram and Facebook and post an image of their favorite piece from CODE and why they would use it. The image must be published in Facebook and Instagram. The customer who posts the image that gets the most ‘likes’ will win the piece they chose as a prize. Those who chose the images with the second most likes on Facebook and Instagram will win a jewelry piece. The contest will run for two weeks, and the favorite images will be posted through all our social media platforms as user generated content.

Positioning campaign: September: • Pop-up store: During the Mercedes Benz fashion week in New York, CODE will have a Pop Up store located in Soho. This Pop Up will sell the CODE products and promote them through social media and the press. The Pop Up rent is covered by Proexport.

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• Event: CODE will do an event in the New York Pop up store that will be in SoHo one week before the Mercedes Benz fashion week in New York. This event will be sponsored by Proexport, which is a government entity that helps Colombian companies that want to export products to other countries. The event will be hosted on a Saturday afternoon and the PR Company will be in charge of the invitations.

The event will be a cocktail party with the designers of the designers and screens showing how each product is made. We will be offering drinks and snacks.

• Social media: For the event and during the 4 days of the Pop Up store, CODE will have a contest in social media and the brand will also post images about the event, a video of how the launch operated and the soundtrack of the event.

• Contest: During this month, CODE will mix their social media with events and will create a contest that will give user generated content. The contest will be launched during the event where there will be a photo both for customers to take pictures with their favorite pieces, upload the into their Instagram accounts with the #CODE hashtag and invite people to buy online. The photo with more likes wins the product that was selected for the picture, the second photo will get 50% of discount on the next purchase, and the third one will get a 20% discount on their purchase. All the photos posted by the consumers will be published in Facebook and Google+ as content of the material.

• Social Media Ads: CODE will pay to promote content generated by the brand and will pay to promote the website in Facebook and to reach more people.

October: • Social media: CODE will continue having the regular posts about the brand and lifestyle but there will be special posts on Vegetarians day (1st of October), UN day (24th of October) and Halloween (31st of October).

• Social Media Ads: CODE will pay to promote content generated by the brand and will pay to promote the website in Facebook to reach more people.

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November: • Social media: CODE will continue having the regular posts about the brand and lifestyle during the first two weeks of November. The second week CODE will launch a contest for Christmas in Pinterest that will last the second 2 weeks of the month.

• Social Media Ads: CODE will pay to promote content generated by the brand and will pay to promote the website in Facebook to reach more people.

5

THE CODE BRAND

• Contests: In this contest the consumers will have to create a Pinterest board of what would be a CODE Christmas for them. The brand will select the 10 boards that best reflect the brand after the 2 weeks of contest and from there select the one that has the most followers. The winner can choose one product up to $200.00 to be delivered as a Christmas present.

• Blog promotion: With the PR we will choose two bloggers to negotiate with so we can send them products as a gift in exchange for them talking about to us in their blog and social media. Negotiating with bloggers normally has a high cost; the idea is to approach them by explaining our work and what we are doing.

January: • Social media: CODE will continue providing the regular posts about its brand and lifestyle, but there will be special posts on Martin Luther King day (19th of January) and during the first week of January.

• Social Media Ads: CODE will pay to promote content generated by the brand and will pay to promote the website in Facebook in order to reach more people.

December: • Christmas Initiative: During Christmas, CODE will have a campaign called 24 Days of Sharing. Each day CODE will share in their social media one thing they are doing to help the environment or society. While CODE is sharing what they are doing, they will invite people to show what they are doing to help. From the people that share what they are doing, CODE will weekly chose two consumers and send them a present for sharing with the world. This will not be announced as a contest and the prices will not be announced at all; it will just be Christmas gifts for people that are sharing with the world. After choosing two weekly winners, CODE will ask for permission to publish their content as ideas to share. The 24 sharing initiatives may include planting a tree, donating blood, helping a fundraiser, donating for kids, donating for the elderly, donating for sick or poor, helping the elderly, giving a disadvantaged person a spot on public transportation, adopting an animal, volunteering in an animal shelter, volunteering to feed the homeless, volunteering for Habitat for Humanity, volunteering to help veterans, volunteering to clean a river, creating something by recycling, and volunteering to paint with children with cancer, among others.

