Marketing Plan

TEAM FORM (300)

Team 20

Checkpoint Assignment

number ___?

Final Draft

Semester

Class (for example,

MTKG 351)

MKTG 351

Meets

Name of Company Nordstrom

Target Market Women aged 18-24

Marketing Initiative Launch a new athletics clothing line named Kora, aimed at a

younger demographic at Nordstrom. Promotion will include

celebrity spokesperson, social media campaign, and ability to use

student discount for athletic line purchases. Provide free in-store

yoga classes where participants receive coupons for the clothing

items after each class. This will occur at all Nordstrom stores in

the US and will begin in Fall 2021 and end in Spring 2022.

Marketing Plan: Kora at Nordstrom

Marketing 351

Professor Lee

1.0 Executive Summary Nordstrom is preparing to launch a social media and celebrity spokesperson marketing campaign

for a new line of high-end fitness clothing for women named Kora. Nordstrom has a large

presence within the luxury retail market with brands for every age, but we plan to target one

demographic group more heavily with this initiative. We are targeting female college students,

which have the overall highest rate of meeting the physical activity guidelines among all age

groups.1 However, the COVID-19 pandemic led to a dip in physical activity from young people.

As the nation's establishments fully reopen, including gyms and retail stores, Nordstrom can take

advantage of young people's desires to increase their fitness levels once again with a new line of

activewear.

This collection would include stylish blouses, jackets, leggings, shorts, and yoga mats that build

off of the increasingly popular athleisure trend. Kora will be the go-to brand for the young

shopper that wants their fitness experience to be a mix of trendy with luxury. The pieces will be

durable and comfortable to withstand, without comprising style.

The primary marketing outlet for Kora will be social media platforms that are popular with

college students, such as Facebook and Instagram. This initiative will be carried out through

sponsored ads in social media users’ feeds and collaborations with major social media

influencers and celebrities. In addition, several in-store events such as yoga sessions and student

discounts will encourage customers in our target market to shop the new collection.

By December 2022, we hope to increase company-wide sales revenue by 5%, acquire a market

share of 2% in the activewear market, and reach social media engagement of 3% through the

launch of this brand.

2.0 Situation Analysis Nordstrom has established itself as a household name for high-end retail goods with an

outstanding quality and customer service track record. Nordstrom has maintained its position as

one of the largest department stores, with over 300 stores in North America.

Despite past successes, Nordstrom has experienced a significant financial hit due to the COVID-

19 pandemic. By the first quarter of 2021, sales were down 13% from pre-pandemic levels, and

the company sustained a net loss of $166 million, continuing a trend of continued losses.2 To

rebuild sales and revitalize the company, Nordstrom will launch a new luxury activewear line

called Kora that targets the 18 to 24 female demographic. This initiative will start in Fall 2021

and end in Spring 2022 to capitalize on holiday and pre-summer sales.

The athletic clothing industry in the United States is valued at $63 billion in 2021 and is

expected to grow by 4.4% annually from 2021 to 2025.3 This significant market expansion is

1 https://www.healthypeople.gov/2020/leading-health-indicators/2020-lhi-topics/Nutrition-Physical-Activity

-and-Obesity/data 2 https://www.cnbc.com/2021/05/25/nordstrom-jwn-reports-q1-2021-earnings.html 3 https://www.prnewswire.com/news-releases/global-sports--fitness-clothing-market-to-reach-221-3-billion-

by-2026--301354148.html

fueled by increased health consciousness that encourages consumers to buy specialty fitness

apparel and the ongoing athleisure trend that has amassed a cult following. The growth potential

of this industry would make Kora an excellent addition to Nordstrom's product lines.

2.1 Market Summary

As a luxury fashion retailer, the typical Nordstrom customer comes from an older, more affluent

demographic. However, 15.4 percent of female respondents aged 18 to 24 shared that they

regularly shop at Nordstrom, showing that this market has potential.4 One study found that

college students who were active pre-lockdown spent more time sedentary and decreased their

total physical activity by over 30% throughout the pandemic.5 On the other hand, college

students that were less active pre-lockdown picked up fitness as a hobby during quarantine and

increased total activity by almost 15%.6 This group may be looking for high-quality activewear

to suit their new fit lifestyle. Nordstrom hopes to tap in with both sectors: women looking to get

back in shape or those with a bit more experience.

