Business PlanR4U DENIM FACTORY Co.

New Delhi, (India)

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Table of Contents

Executive Summary............................................................................................................................51. The Concept....................................................................................................................................6

1.Introduction..................................................................................................................................61.1.1 Industry Overview.............................................................................................................61.1.2 Company Overview...........................................................................................................71.1.3 Our Business......................................................................................................................71.1.4 Our Goals...........................................................................................................................71.1.5 Our Objective.....................................................................................................................71.1.6 Mission Statement............................................................................................................81.1.7 Vision Statement................................................................................................................81.1.8 Core Values.......................................................................................................................8

1.2. Product and Services................................................................................................................91.2.1 Product...............................................................................................................................91.2.2 Service to customers..........................................................................................................91.2.3 Attributes of our product...................................................................................................9

1.3 The Customers........................................................................................................................101.3.1 Target Customer..............................................................................................................101.3.2 Target Customer’s Age....................................................................................................11

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1.3.3 Income class.....................................................................................................................111.3.4 Target Segment................................................................................................................111.3.4 Target Geographies..........................................................................................................12

1.4 The Legal Organization..........................................................................................................121.5 The Owners.............................................................................................................................13

2. Feasibility of Business..................................................................................................................132.1 Location..................................................................................................................................132.2 Site..........................................................................................................................................132.3 Site Expenses..........................................................................................................................14Table 2.1 (Site Expenses).............................................................................................................142.4 Market Potential......................................................................................................................14

2.4.1 Market Growth and Trend...............................................................................................142.4.2 Market Size......................................................................................................................142.4.3 Market Gap......................................................................................................................15

2.5 Competition............................................................................................................................15

2.5.1 Competitive Strategy.......................................................................................................152.5.2 Competitors......................................................................................................................152.5.3 Sustainable Competitive Advantages..............................................................................172.5.4 Technology leadership.....................................................................................................17

2.6 Opportunities and threats........................................................................................................182.6.1 Opportunities...................................................................................................................182.6.2 Threats.............................................................................................................................18

2.7 Sales Forecast.........................................................................................................................182.8 Protecting the Business...........................................................................................................19

2.8.1 Security System...............................................................................................................192.8.3 Contingency Planning......................................................................................................192.8.4 Environmental and Legal Issues......................................................................................202.8.5 Risk Management............................................................................................................20

3. Marketing......................................................................................................................................203.1 Business Name........................................................................................................................203.2 Brand Image............................................................................................................................213.3 Service/Product Mix..........................................................................................................21

3.3.1 Product Expansion Strategy........................................................................................223.3.2 Product enhancement.......................................................................................................23

3.4 Pricing Strategy......................................................................................................................243.4.1 Target Based Costing.......................................................................................................24

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Table 3.2 (Price catalogue)...........................................................................................................253.5 Distribution.............................................................................................................................25

3.5.1 ERP enable Systems........................................................................................................263.6 Promotion...............................................................................................................................27

3.6.1 Sales Promotion...............................................................................................................273.6.2 Direct Marketing..............................................................................................................273.6.4 Viral Marketing...............................................................................................................273.6.5 Display marketing............................................................................................................283.6.7 Alliances..........................................................................................................................28

3.7 Sales plan................................................................................................................................284. Operations.....................................................................................................................................28

4.1 Space and Equipment.............................................................................................................284.2 Organization...........................................................................................................................29

4.2.1 Organization Structure.....................................................................................................29

4.3 Management team...................................................................................................................314.3.1 Employee Engagement....................................................................................................314.3.2 Proper goal setting...........................................................................................................314.3.4 Managing work force diversity........................................................................................324.3.5 Adopting Flat Organizational Structure...........................................................................32

4.4 Regulations.............................................................................................................................336. Finances........................................................................................................................................33

6.1 Start-up Requirements............................................................................................................336.2 Owner’s Investment................................................................................................................356.3 Borrowed Money....................................................................................................................35

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Executive SummaryR4U DENIM FACTORY has been a growing market for a Last 2Years in Denim Industry. The notion of “do- it- yourself” style of business has been widely accepted. And R4U DENIM FACTORY is the brand name chosen for our business and is also the name of the company under which the R4U DENIM FACTORY CO. will be offered. This brand would serve the needs of customers of India, more specifically for those who live in DELHI.

R4U DENIM FACTORY is a jeans factory, we have accumulated abundant experience in jeans field. In our factory we have designers to design our styles and we can also Manufacturing and Trading jeans, Own brand and other brands according to customer's requirement. During the last years Domestic Level business we have established stable and long-term business relationships with many Local Domestic clients, our products have been Delivered to regions, such as U.P (All), Rajasthan,uttarakhand,Patna (Bihar) etc...Here Jeans will be produced based on the exact needs of the customers and will be customized based on the specific requirement or order put by the customers.We would provide service that would create an ultimate experience for our customer and would attract them to come again and again that would in turn promote brand loyalty. Our service will have following points of differentiation.

