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Executive Summary Gaian Adventure Fabric and Notions is a brick and mortar and an e-commerce company based out of Eugene, Ore. As the name implies, Gaian sells outdoor fabrics and assorted notions to assist anyone in completing an outdoor project. Gaian's Internet selection will be large. Additionally, Gaian will take special care in developing a very easy to use, engaging website. Having an easily navigated, simple to use, website is key for transforming lookers into customers. The entire Web inventory will be available at the brick and mortar store located in Eugene. While the majority of business will be from the website, the brick and mortar store will provide a nice source of revenue as well. Through seasoned management and a professionally developed website, Gaian Adventure Fabric and Notions will rapidly gain market share. Situation Analysis Gaian Adventure Fabric and Notions is a start-up company. Marketing is critical to success and future profitability. The store offers a wide variety of outdoor fabrics and notions to both the Eugene area as well as globally through their website. The basic market need is a comprehensive source for all materials associated with construction of outdoor products and clothing. Market Summary Gaian possesses information about the market and knows a great deal about the common attributes of our most prized and loyal customers. Gaian will leverage this information to better understand who is served, their specific needs, and how Gaian can better communicate with them. Market Analysis 20012002200320042005 Potential CustomersGrowth CAGRWalk-ins9%3,6543,9834,3414,7325,1589.00%Internet individuals12%26,54529,73033,29837,29441,76912.00%Internet company customers8%1,2451,3451,4531,5691,6958.02%Total11.51%31,44435,05839,09243,59548,62211.51% Market Needs Gaian is providing its customers with a wide selection of outdoor fabrics, notions, and accessories. Gaian seeks to fulfill the following benefits that are important to their customers. Selection: Gaian will have the largest selection on the Internet. Accessibility: Gaian has the ability to ship to any national or international address. Customer service: The customer will be impressed with the level of attention that they receive. Competitive pricing: All products will be competitively priced relative to the competitors. Market Trends The market trend for this industry is for increased selection. This trend is fueled by the Internet and ability for anyone anywhere to access an online catalog and order from anywhere at anytime. Before the Internet there were several different mail order companies that would ship nationally, but their selection was somewhat limited. Since the Internet a few new companies have popped up, however the established mail order houses have not flocked enthusiastically to the Internet for unknown reasons. So while the trend is to embrace the Internet due to its enormous reach and efficiencies, the established competitors have not embraced the WWW. Market Growth In 1999, the outdoor fabric and notions retail industry reached $24 million in sales. The industry is expected to grow at 5% for the next several years. This growth is in part fueled by the desire of people to save money by making products that they need instead of purchasing them. Additionally, people have very custom, unique needs that are not commercially produced. In order for their needs to be met, they make the products themselves to their own specifications. SWOT Analysis The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats that Gaian faces. Strengths Strong relationships with manufacturers and wholesalers. Excellent staff who are highly trained and very customer attentive. High customer loyalty among repeat customers. Weaknesses A lack of awareness of Gaian among its national and international target population. A limited marketing budget to develop brand awareness. The struggle to continually forecast buying trends and stock inventory accordingly. Opportunities Growing market with a significant percentage of the target market still not aware that Gaian exists. Increased sales with a global market. The ability to continually improve margins through efficiency gains. Threats Internet competition from an already established brick and mortar or mail order house. A slump in the economy decreasing people's discretionary spending. A significant increase in shipping costs. Competition Gaian Adventure Fabric and Notions faces competition from several sources: Mail order companies: these companies for whatever reason have not yet made it on the Internet and therefore are not that significant of a worry. They typically will print a catalog or some sort of flier and mail it out. The company will accept orders either over the phone or via mail/fax. By virtue of the fact that these companies have yet to migrate to the Web indicates a fairly stagnant management team/business direction, therefore these competitors are not of great concern. Internet retailers: these companies are similar to Gaian Adventure Fabric and Notions in that they offer their products to basically anyone using the efficiencies of the Internet. There are approximately four Internet retailers. None of these sites are close in terms of product offerings compared to Gaian Adventure Fabric and Notions. Retail outlets: these stores take the form of either dedicated fabric stores like Gaian Adventure Fabric and Notions' brick and mortar store front, or outdoor retailers such as R.E.I. that carries a LIMITED selection of hardware, notions and fabric. These retail outlets typically serve the local area and not much beyond this. Product