In addition to a wide variety of items that cater to whatever fitness intensity required, employees

will be well versed in what apparel is right for each customer and can provide a personalized

experience. In order to fit in a more modest budget of a college student, the Kora collection will

be priced slightly lower than other Nordstrom brands. Offering in-store yoga classes will

increase foot traffic and, along with coupons and a student discount, encourage customers to

make purchases. Nordstrom also plans to expand the in-store layout of juniors apparel to take up

a larger section of the store and modernize it with chic decor to appeal more to the younger

demographic we are targeting with this initiative. Nordstrom will heavily advertise through

social media platforms and collaborations with influencers, celebrities, and athletes to further

appeal to college students.

2.2 Strengths, Weaknesses, Opportunities, and Threats (SWOT) As a major force within the fashion retailer space, Nordstrom has several strengths that can make

the launch of this new activewear line successful. However, competition and pricing issues can

weaken this initiative.

Strengths: Nordstrom is well-positioned in the market to successfully launch a new brand due to

being a well-known, established retailer.

1. Market share: Although Nordstrom will be bringing a new product into their stores,

their large market share and brand recognizability will allow for easier widespread

dissemination and a higher probability of success. Consumers are aware of the Nordstrom

brand and would be more likely to choose a well-known brand than an unknown, smaller

athletic clothing company.

2. Online presence: Nordstrom already has an established presence on social media

platforms such as Instagram and Twitter. The company can easily share promotion

material to its 3.4 million Instagram followers or 704,000 Twitter followers. The

4 https://www.statista.com/statistics/231310/people-who-bought-at-nordstrom-within-the-last-30-days-usa/ 5 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7523895/ 6 Ibid.

Nordstrom website has also become a large hub for purchases, especially during the

pandemic, making it an excellent platform to advertise this promotion. The website hosts

millions of visitors every month and has seen the percentage of visitors that actually

make a purchase increase by 15 percent.7 Utilizing these digital avenues will make it easy

for the company to promote its new clothing workout line while also allowing customers

to make purchases easily.

3. Established stores: Nordstrom has hundreds of established locations that are large in size

and can house this new clothing line and an expanded junior apparel section. This will

also allow for the in-store yoga classes to occur efficiently in every store. Nordstrom

stores often serve as anchor stores in malls, meaning they receive a large proportion of

mall foot traffic.

Weaknesses: Although Nordstrom has strengths that can potentially make this initiative a

success, pricing and competitive factors may limit the brand's potential.

1. Pricing: Nordstrom may have an issue with pricing due to the store's generally higher

prices. Since most college students do not have a large budget for clothing purchases,

Nordstrom will have to find a balance between a budget-friendly price that is still

profitable.

2. Competition: Nordstrom will have to compete with retail clothing brands that are already

established or have the potential to create their own. If customers are loyal to the

companies they already buy from, they might not be inclined to make the switch to

Nordstrom.

Opportunities: Nordstrom can take advantage of a new demographic to expand its target market

and positively impact customer perceptions.

1. New customer base: Because Nordstrom has never heavily targeted a young female

demographic before, this is an excellent opportunity to bring in new customers with this

initiative. Solidifying a loyal customer base within this demographic range can increase

purchases beyond the activewear line and thus, increase overall sales.

2. Increase brand relevance: Nordstrom has a unique opportunity to capitalize on a current

activewear trend that can take the company into a new and modern era, effectively

repositioning the brand. Nordstrom can stay relevant in the retail world by embracing the

age of social media, new trends, and a younger demographic while still catering to the

older demographics.

Threats: Nordstrom may also face challenges while attempting to enter a new market.

1. Lack of demand: Because younger people may already have other athletic clothing

companies they are loyal customers of, it may be unlikely for them to switch to Kora.

Alternatively, they may seek out activewear at an even lower price point and available at

other generic retailers, such as Target or Walmart. However, offering free yoga classes

7 https://www.cnbc.com/2021/05/25/nordstrom-jwn-reports-q1-2021-earnings.html

and selling trendy pieces that can gain recognition on social media will be incentives for

customers to try the brand.

2. Quality: Because this brand's price point will be slightly lower than other in-store brands

to fit within a college student's budget, the quality of Kora may not be on the same level

as Nordstrom's other designer brands. Although this athletic line will still have a high-end

look and be of a higher caliber than other popular brands, the slight quality discrepancy

compared to other Nordstrom brands may not be something Nordstrom is willing to

accept to maintain its reputation. Despite this, younger people are more likely to

prioritize price over quality and may overlook this issue.

