Juliana Sports Store

Business Identification

Juliana Sports Store is athletic apparel with its own brand of women’s sportswear. The athletic apparel provides easily accessible sportswear, which is comfortable and can be found on the website and in the departmental store. The targeted market includes all women who are over the age of 18. The athletic apparel provides the exact sportswear that might be needed for the right occasion. The family members and friends of any woman can easily buy the fancy sportswear in the athletic apparel.

 

The main intention of the shop is to be able to obtain about 85% of the total market share and also become a famous shopping place for women who like keeping fit and healthy. Juliana Sports Store will be located at 14551 1/3 Forth Valley Road, Edinburgh. Sportswear offered by the athletic apparel include:

  • Sports bra;
  • Women’s shorts;
  • Women’s swimwear;
  • Women’s sweaters;
  • Women’s pants;
  • Tops and T-shirts;
  • Jackets and outwear;
  • Golf apparel;
  • Women’s socks;
  • Women’s hats;
  • Headbands;
  • Wristbands;
  • Leggings;
  • Bikinis;
  • Pullovers;
  • Vests;
  • Sport dresses.

The prices will range from $50 to $300 since they will be specially made from very expensive fabrics.

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Mission, Goals, and Objectives

Mission. The Mission Statement has a very clear proclamation, which is aimed at driving the business to future profitability, the future increase and growth in the business market share. The mission is to be able to offer health and fitness sportswear of available quality for all occasions for women not only in Scotland but around the world, as well. What is more, the direct sales through the website will come in a range of different sizes and styles so as to be able to accommodate all the various body shapes and sizes of the target customers.

Goals. The main goal is to attain ultimate satisfaction from all the potential customers.

Objectives. The main objectives are:

  1. To maintain more than 68% gross margin, and to achieve more than 2,000 positive feedbacks from all customers in a period of one year.
  2. To increase annual sales to more than 1 million through the use of the stores on the website.
  3. To increase profit margins for businesses and satisfy all customers.

Keys to Success

In order for Juliana Sports Store to be able to succeed in the United Kingdom clothing industry, it must have key success factors, which will help the firm to be able to achieve all of its marketing objectives. Some of the company’s keys to success are:

  1. The athletic apparel will offer all its potential customers a unique line of sportswear made from rare materials.
  2. The athletic apparel will make promotions and advertisements in all the areas, in which the target customers are based, to inform everybody about it.
  3. 24-hour customer care service will be aimed to assist the customers to make a good choice and buy the appropriate dress.

The Fitness Industry History

The fitness industry refers to a person, a group of people, an entity or a company that focuses on health, exercise, and general body maintenance. It includes sporting companies, clothing companies, orthotics, supplement and food companies, fitness equipment companies, personal trainers, fitness centers, and gyms. The main aim of the fitness industry is to offer products and services that improve the wellness and health of the people while gaining profit from people’s participation. Currently, there is a wide range of companies, entities, and businesses in the fitness industry, since various methods in which individuals train for body fitness has extended over decades.

The lifestyle people have today is causing them to have excess weight and other health issues. Therefore, people require to do some exercise in order to remain fit and healthy. However, most businesses in the health and fitness industry invest more in gyms than other businesses. It is a very attractive market, which has a very high demand for different sports clothes. The fitness and health industry is largely based on imports, but Edinburgh is the city with a large number of tourists, workers, and students; a majority of them are very curious in finding ways of maintaining fitness. The shop will be located in the central department store that sells many famous brands. The profitable location will attract customers to the pop-up store.

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Legal Form of Ownership

Juliana Sports Store is a merger/partnership business between two partners Mercy McDonald and Lee McCoy. Mercy McDonald will handle all the athletic apparel’s managerial and administrative duties while Lee McCoy will be the silent partner. The athletic apparel requires the following licenses or permits and legal protection:

  1. A Fire Department Permit.
  2. Business Tax Registration Certificate.
  3. Edinburgh City Fictitious Business Name Statement.
  4. Payroll Expense Tax Statement or State Seller’s Permit.

