General Company Description
‘The Clads’ Company is intended to be an international online clothes and accessories company that is to be started at the beginning of 2017. The company mission will be to be the leading retailer and wholesaler of clothes and accessories in the online arena. To achieve this objective, the company will work towards the achievement of specific goals such as: To built the strongest online clothes brand within the next five years; to create the greatest diversity of dressing accessories in the online market within the next 3 years; to offer the most competitive prices that will attract the greatest number of customers in the world and to be the leading dealer in both adults’ and children’s clothes and accessories from the first year. To achieve these goals, the company objectives will be to attain profit margins of not more than 10 percent of all items on sale in the online stores and to obtain feedback from all customers for better service delivery.
The business is intended to operate grounded on values such as integrity, transparency and value for customer satisfaction. These values are essential in maintaining a strong online presence as well as achieving the trust of customers and to ensure their retention and growth. The company will target the entire worldwide population through its marketing strategies since the products to be marketed by the company cut across all populations. The clothes and accessories industry can be described as a dynamic industry due to the changes in the fashion industry. As such, it will require intensive marketing as well as changing with the times in order to concur with the dynamics of the industry. The fashion industry is also fragmented into normal, low cost and luxury items where the prices impact the sales immensely. It is therefore crucial that the company should advertise while also fragmenting the products depending on the target population. The company intends to take advantage of the fragmented market by taking care of the needs of all market populations.
Since the company intends to operate as a Limited Liability Corporation, it will have several key competencies upon which the business strength w ill lie. For instance, the company, being under the management of more than one individual, will have several sources of initial capital investment. In addition to this, the distinction from other clothes businesses that comes through an online presence will provide an opportunity for the company to grow and to market its products effectively. The two key partners will also bring in exceptional academic and professional experience that will help to achieve the growth objectives of the company. This can only be achieved through incorporation of employees with strong academic backgrounds that will favor the growth of the industry.
Products and Services
The company intends to deal with the retail wholesaler and retail of clothes and accessories. The company will stock children’s, women’s, men’s and youth’s wear across all sizes and types and designs. For the children, both male and female children clothes will be provided. The company intends to provide fashion advisory in addition to the products the company is providing. For the company, the clothes provided will be on an order as well as impromptu purchase basis. Moreover, the company also intends to offer clothing accessories for all genders and across all age. For the females, accessories such as necklaces, bangles, chains, shoes, scarves, belts, earrings and brooches among others. The key accessories for the men on the other hand will be shoes, belts, ties, scarves and cuff links among other items. The children will also have relevant accessories for their use. In addition to providing the products associated with the customer needs, the company also intends to provide services such as directing customers and providing fashion advice to customers in need of the same. Providing the customers with fashion design services will also be an additional mandate for the company. For customers torn between different purchase alternatively, the company intends to offer guidance depending on the occasion during which the desired outfit would be used and the budget of the customer.
The company will achieve great profitability through taking advantage of the opportunities that the company has over other competitors. For instance, the company will be the first online outfit to cater for the needs of all populations in the fashion industry. Since the company intends to offer online services, the location of the products will be of no significant impacts on the purchasing trends. The company intends to maintain affordable prices through the use of limited store space. The store to be used for the company products will be a well lit warehouse whereby the clothes and accessories will be displayed for photo shooting with the intention of online display. For special (luxury) products, the company intends to provide leasing services for the customers too. This will be done at affordable and accessible prices in order to attract more customers. The products will also be marketed together with the general merchandise that the company intends to deal in.
Marketing Plan
Market Research
Achievement in any industry requires intensive marketing. Marketing research has to be carried out in order to be able to place the company at a sustainable position in the fashion industry. Clothes and accessories marketing is a pre-requisite for success in the fashion industry. Marketing research is essential for the company in order to understand the changes in the fashion industry and subsequently get into the know-how of customer demands and requirements. Marketing research for the company will be carried out through finding information on the market conditions, pricing ranges and customer purchase profiles for the company.