3. Risk of entering new market: Although the expansion to a new demographic poses an

exciting and potentially profitable opportunity, a major shift to include this market comes

with risk. In addition to a major, long-term social media campaign, this initiative will

require expensive efforts across the whole supply chain. If this clothing line is not

successful, it could add to the continuing losses of the company.

2.3 Competition As the activewear market continues to grow, Nordstrom will have to compete with new and

existing clothing brands.

1. Nike - Nike is one of the most recognizable workout and athletic clothing brands in the

market. With a mission to expand human potential, Nike focuses on design innovation,

technical performance materials, and sustainability.8 Nike provides a massive collection

of sport-specific clothing, including yoga, running, tennis, and basketball. Alternatively,

Nike also offers a wide selection of lifestyle and casual outfits for men, women, and

children for days. This brand has a global presence, with an especially powerful hold on

Americans of all ages.

2. Lululemon - With innovation at the core of the brand, Lululemon creates "technical

fitness apparel for yoga, running, training and most other sweaty pursuits."9 The company

initially started with yoga outfits for women and has expanded to include menswear and

garments targeted for various types of exercises and sports. Selections include sports

bras, leggings, shorts, t-shirts, joggers, tanks, and swimwear. With its extremely high

price points, Lululemon does not exclusively cater to college-aged women.

3. Asics - Asics is best known for high-performance running shoes and offers athletic

clothing for men, women, and children. This range includes blouses, tanks, leggings,

shorts, jackets, polos, and jerseys. Customers can also shop by sport for specialized

clothing. When it comes to innovation, the company turns to their ASICS Institute of

Sport Science to develop and work with new and unique materials to achieve excellence

in all areas.10

8 https://about.nike.com/ 9 https://shop.lululemon.com/ 10 https://corp.asics.com/en/about_asics

4. Gymshark - Founded in 2012, this fitness newcomer owes most of its popularity to its

social media presence and following.11 The company created an online community that

allows avid fans to engage with the brand and gives customers access to fitness

information, challenges, and workout programs. Must-have styles include leggings,

shorts, jackets, and shirts for women and men. Gymshark has recently become a favorite

across the 18 to 24 demographic.

5. Fabletics - To offer affordable, quality activewear and inspire women to lead a healthy

and active lifestyle, Fabletics offers a unique shopping method that sets it apart from

other brands.12 Customers can join the VIP membership program for a monthly fee and

receive member credits to use on any 2-piece outfit. VIP members also receive exclusive

access to better prices, VIP sales, new collections, and the Fabletics FIT app. The

membership can be canceled or skipped at any time. For avid fitness fashionistas, this is

an especially good deal. Alternatively, non-member customers can purchase any of their

leggings, joggers, shorts, tanks, tees, sweaters, or sports bras like a regular retail store.

Nordstrom will differentiate itself from competitors with the launch of Kora by creating a

modern and luxurious experience that younger generations desire at a lower price point than

other competitors.

2.4 Product Offering

Kora at Nordstrom will offer a luxurious and trendy activewear experience for young women

that keep up with the latest trends. Built for every fitness level, Kora will also offer all products

in inclusive sizes ranging from XS to XXL. The collection will feature high-quality activewear

popular among the female 18 to 24 target demographic, such as leggings, sports bras, bike shorts,

running shorts, jackets, sweaters, and workout tops. In addition, small workout accessories such

as yoga mats, resistance bands, and jump ropes will be offered.

A primary selling point of Kora will be the brand itself: trendy clothing for the modern woman

with an overall presentation of luxury, freedom, and fitness. The pieces will be durable enough to

last through long workouts while also being light and comfortable to wear even outside of the

gym as athleisure wear.

Sales projection includes 30,000 new customers in the first quarterly output and up to 50,000

new customers by the end of the first fiscal year. Launching the brand nationwide can increase

profits by up to $2 million at a 30% markup.

2.5 Distribution

Kora will be exclusively distributed and offered through Nordstrom-owned channels:

• In-store: Kora will initially be available in select Nordstrom stores in larger cities such as

New York City or Los Angeles to maximize the number of sales made. As the brand

11 https://www.forbes.com/sites/sboyd/2021/01/27/6-athletic-wear-brands-to-jumpstart-your-2021-fitness

-goals/ 12 https://www.fabletics.com/about

grows, all 368 stores will eventually carry the brand to reach the entire American market.

