Clothing business plan Essay
Tired of seeing old things? Fear no more for Fabulousity is here. Fabulousity is offering to jazz up old things such as shirts, jeans, purses, shades and shoes. The company’s primary target markets are female teenagers ages 12 to 17 and its secondary target market are female kids ages 7 to 11. Fabolousity will be applying the brand identification, specialization, and product quality corporate strategies. As for its marketing strategy, the company will focus on product development and market skimming. In order to build brand recognition, sales promotions, advertisements and the company website will all be utilized.
Fabolousity aims to be the preferred name and destination that comes into the customers minds when it comes to designing with rhinestones. The company wants to help people in terms of improving the looks of the existing things they have. That way, they would not have to buy new things because their old things will start feeling as if it is new.
Fabulousity is a joint venture formed by three companies during September 2007. The whole concept was thought of by the owner of Unifield who proposed to tie up with Jingles Marketing and Echo for capitalization. Formally established the following month,
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In order to capture a part of its target market, Fabolousity is relying on its brand identification, specialization, and product quality strategies. The company will seek to build brand recognition through advertising and its sales force. In addition, Fabolousity will focus its marketing efforts on the target customer segment, which are the female teens and kids. The level of the company’s product quality will also serve as a differentiation point.
The company’s objectives are:
Maintain a significant sales growth of 10 % each quarter until the end of the year.
By the end of the year, the company should achieve a 5% less on operational cost.
To create 25% product awareness for the first quarter through events, promotions and advertisements
To maintain a continual increase of 3% in promoting product awareness per succeeding quarter.
Products and Services
Fabulousity is offering to jazz up things such as apparel, shoes, purses, and shades with rhinestones. The company accepts orders for both lettering and design rhinestones. Fabulousity uses a special type of applicator that will stick the rhinestones to the surfaces without making a mess. Due to the strength of its adhesive, even if the things were soaked in water, the rhinestones would not easily tear off. Only top quality rhinestones are used by Fabulousity. These rhinestones cannot be easily found anywhere since they have the special ability of withholding its shine even though the rhinestones were applied for over a year.
Customers will only need to bring their thing of choice and the rest is up to the Fabulousity team. One can choose from pre-made designs or one can also opt to tell the team what design they want. The team will then make sure that proper adjustments be made so that every rhinestone design will surely be unique.
Since this service is solely offered by Fabulousity, the market skimming pricing strategy will be used to maximize profits. Prices will be set high at first but it will slowly be adjusted accordingly to suit market demands. Every object will have a corresponding price based on the size of the design.
Currently, the product is still in its initial stages. So far, some pre-made designs were already conceptualized and the opening of the first pilot store at Governor’s Square Tallahassee is already underway. Further development of the product is expected after four months. By then, focus will shift towards research and development of both the market and the product.
Industry and Market Analysis
So far, there are no industry competitors yet for Fabulousity. However, the threat of new entrants is high because of the low investment needed and also low exit barriers. The good thing is, threat of substitute products is few, and thus Fabulousity can charge a price premium for its services.
According to data, girls spend more on clothes than boys; hence the company’s chosen primary target markets are female teens with ages 12 to 17. They are also the ones who are more fashion conscious and who would like to stand out from the crowd. They have their own allowances which they often spend on clothes. Also, they value their friends’ opinion very much. The secondary market is female kids ages 7 to 11. They love to dress up and also like cute things. They are deemed the secondary market because they rely on their parent’s decision as to what to buy or not.
The main objective is to position Fabulousity as the place where one can jazz up their old things and make it unique through rhinestone application. The product development strategy will be applied by the company. Taking into consideration the present primary market’s need which is to stand out and be unique, Fabulousity will make sure its offerings will continue to cater to this. In addition, the market skimming price policy will be applied. The product is still at its market introduction stage and there are few substitutes for the product. Hence, by adhering to this policy, profits will be maximized.
Sales promotions, advertisements and the company website will serve as the main tools to create brand awareness. Promotion techniques such as “Tell a friend and get a free design” will be undergone. With a minimum purchase, people will be entitled to bring in a friend who will also avail of Fabulousity’s service. As a prize, the person who brought in a friend will be given a free rhinestone design on any thing of his/her choice. As for advertisements, the company will place its ads in magazines for female teens and kids. The company website will also serve as a way to promote Fabulousity. It will be available 24/7 to provide information about the company and its services.
The following are tasks that need to get Fabulousity’s first mall based branch running by February 2008.
Start conceptualizing the theme of the store
December 1, 2007
Finish contract signing will the management of Governor’s Square Mall
December 13, 2007
Accomplish requirements for electricity of the mall space
December 14, 2007
Start construction of the store
December 18, 2007
Buy and bring in store furniture and equipment
January 18, 2007
February 3, 2008
The company will be headed by three executives who are in their early 20s. Fabolousity will be their first business venture. Each of the executives graduated with a different course. One is a graduate of human resources, another of business management, and another of marketing management. In line with this, each will be handling departments under their specialization – human resources, operations, and marketing respectively. Because of their previous experiences in their fields of expertise, the three executives are very able to execute strategies.
The organizational structure is a flat one. This fosters faster communication between the three departments and the structure is as follows:
The chief executive officer will be personally in charge of the operations department and also see to it that the general plan is administered. Both the heads of human resources and marketing will also report to him. The heads of each department will be responsible for the executions of plans of their department. Under the departments will be the sales associates. All three heads will supervise their performance.
Fabulousity’s rhinestones are obtained from third parties whose lines of business revolve in rhinestone selling. A certain number of packs of rhinestones will be delivered to the store every 1st week of the month and when it is time for replenishment, the store personnel will just give the suppliers a call. A small design usually takes an hour to finish, a medium design takes 2 hours, and a large design takes about 3 hours to finish regardless of the object.
The basic metal rhinestones cost $4.00 per pack of one (144 pieces inside) and the company’s margin is dependent on the thing of choice to be jazzed up but roughly the margin could be estimated at 20-30%. The rhinestones are glued to the surface through the use of an applicator. The applicator is very easy to operate and it only takes a short time to be a professional at it. Aside from the applicator, other tools needed are bent tweezers and hooked snips. The tweezers are used to pick up the rhinestones while the hooked snips is for taking out mistakes – they grab the stones with their hooked tips. All the tools are long term investments and are to be replaced only when they break down.
Cost of Sales
Net income Before Tax
Provision for Income Tax (12%)
Net Income After Tax
Possible Exit Strategies
In the event that the venture does not work out, possible exit strategies would be to change to a smaller location, preferably a stall, so as to lessen the rent expense in the mall. That way, all the materials and tools can still be used.
Pirovano, Tom. “Tune Into Teens: Test Your Teen Aptitude.” Retailing Insights AC Nielsen
Fall/Winter 2006: 20-27.
Rhinestones Unlimited. 2006. Rhinestones Unlimited. 29 Nov. 2007
Wenner, Dawn. Designs by Dawn. 21 Nov. 2007. Designs by Dawn. 29 Nov. 2007