Shoes Project by Usman Akram

Executive Summary

Nowadays, in our hectic lives, ladies face a general problem matching pair of shoes with their costumes and a new pair of shoes for new costumes. Using this once will make you a loyal believer of its advantages, which the industry has never witnessed before.Our mantra is “INNOVATION AND CUSTOMER SATISFACTION LEAD TO SUCCESS”.A product is not only a product it is a bundle of qualities and services, our shoes will be environmental friendly as we will use those materials which will bio degrade self. Since our shoes upper leather changeable so we will provide different styles of upper leathers with a pair of shoes you get five types of upper leathers with our exclusive shoes which a customer can purchase and change her shoes according to his choice. Pakistan's estimated population in 174,578,558 (July 2009) is over making it the world's sixth most-populous country, behind Brazil and ahead of Russia. Due to high birth rate urban population will double in the next 20 years causing more and more opportunity for the promotion of shoes business. Matching shoes keep on observing and predictions the changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle. We carefully research that what will be the new colors and designs for the next upcoming season, for this we pick the themes and colors from Gul Ahmad lawn prints, an idea from western designer’s collections and from the Indian entertainment media. Initially, we are 100% depended on our venders designs but our target is relaying 30% on our venders and 70% of our own design because of tough competition in footwear market as well as due to the design theft we are more focusing on our own designs and styles. Focus is to target the shopping areas where shops for ladies accessories and products are available. The plan involves opening up outlets wherever the outlets of Stylo and ECS are already operating.

THE UNIVERSITY OF LAHORE Page 1

http://en.wikipedia.org/wiki/Russia

http://en.wikipedia.org/wiki/Brazil

http://en.wikipedia.org/wiki/Pakistan

Vision statement

To grow as a dynamic, innovative and market driven domesticManufacturer and distributor, with footwear as our core business, while maintaining a commitment to the country, culture and environment in which we operate.

Mission statement

To be successful as the most dynamic, flexible and market responsive organization, with foot wear as its core business and get maximum satisfaction level of our customers.

SoleThe bottom of a shoe is named the sole.InsoleThe insole is the interior bottom of a shoe, which sits directly beneath the foot. Many shoes have removable and replaceable insoles, and extra insoles are often added for comfort or health reasons (to control the shape, moisture, or smell of the shoe).OutsoleThe outsole is the layer in direct contact with the ground. The material of the outsole depends on the function, dressiness, and quality of the shoe, but is generally very durable material, since it experiences the most stress. Dress shoes have leather outsoles; casual or work-oriented shoes have outsoles made of natural rubber or a synthetic imitation. The outsole may comprise a single piece, or may comprise separate pieces of different materials. Often the heel of the sole is rubber for durability and traction, while the front is leather for style.

HeelThe bottom rear part of a shoe is the heel. These come in a variety of sizes and are usually made to support the large stresses applied to the heel of the foot.


They are often made of the same material as the sole of the shoe. This part can be high to make the person look taller, or flatVamp, or upper any shoe has an upper part that helps hold the shoe onto the foot. In the simplest cases, such as sandals or flip flops, this may be nothing more than a few straps for holding the sole in place. This part is normally decorated or is made in a certain style to look fashionable and attractive for the buyer.

BUSINESS RATIONAL

Ladies face a general problem matching pair of shoes with their costumes and a new pair of shoes for new costumes. Since our shoes upper leather changeable so we will provide different styles of upper leathers with a pair of shoes you get five types of upper leathers with our exclusive shoes which a customer can purchase and change her shoes according to his choice.

MACROECONOMIC INDICATORS OF PAKISTAN

DEMOGRAPHY OF PAKISTANThe population of Pakistan was 32.5 million in 1947. Over the last fifty-five years, it has increased by four folds reaching to a figure of 156 Million approximately. It is expected to 172 million marks in the year 2010. The demographic details of Pakistan’s population areGiven below:


Demography of Pakistan July 2009

Pakistan's estimated population in 174,578,558 (July 2009) is over making it the world's sixth most-populous country, behind Brazil and ahead of Russia. During 1950-2008, Pakistan's urban population expanded over sevenfold, while the total population increased by over fourfold. In the past, the country's population had a relatively high growth rate that has, however, been moderated by declining fertility and birth rates. The population growth rate now stands at 1.6%.