The junior's department of each Nordstrom store will be updated with modern décor with

a dedicated section of the store that will stand out to consumers. Promotional signs and

posters will be set throughout the store to inform and attract customers.

• Online: Kora will also be available for sale on the Nordstrom website. The website will

feature a front-page banner and dedicated webpage that showcases the collection and its

key selling points. Customers will have the option for standard or expedited shipping, in

addition to in-store or curbside pickup, allowing customers to choose their most

convenient option.

3.0 Marketing Research 3.1 Methodology We created a descriptive research study to determine what consumers within our target market

look for in an athletic clothing brand. Our team came up with ten interview questions that would

inform us about the prices our target audience is willing to pay, how often they work out, and

their influences from social media, which can help guide our marketing strategies (Figure 2). The

criteria for choosing who we interviewed aligned with our target market: female college students

in their early twenties who go to the gym to relieve stress or get into shape.

3.2 Key Findings All respondents described their reasons for exercising as either relieving stress or maintaining a

healthy lifestyle. Most interviewees buy their gym clothes from our competitors: Target, Nike,

and Gymshark. 50% of our respondents positively described Nordstrom as a department store

with good quality clothing. 33% percent of our respondents are neutral towards Nordstrom, with

the remaining respondent saying Nordstrom is too pricey. Most respondents said they shopped at

Nordstrom once a month or once every other month.

Their budgets for exercise clothing also varied, with $60 being the average price they were

willing to spend on an item. Furthermore, 66% of our respondents value trendy styles over price

when purchasing exercise clothing. When asked if they wear athletic clothes as "athleisure"

wear, all of our respondents said they often wear gym clothes casually due to convenience and

comfort. Another influential factor the respondents attributed to their purchasing choices was

social media. Half of our respondents agreed that social media influencers or celebrities

influenced their style and clothing choices.

3.3 Application to Marketing Plan The results from this descriptive research study showed us how to effectively tailor Kora

products and advertising to best serve our target market. The main desires of this market are

trendy designs, quality, the ability to wear the clothing as athleisure wear, and a mid-range price

point around $60. Kora will meet all of these needs with our brand and further cater to any price

sensitivity by offering student discounts. There is clear evidence that social media heavily

influences their decision-making, which means Nordstrom will need to rely on social media as a

primary source of marketing communication for Kora products. As stated by a few respondents,

an obstacle we face is Nordstrom not being regularly shopped at or being too pricey. We will

need to create incentives for consumers within this demographic to shop more at Nordstrom and

inform consumers about the lower price point of this brand relative to other Nordstrom brands.

4.0 Marketing Strategy 4.1 Objectives

● Increase sales revenue by 5% ($321.45 million) from $10.715 billion in Q3 of 2021 to

$11.04 billion in December 2022. Kora has the potential to increase sales revenue despite

the higher price point. As disposable income increases, women are willing to spend more

on discretionary high-end apparel items, especially women's apparel.13

● Achieve 2% market share in the women's athletic apparel market by December 2022. The

companies with the largest market shares in the athletic apparel industry were Nike with

18.3% and Adidas with 6%.14 We do not expect Kora to reach these numbers yet, but we

do expect a sizable market share due to the exponential growth of the fitness apparel

industry.

● Reach 3% average engagement rate on advertisements and posts across all social media

sites from Fall 2021 to Spring 2022. Rival IQ, a social media analytics firm, found that

the industry standard for social media engagement ranges from 1% to 5%, with anything

over 1% a sign of effective marketing.15 Given that Kora will be in its introductory phase

for this marketing campaign, we will not expect to have extremely high social media

engagement. However, through extensive social media advertising and promotion from

influencers and celebrities, Kora will achieve a moderate level of social media

engagement.

4.2 Target Markets Kora's target market is middle- to upper-class women aged 18 to 24 years old who are college

students that enjoy working out and keeping up with the latest premium fashion trends.

4.3 Positioning For women aged 18 to 24 years old, Kora will be viewed as the place to shop for high-quality,

fashionable, and comfortable fitness clothing that keeps them looking trendy and feeling their

best, whether in the gym or doing any other daily activities. In addition, Nordstrom can break

past its reputation as a store that caters only to an older demographic as we begin to serve a

younger market.

