Business Proposal: Get Into the Green Scene

2016 Summer Internship

Group B: Anjali Read

Alyssa Lemmo Henry Nguyen Alex Walker

Thalya Enfield Samantha Solaiman

Katherine Du Jessica Fatherly

Business Proposal: Get Into the Green Scene

Objective

As we redefine the PacSun brand and shift away from the GSOM campaign, we would like to capitalize on this opportunity to present an environmentally friendly proposal that introduces corporate responsibility to PacSun’s values. myGSOM members will be able to donate any brand of clothing to a participating PacSun location; in turn, PacSun will recycle or donate clothing to benefit the same communities that ME to WE supports. To thank our members, we would like to offer discounts for each donation made. Overall, we hope to portray PacSun as a lifestyle brand that truly cares about all aspects of life, including reducing our carbon footprint and helping others. Business Development Strategy

The strategy is as follows:

Contact Me to We or similar non-profit to further develop a relationship and negotiate terms of clothing donations and distributions

Initiate testing phase in 50 different locations over a one year trial period

Customers can donate a minimum of five articles of wearable clothing, up to four times a year

Clothing will be shipped to PacSun’s distribution center after every season

A decision to donate to ME to WE or recycle will be made after evaluating the donations Goal:

4 (times a year) x 5 (articles of clothing) = 20 pieces of clothing per person

Average of 5 lbs per person

Goal of 100 people, 500 lbs of clothing per store

Total of 25,000 lbs of clothing for the year Marketing Plan

Motivation: The message that will be sent to motivate consumers to donate will be “Get Into the Green Scene.” We believe by going green, we will make a positive impact. As an individual, you have the power to make an impact as well. Therefore, by taking these next steps, you will join the movement to create a more sustainable world. So, come join PacSun and Get Into the Green Scene! Promotional Strategy: In order to build awareness during our trial phase, our marketing plan relies solely on social media platforms such as Instagram, Snapchat, Twitter, and Facebook. We will also ask Pacsun employees to spread the cause by word of mouth to their customers in stores. Pricing Strategy: An incentive to show appreciation for consumers who donate will be a discount off their purchase.

Customers will be eligible to receive a discount off their entire purchase (excluding promotional items) during their current or next visit in-store:

○ Discounts start at 10% and cap at 25% ○ Donors will receive 10% off after first donation, 15% off after second donation,, 20% off after 3rd

donation, & 25% off after 4th donation ○ The discount rewards will be tracked through a new feature on the myGSOM app

Business Proposal: Get Into the Green Scene Financial Plan

Costs

Shipping costs – ship to distribution center in Kansas; approximately 125 lbs of clothing per shipment: $23,400

Sorting - have store associates sort based on given criteria and ship to the distribution center; from there, others will sort as shipments come in from different test stores

o Labor Costs: $16,766 o Supplies/Clearing space for storage: $10,000

Ship to Me to We or non-profit - $5,000

Developing tracking aspect as a part of the GSOM app: developer costs = $35/hour x 24 hours = $840

Total Cost = $56,006 Profit

Sell what is unusable to recycling companies

Earn an average of $100 per ton, estimated 2 tons are unusable and earn back $200

Increase in sales due to discount: o Creates a relationship with customers which encourages them to return and make purchases using

their new discount. o Assuming each purchase made by a customer totals $40-50:

Total discount: $140,000, COGS: $100,000, Sales: $800,000 Gross profit: $560,000

Boost sales and net profit by over half a million dollars

Net profit: $503,994 Company Gain

The company will gain a greater reputation for its contribution to a more eco-friendly world. We will have a widespread appeal that will allow us to increase our market share. Consumers will see that we are an environmentally conscious company, which will allow us to attract a new consumer audience that appreciates a sustainable, eco-conscious, and responsible retailer. In addition, this will give PacSun a chance to connect with its consumers who are feeling inspired to make a difference. Lastly, Pacsun will be known as a retailer in the leading revolution to create a more pro-social, conventional, and efficient living environment worldwide.