Population

174,578,558 (July 2009 est.)

Age structure

0-14 years: 36.7% (male 33,037,943/female 31,092,572) 15-64 years: 59.1% (male 53,658,173/female


Demographics of Islamic Republic of Pakistan

Population of Pakistan, 1961-2003

Population: 174,578,558 (July 2009)

Growth rate: 1.6%

Birth rate: 31 births/1,000 population (2009)

Death rate: 8 deaths/1,000 population (2009)

Life expectancy: 63.39 years (2009)

–male: 62.4 years (2009)

–female: 64.44 years (2009)

Fertility rate: 3.58 children born/woman (2008 est.)

Age structure:

0-14 years: 36.7% (male 33,037,943/female 31,092,572)

15-64 years: 59.1% (male 53,658,173/female 49,500,786)

65-over: 4.2% (male 3,495,350/female 3,793,734) (2009 est.)

http://en.wikipedia.org/wiki/Russia

http://en.wikipedia.org/wiki/Brazil

http://en.wikipedia.org/wiki/Pakistan

http://en.wikipedia.org/wiki/Islamic_Republic_of_Pakistan

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49,500,786) 65 years and over: 4.2% (male 3,495,350/female 3,793,734) (2009 est.)

Population growth rate

1.6% (2009 est.)

Birth rate

25.89 births/1,000 population (2009 est.)

Death rate

7.21 deaths/1,000 population (July 2009 est.)

Urbanization

Urban population: 36% of total population (2008) rate of urbanization: 3% annual rate of change (2005-10 est.)

Sex ratio

At birth: 1.05 male(s)/female under 15 years: 1.06 male(s)/female 15-64 years: 1.05 male(s)/female 65 years and over: 0.88 male(s)/female total population: 1.04 male(s)/female (2009 est.)

Infant mortality rate

Total: 67.36 deaths/1,000 live births male: 70.65 deaths/1,000 live births female: 63.91 deaths/1,000 live births (2009 est.)


Life expectancy at birth

total population: 65.26 years male: 63.51 years female: 67.11 years (2009 est.)

Total fertility rate

3.43 children born/woman (2009 est.)

POPULATION GROWTH

Achieving a world of population in balance with its environmental resources is crucial to the future of our planet and the welfare of its people. Population growth is a complex issue that directly or indirectly impacts all aspects of our lives and the conditions under which we live.During the past 25 years, cultivable land has increased by 27 percent compared to 98 percent increase in population.1 Due to high birth rate urban population will double in the next 20 years causing more and more opportunity for the promotion of furniture business.At present year 2005-6 the annual population growth rate is around 2.25 in country.Pakistan’s population will be twice over in less than 32 years. Punjab is the most thickly populated area and Karachi is the most densely populated city. Keeping in view the growth rate of population of the country it is likely that housing requirements will enhance andAutomatically demand for home and office furniture will be increase.

DEMAND & SUPPLYOn the basis of present population and assuming the per capita consumption of one pair, the present estimated domestic consumption is 160 million pairs as there are no imports of Footwear in the country, to match the annual growth in population projected future requirement of footwear must be 8% for local consumption and 20 %growth for export.


Accessories to shoesShoe tree - placed inside the shoe when user is not wearing it, to help maintain the shoe's shape

Shoe polishing equipment:Shoe polish - a waxy material spread on shoes to improve appearance, glossiness, and provide protection Shoe brush and polishing cloth - used to apply polish to shoes.

