Marketing plan

2.5 Keys to Success

The keys to success is to meet the demand for an upscale women's shoe store with a wide selection and focused customer attention.

• Fashionable designs.
• Fast customer delivery.
• Well-trained employees.
• Selection.

2.6 Critical Issues

Monaco is still in the speculative stages as a retail store. Its critical issues are to continue to take a modest fiscal approach; expand at a reasonable rate, not for the sake of expansion in itself, but because it is fiscally prudent to.

Marketing Strategy

3.0 Marketing Strategy

Part of Monaco’s marketing strategy will be based solely on location. Monaco is located in a trendy mall in the waterfront that receives abundant walk-through traffic with loads of tourists. This location will cost a premium and will not be directly linked to the marketing budget as rent has been categorized under general overhead.

Another form of marketing to be described later in detail will be advertising. The strategy of the marketing campaign is to increase the target customer's awareness of Monaco.

3.1 Mission

Monaco’s mission is to provide Cape Town with an upscale selection of women's shoes and outstanding customer service. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.

3.2 Marketing Objectives

• Increase repeat customers by 7% per quarter.
• Decrease customer acquisition costs by 8% per year.
• Build an effective pull campaign, bringing in new customers at an increased rate of 9% per quarter.

3.3 Financial Objectives

• Experience a double digit growth rate for the first three years.
• Reduce store overhead by 5% each year.
• Reach profitability by the end of year two.

3.4 Target Markets

Monaco is targeting two population segments within the broad category of the fashion conscious female with disposable income.

• Professionals: these are full time working professional women. They typically earn more than $45,000 themselves. They will purchase shoes for the workplace as well as for leisure time. This group is being targeted as they work full time and therefore have the need for many different pairs of shoes for all of their different outfits. They also have the money to spend on shoes and will take advantage of this reality as women typically love to collect lots of shoes.

• Housewives: this segment has plenty of disposable income because of their husbands. These women love shoes, and spend fair amounts of time shopping for shoes and clothing. The household income of this group is R600,000-R1,500,000 generally toward the higher end of this range. This group is attractive because they have the money and the time to shop for shoes. With both money and time, there is no limit to the number of cool shoes that they would like to own.

3.5 Positioning

Monaco will position itself as the premier outlet for women's fashionable shoes, providing Cape Town with the largest selection, rivaling some of the boutiques in Claremont. Monaco will leverage their competitive edge to achieve this desired positioning.

Monaco’s competitive edge is an unmatched selection in Cape Town. This selection will be achieved in two ways. The first is a very specific effort to carry as many styles of shoes as possible. Monaco recognizes that Cape Town  currently does not have a single store that offers a wide selection of decent quality shoes for the fashion conscious woman consumer. The competitive edge is the recognition of this un-served niche and the serving of this demand.

Monaco will be able to offer a large selection through a unique inventory model that stocks a large number of styles with only one size per style. The advantage to this is that for the same amount of money that Monaco invests in overhead, they can offer far more styles.

This model is effective because women will buy shoes based on style. The way a shoe fits is of little consequence if it looks good. For this reason women are willing to order a pair of shoes sight seen but not fitted. Monaco offers two day delivery with an additional expense rush overnight option.

3.6 Strategies

Monaco’s marketing strategy will seek to create customer awareness regarding the products that they offer, develop the customer base, and work toward building customer loyalty and referrals.

The message that Monaco will seek to communicate is that they offer the largest selection of fashionable women's shoes in Cape Town. Women no longer need to travel to Claremont to find nice shoes. The first method that Monaco will use to communicate this is location. Monaco has chosen an upscale, trendy mall that receives a lot of walk through traffic. This generates large amounts of visibility for Monaco.

Another method of communication is advertisements in Cape Town’s daily newspaper. The advertisements will be placed in the weekly fashion section whose readership is primarily women.

The last method of communication will be through a strategic relationship Monaco will develop with one of the upscale women's clothes stores. The two stores will be co-branding their products as clothes and shoes are intuitively linked. Often times, shoes are purchased to go with the new outfit. The strategic alliances will be used to acquaint customers of the trendy clothes stores with Monaco as the customer demographics are quite similar. The alliances will include discounts when both shoes and clothing are purchased as well as display some of each company's products at the other store. These activities are all designed to develop visibility on behalf of the marketing plan.