Offering Gaian Adventure Fabric and Notions will sell a variety of outdoor fabrics and notions for outdoor applications. These products include: Fleece including Malden Mills 100, 200, 300, power stretch, wind bloc, and thermal stretch. Coated nylons including ripstop, taffeta, oxford-poly, oxford-nitrile, packcloth-poly, packcloth-PVC, 1000 denier Cordura, 500 denier Cordura, and ballistic. Breathable fabrics including noseeum netting, sport mesh, micromesh, leno mesh, supplex, and taslan. Waterproof breathables including 3-layer GoreTex, 2-layer GoreTex, Sympatex, and Ultrex. Notions including Nikwax waterproofing, hook and loop, nylon and polypropylene webbing, grosgraine ribbon, poly herringbone, zipper tape and fixed length zippers, thread, assorted plastic Fastex brand hardware, as well as various patterns. Keys to Success Wide selection, a robust website, and outstanding customer service. Additionally, Gaian Adventure will: Generate repeat business. Increase the transaction amount per customer. Increase the transaction frequency of long-term customers. Critical Issues Gaian Fabrics and Notions is still in the speculative stage as a brick and mortar retail store and e-commerce site. Its critical issues are to continue to take a modest fiscal approach; expand at reasonable rate, not for the sake of expansion in itself, but because it is economically wise to; and build brand awareness which will drive customers to the store and website. Marketing Strategy Gaian's marketing strategy is based on several initiatives. The first will be advertisements in the local Yellow Pages. For unique items such as outdoor fabrics and notions, people refer to the Yellow Pages to find retail stores. To increase visibility to the local customers, strategic relationships will be formed with local outdoor stores and sewing shops. These two venues are often asked for referrals from their customers. By establishing strategic partnerships with these organizations, a lot of local customers will be pointed to Gaian to satiate their needs. To increase visibility among Internet customers, Gaian will be submitting their website to all of the popular search engines. Each submission to a search engine will be specifically tailored for each engine to ensure top listings from searches. Mission Gaian Adventure Fabric and Notions' mission is to provide the customer with whatever type of outdoor fabric and notions that he/she desires. 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. Marketing Objectives Build the customer database by 25% each year. Increase the efficiency of the marketing campaign by 3% each quarter. Generate a 15% increase in click-through traffic for the website. Financial Objectives A double digit growth rate for each future year. Reduce fixed costs by 10% by year two. Increase profit margins by two percentages each quarter. Target Markets Gaian Adventure Fabric and Notions customers can be broken down into three groups: Walk-in local customers: these customers live locally and have come into the shop to pick up the necessary products for a project. Internet individual customers: these are individuals that are in need of supplies for projects. This group of customers can be further broken down into orders from the USA and international orders. International orders will be a decent percentage of the overall individual customers because American fabrics and notions are generally superior to European alternatives and the convenience of ordering Gaian Adventure's products is enhanced with Internet accessibility. Internet based company orders: some orders will be from people within larger fabric manufacturers such as DuPont's Cordura department, GoreTex, and Malden Mills. Although people (typically in the prototype divisions) work for the manufacturer of the fabrics, it is often difficult for them to get small amounts of the fabric for prototyping. So oddly enough, some orders will be from GoreTex employees purchasing GoreTex from Gaian Adventure Fabric and Notions. Positioning Gaian will position itself as the premier website of outdoor fabrics and notions in this country. Consumers appreciate a wide selection of products from a single store. Gaian Adventure Fabrics and Notions will leverage their competitive edge: Gaian Adventure Fabric and Notions' competitive edge will be their focus on e-commerce. The brick and mortar side will be serviced by having the same product offerings that the website has, as well as having someone in the store to help out with any questions/needs that a customer may have. This however, is just one small aspect of the overall business. The foundation of the business is the e-commerce site. This is the foundation because it is the most cost effective way of operating as a retailer, it serves the largest geographical region, and the site can be serviced from anywhere at any time of the day. Gaian Adventure Fabric and Notions will focus on the website as they recognize this is where the highest margins are and the largest target market. The website as the primary focus will allow Gaian Adventure Fabric and Notions to rapidly gain market share as they will redefine anything on their site to meet the need's of the customers. Strategies The single objective is to position Gaian as the premier location for outdoor fabrics and notions, commanding a majority of the market share within five years. The marketing strategy will seek to first create customer awareness regarding the products offered, develop the customer base, and work toward building customer loyalty. The message that Gaian seeks to communicate is that Gaian Adventure offers the finest selection and customer service for outdoor fabric