We will be forming Sole Proprietorship ownership type legal organization. This type of business is easiest way to start because here the owner only needs to get a license to begin the operations. This legal type of business gives absolute control over the business than that of partnerships or corporations. But in long run as the business grows, chances of forming a partnership or corporation are there. Since this a sole proprietorship business model, it will compromise of one owner as the Managing Director..Site that has been chosen to set up and our retail outlet for R4U DENIM FACTORY would be in the downtown area of Delhi (India). Such site would be the most happening area, flooded with people, high density of customers and customers can easily have accessibility to our brand. On the same time our Outlet will also get noticed by mass population.There lies a huge potential in the Jeans industry. This industry has already turned $1.6 billion and has created a significant demand among the people. The market is expected to grow by 5.2% in coming years.

The business will be operating all 7 days a week. Online orders will be accepted all the time 24 hours a day. The working hours of business would be 7 a.m. – 8:00 p.m. The fund required by business would be $30,000. Hence a capital of 75% that is around $22,500 will be invested from the owner’ side.

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1. The Concept

1. Introduction

1.1.1 Industry Overview

R4U DENIM FACTORY has been a growing market for a Last 2Years in Denim Industry. The notion of “do- it- yourself” style of business has been widely accepted. And R4U DENIM FACTORY is the brand name chosen for our business and is also the name of the company under which the R4U DENIM FACTORY CO. will be offered. This brand would serve the needs of customers of India, more specifically for those who live in DELHI.

1.1.2 Company Overview

R4U DENIM FACTORY is the brand name chosen for our business and is also the name of the company under which the R4U DENIM FACTORY CO. will be offered. This brand would serve the needs of customers of India, more specifically for those who live in DELHI.

1.1.3 Our Business

R4U DENIM FACTORY is a jeans factory, we have accumulated abundant experience in jeans field. In our factory we have designers to design our styles and we can also Manufacturing and Trading jeans, Own brand and other brands according to customer's requirement. During the last years Domestic Level business we have established stable and long-term business relationships with many Local Domestic clients, our products have been delivered to regions, in our business we are planning to run our business in retail outlets and also have plans to run our own franchise in the long run. Our Best Jeans guidelines and rules for preparing a Jeans will be applicable to any premises in which our Jeans are being prepared and delivered under our brand name.Other than just preparing Jeans, our purpose is to create an attractive ambience and a unique customer experience when they come in touch with our brand.

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1.1.4 OurGoals

Philanthropic Goals

• Offering our customers the freshest and Comfort possible Jeans which are made from our best resources.

• Promoting the notion of “Go Green”, through our brand and advertising tools to protect our mother earth.

• Dedicating 3.7% of our earned profits to support education for handicapped children.

Business Goals

• To supply optimum quality Jeans with high customer delight• Providing an unique experience to our customer • Ensuring that the Jeans delivered is best for customers. • Giving high efforts nearly 80 hours per month specifically for branding and promotion• Minimize our cost and maximize our effectiveness

Strategic Goals

• Participating in nation-wide and local trade or event shows• Raising funds in order to support our goals through interested capital investors• Achieving 95% customer satisfaction and ensuring more and more loyal customers• Achieving 10% of R4U DENIM FACTORY market down the line in 3 years

1.1.5 Our Objective

Business Objectives:

• Offering aclean, best and superior quality jeans well serviced Denim Factory. • Providing Latest style of denim Jeans menu for all our customers. • Offering superior, quality, fast and friendly service for all our customers. • Establishing ourselves as one of the leading service provider in R4U DENIM FACTORY industry.

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Financial Objectives:

• Increasing our sales by 17.36 % within the first year • Exceeding our monthly forecasted sales. • Meeting annual forecasted profits. • Maintaining strong cash flow by meeting estimated cash flow balances.

Marketing Objectives: • Maintain strong customer base through intensive marketing efforts by advertising and sales promotions. • Creating online advertising and maintaining word of mouth through our optimum service and quality of Denim Jeans• Creating a brand value • Ensuring brand loyalty

1.1.6 Mission Statement

Our company’s mission statement has been designed to help our customer get maximum benefit out of our service.

1. We provide best jeans that are good feeling quality eco-friendly ensuring that our customers have a good wearing.

2. We are adaptable with Jeans product menu including more style, of all types of chocies.3. We provide Jeans that can be customized and are very specific to the requirements and orders

of the customers.4. We guarantee immediate service with delivery at customer’s door step.( In-Future)5. The staff is very important for us,6. Being environmentally responsible is our prime motive

1.1.7 Vision Statement

Our company’s vision statement has been designed to view ourselves in long term as an aspiring brand.

1. We intend to adopt practices that are eco-friendly and helps nourishing our environment.2. We believe in providing best product for our customers with unique experience.3. We continue to invest through our own franchise network and partnering with other business

and Non profitable organizations.

1.1.8 Core Values

Our business core values would lie in three key attributes of business that is “Service”, “Sustain” and “Contribute”.Service: Building an environment for our customers where they get best possible service andan experience that let them come again and again.

Sustainability:Taking approach that is sustainable and help retaining our business for a longer period of time.

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Community Contribution: Believing in educating handicapped children to raise their literacy level and give them moral support to live their life and grow like others.

1.2. Product and Services

1.2.1 Product

R4U DENIM FACTORY Co. core product is “R4U DENIM FACTORY” where R4U stands for do it yourself. Here Jeans will be produced based on the exact needs of the customers and will be customized based on the specific requirement or order put by the customers.

