ShoeAholic as a Company Providing Women with Quality Shoes and Jewelry - Case Study Example

SHOEAHOLIC COMPANY Executive summary ShoeAholic is an international firm that is focused at providing women with quality shoes and jewelries. The increased demand for the women wear is the driving force has made the company to enter new market including Middle East and Africa. Based on its personalized marketing of its products the company objective is to increase its sales by more than 25% in the next 10 years. Other objectives outlined by this marketing plan include increasing the number of retail shops, and increasing the employee’s wages as well as expansion of customer base. The major competitors of ShoeAholic are also covered in the marketing plan. They include Amazon and Zippo Companies. Even though they are experienced, ShoeAholic aims at providing quality products that will make it a market leader in the industry. This marketing plan depicts geographical, behavioral and demographic as the there major aspects of market segmentation that will be adopted by ShoeAholic Company. In order to effectively position itself in the market, the company has undertaken a SWOT analyses. In addition, the aspects of marketing mix that involve the 4Ps (Product, Price, Place, and promotion) are also covered by the paper. Similarly, the forecasted sales and expenses for the first five years is also an essential of ShoeAholic marketing plan. The company aims at raising its sales to $520,000 in the 5th year from $ 165,000 in its 4th year of operation this depicts 215% increase in sales. Within the five years of operation, ShoeAholic expects to make a gross margin of 3.81%. ShoeAholic marketing department will consist of head office marketing manager, regional marketing managers and sales executive. This paper also cover the strategies to undertake incase of contingencies during the operations of the ShoeAholic. These include effective packaging of company product for easier identification and regular auditing of company’s financial statements to detect financial frauds. Introduction In the recent years the market for women wears has drastically expanded. This is due to the increase in population levels, reduced trading barriers among nations and the improved technological know-how. In addition, the changes in designs improvement contribute at least 60% of all sales of cloths world wide. It is evidence that most companies have gone global by embracing online selling techniques. This is due to the fact that this method is cheaper and increases the customer base in most companies. With this in mind, we have opened a premier online women shoe company by the name ShoesAholic. ShoesAholic enable ladies to shop for high quality online shoes, jewelries, handbags right from our show rooms. It is worth noting that selling the perfect outfit which makes a woman feel special is our driving force which will ensure our company attains a competitive edge. ShoesAholic intends to make every woman, not just celebrities, to feel as proud and to feel as if they are getting red carpet treatment. This will be enhanced by the fact that all our wide range of products comes with a personal stylist experience which is only offered to celebrities. We are cognizant that women can shop for shoes anywhere but unless you walk to a high priced boutique on Rodeo Drive you cannot get any personalized attention during shopping. This will be a thing of the past as our online internet offers a personalized attention to all the shoppers across the world. This paper clearly discuses the major initiatives which ShoesAholic will undertake in ensuring that we give our customers quality products which meet their needs. In addition, the marketing plan will indicate the various promotional strategies and the action plan which the company will emulate.  Mission statement of ShoesAholic The mission of ShoesAholic is to sell high quality women’s wear which includes shoes, leather bags, and jewelry that will give them the best impression. ShoesAholic will make sure that women get quality products at personalized levels at an affordable price. To enhance good relationships with our customers, a physical shop will be set in major cities across the world to receive customer queries and complements. SMART objectives of ShoesAholic 1) To increase the company sales by 25% in the next 10 years 2 To open at least 30 retail shops world wide so as to effectively serve our expanding customer base. 3)  To increase wages of employees by 30% so as to enhance their productivity in all the companies branches. This will in turn increase the profitability of ShoesAholic (Paul, 2010). 4) To increase the customer base in major worlds market like Asia, Europe and American markets by 25%.this will be done by selling shoes that are of high quality and at an affordable price (Doran, 1981). 