Media Timeline: Objective August

September

October

To Launch digitally CODE

PR: Free press, press release and blog promotion.

Digital: Social media, Social Media Ads, Contest and SEO

PR: Event and free press.

To create brand awarness and Trade show: Pop-up stores. buzz about CODE launch Digital: Social media, SEO, contests and Social Media Ads. To create brand awarness and PR: free press. generate traffic to the website Digital: Social media, SEO and Social Media Ads.

.

November

To create brand awarness and PR: free press. . generate traffic to the website Digital: Social media, SEO, Contest and Social Media Ads.

December

To create brand awarness and PR: Free press, press release and blog promotion. generate traffic to the website Digital: Social media, Social Media Ads, Contest and SEO

January

64

MEDIA TIMELINE Activity

To create brand awarness and PR: free press. generate traffic to the website Digital: Social media, SEO and Social Media Ads.

.

65

Media

August

MEDIA TIMELINE September October

November

December

January

Event Free Press Press Release Blogger Pop Up Store Social Media Contest SEO Christmas Initiative Social Media AD

Package

Marketing Budget:

5

THE CODE BRAND

Media Event Free Press (Press release) Blogger Contest Christmas initiative SEO Social Media AD Stationary Packaging Milestone Prices Registration of Brand Web management

August

1200 1200 500 800 3000 600 900 1000 800 10000

MARKETING BUDGET September October November 4000 1200

1200

400 800 1800

1200 200

800 900

800 1200

December

1200 1200

January

1200

1500 800 2000

800 800

800 7500

800 3600

1000 800 9000

800 3700

800 5200

Total 4000 7200 2400 1100 1500 4800 9700 600 900 1000 1000 4800 39000

Event Invitation

Pieces: Media Kit

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6

OPERATIONS PLAN

Business License and Registration / Buying / Storage / Distribution 69

OPERATIONS PLAN Business License and Registration: The company will be registered as a Limited partnership. The logo will also be registered as a trademark. This process will be to register both in the U.S. and Colombia. It has a cost of $1,000.

Buying:

6

OPERATIONS PLAN

The contracts with the designers will vary from time to time and designer to designer but these clauses will be on the contract always. Product Strategy: 1. There will be a term and duration of the contract.

2. A minimum of monthly inventory, which with the first 4 designers are 5 units per reference.

3. CODE can return up to 30% of the inventory to a brand if it is not sold. The time limit to return will be of 1 month and 2 weeks. The product that will be returned will be changed with new references from the same brand; money will not be returned unless there is a problem with quality.

4. If a brand doesn’t follow the CODE quality in more than 1 reference a month, the contract with the brand will be canceled.

5. Quality problems with the product will be solved by the brand, not by CODE, but it must be changed.

6. The failure to accomplish a CODE sourcing guideline will dissolve this contract.

7. The brand accepts surprise visits from the quality manager in their studios and warehouses.

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8. The brand will offer their studio and workers for photo shoots and filming for the promotion of CODE and their brand.

9. If a brand will use CODE promotion material they must ask in advance to the marketing director.

Storage: 1. Present: The inventory will be stored during the first 6 months in the owner’s house; when the inventory exceeds 300 units or it becomes too hard to handle for the owner, then CODE will have to find a warehouse.

2. Future: When CODE inventory grows and the need for a warehouse appears, CODE will rent it monthly.The warehouse will be located in Miami and the size will vary as the company grows.

