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Student Details
Student Number
1331907
Marketing
Management
Module Code
e.a.weerawardana@wlv.ac.uk
Assignment Details
Module name
7MK002
01-12-2014
Assignment title
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Contents
1. Executive Summary
.................................................................................................................................. 4
2. Marketing
Audit...............................................................................................................................
......... 5
3. PESTLE analysis and the Macro-Environment
........................................................................................ 5
3.1 Political Factors
......................................................................................................................................
5
3.2 Economic
Factors.............................................................................................................................
....... 6
3.3 Social
Factors.............................................................................................................................
............. 7
3.4 Legal
Factors.............................................................................................................................
.............. 8
3.5 Technological Factors
............................................................................................................................. 9
3.6 Environmental Factors
.......................................................................................................................... 10
4. Porters 5 forces
......................................................................................................................................
10
4.1 Threat of new entrants
.......................................................................................................................... 11
4.2 Determinants of buying
power.............................................................................................................. 11
4.3 Determinants of substitution threats
..................................................................................................... 11
4.4 Determinants of supplier power
............................................................................................................ 11
5.
Competitors.......................................................................................................................
...................... 12
6. Internal Analysis
.....................................................................................................................................
13
6.1 The
Company..........................................................................................................................
.............. 13
6.2 SWOT Analysis
...................................................................................................................................
13
6.3 SWOT / TOWS Analysis for Big-Skinny
............................................................................................. 14
6.4 Fixing SWOT issues
............................................................................................................................. 15
7.
Mission............................................................................................................................
........................ 15
8. Vision
.......................................................................................................................................
............... 15
9. Segmentation, Targeting and Positioning
............................................................................................... 15
9.1
Segmentation.....................................................................................................................
.................... 15
9.2 Targeting
.......................................................................................................................................
........ 17
9.3 Positioning
.......................................................................................................................................
..... 18
9.4 Perceptual Map
.....................................................................................................................................
19
1. Executive Summary
Year 2010 Big Skinny CEO Kiril Alexandrov wanted to change from retail distribution
and print advertising to the world of online marketing to achieve maximum growth. The retail
sales pitch was an easy one, as Alexandrov focused on the value of the wallet and the
impulsiveness of consumers (Edelman & Kominers, 2011) . Converting this type of sales type
was much harder to do in the world of cyberspace. Bid Skinny centered their online marketing
efforts around display ads, keyword searches, social media and relationships with online
distributers and deep discounted sites such as Amazon and Groupon respectively.
The expansion caused much hardship, as Bid Skinny received negative feedback on the review
website Yelp that stemmed from their Group on experiment. They also faced a glitch in their
online promotion that allowed 4,000 people to order free wallets from their online store. Big
Skinny needs to refocus their online marketing strategy by getting rid of display Ads, refining
keywords searches and severing ties with deep discounted sites. Big Skinny can create value for
their product and manage their orders better by being more selective with who distributes their
product and by keeping the price steady. A more seasonal approach surrounding keyword
searches can create new revenue from those who are looking to make quick and impulsive
purchases. Lastly, by being responsible for who distributes their products, Big Skinny can deliver
their product in prompt and timely manner, which will resolve the majority of customer
complaints against Big Skinny.
To perform a business in a successful manner, marketing plan plays a vital role.
Marketing plan also a part of a bigger business plan. The marketing plan helps the Big-Skinny to
focus its goal and objectives. Prior to design a marketing plan, marketing consultant need to
understand and accumulate enough information about the competitors and the customers so that
marketing consultant can target the right market segment with appropriate strategy. (Nijssen &
Frambach, 2001).
2. Marketing Audit
Marketing audit provides analysis on current position and opportunities of Big-Skinny,
Marketing mix analysis, PESTAL, SWOT and TOWS analysis. Kotler (1977) define marketing
audit as an instrument to judge an organizations overall commitment to a market orientation.
Marketing audit helps in increasing the profitability of the company (Kotler, 1999).
