Approving The Decision of Producing Rip Less Extreme T-shirts

1. YOUR VISION OR OBJECTIVE

2. MARKET DEMAND AND COMPETITION.

ANSWER 1.

–Description of the Product -West Nile Extreme Co.- rip less Extreme T-shirts.

The clothing industry is often referred to as the fashion industry. It is an industry dependent on and nourished by changes in color, design, and fabric. This industry in Dubai has increased enormously throughout the years. Styles of clothing have changed as a result of contact with other societies and competition for status within a society. The fashion trend that was four years ago might not hold any importance today due to change in generation to generation, lifestyles of the population, etc.

We have spent plenty of hours in finally approving the decision of producing rip less Extreme T-shirts. Therefore an analysis of appropriate target market is necessary. We can’t target the whole market since that would result in ultimate failure. Our target market should be unique that distinguish a certain group of consumers from the overall market.

“Our vision is to be the best company in the world–in the eyes of our customers, shareholders, communities and specially people. We expect and demand the best we have to offer by always keeping our companies values top of mind.”

Product review

The Extreme T-shirt will come in several different colors and designs. Features include pockets on the inside of the shirt so that valuables are safe, a special cotton blend material in the neck for comfort and ventilation, and of course, the special rip-less Kevlar-based material for safety. We will guarantee that our shirt will not rip! If there is any problem with the product, we will send the customer a brand new one for no extra cost. We also have a money-back guarantee as well. If the customer is not completely satisfied with this product, we will refund the purchase price within 30 days. The potential profit and benefit from this product will be high. The product itself is a shopping item, meaning people compare shop. The production cost per unit is Dhs 12; retail value will be capped at Dhs 49.99 for physiological pricing. The pricing strategy used for this will be skimming, so that cost will be recovered. The great demand for this product once they hit the market will undoubtedly benefit the organization. The organization intends to position this product in the mid-high price range and extremely high quality and durability.

Competition Review

We have discussed an uncontrollable environmental factor known as competition. We have evaluated our competitors, and established that we have no direct competition because of the technology and patenting information developed in our product. We also have no indirect competition because there is no product in the market that even comes close to compare to the efficiency and innovativeness of our West Nile line of products. The type of competitive environment known as alternative-gratification does affect our organization in some ways, but there is no way to control it. We cannot stop a consumer from going to a movie or buying a pair of pants instead of our product, so there is nothing we can do about it.

All three of these competitors are most likely to immediately mimic our product, and pose to be the most threatening. A SWOT analysis can be used to determine how competitor’s threats are progressing. Simply by determining our advantages, strengths and resources can keep us competitive. For West Nile there are three main competitors:

Company

Main Product

Element

Tee Shirts

Roxy

Surf Wear

Hurley

Tee Shirts

Description

Elements

Element Skateboard Company was crated in the United States. A major force over the years for Element Company is the skateboard team that includes members like Bill Pepper, Bam Margera (of Jackass fame). The Earth, Wind and Fire logo viewed on most of the Element clothing range is being seen more and more on the street for reasons of independence and creativity.

Roxy

Roxy, Quiksilver’s, is dedicated to active living and the extreme sports lifestyle. The Roxy cloth line is designed by Dana Dartez. Roxy prides itself on their connection to the junior customer, progressive yet embracing all elements of life. The clothes range from basic surf wear for sport and style to vintage inspired, forward sportswear.

Hurley

Hurley International is a youth brand that derives its fashion sense from deep roots from surf, music, skate and art. Hurly is about positively, family, creativity, honesty and diversity. Originally created in Southern California

QUESTION 2.

DISCUSS AND COMPARE AT LEAST TWO OR THREE MARKET SEGMENTS THAT MIGHT SUIT YOUR PRODUCT OR SERVICE.

Market segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations sharing with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function. A true market segment meets all of the following criteria: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus, and it can be reached by a market intervention. The term is also used when consumers with identical product and/or service needs are divided up into groups so they can be charged different amounts. These can broadly be viewed as ‘positive’ and ‘negative’ applications of the same idea, splitting up the market into smaller groups.

Examples:

* Age

* Gender

* Price

* Interests

While there may be theoretically ‘ideal’ market segments, in reality every organization engaged in a market will develop different ways of imagining market segments, and create Product differentiation strategies to exploit these segments. The market segmentation and corresponding product differentiation strategy can give a firm a temporary commercial advantage.

— Description of each segment:

Geographic Segmentation

Will be marketing in Dubai. Operating headquarters would be located at: Dubai City Centre

This pie chart shows that large portion of population resides in Deira. Therefore we will be able to make huge amounts of profits.