Distribution: DISTRIBUTION CHAIN: DESIGNERS Colombia

TRANSPORT

STORAGE

Ocean/Air

Miami

TRANSPORT Ocean/Airi

CLIENTS USA

SHIPPING AND RECEIVING PORT: CODE will start shipping their merchandise once a month by plane since the quantity is small and it results more expensive to ship it by ocean. It will be shipped in the Olaya Herrera Airport in Colombia and will arrive in Miami International Airport. From there it will be taken to the owner’s house where the product will be stored. This will be maintained as the transportation route until the shipments are larger than 500 units. Then they will pass onto freight.

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FREIGHT COMPANIES: The transportation from Colombia to Miami will be made by UPS in boxes of 24” x 24” x 24”.

COSTUMER DISTRIBUTION:

6

OPERATIONS PLAN

From the Miami storage there will be daily shipments to consumers through USPS. These have a cost of $10.00 per medium box and $8.00 for the small box. The product will take at least two days to arrive at the consumer’s house.

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7

CODE MANAGEMENT Management Summary / Management Team

75

CODE MANAGEMENT Management Summary:

7

CODE MANAGEMENT

CODE is majority owned by Sofia Restrepo and Julia Restrepo. Sofia Restrepo holds a Master’s degree in Luxury and Fashion Management, while Julia Restrepo has a Bachelor’s degree in design engineering. They are sisters and created the company together as a Limited Partnership. They are both involved in the daily tasks and have specific positions. This partnership was created since they both live at strategic locations and have specific backgrounds that allow them to work as a team in different areas of the company and cities. The company shares are divided 70% - 30%. The largest portion belongs to Sofia Restrepo and the smaller one to Julia Restrepo

• Out sourcing: There will be some services that will be managed as outsourcing when needed. The web design and content management in it will be managed by a company who specializes in web management. It has a cost of $800.00 monthly. The accounting of the company will be managed by the owners; a third party will be hired to do taxes and provide information which requires a certified accountant. This has a cost of $7.25 an hour.

Future: In the future the company will have to hire other people, which will be a creative director, a warehouse manager and an accountant. As the company grows, new positions will open.

Sofia Restrepo has two big responsibilities; she is in charge of the logistics within the US and is the marketing manager. Julia, on the other side, manages the curation of the designers, supervises the quality visits, negotiates with designers and will be in charge of the logistics of shipment between Colombia and the U.S. Sofia Restrepo and Julia Restrepo will work with a company to outsource the website and provide updates which will cost them $800.00 monthly along with a lawyer and an accountant in outsourcing.

Management Team: Current: • Sofia Restrepo: She will be in charge of logistics in the U.S. and marketing. Her daily tasks will include doing the management of the product inventory, being in charge of the daily shipping of the products to the clients, managing the social media of the brand, the PR, advertising, packaging and their website.

• Julia Restrepo: She will be in charge of logistics in Colombia and the brand and quality management. Her daily tasks will include being in charge of the monthly shipping of the products to the U.S., doing quality supervision, negotiation and management of the designers and curation of the product in general.

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8

FINANCIAL PLAN

Sales Forecast / Balance Sheet / Cash Flow / Breakeven Analysis 79

FINANCIAL PLAN

Cash Flow Cash Flow Forecast

Sales Forecast Aug

6 6 6 18 20% 5% 90 $13,500 $2,700

Sep

9 8 8 25 25% 5% 100 $15,000 $3,750

Oct

8 7 7 22 20% 5% 110 $16,500 $3,300

Nov

14 14 14 42 28% 7% 150 $22,500 $6,300

FINANCIAL PLAN

Product Handbags Jewelry Scarfs Total Sell-throught Monthly Sell-throught Weekly Inventory Dollars On Hand Sales On Dollars

Sales Forecast Dec Jan Feb 27 9 10 27 9 13 27 8 13 81 26 39 45% 20% 28% 9% 5% 7% 180 130 140 $27,000 $19,500 $21,000 $12,150 $3,900 $5,880