Factors
Implication
Probability
Impact
A&B
Stable Government
Increase in taxes
Stability in policy
Selling price of
wallets to increase
3
6
4
-4
12
-24
Decrease in sales
Change in international
legislations
Impact on company
external operations
Government recognition
Enhances integrity
and customer trust
-5
-3
-35
-18
9
Factors
Implication
Probability
Impact
A&B
Higher income,
higher buying power
Unfavorable fluctuation in
exchange rates
Price fluctuations
-4
- 24
Decline in purchasing
power
-6
Decrease in sales
Manufacturing, meanwhile, has declined in importance but still accounts for about 10%
of economic output. Facing burgeoning public deficits and debt levels, in 2010 the
CAMERON-led coalition government (between Conservatives and Liberal Democrats) initiated
a five- year austerity programme, which aimed to lower Londons budget deficit from about 11%
of GDP in 2010 to nearly 1% by 2015. In November 2011, Chancellor of the Exchequer George
OSBORNE announced additional austerity measures through 2017 largely due to the euro-zone
debt crisis. The CAMERON government raised the value added tax from 17.5% to 20% in 2011.
It has pledged to reduce the corporation tax rate to 21% by 2014. The Bank of England (BoE)
implemented as asset purchase program of 375 billion (approximately $605 billion) as of
December 2013. European Central Bank, but Britain remains outside the European Economic
and Monetary Union (EMU). In economy, however, in 2013 GDP grew 1.4%, accelerating
unexpectedly in the second half of the year because of greater consumer spending and a
recovering housing market. The budget deficit is falling but remains high at nearly 7% and
public debt has continued to increase (T he W o rl d F a ctboo k, 2 014 )
Factors
Implication
Probability
Impact
A&B
Constant change in
social/cultural
environment
Different strategies
should be practise
-5
-30
Depending on raw
material locally
Increase in social
demand and
dependability on the
brand
Increase in sales
12
3
15
Factors
Implication
Probability
Impact
A&B
49
Continuous technology
developments
28
36
4. Porters 5 forces
The above diagram developed by Porter as, Techniques for Analyzing industries and
Competitors (Porter, 1998).
Magnitude
Very high
Easily copied
High
Very high
Low
Magnitude
High
High
Very high
Magnitude
Very high
Magnitude
Since there are more players in the market, bargaining power is low
Very high
5. Competitors
Arnold Wills Accessories Average wallet price 70. Established in 1946, and claims to
be the United Kingdoms leading manufacturer of accessories, having its own design
team
and
working
closely
with
designer
stores
and
high
street
retailers
( http://www.arnoldwills.co.uk , n.d.).
Dewhurst Dent Average wallet price 30. Company based in Bolton. Its
subsidiary Dents is based in Wilshire and manufactures hand bags, belts and other small
accessories. It also has its own retail outlets (http://www.dents.co.uk , n.d.).
Marlborough Gift Ware Average wallet price 40. manufactures small leather
goods and other related products for the giftware and premium market
Launer Average wallet price 154. Manufactures handbags, wallets and small
leather goods in a factory near Birmingham, the traditional center of leather
goods manufacturing in the UK
( http://www.launer.com , n.d.).
Marks and Spencer (M&S) Average wallet price 19. With 330 non-food outlets is
one of the most popular destinations for bags and leather goods although it has come
under intense competition from discount clothing retailers. Many department stores stock
their
own
brand
of
items
as
well
as
selling
leading
brands
(http://www.marksandspencer.com , n.d.).
Pure Luxurious London Average wallet price 50. Company was conceived in 2009.
Over 50 years experience promoting luxury brands throughout the UK.
6. Internal Analysis
Its very important to do organizations internal analysis to take decisions.
6.1 The Company
Evaluating the companys objectives, strategy, and capabilities helps the company to
indicate the strength of its business model, whether there are areas for improvement and how
well the company fits the external environment.
Internal Weaknesses
Lack
of
techniques.
marketing
Machine washable
Water resistant
Differentiated products
External Opportunities
S/O
Online Marketing
Ethical and green marketing
and
External Threats
S/T
W/T
Create competencies to
overcome the poor online
experience.
Changing behaviors of
customers.
Many manufacturers have their
own retail chains.
EU and developing counties
Switch country Manufacturing
sources.
7. Mission
Bringing a creative, stylish and unique high quality wallet to the young and mature
through providing a superior customer satisfaction in a profitable and highly efficient manner by
getting 1% market share in 2017.
8. Vision
We believe in step by step progress and dream about a uncompromised modern
production house with creative and innovative products which eventually will become a one
wallet for any & all kind of synthetic leather products and accessories.
look superior. They do not care about over spending on an item if it is something that they really
need. These men like to buy their clothes and accessories with cash and will shop in towns,
rather than out of town. They also heavily use internet (Fashion Segments Hand Book, n.d.).