Demographic Segmentation

* Male and female

* Their hobby as skate boarding

* Usually single – studying or having skate boarding as a profession

* For all religions and various income levels

* Between 12-30 years old

As we can see that we won’t have difficulties in targeting people of ages12-30 since they occupy half the population.

Psychographic Segmentation

* Trendy

* Most of our target market would be Experiencers, Achievers, Makers and Strugglers.

* Generation X

Benefit Segmentation

* Rip less

* Preventing from injuries

* Medium priced

* High quality

* Durable

Usage Segmentation

* Rebate

* Coupons

* Special cards – after purchasing 2 or more t-shirts, our consumers can win a raffle draw .

QUESTION 3.

COMPLETE A BRIEF MARKETING RESEARCH REPORT TO FIND OUT THE CONVINIENCE OF YOUR CUSTOMERS FOR THE DISTRIBUTION PROCESS.

ANSWER 3.

MARKET RESEARCH:

Research was mostly generated by a survey, (Appendix A) that had to be done to enter into a contest. The contest was a promotional offering to bring attention to our brand. The contest was a chance to win either West Nile products, or to win a chance to skate along side Tony Hawk in L.A. The survey was also offered at certain stores thought-out Deira City Centre. The survey was well designed; it allowed us to see where the people who had filled out the survey were coming from and what parts of the media they were tuned into. For example the most picked magazines were Friday and Skateboarding magazine, therefore we will generally advertise in those magazines. Information was also gathered from Stats Dubai on the percentage of our target market (ages 12-30) in Dubai which is 23.8%. Internet survey, you had to fill out this survey to enter yourself into the contest to either win a West Nile prize pack of a bunch West Nile products and/or a chance to skate with Tony hawk.

Strength:

1. Our company with the development of the new rip-less material will reshape the retail industry, at least for athletic uses.

2. Very qualified scientists have been working on R&D for quite some time now, and finally they have perfected the new technology.

3. Our manufactories located in a developing country which means low costs, the main countries are China and India.

4. Our company has enough money to invest in researching, advertising in new market.

Weakness:

1. We have little control over price because the market is very competitive.

2. there are lot of difficulties for us to make our consumers recognize our products (like high promotion cost, brand name)

3. Selecting the location is difficult, where should we go to place? Put our products in The Bay, Sears or other shopping malls.

4. Our new technology maybe easy duplicated by our major competitors.

Opportunities:

1. Trends and culture have a significant effect on our line of products. Recently the fashion is the key trend around market.

2. Our market is in Dubai which is known as one of the most economically powerful and well-off region of UAE which can create strong demand for goods and services.

Threats:

1. There are many famous companies existing already, which are welcomed by audiences, it is difficult for our company to go to persuade people to buy.

2. The lack of advertising, people maybe never heard about our company’s name and has no idea about our product.

3. There are many competitors in this market, they have huge finance to support their products enter market.

Objectives and issues

We have many goals as an up-and-coming organization, both short-term and long-term. Our short-term goals include introducing our product in the market with great success.

Furthermore, we thrive on customer satisfaction and productivity, through this we intend to expand the organization into UAE within 1 year, because of the scarcity of our product and the high threat of mimics. The product is far more technologically advanced than any other type of clothing in the market. We must first register the product as a trademark in the hopes of slowing down competitors. Since the product was obtained through the company’s research and technology, it is the first of its kind. The brand “West Nile T-Shirts”, the logo, the development of the product itself will be registered as a trademark.

Our many long-term goals include the research and development of a brand new West Nile clothing line for the same target market. This Kevlar-based technology will be implemented in long-sleeve t-shirts, sweatshirts, pants, and even shorts. They will still be directed towards the 12-30yrs skateboarding market. We eventually will produce new products for a different target market such as any other sport that involves numerous injuries, cuts and bruises.

QUESTION 4.

KEEPING IN MIND SEGMENTATION ISSUES AND DISTRIBUTION DEMANDS AND ORGANIZATION OBJECTIVE NOW RATIONALLY SUGGEST A PRICING PLAN FOR YOUR PRODUCT.

ANSWER 4.

ACTION PROGRAM

In 2010, we will invest a total Dhs5 million in promotional support of our West Nile Extreme T-shirt. The majority Dhs3 million will be used in commercial and advertising such as television, radio, newspaper and magazine. The remaining Dhs2 million is to be used in distributing free Extreme T-shirts and the contest we are planning all over UAE.