Market Research for the company will be carried out through two key procedures. There is the secondary research to be carried out through careful consideration of the available literature on the fashion industry. Industry trends will be realized through such secondary research. Consideration of brochures, demographic information, newspapers and journals will be essential in realizing the trends in the industry. Moreover, secondary information will also be crucial in understanding the labor market since the company will have to employ some laborers to accomplish the company objectives. On the other hand, it will be important for the company to carry out primary market research h through consideration of customer feedback information. Through understanding the needs of the customers as portrayed in the customer feedback information, the company will be able to provide effective customer services for all the customers. The demands of customers in terms of product qualities and types will also be fulfilled through understanding customer demands.
Economics
The fashion industry is characterized by great spending in the present times and is bound to increase in the future. The industry is continuously growing in physical as well as in virtual operations. With over 28 percent of the average national spend in the world today, the fashion industry can be recognized as the most dynamic and strongest industry in the world. The company intends to posses not less than 30 percent of the online market shares in the industry. The industry is continuously growing as a result of the changes in the industry. The growth of Mobile Commerce is one of the factors that are increasingly affecting the fashion industry in a positive way. While the online operations platforms will provide the company with an excellent opportunity for growth, there are various core barriers that will affect the company’s profitability in the future.
For instance, the key challenge that ‘The Clads’ is bound to face is that of brand recognition and brand acceptance. The fashion industry is currently characterized with strong brands which consist of fashion designers as well as several online marketers. It will therefore be crucial for the company to engage in more intensive marketing practices to keep in pace with the already existing companies. In addition to this, the company will also face high marketing and production costs. Being retail and wholesale marketer, the company will be mainly faced with the challenge of obtaining the clothes and accessories at low costs from suppliers. Tariffs and barriers and shipping costs will also be barriers to the company operations. In case of each of these barriers, the company will work with the objective of reducing expenses in order to increase the profit margin at all times. Obtaining bids for low cost shipping and partnering with other companies in shipping will both help to curb the extra shipping costs to be incurred.
Products
The company intends to offer three major product categories. The first category is set to be the luxury products category. This will include products such as special fashion design wears which are provided on order, wedding and special function outfits and all the associated accessories. The market for this product category will be mainly the individuals, groups and entities that are associated with the high end market. These products are associated with high profit margins as their demand increases with increase in the product prices. To better market these products, the company will use exceptional and high end adverts for the company. The intention is to bring on customers who desire value. The company will thus focus on providing value for the customers’ money. The key advantage associated with these products is that the demand is price dependent but does not depend on the changes in the fashion industry. Since the company provides these products on order, there will be no refund policy for the items within this category.
A second category of products that will be sold by the company includes the common use products that do not require prior ordering or exceptional demands. For these products, the demand is influenced by factors such as product prices and the dynamism of the fashion industry. To better sell these products, the company will have to minimize fashion dependent pieces while also marketing intensively to reach a wide market share. Most of the purchases at the company are intended to be from this category hence it is expected that the category will provide the greatest profits to the company. In addition to this, the company will provide products in the low cost category. This category comprises of products obtained for resale purposes from different sources. Products in these two categories will be subject to a 50 percent refund policy dependent on the nature of the customer complaint received. The low price products will only be shipped if bought in bulk since the intended target market will not be able to afford single item shipping in most cases. As such, they are intended to be sold in most cases physically from the company warehouse.
Customers
Based on the company product range, it intends to attract customers across all ages and all preferences. The categorization of the products into different classes will make it easy for the customers also to be categorized. Contrary to the conventional categorization by age, gender and all that, the company’s customers will be categorized by earning capacity. The high level customers are characterized by a high profile and targeted by the luxury products offered by the company. On the other hand, the common use products will target the mid-level earners while the low price products will target those earners who depend on low quality low priced products. The marketing will be done to target customers across the globe since most of the sales will be carried out through online means.