3.7 Marketing Mix

Monaco marketing mix is comprised of the following approaches to product, pricing, place and promotion

• Price: Monaco pricing is designed to be competitive to the other fashion shoe retailers. Before Monaco can decide on a pricing strategy I will need to take certain factors into consideration such as seasons as some seasons there will be a demand for our shoes such as in summer where you want to wear open shoes, etc.

• Product

        

Introduction

Monaco is introduced to the market by using the different tools of advertising and promotion. People will soon read about or hear about the new shoe store that has opened. There will not be a very high customer base at first, but the more people hear about Monaco they will be interested to come and have a look.

Growth

More people have heard about the store at this stage and recommendations have been made by people who have been at Monaco. This will result in a growth in a customer base and a growth in sales. Other designer shoe stores will soon start with marketing strategies, and competition will increase.

Maturity

My business will reach its peak. Many people would have heard about us, Competition at this stage is high as everybody would be battling to attract customers to make business. I would have to lower my prices to keep my existing customers, but also should approach new customers to find another way of still being a working business.

Decline

Sales decline and this mean that I will need to come up with new ideas and services or modify my existing services as my customers’ needs and expectations change which I have to fulfil.

• Place: All shoes will be distributed to Monaco store front. While this will necessitate a second trip for the customer to come and pick up the shoes, it allows Monaco to offer a much wider selection than any of the competition.

• Promotion: Location, targeted advertising in the newspaper and strategic alliances will serve as the foundation of Monaco advertising and promotion effort.

Newspapers

National Newspapers to use: Die Burger, The Argus

Using Newspapers can be very expensive. If Monaco decide to advertise in a National Sunday Newspaper it will cost more than using a Local small newspaper. By using large newspaper groups Monaco will attract a wider market, but because of the cost and starting out as a new business, we will use national newspapers especially before peak season.

Radio

Using Radio advertising is cheaper than using national television, although an actor might be needed to read the advertisement. Although interviews with myself can be arranged saving on costs as well. Monaco will especially use local radio stations when events will occur at the mall or shop.

Internet

Monaco will create a website for people to visit with detailed information about the shoes. Contact details to be put on a professional manner for people to have a good perception of business. Having an email address will allow me to contact business and organisations by means of electronic mail which is used mainly today for creating awareness.

Other Means:

Monaco can make use of Van Signs on my car, or business cards and leaflets that can be distributed at different business and households throughout the province.

 

To attract customers and keep them Monaco will be making use of AIDA. (Attention, Interest, Desire and Action)

Attention

Monaco will start off with a launch. It is very important to invite potential customers instead of friends. At the launch that should include good food, good wine, good music and a great atmosphere give the guests something to remember us by. This can be something stylish or something idiotic. This gesture should still be spoken of and be communicated to potential customers.

Interest

Monaco will on a regular basis organise an event. This doesn’t have to be big.

Desire

Monaco will make use of many photos everywhere. Photos of a woman wearing the designer shoes. By doing this we will create desire , because it looks good and then people want it which will create a need for it.

Action.

Buy one get one free should not only be used in a bar. Monaco will offer, buy one get one free to its customers at a certain time of the year. Costumers that buy our shoes can and will tell their friends where they bought it, and so more costumers will come to Monaco

3.8 Marketing Research

During the initial phases of the marketing plan development, several focus groups were carried out to help gain insight into the most prized customer and some of their decision-making processes as they relate to shoe purchases. The information collected from the focus groups has been extremely helpful to Monaco and help justify the business model.

An additional source of market research is a comprehensive survey that has been distributed to an upscale women's clothing retailer's customers. A mathematics graduate student was used in the development of the survey ensuring the survey was statistically significant and relevant. The survey was also quite insightful into the mind of a prospective customer.

Financials

4.0 Financials

This section will offer a financial overview of Monaco as it relates to the marketing activities. Monaco will address break-even analysis, sales forecasts, expense forecasts, and how those link to the market strategy.