Mar

Cash Cash Receipts Receipts Owner Investment Cash Sales TOTAL Cash In

Aug $60,000 $2,700 $62,700

Sept

Oct

Nov

Dec

Jan

$0 $0 $6,300 $12,150 $6,300 $12,150

$0 $3,900 $3,900

Feb

Mar

Apr

May

Jun

Jul

0 0 0 0 0 0 $5,880 $7,875 $6,720 $7,140 $9,450 $7,980 $5,880 $7,875 $6,720 $7,140 $9,450 $7,980

TOTAL $60,000 $77,145 $137,145

$3,750 $3,750

$3,300 $3,300

$1,160

$1,400

$2,480

$4,500

$1,240

$1,440

$1,520

$2,200

$1,920

$2,320

$2,920

$1,500

$9,000

$3,700

$5,200

$7,500

$3,600

$5,200

$3,900

$3,900

$3,900

$3,900

$3,900

$61,200

$180 $400

$6,000 $100 $250 $400

$0 $100 $220 $400

$0 $100 $420 $400

$3,000 $100 $810 $400

$0 $100 $260 $400

$1,000 $100 $280 $400

$0 $100 $450 $400

$0 $100 $380 $400

$0 $100 $470 $400

$1,000 $100 $630 $400

$0 $100 $530 $400

$11,000 $1,200 $4,880 $4,800

TOTAL Cash Out

$14,280

$16,910

$5,820

$8,600 $16,310

$5,600

$8,420 $6,370 $6,980 $6,790 $8,350 $7,850

$84,580

Total Cash Flow

$48,420 -$13,160 -$2,520 -$2,300 -$4,160 -$1,700 -$2,540 $1,505

Apr

Cash Paid Paid Out Out 18Cash 15 Inventory Inventory 18Total Inventory 15

May

16 16 $3,600 18 12 16 Advertising Advertising and and Promotion Promotion 53Marketing Campaign 45 48 $7,500 of the brand 28% $1,000 35%Registration 28% Packaging $900 7%Stationary 7% 7%$600 150 160 170 Other Other Expenses Expenses $22,500Travel $24,000 $25,500 $0 $7,875Accounting $6,720 $7,140$100 Shipping Services

-$260

$350 $1,100

$130

$24,865

8

$60,000

$50,000

Total sales during the first year $77,145.

$48,420

$40,000

$30,000

Balance Sheet

$20,000

Balance Sheet Fist Year Forecast ASSETS Cash Accounts Receivable Inventory

Total:

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$10,000 $73,380 $28,500

$111,880

LIABILITIES Accounts Payable $0 Total: $0 OWNERS EQUITY Paid in Capital $60,000 Retained Earnings $780 Total: $60,780

$10,000 $1,505

$350 $1,100 $130

$0 -­‐$2,520 -­‐$2,300

-­‐$4,160

-­‐$1,700 -­‐$2,540

-­‐$260

-­‐$10,000 -­‐$13,160 -­‐$20,000

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Breakeven Analysis

Shipping Marketing Expenses Accounting Services Total

USS 406 USS 5,100 USS 100 USS 400 USS 6,006

Average Inventory ($) Average Inventory (Units) Turnover Rate Markup: Breakeven Sales:

$20,503.00 123 1.75 72% $8,341

8

FINANCIAL PLAN

Monthly Expenses

$250,000

$200,000

$150,000 SALES $100,000

TOTAL EXPENSES

$50,000

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Jul

Jun

May

Apr

Mar

Jan

Feb

Dec

Nov

Oct

Sept

Jul

Aug

Jun

Apr

May

Feb

Mar

Jan

Dec

Oct

Nov

Sep

Aug

$-­‐

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84

9

OTHER Appendix / Glossary / References / Bibliographical Statement 85

APPENDIX

Brand Manual

Pop Up Store Location

THE COLORS

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Bodoni Svty ITC CC (book)

Appendix

B o d o n i S v t y Tw o I T C T T B o o k Bodoni Svty ITC CC (italic)

abcdefghijklmnopqrstuvwxyz ABCDEFGHIJKLMNOPQRSTUVWXYZ 1 2 3 4 5 67 8 9 0

Body

Helvetica Neue (light)

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LOGO ELEMENTS

https://www.thestorefront.com

Window Logo Pop Up Store:

Symbol

Name

Tag line

All the elements in the logo can be used individual, but the name has to alwas acompaing the other elements

LOGO SIZES 0.7 cm

1 cm

3 cm

1 cm

0.7 cm

3 cm The logo doesnt have a maxim size but when it will be used in less than 1 cm it should only have the name, without tagline and symbol. When used in less than 3cm take out tag line.

