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Executive Summary
The Girlfunk Jewelry is a business that will specialize in the avant-garde line of sustainable jewelry targeting the celebrity customer segment. The business is based online and will have a strategic e-commerce platform for ordering handmade jewelry designs, which incorporate retro junk into high fashion futuristic funk. The business is actively committed to offering customized jewelry within the business values of originality, innovation, and aesthetic quality. As a new business venture, the Girlfunk Jewelry will proactively integrate the aspect of recycling materials to make its line of jewelry. The marketing environment in the US for Girlfunk Jewelry has been amenable to the affordable funky jewelry.
Besides, the Girlfunk Jewelry products guarantee unmatched comfort and quality for the clients. The Girlfunk Jewelry is interested in growing different brands out of the current jewelry products. Besides, the company has plans for rolling out an online store through social media and the company website. During the next five years, the Girlfunk Jewelry targets to increase product visibility, distributing, and diversification in the US market and beyond. The companys vision is to be the leading business in the customized jewelry industry within the expansive US market. The Girlfunk products are customized trunk jewelry designed for the celebrity market for the female gender.
The products are made from recycled materials and come in different variety. The products are designed to suit the needs of each client, since the customer is given opportunity to make modifications to suit his or her personality before delivery. In addition, the Girlfunk Jewelry products are very affordable as compared to products of main competitors despite similar or high quality status. The customized jewelry sector has a 19% stake in the jewelry and fashion industry in the US.
The Girlfunk Jewelry intends to capture at least 20% of this sector within the next three years. The main financial needs of the business are in the form of marketing and start-up costs. The financial need for the Girlfunk Jewelry is estimated at $106,800, which will be obtained through bank loan and personal savings. The Girlfunk Jewelry venture will be profitable since the products are unique and differentiated by quality, style, and affordability. The business will be located in West Hollywood because this place is strategic to reach the market. The target market consists of female celebrity clients interested in customized trunk jewelry within the region of Los Angeles.
Product or Service
Purpose
Girlfunk Jewelry is an upcoming avant-garde line of sustainable jewelry. This e-commerce business strives on handmade designs that incorporate retro junk into high fashion futuristic funk. Girlfunk is committed to delivering a line of jewelry that is aesthetic through its innovative and original concept. As an upcoming independent jewelry label, Girlfunk encourages the use of recycled materials to create channels in the form of body armor jewelry. The Girlfunk is ready to enter the US marketplace, not only due to its unique design process, but also because its drive to let the world know about the unique designs. Besides, the business intends to use the online platform to reach clients who do not have time to visit stores to make orders, since they will be able to do so via the Girlfunk website. This means that customers will only visit the jewelry store collect their ordered products that are handcrafted. The business intends to address the current shortfall in the handcrafted jewelry through the unique Girlfunk products that are made from recycled materials and customized to the taste of each client (Mariotti 23).
Limitations
In order to understand the limitations of the Girlfunk Jewelry brand, a SWOT analysis was carried out and the results tabulated below.
From the SWOT analysis, some of the limitations that Girlfunk will encounter in the beginning stage of business include limited financing due to high startup costs, tough competition from established brands, and limited product line due to the time consuming concept of handcrafting. Besides, being a sole proprietor up against already established online e-commerce brands, the Girlfunk Jewelry may face the limitation of slow market penetration since this kind of business depends on customer referral and predetermined preferences. Lastly, being a new venture, the Girlfunk Jewelry will face the limitation of balancing human resource management and investing more profits in the business to guarantee sustainable growth and market expansion (Mariotti 41).
Government approvals
County of Los Angeles
Fictitious business name for doing business as a statement. This applies to all direct selling establishments when the business name does not include the surname of the individual owner or owners.
The state of California
Los Angeles Sellers Permit by the Board of Equalization (BOE) for persons interested in engaging in business in CA with intention to sell tangible goods on personal property.
City of Los Angeles
Business license in the form of a Business Tax Certificate, which applies to all direct selling establishments and is required for all entities doing business within the perimeters of city limits.
Liabilities
The Girlfunk Jewelry online platform has to adopt several strategies to ensure that information of the customer is protected. These policies are influenced by the need to ensure that safety and security over the cyberspace is guaranteed. Thus, the introduction of a Secure Online Shopping System (SOSS) by the site is vital towards protecting customer information. Secure online shopping system is a platform where consumers are able to make orders on particular product and payments using their credit cards. The SOSS platform ensures the safety and security of those cards. Besides, the site will offer password protection system in collaboration with the customer (Mariotti 33).
As part of their security policy, every customer is required to choose a strong password which should be changed frequently. To ensure that the business is protected, the Girlfunk Jewelry will get technology liability insurance to provide protection against many threats that might interfere with the e-commerce platform such as computer viruses, cyber hacking, DOS (denial of service invasions), and hard drive crashing among others. This will ensure that the business and customers are protected 24/7.