Product will have 3 important points of differentiation

1. Customers themselves can design the Jeans and give an order accordingly2. Jeans decorative will be supplied and will be available in handy where customers can choose

the fabric, accessories and rivets items available in jeans decorative kits3. Pre framed designs for Jeans with wearing various occasions like “Birthday”,” Christmas”,

New-year”, “valentine’s Day” , Festive Seasons and Daily wearing Jeans etc. will be available; however customers will always have the choice to create their own design.

1.2.2 Service to customers

We would provide service that would create an ultimate experience for our customer and would attract them to come again and again that would in turn promote brand loyalty. Our service will have following points of differentiation

1. Instant Jeans preparation and Ware-house delivery at customers door step2. Able to take orders online, through E-commerce, e-portals and process order payments

online through online banking system/credit cards/debit cards3. High quality ambience and friendly staff putting customers at ease4. Online jeans designing portal of our brand, where customers can design the Jeans and put

us the order.

1.2.3 Attributes of our product

R4U DENIM FACTORY will be focused on notion of having need of customers. On the same front it would taste good and feeling touch well would be available in variety of different style of jeans. In addition, the jeans will provide accessories such as earrings and pocketbook items that will appeal to both the male and female consumer. Our jeans will dedicate in creating specialty jeans for all occasions which can fit to the individual needs of our diversified customer base.

We also take care of cross-contamination and make sure that the equipment, clothes to our customers. Serve to best deals with him.

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1.3 The Customers

1.3.1 Target Customer

Our target customers are those who would require jeans at different occasion with specific needs. All jeans outlets and shops may not satisfy or full their needs as most of the shops provide pre designed fabricated jeans that are standardized and customers have to choose any one from the. However we are targeting customers who are in need for customized jeans for a special occasion, where they want jeans of their own design.

We can see that in India people from different geographies and ethnic background are located. Also we can see that the Americans are the people who mostly constitute the population of India, followed by Africans and Asians.

1.3.2 Target Customer’s Age

Chart 1.1

From the above chart we can clearly see the age group distribution. India has 25-34 age groups as the highest proportion, followed by 16-24.

So our prime target age groups would be customers would fall in between 15 - 35 year.

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1.3.3 Income class

Since we would be providing customized Jeans, we would be targeting both premium customers as well as economical customers. We will have separate section for both. For economical class we would target customers with an average disposable income of $3,500 to $10,000 per month.For premium class our target customers would be one with an average disposable income above $3,000 to $10,000 per month.

1.3.4 Target Segment

Our prime target would be to raise volumes of sales by targeting specific occasions or events. This occasion are ranked in order of their priority. Our target is in identifying people who enjoy luxury items, organic products, and care about their health and are Concern about protecting environment.

Our prime target would be to raise volumes of sales by targeting specific occasions or events. This occasion are ranked in order of their priority.

1. Birthday2. Festivals3. Marriage& Weddings4. Anniversary parties5. Baby showers 6. Valentine’s Day7. Christmas8. New Year9. Family Functions10. Bon Voyage11. Bridal showers12. Congratulatory celebrations13. Graduations14. Holidays i.e., Easter, Christmas, Fathers’ Day, Mothers’ Day, St. Patrick’s

Day, Thanksgiving, Earth Day, Memorial Day, etc.

15. New Home Welcoming16. Retirements17. Thank you giving18. Other Many festival Occasions

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1.4 The Legal Organization

We will be forming Sole Proprietorship ownership type legal organization. This type of business is easiest way to start because the owner needs to get only a license to begin the operations. This legal type of business gives absolute control over the business than that of partnerships or corporations. But in long run as the business grows, chances of forming a partnership or corporation are there. The sole proprietors income from business perspective is considered as personal income. Owner can declare income as part of Schedule C, Profit and Loss from a Business or Profession, with a standard 1040 Federal Individual Income tax return. The sole trade structure is on the most straight-forward option of carrying a business. The individual is taxed under the Inland Revenue's Self-Assessment system, with income tax calculated after deduction for legitimate business expenses and personal allowances. A sole proprietorship owner is personally liable for all the debts of the business, but also owns all the profits. In case of conflict or damage, owner can lose his personal asset which may not be the part of business.

Advantages of a Sole Proprietorship

Quicker Tax Preparation Lower Start-up Costs Ease of Money Handling

Disadvantages of a Sole Proprietorship

Personally Liable to damage Lack of Financial Controls Lonely at the Top Difficult to Raise Capital

1.5 The Owners

Since this a sole proprietorship business model, it will compromise of one owner as the Managing Director. In this case owner himself/herself would remain the Chairperson. However it will have board of directors of 2 members to look into the business, audit and inspect that everything is right on the way. Equity Shares will be raised to attract more investors and agreement will be signed based on mutual understanding, so that the investors gets maximum benefit out of the business. However owner will enjoy the maximum privileged power.

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2. Feasibility of Business2.1 Location

This business is basically established and is registered with New Delhi (India). The R4U DENIM FACTORY Co. will be located in the New Delhi, which are the largest city of India and also the capital of the state of Delhi. New Delhi is situated in the southern part of Delhi, Delhi has one of them high population metro states in India residents and is expected to have highest demand for Jeans in entire India, because of its presence of high income class people, young working group of people and students and also a presence of lifestyle that would trigger several happenings, party themes, celebrations, events and occasion all around the city raising the demand for Jeans and attractive jeans brands. New Delhi is one of the world's most diverse cities counted by percentage of nonnative born residents.