13 https://www.prnewswire.com/news-releases/global-sports--fitness-clothing-market-to-reach-221-3-billion-

by-2026--301354148.html 14 https://www.statista.com/statistics/896595/sports-apparel-market-share-by-company-us/ 15 https://www.rivaliq.com/blog/social-media-industry-benchmark-report/

5.0 Strategies Marketing strategies to launch Kora will be broken down into four different groups: product,

pricing, place, and promotion.

Product: Kora will offer several clothing styles with inclusive sizing, ranging from XS to XXL.

The line will include clothing and accessories in styles and colors that are popular in the fitness

sector. The collection will include a wide variety of:

• Apparel: Shirts, shorts, leggings, sports bras, hoodies, sweatshirts, joggers, jackets

• Accessories: Socks, gloves, baseball hats and visors, water bottles, towels, gym bags,

small workout equipment (e.g., jump ropes, resistance bands, yoga mats)

Besides the physical clothing items themselves, a key selling aspect of this brand is the overall

high-end feeling it evokes. Customers are not only paying for the clothing but also the brand

name.

Kora will also have a few key pieces that we expect to be best sellers and will be considered the

brand's core products. The first would be the PowerAir leggings and Airbrush crewneck sweater,

which will be advertised as everyday staples that come in over ten different colors, such as pastel

purple, olive green, and dusty pink. In addition, the PowerAir set, which is a matching sports bra

and legging set sold in popular colors, will capitalize off of a popular trend to appeal to

customers.

A section of the store will be dedicated to Kora products, preferably next to the junior's and

women's clothing departments, to attract shoppers from both markets. The in-store presentation

will highlight the trendy designs of the clothing with mannequin displays that showcase the

outfits and décor that is popular among the younger demographic, including white and pastel

color schemes and greenery.

Personal selling by a team of specially trained Nordstrom employees will provide personalized

services to Kora's customers, such as finding the right size or recommending the best product for

their needs. These employees will also wear Kora products to provide a real-life model for the

clothing.

All packaging for Kora products will showcase the Kora logo and be made from 100% recycled

material to appeal to a more environmentally conscious consumer. Kora clothing items will also

come with a Quality Guarantee, which allows customers to easily return or exchange clothing

items with manufacturing defects or substantial performance issues. Additionally, there will be

an in-store tailoring service that provides free hemming and low-cost alternations for all items in

the clothing line.

Pricing: Kora will be a moderately priced clothing line to provide a high-fashion feel while also

fitting in the budget of younger shoppers. Tentative pricing is as follows:

• Tops: $15 to $40

• Bottoms: $30 to $70

• Accessories: $15 to $45

For example, the Airbrush crewneck sweater will be priced at $40 and FreedomLift running

shorts will be priced at $30.

Overall, shoppers are willing to pay more, given that the price point in the athletic clothing

market is higher than the market for other types of clothing. In terms of other firms in the fitness

clothing market, Kora's pricing strategy will establish itself as the middle ground between

higher-end brands, such as Alo and Lululemon, and generic budget brands, such as those found

at Target and Walmart. Thus, Kora's price point will be higher than budget brands but lower than

other luxury fitness brands. For example, Lululemon's best-selling leggings are priced at $98,

while Old Navy prices their budget workout leggings at $35. Kora will sell their staple PowerAir

leggings for $65.

This middle ground pricing will be standard for most Kora products and is justified as it attracts

customers who want a higher quality piece than what discount retailers offer but is less

expensive than other high-end brands. By offering the best of both worlds, Kora hopes to gain a

larger market share within the fitness sector by attracting customers that regularly shop at budget

or high-end activewear companies.

As market share grows over time, the brand's price points can increase to provide larger profit

margins. In addition, given that we are targeting a younger demographic, we will offer a 10%

student discount that can encourage students to purchase our products.

Place (Distribution): The two main channels where Kora will be sold are physical Nordstrom

stores and the Nordstrom website. The brand and designated section of the store dedicated to the

brand will be made available in most Nordstrom stores nationwide, expanding to all 468 stores as

market share grows. The line will also be made available on the Nordstrom website, with the

added option for in-store pickup or free expedited shipping for the first two months following the

initial launch to make the purchasing process as quick and simple for the customer as possible.