5) To increase the revenue of the company by 60% in order to give our shareholders good returns. Products positioning ShoesAholic will offer wide variety of products in its stores. The company will avoid general treatment of customers. This will be ensured by emulating personalized attention to our customers during their shopping in order to ensure that they get their product (Barnlund, 2008). Skilled employees will be available in all stores so as to give guidance to our customers on the importance and effects of the products they choose to purchase. Market Analysis ShoeAholic targets executive women and other ladies in various professionals. In addition, the company aims at providing the best outfits for the house wives. In order to effectively serve the overall market, the company segments its market into demographic geographic and behavioral aspects (Goldstein, 2007). Demographic segmentation Due to the high density of women especially in urban centers, the company is focused at establishing a number of stores with various products in order to save the time taken by our customer to travel long distances looking for our products. Through effective promotion and advertisement strategies, ShoeAholic aims at increasing its potential customers from 1,300 to 2,500 per square kilometer in urban areas (McCole, 2003). Due to the low population density in rural areas, the company is focused at opening retail stores at the major shopping centers for example at district or provincial headquarters. Through this market expansion the company expects to increase its sales revenue from $2,535 in the first year to 2,570 in the second year. Geographic segmentation Through geographical segmentation, ShoeAholic Company aims at covering the Middle East and African markets. Due to the reduced awareness of the company products in these markets, extensive advertisement will be adopted through the use of internet, banners, sponsorship among others (Robbins and Judge, 2007). As a result, the company anticipates increasing its growth rate by 30% in the new markets. The quality of our products will address the various challenges that the competitors have yet recognized. For instance, due to adverse whether condition in Europe and some parts of Africa, the company aims at providing quality products to meet the needs of our customers. Behavioral segmentation Taste and preference and behavior of our customers are other vital marketing aspects that the company will emulate. Taking into consideration that middle aged women need their cloths and shoes to have modern styles, the company is focused at providing excellent design to the young ladies. In addition, the company will provide young ladies for example the college and university students with the most modern garments that make them look fashionable. Even though making regular changes on the clothing and shoes designs is an expensive venture, the company expects to attain a growth rate of 50% per year. One of the avenues the company will use to notify our customer of new products in the market will be through our website and social sites including face book and twitter (Northouse, 2006). Competitor Assessment It is worth noting that women are the majority buyers in the shoe industry and jewelries. According to Abell (2009) all shoes bought in any particular year, ladies buy at least 70% with Europe, Asia and American continents toping the list. Our company will highly explore these potential markets by making sure that we offer the highest quality range of shoes at an affordable price. For US$ 29.95 only, a customer from any part of the world will buy a pair of shoe or any other gorgeous item of choice from our shops. If a customer is not satisfied with a product she will have an opportunity to return it to the company for exchange. Due to the cut-throat competition in women wear and shoe industry, ShoeAholic is well armed with strong marketing policies to put at bay its competitors. Some of the major competitors include Amazon and Zappo Companies who offers online sale of shoes. One of the major advantages possessed by our competitors is that they are already in the market and they are aware of the products that are highly demanded. In addition, they have industry experience an aspect that is lacking in our organization (Cooperrider & Whitney, 2005). However, they are disadvantaged in that none of them specializes in selling ladies shoes. Furthermore, the competitors’ sell their shoes without putting in mind the individual needs of a customer. In this way, they have not been able to dominate the market despite most of them being in the business for along time. It is clear that the policies which have been adopted by our company will make the company to be the market leader in the next five years.  Critical success factors for ShoeAholic The competitors marketing strategies are not comprehensive ones as compared to those of ShoesAholic. The photos of the products they are offering are not clear on their websites. In the same way, they are not price specific (Kotler et al, 2006). In order to counteract any strategy which may interfere with our marketing policies in the shoes industry, we have personalized our services in such a way that our fashion stylists chooses shoes for our customers at the end of every month .This is the time when we make high sales based on the increased purchasing power of our customers. In order to create the customer awareness and dominate the shoes industry, our company adopted a name which is easy to be remembered by our customers. In this way, the name ShoesAholic has dominated the minds of our customers leading to strong customers’ awareness and customer loyalty. The increased distribution outlets of our products will ensure higher accessibility of our products in the market. This is a strategy which will greatly enhance our customer services leading to ShoesAholic competitive edge (Aaker, 