2.2 Market Potential

2.2.1 Market Growth and Trend

There lies a huge potential in the Denim industry. This industry has already turned $1.6 billion and has created a significant demand among the people. The Denim market is expected to grow by 5.2% in coming years. The global Jeans market is expected to exceed $310 billion in 2015 as per the global industry analytics. This demand is being driven by change in the lifestyle of people, where people want to celebrate, and Jeans is an effective means of showing joy and affection. Consumers are increasing to buy convenient Jeans. The global Denim jeans market has shown a recovery from economic recession and is expected to record strong growth in the coming years. Factors triggering the expansion of Jeans market include affordability, convenience and benefits of Jeans good products. Demand for healthier fortified jeans has also driven sales in US and worldwide.

 2.2.2 Market Size

The Market size for jeans industry in India is $3.060 Billion. The largest four players are estimated to account for less than 15.0% of total industry revenue. The annual revenue is $919 million with annual growth of 4.9% in 2012. The average profit has been 18.7%, which employees nearly 18,943 people in India, with 2,807 businesses running full time.

2.2.3 Market Gap

This is a very high potential market because of their so market gap in this sector from various perspectives.

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Only 15% of total industry revenue are estimated to be captured by market leaders, which says that the vast area of customer are untapped and since major players do not have major share, it would be easy to enter the market.

The market size is $3.060 billion but the revenue is only $919 million, which says that around 67% of the market is untapped and hence there lies a huge opportunity with first mover advantage to cater those areas of customer that have not been addressed.

The market is growing and expected to grow at a higher rate of 5.2%, so definitely there will be a rise in demand for jeans and this mismatch of demand and supply would lead to a gap which can met effectively by entering the market at right time at the right place.

Need for mass customization, health conscious, fresh organic Jeans with R4U style of business is lacking in existing industry which would be an advantage to penetrate the market with unique selling strategy.

2.3 Competition

2.3.1 Competitive StrategyIt is very important to enter into the market adopting certain strategy that will help winning edge over others.

Point of DifferentiationIt is very much important for the brand to create a unique selling proposition and inherit certain attributes in the product that would help the brand to penetrate and capture the market at a faster space overtaking the current players. We will be differentiating us through extremely flexible product attributes and high quality of service. Our products would be different to other jeans manufacturing company.

Blue Ocean Strategy

A strategy that can lead to wide spread innovation, such that it spreads radically and would give birth to a new market which nobody thought of earlier will help a company take miles ahead of advantage than that of its competitors. Our focus is on R4U style of jeans, where customer can design there jeans online or offline and cam raise an order. We would have the ability to provide mass customization.

First Mover Advantage

Best way to be in the market is to be the first to take advantage of existing product and enjoy being first to keep idea in front of the customers. We will be almost the first player in the domestic market in New Delhi, to launch our services online, where customers can book, order, design and get deliveries through our online portals.

Direct CompetitorsDirect competitors are basically are those brands that do serve the same product having same similar features and target the same customer segment with their try to place their product on the same market and can take away the market share. The direct competitors in New Delhi, because New Delhi, Mumbai, and Kolkata are jeans manufacturing Hub, and they provide jeans in wholesale very low prices and quality not so good.

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In Direct CompetitorsIndirect competitors are basically are those brands that do not serve the same product having same similar features but target the same customer segment and hence their alternative product can take away the market share. The direct competitors for denim jeans industry would mainly be market players from denim factory, Denim industry.

2.3.2Sustainable Competitive Advantages

Based our competitive strategy mentioned above, we need to have few competitive advantages which include adaptability with time. This can be done by sticking to the following rules.

1. Price structure remains competitive2. Our selection of Jeans designs is much more diverse and can be customized.3. We are adaptable to our customers4. We can adapt any Jeans design to any specific occasion5. We deliver immediately at door step of customers6. In an effort to help save the environment a percentage of our net profits go to the Conservation Fund.

2.3.3Technology leadership

Figure:2.1

Adopting continuous technical innovation, brainstorming and focusing on continuous improvement would help in building technical competencies. Sustainable strategies can be adopted to keep core technical competencies up to date with the current need in this sector.

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2.4Opportunities and threats

2.4.1 Opportunities

There is a chance to capitalize on the changing market need where customer are looking more into customized jeans orders

Vast area of Jeans market in India, Almost 675 of market size is un captured Online placing of orders, placing design and shopping for Jeans has not taken up at a large

scale. The use of eco-friendly technology has been becoming popular in the market There is lesser barrier to entry as very few players has captured vast market share. Domestic market in India is booming and expected to have large customer base Denim Jeans market is growing and hence supply needs to be increased with increase in

demand Changes in lifestyle of people to go living a life full of happenings, celebrations, occasions,

events, festivals, ceremonies have given a thrust to the Jeans industry Need for instant home delivery and online payment have significantly risen

2.4.2 Threats

Competitors can steal our idea, imitate, copy or build superior products on our lacunae. Business may face trouble due to delayed breakeven and liquidity crisis Partnership in long term may become an important issues Breakdown in technological, online portals or maintenance can lead to unexpected shut down

of business. Financial problems could threaten our first year’s success Time management could falter our productivity Substitute products can overtake our products Misunderstanding with suppliers can lead to cost conflicts Economy slowdown can lead to losses Growing inflation can put pressure on increase of cost which may have a competitive

disadvantage.