LOGO VARIATIONS

GRAPHITE LOGO

STEEL LOGO can only be used on dark backgrounds

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WHITE LOGO on dark background

GOLD LOGO any contrasting color and on foil

SLATE LOGO on white, suede, sand or steel background

SILVER LOGO any contrasting color and on foil

STONE LOGO can only be used on dark backgrounds

WHITE LOGO & BLACK CIRCLE

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Advertorial Example

Seed Souvenir:

I n c o d e w e b e l i e v e i n t r a n s f o r mi n g f a s h i o n t o trans form t h e w o r l d . We i n v i t e you to b e p a r t o f t h i s t r a n s f o r ma ti on. S tart b y p l a n t i n g t h i s Ma p l e Tree to h e l p t h e e n v i ro n m ent.

To P l a n t a Tre e i s t o B e l i e v e I n To mo r ro w.

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Appendix

1. Put soil in a pot.

2. Put the seed in the soil, not to deep.

3. Cover the seed with soil.

4. Put the pot where it can get sunlight.

5. Put water in the pot daily.

Media Kit:

WE ARE PART OF THE FASHION REVOLUTION...

DO YOU WANT TO JOIN US OR FOUND MORE ABOUT THIS?

MEDIA KIT

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...JUST KEEP READING!

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Price Example Mulberry Hand Bag

ABOUT US

OUR TARGET

CODE is an Online, high-end fashion store that offers premium Colombian accessories to the U.S. market. This company was founded in 2014 when the sisters Julia Restrepo and Sofia Retrepo decided to unite their passion for fashion and helping.

Since both of them where growing they made part of volunteer and leadership programs. They used to help to different causes around their city each one in their own way. While they grew up caring about helping the people and the world they also were surrounded by the fashion world thanks to their mother.

When the life made them choose a career Julia desired engineer design while Sofia went for marketing. Then while Sofia made her Master in Savannah Georgia he realized there was a great opportunity to mix both passions and create her dream company with her sister at her side.

There is where CODE was born. It is a unique Online platform that sells curated products from various Colombian designers to a specific niche of American Millennials who value sustainability and demand exclusivity. CODE, is being a part of the fashion change towards sustainability. These designers will be able to expand into new markets while they support and help the different communities they work with thanks to the company.

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Appendix

CODE consumers will know that they are not just buying a product; they are becoming part of a bigger change. When consumers buy a CODE product, they are helping companies to help society. CODE’s strong sourcing guidelines are based on the company values and are the key to ensuring that products are sustainable and of high quality.

OUR DESIGNERS

Thomas Law

Ashley Taylor

This 33 years old american men graduated from University of San Francisco with a degree in Architecture. He currently live in San Francisco with his wife in a rented apartment.

This 26 years old Manhattan girl graduated from LIM College with a degree in Marketing. She is currently making $80,000 annually in her Marketing Communication specialist job. She lives in Manhattan alone in a rented apartment.

