Marketing Plan 2011-2012 - · PDF file4/1/2013 · Marketing Plan 2011-2012 Stoneage Jeans Co. 40 - A, Off Zafar Ali Rd. Gulberg 5 Lahore, Pakistan. +92 42 111 245 245 +92 42 111 222

Marketing Plan 2011-2012

Stoneage Jeans Co. 40 - A, Off Zafar Ali Rd. Gulberg 5

Lahore, Pakistan. +92 42 111 245 245 +92 42 111 222 245

[email protected]

Table of Contents

Contents 1. Executive Summary ............................................................................................................ 12. Situation Analysis ................................................................................................................ 1

2.1. BCG Portfolio ............................................................................................................... 22.2. Market Needs .............................................................................................................. 22.3. The Market .................................................................................................................. 3

2.3.1. Market Trends ...................................................................................................... 32.3.2. Market Growth ...................................................................................................... 42.3.3. Supply Chain Channels and Logistics ................................................................... 4

2.4. The Company .............................................................................................................. 42.4.1. Mission ................................................................................................................. 42.4.2. Product Offering ................................................................................................... 52.4.3. Differentiation and Positioning .............................................................................. 52.4.4. SWOT Summary .................................................................................................. 6

2.5. Competition .................................................................................................................. 73. Marketing Strategy .............................................................................................................. 9

3.1. Value Proposition ......................................................................................................... 93.2. Critical Issues ............................................................................................................ 103.3. Financial Objectives ................................................................................................... 103.4. Marketing Objectives .................................................................................................. 103.5. Target Market Strategy ............................................................................................... 103.6. Messaging ................................................................................................................. 11

3.6.1. Branding ............................................................................................................ 114. Marketing Mix ................................................................................................................... 11

4.1. Product Marketing ...................................................................................................... 114.1.1. Product Life Cycle .............................................................................................. 11

4.2. Pricing ....................................................................................................................... 124.3. Promotion .................................................................................................................. 12

4.3.1. Advertising ......................................................................................................... 124.3.2. Public Relations ................................................................................................. 134.3.3. Direct Marketing ................................................................................................. 13

4.4. Service ...................................................................................................................... 134.5. Implementation Schedule (Action Plan/Budgets) ........................................................ 13

5. Controls ............................................................................................................................ 145.1. Implementation .......................................................................................................... 145.2. Keys to Success ........................................................................................................ 145.3. Market Research ........................................................................................................ 145.4. Contingency Planning ................................................................................................ 15

6. Appendix .......................................................................................................................... 166.1. Sales Forecast ........................................................................................................... 166.2. Marketing Expense Budget (Expanded) ..................................................................... 176.3. Contribution Margin (Expanded) ................................................................................. 186.4. Marketing Expense Budget ........................................................................................ 196.5. Contribution Magins ................................................................................................... 206.6. Milestones ................................................................................................................. 216.7. ROI ............................................................................................................................ 226.8. Customers Lifetime Value .......................................................................................... 22

Stoneage Marketing Plan 2011-2012

Page 1

1. Executive Summary

Stone Age is a brand identified by its progressive, cutting edge borderline funk that has been inspired by the growing need for an urban youth trend movement. The marketing mix includes the unique, trendy and attractive products which are produces to meet specific design philosophy, the pricing strategy, promotions. The analysis of internal and external strength of the organisation, competitive environment enables the team to propose dynamic and constructive strategies for the successful compliance of company’s objectives and strategic mission. The marketing strategies are outlined to gain major market share across Pakistan with distinguished products of apparel and other accessories for young male and female. It focuses on the Organizational Objectives and Market Proposition.

The forecasted revenues range from a dramatic low of PKR13,425,000 in March 2012 as its the time when the target market is engaged in their curriculum assessments, to a high of PKR 25,295,000 in June 2012 with they are engaged in extracurricular. This variation is due to the seasonality of the Product sales

The accomplishment and success of Stoneage will be measured with the capture of market share in terms of economic value and the increase in the brand value.

2. Situation Analysis

The needs for youth denim is validated and magnified by information that attributes long-term value to their self confidence. Numerous studies document the direct value of youth participation in fashion trends. These studies indicate a direct correlation demonstrating that desire of warring jeans has been completely revolutionized from just jeans to the statement of freedom. Increasing involvement in social activities, Youth in Pakistan has developed brand conscious behaviors. Research indicates the economic, social and personal value of "investing" in the desires of children in a positive and constructive manner avoids the social and penal system costs that may later result. To meet this need, Stoneage offers an experience that serves as a personal "Freedom" for Customers through their Products. These important benefits continue to validate the Stoneage concept of design Philosophy.

Whereas the fast changing customer taste and fashion trends, competition from both low and high end brands and the development in modern selling and distribution techniques are building up difficulties and reducing competitive advantages. Therefore, a new range of appeal and accessories has been launched with the label "Bloodline”.


Page 2

2.1. BCG Portfolio

The two products Ranges of Stoneage lies in the respective quadrants as shown in the matrix below.

2.2. Market Needs

Stoneage Jeans Co. is serving their customers with progressive, cutting edge borderline funk that has been inspired by the growing need for an urban youth trend movement. We design with an edgy creativity while focusing on modern lines and sleek fits. Each and every item out of our denim/casual-wear collection has been designed and tailored with the confident sassy young men and women of today in mind, bringing out their inner freedom:

• Trendy- • Expressive- • High quality- • Consistency- • Customer Service-

Customers usually have a very high involvement when shopping for clothes. Customers can but they do not usually perceive significant differences between brands. Their decisions are based on promotions or word of mouth this is because they are familiar with that particular brand which in our case is Stoneage. Dissonance – Buying Behavior.