In the commercial and advertising, the logic here is that we will determined the optimal promotion message that Extreme T-shirt protects skateboarders from minor/major injuries and has distinguished quality of anti-skid/rip. Therefore, Extreme T-shirt is helping consumers save their money and time. When customers think of Extreme T-shirt, its distinguished quality should come first in their minds.

Dhs2 million is planned in consumer promotion, including Dhs1 million for winning free Extreme T-shits draw. In order to distribute free Extreme T-shirts, we will use big shopping malls or retail stores to enter a contest. We will also give extra free T-shirts on that day of the contest. At the contest we will invite Tony Hawk as West Nile’s official model. And our consumers will have and experience great time with Tony Hawk. We are planning that the contest will be held in Aug. 2010.

We plan full and aggressive distribution of all of our offerings through all of the retail channels. We expect that our offering will be distributed all of retail channels by using West Nile’s strong distribution channel. Then for the first six months we will provide them Extreme T-shirts for Dhs10/ea. which is about 20% off from wholesale value. And any retail stores which sell Extreme T-shirts more than other competitors’ will eventually get additional funds promoting West Nile’s Extreme T-shirts themselves.

We expect to see that West Nile’s Extreme T-shirt will take over 20% of total market share and it is about sales revenue of Dhs12 millions in 2010. We also expect a nearly 25.066% increase in operating profits. After, the first year, review the sales of the product line, we will decide what corresponding action should be done such as we initially reduce unit and dollar sizes of the market or increase.

Budget

The annual budget is the financial plan to implement the organization’s strategy for the next year. When that organization’s environment is relatively stable, budgeting factors are predictable and the budgeting process is less challenging than when environmental factors are highly uncertain. Planning is the cornerstone of effective management, strategic development, and implementation.

West Nile ( rip less -extreme shirt ) is moving toward a truly global supply chain with fewer, more sophisticated global and regional and regional state of the art manufacturing centers. Business support functions will be centralized into regional and global share service centers with larger and more effective sales and marketing organizations in key markets. West Nile firmly believes that the fundamentals of our business are very strong and our business strategy is sound. We are extremely focusing on the high quality innovation and are prepared to continue to spend aggressively to support our global brands. We are optimistic that we will reach our profit expectation in 2006 and we are confident that our historic success will continue.

In our project, I will plan four years budgeting for our new anti-skid/rip shirt.

Offering

Manufacturer net price

Retail price ( Exclude tax)

Anti-skid/rip shirt(Extreme)

Dhs12.00

Dhs49.99

Our projected results appear below. Based upon conservation estimate of rates, we expect to see that we take over about 20% of the market share and it will be about Dhs12 millions of total revenue and Dhs9.12 millions of net revenue in 2010. We expect a nearly 25.066% increase in operating profit in 2010. In this environment, we expect an initial of net revenue followed increase in revenue and operating profits along with a modest long-term increase in unit volume.

QUESTION 5 (A)

IN THE LIGHT OF YOUR PRODUCT VISION AND MARKETING OBJECTIVE; NEW DESIGN A MARKETING PLAN WHILE HIGHLITING YOUR PROMOTIONAL STRATEGIES :

ANSWER 5(A)

* Promotion

– Types used. – doing TV ads for West Nile products with Tony hawk and other skateboarders, Advertisements in Thrasher and Skateboarding magazines, on all of them are also advertising the contest with Tony hawk and products give away but only if they fill out the survey that’s on the website, also bulletin boards

– Considerations to market.

– Kinds of Research done to promote promotion.

* Market Research

non skid/rip shirt technology, but not losing the softness

endorsing Tony hawk in his new game, and board stickers

other skaters will endorse it as well

guaranteed to be a massive craze because every skater will want one

only one company that has this type of shirt and technology, giving our company an extreme edge

target market age will be aimed at anyone that skates because of the new skid protection is so unique that everyone wants it

the shirt is CSA approved because of the anti-skid/tear protection

have unique style compared to other companies

Target Market:

Extreme T-shirt targets on skate boarders or skaters whose ages are between twelve to thirty years old approximately. The reason that Extreme T-shirt is targeting on this group of people more than other segments because Extreme T-shirt is specially designed for them. People in that age group (12~30 years old) are more than 50% of total population. This type of people tends to practice many different tricks and while they are performing those tricks, they often fall down and are injured. Most likely, T-Shirts are easily ripped when the accident happens. It costs them a lot to buy shirts every time it happens. However, our customers can reduce the buying costs. Since we provide them anti-skid/rip T-Shirt, Extreme T-shirt is hardly ripped. In case where Extreme T-Shirt is ripped while they are performing skateboarding, we provide them an exchange service.