Overshoes or galoshes: - A rubber covering placed over shoes for rain and snow protection

COMPETITOR ANALYSISMATCHING SHOES has three direct competitors in the market. STYLO:


They started with one rented outlet in Lahore in 1974, to becoming the largest selling ladies’ Shoes brand in Pakistan and the largest ladies shoes retail network in the country as well, Stylo Shoes has come a long way. They are currently present in 16 cities with 27 outlets and plan on expanding further in the coming months. Ehsan Chappal Store First outlet opened in 1954 in Anarkali and soon became a ragging success for its excellent quality and designing. Since then we have been expanding operations in the fields of manufacturing, importing exporting and retailing. ECS owns multiple brands of ladies and girl’s footwear, bags and accessories including ecs, e-circle, effects and elements. All these brands are exclusively available at ECS stores located at most convenient locations in most major cities of Pakistan. ECS currently have 8 branches and focusing on giving the superior customer satisfaction to all the customers. SHU-8: Bata a multinational brand has recently open shu-8 for the female market offering casual and fancy shoes. They currently have only four outlets and planning to expand more in the market. Private Brands: We consider them direct competitor, though they don’t carry any brand name with them but still they are the biggest threat to the main players in terms of Sales, as they offer their products in low prices so people tend to buy more shoes from them.The ECS manager told us the estimated current market shares of these two companies, which are as follows:Market Shares

1. Stylo 36%2. ECS 27%3. Others 37%

MAJOR PLAYERS – FOOTWEAR OUTLET

Key Players Areas of Operations

Bata Pakistan Limited International


Service (Pvt.) Ltd Nation wideHush Puppies Nation wideEnglish Shoes Nation wideStarlet (Pvt.) Ltd Nation wideBorjan (Pvt.) Ltd Lahore & SurroundingsStylo Shoes Lahore & SurroundingsElegant Shoes Lahore & SurroundingsMilli Shoes National wideReboc LahoreEhsan Chappal Store Lahore & SurroundingsDulhosie Shoes Lahore

MARKET RESEARCH

Product Research MATCHING SHOES is continuously conducting product research through the focus group just to improve their product quality and sales target. It also helps them to look at what products can be produced with available technology, and what new product innovations near-future technology can develop.

Advertising Research: MATCHING SHOES is using localize promotion on cable network, out door medium in the form of billboards and on different magazine. They are also conducting the research to improve the efficacy of advertising and analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication.

Brand Equity Research: MATCHING SHOES conduct research that how favorably consumers view the brand and like to stick with their brands. According to STYLO management team, the brand equity is quite low as females usually go towards attractive styles, design and affordable prices.

Brand Name Testing:


We tested that what do consumers feel about the names of the products? And it’s a feedback.

Commercial Eye Tracking Research: MATCHING SHOES regularly examines their advertisements, package designs, websites, etc by analyzing visual behavior of the consumer.

Concept Testing: MATCHING SHOES test the acceptance of their advertisement and message concept among their target consumers.

Cool Hunting: Soul keep on observing and predictions the changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle

Buyer Decision Processes Research: In that research we determine what factors motivates people to buy and what decision-making process they use. In there case, customers usually go towards attractive designs and affordable prices.

Price Elasticity Testing: As there is high inflation and raw material is quite expensive now so we determine how sensitive customers are if MATCHIN SHOES will change prices of their products.

Sales Forecasting: We determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc. According to them each of their outlets has different sale targets according to its location. On the other hand it’s our target that we will at break even after 3 years.

Location Research:


The well-known Liberty Market--the heart of Lahore, which itself is the heart of Pakistan. But we are very much concern about the good location for opening our outlets just to improve our target sales.

Suppliers Research:We usually find out the expert and experienced venders to work with us so that they supply the best quality. They also have a contract with them that they will not sell their designs to their competitors.

Competitors Research: We also be aware of each of our competitors moves so that we make our strategies accordingly.

Research & Development:Research and development is nowadays of great importance in business as the level of competition, production processes and methods are rapidly increasing. It is of especial importance in the field of Marketing where companies keep an eagle eye on competitors and customers.

MARKET STRATEGY

STRATEGIC RECOMMENDATION

Marketing

Paper marketing is essential for attracting clients towards newly established business. Once a reasonable clientele is established the stress on marketing can be decreased, as it will be automatically done through word on mouth.Major marketing is done through advertisement. This includes giving advertisement inNewspapers and magazines. An effective marketing campaign plays a vital role in the success of business.Regular and sustained marketing is required for a successful business of retail shop. The important marketing channels would be flyer distribution, Cable TV,


etc. Regular advertisement expense should be at least 1% to 2% of sales in such business. Some marketing and promotional tips are as under:

Existing customers are best referrals. Know customers’ needs. Frequent clearance sales

Pricing

Retailers have a basic philosophy towards pricing their product. What is important is that they create and stick to a strategy for pricing so as to convey a clear message to the consumer. The market has certainly created the need for all retailers, even those at the higher end, to become more value oriented. That is not to suggest that you necessarily need to compete on price, only that you be aware of providing consumer perceived value.Some value pricing strategies are as follows:

Provides the consumer with an incentive to become a repeat customer by offering a future discount.