Location and Facilities

Juliana Sports Store will be in a rented premise located in a shopping mall, in a retail strip mall at 14551 1/3 Forth Valley Road, Edinburgh. The floor area of the business premise consists of 1,600 square feet, and the shop will be in a very convenient location, in the center of Scotland where the premises will be surrounded by restaurants, hotels and several banks. The business will be located on a very busy street with many potential customers. The thing that will make it unique and different from close competitors is that the business will be very much committed to providing all sportswear for women who prefer fashion and fitness cloth of high quality; they will be available for them in a very convenient location.

The location of the business is in a very high profile area, which is easily accessible from all parts of the country. The business will operate all through the weekdays from Monday to Friday from 7.00 a.m. till 7.00 p.m., and on Saturdays and Sundays from 9.00 a.m. till 5.00 p.m. There will be an extension of some hours during the Christmas Holiday shopping season.

Legal Issues

The country has made progress across a broad front of regulatory and legal issues concerning the general business climate. Nevertheless, the country still has to address major concerns. From the perspective of legal analysts and investors, the suitability of legislation and a lack of consecution can affect investment decisions. One more issue is the institutional capacity of the country authorities and the judiciary to satisfy the legislation. The report considers these issues in important areas of legislation and puts forward suggestions for improvement. There are no specific problems in the country with the legislation, because the legal sphere, brand registrations and legalizations itself are accessible for all citizens and foreign investors.

Management Structure

Juliana Sports Store is quite a small business; therefore, its management structure is very simple. Mercy McDonald who is the co-owner and the General Manager of the business will be responsible for the athletic apparel’s promotions, purchasing, part-time sales representative and all the administrative functions.

There will be two part-time employees and one full-time employee who will be working 20-25 hours a week with a salary of 15.00 per hour (for the full-time employee) and 8.00 per hour (for the part-time employee). The employees will get a one month leave per annum and medical benefits as the benefits.

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Products and Service

Juliana Sports Store will provide luxurious and fancy sportswear for high and middle-income women through the official website and departmental store in Scotland. The sportswear will include a sports bra, women’s shorts, women’s swimwear, women’s sweaters, women’s pants, tops and T-shirts, jackets and outwear, golf apparel, women’s socks, women’s hats, headbands, wristbands, leggings, bikinis, pullovers, vests and sport dresses. The clothes will be made of unique and expensive materials such as satin, organdie silk, and chiffon. The manufacturing of these clothes will be handled by a third party where the fulfillment will be done in-house.

The line of luxurious sportswear from the athletic apparel will carry the official logo of the business, which is a black label with the name of the business written with capital letters and the initials written in the bottom right corner. Juliana Sports Store will satisfy all the demands of its potential customers through the proper maintenance of the inventory levels that the business will have, which will enable the immediate delivery of sportswear to its customers. Juliana Sports Store will also execute a marketing campaign so as to be able to generate awareness of the Juliana Sports Store brand.

Market Analysis

Target Market

The business primarily targets more than 5 million women with high and middle income who prefer luxurious and fancy clothes and often buy expensive and beautiful sportswear fitness and health practices. Women love maintaining shape to fit with fashion, and to remain attractive throughout their life. The athletic apparel will provide even the most demanding client with unique sportswear.

It is expected that the majority of the customers will be high-class women with a high income since sportswear will be made for sophisticated clients who choose luxury clothes. In other words, the target customers will be high-income women since the fabrics used for the sportswear will be unique and expensive for women with low income.

There are three groups of people who would buy this sportswear from Juliana Sports Store: women from the group with high income who make the majority of the percentage; women from the group with middle income; husbands and family members who wish to buy sportswear for their girlfriends and wives, and the group of women with low income who will be able to afford them.

Industry Analysis

The industry can be analyzed as different sets of businesses that satisfy the varying needs of customers (Kotler & Kelvin, 2006). The industry can be defined by brand competition, product competition, form competition, and generic competition. The attractiveness of the industry does not fully indicate that all the businesses and companies working within the industry operate at the same costs and profitability margins, but it purely depends on the core competences of the business, which makes it have a competitive advantage over the others operating in the same industry (Colander, 2004).