Related product spin-offs
In order to appeal to the target client and differentiate the jewelries from others in the market, the Girlfunk Jewelry will roll out a series of related product spin-offs. For instance, the Girlfunk will have special jewelry hangers to protect its products when not in use. The hangers will be made classy, shinny, and oval shape to make them different from those of other competitors. The jewelry hanger will be slim and light-weight velvet torso, which has a shape of a dress to easily fit in any closet since Girlfunks products are very large and often compared to a garment such as chainmail. The modifications in the jewelry hanger will make it easy for the client to store each piece of the jewelry separately to minimize chances of being destroyed and reshaped in storage (Mariotti 45).
Secondary products/services
The secondary products that can be created to generate additional profit for the Girlfunk Jewelry are delivery service, customization service, and special packaging service for a small fee. The product delivery service will be designed for customers who cannot find time to visit the store. At a small fee of between $10 and $100, customers will be able to request for delivery of their order within all states in the US. Under customization service, product price will increase by a proportion for further adjustments that a customer requests for on the finished product. The additional fee for customization will depend on the customers taste and preferences. The unique packaging will be reserved for customers presenting the jewelry as gifts to different classes of individuals. The fees charged for special packaging will also depend on taste and preference of each customer (Mariotti 31).
Market
Current industry and industrial trend
The US fashion industry has experienced steady growth as more customers embrace renowned brands such as Dooney & Bourke, Kate Spade LLC, and Michael Kors, and the new entrant called the Girlfunk Jewelry. The US fashion industry has an estimated market value of over $700 billion. The jewelry sector represents 19% of the market share. Despite the economic swing of 2007-2008 financial years, the players in this industry managed to recover and are currently experiencing an average growth of 20% annually (U.S. Census Bureau par 9). At present, the jewelry sector commands 6% of the total market value of the consumer purchases across the US.
The market share is anticipated to expand further to 15% by the year 2016. The jewelry sector at present is controlled by Dooney & Bourke, Kate Spade LLC, and Michael Kors, who have managed to establish a household name for their brands (U.S. Census Bureau par 9). Moreover, promotional services adopted by these companies have spurred the growth of jewelry production in the US market.
Growth potential
The adoption of efficient and reliable technology in the marketing of the jewelry products positively skewed the market to the advantage of the Girlfunk business. Based on the annual growth and market share for the handcrafted jewelry, the Girlfunk Jewelry is positioned to benefit in the future because the industry is highly attractive, especially in the customized brands. The company can use flexible sourcing, retail distribution, and product focused differentiation to survive the impact of these competitors. As a result, the annual sales will increase by 20% each year.
The Girlfunk Jewelry can utilize retail distribution to further expand its presence in markets like Japan, China, and Europe. It can apply product differentiation strategy to expand and position itself as a fashionable jewelry house. The Girlfunk Jewelrys scope of operations may be characterized by retailing different jewelry apparels to target women and female children market segments. For instance, Girlfunk Jewelry may create renowned brands for a number of commodities like female head jewelry, trunk jewelry, and neck jewelry. In addition, the Girlfunk Jewelry may roll out series of grand strategies such as concentration, market development, product development, vertical integration, market penetration, and retail distribution strategies to expose its numerous products across the globe as the most competitive brand.
Competition profile
In order to survive the competition, the Girlfunk Jewelry has positioned itself through a strategic competitive profile discussed below.
Strong brand
Girlfunk Jewelry has established a brand image that enables it to attract customers with less effort as opposed to most of its less established rivals. The entrants have to invest heavily in promotion and advertising for them to attract new customers and maintain their customers (Kotler and Keller 33). The established brand image has enabled the company to cut on its cost and get increased levels of profitability.
Steady commitment to quality
Strong commitment to quality and product innovation enables the company to get the right experience for their customers. This has been possible through the recruitment of employees with the right skills and knowledge. These employees are further trained to understand the company production strategies (Kotler and Keller 35). Moreover, the company conducts more market research to ascertain customer thoughts and changing demands.
Expanded market
Girlfunk Jewelry has an active presence in the US with an expanding presence in emerging markets including China, Japan, and Europe. In the next five years, revenues from sales will double annually since the current market penetration strategy is likely to increase the revenues.
Market experience
Having been in the jewelry sector for more than two years, the Girlfunk Jewelry has acquired enough experience to compete favorably in the industry. It has had sufficient time to learn from its weaknesses and develop long-term strategies that will anchor it through the future of the market. As a way of adopting the emergent technological changes, the Girlfunk Jewelry has invested in technological creativity to suit its consumer changing needs. Finally, the company will be able to win more customers with its strategically-placed and ambient stores with conspicuous features (Kotler and Keller 24).
Target market
Psychographics refers to the study of the values, personality, attitudes, opinions, lifestyles, and interests (Cheverton 26). Purchasing trends continue to progress proportionately to evolving psychographics. Consumer behavior is increasingly being influenced by a host factors including; wealth propensity, behavioral proclivities, globalization, cultural discernment, and enhanced education. This has driven the acceptance of branding and particular store brands as people become aware of their value. They are willing to evolve their lifestyles more to sample store brands as much as national brands (Bowden 65).