Frequent clearance sales Include a gift with purchase Feature your discounted prices predominantly.

Store layout and presentation

Today’s successful retailer is the one making the most profitable use of every square foot of space in the store and in the warehouse. Because space is costly, retailers need to take a strategic approach to its use. Floor patterns, location of merchandise, amounts of merchandise and the appropriate displays are all key factors in determining space. Misuse of space can beas detrimental to success as poor Buying. It is very important for every store to create a suitable atmosphere and appealing presentations in order to trigger the consumer’s buying decision. In a world where one can find identical merchandise in more than one store, layout and presentation becomes a key-differentiating factor. The proposed store should be air conditioned. There should be proper arrangement of lightening.


Use of computer

The computer is an invaluable aid in processing the large number of transactions and vast amounts of information involved in managing a retail operation. The amount of data needed for merchandise planning for example would require hundreds of man-hours to produce, whereas a well-designed computer system can perform the task in seconds. Software for inventory and sales recording and management should be used to have updated data at all the times. This software not only records each and every sales transaction but also update stockand cash position after every transaction.

InventoryStock of finished goods kept must be for 180 days by farseeing major occasions, holidays, weather and Islamic events like Eid. Supply source would be outsourcing from leading manufacturers with own developed brands. There must be well-known imported brand category and other footwear accessories like socks polishes, laces and gifts for children. In order to keep pace with modern trends and analyze the needs, demands and desires of our customer’s MATCHING SHOES is continuously working on improving quality with affordable and elegant designs to become a good market share in fashion shoe industry. As we want to achieve 10% of total market share within a period of 5 years. Our designer is NCA graduate; always try to come with different and unique designs and styles. We carefully research that what will be the new colors and designs for the next upcoming season, for this we pick the themes and colors from Gul Ahmad lawn prints, an idea from western designer’s collections and from the Indian entertainment media. Initially, we are 100% depended on our venders designs but our target is relaying 30% on our venders and 70% of our own design because of tough competition in footwear market as well as due to the design theft we are more focusing on our own designs and styles.

Production Process / Suppliers

MATCHING SHOES have no production process as we are working with different venders and we have about 100 – 150 venders. They have different production capacities i.e. some venders can provide 100 pairs of shoe per week and some are more than that. Actually, Ehsan, Stylo and Soul has almost same vender base.


Sales Strategies: Marketing and sales are very different, but have the same goal. Marketing improves the selling environment and plays a very important role in sales. MATCHING SHOES sales strategies are to drive more profits and business success. Basically, we gives sales target to each and every outlet according to their location and they are very successful in achieving that target. Our goal is to increase the number of interactions between potential customers and the sales team using promotional techniques such as advertising, sales promotions, publicity, creating new sales channels and new product designs. We focus on the first week of the month because sales tend to be high within that comparatively. On the other hand occasions are treated extraordinarily.

MARKETING PLAN

SEGMENTATION“SEGMENT” – A market segment consists of a group of customers who share a similar set wants.The marketer does not create the segments; the marketer’s task is to identify the segments and decide which one(s) to target. Segment marketing offers several benefits over mass marketing. We at MATCHING SHOES believe that we can create a more fine-tuned product or service offering and price it appropriately for the target segment.

BASIS OF SEGMENTATION FOR MATCHING SHOES:

GEOGRAPHIC SEGMENTATION: Calls for dividing the market into different geographical units, such as, nations, states, regions, cities or neighborhoods. We will be operating basically in the Urban and Suburban areas and tend to slowly and steadily expand business.The initial plan was to capture the most footfall market areas. Though a deep market analysis the following four outlets were planned in the first phase of opening.