2.5Sales Forecast

The sales are expected to grow at an average of 7.7% in the first year and in two year the sales will grow by 16%. On the first year the company would incur loses and net cash flow would be negative, but in the second year it will be compensated and in the third year company is expected to gives us significant profit.

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2.6Protecting the Business

2.6.1 Security System

Security system and CCTV would be installed in the Outlets and warehouses to avoid any loss or damage due to steal and robbery. This security system will be in a position to generate an alert in case of any ambiguity and will be able to communicate to the staff working in the store and also to the top management like Director and Board committee via Mobile commerce or SMS.

In case of theft or robbery, staff would be provided with intelligence surveillance system where they can easily notify and alert to the nearest police station or emergency rescue ward through mobile devise or an automated alert system enabled on the shop, that help notifying without letting people know that an alert has already being send.

2.6.2 Insurance Policy

Wherever possible an insurance policy should be adopted. This will help in avoiding any losses due to personal damage, natural disaster or catastrophe. Especially insurance should be made for Electronic gadgets, machines in the factories, software systems and infrastructure support service. All staffs would be covered under insurance policy.

The insurance will be updated every time it gets expire and can help the business to get rid of any larger future risk of damage caused to Factory, Outlets, warehouses, shop, business or staff.

2.8.3 Contingency Planning

It is very important to make proper budgeting and decide a backup plan in case the business doesn’t operate as planned, deviates from actual cost that what was expected or goes bankruptcy. A reserve fund has to keep aside as contingency, which can used to attain liquidity at the time of financial crisis.

It is estimated that 6.7% of every investment and 7.8% of monthly profit would be kept aside as a contingency to protect the business at bad times.

2.8.4 Environmental and Legal Issues

It is to me made sure that in no case our brand violates environmental or legal issues. A familiar lawyer can be appointed on contract based to keep in track that everything is set correctly and that there is nothing wrong which may lead to penalty in future. Corporate governance will be maintained and auditing be done through external auditors to maintain the transparency and credibility of our accounting system and align our financial statements up to standards which will be released every quarters.

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2.8.5 Risk Management

There are several risks that may come into picture during the business operations like lack of resources at any particular festive seasons or holidays, break down in technology or limited access to technical equipment, changes in the schedule of college going students, lack of training and skill set of employees, unwanted halting of city due to strike or loss or damage due to natural disaster. In such cases the team should be have prepared to take up a backup plan with the motive to solve the inconveniences caused without affecting the course of the project. The risk assessment will be continuously monitored and updated with weekly assessments in order to avoid misunderstandings and reschedule the tasks if needed.

3. Marketing

3.1 Business Name

The name of the business is “R4U DENIM FACTORY”.

3.2 Brand Image

Brand IdentityR4U DENIM FACTORY Co. will be known for core product is “R4U Denim Factory” where R4U stands for do it yourself. Our products will be produced based on the exact needs of the customers and will be customized based on the specific requirement or order put by the customers. Customers themselves can design the jeans and give an order accordingly. Jeans decorative will be supplied and will be available in handy where customers can choose the fabric, accessories and decorative items available in jeans decorative kits.

Brand Notion

R4U DENIM FACTORY Co. will be focused with a notion of having Quality, Looking, Dashing Look, comfort wearing need of customers. On the same front it would taste good to feeling touch as well and would be available in variety of fabric. Our jeans will dedicate in creating specialty jeans for all occasions which can fit to the individual needs of our diversified customer base.

Brand ValueOur business value would lie in three key attributes of business that is “Service”, “Sustain” and “Contribute”. Building an environment for our customers where they get best possible service and an experience that let them come again and again. Taking approach that is sustainable and help retaining our business for a longer period of time. Believing in educating handicapped children to raise their literacy level and give them moral support to live their life and grow like others.

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3.3.2 Product enhancement

Figure:3.3

Product enhancement can be done my undergoing a product/service gap analysis by listing the product with their features and existing brand catering in the same sector. In the matrix the areas where product features are being neglected by most of the major market players but is very essential can be targeted and a complete new product feature can be designed and upgraded.It is important to choose the right person and technology at the right time to upgrade the product feature. It is very important to identify the product’s new requirement and technical requirements. Once it is finalised it is important to understand the business investment required and whether it develop a break even situation or not. In case it’s financially feasible, a proper plan should be developed and implemented. After implementation it is very important to monitor the new product feature and keep maintaining and sustaining it.

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Figure 3.4

Moving too far to the right on the matrix can increase product development costs to an unsustainable level. Moving too far upward on the matrix can require unsustainable levels of marketing expenditures to increase the Company's visibility in unfamiliar territory. Here we will be focusing on the core space with the development of new product.

Most important cost involved in this sector will be the cost of transportation and while over hauling and maintenance. Shipment of equipment’s can be optimized .The cost can be brought down by locating in all important areas where such need arises.

Proper inventory management and MRP (material resource planning) incorporated with Total quality management on shop floor can help down to reduce the cost to large extent by bringing down the wastage of resources. Reducing the entire cycle of service time would help in cost reduction.