Segment Needs & Corresponding Benefits of Stoneage

Target Market Customer Needs Corresponding Benefits Students Male • Jeans that are Stylish • Stylish

STARStoneage Denim

?Stoneage Bloodline

COW DOG


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(consumer market) and Fashion Statement • Rocky

Students Female (consumer market)

• Jeans that are Stylish and Fashion Statement

• Stylish

• Comfortable

Professionals (consumer market)

• Jeans that are Comfortable and Exclusive

• Stylish

• Comfortable

2.3. The Market

Stoneage offers the perfect denim experiences for the increasing population of youth. It offers young people the opportunity to express freedom through fashion. These experiences provide Liberty. A source of increasing self confidence is just one of the many intangible benefits Stoneage offers.

Stoneage targets the youth and startup professionals from Upper and Middle Class as its market segment.

Geographic Density Urban and Metropolitan cities Local Karachi, Lahore, Islamabad, Peshawar, Quetta International Dubai

Demographics Gender Male, Female Age 15 – 35 years Social class Middle and Upper Income More than Rs.60,000 Occupation Professional, students

Psychographic Lifestyle Fashionable, outgoing, achievers Personality Brand Obsessive and ambitious

2.3.1. Market Trends

We stand to benefit from some specific market trends:

• Fashion:

•

Increasing awareness and demand for fashion is widening the market in scope and accelerating growth. Expression:

•

The comprehension of Fashion industry has been revolutionized. Now it is taken as a statement of Comfort, Style, Expression and Freedom. Demographics:

•

The changing role of women in the society is fast, though expanding market size fast. Involvement vs. Differences: Customers usually have a very high involvement when shopping for clothes and they don’t perceive significant differences between brands.


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2.3.2. Market Growth

The growth rate of the target markets has been steady over the Last years. 26% growth in the Men wear and 13.5% in the women wear. Overall growth 24.37%.

2.3.3. Channels and Logistics

Stoneage is a Brand label of Crescent Bahuman Ltd and its products are channelized to end consumer via Direct Sales. Stoneage has its local outlets in the major cities, while it is maintaining an international outlet as well, in Dubai. This is to maintain its exclusiveness.

2.4. The Company

Stone Age is a brand identified by its progressive, cutting edge borderline funk that has been inspired by the growing need for an urban youth trend movement. We design with an edgy creativity while focusing on modern lines and sleek fits. Each and every item out of our denim/casual-wear collection has been designed and tailored with the confident sassy young men and women of today in mind, bringing out their inner freedom.

Stone age is a part of Crescent Bahuman Ltd, one of the country's leading denim exporters boasting a clientele as versatile as Levi's®, Mustang, Bensherman and Xpress Ltd. In less than two years (the first branch opened its doors in March, 2006), Stone Age has become the leader in how denim trends are dictated in Lahore and Karachi (where we have four outlets) and we are further venturing into Islamabad, Multan, Sialkot and Faisalabad. Stone Age is a one-of-its-kind brand as it has recruited the very best denim design talent in the country to lead the way in creating for the discerning masses, thus ensuring quality, exclusivity and accredited style.

2.4.1. Mission

Whether inspired by punk rock, go-getting glam, funk or urban street culture, Stoneage aims to empower the young with a fashion statement to emancipate and liberate. Dressing up the cool and toning down the convention, Stoneage

Supplier CBL

Stoneage Manufacturing

Unit

Dubai Outlets Karachi Outlets Lahore Outlets Islamabad Outlets

Peshawar/Quetta Outlet


Page 5

enhances a trend culture honed in on what the rebels of today crave: street smart threads on a whole new scale of attitude re-born.

2.4.2. Product Offering

Mainly Stoneage is a Brand label for denim products, while just to give the ease of having entire high quality and exclusively designed outfit range under one roof, Stoneage launched Bloodline last year, which is an auxiliary brand or sub label, covering entire range of outfits and accessories.

2.4.3. Differentiation and Positioning

Stoneage focus on the design philosophy. Its Market Positioning is amongst the niche brands in Pakistan. It stands as a Fashion statement expressing Freedom and ruggedness.

Stoneage

Denim

Men

Jasper (Straight Low)

Zircon (Slim Low)

Grabble (Straight)

Embrald (Relaxed High)

Topaz (Boot Low)

Women

Diamond (Slim Low)

Pearl (Boot Low)

Amber (Straight Low)

Garnet (Skin Fit Jeggings)

Bloodline

Man

Tops

Tees

Polos

Woven Shirts

Bottoms

Chino

Accessories

Glasses

Belts

Shoes

Caps

Jewelry

Women

Tops

Polos

Camisole

Tees

Poncho

Tunic

Bottoms

Tights

Accessories

Scarfs

Shoes

Belts

Bags

Glasses

Jewelry


Page 6

2.4.4. SWOT Summary

The following outlines the most significant strengths and weaknesses internal to Stoneage, and the opportunities and threats that exist in our environment. Our objective is to deploy our strengths to score benefits of the opportunities, develop those areas that are weak, and devise plans to confront threats.

Pric

e (R

s)

Quality Design

Positioning MAP

Levi's

Stoneage

Outfitters

Crossroad

Bloodline

Unbranded

Levi Signature


Page 7

2.5. Competition

Stoneage has a market share of 12 % of its targeted market. A number of local and foreign Brands offering Denim experiences are in the Pakistan Market. Every brand has its respective positioning strategy. None of these Brands offers the extensive range of Jeans with experience of Freedom. Some brands do, however, offer specific attributes which customers find attractive. This is particularly true for those who seek a higher level of competition. Some of the competitor brands are Levi's, Outfitter, Crossroad, etc. Most of Stoneage competitors are the clients of Crescent Bahuman Ltd., as it designs and produces their products as well.