Super Location: Top locations:

1. Liberty Market Lahore 2. Tariq Road Karachi3. Bank Road Rawalpindi 4. Link Road Lahore

The immediate geographic target is the city of Lahore, Karachi, Islamabad and Rawalpindi. First phase of openings of outlets is targeted towards 3 outlets in Lahore, 1 in Karachi, 2 in Rawalpindi, 1 in Abbotabad, 1 in Peshawar, 1 in Sahiwal and 1 in Faisalabad. Focus is to target the shopping areas where shops for ladies accessories and products are available. The plan involves opening up outlets wherever the outlets of Stylo and ECS are already operating. Market footfall will be the focus for every new outlet.

DEMOGRAPHIC SEGMENTATIONMACROECONOMIC INDICATORS OF PAKISTAN DEMOGRAPHY OF PAKISTANThe population of Pakistan was 32.5 million in 1947. Over the last fifty-five years, it has increased by four folds reaching to a figure of 156 Million approximately. It is expected to 172 million marks in the year 2010. The demographic details of Pakistan’s population areGiven below: Demography of Pakistan 2006Total Estimated Population 156 MillionPopulation Density: 185/sq. kmPopulation Growth 2.25%Population Doubling Time: 32 YearsBirth Rate: 27.3 per 1000 population In this the market is divided into groups on the basis of variables such as age, family size, gender, income , occupation, religion, generation, nationality and social class. We are basically catering to females above 18years of age, adults and women.

PSYCHOGRAPHIC SEGMENTATION


In psychographic segmentation, buyers are divided on the basis of lifestyle or personality or values. Moreover we have tried to analyze the different personality traits of the individuals surveyed. Office going ladies want something smart and comfortable because they have to do all the chores (of the house as well as of the office).

TARGETINGTarget Markets Target market is a female of all ages. Females are 51% of the total population of Pakistan.We target upper middle, middle and lower middle class.The main target customers lie in urban and semi urban region. Social class:-This will pay a vital role with the rise in brand image there will be continues rise in the sale. Social class will be formed by many clusters, which will affect buyers buying behavior mainly they are occupation, social class, wealth, education. Shoes is very diversified product we can’t focus on any single section so buying behavior will change from social class top to bottom. Our target will be lower middle, upper middle, middle class and working class and try to cover 75% of the total customers Family.

POSITIONING:

We come in market with the positioning statement of

“MATCH YOUR SHOES WITHOUT LOOSING MONEY”we have given about the product and we don’t say after wearing it you will feel like heaven but it is down to the earth and we believe in what we are giving its should be up to what we said .competence is something which is related to reliable , intelligent , successful as you wear the you will know how successfully it work and how reliable it is and you haven’t wasted your money in things which you after buying is of no use to you but instead you will feel like you have invested in right direction and you have intelligently also and as it will work successfully you will come to know how reliable it is and as we are using good material also you can rely that you have


invested your money at the right place and is it is also serving the purpose for what it is bought.As it will last long you will feel like what you have spent is not wasted and you have utilized the whole money you have spent you have not taken any wrong decision you right in taking the decision you have taken because in some cases after people buy things they feel that they taken some wrong decision but it will not happen in our case you will feel satisfied at every part you look because we believe in customer satisfaction , customer is the first priority for us if she is satisfied we feel our efforts are not wasted we feel our efforts come true .Positioning: Match shoes without losing money are our positioning statement. Advertising & Promotion: However this is a masses brand but focused advertising and used to create awareness. Pricing: Matching shoes pricing is designed to be competitive to the other fashion shoe retailers.

BRANDING

MATCHING SHOES As per the marketing concerns the company Wants to penetrate into customer’s mind Continuous advertising and publicity.


BRAND AWARENESS

We uses print media to advertise in different areas for creating brand awareness. It has increased the awareness through repetitive exposure of its brand name in different places like road side advertisements, newspapers and magazines. Its awareness level is measured in terms of

Brand recognition Brand recall Market share Feedback of the customer


General survey (news paper, fashion magazine)

Our own marketing department survey Researcher will attract a large number of buyers and win a larger market share by keeping their prices comparatively low. The more buyers get attracted the more market share will be grabbed by the product and thus the objective of having 50% market share.

