research paper
TONY LITtLE CHEEKS ®
Executive presentation group 3 marketing management
Jessica Boehm, mehek qureshi, cherod jones
Contents of presentation
Mission Statement
Objectives
Competition
SWOT Analysis & Results
Action Programs
Product Overview
Controls & Contingency
Marketing Elements
Macro-Environment Trends
Marketing Strategies Slides 11-14
Budgets Slides 17-19
Department Cooperation
Contingencies
References
Mission statement
Company Mission- created internally by the team
“To provide the public with a fun, affordable, stylish, and functional sandal created by a fitness guru, made for the fitness enthusiast”
Business Definition
Health and fitness industry, B2C, retail footwear
Unit Contribution and Distinctive Competence
Creating extra growth opportunities
Product (sandals) supported by warranty and celebrities use of the product
The mission statement of the company is, “To provide the public with a fun, affordable, stylish, and functional sandal created by a fitness guru, made for the fitness enthusiast.” The definition of the business is health and fitness sector, uses buyer to customer strategy. The company engages in retail footwear. When it comes to the contribution of unit and distinctive competence, it will create additional growth opportunities by expanding the Tony Little footwear line and diversifying his products. These sandals are backed by warranty and worn by the celebrities and other fitness professionals.
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Objectives – marketing & FINANCIAL
Marketing Objectives
Increase online sales by 25% within the first 3 months of the new sandal promotion
Improve traffic conversion rate on both physical stores and online platforms by 30% by February 2021.
Reach or exceed an average ROAS (specifics on slide 20)
Financial Objectives
The goal is to generate profits
The main financial objective is to attain Return on Investment (ROI)
The average cost of producing one pair is $12
The selling price ranges between $25- $40 per pair
Even though the goal of Tony Little Cheeks Sandals financial objectives is to make profits and money, they help provide an understanding of how the desired amount is achieved, the timeframe, and how the received profits will be spent. As such, the focus on the financial objectives is to attain profitability in line with the company’s long-term health, mission, and survival in the ever-competitive business environment. The principal financial objective is to achieve a return on investment.
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products overview
Cheeks® Bandals & Sandals
massage and exercise sandals
The product is affordable, comfortable, casual and stylish
Products can be for everyday use and are meant to be
The products are manufactured for adult’s sizes 5-11
Products made for mostly ladies –none for kids yet
Objective - get more sales, awareness, and engagement with Tony Little’s Cheeks Sandal / Bandal line
Goal – Overall Sales of Cheeks footwear
Strategy - Social media, Google Ads & Shopping, TV, e-commerce
Target Audience - mostly females, national online targeting but local for TV since so expensive
Timeline – 8-10 weeks
High-level Elements of the Marketing Plan
MARKETING MACRO-ENVIRONMENT TRENDS
Technological trends link to the creation of new technologies. It creates an excellent opportunity for new products and market opportunities.
Tony Little Cheeks Sandals will use mobile applications and wireless communication to penetrate the market
Government regulations affect choice of words, pictures, and content used to advertise the sandals
The economic trends relating to our product include: consumer purchasing power, inflation rate, sales tax or VAT
In totality, the microenvironment provides the marketers with specific areas that could drive opportunities or threats to the business processes.
When it comes to technology, wireless communication and mobile applications have offered a good chance for Tony Little Cheeks Sandals to penetrate the market. Through social media, the target audience can be informed about available products and the benefits of using sandals. On another point, certain regulations may determine the choice of words, pictures, and content to use to advertise sandals. Economic trends may concern consumers’ purchasing power, spending patterns, and behaviors (Birnleitner & Student, 2018). Consideration of disposable personal income, sales VAT/tax, GDP real growth rate, inflation rate, and unemployment rate will offer the business with a comprehension of the specific target audience to focus on.
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Competition
3 major competitors offering a similar product:
-Clarks –
has good market share and is recognize for its comfort
reputable brand name,
pricing is normally higher than ours
well known by older demographic
-Reef-
has much larger portion of individuals in our target market, ie beach goers
Has greater product line to offer more
Very well-known brand name & reputable
Prices are comparable depending on the style
Well known by younger demographic
-Skechers-
Has huge market share
Globally known, brand recognition everywhere
Offers similar products with similar benefits at comparable prices
Well known by all demographics
SWOT ANALYSIS
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
Internal
External
Affordability – comparable if not lower prices than competitors
Brand Recognition – Tony Little fitness expert
Established relationships with HSN
Quality & Comfort – long-lasting, good material, & gel footbed cradle technology
Functionality & Design – achieves its purpose as well as being stylish
Limited Demographics – only targeting the older demographic that shops on HSN
Limited Styles – Sandals and Bandals are limited – he could expand on product line
Cannibalization (CITE) – when websites are competing for same product line – and he is through Amazon and his own site
Inventory Issues – there seems to be back orders or items of larger sizes out of stock
Greater Social Media – reach younger demographic and target via social marketing
Feedback & Reviews - gather more information from direct consumers to fix products
Cast wider net - the already targeted audience is living longer now a days and healthier lifestyle
Cross-channel promotion – promote more on HSN & direct them to purchase on the website
COVID – the older demographics are more susceptible to illness and are going out less
Fierce Competition – besides low barrier to entry, many retailers offer similar product at similar price
Seasonality – only able to run the sandal & bandal line in the south during the winter months (See Graph)
Cite for cannibalization - https://neilpatel.com/blog/web-marketing-cannibalization/#:~:text=Web%20marketing%20c annibalization%20happens%20when,away%20at%20your%20own%20results.