• Levi’s – Levi’s is a foreign Brand and has 32% market share in our target market. It positions itself as a Brand with a product line that is Comfortable and with Adventurous Attitude.

• Crossroads – Crossroads is a local brand and has approx. 8% market share in our target market. It is positioning itself as a product line which lies somewhere between the image of Attitude and Fun.

StrengthsWell defined and Realistic Brand Image

Motivated LeadershipAdaptable to changing times

The Goodwill in the Market of the CompanyEfficiently managed resourcesPrime locations within the city

Proper planning in the placement of the BrandIncreasing frequency of customers

Producing for Key competitors

Weaknesses

Improper forecasting of demandHigh infrastructure expenditureLimited OutletsHigh PriceFrequent shifts in the fashion and trends

Encourage InnovationDevelopment of employees by providing training

Reduction in the time between manufacturing the product

Setting up of new stores in new locationsProviding seating facilities in the store

More emphasis on women apparel

Opportunities

Economic Slowdown due to varied factors Unexpected Events Clowning of process by competitors Emergence of new fashion trends which could result in loss of present stock Shift in the customer preferences Emergence of new Brands

Threats

SWOT


Page 8

• Outfitters – It is a Local brand with 7% market share in our target market. It is positioning itself as a Fun product.

A Quality – Comfort/Brand Image matrix of potential competitors is as follows.

Following is the Target Market share Distribution Chart.

Crossroads 8%

Levi's 32%

Outfitters 7%

Stoneage 12%

12%

32%

7%8%

41%

Targeted Market

Stoneage

Levi's

Outfitters

Crossroads

Others

Fun Attitude

Comfort

Quality


Page 9

3. Marketing Strategy

Stoneage strives to be the premier and stylized provider of denim experiences for youth in the areas covered.

The marketing strategy efforts to successfully converse the unique value and philosophy of the brand. This strategy redefines the focus from the "cost" problem to the benefits of exclusive products. The marketing strategy will carry on to recognize the requirements of the market and communicate with them in the most positive and effective manner possible.

Current efforts continually endeavor to understand how Stoneage can maintain the quality and integrity of the Brand within the finite financial resources. This challenge is ever-increasing. As costs carry on increasing in a number of areas, the expectations and demands of our customers do as well. Stoneage is constantly working to improve the products through enhancements and changes in its arrangement and implementation. Excellence in Quality and efficiency are just two goals of these transformations.

The growth stratagem is based on constant attention to the quality of the products in combination with identifying opportunities to develop the distribution wherever possible. Recent penetration in key areas, such as Islamabad and Rawalpindi, present complex challenges for the entire business.

3.1. Value Proposition

Stoneage does much more than simply provide apparel with quality and style to the youth, it provides the significant benefits of expressing, with distinguished appearance, liberating inner self and empowering youth with the confidence to take initiative, that are associated with individuals’ involvement in economic, social and professional activities. These benefits value higher as the value we ask for the brand. Stoneage keeps itself amongst the high end brands with similar products, in the market, keeping itself a bit different by its design philosophy. Primarily, the marketing strategy made and implemented in the past few years, have raised the brand value amongst the top brand. But now Stoneage needs to distinguish itself and exploit the uniqueness of the brand.

Price

Bene

fits More for More

More for SameSTONEAGE

More for Less

Same

Less for Less


Page 10

The whole marketing mix of Stoneage is designed in away to set high quality and style standards in the mind, customers are convinced that what they get is more then what they pay.

The new endeavor should be to set an image in the minds of the customers about the importance of “Being Pakistani and Buying Pakistani” and that our brands can outshine internationals ones.

3.2. Critical Issues

Our strengths are impressive. Our weaknesses are identified and have potential solutions. Stoneage could be described as in a "speculative" situation. We are presented with numerous opportunities and also have threats that present a level of risk. However, we have a chance to experience large returns on our efforts if we can continue to capture the entire market share of the targeted segment and are not negatively impacted by the alternative products in our market. We are well positioned in the market. We have the ability to continue to offer the greatest value and we take advantage of our economies of scale.

The critical issues include the following:

• Continuing to offer products that are perceived to be positive, enriching, and affordable as compared to the alternatives.

• Comprehending customers rapidly changing preferences. • Portraying the acceptable brand image and the design philosophy.

3.3. Financial Objectives

1. Raise Contribution Margin to a minimum level of $45,000,000 within the next fiscal year.

2. Double the Brand Value within next two years. 3. 15% reducing in Production and Direct Sales Costs.

3.4. Marketing Objectives

The objective is to provide quality and stylish products with this valuable experience of exclusiveness, liberty and inner freedom to the youth. The design philosophy of Stoneage is unique and requires stimulated exploitations.

1. We need to expand and penetrate into the market in major cities of Pakistan. 2. We need to establish the brand as trend setters. 3. We need to position the brand in the youth mind as the exclusive, liberators. 4. We need to understand the changing preferences and tastes of the market.

3.5. Target Market Strategy

Youth are the major consumers of Denim Products, therefore, the target market for Stoneage continues to be youth, who are involved in educational, social and startup professional activates and located in major Metro – Cities. To increase the share Target Market Stoneage need to focus on their needs and the positioning they have for the brand. Stoneage is at the growth stage; therefore it requires a huge promotion, to get lime light. This promotion will not be persuasive at all. On the other hand it will exploit the brands exclusiveness.