The United Kingdom fitness and health industry are a fast-growing in the retail market since the retail sales have greatly increased estimates by over 13% and nearly $600 billion. The fitness industry is one of the largest industries in the retail sector of the country. The lowest growth rates have been shown in 2008-2009, in the time of the global financial crisis, which affected most of the countries all around the world. By the end of 2009, the market was able to return to its normal position, and the total sales grew by 10%.

It has been estimated that there would be an increase in the customers’ spending on sports items up to 2014 at a rate of about 20-35%. The UK market is expected to expand at a very high rate although the market will be at a decreasing pace.

Porter’s Five Forces Analysis declares that, in the clothing industry, the competition is very tough and intense, and there is no attraction for other potential entrance in the market (Wilson, 2006).

  1. The Threat of Substitute Products (HIGH)

The threat of substitute products from competitors is very high, because it is still a new brand in the market, and it has not established its own loyal customers yet. The business must provide the unique and extraordinary sportswear of much higher quality than competing products.

  1. Bargaining Power of Buyers (HIGH)

The bargaining power of the buyers in the fitness and health industry of the country is very high since the buyers can easily make decisions as to the brand that they are comfortable using, which is determined by the quality and its price (Aaker, 2004). Through the availability of online shopping, the customers have become price sensitive, because the Internet assists customers with all the necessary information that they need to know in making the decision on the brand they want to consume. Consumers become price-sensitive because people prefer spending money on brands, which are cheap and, consequently, makes a business to be successful; it has to consider the bargaining power of consumers and buyers. Online shopping increased the bargaining power of many buyers.

  1. Bargaining Power of Suppliers (LOW)

The bargaining power of suppliers usually depends on relationships, which exist between the two parties. It affects prices, quality and delivery times when ordering products in large amounts. As it is a new brand in the dress industry, it means that it has to be open to suppliers’ suggestions. Otherwise, they can choose another company to work with; their bargaining power is very high, and the athletic apparel may end up losing our supplier.

  1. The Threat of New Entrants (HIGH)

The threat of new entrants into the market is very high in the dress industry as this market is rapidly growing, and there are many incoming businesses venturing into the business (Keller, 2003). There are new designers who are appearing each year. Consequently, the business is facing a challenge since it is new in this production branch, and it may take a very long time to get a strong position and become one of the best designers in the fitness industry.

  1. The Intensity of Rivalry (HIGH)

In the clothing industry, the rivalry is very high as a result of the existence of intense competition. This intense rivalry causes a slowdown in the industry through the intensification of the competition levels and also leads to the product lifecycle shortening (Colander, 2004).

Competitive Analysis

The success of the business, which mainly operates for marketing and the acquisition of high profits, is dependent on the management and the establishment of all the products and services that are being offered. For the venture to be able to compete and survive in the competitive market, it has to become very successful. Constant innovation and product line development are what can lead to success, which could lead to a constant increase in the clientele numbers (Keller, 2003). Close competitors have a great advantage since their businesses have been in the industry for quite a while, which makes the venture be disadvantaged.

Market Strategy

4Ps

Product

Juliana Sports Store presents fancy and luxurious products for the satisfaction of all consumers’ needs and profitability of the business. Therefore, the prosperity of a business depends on the quality product.

Price

Juliana Sports Store offers a wide variety of luxurious sportswear, and it intends to satisfy all customers’ needs. The prices are moderate and vary according to their needs. There are essential products, which are relatively cheap. Meanwhile, Juliana Sports Store produces luxurious sportswear for women with high incomes, as well.

Place

With online shopping, customers of Juliana Sports Store are able to get all the desired goods that would be delivered to their homes or even to their doorsteps straight from the store. Customers can get all the information concerning the products that they may want to buy from the official website of the Juliana Sports Store and the stores. They have the opportunity to find out about all the delivery charges and the delivery time; for example, it indicates that customers have to fill out their sportswear correctly.