NEW PRODUCT DEVELOPMENT

New Product IdeaWhen we started thinking about developing a new product there were so many ideas which came into our mind but the most feasible and the most reliable idea was to produce ladies shoes.

Reason

Less risk involved Everlasting market Huge number of potential customer Buyers is willing to pay for quality

This idea also provide us an opportunity to generate from a very well established market which secure our investment for long time period and it also help us to achieve our break even point with in short span of time.

CREATIVE STRATEGY

We modifying western design with eastern to give a new and modern look; also have a designers to create seasonal and occasional designs as per market demand. Our choice colors according to the new upcoming seasonal colors and designs. We usually pick the idea of new forthcoming colors from the textile industries and from Indian entertainment industry.


On the first week of the month because sales tend to be high within that comparatively. On the other hand occasions are treated extraordinarily.The market trends follow weather change and occasions. The following occasions affect the overall design, color combinations and materials.

Eid Shadi season Summer season Winter season

Market trends are also being derived through Indian movies and especially from star plus dramas. Color pallet is being assessed by the movies. Trends in the fashion footwear market are evolving and the style mantras of the past are no longer applicable. There are new fashion icons and trends governing consumer choices now. The buying habits for fashion-conscious women consist of typically buying at least one pair of shoes per month. Women generally purchase a pair of shoes to go with a specific dress. Once the woman purchases the dress she will then begin the long search for the perfect pair of shoes. If any lady buys two pair of shoes then she is the part of our lottery that is held after every six months and the first prize is FRIDGE second COLOUR TV and third MICRO WAVE OVEN.On the purchase of Rs. 1000 or more we will give her a shopping card.

BENEFITS OF SHOPPING CARD

Card holders would be entitled to a 10% discount on every purchase. Card holders would be the first to be informed of the latest seasonal

packages. You would be entitled to special gifts from MATCHING SHOES on special

occasions.

Top Shopper Bonus Top shoppers will be awarded special bonuses or surprise gifts.


ADVERTISING CAMPAIGN

Pre launch and launch day

We will show half advertisement 2 months before through different mediums of promotion. In order to create curiosity in buyers. We will put sample shoes for sale so that feedback can be taken properly of the buyers and subsequent changes can be bringing about it. 2 days before launching we will start showing advertisement all around the country. In these 2 months our maximum investment on video, audio and print adds. There will be an advertisement on every channel at all possible time because”JO DIKHTA HAI WOH BIKTA HAI”. We will take into consideration radios also. We will be doing public gatherings sponsoring shows and events. To sell a product it is necessary to create a big brand image.Secondly our competitors are multinationals with lots of money, brand image and quality so it is necessary to hit the market on right time and right place. On the day of launch we will hire trucks and busses and show stage shows in mall roads where there is a big public gathering. For shows we will target in big cities so that our target customers that are upper middle, middle and lower middle class persons. Advertisements will be showing everything and targeting on quality of product and our aims. Will try to show that shoes are not just normal shoe it is” SHOES MADE WITH LOTS OF RESEARCH” for every individual customer.One reason for this is because of being a new entrant and less number of outlets in selective areas. Instead of playing a proper 30 or 60 seconds TV commercial over national channels its preferred to play the add on local cables only to target those areas where they have opened the outlets. Avoiding the national TV channels commercials has saved cost. The planning shoes that showing TV commercial in the cities where there is no stores launched can hurt the brand image thus the decision for local cable channels is better to save the image and to communicate effectively. For promotion the management takes the following steps • Loyalty cards are given to customer to develop a closer relationship with them and to support and encourage buying.

• In-house magazine is in the process.


• Promotional material is given to suppliers and distributors (wall clocks).

• Branding is maintained through the shop interiors.