Page 11

3.6. Messaging

The core message of Stoneage is one of value:

Stoneage design philosophy is to empower the young with a fashion statement to emancipate and liberate.

3.6.1. Branding

The Stoneage brand communicates the complete design philosophy, building up an outstanding fashion statement. The brand embodies the values that we believe and focuses on bringing out the Inner freedom and self confidence in the youth.

The Stoneage branding ranges from glossy images in Fashion magazines, Branding Ramp walks and gigs to OOH. Traditionally almost all fashion labels do this. To outstand and position Stoneage above all, a campaign in different educational institutions must be launched, in a distinctive way.

Target Market Messaging Messaging Market Segments Dare to Wear Men Wear Freedom Statement Women

4. Marketing Mix

Stoneage premium quality and style designs market itself as one of the leading fashion statement. Costs of the production has been reduced, despite of the fact that the brand equity increases the retail price. Stoneage developed a complete distinctive method of Fashion Brand Marketing.

4.1. Product Marketing

The product itself is a key component to our marketing mix. Our product should be our best advertisement. In this case even more, because our specialization in denim and quality can't alone make the brand grow. The style of Stoneage product must be a trend setter, meet the product philosophy and the design of the products must meet the changing taste of the youth. The Product Life Cycle is in the Growth stage.

4.1.1. Product Life Cycle

Stoneage sits in the region where it is still growing. This is because it is a new brand launched in 2004. It is still gaining relative market share. It has few competitors. It has untouched potential markets that it needs to penetrate. Investments are higher as Stoneage products are at growth.


Page 12

4.2. Pricing

Stoneage strives to minimize costs on the entire range of products, so that everyone can afford it.

Stoneage is also maintaining a Factory outlet in Karachi to facilitate those youth who can't afford latest products.

• Our pricing strategy will be based on competitive parity guidelines. We will not exceed competitors' prices by more than 10%.

• Price says a lot about a product. The products that are exclusive and not available elsewhere in the region will be marked up to meet the demand curve. We are not afraid of premium pricing a premium product.

4.3. Promotion

Stoneage' promotion strategy is a three-pronged approach of advertising, public relations and direct marketing to the youth specifically.

Because Stoneage has a limited marketing budget, Stoneage will take a more grass-roots approach and leverage PR and volunteers to assist with marketing to our target audiences.

4.3.1. Advertising

Stoneage will do some traditional promotions, like Photoshoots in Fashion Magazine, Ramp Walks and OOH in Karachi and Lahore.


Page 13

4.3.2. Public Relations

Stoneage does not have excess advertising budget and will not be advertising through TVCs. Instead, Stoneage will focus on most distinct and highly-targeted campaigns to reach Youth where they are most: Educational Institutes. This campaign will hit the market with the Summer Launch.

Stoneage will organize a series of talent Shows at major Institutions in Karachi, Lahore, Islamabad, Peshawar and Quetta and a mega final event in Lahore, with a media partner. The theme of the series of these events, is "Express your Freedom". Stoneage believes that every individual bares distinctive characteristics, so the participants are incomparable. The most distinctive individuals or groups will be selected, to participate in the Mega event. The judgments will be done by the brand ambassadors respective to their industries. All events to be organized at the institution will be with the cooperation of the student societies, who will volunteer entire event management sponsored by Stoneage and Media Partner. The society managed the best event in relationship (50/50) with minimum budget will get a chance to organize the Mega event. Selections at institutions will be done by Student Votes through Mobile Messaging and Stoneage Website with their personal information and identified through their institution name and IDs.

These events will seek Musical and Rampwalks talents.

4.3.3. Direct Marketing

The Data that will be gathered through Votes during "Express your Freedom", will serve as relative research data. This Data will be used for direct marketing through, e-mails and sms marketing.

Stoneage will start a customer loyalty card programs. The sign-ups will be done during "Express your Freedom", on the bases of the data collected through voting procedure.

4.4. Service

Service is important to our mix. We have an obligation to provide quality products and cheerful service, effectively and efficiently. Our service goals are simple and easy to maintain.

We will make plain our policy that we do not accept returns or exchanges without receipt and proof of product failure. We are in this to make money, as a business, and cannot afford to give our value to free riders or people with 'buyer's remorse', who choose not to take responsibility for their purchase(s).

4.5. Implementation Schedule (Action Plan/Budgets)

The table 6.5. identify the key marketing programs. Milestones for Dates and budgets are specified. We will track plan-vs.-actual results for each of these programs and evaluate them at our quarterly Board of Directors meetings. If we discover they are not accomplishing the intended goals necessary, the programs will be revised. For monthly details see table 6.2.


Page 14

5. Controls

The purpose of the Stoneage marketing plan is to serve as a guide to the staff, the Board of Directors, and the volunteers to continue to improve the organization and its ability to provide denim to the youth of the Country. We must take action to accomplish our goals. Failing to implement even one of the programs could be devastating to our success.

5.1. Implementation

Stoneage marketing team will conduct weekly Milestones Meetings with the Stakeholders, to review current milestone status, funding status, and status of the actual programs.

For Stoneage, it's critical that there is consistent focuses on implementation in order to not only maintain strong programs, but to maintain strong relationships with customers. The Customers' Lifetime Value table 6.8 shows the long-term value of our average customers which is testament to the need for focus on implementation of both milestones and program quality.

5.2. Keys to Success

• Expand into new areas within Pakistan, by opening outlet and launching campaigns.