2008). In addition, in order to ensure customer satisfaction on the product, regular product reviews and innovation will be done. To start with, all the customers’ queries will be treated with utmost seriousness. Unlike our competitors, our store will embrace high level of innovation which will enable us to come up with a new product at least once per month so as to cater for the needs of various categories of customers. Competitive responses In order to counter attack the market entry strategies of ShoeAholic, competitors are likely to change their prices and distribution techniques. In most online shoe selling companies, they have linked up with certain distributors located in major cities in the world. In this way, all the products sent to the customers are received via the authorized branch in the specific country. Sometimes the authorized agent takes a longer time before notifying the customer on the arrival of her parcel which in turns damages the company’s reputation (Kau & Wan-Yiun Loh, 2006). To deal with these marketing challenges, ShoesAholic Company will initially transport its products from the headquarters directly to the customers without involving any distributor. Later the company will set its own retail shops (Abell, 2009). ShoeAholic will undertake regular research on prices offered by the competitors in order to ensure our prices remain competitive without compromising the quality of our products. SWOT analysis ShoesAholic is a focused firm that will not ignore any unexploited market opportunity. Being a new venture in the shoes and clothing industry, the company is aimed at facing off all the challenges that may occur during its operations (Heyman, 1994). The desire to attain a competitive edge in the market, has propelled the company to undertake a SWOT analyzes that seeks to evaluate the strengths, weaknesses, opportunities and threats involved in the daily operations of ShoesAholic. Strengths Its only celebrities who receive personalized services when they are doing their shopping at high valued shopping malls. Our company has reversed this trend as all ladies can now shop for their wears at an affordable price of only $29.95 and at a personalized level. Our competitors’ do not offer these services to their customers. Once a customer buys from our shop, a follow up on her satisfaction level is made. As a result, our customers loyalty is enhanced since problems arising during our dealings with the clients are promptly solved based on the strong public relations department which has been emulated by ShoesAholic. Due to their strong customer loyalty towards our products, we have been able to maintain our existing customers allowing us at concentrating on how we can explore on new markets (Laermer and Simmons, 2007). A notable strength by ShoesAholic is that it offers wide range of products, a feature which is lacking in our competitors. Our wide range of shoes ranges from the official wears to the casual clothes. For example, each and every month we will be coming up with new product to be placed on our website to be ordered by our customers (Quinn, 1993). When a customer orders shoes from our competitors it normally takes time before they are delivered. This is due to delays arising from their complicated delivery channels. Our company has emulated a strong infrastructure which ensures timely delivery of all orders at the door step of our customers thus allowing them to concentrate on other important issues and to reduce the costs of calling our offices to complain for the lateness in the delivery of their products. Opportunities ShoeAholic Company has a great chance of expansion and growth. Most of the customers who buy shoes from the competitors complain on a number of issues like delay in delivery, high prices of the shoes among others. Since our company has put enough measures to mitigate these problems, we hope to persuade all these customers to be buying from our shop (Gupta, 2006). The company also aims at utilizing the ever evolving technology advances to reach more customers in the shortest time possible. For example, we hope to advertise our products through the main search engines like Goggle, yahoo among others. In this way, we will cut on the advertisement costs while reaching more number of customers (Pareek and Moore, 2009). Another significant opportunity that exists for ShoeAholic is the unexploited market in the developing countries. In this regard, it is vital that the company puts in place effective promotional strategies which are aimed at entering the unexploited market. This would entail undertaking advertisement strategies for instance via social networking sites such as Facebook. Threats It is evident that our business strategies are faced by many threats which may end up reducing our sales in long run if the situation is not contained. Many customers who have bought ladies shoes online from our competitors in the past have complained as a result of being offered substandard products (Abell, 2009). This vice has ended up reducing the number of potential customers. To counter this ShoesAholic Company is offering an interactive website where by the customers can be able to give feedbacks immediately they receive our products and an immediate response will be made if they are not satisfied. Trade barriers are other threats that are facing our company especially in Asian and African