Competition
The key competition that the company will have to contend with in terms of online clothes and accessories marketing are concerned is Amazon. However, Amazon offers a wide range of products while ‘The Clads’ will offer only clothes and accessories allowing to possess greater competitive advantage for customers targeting clothes’ companies. In addition to this, the company will also offer lower costs for their products compared to Amazon. On the other hand, the company is new and will require more intensive marketing to reach out to potential customers while Amazon is an already established enterprise. The company products will be of qualities similar to those offered by Amazon. It is expected that only the clothes division at Amazon will provide competition for the company. The company intends to take in experienced and expert employees to address the challenges faced by the organization, particularly in marketing and distribution of products by the company.
A business niche will be created by the company in the clothes and accessories industry. As other companies such as Amazon are focusing on the online aspect of business, ‘The Clads’ will focus on the clothes aspects of business. This implies that the company desires to create a niche as the most globally recognized clothes and accessories business.
Marketing Strategy
The marketing strategy for the company will be based on various features of marketing. Consideration of the promotional activities, the product prices, the place of operation and the people involved will have to be carried out in order to effectively lay down a strategy for successful marketing.
Product promotion
The company intends to use various promotional strategies to strengthen the presence of the products in the market. The key strategies that have been put in place for the promotion of the company products include the use of media such as print and electronic media platforms. Print media such as fashion magazines and newspapers will be used to display the company clothes and accessories. While using the fashion magazines and newspapers, the company intends to hire the assistance of professional models to display the clothes enticingly. In addition to this, electronic media such as television and radio networks will also come in handy for effective marketing of the company products. Online social media platforms will also be used as marketing platforms for the company products. The initial advertisement posts will be produced and aired prior to the start of the business, approximately one and a half months to the business start up. In this way, the company intends to capture the attention of potential customers before the business picks up. Follow up advertisements will be put up after every two months to refresh the memory of potential clients. While doing this, the company intends to use commercials rather than infomercials since clothes are basic needs and it is presumed that all users know the benefits of using clothes. To make the commercials worthwhile, the objective will be to produce catchy pieces that will stay on the minds of the customers for prolonged periods of time.
Besides the advertisement, the company will also use a bonus and reward point systems to recognize the importance of various customers. Customers will be issued with reward signatures to be used online and cards to be used for customers who walk in to the company’s warehouse on physical purchases. For each of the online customers, a password that uniquely identifies the customer will be created. This password will then be used to identify the customer uniquely and to award points to customers on every purchase. The customers will be notified of a minimum number of points redeemable from the stores for accessories as well as clothing items. This will help to retain more customers as well as to grow the exiting customers towards greater purchase potential.
Promotional Budget
Since the business is just starting, the promotional budget is designed to be not more than 20 percent of the total targeted revenue. This will be significantly high but it is necessary since the company needs to attract more customers in order to stabilize in its operations. This can only be achieved through intensive marketing and promotion of company products.
Product Pricing
The company has competitors that are highly stabilized and who can afford great price reduction. However, it is not advisable for the company to lower the product prices beyond profitability margins. As such, the prices will be set by the company based on the market research h conducted for the different market categories. The prices will be set at margins s lightly below the present competitor rates but within affordability ranges. The chosen pricing strategy is similar to what is used across the fashion industry, especially for startup firms. However, after stabilization, the prices will be reviewed frequently to match the market conditions at the time as well as to be able to satisfy the demands of the customers. Effective advertising coupled with appropriate pricing will affect purchase characteristics positively since most of the clothing industry businesses offer similar products. It is essential that the company sets itself apart from the competition based on price as well as other many factors.
Proposed Location
The business is desired to operate majorly on an online platform. This is because online operations can help a business reach out to many potential customers especially when the customers’ desire service tailored to their needs and are not at liberty to travel. The company will however have a physical store, a warehouse in an upscale urban area where the populations are high and the purchase potential is likely to be high. While choosing the store location, factors such as demographic profile, income distribution, security and ease of transportation will be considered effectively. These factors can affect the operation of the business to a great extent. Furthermore, the location chosen will have to be significant to the company’s image as well as not out of the way for potential customers. The closer it is to a high way the better the location for the business. It is important to note that despite the concentration on online business, the company will also attain a lot of sales, particularly of the low priced apparel from their physical location. Although only a single store will be used in the beginning, it is intended for the store to create more similar branches to cater for many customers across the world.