The ability to extend the Nordstrom website onto social media sites such as Facebook and

Instagram, where customers can directly buy the items, will also provide an accessible shopping

channel.

Promotion: Kora's promotional activities will be extensive upon initial launch to spread

awareness of the brand. In-store promotion of stores in select larger markets such as New York

and Los Angeles will include hosting a special event upon initial launch with a live DJ, free t-

shirts, and photo booths to attract customers to shop the new brand. This event will also leverage

social media by encouraging customers to post content with the hashtag #KORAAthletics and

tagging our pages.

In addition, the free yoga sessions led by experienced yoga instructors will occur periodically in

these larger stores after the initial launch. After the yoga session, participants will receive a

coupon exclusive for Kora pieces to incentivize purchases. During the yoga sessions, photo

booths and "Instagrammable" photo-ops will encourage visitors to post about the brand and

increase social media exposure.

Marketing communication outside of the store will primarily be on social media. The core

message of these advertisements will be to promote Kora's brand name and its main selling

points of high-quality athletic goods that follow the latest trends for a younger demographic.

Kora will leverage the use of social media influencers and celebrity spokespersons, including

well-known athletes such as Naomi Osaka, to make posts on other social media sites popular

among a younger demographic such as Instagram, TikTok, and YouTube. Celebrities and

influencers will post content of them wearing and showcasing Kora products on their social

media platforms during the initial launch week to reach as many people as possible.

The main Social Media Plan will take place on Facebook, where regular posts will advertise the

products16. Facebook will also be a convenient forum for customers to chat with Nordstrom

representatives to ask questions or submit comments they may have, providing a more

personalized customer experience. Nordstrom's other social media accounts, such as Instagram

and TikTok, will also heavily promote Kora through posts on their account and sponsored posts

that appear on users' feeds. In addition, sponsored posts that appear on users' feeds as

advertisements will inform customers about the brand and the different offered items. Customers

will have the ability to buy directly from the social media platform or can be redirected to the

Nordstrom website to browse the whole collection.

Advertisements will also appear as commercials on television and streaming services, billboards,

and side banners on different popular websites, such as YouTube. Customers will also be able to

sign up for Kora's emailing list, which will deliver coupons, free workout tips and videos, and

exclusive news about upcoming promotions straight to their inbox.

6.0 Financials Our financial analysis uses the average selling price of Kora clothing items which is $50. After

an average cost per unit of $20, which includes the cost of labor, materials, quality testing, and

distribution, the average gross profit per unit is $30.

Of the 41,408 college students in the Fullerton area, 58.5% are female, which results in 24,224

individuals that are in our target market.17 With an average of 65% of college students that work

out, the estimated number of purchases per year is 15,745.18 We predict consumers will buy an

average of 15 pieces a year due to changing seasons and trends. Our estimated market share is

based on the current market shares of other major athletic clothing companies. For example,

Lululemon and Under Armor have market shares of 1.9% and 4.1%, respectively.19 As we expect

to start with moderate success and grow over the years, we expect market shares of 1%, 1.5%,

and 2% in the first three years of operation.

Due to the major force of this marketing campaign being social media, most of our costs will be

from advertising. Over the first three years of operation, Nordstrom will spend a cumulative

16 https://www.facebook.com/KORA-Athletics-at-Nordstrom-107059678435205 17 http://www.fullerton.edu/about/ 18 https://journals.humankinetics.com/view/journals/jpah/15/10/article-p737.xml 19 https://www.statista.com/statistics/896595/sports-apparel-market-share-by-company-us/

$213,500 on advertisements, events, and workforce and earn $531,407 in revenue, resulting in

$318,844 in gross profits (Figure 1). The return on marketing investment (ROMI) is 1.17,

making this marketing initiative positive from a financial viewpoint.

Appendix

Figure 1: Financial Analysis

Assumptions

Average clothing piece will sell for $50 and generate a gross profit of $30

Overall population at CSUF: 41,408

Overall female population at CSUF: 24,224

Percentage of population that wears athletic clothing: 70%

Average student purchases 15 pieces a year

With the proposed marketing support, the market shares would be 1%, 1.5%, and 2%.