Distribution Channels

Juliana Sports Store will be distributed by two channels: online (web-site) and offline (distributor, the department store in Great Britain with 72% of sales). When the products leave the manufacturer, they are directed to the Juliana office where personnel gives retail price for pieces, and then the cloth is delivered to the department store. When a customer buys a product online, the price stays the same as in the store. A customer can get any information he/she needs. The website will be secured, and the buyers will be able to pay using a credit card (Visa and Master Card) without a risk.

Price List

The price policy is related straight away to Juliana Sports Store positioning. The price strategy of Juliana Sports Store is price skimming. By charging high prices, the company is planning to build a high-quality image for the product and its appropriateness because customers do not highly price sensitive. The average mark up for the product will be added to the cost price, which is 2.7-3.5. It depends on the material that was used for the dress and for what occasion the product was made.

Juliana Sports Store carries a wide range of prices from moderate to upscale. It aims to be in reach of the premium shopper who spends on the average $300 on a dress. However, the shop aims at having the opportunity to persuade a customer to buy products of the higher quality line by demonstrating the brand/price/value/relationship.

After launching the store, there will be an opportunity to consider the demand and competitors’ reactions. All the information will be applied to creating a sales strategy and promotional discount.

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Selling Strategy

The selling strategy will be very simple and will satisfy all customers. One of the selling strategy tools is the development of product awareness among women and their families with high and middle income. There is a great possibility that women will enjoy wearing luxurious sportswear for the important occasions in their lives. It is believed that when a customer leaves the shop satisfied, he/she will bring a new customer, and this will broadcast the business’s name to the public in support of the products’ quality.

The main goals in the selling strategy of Juliana Sports Store are to attain full growth potential, acquire new customers and retain the old and existing customers. The athletic apparel will use some advertising campaigns through the Internet and the media.

The selling strategy, which Juliana Sports Store will use, will include the following:

  1. Punch Cards: After buying the clothes 5 times in the athletic apparel, the customer will get a 50% bonus on the next 3 sportswear that he/she will purchase. This method of rewarding will show appreciation for choosing athletic apparel. Moreover, it may help to bring new customers.
  2. Prioritizing Customers Experiences: if a customer is not satisfied with the shopping experience, no doubt, the customer will not visit such athletic apparel again. All the employees in Juliana Sports Store are well trained in customer service so as to be able to handle all the problems that might appear. They will try to create a positive impression on the country’s shopping. As a result, the customer might want to come back to the athletic apparel again.
  3. Special Bonus Programs: a bonus program will increase the number of customers through its special bonus program. This is where a customer who purchases more than five sports clothes will be awarded a 10% bonus on the total cost of sportswear he/she bought. This will increase the purchasing power of customers since they will be motivated to buy more sportswear from our store.

Milestones

The key milestones for Juliana Sports Store during the first year are as follows:

  • The completion of the business plan;
  • Obtaining of the NCCA licensing;
  • Ordering the supplies;
  • Meeting with vendors to review the clothing lines;
  • Business insurance.

The milestones, which highlight all plans with the specific dates where the whole schedule shows the commitment of employees to the company.

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Juliana Sports Store: 3 Main Key Deliverables

  1. Sales Revenue

Sales revenue is one of the key deliverables, which correlates with the success factors. The sales revenue shows the total amount of gross income, which is produced (Gerald, 2004). The total amount of money, which is produced by the business, is the total amount of sales.

  1. Market Share

The market share in the market portion that the athletic apparel owns, and it indicates the percentage of the total sales from all sportswear sold by the store. It has a relation to the target market of the business (West et al., 2010). The market share is very important in the determination of the athletic apparel’s competitive strengths, which would lead to the business's ability to offer more products.

  1. Customer Satisfaction

Customer satisfaction is one of the major key deliverables which can show customer loyalty. Customer satisfaction is very essential to Juliana Sports Store since the customers are the determiners of the business profitability (Wilson, 2006).

