Dollinger index

(Kiana) #1

192 ENTREPRENEURSHIP


tion us to be operationally nimble and quick to adapt to any changes in our core customer cri-
teria.


Marketing Strategy


Product. Bibs, tees, onesies, and blankets will be our initial product offerings. Our research indi-
cates that these are products that customers would like to customize, and that they are willing to
pay for the ability to do so via a user-friendly process that’s not too expensive. These products
also have the added benefit of being readily available from dozens of national and international
suppliers at very reasonable costs and being essentially immune to any erratic price fluctuations.


Pricing. At a basic level, pricing will depend on the following variables that are or are not com-
ponents of each purchase:



  • Product (e.g. bib, tee, onesie)

  • Size

  • Quantity and number of images


Most items will be available for less than $50, and the average single-item purchase is estimated
to be in $30-$40 range. Our COGS will not be significant, and we expect Gross Margins to sta-
bilize around 80 percent. Thus we are not likely to raise prices significantly, at least initially. By
keeping our operating expenses aligned with our projected amounts, we will position ourselves
to significantly boost our Net Profit Margin without raising prices once our sales volume increas-
es.
We will not offer varying levels of fabric quality; instead we will offer only high quality fab-
rics. Our research repeatedly shows that customers expect customized purchases to be of above
average quality. Using profit maximizing pricing techniques, we will seek to increase prices on
popular items in order to extract as much consumer surplus as possible from our customers.
Research also indicates that, although clients want as much variety as possible in their prod-
uct choices, they want pricing to be straightforward—no trivial a la carte charges that subtly run
up the purchase price. We embrace this request and will offer a streamlined pricing schema driv-
en by the above listed variables and outlined in detail on our site.


Place. We will be an online retailer. As such, we will dedicate significant resources to building
our virtual store and to all the other processes critical to an efficient e-commerce operation. The
creation and ongoing upkeep of our site will be one of the most expensive undertakings of this
venture. However, our research clearly shows that customers will instantly abandon any site they
find confusing, unprofessional in appearance, or slow in loading pages and content. We want to
make sure that we deliver 100 percent satisfaction on each of these criteria. Depending on the
degree of our initial success and profitability, longer term plans may include further testing our
model in shopping malls, as noted earlier.


Promotion. As an e-tailer, we will utilize the most proven online advertising techniques. One
major element of this effort will be the purchase of prominent keyword search results with the
major search engines like Yahoo, MSN, and Google. Particularly in the first 12 months, it will be
critical that we keep our name in front of our customers so that they are made aware of our site

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