4.1 Break-even Analysis

The break-even analysis indicates that R155,000 will be needed to reach the break-even point.

Break-even Analysis



Break-even Analysis

4.2 Sales Forecast

The first month will be used to set up the store front. Employees will be hired and inventory will be purchased. There will be no sales activity during the first month. The second month will begin to see sales activity and it is forecasted that around month four sales will really begin to pick up. The reason for this is that word will get out about Monaco and more and more people will be coming in to check out the extensive selection.

Sales Monthly



Sales Forecast

4.3 Expense Forecast

The marketing expenses will be higher relative to other months during the first four months when Monaco is trying to generate interest in the new store. The expenses will also spike toward the end of the year during the winter holiday season.

Monthly Expense Budget

Financial Projections

5.0 Controls

The purpose of Monaco’s marketing plan is to serve as a guide for the organization. The following areas will be monitored to gauge performance:

• Revenue: monthly and annual.
• Expenses: monthly and annual.
• Repeat business.
• Customer satisfaction.

5.1 Implementation

The following milestones identify the key marketing programs. It is important to accomplish each one on time and on budget.

5.2 Marketing Organization

Holly Heels is responsible for the marketing effort. Holly will outsource the creative services.

5.3 Contingency Planning

Difficulties and risks:

• Problems reaching the break-even point due to lack-luster sales.
• A break down in the just in time (JIT) business model.
• Consumers who are unwilling to wait a day or two to get their shoes.

Worst cast risks may include:

• Determining that the business cannot support itself on an ongoing basis.
• Having to liquidate equipment/inventory to cover liabilities.

2.        Identify and assess techniques for developing products.

Attribute listing:  Using this technique, the important attributes of an existing product are listed.  Thereafter consideration is given to the possible modification of each attribute, with the aim of ending up with an improved product.  The classic example in this regard is the screwdriver.  By subjecting the ordinary screwdriver and its attributes to such question as:  Can it be enlarged?  Can it be made smaller?  Can electrical power be added to it?  Can different heads be attached to it?  By addressing these attribute-related questions, ideas emerged that result in developing the electric power-driven screwdriver with different sizes and shapes of shanks.

Forced relationships:  this technique focuses on different objects that are used in the same environment.  The food processor resulted after various kitchen utensils such as those for cutting, shredding, mincing, and mixing were combined into one appliance.

Brainstorming:  The goal of brainstorming is to get a group of people to think of unlimited ways to vary a product or solve a problem.  Group members avoid criticism of a proposed idea, no matter how ridiculous it may seem.  Objective evaluation is postponed at first.  The sheer quantity of ideas is what matters initially.

Focus groups:  An objective of focus group interviews is to stimulate insightful comments through group interaction.  Focus groups usually comprise 7 to 10 people.  Sometimes, consumer focus groups generate excellent new product ideas.  In the industrial market, machine tools, keyboard designs, and aircraft interiors have evolved from focus groups’ suggestions.

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3. Appraise the processes and techniques used for auditing the marketing environment.

 ansoff matrix

•  (existing markets, existing products): Market penetration occurs when a company enters/penetrates a market with current products. The best way to achieve this is by gaining competitors' customers (part of their market share). Other ways include attracting non-users of your product or convincing current clients to use more of your product/service, with advertising or other promotions. Market penetration is the least risky way for a company to grow.

•  (existing markets, new products): A firm with a market for its current products might embark on a strategy of developing other products catering to the same market (although these new products need not be new to the market; the point is that the product is new to the company). For example,  is always within the fast-food industry, but frequently markets new burgers. Frequently, when a firm creates new products, it can gain new customers for these products. Hence, new product development can be a crucial business development strategy for firms to stay competitive.
•  (new markets, existing products): An established product in the marketplace can be tweaked or targeted to a different customer segment, as a strategy to earn more revenue for the firm. For example,  was first marketed for sick children and then rebranded to target athletes. This is a good example of developing a new market for an existing product. Again, the market need not be new in itself, the point is that the market is new to the company.
•  (new markets, new products): Virgin Cola, Virgin Megastores, Virgin Airlines, Virgin Telecommunications are examples of new products created by the , to leverage the Virgin brand. This resulted in the company entering new markets where it had no presence before.