ECS has always spent vigorously in such campaigns. They have designed their own transport trucks with very attractive banners of their brand to serve as an advertising agent. In girl’s colleges, they advertise a lot by pasting permanent stickers of their logos and colors on the benches and roofs. Furthermore, they also hold stalls in girl’s colleges of their latest shoe variety to promote their products into the population. On the last page, pictures of Kinnaird College and Home Economics College are given for demonstration. Also they advertise in fashion magazines as well, like FAQ, G&G, etc. They get a good response from many fashion institutes who see this brand in fashion magazines. Over the period of time, they have changed their logo so many times. Just like Pepsi Co., who in 1996 spent USD500 million just to change the color of its logo. This was for education. Coke would never reach its stage right now if they were not educating the customer about their product. Pepsi Co., were willing to spent that huge sum just to ensure that their customer was not swept away by Coca-Cola, where the latter was hosting the Olympics Games at the home-town of Coke in Atlanta, Georgia, USA. The mass logo color change by Pepsi is a way of educating the customer that Pepsi is still around and was not out of sight. In the same way ECS also keeps its way to better and improved features in all aspects. They have experimented and maintained a lot of logos and got different results every time; like readability problem, etc. Change of logo also comes with great financial charges to change that logo on every pad, every show, every bag, every outlet, etc. However, now ECS thinks that they have come-up with a stable brand logo this time. On the opening of new outlets, special invitation cards, flyers and offers are sent to thousands of existing customers.OPERATIONAL PLAN Controls•Quarterly Budgets or Mini Budgets are made.•Decisions only top management can take.•Monthly meetings are conducted for failed products.•Decisions are taken on suggestions and feed back.

PROJECT INVESTMENT THE UNIVERSITY OF LAHORE Page 22

Cost of the project will consist of the following.Lahore Branch – Head Office – Warehouse

Furniture & Fixture 1,500,000 Office Equipment 700,000 Vehicles 1,400,000 Security deposit 960,000 Pre-operating Expenses 110,000 Total Fixed Cost 4,670,000 Initial Working Capital 1,338,688 Total Project Cost 6,008,688

Yearly Marketing BudgetRupees in ThousandsTotal Sales 2,567,201Cost of Goods Sold 2,167,148Gross Profit 400,053Less Selling Expenses 131,497Less Admin Expenses 97,796Net Profit 170,760

Financial ProjectionsProject Summary

Project Cost Pak Rs.

Furniture & Fixture 1,500,000 Office Equipment 700,000 Vehicles 1,400,000 Security deposit 960,000 Pre-operating Expenses 110,000 Total fixed Cost 4,670,000


Initial Working Capital 1,338,688

Total Project Cost 6,008,688

Financial Plan

Capita 50% 3,004,344 Long term Loan 1,425,131 Short term Loan 1,079,213 Other Liabilities / Creditors 500,000 Total Funds 6,008,688

For Lahore Branch ( 1st Year )

Position Reqd. Salary / Month Total

Branch Manager 1 15,000 15,000

Salesmen 3 6,000 18,000

Helper 2 4,000 8,000


6 41,000

Other Benefits 10% 4,100

Gross Monthly Wages and Salaries 45,100

Gross Wages and Salaries per Annum 541,200

For Other Branches (2nd year onwards)

Position Reqd. Salary / Month Total

Branch Manager 1 10,000 10,000

Salesmen 2 6,000 12,000

Helper 1 4,000 4,000

4 26,000

Other Benefits 10% 2,600

Gross Monthly Wages and Salaries 28,600

Gross Wages and Salaries per Annum 343,200


Cash-Flow Statement

For The Year 0 1 2 3 4 5

Net Profit Before Tax (1,627,895

) (1,064,589

) 2,309,046 7,229,225 14,360,222

Add Depreciation 616,400 576,540 562,632 569,181 534,968 Pre-operating Expenses 22,000 22,000 22,000 22,000 22,000

(989,495

) (466,049

) 2,893,678 7,820,406 14,917,190

Inc / (Dec) in Current Assets

Inventory (838,688) (1,087,418

) (1,482,565

) (1,964,398

) (2,548,158

) (3,004,788)

Security Deposit (960,000) (150,000

) (210,000

) (240,000

) (150,000

) (150,000)

Inc / (Dec) in Current Liabilities Creditors & Other Liabilities 500,000 (13,000) 113,000 146,000 171,000 161,000

Change in Working Capital (1,298,688) (1,250,418

) (1,579,565

) (2,058,398

) (2,527,158

) (2,993,788)

