Gallery of Art in Colorado - Term Paper Example

Business Plan Executive Summary The plan proposed here is for the start of a Gallery of art in Colorado. A detailed plan for the start up of the business has been drawn out based on a thorough analysis of the markets as well as based on a thorough understanding of concepts from different areas like strategy, human resources, finance and also marketing. The plan has used the strategy clock for development of the strategies and the main aspects that have been concentrated on include differentiation and focused differentiation. The target market for this plan includes a wide range of customers who mostly are a wealthy and interested in art. The reliability and validity of the research is based on a primary and secondary research and complete detailed plans of the financials and human resources for the company. Introduction: Galleries and art exhibitions have a wide appeal to all age groups and especially to those in the 35-44 age groups, in the US. Whilst visits to galleries in America increased by 1% in 2003, 2005 saw an estimated 492 million visits to over 2700 galleries in the US. There has been immense growth in terms of the demand for the art work and the markets are growing at a very high rate. There is a major scope for the markets which in turn is the underlying reason for this business as a choice. The aim is enter into the markets and gain a strong foot hold on the markets and build to make high profits. Business Description The business will mainly be held owned by a group of MBA graduates, each specializing in their own field, i.e. operations, finance, human resources, strategy and marketing. The mission statement for the company has been developed to be, “Our mission is to maintain our reputation as an energetic, outgoing and accessible art gallery in Colorado that inspire and interest and sell art work to an increasingly diverse audience and collectors. We focus on both managing a gallery as well as selling branded artwork and products. We aim to acquire, collect and present to our customer the finest works of art available on the market scene in a variety of media and concepts as well as supplying art materials to our customers.” The company’s vision has been drawn out as follows, “Our vision is to expand our business into promoting a strong arts education and arts appreciation for our customers, the general public and educational institutions with interest in art. We aim to develop and integrate our brand into a household name in the art market.” The main objectives of the company have been developed based on a thorough market research and after detailed analysis of the mission and vision of the company. The objectives have been discussed further. Firstly, the company aims at making at least 1000 products within the first two years, and to achieve a turnover of one million for the first year. Also the aim is to increase the sales by 10% for the next two consecutive years and to use a differentiation strategy to gain a strong market share. The company also aims to maintain healthy terms with the Artists working for the company to ensure long term relationships and to also create and sustain an effective and aggressive marketing, which will be the main key to the company’s success. The aim is to achieve a return on investments of 20% and to also develop a fully interactive and real time website to be developed gradually from the basic eCommerce website. Industry and Market Analysis In order to develop a plan which is complete, the company will conduct a thorough market analysis. Here the aim is to use primary research and to visit few galleries based on which decisions can be made for the business and its marketing mix. A few galleries had been chosen and studied, either by directly visiting or using their websites. A few of the galleries researched include, Adagio Art Glass, Art & Soul Gallery, Buffalo Mountain Gallery, Hayden Hayes Gallery, Indigo Gallery, and Smith Klein Gallery. Here gave valuable insights into the information regarding the potential sales per month, operational plan and staffing requirements. Information was also gathered on the different prominent media through which advertising can be easily done to target the potential market segments was sought. Competitive Analysis Since art is unique, there is no accurate index for prices and no transparency. Hence it is very difficult to compare the prices of artworks. Hence we consider new players dealing with young and emerging artists, as our competitors. Companies travel around the country visiting Fine Art departments, degree shows and fairs to find the new talent to sell on their websites. The savings that they make as an online gallery enable them to offer customers work at lower prices than would be the case in a physical gallery space. They categorize their work and customers use search engines to find affordable art they are interested in. The prices vary from 50 to 2200 and most of them are in the range of 350-750 and the average selling price is around 400. Marketing Strategy Our main gallery will be situated in Littleton, Colorado. The main aim is to reach customers who will be mostly working and upper class citizens. The company will hold exhibition at different regions of the country on different days and build-up a database of customers. In terms of our marketing mix, the following have been developed. Our products will be fine contemporary painting in different media and photography. We aim to meet our customers’ need by selling order to buy products. We will offer brilliant artist to reflect the business of the bank by tailoring art to meet customer requirements. E.g. painting for a banking hall will reflect their business hence the new $40 note will be painted by our most brilliant artist to reflect the business of the bank. Also, the price will range from $400- 25000 depending on the media, style, quality and artist. Price for materials e.g. brush, painting, labels, scalpels etc, will be matched comprehensively to competitors price and a lower price fixed will be ascertained. The director with vast knowledge in contemporary art will price the art works. The people involved in the business also form part of the service and play an important role in instilling a positive customer experience. Our website will serve a back up for advertising and marketing and all promotional activities. Customers can order their own style media of paintings. Customized work such as the painting of family events e.g. Weddings, portraits etc to the customers taste will be one of our competitive advantage strategies as compared to our competitors. The Physical Décor of the gallery is also important, and an attempt to meet the taste of elegant and rich people will be made. Here the atmosphere will be developed to meet their needs. Considering the next aspect of the marketing strategies, the promotional mix, it is critical that we communicate what we have to offer to our target audience through the appropriate tools of getting the message across. We aim to promote and advertise as well as market our product via the Art Magazine, which is the biggest selling Art magazine in the country. We will advertise through magazines and art centers. Our logo will flash on their