BCG Matrix

•  are units with high market share in a slow-growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a "mature" market, and every corporation would be thrilled to own as many as possible. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.
• Dogs, or more charitably called pets, are units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the business's market share. Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units, from an accounting point of view such a unit is worthless, not generating cash for the company. They depress a profitable company's  ratio, used by many investors to judge how well a company is being managed. Dogs, it is thought, should be sold off.
• Question marks (also known as problem child) are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption. A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.
• Stars are units with a high market share in a fast-growing industry. The hope is that stars become the next cash cows. Sustaining the business unit's market leadership may require extra cash, but this is worthwhile if that's what it takes for the unit to remain a leader. When growth slows, stars become cash cows if they have been able to maintain their category leadership, or they move from brief stardom to dogdom

4.        Specify measures to monitor and review marketing performance.

Benchmarking:

Benchmarking is important because it encourages management to focus externally on the customer and the competition.  It destroys complacency and creates a sense of urgency.  It should get everyone in an organisation involved and committed to a series of specific action targets providing for continuing improvement.

The benchmarking process involves seven steps:

1. Determine which functions to benchmark.

Examples would be inventory turnover or customer service

2. Identify the key performance variables to measure.

To measure customer service, for instance, an organisation my chose to measure order delivery time.

3. Identify the ‘best-in-class’ organizations.

Benchmarking should not be aimed solely at direct product competitors.  In fact, it could be a mistake to do so, since they may have practices that are less then desirable.  It should be directed at those organizations and business functions within organizations that are recognized as the best or as industry leaders.

4. Measure the performance of the ‘best-in-class’ organizations.
5. Measure the organization’s own performance.
6. Specify programmes and actions to close the gap.

Based on the findings of the previous steps, decide what steps should be taken to eliminate the gap.

7. Implement and monitor the results.

Target dates and regular feedback are important steps in the process to ensure that the process works effectively.

The Balanced scorecard

Financial:  How do our shareholders view us?

Customers:  How do our customers see us?

Internal business processes:  What must we excel at?

Innovation and learning:  Can we improve what we do?

        

5.        Investigate two different organizations’ responses to ethics in marketing.

IT and Security

Many of the ethical issues that face IT professionals involve privacy. For example:

• Should you read the private e-mail of your network users just “because you can?” Is it okay to read employees’ e-mail as a security measure, to ensure that sensitive company information isn’t being disclosed? Is it okay to read employees’ e-mail to ensure that company rules (for instance, against personal use of the e-mail system) aren’t being violated? If you do read employees’ e-mail, should you disclose that policy to them? Before or after the fact?
• Is it okay to monitor the Web sites visited by your network users? Should you routinely keep logs of visited sites? Is it negligent to not monitor such Internet usage, to prevent the possibility of pornography in the workplace that could create a hostile work environment?

Remember that we’re not talking about legal questions here. A company may very well have the legal right to monitor everything an employee does with its computer equipment. We’re talking about the ethical aspects of having the ability to do so.

As a network administrator or security professional, you have rights and privileges that allow you to access most of the data on the systems on your network. You may even be able to access encrypted data if you have access to the recovery agent account. What you do with those abilities depend in part on your particular job duties (for example, if monitoring employee mail is a part of your official job description) and in part on your personal ethical beliefs about these issues.

The slippery slope

A common concept in any ethics discussion is the “slippery slope.” This pertains to the ease with which a person can go from doing something that doesn’t really seem unethical (such as scanning employees’ e-mail “just for fun”) to doing things that are increasingly unethical (such as making little changes in their mail messages or diverting messages to the wrong recipient).

In looking at the list of privacy issues above, it’s easy to justify each of the actions described. But it’s also easy to see how each of those actions could “morph” into much less justifiable actions. For example, the information you gained from reading someone’s e-mail could be used to embarrass that person, to gain a political advantage within the company, to get him/her disciplined or fired, or even for blackmail.

The slippery slope concept can also go beyond using your IT skills. If it’s okay to read other employees’ e-mail, is it also okay to go through their desk drawers when they aren’t there? To open their briefcases or purses?