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RESULTS OF SWOT ANALYSIS issues to be addressed
Expansion of Product Line – expansion into boots / winter shoes to not waste advertising dollars
Demographic Targeting - Shift focus from HSN to younger audience on Social Media -
Website functionality – if website can be improved, up-to-date reviews can be added as well as real-time inventory and purchases can be made online directly
Mitigate cannibalization – strategize and cohesively find one way to target the cheeks sandals online – one website only
MARKET SEGMENTS & Positioning
TARGET MARKET SEGMENTS
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AGE & GENDER
Focus on Women mostly
INCOME
Affordable to all types of income ranges
Will not target the top 10% or Elite that have expensive purchasing habits
GEOGRAPHY
Engagement w Tony Little
Active Outdoor Fitness Enthusiasts
BEHAVIORS
National - once boots are added to the mix
Age 30+
Local – Target Sandals all year long & use Tony Little Brand for local recognition
Online Shoppers
COMPETITIVE ADVANTAGE BY SEGMENT
There are various factors which can help a business to gain competitive advantage when it comes to market segmentation. One of these factors in our case is purchase behaviors. Because much of the purchasing currently has moved to online via numerous varied platforms such as mobile and social systems (Zinkhan & Pereira, 2019) there is need to target home and online shoppers by their last purchases and procuring behavior. E-commerce can be considered on geographical segmentation to reach a wide group of targeted audience.
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Age & Gender
Women after retirement 65+ (long-lasting, comfortable, reputable – brand name
Women between 30-65 (stylish, functional, affordable)
For Locals – positioning Tony Little Brand
Behaviors
Target Online Shoppers via Google ads, social media, etc
Target Audiences that have already engaged with Tony Little Brand
Geography
Income
To compete with our competitors
Comfy affordable beach sandal” we can compete by offering the lower prices w the same attributes they offer
Target consumers who are active, healthy and outdoor enthusiasts
MARKETING MIX DECISIONS Product & Pricing Strategy
Product
- Since his Cheeks shoe line is considered to be more of a new product launch and in the growth stage we need to consider the main product which consists of the following
Pricing
When getting into the market with a new product, Tony Little Cheeks Sandals should have a penetration price of around $17 per sandal.
Looking at Tony Little Cheeks Sandals' pricing strategy, it is important to focus on
Extra Comfort – Focus on patent cushion gel footbed
Long-lasting & durable - quality material made to withstand long wear and tear
Style - casual and stylish with interchangeable straps
Functionality - When you Stand you Stretch and when you Walk you Flex.(Little, 2020)
Light weight & waterproof
Competitor actions, customers' ability to pay, market conditions, and input costs
MARKETING MIX DECISIONS cont COMMUNICATION & DISTRIBUTION
Communication
Others
Distribution
It should distribute the products in brick and mortar department stores as well as online e-commerce. This will ensure the product reaches its target customer with ease.
Traditional & Non-Traditional
TV, Print, & Digital
PR, local events with Tony Little, fundraisers & public sporting events
Communication / Customer Service - the service is covered in the mission statement, contact information accessible
Promotion: strategy applied aims at targeting individual by promoting active and healthy lifestyle
Distribution: availability of Amazon storefront and HSN outlet increases product accessibility
Pricing: designed to fit the target group with consideration of competitor’s price
Advertising / Specific Promotion: offer enticing offer to start such as BOGO or subscription savings
MARKETING ACTION PROGRAMS
Tony Little’s advertising strategy focus on targeting people by promoting a healthy and active lifestyle. Specifically, for the cheeks brand they state how they want to “improve customer health and fitness experiences throughout everyday activities” (www.tonylittle.com/cheeks, nd).
The exercise sandal is another way he promotes active wear to help achieve this goal. The company holds a strong online website which also doubles a community for active people. They affix all their products with the cheeks logo which is another way to promote and advertise the brand.
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DEPARTMENT COOPERATION & RESPONSIBLITIES
Cooperation with other departments is key to reaching targeted segments that the company plans to capitalize on (CITE). The following departments must work harmoniously in order to achieve overall success.
Sales - The sales department is tasked with creating superior value in the eyes of the consumer without cannibalizing existing products. The sales department must consider the cost of getting the product to market. The sales department must keep in mind that each line of shoe that Cheeks makes must hold a competitive advantage.