Positioning:

The positioning concept of Extreme T-Shirt is providing anti-skid/rip shirts, therefore consumers can save their expense on skateboard shirts. Even though our brand name and reputation in the market are not strong enough to fight against competitors such as Element, Roxy, and Hurley, our market positioning is quite different from their positioning.

West Nile company plans to generate a new type of product line in skateboard industry to develop Extreme T-shirt. We provide Extreme T-shirt to consumers with medium price and high quality. Especially the quality of our product has distinguished distinction which is a rip-less T-shirt. Anti-skid/rip T-shirt also prevents skateboarders who wears our Extreme T-shirt from any minor/major injuries.

POSITIONING

High Quality

Element West Nile

Roxy Hurley

Low Quality

QUESTION 5 (B)

DISCUSS THE IMPORTANCE OF MARKETING MIX AT LENGTH TO SUPPORT THE SUCCESS OF YOUR PRODUCT.

ANSWER 5(B)

Product: A rip less t-shirt, the first of its kind.

Price: Skimming price strategy to recover costs.

Place: One-Step Distribution Channel.

Promotion: Specialty Advertising

Marketing Mix:

The marketing mix includes four parts, which are product, price, promotion, and place.

We have many goals as an up-and-coming organization, both long-term and short-term. Our short-term goals include introducing our product in the market with great success.

Furthermore, we thrive on customer satisfaction and productivity, through this we intend to expand the organization into North America within 1 year, because of the scarcity of our product and the high threat of mimics. The product is far more technologically advanced than any other type of clothing in the market. We must first register the product as a trademark in the hopes of slowing down competitors. Since the product was obtained through the company’s research and technology, it is the first of its kind. The brand “West Nile T-Shirts”, the logo, the development of the product itself will be registered as a trademark. The image that our company holds is one of creativity, imagination, and humor. When consumers think of West Nile, they will not think of killer mosquitoes, they will be thinking about creative individuality. Our many long-term goals include the research and development of a brand new West Nile clothing line for the same target market. This Kevlar-based technology will be implemented in long-sleeve t-shirts, sweatshirts, pants, and even shorts. They will still be directed towards the 12-30yrs skateboarding market. We eventually will produce new products for a different target market such as any other sport that involves numerous injuries, cuts and bruises.

The West Nile t-shirt will come in several different colors and designs. Features include pockets on the inside of the shirt so that valuables are safe, a special cotton blend material in the neck for comfort and ventilation, and of course, the special rip-less Kevlar-based material for safety. We will guarantee that our shirt will not rip! If there is any problem with the product, we will send the customer a brand new one for no extra cost. We also have a money-back guarantee as well. If the customer is not completely satisfied with this product, we will refund the purchase price within 30 days. The potential profit and benefit from this product will be high. The product itself is a shopping item, meaning people compare shop. The production cost per unit is $12; retail value will be caped at $49.99 for physiological pricing. The pricing strategy used for this will be skimming, so that cost will be recovered. The great demand for this product once they hit the market will undoubtedly benefit the organization. The organization intends to position this product in the mid-high price range and extremely high quality and durability.

The distribution method chosen for this product will be one step channels distribution. Distributing directly to retailers will cut down on marks up from distribution and will keep prices low for the consumer. We would sell in bulk to a franchise distribution centre, such as Loblaws Distribution or National Grociers and they would take the responsibility to distribute our product to its affiliates or selling to other retailers who in turn sell to the final consumer. Even if small retailers choose to purchase our product from franchised distributor, they offer our product at convenient time and location, but of course with a mark up.

One Step Distribution

For the promotion of our West Nile T-Shirts there are several places we shall be advertising and promoting our products to get attention and recognition. A big help with promoting will come from Tony Hawk, a pro skater whom we have indorsed to wear and use our products. Tony Hawk is at the moment the most popular skateboarder, so him wearing and using our equipment will be a massive influence to our future customers. He is going to have our West Nile shirts in his new game Tony Hawk: Underground 2 and he will also be wearing our shirts when he skates. At the current moment our rip-less shirts have an extreme unique edge and no direct competition for the product, therefore we will be utilize skimming pricing. Because we are using the skimming pricing our promotions will be directed at the benefits of the shirt being rip-less and yet still trendy. Advertisements will be circulating in Thrasher Magazine and Skateboarding Magazine; the ads will consist of skateboarders whom fit our target market skating in our products.