Real world ethical dilemmas

What if your perusal of random documents reveals company trade secrets? What if you later leave the company and go to work for a competitor? Is it wrong to use that knowledge in your new job? Would it be “more wrong” if you printed out those documents and took them with you, than if you just relied on your memory?

What if the documents you read showed that the company was violating government regulations or laws? Do you have a moral obligation to turn them in, or are you ethically bound to respect your employer’s privacy? Would it make a difference if you signed a non-disclosure agreement when you accepted the job?

IT and security consultants who do work for multiple companies have even more ethical issues to deal with. If you learn things about one of your clients that might affect your other client(s), where does your loyalty lie?

Then there are money issues. The proliferation of network attacks, hacks, viruses, and other threats to their IT infrastructures have caused many companies to “be afraid, be very afraid.” As a security consultant, it may be very easy to play on that fear to convince companies to spend far more money than they really need to. Is it wrong for you to charge hundreds or even thousands of dollars per hour for your services, or is it a case of “whatever the market will bear?” Is it wrong for you to mark up the equipment and software that you get for the customer when you pass the cost through? What about kickbacks from equipment manufacturers? Is it wrong to accept “commissions” from them for convincing your clients to go with their products? Or what if the connection is more subtle? Is it wrong to steer your clients toward the products of companies in which you hold stock?

Another ethical issue involves promising more than you can deliver, or manipulating data to obtain higher fees. You can install technologies and configure settings to make a client’s network more secure, but you can never make it completely secure. Is it wrong to talk a client into replacing their current firewalls with those of a different manufacturer, or switching to an open source operating system – which changes, coincidentally, will result in many more billable hours for you – on the premise that this is the answer to their security problems?

Here’s another scenario: what if a client asks you to save money by cutting out some of the security measures that you recommended, yet your analysis of the client’s security needs show that sensitive information will be at risk if you do so? You try to explain this to the client, but he/she is adamant. Should you go ahead and configure the network in a less secure manner? Should you “eat” the cost and install the extra security measures at no cost to the client? Should you refuse to do the job? Would it make a difference if the client’s business were in a regulated industry, and implementing the lower security standards would constitute a violation of HIPAA, GLB, SOX or other laws?

Nestlé milk drink

Nestle USA has responded to recent controversy over the damage done to children's health by soft drinks by promoting vending of its Nesquik drink in schools.

The program provides campuses with the Nesquik ready-to-drink brand flavored milk, said to contain 40 per cent of the Recommended Daily Value of calcium in an eight-ounce serving. Nestle is hoping to market the product as a healthier alternative to 'nutrient-poor' soft drinks.

Nesquik vending machines are branded with the recognizable Nesquik Bunny. Nesquik flavors include Chocolate, Strawberry, Fat Free Chocolate, Buncha Banana, and the new Double Chocolate and Very Vanilla.

L.A. Unified - the US' second largest school district - recently banned the sale of soft drinks in all of its 677 schools, effective from January 2004. The schools will only be able to offer water, milk and beverages that contain at least 50 per cent juice and no added sweeteners.

"Nearly eight out of 10 teenagers do not get the calcium they need," said Andy Hill, marketing manager for Nestle Nesquik RTD. "There's a need for more nutritional beverages in schools. Nesquik meets this demand without compromising taste or nutrition."

The company cites a recent  by the University of Vermont (July 2002) which found that children who drink flavored milk consume more calcium, drink fewer nutrient-poor soft drinks, and tend to have a lower intake of sugars or total fat in their overall diet.

The Nesquik vending program has been launched in other locations, including business and industry, and entertainment facilities like sports arenas and amusement parks.

Nestle USA is part of the world's largest food company, Switzerland's Nestle, which had annual sales of $11.6 billion in 2002

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6.        Identify ethical issues in marketing.

Price fixing is an agreement between business competitors to sell the same  or service at the same price. In general, it is an agreement intended to ultimately push the price of a product as high as possible, leading to  for all the sellers. Price-fixing can also involve any agreement to fix, peg, discount or stabilize prices. The principal feature is any agreement on price, whether expressed or implied. For the buyer, meanwhile, the practice results in a phenomenon similar to .