Name: Ashley Taylor

• Leisure activities: Travel, photography, going out with friends and exercising • Goals: To continue growing in his own company while implementing sustainable architecture • Taste in appearance: He appreciates quality, uniqueness and clothes that care for the environment and society • Shopping habits: Depending on the product, he buys Online or in store. He usually buys technology Online and he buys it every time a new gadget he finds interesting appears. His apparel and accessories are a different story; he buys these a few times a month. Normally, when he sees a product he likes in a store or worn by a friend, he will buy it Online, but this will also depend on whether he can find it elsewhere at a cheaper price

• Leisure activities: Shopping, exercising, going out with friends, going to social events and doing philanthropy •Goals: To continue growing in her career and to continue studying • Taste in appearance: She appreciates high-end design, exclusivity, quality and sustainability • Shopping habits: Ashley is constantly looking for things to buy, Online or in store. She normally goes to the store, sees what she likes and tries it on so that she can go back home and buy it Online.

She sometimes also buys in store. She is always looking for new brands, people’s opinions on products and what is trendy

PRESS RELEASE

CODE work as an Online store that sells premium sustainable Colombian designer products.

The company launches a new designer every two months and there is always an opportunity for new designers to shine. This designers are always chosen by the brand owner in order to maintain the brand integrity and product quality at all times. Here are some of the designers we work with: Ballen Pelletiere: This company was born in 2011 when Ricardo Ballen returned to Colombia after living in Milan during the five years he studied product design. The inspiration collected through his years in Milan was mixed with his passion for the equestrian world to give birth to his bags brand Ballen Pelletiere. The brand represents his knowledge in product design mixed with the inspiration left by his past. Each piece is handmade by skilled artisans and leather goods craftsmen to ensure its high quality.

Antilope: Camila Restrepo is the Colombian designer who founded Antilope. She is a graphic designer and illustrator with a masters in textile design from Madrid. After finishing her studies in Spain, she decided to come back to Colombia to create this brand where she could translate her passion with the world while she helped Colombia to grow.

Antilope sells scarves that have handmade illustrations printed in high quality fabrics. Camila creates each print first by herself and later she prints them in cotton or silk made by 120 women that live in Cauca, Colombia.

Jaure: Jaure is a company created in 2011 by the fashion designer Sara Londono and architect Maria Paulina Arango. They merged their knowledge in different areas and backgrounds to create a jewelry company that allows them to mix their passion for fashion and art with their passion for helping Colombian people.

Jaure, which in the Embera language means soul and spirit, offers unique pieces that are made by indigenous peoples from the Embera tribe in Colombia.

https://uk.finance.yahoo.com/news/the-real-cost-of----a-handbag-105737048.html

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GLOSSARY FARC: This is the Revolutionary Armed Forces of Colombia. It is a powerful and

Accenture (2013). Seamless retail for millennial consumers: Getting it right.

Retrieved from http://www.accenture.com/us-en/Pages/insight-retail- trends-millennial-shopping-behavior.aspx

Guerilla: These are independent groups that fight against forces. They sometimes

Accenture (2013).Who are the Millennial shoppers? Retrieved from http:// www.accenture.com/us-en/outlook/Pages/outlook-journal-2013-who-are- millennialshoppers-what-do-they-really-want-retail.aspx

wealthy terrorist organization formed in 1957. It has strong ties to drug dealers and creates an unsafe environment in Colombia. have strong, good ideals but normally work through war and a need for power.

Higg Index: Launched in 2012, the Higg Index is an apparel and footwear standard for environmental and social sustainability throughout the supply chain.

Millennials: Millennials or Generation Y is a demographic group born between

Glossary

the 1980s and the early 2000s.

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REFERENCES

Conversion Rate: The conversion rate is the percentage of users who take a desired action. The archetypical example of conversion rate is the percentage of website visitors who buy something on the site.

Bounce Rate: The percentage of visitors to a particular website who navigate away from the site after viewing only one page.

MarketingProfs. (2011, January 3). Affluent Gen-Y hooked on social media, brands.