9.2 Targeting
Segment 1: Age 18 25 Young male
9.3 Positioning
Segment 1 : Age 18 25 Young male
Less affordability, less electronic cards, change with the trend, less thickness
Ideal type of wallets - BI-FOLD Wallets
Branding : Brand name is Y-Fold ( Bi-Fold for Young)
High affordability, Use lot of electronic cards, change with the trend, less thickness, sometime
like to keep mobile phone in same wallet.
Ideal type of wallets - TRI-FOLD Wallets, CELLPHONE Wallets
Branding : Brand name is M-Fold ( Tri-Fold for Mature)
High Qlty
Malborough(40)
M-Fold
M&S(19)
Y-Fold
Low Price
about the rationale of this expansion of market development strategy. The acceptability relates to
the expected return from the strategy, the level of risk and the likely reaction of customers.
Feasibility will be regarded to whether Bid Skinny has the resources and competence to deliver
the strategy.
11.1 Product
Entering a new market with an existing product involves in market development (Ansoff,
1957). Big Skinny can highlight its various products with features to enter in to new market. This
diversification of products will show their innovative skills. Big Skinny should improve their
existing product and use market research, product adaptation analysis, and legal review to seek
expansion for the existing products (McDonald, 2007).
As per the above figure its clearly shows that how the leather goods market being
distributed in 2009. Wallets belong to small accessories market and share was 17.6%.
11.3 Price
Price for Segment 1wallet Y-Fold : 15
Price for Segment 2 wallet M-Fold: 25
Pricing in the leather and wallet accessories have fallen over the years. Import prices of
leather accessories also reduced since 2004, 3.6% in 2008 and 2% in 2009. In UK the era of
cheap fashion has gone as far as it can go. Retailers have no more scope to reduce prices further.
And other factors such as the weakness of the Pound and price increases from suppliers mean
that prices have been cut by almost as much as they can. The purchasing trend from discount
retailers and super markets will continue, but this will also result in a homogenization of the
market and reduction of choice (Mintel, 2008).
The penetrating pricing will be the suitable and appropriate strategy. It will help Big
Skinny to reach the customers. Since leading competitors are dominating market share with high
price, there will be a scope to get a share by entering with a low price. I have given 2 different
prices for the each segmented brands by considering the segment characteristics and market
behavior.
11.4 Place
Super markets, clothing stores
Agents or whole sale
www.thewholeseller.co.uk
www.fairtradewholesale.co.uk
Department stores
11.5 Promotion
Booth Advertising
Print Advertising
In Personnel Sales
Postcards on restaurants
Departments stores
Retailers
Grocery Multiple stores
to build
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Local listings and classifieds Create business listing on listing sites such as City search
to ensure that consumers searching for nearby businesses find ours.
Search advertising Method of placing online ads on web pages, near search engine
results.
Contextual ads Display ads to the next level, by placing them on sites related to my
offerings.
Display ads Probably seen the dancing aliens. Thats a display or banner ad.
Group Buying Connect with new customers through programs that offer multiple
buyers, collective purchasing deals.
Mobile marketing Many smart phones and mobile devices provide web browsing,
cameras and video capabilities.
Social networking sites Cultivate new business through social networking sites where
members share their ideas.
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Online PR
Online relationship
communication
Online sales
promotion
Offline Advertising
Outdoor
advertising (print)
PR and publicity
Personal selling
Outdoor advertising Prints, broadcast ads, brochures, posters, leaflets, billboards etc.
PR and publicity Press kits, speeches, seminars, annual reports, company magazines.
Personal selling Sales presentations, sales meetings, fairs, trade shows, events
Business Attractiveness
As per the figure 2 shows above, failure rates are high within the first five years of
starting a business, typically around 40 50%, with the highest failure in the first year. Recent
studies in UK have shown higher survival rates for new ventures in innovative industries like Big
Skinny (Helmers & Rogers, 2010).
There are various reasons why new business fail and close.
Total promotion budget allocation for the year 2015 - 90,000(6% of the sale)
2015
2016
2017
25%
20%
25%
Public Relations
5%
5%
5%
Online promotions
25%
30%
30%
Sales Promotions
15%
25%
20%
Social Media
10%
10%
10%
Personal Selling
20%
10%
10%
Total
100%
100%
100%
Financial Planning is a continues process that flows with strategic decision making. The
Operating Plan and the Financial Plan will both support the Strategic Plan. The best place to start
in preparing a budget is with sales since this is a driving force behind much of our financial
activity. However, we have to take into account numerous factors before we can finalize our
budgets.