Price discrimination exists when sales of identical  or  are transacted at different  from the same provider. In a theoretical market with , no  or prohibition on secondary exchange (or re-selling) to prevent , price discrimination can only be a feature of  and oligopoly , where  can be exercised. Otherwise, the moment the seller tries to sell the same good at different prices, the buyer at the lower price can arbitrage by selling to the consumer buying at the higher price but with a tiny discount. However, market frictions in  such as the airlines and even in fully competitive retail or industrial markets allow for a limited degree of differential pricing to different consumers. Price discrimination also occurs when it costs more to supply one customer than it does another, and yet the supplier charges both the same price.

Sex in advertising is the use of sexual or erotic imagery (also called "sex appeal") in  to draw interest to a particular , for purpose of . A feature of sex in advertising is that the imagery used, such as that of a pretty woman, typically has no connection to the product being advertised. The purpose of the imagery is to attract attention of the potential customer or user. The type of imagery that may be used is very broad, and would include , , and , even if it is often only suggestively sexual.

False advertising or deceptive advertising is the use of false or misleading statements in . As advertising has the potential to persuade people into commercial transactions that they might otherwise avoid, many governments around the world use regulations to control false, deceptive or misleading advertising. Truth in labeling refers to essentially the same concept, that customers have the  what they are buying, and that all necessary information should be on the .

Product placement, or embedded marketing, is a form of advertisement, where branded goods or services are placed in a context usually devoid of ads, such as movies, the story line of television shows, or news programs. The product placement is often not disclosed at the time that the good or service is featured. Product placement became common in the 1980s

Ambush marketing is a marketing campaign that takes place around an event but does not involve payment of a sponsorship fee to the event. For most events of any significance, one  will pay to become the exclusive and official  of the event in a particular category or categories, and this exclusivity creates a problem for one or more other brands. Those other brands then find ways to promote themselves in connection with the same event, without paying the sponsorship fee and without breaking any laws.

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7.        Describe the implications of ethical issues on the marketing mix for an organization.

Product: 

• Labeling information – You market toys through large department stores.  Your brand has a good reputation as Australian-make, sage, high-quality products for children.  Following pressure on prices exerted by the buyers of the department stores you have decided to import the components of the toys and assemble them here, adding some locally made parts.  You don’t want to harm you brand image by labeling the toys as imported.  One of the parts being made locally has ‘Made in Australia’ stamped on it.

• Product testing – Your pharmaceutical firm is developing a new cancer treatment drug.  Extensive tests are being performed on laboratory rats.  Some of the rats die during the tests.

Place:

• Product placement – You pay a substantial fee to have your new-release model car used by the hero in a soon-to-be-released movie.  In the film, the car is shown driving at speeds that are not safely achievable by normal motorists.

Price:

• Price fixing – is an agreement between business competitors to sell the same  or service at the same price. In general, it is an agreement intended to ultimately push the price of a product as high as possible, leading to  for all the sellers. Price-fixing can also involve any agreement to fix, peg, discount or stabilize prices. The principal feature is any agreement on price, whether expressed or implied. For the buyer, meanwhile, the practice results in a phenomenon similar to .

• Deceptive pricing – Your supermarket chain is engaged in a price war with a competitive chain.  You run a newspaper advertisement showing the comparative prices on similar lines in you stores and your competitor’s; the total cost of the basket of products is significantly lower on your list.  ‘We save you money!’ is the headline for the advertisement.

Promotion:

• Advertising to children – You are launching a range of ‘hero’ toys aimed at 5- to 7- year-olds.  The toys are small and static, but by using lighting and animation techniques in the TV ad the toys appear larger and more involving.  You are concerned about the ad, but your lawyers clear it, saying that they could mount a persuasive case that it is just within the regulations for advertising to children.

• Sex in advertising - You market men’s footwear.  Your key target market is men aged 18 to 24, of low to middle socioeconomic status.  Your recent outdoor ad campaign shows attractive, large-breasted women posed provocatively with young men wearing your boots and shoes.  The ads say nothing about the footwear.  Post-testing of the ads show that they are creating excellent brand awareness.