and notions. The message will be communicated in several ways. The first is through Yellow Page advertisements. Another way is through submissions for all of the popular Internet search engines. This will generate visibility for Gaian when people are looking for a outdoor store and use a search engine to find them. Marketing Mix Gaian's marketing mix is comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service. Pricing: Gaian's pricing scheme will be based on achieving a specific margin for each product. Distribution: Gaian can ship all products to any national or international address. Advertising and promotion: The most successful advertising will be with the Yellow Pages as well as submissions with search engines. Additionally, strategic relationships with local service providers and retail stores will also be a significant source of referrals. Customer service: Obsessive customer service is the mantra. Gaian's philosophy is whatever needs to be done to make the customer happy must occur, even at the expense of short-term profits. In the long term, this investment will pay off with a fiercely loyal customer base who is extremely vocal to their friends with referrals. Marketing Research During the initial phase of the marketing plan development, several focus groups were held to gain insight into a variety of prospective customers. These focus groups provided helpful insight into the decision making processes. An additional source of dynamic market research is a feedback mechanism based on a suggestion card system. The suggestion card has several statements that customers are asked to rate in terms of a given scale. There are also several open ended questions that allow the customer to freely offer constructive criticism or praise. Gaian will work hard to implement reasonable suggestions in order to improve their service offerings as well as show their commitment to the customer that their suggestions are valued. Financials This section will offer a financial overview of Gaian Adventure Fabrics and Notions as it relates to the marketing activities. Gaian will address break-even analysis, sales forecasts, expenses forecasts, and how those link to the marketing strategy. Break-even Analysis The Break-even Analysis indicates $11,818 will be needed in monthly revenue to reach the break-even point. Break-even Analysis Monthly Revenue Break-even$6,526 Assumptions: Average Percent Variable Cost45%Estimated Monthly Fixed Cost$6,500 Sales Forecast The first month will be used to set up the store front and website. There will be no sales activity. The first three months will have sales activity but it will be fairly slow. Month four will see decent activity as people begin to become aware of Gaian Adventure Fabric and Notions. Sales will be large enough to reach profitability by month nine. Sales Forecast 200120022003Sales Walk-ins$14,123$21,509$24,112Internet individuals$108,540$165,455$185,475Total Sales$122,663$186,964$209,587 Direct Cost of Sales200120022003Walk-ins$6,355$9,679$10,850Internet individuals$48,843$74,455$83,464Subtotal Direct Cost of Sales$55,198$84,134$94,314 Expense Forecast The marketing expenses will be budgeted to ramp up sales during the months when consumers typically spend more on fabrics and notions. Marketing Expense Budget 200120022003Advertising$2,250$3,000$4,000Strategic partnerships$605$800$1,000Other$480$600$800 ------------------------------------Total Sales and Marketing Expenses$3,335$4,400$5,800Percent of Sales Controls The purpose of Gaian Adventure Fabrics and Notions' 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. Implementation The following milestones identify the key marketing programs. It is important to accomplish each one on time and on budget. Milestones AdvertisingStart DateEnd DateBudgetManagerDepartmentMarketing plan completion1/1013/1/2001$0MarthaMarketingAdvertising campaign1/101Ongoing$9,400MarthaMarketingStrategic partnerships1/101Ongoing$2,400MarthaMarketingSearch engine submission1/101Ongoing$1,880MarthaMarketingName me1/1/20031/15/2003$0ABCDepartmentName me1/1/20031/15/2003$0ABCDepartmentName me1/1/20031/15/2003$0ABCDepartmentName me1/1/20031/15/2003$0ABCDepartmentName me1/1/20031/15/2003$0ABCDepartmentOther1/1/20031/15/2003$0ABCDepartmentTotal Advertising Budget $13,680 PRStart DateEnd DateBudgetManagerDepartmentName me1/1/20061/15/2006$0ABCDepartmentName me1/1/20061/15/2006$0ABCDepartmentName me1/1/20061/15/2006$0ABCDepartmentOther1/1/20061/15/2006$0ABCDepartmentTotal PR Budget $0 Direct MarketingStart DateEnd DateBudgetManagerDepartmentName me1/1/20061/15/2006$0ABCDepartmentName me1/1/20061/15/2006$0ABCDepartmentName me1/1/20061/15/2006$0ABCDepartmentOther1/1/20061/15/2006$0ABCDepartmentTotal Direct Marketing Budget $0 Web DevelopmentStart DateEnd DateBudgetManagerDepartmentName me1/1/20061/15/2006$0ABCDepartmentName me1/1/20061/15/2006$0ABCDepartmentName me1/1/20061/15/2006$0ABCDepartmentOther1/1/20061/15/2006$0ABCDepartmentTotal Web Development Budget $0 OtherStart DateEnd DateBudgetManagerDepartmentName me1/1/20061/15/2006$0ABCDepartmentName me1/1/20061/15/2006$0ABCDepartmentName me1/1/20061/15/2006$0ABCDepartmentOther1/1/20061/15/2006$0ABCDepartmentTotal Other Budget $0 Totals $13,680 Contingency Planning Difficulties and risks: Problems generating visibility. A sudden change of direction (a legitmate entry into the Internet) from an already established competitor. Problems with shippers would have a significant ripple effect on Gaian. Worst case risks may include: Determining that the business cannot support itself on an ongoing basis. Having to liquidate equipment to cover liabilities.

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