Budgeting should be flexible, allowing modification when something changes. For example-, the
following will impact budgeting:
Competitive situation
Technology trends
Availability of resources
Budgeting should be both top down and bottom up will work to finalize a budget. We can
streamline the budgeting process by developing a financial model. Financial models can
facilitate what if analysis so we can assess decisions before they are made. This can
dramatically improve the budgeting process.
One of the biggest challenges within financial planning and budgeting is how do we make it
value-added. Budgeting requires clear channels of communication, support from upper-level
management, participation from various personnel, and predictive characteristics, budgeting
should not strive for accuracy, but should strive to support the decision making process. If we
focus too much on accuracy, we will end-up with a budgeting process that incurs time and costs
in excess of the benefits derived. The challenge is to make financial planning a value-added
activity that helps the organization achieve its strategic goals and objectives.
Feb
Mar
Apr
May Jun
Jul
Aug
Sep
Oct
Nov
Dec
Total
43,000
YFold
5000
5000
3000
2000 2000 2000
3000
3000
2000 2000 4000
5000
38,000
MFold
Sales 9000 11000 5000 4000 4000 7000 8000 8000 4000 4000 9000 8000 81000
units
Sales 185000 215000 105000 80000 80000 125000 150000 150000 80000 80000 175000 170000 1595000
value
4000
6000
2000
2000
2000
5000
5000
5000
2000
2000
5000
3000
From last week of January to February 14 wallets sales goes up with Valentines day
celebration.
Last week of June to August Summer sales in UK. People spend on gift items and others
due to half price and discounts offers. This period also summer holidays for university
students. They do part time jobs and spend lot on accessories and gift items.
There are no special events in September and October.
November in UK they celebrate Black-Friday. People do lot of purchases due to special
discount offers.
December Christmas celebration.
th
7000
6000
5000
400
0
Y Fold
M Fold
300
0
2000
1000
0
Jan
Dec
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Above chart shows clearly that the projection forecast of Y-Fold and M-Fold for the
year 2015.
Total projected Y-Fold wallets for the year 2015 are 43,000 units, and value wise its
645,000. Highest forecast of 6000 units planned with Y-Fold for the month of February, align
with Valentines celebration. From end of June to August there are summer holidays in UK.
University students also get their vacation and they do part time jobs and spend on their fashion
and clothing. In November UK people highly celebrate Black-Friday, and they do shopping to
enjoy special discounts and other special offers. 4000 units of Y-Fold are planned in January
with New Year season. In March, April, May, September and October there are no special
events and projected 2000 units of Y-Fold in each month.
Total projected M-Fold wallets for the year 2015 are 38,000 units, and value wise its
950,000. As per the above chart I have projected special forecasts align with special events. In
month of January 5000 M-Folds projected with New Year season. It will be able to maintain the
same sale in month of February also with Valentines celebrations. December also highest sale of
5000 units of M-Folds expected with Christmas season and annual bonus. Next highest sales of
M-Fold 4000 units projected in month of November align with Black-Friday. In month of July
3000 units of M-Folds planned for the Fathers Day celebration. Maintain same sale of 3000
M-Folds in month of August with summer holiday shopping season. Since there are no special
events in March, April, September and October I have planned to maintain sale of 2000 units
each month.
15. Conclusion
The success of the Big Skinny shows how far the branding can come in moving beyond
splashing ones logo on a billboard. It had fostered powerful identities by making their marketing
concept into a virus and spending it out into the culture via a variety of channels.
As entering to a mew market in a rapidly changing business environment with a high
competitors pressure Big Skinny have to adopt new expansion strategies or diversified the
existing, in order to enter to UK market. The company must constantly adapt to the fast changing
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http://www.arnoldwills.co.uk
n.d.
[Online]
n.d.
[Online]
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Baldwin, J. & Gellatly, G., 2003. Innovation Strategies and Performance in small firms.
Massachusetts: Edward Elgar.
CBI Market Survey, 2010. The Luggage and leather good market in UK. [Online]
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at:
http://www.cbi.eu/system/files/marketintel/201020-
20luggage20and20leather20goods20-20United20Kingdom2.pdf
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Fashion
Segments
Available
Hand
Book,
n.d.
Fashion
at:
Segments
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Book.
[Online]
http://www.experian.co.uk/assets/business-
strategies/brochures/fashion_segments_handbook_males_small[1].pdf
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industrial organization, Volume 36:3, pp. 227 - 248.
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Appendix