Becoming a Leading Provider of High-Quality Apparels - Example

Name: Course: Institution: Tutor: BUSINESS PLAN FOR THYAB 1.0 MISSION STATEMENT To offer consistent, affordable and reliable high quality fashion clothes which appeal to both low and medium income earners. We will achieve this by developing and establishing strategic relationships with our customers 1.1 Goals i. To deliver services and products on time, at the right price for the right quality to all our customers; ii. To provide a high profit margin for the business, and become cash positive, thereby providing a good return on investment; iii. To be market leaders within this industry by building a reputation of reliability and good workmanship with an emphasis on detail; iv. To maintain standard of performance, customer service and professionalism within the clothing retail industry. v. To enable potential and existing customers to identify with our slogan 1.2 Business Vision 2 Year Vision Thyab’s two-year vision is to become a leading provider of high-quality apparels in Melbourne and adjacent cities. 5 Year Vision Thyab’s five year vision is to be the best clothes retailer in Australia- in the eyes of its customers, suppliers and the community in general. 2.0 CORE BUSINESS CONCEPT Thyab is an upcoming clothes retail store. The company stocks high quality fashion materials which are sourced from local suppliers and foreign companies. Our marketing objective is to guarantee that every customer’s objective is met at the highest quality level. This will be accomplished through an innovative marketing plan that will remove the time consuming and costly trips made by customers to clothes stores. At Thyab, we understand that no two businesses can be exactly alike and therefore no single solution can be a perfect fit for every customer need. That is why Thyab strives to offer customized, high quality clothes that match customer needs. 2.1 Secondary Business Concept Our primary source of revenue is the sale of fashion clothes. To diversify the source of revenue, Thyab will sell movie tickets in Melbourne. Sale of tickets is not only a good source of revenue for Thyab but is also a marketing strategy for Thyab’s unique clothes’ products. 2.2 Future Business Concept: 2012 and Beyond Thyab’s long term vision is to grow into a world class clothes retailer. To this end, the company has plans to expand its business presence in Melbourne during the first five years by opening up new branches. Afterwards, the company intends to spread to other cities in Australia. Although expansion to other cities will take a considerably longer period of time, the company will take measures to ensure that the expansion is not impeded by financial constraints. 3.0 KEY SUCCESS FACTORS There are many factors that will contribute to Thyab’s success in the long term and short term. Key among these factors is aggressive marketing and innovation. To cope with the stiff competition in the clothes retail industry in Australia, Thyab will adopt modern marketing models. In this respect, the company’s marketing team will target specific market targets and offer customized products to each group. Through aggressive marketing, the company aims to explore the weaknesses and strengths of its competitors. The other factor, innovation, will enable the company survive and grow in the ever changing clothes market. Through this success factor, the company will systematically innovate and deliver new products to the market. 4.0 KEY BUSINESS OBJECTIVES & ASSOCIATED STRATEGIES Objective Strategies To provide the best services to customers amongst all our competitors. The company will achieve this objective by developing products, services and deals which will attract and retain customers in long-term relationships. To offer low-priced products among all clothes retailers in Melbourne. The objective will entail among other things price reduction, maximum volume, efficient distribution and thin margins. The strategy will also involve decisions about cost reduction to make the services more competitive in the market. To increase sales volume and customer base during each month. This will enable the company achieve strong revenue growth and build on key competencies by exploring market needs. 5.0 S.W.O.T. ANALYSIS SWOT Strategies INTERNAL Strengths i. Unique low-priced products. ii. Direct sale to customers, thus saving time and distribution costs. iii. Strong financial position iv. Strategic alliance with leading suppliers. i. Use capabilities and market share to entice low cost producers to become partners. ii. Expand geographic scope of market to improve customer size. INTERNAL Weaknesses Strategies i. The business is newly established and is run by one person hence no economies of scale. ii. . iii. Not diversified. iv. Weak management team i. Hire an agent and a skilled staff to manage the business. ii. Hire and train new staff to produce expertise. EXTERNAL Opportunities Strategies i. Lucrative and growing market for clothes wear. ii. Potential to hire skilled staff to handle various functions such as production, marketing and accounting instead of relying on family labor. iii. Potential to open up more distribution options such as selling to non-bridal retailers, online marketing and through bridal shows. i. Use market share and reputation to keep low cost competition away from end-user customer base. ii. Use strategic partnerships to reduce impact of low cost competition and threat from retail competitors. EXTERNAL Threats Strategies i. Stiff competition from departmental stores, specialty chain stores and supermarket retailers. ii. The threat of new market entrants is very high due to low start-up costs. i. Use strategic partnerships to reduce impact of low cost competition and threat from retail competitors. 