Strategy and Implementation Summary
NALB's goal is to provide products, service and education to the underserved creative community on the Big Island. The current population is underserved due to a perceived lack of customer service in the few existing outlets for supplies.
Our intention is to gain 80% of the market share by focusing on our customer service, niche positioning, convenient location, quality brands, special promotions and becoming a gathering spot for artists. While we will focus on our primary customer segments, we offer products that virtually every artist/crafter requires. We will create an atmosphere that is appealing to the true artist, whether amateur or professional. The balance of customers will come because they will see this as the center of creative people.
The store will merchandise in a manner consistent with our values and the fundamentals of good retail space use. We will provide a bulletin board for all manner of communications among the community. We will provide space for classes and creative hands-on experimentation.
- Every resident on the Big Island is a potential customer. By marketing to our two target segments, we will expose ourselves to additional new customers.
- Our proximity to Costco and Home Depot will bring in those travelling from outside Kona.
- We will continue to be involved in the art and craft community as participants, suppliers and encouragers.
5.1 Competitive Edge
NALB's competitive edge involves five areas:
- Customer Service as priority one.
- Location. The store is located in the Kaloko Industrial Park, one block from both Costco and Home Depot. The location will attract more customers from out of the Kona area because a visit to the art supply store can be consolidated with a trip to Costco, a store with an established draw on customers from all over the island. The store is also visible from the Queen's Highway due to signage on the makai side of the building.
- NALB will be an art education center. We will have a large classroom available for instruction in various media and techniques.
- NALB will be a gathering place for artists. We will dedicate a portion of the warehouse area to a cafe style lounge where customers can read art magazines, look at the art gallery, drink coffee, listen to music, or visit with other artists.
- We will provide percentage discounts for repeat customers.
Each of these is a competitive advantage because none is being addressed, by an art supply outlet, in Kona at this time.
5.2 Marketing Strategy
Our marketing strategy will focus heavily on customer service with loyalty and retention in sales; on sales promotion, and on niche positioning in the market.
In addition to price and item promotional announcements, NALB Creative Center will focus its marketing efforts via several key direct-to-consumer advertising vehicles:
Local and Regional Magazine Publications: (West Hawaii Today, Hilo Tribune-Herald, Hawai'i Island Journal). Each of these papers provide a demographic base that lines up nicely with that of NALB's.
Direct Mail Postcards: NALB will look to increase consumer awareness, retain the existing customer base and promote increased sales via postcard mailings. These mailings will be targeted around special events, and are intended to liquidate slow moving products or showcase vendor negotiated specials.
- Spring Open House--15% to 20% savings opportunity.
- Fall Open House--15% to 20% savings opportunity.
- Holiday Open House--15% to 20% savings opportunity.
- Annual Anniversary Postcard--promotes in-store design seminars, special events and savings opportunities.
Website Marketing: As we establish our on-line education and gallery segment, we will support the business via search engine marketing, URL links and e-mail marketing on all correspondence. This third channel of business will increase the customer base, sales potential and service opportunities provided by NALB.
- Direct Calls on professional artists, architects and designers.
- Word of mouth. By giving first-time customers great service and a fair price, the word is sure to spread.
- In-store events and celebrations.
All marketing decisions with regard to specific media choices, frequency, size, and expenditures will be analyzed on an on-going basis with careful consideration of returns generated and consistency with our mission and vision.
5.3 Sales Strategy
NALB Creative Center will approach sales from a relationship basis. We will assist customers in a personal manner, using personal names and displaying our names on badges. We will ask the questions needed to provide the customers with the services they desire. Gathering key customer information and seeking performance feedback on the products and services offered will assist us in the following ways:
- Targeting our marketing efforts most effectively.
- Developing product offers and merchandising formats that increase sales.
- Developing services and perks that enhance the shopping experience.
- Increasing awareness of NCC within the retail consumer marketplace.
- Developing future sales opportunities that allow for continued growth of the business.
Key to the sales strategy is direct sales calls on all market segments targeted in this plan. These sales calls need to be made by the owners, by virtue of their background and knowledge of the customers, products and competitors. Experience has proven that the more time we devote to sales, the more sales result. A full-time team member needs to be found and added as soon as possible. Without this person, too much of the owner's time is deflected away from their major tasks.
We will utilize the POS software with every sales transaction. With each purchase the software will record and maintain in its database the customer's name, address and purchases. This information will be used with our direct mailing program to focus on our top 50% of customers. This will also make inventory control easier and more effective.
We will offer the best return/exchange policy possible, to build trust with our customers and maintain retention and loyalty. At least 50% of returns will be sent back to the distributor or vendor.
For in-store sales, our strategy will be to maintain as much on-site point-of-purchase literature as is physically possible. We will remember that selling art and craft supplies is about educating and filling a need, not pressuring the customer to buy.
Most importantly, we need to sell our company, not necessarily the products. We will need to push our service, education, and support capabilities. This will be done through relating with customers, drawing out creative dreams and aspirations, stretching customers into new creative arenas, and so forth.
5.3.1 Sales Forecast
The following table and chart highlight forecasted sales. We expect sales to start off conservatively and increase extensively during the holiday season and during the months of July and August as the education systems start their new year.
NALB has planned for a rate of growth at 5% for the first year as we build name recognition and status in the community. In the second year we project a growth rate of 10%. In the third year we look to see an increase of revenue of 20% as we gain a larger percentage of the market share and increase our customer base beyond the Kona area.
The accompanying milestone chart highlights our plan with specific dates. This schedule reflects our strong committment to organization and detail. During the 6-month and 12-month evaluation period, we will complete a detailed evaluation of all aspects of the business:
- Financials/Bottom Line
- Customer satisfaction
- Goals for next period
We will have in place a "Plan-B," for implementation, should the evaluation show that it is ill-advised to continue the current endeavor. Product diversification, location, advertising, new markets, will be considered if NALB needs to be more liquid.