• Leverage the growth offered by the increasing brand awareness. • Identify additional Market segment to support future growth and offer wider

range of Products. • Continue to develop.

5.3. Market Research

An effective Market Research can be developed by gathering Data through Sign – Ups and Blotting during the Event series “Express your Freedom” proposed for promotion. Loyalty card subscription is a research method which will be adopted to gain customers life time value. Whereas previous researches were conducted by following methods.

• Initial Question Results -- The staff notes customer responses to the "How did you hear about us?" question.

76% Answers: “from Peers” 12% Answers: “Fashion Magazine” 12% Answers: “Rampwalks”

We attempt to correlate that with our advertising and promotional activities and referral-generation programs.

• Store Suggestions -- The store suggestion box is another method to gain additional information from customers. Some of the most productive questions are:

o What suggestion do you have to improve the store? o Why did you visit the store today? o What other products or services would you like to have available in the

store? • Competitive Shopping -- We continually shop other stores. This is to gain

Customers Insight. We visit each store in our market at least once each quarter


Page 15

for competitive information, we visit stores in the Karachi and Lahore markets for merchandising and buying insight, and we subscribe to every catalog we know that has alternatives as any part of their product line.

5.4. Contingency Planning

The following lists, in order of probability beginning with the highest potential for change that will impact this marketing plan, the future of Stoneage:

• Major philosophy shift regarding the use changing customer choices. • The rapid growth of one of the alternative brand that significantly reduces our

market share and our ability to operate.

Appendix

Page 16

6. Appendix

6.1. Sales Forecast Sales Forecast

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Sales 26%

Stoneage Denim Men Collection

PKR17,500,000

PKR16,600,000

PKR14,600,000

PKR12,200,000

PKR11,900,000

PKR12,200,000

PKR14,300,000

PKR12,200,000

PKR10,000,000

PKR9,500,000 PKR18,000,000

PKR19,000,000

72%

Stoneage Denim Women Collection

PKR1,250,000 PKR1,200,000 PKR1,150,000 PKR1,200,000 PKR1,400,000 PKR1,600,000 PKR1,800,000 PKR2,500,000 PKR3,200,000 PKR4,000,000 PKR4,500,000 PKR4,200,000

0%

Bloodline Men Collection

PKR1,500,000 PKR1,400,000 PKR750,000 PKR600,000 PKR500,000 PKR150,000 PKR100,000 PKR55,000 PKR25,000 PKR20,000 PKR200,000 PKR1,700,000

76%

Bloodline Women Collection

PKR75,000 PKR50,000 PKR45,000 PKR65,000 PKR95,000 PKR150,000 PKR185,000 PKR220,000 PKR200,000 PKR300,000 PKR320,000 PKR395,000

Total Sales PKR20,325,000

PKR19,250,000

PKR16,545,000

PKR14,065,000

PKR13,895,000

PKR14,100,000

PKR16,385,000

PKR14,975,000

PKR13,425,000

PKR13,820,000

PKR23,020,000

PKR25,295,000

Direct Cost of

Sales Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Stoneage Denim Men Collection


Stoneage Denim Women Collection


Bloodline Men Collection

PKR1,200,000 PKR1,200,000 PKR700,000 PKR500,000 PKR450,000 PKR135,000 PKR95,000 PKR54,000 PKR24,700 PKR19,500 PKR185,000 PKR900,000

Bloodline Women Collection


Subtotal Direct Cost of Sales


Appendix

Page 17

6.2. Marketing Expense Budget (Expanded) Marketing Expense Budget

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Pay-Per-

Click PKR43,500 PKR43,500 PKR43,500 PKR43,500 PKR43,500 PKR43,500 PKR43,500 PKR43,500 PKR43,500 PKR43,500 PKR43,500 PKR43,500

Direct Marketing

PKR1,300,000 PKR1,200,000 PKR1,200,000 PKR1,200,000 PKR1,200,000 PKR1,200,000 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0

Public Relations

PKR29,000,000 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0

Photoshoots PKR400,000 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 Monthly

Fashion Magazine

PKR0 PKR0 PKR0 PKR700,000 PKR700,000 PKR700,000 PKR700,000 PKR700,000 PKR700,000 PKR700,000 PKR700,000 PKR1,400,000

OOH Summer Campaign

PKR500,000 PKR500,000 PKR500,000 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR500,000 PKR500,000 PKR500,000

OOH Winter Campaign

PKR0 PKR0 PKR0 PKR500,000 PKR500,000 PKR500,000 PKR500,000 PKR500,000 PKR500,000 PKR0 PKR0 PKR0

------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Total Sales

and Marketing Expenses

$31,243,500 $1,743,500 PKR1,743,500 PKR2,443,500 PKR2,443,500 PKR2,443,500 PKR1,243,500 PKR1,243,500 PKR1,243,500 PKR1,243,500 PKR1,243,500 PKR1,943,500

Percent of Sales

153.72% 9.06% 10.54% 17.37% 17.59% 17.33% 7.59% 8.30% 9.26% 9.00% 5.40% 7.68%

Appendix

Page 18

6.3. Contribution Margin (Expanded) Contribution Margin

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Sales $20,325,000 $19,250,000 $16,545,000 $14,065,000 $13,895,000 $14,100,000 $16,385,000 $14,975,000 $13,425,000 $13,820,000 $23,020,000 $25,295,000 Direct Costs

of Goods $7,895,000 $7,285,000 $6,785,000 $6,090,000 $5,947,000 $5,760,000 $6,730,000 $5,714,000 $6,134,700 $5,564,500 $9,935,000 $11,775,000