Modern methods and use of IT solutions can help reduce the burden and cover more contracts at limited time. A good scalable amount of leads and contracts can reduce the cost significantly by economic of scale thus reducing the variable cost.

A complete end to end value added supply chain collaborated with efficient partners, suppliers and distributors would help to have a control on quality.

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3.4 Pricing Strategy

3.4.1 Target Based Costing

R4U DENIM FACTORY CO. will be designing a target based costing, where based on the ability of customers to pay for a product; the product would be designed in such way that it can accommodate the price for them. This pricing strategy would give a better prospective that we understand the customer’s economical need and hence try to fit them based on their purchasing power. It is basically a bottom to top approach of costing in which, at first we see at top that how much the customer can afford to pay and then based on that cost the breakdown of prices are done to each individual components and a price associated to it. It leads to standardization of product.

3.4.2 Value Pricing.

However for premium customer who are more concerned about ordering customized jeans, for them vale pricing would be done. In this price more than the cost, the value that we are delivering for a given cost will be of higher concern. Higher cost may not be an issue, if customer is getting the desired quality for the paid price. It is basically a top to bottom approach of costing in which, based on customer’s requirement or design all the components or items are gathered and they are added one after other to calculate the total price, checking at each stage that for the price assigned the value has been added to the product or service. At last a final price is quoted to customer for their specific design. It leads to customization of product.

Especially in the case of custom orders, which are essentially a service, consumers will be led to believe that they are getting a superior product. Our prices charged will be slightly higher than that of our domestic competitors, mainly because we are striving for optimum quality in our products.

3.5 DistributionThe primary mode of distributing our product would be through our retail stores. In future we will be letting our won franchise network to promote the product. However suppliers will be there to meet our resource requirement. Over a period of time, we will start distributing our jeans through other channels and retail outlets like in multi-brand shopping mall where our products too would be available. We would provide service that would create an ultimate experience for our customer and would attract them to come again and again that would in turn promote brand loyalty. Our service will have Instant jean preparation and home delivery at customers door step.

3.5.1 ERP enabled SystemsAn ERP enabled tool that work on both e-commerce and m-commerce platform would be used to integrate all the business process into one. It would connect between customers, staffs, management team and staff on delivery and would help in making business transaction like ordering, buying, delivering and storage very on simple online or offline.

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System for Ordering

We would be able to take orders online, through e-commerce a mobile based application, e-ecommerce an online based web portal where customers would be in a position to view the menu and catalogues, watch out special offers and make their choice of jeans through drag and drop features available. In case of customers who are looking for customized jeans, can design a special jeans online through our simulation tool kit, that will help a customer to design his/her own jeans on the web through available set of wizards and then after finish the design he can finally place the order through submit button. The orders would automatically come to the Staff at our outlet; with auto generated mails send to the webmaster and director. The customers will have the option to modify the order, reach out our staff in case of query through SKYPE enable video chatting, text message chatting or a phone call through Skype. Other than that they can also communicate to us through mails, phone or Fax.

System of Billing Online processing of order will be available through the gateway payment facility which would accept Credit card, VISA or master card, debit card for all banks in India and PayPal. They will also be able to make payments through online banking or mobile banking system. On our shop to we will be expecting cash/ cheque/ cards to process their transaction.

System of DeliveryWe will have a network of home delivery in nearby areas, where while placing an order, the order will be delivered at home once the Jeans has been made. Automatically a message would be sent to the customer that the cake is ready and will delivered shortly, with details and phone number of the person who will be delivering. On the same front the staff in charge of delivery would get customer details and contact with address and mobile number. He updates the progress to customers in case of any delay.Our online team can monitor anytime the exact position of staff on delivery on Google maps through android enabled GPRS tracking system. Manager can anytime check the status of a particular order that whether it is closed, opened or is in progress with percentage of progress made.

System of Storing

An inventory tracking tool will help us to manage of our resources and material to be stored. This software tool will generate automatic reports on the number of cakes ordered, their ingredients, flavors, requirements of stuffs, toppings etc. and will generate a net summary on total requirement of every detailed item in an hourly basis.This system will let us know the shortage or excess of anytime and thus would help in maintaining inventory at proper level with safety limit that would reduce the cost of storage.The software would also be in a position to alarm when it sees that there is a chances that the store will go out of processing capacity due to large orders or shortage of any resources to meet the target in given timeline.

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3.6 PromotionWe are expecting to come in touch with our customers through the internet by means of social media like Facebook, promoting through twitter. A website will be freshly launched that will dedicate in order to sell our product, will help in branding and promoting our brand value.

Other than promoting from internet, business corporate cards, brochure with menu and product selection will help in promoting our brands. Pamphlets, posters and flyers will be used in Streets of India to attract customers. Use of media, newspaper will too be used to promote our brand and products and convey that how we are unique over other players.We hope to contact our customers through the Internet by the use of social Networking sites, such as Facebook, and our own website in order to sell our products as Well as attract people to our on location business. Beyond an Internet connection, we will incorporate business cards, brochures that provide our menu and product selection, a Window display that will be a direct aesthetic appeal, and in the beginning use Advertisements in the newspaper to introduce our new business.