6.0 MARKETING PLAN 6.1 Marketing Plan Objectives i. To give the business focussed marketing direction. i. To increase customers’ lifetime value. ii. Increase the average number of products purchased in each sale. iii. To increase the frequency that a loyal customer shops iv. Increase the number of new customers v. Increase customer satisfaction vi. Increase new customers from referral and word of mouth 6.1.1 Marketing Plan Goals: The goals of the marketing plan are to: i. Identify the company’s customer base and market segmentation; ii. Find objective industry information regarding trends and growth; iii. Identify the company’s competitors and their strength and weaknesses; iv. Determine if there is a market for our products and services; v. Identify company’s sustainable competitive advantage vi. Identify new marketing channels to find new windows of opportunity; vii. Identify promotional methods to reach different market segments. viii. Establish a promotional/marketing budget ix. Maintain/improve professional image with associated brand (logo) exposure to capture other key markets and customers 6.2 Industry Information Australia is one of the countries in the world with the highest clothes acquisition rates. Since 2000, the Australian clothes retail market has exceeded projected growth expectations to become one of the fastest growing industries in the country. Current projections indicate that the Australian clothes retail industry is likely to grow profitably in the next few years (ABS, 2006). Future trends in the industry will include special bridal wear, cocktail dresses and cuffs. Other trends that will be witnessed include fashion clothes with ethnic and exotic feel. Innovations in geometric designs will be a driving factor that will help incorporate various design models to keep pace with changes in market trends. Electronic commerce has of late become an important force in the Australian clothes retail industry. Researches indicate that about 15% of Australians prefer making their purchases online because this option gives them the opportunity to compare prices easily. 6.3 Market Research To understand market characteristics, the company will conduct an extensive market research. Market research will help identify opportunities to better serve various target market groups. In addition, market research will help the company investigate the level of competition in the market and clarify its unique value preposition. This way, the company will be able to determine the best methods for meeting the diverse needs of the target market. 6.4 Customer Profile Our target market will be: Table 2: Target Customer Profile Description 6.5 Customer Buying Motives i. Leading brand value and a strong brand portfolio. ii. High fashion low priced products. iii. Wide assortment of unique clothes products. iv. Recommendation from friends and relatives. 6.6 Market Size Melbourne has a population of about 4 million people of which Thyab targets about 100000. Thyab’s primary market will consist of high quality clothes shoppers and will cut across all sex groups and age group. To reach out to expected customer base, the company will engage a number of advisement and marketing strategies including internet adverts and adverts on print and electronic media. These adverts will increase the company’s popularity among potential consumers by creating awareness about the company’s latest brands. For quick market penetration, Thyab will strategically open multiple retail stores throughout Melbourne. The stores will stock unique products and will be coordinated with each other for faster information flow. 6.6 Growth Potential Generally, the Australian clothes industry is upward growth oriented. For the last ten years, the industry has grown tremendously save for the 2008 global economic crisis during which clothes purchases declined. However, the industry has since then recovered and it is expected to show upward trends for the coming years (ABS, 2006). There are specific factors that will contribute to the company’s upward growth in the coming years. One of these factors is reduction of tax on imported materials. Reduction of import taxes has made it easier for clothes products to be sold at cheap prices. Thyab will capitalize on this incentive to offer low priced products so as to enhance rapid market penetration and high profitability. Another important factor that will ensure upward growth in the clothes retail industry is political stability. In addition, the stability of Australia’s currency against major foreign currencies is a crucial factor for the growth of the clothes industry. 6.6 Competition In 2010, there were 10, 600 clothing retail establishments in Australia. These establishments were distributed across the country according to population densities. These means that majority of these establishments were concentrated in the densely populated cities of Melbourne, Sydney, Perth and Brisbane (ABS, 2006). Generally, the structure of Australia’s garment retail industry is reflective of the country’s historical development. Under the industry protection policies of the pre-1990s, the clothing retail market was dominated by large firms that controlled access to import quotas. However, with the abolition of quotas in 1993, retailers re-energized theirs supply chains by jettisonising relationships with local manufacturers. In line with international trends, Australian retailers have significantly increased their investment in customer loyalty and brand identity. Today, Australia’s clothing retail market is dominated by four important players: departmental stores; specialty chains; boutiques and small retailers. Specialty chain stores and boutiques hold about 40% market share while department stores hold 35% market share in Australia’s clothing retail market. The reminder of the market share is dominated by supermarkets, lifestyles stores and other retail stores. Departmental stores represent a significant portion of sales in the clothes market. Australia’s departmental store sector is dominated by two important firms: David Jones and Myer. The two are national firms that operate in mainstream markets but they also compete in discount sector. Other major competitors in the sector include Kmart and Target, both of which operate within the Coles group of companies. The specialty clothing retail sector is composed of national retail stores and small regional chain stores as well as highly specialized niche chains. The most prominent of these are: the Just Group; Specialty Fashion Group; Retail Holdings; Country Road; Noni B and Colorado Group. The six account for a remarkable proportion of the total specialty store sales. 