Costs of Goods

$250,000 $250,000 $250,000 $200,000 $200,000 $200,000 $250,000 $200,000 $175,000 $185,000 $250,000 $245,000

------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Cost of

Goods Sold $8,145,000 $7,535,000 $7,035,000 $6,290,000 $6,147,000 $5,960,000 $6,980,000 $5,914,000 $6,309,700 $5,749,500 $10,185,000 $12,020,000

Gross

Margin $12,180,000 $11,715,000 $9,510,000 $7,775,000 $7,748,000 $8,140,000 $9,405,000 $9,061,000 $7,115,300 $8,070,500 $12,835,000 $13,275,000

Gross Margin %

59.93% 60.86% 57.48% 55.28% 55.76% 57.73% 57.40% 60.51% 53.00% 58.40% 55.76% 52.48%

Marketing

Expense Budget

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Pay-Per-Click


Direct Marketing

PKR1,300,000 PKR1,200,000 PKR1,200,000 PKR1,200,000 PKR1,200,000 PKR1,200,000 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0

Public Relations

PKR29,000,000 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0

Photoshoots PKR400,000 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 Monthly

Fashion Magazine

PKR0 PKR0 PKR0 PKR700,000 PKR700,000 PKR700,000 PKR700,000 PKR700,000 PKR700,000 PKR700,000 PKR700,000 PKR1,400,000

OOH Summer Campaign

PKR500,000 PKR500,000 PKR500,000 PKR0 PKR0 PKR0 PKR0 PKR0 PKR0 PKR500,000 PKR500,000 PKR500,000

OOH Winter Campaign

PKR0 PKR0 PKR0 PKR500,000 PKR500,000 PKR500,000 PKR500,000 PKR500,000 PKR500,000 PKR0 PKR0 PKR0

------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Total Sales

and Marketing Expenses

$31,243,500 $1,743,500 PKR1,743,500 PKR2,443,500 PKR2,443,500 PKR2,443,500 PKR1,243,500 PKR1,243,500 PKR1,243,500 PKR1,243,500 PKR1,243,500 PKR1,943,500

Percent of Sales

153.72% 9.06% 10.54% 17.37% 17.59% 17.33% 7.59% 8.30% 9.26% 9.00% 5.40% 7.68%

Contribution

Margin ($19,063,500) $9,971,500 $7,766,500 $5,331,500 $5,304,500 $5,696,500 $8,161,500 $7,817,500 $5,871,800 $6,827,000 $11,591,500 $11,331,500

Contribution Margin / Sales

-93.79% 51.80% 46.94% 37.91% 38.18% 40.40% 49.81% 52.20% 43.74% 49.40% 50.35% 44.80%

Appendix

6.4. Marketing Expense Budget

Marketing Expense Budget FY 2012 Pay-Per-Click PKR522,000 Direct Marketing PKR7,300,000 Public Relations PKR29,000,000 Photoshoots PKR400,000 Monthly Fashion Magazine PKR7,000,000 OOH Summer Campaign PKR3,000,000 OOH Winter Campaign PKR3,000,000 ------------ Total Sales and Marketing Expenses PKR50,222,000 Percent of Sales 24.49%

1.04%

14.54%

57.74%

0.80%

13.94%

5.97% 5.97%

Pay-Per-Click Direct Marketing

Public Relations Photoshoots Monthly Fashion Magazine

OOH Summer Campaign

OOH Winter Campaign

Marketing Expense Budget


Appendix

6.5. Contribution Margins

Contribution Margin FY 2012 Sales $205,100,000 Direct Costs of Goods $85,615,200 Costs of Goods $2,655,000 ------------ Cost of Goods Sold $88,270,200 Gross Margin $116,829,800 Gross Margin % 56.96% Marketing Expense Budget FY 2012 Pay-Per-Click PKR522,000 Direct Marketing PKR7,300,000 Public Relations PKR29,000,000 Photoshoots PKR400,000 Monthly Fashion Magazine PKR7,000,000 OOH Summer Campaign PKR3,000,000 OOH Winter Campaign PKR3,000,000 ------------ Total Sales and Marketing Expenses PKR50,222,000 Percent of Sales 24.49% Contribution Margin PKR66,607,800 Contribution Margin / Sales 32.48%

Appendix

6.6. Milestones

Milestones

Advertising Start Date End Date Budget Manager Department 1/1/2011 Product Photoshoots 31/3/2011 PKR4,000,000 Yasir

Saeed Marketing

1/4/2011 Monthly Fashion Magazine 31/12/2011 PKR7,000,000 Yasir Saeed

Marketing

1/3/2011 OOH Summer Campaign 31/7/2011 PKR3,000,000 Yasir Saeed

Marketing

1/9/2011 OOH Winter Campaign 31/12/2011 PKR3,000,000 Yasir Saeed

Marketing

Total Advertising Budget PKR17,000,000 PR Start Date End Date Budget Manager Department

1/2/2011 Lahore Events 14/8/2011 PKR11,000,000 Yasir Saeed

Marketing

1/2/2011 Karachi Events 31/5/2011 PKR5,500,000 Yasir Saeed

Marketing

1/2/2011 Islamabad Events 31/5/2011 PKR5,500,000 Yasir Saeed

Marketing

1/2/2011 Peshawar Events 31/5/2011 PKR3,500,000 Yasir Saeed

Marketing

1/2/2011 Quetta Events 31/5/2011 PKR3,500,000 Yasir Saeed

Marketing

Total PR Budget PKR29,000,000 Direct Marketing Start Date End Date Budget Manager Department