Retrieved from http://www.marketingprofs.com/charts/2011/4152/affluent-gen-yhooked-on-social-media-brands Bain&Company (2013, October 28). Americas surpasses China as luxury goods growth leader propelled by Chinese tourism and new store openings, finds Bain & Company’s 2013 luxury goods worldwide market study. Bain & Company. Retrieved from http://www.bain.com/about/press/press-releases/americas-surpasses-chinaas-luxury-goods-growth-leader.aspx Carmichael, M. (2011, March 10). Where the Millennials are: What Gen Y spends its money on, and where to find them. Advertising Age. Retrieved from http:// adage.com/article/adagestat/advertising-age-finds-cities-millennials/149347/ D’Arpizio, C. (2014, January 14). Luxury goods worldwide market study winter 2014. Bain & Company. Retrieved from http://www.bain.com/publications/articles/ luxury-goods-worldwide-market-study-winter-2014.aspx Doran, S. (2013, July 9). Renewed optimism in the U.S. luxury market. Luxury Society. Retrieved from http://luxurysociety.com/articles/2013/07/renewedoptimism-in-the-us-luxury-market Doran, S. (n.d.). Luxury goods spending to reach €217 billion in 2013. Luxury Society. Retrieved from http://luxurysociety.com/articles/2013/10/luxury-goodsspending-to-reach-217-billion-in-2013

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E-Marketers. (2014, February 3). Global B2C ecommerce sales to hit $1.5 trillion this year driven by growth in emerging markets. Retrieved from http://www. emarketer. com/Article/Global-B2C-Ecommerce-Sales-Hit-15-Trillion-This-YearDriven-by-Growth-Emerging-Markets/1010575 Faw, L. (2012, October 2). Meet the Millennial 1%: Young, rich, and redefining luxury. Forbes. Retrieved from http://www.forbes.com/sites/larissafaw/ 2012/10/02/meet-the-millennial-1-young-rich-and-redefining-luxury/ Fromm, J., & Garton, C. (2013). Marketing to millennials: Reach the largest and most influential generation of consumers ever. New York: AMACOM.

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References

Halpert, J. (2012, May 15). Exclusive survey: The hottest brands among Millennials. The Fiscal Times. Retrieved from http://www.thefiscaltimes.com/ Articles/2012/05/15/Exclusive-Survey-The-Hottest-Brands-Among-Millennials How Millennials Shop Online. (2013, July 10). eMarketer. Retrieved from http:// www.emarketer.com/Article/How-Millennials-Shop-Online/1010031 Index of Economic Freedom: Colombia. (n.d.). The Heritage Foundation. Retrieved from http://www.heritage.org/index/country/colombia Indvik, L. (2013, March 12). “Forrester: U.S. online retail sales to hit $370 billion by 2017.” Mashable. Retrieved from http://mashable.com/2013/03/12/forrester-u-sJones, S. (2014, February 3). Number of luxury consumers to reach 440 million by 2020: BCG. Luxury Daily RSS. Retrieved from http://www.luxurydaily.com/ number-of-luxury-consumers-to-reach-440-million-by-2020-report/ Keeter, S., & Taylor, P. (2010, March 5). Millennials, confident. connected. open to change. Retrieved November 17, 2014, from http://www.pewsocialtrends.org/ files/2010/10/millennials-confident-connected-open-to-change.pdf Kingkade, T. (2013, March 1). Millennials would rather ditch car than smartphone or computer: Zipcar survey. The Huffington Post. Retrieved from http://www. huffingtonpost.com/2013/03/01/millennials-car-ownership_n_2789454.html

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Lockwood, L. (2013, October 28). Scrutinizing Millennials´ shopping habits.