Sales Forecast

It is expected that sales will begin in a conservative manner. It is expected to increase at a fast rate during the Christmas Holiday Season since this is the time of shopping for the festive season (Appendix A). It is planned that there will be a 15% growth rate during the first year since we new business in the fashion and clothing industry; further, it is expected that there will be an increase in revenue to 20%. Therefore, the venture will gain a larger market share in the industry and also an increase in the customer base. It illustrates the sales forecast for the first three years of the athletic apparel’s operation. Appendix A shows the sales forecast for the first 12 months of the business operation.

Implementation Strategy

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Overall Strategy

The strategies are the tools, which are used for achieving the goals. Juliana Sports Store will evaluate the suitability of the company’s sales through two strategies: the replacement strategy, which would determine if sportswear is suitable for direct sale, and the complementary strategy, which could help to determine if sportswear is unsuitable for direct sale. This would lead to the business need to analyze its market target through market segmentation where Juliana Sports Store has identified the groups of women with middle and high income in a target group. Therefore, the business can be able to provide different sportswear according to the needs of all groups to enhance customer satisfaction and increase the direct sales of the company.

These market segments in Juliana Sports Store will be analyzed for the purpose of determining the market value of the company. The future projections of the future market share between the segments, all the not achieved needs – among the segments, and the market shares among the close competitors of the company. The online customer segmentation will enable the company to move to greater heights because it will ensure better customer satisfaction. Moreover, there will be a possibility to get acquainted with the competitors, how their needs are changing, how the shop can target the market segments, how it can be able to increase its value, and how it can be able to come first through market positioning. This can influence the customer and create a positive perception of the offered sportswear in the market.

There are many advantages why an organization can use social media:

  1. Brand Awareness: this is mostly done using social websites.
  2. Targeted and Niche Marketing: the brand marketers in Juliana Sports Store can ‘listen’ to what their customers are saying, understand their needs and needs of the group of customers with similar requirements. They will target them through social media websites.
  3. Monitor Customer Feedback: social media are a great new avenue for getting customer feedback about a brand. The positive feedback from the customers enhances the brand image, and the negative feedback can be immediately responded by giving the brand a ‘responsible’ and ‘communicable’ image (Finlay, 2000).

Implementation

The goals of Juliana Sports Store are to improve its customer satisfaction and to reduce its operating expenses, including administrative and office expenses. If Juliana Sports Store is able to achieve its goals, then, it would be able to meet its main objectives. The main goal is to attain a competitive advantage, which will make the business to achieve the industry returns, which are above average.

Control Plan

The control plan is the measurement and evaluation of whether the business is able to reach the goal. This can be done through the use of:

Customer Feedback Monitoring

This can help in monitoring customer satisfaction and the performance of the channel through the use of new digital media (websites and other traditional channels). This shows that, if the customers’ needs are met, then, the number of complaints would decrease. Meanwhile, the number of comments will increase in numbers, which could symbolize the growth in the total sales of the company (Bradley, 2007).

Target Market Sales

The total sales in our business can be measured in the number of total units, which were sold. This can be done through the use of market surveys. The actual sales from the targeted market are compared. Afterward, they are compared to the projections of the marketing plan so as to determine if there are any changes, which would need special attention (Gerald, 2004). For example, Juliana Sports Store targets all women who are over the age of 18 with no upper limit. The market sales would be monitored for that specific group. If the realized sales are low, it would mean that there is a need for further research. One would search for the reasons why the target group is not positively responding to the business’s marketing.

Budgeting

Budgeting in marketing is the balance, which exists between the revenue that is created by the marketing plan and the costs, which are incurred in the marketing of the business’s products like advertising. Juliana Sports Store will monitor all these costs for being able to minimize the spending and increase the profitability of the business. Thus, when the athletic apparel is able to maintain the budget, it will be very easy to come up with ways to cut down the spending.