1/7/2011 SMS Marketing 31/12/2011 PKR500,000 Yasir Saeed

Marketing

1/7/2011 E-Mail Marketing 31/12/2011 PKR300,000 Yasir Saeed

Marketing

1/7/2011 Customer Loyalty Cards 31/12/2011 PKR6,500,000 Yasir Saeed

Marketing

Total Direct Marketing Budget PKR7,300,000 Totals $54,050,000

Appendix

6.7. ROI Return On Investment (ROI)

Events Campaign Details 500,000 Total Impressions PKR67,500,000.00 Total Program Cost 95.00% Response Rate 15.00% Conversion Rate PKR5,000.00 Average Customer Purchase Response 475,000 Total Responders 71,250 Total Buyers PKR356,250,000.00 Revenue Generated Costs PKR142.11 Cost per Response PKR947.37 Cost per Sale PKR288,750,000.00 Total Campaign Profit

Marketing ROI 27.78%

6.8. Customers Lifetime Value Customer Lifetime Value

Customer Purchase Forecast: 20 Average Customer Lifetime (years): 7 Average number of purchases per year: PKR45,000.00 Average purchase value: 57% Average Gross Margin %: PKR25,632.00 Gross Margin per purchase PKR3,588,480.00 Total Customer Purchases:

Customer Acquisition Costs: PKR14.76 Cost of marketing to a potential customer: 56% Average conversion rate: PKR26.51 Subtotal Cost of attracting customer: PKR25.63 Other one-off costs for first-time customers: PKR52.14 Total Customer Acquisition Costs: PKR3,588,427.86 Unadjusted Customer Lifetime Value: Adjusted Customer Lifetime Value: 12% Discount Rate:

Net Present Value of Customer Lifetime Value: PKR372,000.71

Appendix

Work Distribution

Name Signatures

Adeel A. Siddiqui

• Outline Structuring

• Situations Analysis

• Proof Reading

__________________________

Eruj Nazar Mehmood

• Correspondence with Yasir Saeed

• Marketing Strategy

• Report Compilation (First Half)

__________________________

Mansoor Ahmed Khan

• Marketing Research

• Action Plan/Budgeting

• Controls

__________________________

Rida Idrees

• Marketing Mix

• Report Compilations (Second Half)

• Presentastions

__________________________

10/4/2012

1


Submitted by:

Adeel Amir SiddiquiEruj Nazar MehmoodMansoor Ahmed Khan Rida Idrees

Section A (MBA – R – 2 Yrs)

Faculty:Samra Shehzad

About

Brand for Crescent Bahuman Ltd. Denim and Accessories 12% Market Share of Targeted Market 12% Market Share of Targeted Market

Segment. Market growth rate 24.37%

Mission

Aims to empower the young with a fashion statement to emancipate and liberatestatement to emancipate and liberate

Market NeedsUrban Youth Trend

StyleExpression of Freedom

ComfortHigh QualityConsistency

Customer Service

Target Market

Geographic

Density Urban and Metropolitan cities

Local Karachi, Lahore, Islamabad, Peshawar, Quetta

International Dubai

Demographics

Gender Male, Female

Age 15 – 35 years

Social class Middle and Upper

Income More than Rs.80,000

Occupation Professional, students

Psychographic

Lifestyle Fashionable, outgoing, achievers

Personality Brand Obsessive and ambitious

Direct Sales Channel

Supplier CBL

StoneageManufacturing

Unit

Dubai Outlets Karachi Outlets Lahore Outlets Islamabad Outlets Peshawar/Quetta Outlet

10/4/2012

2

Competitors

Levi’s Outfitters Crossroads

12%

32%

7%8%

41%

Targeted Market

Stoneage

Levi's

Outfitters

Crossroads

Others

Competitors Brand Image Portfolio

Levi's 32%

Stoneage 12%

Comfort

Crossroads 8%Outfitters

7%

Fun Attitude

Quality

Differentiation and Positioning

Unique Design Philosophy Amongst the to top brands in Pakistan Stands as a fashion statement expressing

freedom and ruggednessfreedom and ruggedness Providing the quality and design that

competes with any international brands at an affordable price

Differentiation & PositioningPositioning MAP

Levi's

Stoneage

Pri

ce (

Rs)

Quality Design

Stoneage

Outfitters

Crossroad

Bloodline

Unbranded

Levi Signature

BCG Portfolio

STARStoneage Denim

?Stoneage Bloodline

COW DOG

StrengthsWell defined and Realistic Brand Image

Motivated Leadership

Adaptable to changing times

The Goodwill in the Market of the Company

Efficiently managed resources

Prime locations within the city

Proper planning in the placement of the Brand

Increasing frequency of customers

Producing for Key competitors

Weaknesses

Improper forecasting of demand

High infrastructure expenditure

Limited Outlets

High Price

Frequent shifts in the fashion and trends

SWOT

Encourage Innovation

Development of employees by providing training

Reduction in the time between manufacturing the product

Setting up of new stores in new locations

Providing seating facilities in the store

More emphasis on women apparel

Opportunities

Economic Slowdown due to varied factors

Unexpected Events

Clowning of process by competitors

Emergence of new fashion trends which could result in loss of present stock

Shift in the customer preferences

Emergence of new Brands

Threats

SWOT

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3

MARKETING STRATEGYEruj Nazar

Marketing Strategy

Attempts to successfully communicate the brand’s unique value and philosophy

Redirects the focus from the cost to the benefits

Maintain the quality and integrity Growth Strategy – Identify opportunities

to diversify products and distribution

Value Proposition

Price

More for More

More for SameSTONEAGE

More for Less

Bene

fits

More STONEAGE

Same

Less for Less

Critical Issues

Consistently offering products that are perceived to be positive, enriching, and affordable as compared to the alternatives.