Design / Production - -The production department is tasked with assembling the materials and incorporating the technology into the products to give the different lines value
Quality Assurance – This team must be the final stage of checking over everything before and after launch of the product line. They will also be the line of defense when things are returned or damaged
Management -The managing department is tasked with the responsibility of recognizing customer needs and doing so in a manner that maintains profitability (Moutinho L., 200). Management at all levels must be effective and efficient.
Accounting – They will keep track of our budgeting, our target ROI and ROAS goals and make sure the new sandal / bandals are bringing in the desired numbers
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BUDGET OVERVIEW
Budgeting provides the plan and process on how the business will spend its money. It allows the business to determine whether there is enough money to achieve the goals of the business (Bhasin, 2020). If the business does not have enough resources or money, the budget provides insights into the specific areas to prioritize.
While looking at Tony Little Cheeks Sandals, the section will focus on revenue and expenses.
The revenue section pays attention to forecasted sales volumes by unit and average price; forecasted sales volumes by unit and average price are very important to the business.
It provides the business with an opportunity to create cash flow statements, balance sheets, and profit and loss statements.
Besides providing excellent guides as to where to allocate the funds, the budget can also guide on how much should be spent on marketing to acquire new customers, how much on administration and operations (Dickey, 2010)
In specifics, Tony Little Cheeks Sandals forecasted sales volumes by unit, and the average price is as follows:
Each hour, around 600 people pass by the streets where Tony Little Cheeks Sandals check-in shop is located. One out of ten will get into Tony Little Cheeks Sandals shop.
Statistically, it implies that around 60 potential customers will visit the shop. One of five people coming into the shop will purchase a product.
Analytically, it implies that the store will make around 12 sales walk-in sales per hour. The average price of the product is $24, which implies that the shop will make $288 per hour.
If the shop is opened for 10 hours a day, the total sales will be $2880. Around 120 items will be sold. In a month, the store will have sold $86,400.
REVENUE
*We are still working this out for Milestone 7
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EXPENSES
Expenses are the cost of operations that the company must incur to generate revenue. At Tony Little Cheeks Sandals, the average cost of producing a product is $12, then sold at $24. The cost of physical distribution is $1.5; marketing cost stands at $3 per product. It implies that the total cost of the product from production to customers’ hands, including distribution, advertisement, and placement on the shelves, is $16.5. Therefore, if sold at $24, the actual profit of the product is $7.5. The store has three employees, with each employee being paid $7 per hour. If they work for 10 hours daily, it means the store pays $210. Statistically, it implies that if 120 products are sold, the actual profit is $900 minus 210, which implies that the store makes around $690 per day. In a month, the actual profit will be $20,700
Cost of Production
Cost of Distribution
Marketing Costs
TRACK & MEASURE SUCCESS controls
To monitor our progress and track performance, KPIs will be put in place to compare our results against the objectives. We want to gauge performance by measuring the success of our initiatives by looking at the following:
Net sales, profit and revenue on a monthly basis
See where our efforts are most successful and where we need to cut our costs
Variable costs and expenses on a monthly basis
Costs directly related to our product line
The % of repeat customers vs new ones
Tells us how well people know the Tony Little brand name as well as how many people like the shoes and intend to purchase more
ROAS during promotions and new launches
Will need a benchmark to start, average 300% and can evaluate after 1 month
The amount of website sales vs. TV sales vs. store sales
See what channel produces the best results in terms of sales to costs
The % of returned items to purchased items
We can gauge product quality and customer satisfaction
CONTINGENCIES
In regards to actual events, we plan on facing the following situations with the following solutions
Product damage / replacement
We will have an agreement/ contract with each manufacturer that will reimburse us for expedited shipping and returns to replace the product as quickly as possible
We will have a quality assurance team in place to inspect the orders of products going out and products coming in to try and be proactive
Product launch is delayed due to inventory issues such as bullet 1
Websites and any other means of advertising will be updated immediately so the customer is aware
Quality control team contact any vendors, retailers, customers etc for transparency & communication
Not all marketing channels are ready to run at the same time
If for any reason, the holiday promotion is ready on the website and not on TV or vice versa, we will only run the channels that are ready with the promotions so we do not have different offers running across media channels.
Once channels are all aligned with the same promotional message, we will run simultaneously, ie. TV, Google PPC, Social Media, e-commerce (online shopping)
Technical issues on the website
Quality control team is also aligned with a backup server or notification if our site were to go down for any reason so they could fix it immediately
REFERENCES:
Zinkhan, G. M., & Pereira, A. (2019). An overview of marketing strategy and planning. International Journal of Research in Marketing, 11(3), 185-218.
Birnleitner, H., & Student, D. (2018). Influence of macro-environmental factors to the process of integrating a business entity. In Proceedings from Industry, science and policy makers for sustainable future: the 14th Management International Conference (pp. 21-23).
Dickey, T. (2010). Basics of budgeting: Become a better business planner. Axzo Press.
Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Pearson.