Women´s Wear Daily. Retrieved from http://0-www.wwd.com.library.scad. edu/retail-news/trends-analysis/the-millennial-obsession-7250645 MarketLine. (2013). United States country profile. Country Report. Retrieved from http://0-search.ebscohost.com.library.scad.edu/login.aspx?direct=true&db= buh&AN=89776688&site=bsi-live MarketLine. (2013). Colombia country profile. Country Report. Retrieved from http://0search.ebscohost.com.library.scad.edu/login.aspx?direct=true&db=buh&AN=91 530082&site=bsi-liv Major Shippers Category. (n.d.). Otexa. Retrieved from http://www.otexa.ita.doc. gov/msr/catV0.ht Nickell, S. (2012, April 12). Millennials: Next consumer target. Gifts and Decorative Accessories, Business section. Retrieved from http://0-search.ebscohost.com .library.scad.edu/login.aspx?direct=true&db=buh&AN=74404827&site=bsi-live Petro, G. (2013, March 21). Millennial engagement and loyalty—Make them pa rt of the process. Forbes. Retrieved from http://www.forbes.com/sites/gregpetro/ 2013/03/21/millennial-engagement-and-loyalty-make-them-part-of-the-process/ Stadd, A. (2013, November 19). Millennial, fashion and social media. Media Bistro.

Retrieved from http://www.mediabistro.com/alltwitter/millennials-fashion-socialmedia_b51831 So how many Millennials are there in the US, anyway? (Updated). (2014, June 30).

MarketingCharts. Retrieved from http://www.marketingcharts.com/traditional/ so-how-many-millennials-are-there-in-the-us-anyway-30401/ TARGET: MILLENNIALS. (n.d.). AdAge. Retrieved from http://brandedcontent. adage.com/cableguide2013/article.php?id=355 The 25 best cities & neighborhoods for Millennials. (n.d.). Ink Niche Insight + Analysis. Retrieved from https://ink.niche.com/the-25-best-cities-andneighborhoods-for-millennials/

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The Millennial Consumer. (n.d.). The Boston Consulting Group. Retrieved from http:// www.brandchannel.com/images/papers/536_BCG_The_Millennial_Consumer_ Apr_2012%20%283%29_tcm80-103894.pdf Trungdzu, J (2013). Factors of high-end retail marketing: A study of growth opportunities for clothing retailers in the American women’s apparel industry.

(Honors Scholar Theses.) Retrieved from http://digitalcommons.uconn.edu/ srhonors _theses/293

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References

Wang, L. (2013, September 8). Luxury sales to exceed $318 billion, driven by emerging markets and ‘affordable luxury. The Business of Fashion. Retrieved from http://www.businessoffashion.com/2013/10/euromonitor-coach-michael-korslouis-vuitton-versace-fflur-roberts.html Walking in a woman’s shoes: It’s style that matters. (n.d.). Women’s Footwear.

Retrieved October 28, 2014, from http://www.npd.com/wps/portal/npd/us/news /press-releases/walking-in-a-womans-shoes:-its-style-that-matters/ What brands do Millennials love? (2014, July 28). SayDaily. Retrieved from http:// www.saydaily.com/2014/07/brands-millennials-love Who are the Millennials? (n.d.). Deloitte. Retrieved September 10, 2014, from http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/ Documents/us_consu Worldwide ecommerce sales toincrease nearly 20% in 2014. (2014, July 23). e-marketers. Retrieved from http://www.emarketer.com/Article/WorldwideEcommerce-Sales-Increase-Nearly-20-2014/1011039

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BIBLIOGRAPHICAL STATEMENT Sofia Restrepo is a Luxury and Fashion Management student in the Savannah College of Art and Design.

As undergrad she obtained a B.F.A in advertising in Colombia, her home country. Since she is a little she has had a passion for fashion and everything that surrounds that world.

As a consequence of this, while Sofia was an undergrad she realize all her projects were about fashion, mixing her to passions: marketing and fashion into one learning process.

When she graduated in 2012 from advertising she worked for a year in the French fashion company, NAF NAF. At NAF NAF, she was in charge of training the employees and managing the media. From these experiences she learned how the real fashion world worked and that numbers are everything in retail.

Based on that experience she decided to go one step further and moved to Savannah to complete the Master in Luxury and Fashion management. In this course she developed skills in marketing, forecasting, fashion business, supply chain and how fashion companies run in general.

In the third quarter she decided that after meeting the important people she meet through SCAD and watching how the American market was behaving she could establish a company that gives the U.S. exclusive Colombian products.

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