Comprehending customers rapidly changing preferences.

Portraying the acceptable brand image and the design philosophy.

Marketing Objectives

We need to expand and penetrate into the market in major cities of Pakistan.

We need to establish the brand as trend setters.

We need to position the brand in the youth mind as the exclusive, liberators.

We need to understand the changing preferences and tastes of the market.

Customer Buying Behavior

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4

Customer Buying Behavior

Customers usually have a very high involvement when Shopping for clothes.

Customers can but they do not usually perceive significant differences between brands.

Their decisions are based on promotions or word of mouth this is because they are familiar with that particular brands which in our case is Stoneage.

Target Market Strategy

Buying power Targets the youth of different colleges and

universities High income High income educated

Branding Messages

Men’s Wear – Dare to ware Women’s Wear Wear Freedom Women s Wear – Wear Freedom

Statement

Design Philosophy

Exclusive Stylish Rocky Liberating Liberating

MARKETING MIXRida Idress

Product OfferingsStoneage

Denim

Men

Jasper (Straight Low)

Zircon (Slim Low)

Women

Diamond (Slim Low)

Pearl (Boot Low)

Bloodline

Man

Tops

Tees

Bottoms

Chino

Accessories

Glasses

Women

Tops

Polos

Bottoms

Tights

Accessories

Scarfs

Grabble (Straight)

Embrald (Relaxed High)

Topaz (Boot Low)

Amber (Straight Low)

Garnet (Skin Fit Jeggings)

Polos

Woven Shirts

Belts

Shoes

Caps

Jewelry

Camisole

Tees

Poncho

Tunic

Shoes

Belts

Bags

Glasses

Jewelry

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5

Product Life Cycle (PLC) Pricing strategy

Our pricing strategy will be based on competitive parity guidelines. We will not exceed competitors' prices by more than 10%.P i l b d Th Price says a lot about a product. The products that are exclusive and not available elsewhere in the region will be marked up to meet the demand curve. We are not afraid of premium pricing a premium product.

Promotions

Advertising Public Relations Direct Marketing Direct Marketing

Advertising

Photoshoots Fashion Magazines Ramp Walks OOH OOH

Public Relations

Series of Events “Express your Freedom Event Management, Musical and Ramp

Walk Talent Hunt in Educational Walk Talent Hunt in Educational Institutions

No Competition Grande Event on 14th August, 2011

Direct Marketing

E – mails SMS Phone Call Phone Call Customer’s Loyalty Card

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Service

Obligation to provide quality products and cheerful service, effectively and efficiently

Policy of not accepting returns or exchanges without receipt and proof of product failurewithout receipt and proof of product failure

RESEARCH & CONTROLS

MansoorAhmed Khan

CONTROLS

Market Research Tool

Present Tools◦ Store Suggestion◦ Competitive Shopping

Future ToolsFuture Tools◦ Signups◦ Event Voting◦ Customer’s Loyalty Card

Milestones & BudgetsMilestones

Advertising Start Date End Date Budget Manager Department

ProductPhotoshoots

1/1/2011 31/3/2011 PKR4,000,000 Yasir Saeed Marketing

Monthly FashionMagazine


OOH SummerCampaign


OOH WinterCampaign


Total AdvertisingBudget

PKR17,000,000

PR Start Date End Date Budget Manager DepartmentPR Start Date End Date Budget Manager Department

Lahore Events 1/2/2011 14/8/2011 PKR11,000,000 Yasir Saeed Marketing

Karachi Events 1/2/2011 31/5/2011 PKR5,500,000 Yasir Saeed Marketing

Islamabad Events 1/2/2011 31/5/2011 PKR5,500,000 Yasir Saeed Marketing

Peshawar Events 1/2/2011 31/5/2011 PKR3,500,000 Yasir Saeed Marketing

Quetta Events 1/2/2011 31/5/2011 PKR3,500,000 Yasir Saeed Marketing

Total PR Budget PKR29,000,000

Direct Marketing Start Date End Date Budget Manager Department

SMS Marketing 1/7/2011 31/12/2011 PKR500,000 Yasir Saeed Marketing

E-Mail Marketing 1/7/2011 31/12/2011 PKR300,000 Yasir Saeed Marketing

Customer LoyaltyCards


Total DirectMarketing Budget

PKR7,300,000

Totals $54,050,000

Marketing Expenses Budget

57.74%


1.04%

14.54%

0.80%

13.94%

5.97% 5.97%

Pay-Per-Click Direct Marketing Public Relations Photoshoots Monthly Fashion Magazine

OOH Summer Campaign

OOH Winter Campaign


Controls

Implementations must meet Milestones Marketing ROI 27.78% Customer’s Lifetime Value PKR375 000 Customer s Lifetime Value PKR375,000 Competitive Shopping

10/4/2012

7

Keys to Success

Expand into new areas within Pakistan, by opening outlet and launching campaigns.

Leverage the growth offered by the increasing brand awareness.g

Identify additional Market segment to support future growth and offer wider range of Products.

Continue to develop.

Documents

Marketing Plan 2011-2012 - · PDF file4/1/2013 · Marketing Plan 2011-2012 Stoneage Jeans Co. 40 - A, Off Zafar Ali Rd. Gulberg 5 Lahore, Pakistan. +92 42 111 245 245 +92 42 111 222