Cigar World

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Cigar Manufacturing Business Plan

Strategy and Implementation Summary

Our sales and marketing strategies are discussed in the following topics.

5.1 Value Proposition

Cigar World offers the following value proposition for customers:

  • Presentation. The 'Fine Cigar' premium cigar has the best presentation in the industry.
  • Extremely competitive prices. We have prices that are very affordable.
  • Quality. The quality of the 'Fine Cigar' is as good as that of major brands.
  • Customer service. Customers can count on us to deliver on time and can easily reach us whenever they need to.

5.2 Distribution Strategy

Our customers are satisfied with the quality of customer service we have provided. The company is currently offering a toll-free line for customer service. Due to the nature of our product we only offer a full return on box damage due to shipping, we do not offer money back guarantee on the cigars itself, the customer can return the merchandise before accepting it. Customers can reach us by email, fax, or our 800 number.

5.3 Marketing Strategy

In marketing our products and services, we will rely on a combination of the following channels:

  • Trade shows. This is a highly effective medium, allowing us to showcase our products, make contact with industry leaders, and keep abreast with the changes and advancements in product selection, manufacturing, and delivery.

  • Telephone solicitations. Our telephone solicitation concept is very unique, we have not heard of a cigar company using this concept as a marketing tool. The competition prefers to attend trade shows and place magazine ads. Our company has, in addition to other channels, been using the phones aggressively with much success.

  • Direct mail. Direct mail is probably the most flexible medium of all. A direct mail piece and the program of which it is a part can be almost whatever we want it to be. With this approach, we can send coupons, make direct selling offers, select the audience by name, and set whatever distribution schedule is most desirable, without being constrained by the publication or broadcast schedules of the major media.

  • Personal visits from our sales representatives. This is a method we feel will be highly effective especially in the North Carolina area. A van has been purchased for the sole use of the sales representatives. We believe that will allow for efficiency, smooth operation, and put us in direct contact with the clients and major decision-makers.

  • Website. A website has been developed and this will be one of the major communication channels. Use of the Internet is growing and more and more people are using it in place of the traditional methods to look for services and even to do their shopping.

The message associated with our products is high quality at affordable prices. In monitoring our products, service and market position, we will rely on feedback from customers with whom we have relationships. This will be done through direct mail and telephone solicitations. Our promotional plan is diverse and will include a range of marketing communications. Future plans call for company owned stores nationwide and in Europe, and the establishment of a magazine ad campaign.

The table below summarized our sales forecast for fiscal year 2000-2002.

5.4 Sales Forecast

Cigar World forecasts modest but steady growth in sales during the first year of this plan. As new releases are added to the product offerings, marketing increases our exposure in our target segments, and the smoking of cigars gains greater acceptance as a cultural trend we anticipate skyrocketing sales in year two and three.

Sales Forecast
2000 2001 2002
Sales
All Product Lines $2,500,000 $8,000,000 $13,050,000
Other $0 $0 $0
Total Sales $2,500,000 $8,000,000 $13,050,000
Direct Cost of Sales 2000 2001 2002
All Product Lines $100,000 $370,000 $400,000
Other $0 $0 $0
Subtotal Direct Cost of Sales $100,000 $370,000 $400,000

5.5 Strategic Alliances

We are currently in the process of negotiating a merger with Cigar Maker, a cigar producer in Jamaica. Once complete, this merger will enable us to secure a production of one million cigars a month with the potential to double this capacity at short notice. Also, upon completion of the merger, plans have been made to relocate to a much larger facility close to the main airport in Jamaica. We believe that this will expedite the dispatching of orders and enable us to develop this facility as a tourist attraction.