website listing us as a corporate member. This will boost our publicity and enable us to reach a wider variety of audience. We will hold two exhibitions every week, one which will be held in gallery and other in the public space, such as a hotel conference room. Here we will invite our customers and potential buyers. These exhibitions will be made different from normal ones, as we plan to hold events with it such as wine tasting, continental delicatessen, parties and other planned attractions. The use of radio, advertising will form an important aspect of our promotional mix. Local radio stations in Colorado will also be used to promote the gallery. Also we plan to put key hocks at bus stations, on roads, near big shopping malls for initial three months when the gallery is opened. This will bring our gallery into the eyes of our customer. Later on we will be having ads on bus stops, on buses, in cinema hall, and also in opera centers (halls) where most of the art lover public is been expected to visit. This will enable us to connect with our clients and customers on personal levels and know how to quickly find out what matters most to them. Having conducted the market research company (marketing) they will offer us the service of door to door marketing to target our segmented market in Colorado. The use of flyers and leaflets through well known news papers will also give us the opportunity to reach to wide audience for our exhibition and to our gallery. Internet will be our main source of information. We will continuously update our site post paintings and the information about the painters and also the information about the art materials. We will send the e-mails, invitations to our customers for visiting our gallery and exhibitions. Operations: The operations will be based in four main stages. The figure below provides a clear idea of the operations. The customer can seek information from the website, exhibition and also by visiting the art gallery. Our website will have all the information about the exhibitions and the address of our gallery. The exhibition will be other source of information where selected paintings will be displayed in order so that people can know about our work and can visit to our gallery. The total information about the product and price will be updated continuously on the website. Website will also contain the information about the painters who painted the paintings. Also for our exhibitions we will be printing a booklet, which will contain the pictures along with the price of the paintings being displayed during the time of exhibition. The customer can place order on the internet, in exhibitions and in the gallery. The whole system will be integrated as in say if a particular purchase is been made on the internet this will automatically update the system and that particular painting will be shown as sold on internet as well as in exhibition and in gallery. There will be no priority as such for the delivery of the material for the people who buy from internet or from the exhibition. The delivery will be made according to the stock available. The delivery of the paintings, painting sheets will be sent to the customer through courier. The customers who want to purchase paintings with frame will have to come and collect it from the gallery as sending the whole painting frame in very risky and it cannot be insured. Here we assume that for a particular month half of the sales will be cash sales and the remaining sales will be credit sales which will come into our account after 31 days as our clients will have this much time. In case of online sales payment is authorized immediately but the amount is taken from the account only after the delivery. For the delivery we have done a contract with the courier service which will take care of our deliveries. Delivery period will depend upon the quantity and area in which the product is delivered. Our customer will be able to track the delivery status online through our website. A full-fledged website will be developed with the all the eCommerce applications. The website will act as an important access channel to the customers. The primary target market segments are also web savvy people and hence a high performance website with provision for secure online transactions is very crucial for the company’s success. All the information systems will be integrated so that we have a single unified customer and transaction database. The Information system is utilized to perform ‘Customer Profiling’ and ‘Preferencing’. Based on the category and the type of art products bought, and also the customer demographics, the information system can be utilized to create profiles of customers and they can be targeted via personalized marketing. As both the front-end systems are connected to a single Back Office and single Database, all the customer information and the transactional information will be integrated. Hence it will be possible to retrieve the order placed online in the front-end system used at the gallery. Human Resource Requirements The human resource requirement of the company is very limited. The business will need, a secretary and a shop (Gallery) Assistant. The additional resources required for the marketing activities will be hired on a part time basis as per the requirements. As one of the main lines, the gallery sells different kinds of art products such as painting brushes, color pigment, easels, canvas, palettes, etc, with its own brand within 5-6 months of the set up. The additional HR needs for this part will be recruited as required. An additional resource is required to coordinate, to track the orders and to supervise the overall procedure. The job of the coordinator includes, communicating with the exporters, forwarders and customers and also to document the processes. Financials The start up costs and the financials of the company are as follows: Particulars $ Furniture Desk sets (X2) 75   Chairs (X5) 175 Reception Installation 125 Mounting Frames (X3) 400 Electrical Installation 900 IT & Communication 500 Computers - Packages (X 2) 1, 400 Website Hosting & Development 1, 250 Software Licenses 7, 500 Search Engines Registration 750 Telephone & Other Utilities 250     13, 325 Legal   Registration – Company Name 20 Copyright Logo (for 5 years) 30 Embossing Tool 50 Legal Expenses 500     600 Van 750 Total Capital Expenses 14, 675 Initial Painting (X10) 10, 325 Total Set up Costs 25, 000 References Beynon-Davies, P., 2004, e-Business, Palgrave Macmillan, NewYork Ferguson, R. and Hlavinka, K., 2006, ‘Loyalty Trends 2006: Three Evolutionary Trends to transform your Loyalty Strategy’, Journal of Consumer Marketing, Nov 5, 2006, Vol. 23, p292-299 Fisk, R. P., Grove, S. J. and John, J., 2000, Interactive Services Marketing, Houghton Mifflin, Boston Jobber, D., 2004, Principles and Practice of Marketing, 4th edn, McGraw-Hill International, Berkshire Johnson, G., Scholes, K. and Whittington, R., 2006, Exploring Corporate Strategy, 7th edn, Prentice Hall, Essex Sloman, J. and Sutcliffe, M., 2004, Economics for Business, 3rd edn, Prentice Hall, Essex Wood, A., 2003, ‘The Value of Customer and Prospect Databases as a Corporate Asset’, International Journal of Retail & Distribution Management, Nov 12, 2003, Vol. 31, p638-643 Read More