Various modes of Promotion would be as follows

3.6.1 Sales Promotion

Free Samples would be distributed to people in malls and near our shop to try and experience our product. This sampling will help in promoting our brand. Weekly Sale Item would help in raising the sales to a new level at end of every weak. Organizing Trade show son retail mall would help people come I touch to the brand and be aware of our products in the market.Sponsorship or corporate social responsibility will be a catchy way to attract mass youth at a time.

3.6.2 Direct Marketing

Direct marketing can be an effective tool to promote brands through media sources like Radio. Two weeks prior to grand opening of R4U DENIM FACTORY, several 30-second plots of announcement will do in radio FM of Toronto. The advertisements will be aired 2-5 times an everyday which will help in grand opening. Local Newspaper advertisement would help in raising awareness as well as credulity of the brand , as Newspaper are being read by mass population and is also trusted upon the facts portrayed by newspaper.

3.6.4 Viral Marketing

Internet marketing would help in gaining attention of huge population through word of mouth. Blogs and word press can be used to promote opinions on the product and how people would love to have it. A video promotion or illustrators on YouTube can give an extra mileage to viral marketing.Social networking forum like Facebook, MySpace have communities where posting can lead us to footfalls or posting of link that direct to company website would generate traffic for awareness. Website will help customer direct, place order, watch brochures, make payment and get order online. Sending of Direct Mail to people from customer’s database and bulk SMS to target customers can help us achieving a high footfall in our shop.

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3.6.5 Display marketingPosters, banners can help us attract attention of customer in an unconscious state while are travelling on road or walking. Pamphlets, flyers put inside newspaper or supplied at door step can be of great help. Digital boards and display can make an added advantage.

3.6.7 AlliancesOur brand will work with some of the corporate companies in the area to display flyers in their gallery areas. The expectation is that staff members will see the flyer and visit the factory. Or strategic alliances to share common resources while branding where both of us will be marketing each other’s product would help in getting higher sales volume.

3.7 Sales plan

We will be focusing on following areas to generate higher sales

Allocating sales quota for each day and target quota for a month that will be set as a benchmark to be achieved.

Sales success would require planning. A sales strategy would be formulated to achieve sales success in stipulated time by setting reward system for marketers and ensuring superiors quality service and value pricing.

Sales promotion technique like discounting, providing coupons, seasonal offers and free gifts will boost up the sales at the odd times.

Constantly Reevaluating sale potential on a monthly basis will give idea on if any changes required on the existing advertisement techniques.

Free home delivery would attract customer to make more orders sitting at their homes. Bringing the concept of loyal customer pricing will be of worth, where more a customer buys

our product, more is the discount/bonus/reward points the customer gets on buying a product next time.

The Jeans Factory will review its comprehensive tactical plan to identify weakness in its components. If there are components that are not delivering then they will be identified and altered to produce the desired results.

Sales will be boost up varying the promotional strategy and devising a new sales strategy based on expected demand, market potential and festive seasons.

Grand promotions at festive seasons, with special offers and combo packages can help customer to buy in higher volumes.

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4. Operations

4.1 Space and EquipmentSpaceInitially a space of 4500 square feet will be required to set up the Jeans outlet. This space will be taken in downtown area which located along the Street starting from the Street.

Site expenses for private office available in down turn area would be $300 / 100ft². The space will be taken on lease initially for 4 to 5 years. So with an expectation of a shop of 4500 square feet, the expenses will go about $13500 per year. However the cost of the area and land is increasing by 11.2% hence every year is the site expenses will go high. Also the maintenance cost for land and building is increasing by 7% every year in New Delhi.

Equipment’sThe equipment’s that would be need would include 2 iMac 21.5” (3.1 GHz), Domain Name, website hosting service, Business License, commercial sewing machine , All Types of machine and Accessories item, Working table, Different types of Denim fabric , Double Standard sewing machine, Invertors, Cell Phones , Desk Phones , accessories supplies, Delivery Van , Extra .

4.2 Organization

4.2.1 Organization Structure

The management team will consist basically President/owner who will look into the entire operations and execution of business. The Web master/marketing specialist will be supervised and report to president. All other employees and staff will report to the Web Master/Marketing Specialist. Web/master will be the person who would be driving the entire marketing needs of business and would be generating leads for the business. Since our company has the convenience of being a small business, the President can step in at any point to help the company run smoothly.

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4.2.2 Personnel Plan/Job Descriptions

Web Master/Marketing Specialist (1 Full Time position)

His/her responsibilities are:

a) Design and maintain websiteb) Process online order and raise a requestc) Handle customer inquiries d) Manage e-mail liste) Maintain blogsf) Post online press releasesg) Collect customer databaseh) Implement sales techniques

Pattern master/Creative designer Artist (2Full Time position)Their responsibilities are:a) Processing and login in customer orderb) Scheduling an order on calendar and start processing itc) Handling customer inquiries/confirming customer requirementsd) Creating customized jeanse) Scheduling deliverf) Handling orders that come offline in the outletsg) Pricing for customized jeans or specific orders

Delivery Driver (2 Full Time position)Their responsibilities are:a) Confirming details of delivery with location and timeb) Communicate with staff and customerc) Contacting customer to notify expected time of delivery and deliver receiptd) Loading product in the vehicled) Delivering producte) Thanking customer and leave business card f) Maintaining vehicle’s resources like gas, oil and performing general repairs, overhauling etc.