markets. Ultimately customers from those countries are unable able to access our product since the barriers block us from delivering the goods to them (Quinn, 1993). In the same way, the reduced consumers’ purchasing power which has been caused by the recent economic recession may cause a reduction of our sales since most of our customers direct their low incomes to other basic needs such as food and shelter. Political instability that has been experienced in most African countries is also a great threat for the effective expansion of the company the region. For example, political chaos may result to the destruction of the company assets or theft of the products during distribution. Weaknesses As mentioned earlier, ShoeAholic is a new venture in an existing shoes and clothing industry. As a result the company lacks enough experience as compared to its competitors who have been in the market for a long time. In addition, the company has few distribution channels. Unlike some competitors like Alibaba or Amazon who enjoy distribution channels across the globe. This has made us not to access customers from some of the potential areas like India, China among other countries. Being a new venture, we have not attained a strong financial position. However, our intensive marketing strategies will ensure that our revenue is increased in the next 4 years. Marketing Strategy In its effort to attain a competitive edge, ShoeAholic will adopt various marketing strategies. These include product diversification and innovation, expansion of customer base by entering new market such as Middle East and Africa and e-marketing. Similarly, the company intends to emulate the marketing mix that entails the 4Ps (Price, Promotion, Product and Place) as discussed in the section below. Product ShoeAholic Company is a global firm that specializes on selling high quality ladies shoes and clothes with personalized touch. The most notable brands of shoes are the stiletto, gladiators, peep toes, flat form, wedged, boots among other others. The high range of shoes products are well packaged with a one month warranty. The high quality of our products is a significant aspect which makes our products different from those of our competitors (La and Kamdampully, 20040.This is for instance based on the attractive blue and red colors of our products. Price In order to remain competitive, ShoeAholic Company aims at adopting penetrative pricing technique. This entails lowering initial prices in new market in order to attract new customers who are loyal towards our competitor’s products (Kotler & Armstrong, 2010). For only 29.95 US dollars customers will be able to shop for product .For those distributors and individual customers who buy from our shops discount will be given to them upon payment of the goods within the stipulated period. The methods of payment will be through MasterCard, Visa, Discovery and Pay pal or the American Express Our product ranges from casual to executive ladies shoes at that affordable cost. Place To ensure effective distribution of our products, one level of distribution channel will be adopted. This will reduce the cost of the distribution as well as delays in the delivery of our products to the customers. Similarly, ShoeAholic aim at increasing its retail outlets to ensure that all the customers regardless of their location can access our products. Through employment of trucks especially in rural areas, distributors will effectively deliver the products to the retail outlets that are located far from the producers. Promotion Based on the fact that we aim at expanding our customer base, ShoeAholic will embark on an intensive advertising campaign through the major search engine sites. As stipulated by Don et al, (1993) such advertisement methods are cheaper and effective in reaching more customers around the world. Sales promotions will also be emulated especially during the holidays when the sales figures are high. In order to create more customer awareness, the company will emulate media as an avenue of promoting its products. Due to the increased use social sites such as facebook especially among the young consumers, the company is focused at establishing facebook group where customers can freely share their experience regarding our products (Simon and Clarke, 1982). In addition, fashion magazines, newspapers and billboards will also be emulated in promoting the company products. The table below summarizes the promotional strategies being used by our company Products   Retail packaging Retail price in US$ Percentage discount given Wholesale   packaging Whole sale price in US$ Percentage discount given Shoes Dozen in a box 355 10 50 boxes  17750 15 Jewelry Dozen in a box 355 8 50 boxes 17750 13 Leather bag Dozen in a box 355 6 50 boxes 17750 13 Forecast and Budget The achievement of the marketing strategies as depicted by this marketing plan largely depends on the financial stability of the company. The section below indicates the forecasted sales and expenses during the first five years of ShoeAholic operations. Forecasted monthly sales for the 1st year Month Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Sales($000) 100 125 145 150 165 170 200 220 270 290 300 400 Forecasted total sales for the 1st year-5th year Year 1st 2nd 3rd 4th 5th Sales ($000) 2,535 2,570 2,572 2,565 2,530 Marketing expenditure for the first five years ($ 000) Expenditure ($000) Year 1 Year 2 Year 3 Year 4 Year 5 Advertising 350 345 345 340 250 Direct marketing 250 250 250 230 200 Internet marketing 260 200 195 150 100 Consumer promotion 300 250 230 200 180 Trade promotion 260 230 200 195 150 Sales force expenses 450 460 470 450 400 Public relations 300 300 250 240 200 Customer service 250 230 230 195 180 Others 460 400 420 400 350 Total expenses 2,620 2,665 2,590 2,400 2,010 Forecasted profit for the 1st year-5th year ($000) Year 1 Year 2 Year 3 Year 4 Year 5 Total Total sales 2,535 2,570 2,572 2,565 2,530 12,772 Total expenses 2,620 2,665 2,590 2,400 2,010 12,285 Gross profit (85) (95) (18) 165 520 Discussion During the initial years of operations, ShoeAholic will have to incur high expenses. These expenses that include advertisement, promotional, commissions, internet and direct marketing will lead to a reduction of profits in the 1st to 3rd years. From the above table, the company total expenses for the first 3 years exceeds the total sales leading to a loss of $85,000, $95,000, and $18,000 in 1st, 2nd and 3rd years respectively. However, increase in the expenses during the first, second and third years when the company is being establishing in new market are offset by the increase in sales during the 3rd year of operations. Even though the company experiences a reduction in the sales figure due to competition, it incurs fewer expenses in 4th and 5th years due to its strong marketing strategies that will enhance its product awareness and customer loyalty. As a result, the company speculates to increase its profit by 215% in 5th year. ShoeAholic gross margin after the fifth year is 12,772-12,285/12,772*100%=3.81 Organizational chart for marketing department The success of ShoeAholic Company will largely depend on the effectiveness and efficiency of the marketing team taking into consideration that it is new in the industry (Lindebaum and Cartwright, 2010). Head office marketing manager will be responsible for coordinating all the marketing strategies of the company (Bennis, 2009). In order to ensure all the market segments are covered, regional marketing managers will ensure the policies from the head office marketing department are implemented in all geographical areas. In addition, regional managers will coordinate the sales executives. The role of sales executive will include guiding customers during their purchases and decision making process. Contingency plan For this plans to be successful adequate control measures must be put into place. To start with an intensive market share analysis will be conducted after product launching. In order to face off our company in the market, some of the competitors may copy our product with an intention of confusing our customers. In this case, an intensive public education and all details of our product will be clearly exposed during packaging for easier identification. In the same way, frauds and misappropriation of funds may occur either within the company premises or during distribution of our products. To address such financial challenges, an independent professional body including PricewaterhouseCoopers will be employed to evaluate our books of accounting after every six months (Baker, 2008). In this way, we will be able to detect any misappropriation of funds. They will also guide us on how we can strengthen our balance sheet both in the short run and in the long run. Due to heavy workload on our employees, some may feel demotivated, an aspect that can affect the profitability of the company. To address demotivation, members of staff will be evaluated on their performances on yearly bases (Bass & Bass, 2008). Those who fail to perform well during any financial year will be guided on how to improve their performance for instance by sponsoring them for evening lessons. On the other hand, rewards and promotions will be given to the employees who have excelled in their respective fields (Banting, Ross and Randolph, 2009). Conclusion  ShoeAholic Company aims at offering ladies with a world class quality shoes at affordable prices. As stipulated by this marketing plan, the company aims to be a market leader in less than five years. Even though there is stiff competition from companies such as Amazon and Zappo Companies, the company will effectively portray it products via its website an aspect that will ensure its success. In the same way, the company is focused at addressing all issues raised through the customer feedback system.  ShoeAholic segments its market according to demography, consumer behavior and geography. Through effective application of the marketing mix that entails price, promotion, product and place the company will attain a competitive edge. Based from the above marketing plan it is fundamental for a new business venture such as ShoeAholic to undertake a SWOT analyses so as to face off the challenges that are in the global market. The roles of marketing department have not been overlooked as depicted by the ShoeAholic marketing plan. In order to ensure financial strength, ShoeAholic has made a five year sales and expenses forecast. Even though the company will experience a loss during the initial years of operation, the effective marketing strategies will offset the losses in the 4th and 5th year. Various aspects will be emulated in cases of contingency. 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