Cost of Marketing Program

Year 1 Year 2 Year 3 Total

Advertisements $ 70,000 $ 50,000 $ 40,000

Events $ 10,000 $ 8,000 $ 5,000

Salesforce $ 40,000 $ 30,000 $ 20,000

Total $ 120,000 $ 88,000 $ 65,000 $ 273,000

Analysis

With program

Market 24,224 24,224 24,224

Percent wearers 65.00% 65.00% 65.00%

Number of purchases 15,745 15,745 15,745

Annual purchases per student 15 15 15

Total sets purchased 236,181 236,181 236,181

Share 1.00% 1.50% 2.00%

Volume 2,362 3,543 4,724

Revenue per unit $50 $50 $50

Revenue $118,090 $177,136 $236,181 $531,407

Gross Profit per unit $30 $30 $30

Gross Profit $ 70,854 $ 106,281 $ 141,709 $318,844

Discussion

Cumulative cost of the marketing program over the three year period is $273,000

Incremental gross profit generated by marketing program =$ 318,844

Therefore, spending $273,000 on marketing will generate an extra $ 318,844 in gross profit

Net incremental gross profit = $318,844

Return on marketing investment (ROMI) = 318,844/273,000 = 1.17

This program is positive from a financial viewpoint.

Figure 2: Market Research Questions

Questions Responses

1. How often do you work out or do yoga? ● 2 to 3 times a week

● Yoga never, workout 5-6 times per week

● 5 days a week

● Twice to Three times a week

● 5 times a week

● 3 to 4 days a week

2. Do you exercise to handle the stress of college

or for other reasons?

● Yes, to stay in shape and work off the

unhealthy college food

● Yes, I exercise to help with stress with

everyday life which college would be included

and also to live a healthy lifestyle

● Yes, I workout to relieve stress generally and

to stay healthy

● Yes and to improve my back pain

● Yes, to avoid stress and to stay healthy and in

shape

● Yes, to stay healthy and active

3. How much do you typically spend on athletic

clothing?

● $200; $30 on leggings, $20 on shorts/shirts,

$30 on equipment

● $40 on shorts and $30 on shirts

● At least $30

● $50 on leggings, $15-20 on shirts

● $100 total; around $60 for shoes and $40 on

shirts and shorts

● Around $30-$50

4. What brands do you typically buy for

activewear?

● Fabletics, Athleta, All in Motion from Target,

PINK

● Nike, Gymshark

● Amazon, Lululemon, and Gymshark

● Alo and Lululemon

● Asics and Nike

● Whatever they sell at target

5. What is your perception of Nordstrom? ● Prestigious, classy, upper-class, good quality

● Don't have much of an opinion, I have not

really looked at it and do shop there much

● I don't shop at Nordstrom often but I have a

neutral perception of the brand

● It's great in term of price and trend

● It's overpriced

● Really good store with a lot of variety

6. How often do you shop at Nordstrom?

● Once a month

● Not often, usually goes for specific items

● Not often

● Once every two months

● Almost never

● Not often, its pricey

7. What is more of an influencing factor when

buying athletic clothing: price or style?

● Style, because I like clothing that is cute

● Style, it is important to look good, to feel good

about yourself, to have a good workout

● Style

● Style

● Price, I don't care too much about the style as

long as it's comfortable and looks fine it gets

the job done for me

● Price

8. Do you often wear athletic clothing outside of

the gym as "athleisure" clothing?

● Yes, I want something that is comfortable,

versatile, and cute. It also helps when I go to

the gym after class. I can go to class with my

cute workout clothes and not feel like I look

lazy, and then go straight to the gym without

having to stop by my dorm.

● It is important but not crucial, it is nice when

workout clothing is multifunctional, and you

can wear it to do other things as well as

workout in it ● Yes

● Yes

● Yes

9. What appeals to you the most about other

brand name athletic apparel clothing lines?

● Quality, style, what's trendy at the moment,

durability

● The way it fits, the way they look on me,

comfort

● Variety of styles and pricing

● The style, material, comfort

● The aesthetic and style of a brand sticks out to

me the most

● The style, material of the clothing, comfort

10. Does social media play a large role in

influencing your athletic clothing purchasing

decisions?

● Yes; influencers, other girls on campus and at

the gym, my friends

● Subconsciously yes, when you see famous

people wearing a specific brand, you hope to

be like them by wearing the brand

● Sometimes yes

● Yes, I do. When I see someone in a good

shape I will follow their habits and lifestyle

● Somewhat, however, most of my workout

clothes are just basic t-shirts and shorts so I've

never really put much thought to that.

● No