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4.3 Management team

4.3.1 Employee Engagement.Figure 4.2

Engaging employee and keeping them motivated in work is very important. Alienation of employees can result in low productivity. An individual should never get detached from his/her work leading which would result in low productivity. Most of the companies give a lot of emphasis on this. It also helps in building team synergy.It is very important that an enthusiast leader takes care of the entire process. An employee should be surrounded by supportive coworkers, should be satisfied with job and career within a high performing organization. As a result we industry owner’s get a committed set of employees who are satisfied and loyal to their customers. Organizations retain a high performing efficient workforce making it a productive and profitable organization.

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4.3.2 Proper goal setting.Setting up of goal is very important. A goal is effective only when every individual's personal

goal is inclined with the organizational goal and if both of these goals are different then an individual gets detached from his goals which may lead to alienation. To set a good goal we should train employees to build up a specific goal which should be measurable. The goals must be assignable to individual or group and should be realistic enough to attend those goals within the stipulated time. However every goal should be time based and associated with a deadline that is feasible enough.

Figure 4.3

4.3.4 Managing work force diversityManaging work force diversity is very important due to varied culture of people belonging to different society. When people are treated indifferently and do not resemble or fit in a particular society/environment of work, they get isolated leading to alienation. Most of the top marching companies have adopted effective management strategies to overcome differences caused by work force diversity to avoid alienation. It is to be kept in mind that the policies are fair for every individual irrespective of gender, ethnics, caste, culture, gender. All employees should be made satisfied and engaged in work equally. Diversity of each individual should be considered and their sentiments should never be disappointed or discouraged just because they are different.

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Figure 4.4

4.3.5 Adopting Flat Organizational Structure

Figure 4.5

Instead of adopting a traditional hierarchy based organizational structure a flat organizational structure would remove the communication gap and would help in free cob – web networking mode of communication where people can express freely removing the power apart and meeting efficiency

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in team work. Most of the contemporary companies are adopting it because lack of communication over a longer period of time can lead to alienation.

4.4 Regulations

Our brand will be liable to pay compensation for damage and losses due caused by any of our product.

We would encourage scientific and technological research in this industry to extent our technical reach. Any unit or individual who achieves an outstanding outcome will be rewarded.

 Our brand would safety of customer and ensures that it does not have any chemicals or ingredients that are not good wearing for Body.

The complete department who is taking charge jeans processing will held e responsible for any dispute in accounting system or violation of customers right.

All technical control system would be centralized. We would strictly adhere to the socialist operation and management, pursuing the aim of

serving people, improvises operation and management. We shall care for and abide by environmental regulations, emission on chemicals and we

would certified by government body.

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6. Finances

6.1 Start-up Requirements

Table 6.1

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Survival of Business

A minimum amount of $11,687has to be withdrawn to meet the monthly expenses for the survival of business.As expected every month $5,730 has to be withdrawn to meet operational expenses, minimum $ 800 and $4800 for the payment of VAT, Sales Tax and Bill respectively and an amount of $ 357 for Long term liabilities

Table 6.2

Minimum Expected cash to be withdrawn from business per month

Minimum Monthly Expenses Amount Cash spending for Monthly Operations $5,730 Minimum VAT that would be Paid $800 Minimum Bill Payments $4,800 Long Term Liabilities Repayment $357

TOTAL WITHDRWAL $11,687

From the cash flow statement in in table 6.5, we have identified the average minimum amount cash that has to be withdrawn from business and has been listed in table 6.2.

Survival of Owner

The minimum amount of money that I would have to withdraw from business to meet my personal obligations would be $15,760, of which 60% of the amount which is $ 9546 will be kept as capital. Further 20% of this capital that is $1890 will save as a contingency amount to meet the emergency or situation when business goes out of liquidity or cash.

In long run business will generate profit, 7.8% of profit will be also kept aside as contingency.

6.2 Owner’s Investment

The fund required by business would be $30,000. Hence a capital of 75% that is around $22,500 will be invested from the owner’ side. No loans will be taken from banks to fetch this money. The capital of owner would be invested mainly in assets, buying equipment’s and allocating space for retail outlets as they are prime need. The amount that will obtain from other means would be used for marketing.

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6.3 Borrowed Money

Initially no amount will be borrowed in the form of loans. We will not indulge with bank and take loan as it would lead to pay back of interest which would decrease our profits over period of time.All borrowing would be made from family, friends, venture capitalist and public. It will be dividing in the following way.

• 5% of capital be raised from Family and Friends which accounts to be around $ 1,5000• However 10% of funds would be raised from one or at max two capital ventures which

would account for $3,000• Rest 10% would be open to public trade market to invest which would account for $ 3,000.

Thanks to All….

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Note: Please pricing in dollars for foreign buyers or investors, Not for Indian markets.

Thanks We are Denim Manufacturer and Traders. Brand : R4U Denim Factory Make: All Types of denim products ( Men & Woman) Whatsapp: +919560950703 Facebook: https://www.facebook.com/pages/R4U-Denim-factory/620584621351614 Linkedin: http://in.linkedin.com/in/r4udenimfactory/ Twitter: https://twitter.com/R4UdenimfactoryOther: R4U Denim Factory Jeans Manufacturer WEBSITE: www.r4udenimfactory.net 

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