6.6.1 Competitor’s Strengths and Weaknesses Analysis Competitor Main Area of Threat Strengths Weaknesses Department stores Distribution Large and well developed distribution network. Highly specialized sales and marketing team. Lack of specialty offerings. Only located in large cities Specialty Chains stores Financial strengths Well integrated supply chain networks. Financially stable. Stiff inter-sector competition Expensive products Supermarkets Customer base Extensive market penetration Huge customer base Expensive products Do not stock unique and custom tailored products Table 6: List of One Tribe’s Competitor’s and their Strengths and Weaknesses 6.6.2 Sustainable Competitive Advantage Thyab offers unique fashion clothes that appeal to a great market base including children and adults. While most of the company’s products are imported from several foreign countries, they are specially selected to match the ever changing needs of the local Australian needs. Moreover, Thyab’s products are sold at subsidized prices. This marketing strategy ensures that even the low income earners can enjoy our products. Thyab intends to establish a country-wide presence within five years of its market entry. This will be made possible through aggressive market campaigns. 6.7 Marketing Strategies The marketing strategy is based on the traditional 4-P’s 1. Product 2. Pricing 3. Promotion 4. Placement (Distribution 5. 6.7.1 Service/Product Mix Service/Product Mix Type Features 1. Children’s clothes 2. Women’s clothes 3. Men’s’ clothes i. High quality and durable ii. Fashionable and trendy. iii. High quality casual and official and casual wears. Table 6: List of Service/Product mix and associated features 6.7.2 Pricing Thyab’s pricing strategy will be based on the following factors: i. Market value (what customers are prepared to pay). ii. Competitors pricing. iii. Niche market price (higher end of market). Generally, Thyab’s products will be priced lower than what the market offers on average. 6.7.3 Distribution/Placement Distribution channels will be established through Melbourne to facilitate quick sourcing and delivery of products to the market. Direct and retail selling will be the main distribution channels that will be utilized most. 6.8 Advertising & Promotional Plan 6.8.1 Promotional Objective Promotion will be the main tool that will be used to raise customer awareness and brand loyalty. It is through product promotion that Thyab will outperform its competitors in the long run. 6.8.2 Promotional Strategy Promotion will be through adverts in print and electronic media. The company will also consider word of mouth recommendations as an important promotional strategy. 6.8.3 Advertising, public relations and promotions. The promotional strategy will be in four phases: 1. Initial Phase: During the initial phase, the company will concentrate more on direct sales and word of mouth recommendation. 2. Start-up Phase: In the start up phase, the company will use print and electronic media to reach selected target markets. At this phase, the company will also introduce internet promotion. 3. Growth Phase: During this phase, the company will rely more on its developed distribution network and strategic relationships with suppliers and distributors to penetrate large market segments. 4. Mature Phase: At the mature phase, the company will concentrate more on maintaining its competitive advantages. As such, the company will seek to consolidate its market and distribution channels through sustained adverts. 6.9 Total Promotional Budget Thyab intends to spend AU$ 10000 in promotion and related activities during the first year. This amount may, however, vary depending on particular circumstances under which different promotional strategies are conducted. 6.10 Marketing Image Thyab’s marketing image will encompass both a clearly identifiable logo and unique employee uniforms and standard dress which identify the company’s business. 6.10.1 Image Strategy To make our marketing image known to a larger cross section of potential customers, the company will develop a strategic market logo and monitor its performance. Image standards will be set so that customers do not confuse them with competing images. 6.11 Internet Website Given that e-commerce is becoming a norm, in the modern world of business, Thyab will establish an online presence via the internet. The company will develop its own website through which it will advertise its products to customers. Moreover, the company will also promote its products through social sites and blogs. 6.12 Sales Mix/Customer Estimate Table From market research we can determine: Customer Purchase Estimate per visit Product type Unit price1 (AU$) Unit price2 (AU$) Children’s’ clothing 35 50 Men’s clothing 100 120 Women’s clothing 95 105 Reference Australian Bureau of Statistics 2006. Household Expenditure Survey, 2004–05,” ABS Cat. No. 6535.0. Australian Bureau of Statistics, Ausstats. Read More