In the context of the Girlfunk Jewelry, psychographics refer to the data on the lifestyles of its customers, which they use in creating customer profiles. This information is important to the company, especially when it comes to market segmentation. In particular, Girlfunk Jewelry has used this information in market segmentation on the basis of lifestyles, social class, and personality attributes. The target market is divided into young digerati and prism segments as discussed below.
Young Digerati: Youthful customers
The strategy entails active marketing the Girlfunk Jewelry, product to the young Americans since this group has low expenses, but with discretionary income and are very much interested in differentiated jewelry products (Kotler and Keller 39). Through the digital marketing strategy that stresses on proactive connection to fashionable lifestyle, the company will be in a position to penetrate this market without having to alienate other customers (U.S. Census Bureau par 14). This group is ethnically diverse and consists of 25.19% of the US households and they frequent social media (U.S. Census Bureau par 9).
Prism Segment: Middle-aged customers
This group consists of middle-aged customers who consist of 32.39% of the total US households. This group has active online lifestyle and own majority of the smart phones and other electronic gadgets, which can access the internet. This group is ethnically diverse and has high disposable income (U.S. Census Bureau par 4). Therefore, e-marketing strategies will be effective in reaching this segment to promote the Girlfunk Jewelry products (Kotler and Keller 39).
Market penetration
Short term strategies
The short term advertising strategies is the use of social media and business website to reach the targeted clients. The main objective of the digital marketing plan is to attract the younger customers market through the website and a twitter fun page in order to increase the customer traffic in its jewelry stores. The objective aims at packaging the Girlfunk Jewelry as a favorite of the younger customers who frequent social media and actually share a common communication culture. Apparently, this segment forms the largest bracket of those who visit jewelry stores. The use of social media to attract this market segment is achievable since the target market frequents social media as a site for interaction and purchase of jewelry products (Bowden 64). The budget for short term advertising strategies will be about $3,000 since use of social media is affordable.
Long-term strategies
The long-term strategies will be search engine optimization and continuous use of social media advertisement for at least five years. Search engine optimization for the Girlfunk Jewelry website can be achieved through installing plugins that possess extra features such as page navigation, thumbnail, and customized page numbers (Kotler and Keller 15). Specifically, this proposed system in Google will consist of a multi tab page that will serve different areas and services to online customers. The main categories may be Girlfunk Jewelry ordering menu, e-newspaper/magazines and brochures related to the common brands of the Girlfunk Jewelry, shopping (duty free) for customized Girlfunk Jewelry options, and a guide to cost for each type of the Girlfunk Jewelry product(Kotler and Keller 29).
When implementing SEO in the Google search, it is necessary to revise the algorithms constantly for the search result of the Girlfunk Jewelry website to remain at the top (Bowden 68). This can be achieved through revising the content to ensure that all the information in the website pertains directly to the needs of potential clients. Thus, constant blogging on the website and recruiting other independent bloggers to blog about the website will give the Girlfunk Jewelry website a competitive advantage in marketing its product in the expansive US market (Kotler and Keller 18).
The SEO may also be tailored to include a unique cookie which is transferable to the users of the Girlfunk Jewelry website. The unique cookie for the website will be transferred to all primary and secondary visitors to this site hence broadening the spread information on this website in the US. Optimizing the SEO has the potential of making the website go viral within six months since the unique cookie will spread to the primary and secondary users (Kotler and Keller 19). The risk of using this option may be the high cost of constantly optimizing the SEO and hiring unprofessional bloggers who may compromise the elements of trust in dealing with the potential clients (Cheverton 23). However, the benefits in relation to the Girlfunk Jewelry surpass the demerits.
Cost of digital marketing strategies
The cost of digital marketing is summarized in the table below.
Financial Cash flow Report
Cost of doing business
Expected revenue
The business targets to sell 3,000 jewelries to customers within the end of the first year of operation. Since each product will cost an average of $50, the expected revenue is calculated below.
Expected revenue= Cost of each jewelry * Number of customers
=50*3,000
=$150, 000
The Girlfunk Jewelry 12-Month Income Statement.
The Girlfunk Jewelry Balance Sheet As at 30th December 2016.
Girlfunk Jewelry Statement of changes in equity (Per Owner) As at 31 December 2014.
Return on investment = Gains (Investment costs/Investment costs)
Return on investment for the business
-
Gains $16, 000
-
Investment cost $12, 000
-
Gains Investment costs $4, 000
Therefore, return on investment is 4,000/12,000 = 37.5%
From the above calculations, the business is likely to break even within six months. Through financial planning, the Girlfunk Jewelry business may be in a position to correctly forecast the profits and manage assets and costs associated with running the business (Kotler and Keller 29). In addition, financial planni
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