Market Share

The market share of Juliana Sports Store will be the percentage of all the consumer sales, which will be dominated. With the constant viewing of the consumer patterns, the athletic apparel will be able to determine its market share in the industry. This is very important in monitoring the progress of our business plan since one of the business goals is to increase the market share of the business. Hence, the athletic apparel has to put into consideration the consumer tastes and preferences.

Financial Statements and Projections

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Revenue and Cost Estimate

The revenue and cost estimate make up the first part of the profit and loss statement. The costs are the total expenditures, which have been incurred while operating the business, and while the revenue is the total income before the deduction of the expenses. Appendix D will give the estimates revenue and the estimated expenses (cash flows) in Juliana Sports Store for the first 12 months of its operation, which are based on the sales forecast.

Forecasted Profit and Loss Statement

The forecasted profit and loss statement of Juliana Sports Store shows a summary of all the costs, expenses and revenues, which have been incurred in a specified period of time, showing the ability that the business has in generating profits through increasing the total revenue. Therefore, it reduces costs. Appendix B indicates the forecasted profit and loss statement for Juliana Sports Store for the first 12 months of its operation.

Forecasted Balance Sheet

All the financials of the business reflect the past performances and future assumptions, which are mainly based on the inventory plans, the future cash flow, and the apparel trends. The forecasted balance sheet is shown in Appendix C.

Financial Projections

The financial projections for the first three years of operation are summarized below:

  1. Projected Profit and Loss.
  2. Projected Cash Flow.
  3. Projected Balance Sheet.

General Assumptions

Since Juliana Sports Store does not sell its sportswear on credit, all sales are deposited into the athletic apparel’s checking account within the duration of 48 hours. The checking account of the athletic apparel will be with Scotland Mutual where the current interest rates are at 10% p.a., the long-term interest rate is at 10% p.a. and the tax rate is at 30% p.a.

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Breakeven Point

The break-even point in a business is the point where the costs equal the expenses since there is no net gain and also no net loss meaning, it is the point when the business neither makes profits nor losses. For Juliana Sports Store, in the first year, it expects to sell a total of about 6020 sportswear from the sales forecast. Meanwhile, if it sells less than 6020 sportswear, the business will automatically make a loss. However, if it sells more than 6020 sportswear, the company would make a profit.

It is the work of the manager to ensure that the number of sportswear, which is sold, should be equal to or even more than 6020 sportswear. The manager should control the whole process and promote to make profits. Moreover, the company could come up with strategies that could reduce all the fixed costs by negotiating for purchases of the materials and controlling all the other costs within the business. One can try to reduce the variable costs and increase the selling prices of the finished sportswear.

The break-even analysis in Juliana Sports Store indicates the monthly revenue, which is necessary for the business to reach a break-even point. The fixed costs are $58,000 with approximately $47 average sales and variable costs of $21. This shows that for Juliana Sports Store to be able to attain a break-even point there is the need to make $127,000 per month.

Financial Position

The growth of Juliana Sports Store will be performed at a very moderate rate, with a positive cash balance. All sales will be on cash terms with the athletic apparels accepting cash payments, checks and credit card payments. In order to be able to reduce the bounced and rejected checks, Juliana Sports Store will employ the services of TeleCheck Company, which assists it in the verification of the authenticity of checks. Advertising and marketing will be expected to remain at below 5% of the athletic apparel’s total sales. All the residual profits will continue to be reinvested with the expansion of the athletic apparel and the personnel.

Capital and Investment Needs

The capital financing for Juliana Sports Store would come from the existing funds, which will include the cash balances, bank overdrafts, bank loans, shareholder’s capital, the working capital, which have already been invested in the business (debtors and stocks), and the creditors (the suppliers).

Juliana Sports Store will commence with a 3 months inventory where the company’s assets will also reside in cash, $3,840 will be the opening cash on hand balance. The financing of the business will be performed from the investment by the owners of $51,000, a secured bank loan of about $167,000 and a $20,000 short term credit for the inventory replenishing for the months where high receipts are expected.

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