Distribution Channels
Since the company will be operating on an online basis, it is expected to have various distribution channels to reach customers across the world. The product will be sold by retail, wholesale as well as through direct web order. Through retail, the company intends to sell mostly clothing items and to very few people. It is expected that most of the sales that will come from overseas will be for wholesale purposes. For those who order online, the deliveries will be done by courier initially and later after stabilization, the company may be in a position to use its own cars for the delivery of products. Locally, the company will have a sales team that will tasked with the distribution and marketing of the company products to various areas. Each of the sales team members will be given sales targets to be achieved by the end of stipulated periods of time. Agents and contractors may also be contacted for their services in company marketing and sales practices.
Operational Plan
The operational plan for the company will entail consideration of various factors to ensure that the company operates sustainably and effectively. From aspects such as production, to the design of the store layout to the operational personnel, the company will have to take detailed procedures in planning for the success of the company.
Production
‘The Clads’ is not a manufacturing company but rather a retail and wholesale company for clothes and accessories. However, there is still need for the company to put in place strategies for obtaining the products to be sold. The company will have suppliers of the clothes and accessories. These suppliers will be obtained through a bidding process where the lowest bidder wins the tenders to supply particular clothing items and/ or accessories. The quality of the items supplied will be analyzed through a random sampling and testing technique where the company quality control personnel will pick clothes and other items from the supplied batches and then check them thoroughly for flaws. The company will keep records of all the items obtained from the suppliers as well as those items that have been sold to help in inventory management.
Legal Environment
Although the company has made detailed plans for the business they intend to engage in, it will be important to address some of the legal issues that may affect the operations of the business. For instance, aspects such as work permits, business zoning and requirements for building code, trademarks, patents and copyright as well as insurance will all be part of the legal environment for the operations of the company. The legal environment can affect operations immensely if not under effective management.
Personnel
The company will be requiring the services of skilled employees. Since the company will be operating on a limited physical store capacity initially, it is designed to operate with a minimum of 20 employees at the store. The distribution will be carried out through other companies that provide courier services initially but may change in future. At the company’s store, the employees required will include: store keepers, models, fashion designers and sales and marketing personnel. To acquire this diverse employee base, the company will employ the services of a reputable recruitment company for the hiring and placement of employees. This will be done through online applications, planning for interviews and consideration of academic and practical experience for all the potential employees of the company. An equal opportunity process will be used to ensure only the best employees are picked for particular jobs.
Credit Policy
The company will not be able to provide credit for customers who are purchasing on physical terms. On the other hand, repeat customers may be accorded credit services on condition that they provided a payment plan for the services and products offered to them. For the customers who fail to make timely payments, the company will undertake to send frequent reminders in order to avoid missing the payments.
Management and Organization
The company will be run under the stewardship of a qualified managing director. The managing director has already been identified and brings on board exceptional academic capabilities in business management. With masters in business administration and more than three years experience managing a retail and wholesale business in another industry, it is expected that this individual will be able to perform distinctively in terms of growing the business. To make his operations more sustainable, he will be put in place with various personalities who are considered to be of high standing in the fashion industry. The head of the fashion design team for example has great skill and practical experience in the industry and will be able to bring on new features to fashion that will attract more customers to the company. Other departments in the company will include the sales and marketing department, the business organization department and the procurement departments. Each of these departments will be headed by competent individuals who are expected to work in collaboration with the others in the departments for the achievement of the organizational objectives. A maximum of 10 individuals will be needed to cover the unskilled labor positions and their roles will be to organize the store, cleaning and grounds work among others. This group of employees will be taken frequently on a casual basis.