Net In/Outflow from Operational Activity

(1,298,688) (2,239,914

) (2,045,613

) 835,280 5,293,248 11,923,402

Capital Expenditure (4,210,000) - - - - -

Cash-Flow from Financial Activity Addition to long term loan 1,424,131

Repay long term loans (211,645

) (243,252

) (279,580

) (321,333

) (369,321)

Incur in short term loan 1,079,213 742,451 1,015,539 1,322,639 1,618,895 1,892,873

Tax paid - (33,548) (77,044) (461,809

) (1,445,845)

Owners Investment 3,004,344 - - - - -

Net Inc / (Dec) in Cash (1,709,107

) (1,306,874

) 1,801,294 6,129,000 12,001,108

Cash in beginning of year 500,000 500,000 (1,209,107

) (2,515,982

) (714,687

) 5,414,313

Cash Balance ( End of Year ) 500,000 (1,209,107

) (2,515,982

) (714,687

) 5,414,313 17,415,421


Income Statement

For the year 1 2 3 4 5

Revenue 6,709,500 15,408,846 27,269,363 42,984,548 63,369,811 Less: Cost of Services 4,948,730 12,297,600 19,764,194 29,347,193 41,424,560

Gross Profit / (Loss) 1,760,770 3,111,246 7,505,169 13,637,355 21,945,251 Less: Operating Expenses

Administration & Selling Expenses 2,965,570 3,652,327 4,537,000 5,580,304 6,559,118 Financial Charges 423,095 523,508 659,123 827,826 1,025,911 Profit Before Taxation (1,627,895) (1,064,589) 2,309,046 7,229,225 14,360,222

Less: Income Tax 33,548 77,044 461,809 1,445,845 2,872,044

Net Profit After Tax (1,661,443) (1,141,633) 1,847,237 5,783,380 11,488,178 Balance Brought Forward (1,661,443) (2,803,076) (955,839) 4,827,541

Retained Earning (1,661,443) (2,803,076) (955,839) 4,827,541 16,315,719


Balance Sheet

CAPITAL AND LIABILITIES 0 1 2 3 4 5

Paid up Capital 3,004,344 3,004,344 3,803,394 4,642,397 5,523,349 6,448,349

Retained Earning (1,661,443) (2,803,076) (955,839

) 4,827,541 16,315,719

Total Equity 3,004,344 1,342,901 1,000,318 3,686,558 10,350,890 22,764,068

Long term Loan 1,425,131 1,213,487 970,234 690,654 369,321 -

Current Liabilities Creditors and Other Liabilities 500,000 487,000 600,000 764,000 917,000 1,078,000

Short term Loan 1,079,213 1,821,663 2,837,202 4,159,841 5,778,736 7,671,608

Tax payable 33,548 77,044 461,809 1,445,845 2,872,044

Total Current Liabilities 1,579,213 2,342,211 3,514,246 5,385,650 8,141,581 11,621,652

Total Capital and Liabilities 6,008,688 4,898,599 5,484,798 9,762,862 18,861,792 34,385,720

ASSETS 0 1 2 3 4 5


Fixed Assets 3,600,000 3,600,000 4,399,050 5,238,053 6,119,005 7,044,005

Less: Depreciation 616,400 1,192,940 1,755,572 2,324,753 2,859,721

Net Fixed Assets 3,600,000 2,983,600 3,206,110 3,482,481 3,794,252 4,184,284

Pre-operating Expenses 110,000 88,000 66,000 44,000 22,000 -

Current Assets

Inventory 838,688 1,926,106 3,408,670 5,373,068 7,921,226 10,926,014

Security deposit 960,000 1,110,000 1,320,000 1,560,000 1,710,000 1,860,000

Cash and Bank Balance 500,000 (1,209,107) (2,515,982) (714,687

) 5,414,314 17,415,422

Total Current Assets 2,298,688 1,826,999 2,212,688 6,218,381 15,045,540 30,201,436

Total Assets 6,008,688 4,898,599 5,484,798 9,744,862 18,861,792 34,385,720

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Documents

Shoes Project by Usman Akram