Strategy and Implementation Summary
Our strategy and implementation of our Industrial Sales Division keeps in stride with the other JTB divisions in that our intentions are to develop the business by distributing only quality products and services. The real strategy behind the business plan we are proposing is its growth capabilities when the currently not projected additional distributors are considered.
The strategy is simple: by utilizing our custom applications, we can eliminate much of the traditional overhead required to support external business activities, while still filling our orders. In many cases, buyers' internal staff cannot handle technical issues, and consequently seek outside help.
5.1 Value Proposition
JTB's Industrial Sales Division's value proposition is very simple, providing quality and service that meets the customers' requirements. With three JTB divisions, whenever possible, we attempt to utilize our own in-house skills to meet our customers, needs. When accomplished in-house, the value turns into a quality product or service for a reduced overall cost to the customer.
Simpler logistics means faster overall services at a reduced cost.
5.2 Competitive Edge
Our competitive edge is a unique offering of products and services, marketing our goods and services to many different industries. Our strongest asset is our twenty-five years of application support, acquired while working previously as a service business. With our three different divisions, we can offer many different services under one roof.
This offering of products and services, combined with the development of our own Web-based sales and marketing initiatives and applications, will strengthen JTB's ties to our partners and direct clients. As computer networking is a strong area for me personally, I see the benefits to businesses that have solid network-based sales and marketing tools in place. JTB will be able to offer much larger clients an extremely large variety of products and services. All of the JTB divisions will benefit from the marketing, strategic ad placements and direct marketing products offered by each of the JTB divisions.
5.3 Marketing Strategy
Key Goals to our marketing plans are as follows:
- Develop a high profile sales environment to bring our products to new and existing clients.
- Develop new ways to market our products to potential clients via our branded applications and software.
- Develop partnerships, adding these partners services and products to develop a large products and services offering.
- Develop and maintain a quality customer service and follow-up program for all of the JTB divisions.
- Develop and utilize an ongoing automated marketing system to contact potential clients.
- Carefully target marketing expenditures to maximize returns on the campaigns.
5.3.1 Distribution Strategy
JTB will implement a distribution system developed by our Integrated Technologies Division. This provides the necessary real-time ability to share our inventory with other suppliers and customers. With the real-time capabilities mixed into our sales applications, we will be able to work very closely with our manufacturing partners to fill orders, receive orders, and process requests for quote.
5.3.2 Promotion Strategy
JTB Industrial Sales will promote sales and specials via the Internet, faxed and mailed sales literature, and printed media sent to the customers with our boxed shipments. Our integrated P.C.-based marketing systems will e-mail buyers about current promotions.
Our other divisions' customer databases will be accessible by the Industrial Sales Divisions staff as well, allowing further solicitations into new markets and clients. With tailored promotions, we hope to gain a large promotion-based clientele that hopefully yields many return customers to further develop our long term return customer base.
5.3.3 Strategic Alliances
JTB Industrial Sales will develop long term relationships within the manufacturing and metalworking industry, developing vendor relationships to provide our clients with industrial products and services. Our manufacturing partners and industrial suppliers will be hand picked for their products and services. Our main goal while developing a strategic alliance is to select the best possible product or service providers we can locate.
JTB will utilize our business development applications provided to network with our clients and manufacturing partners to create a unique purchasing environment, providing the smaller clients with the same degree of service as our larger clients.
5.3.4 Pricing Strategy
JTB Industrial Sales will rely on well-known printed industrial product catalogs as a benchmark for pricing references.
While it is true that these giant catalog companies enjoy better distributor discounts when they make their purchasing arrangements with suppliers, its also possible to use their printed prices as a benchmark for our clients to make comparisons, when they purchase from us. Unless the item is a complete special, or a special standard, it can be found in a catalog, providing us with a good reference index to work from while calculating our discounts on list prices.
In general, it is usually fairly easy to compete in either the catalog business, or the Industrial Sales business, in terms of percentages. We will not structure our pricing to give the house away. What will set us apart is the service offering following the sale; we will generate additional revenues by servicing the distributed products, thus another sales point can be made as well.
"Not only can we sell you the new products you need, we can service them in-house as well."
5.3.5 Marketing Programs
Our marketing programs will consist of a blend of the following:
- Internet-based industrial website banner ads: as we develop our industrial Internet marketplaces, we will place ads into our sites and many other industrial product sites as well.
- Promotional e-mail-based product e-flyers: as we collect users at our sites, we will build a sales process of delivering e-mail based promotions to our visitors highlighting our products and services.
- Catalog supplemental flyer programs delivered with all shipments: our shipping department will include inventory specials with all boxed shipments to our clients, saving much of the mailing costs.
- Fax-based special promotions, when allowed: we hope to target purchasing agents and buyers with our specials.
- in all cases and methods of delivery, we can build a promotional special to target each client's purchasing history.
- Direct telephone solicitation while taking orders: our sales staff will close all order calls with a quick overview of our sales specials.
Offices and Location for JTB Industrial Sales - Long term location arrangements for the Industrial Sales Divisions offices and warehouse.
Selection of Sales Associates - JTB Industrial Sales Division will be seeking bright, sales-oriented individuals to fulfill our internal needs for customer support, sales and marketing initiatives, and long term goals.
Set up Lines and Services offering - JTB will solicit the desired industrial lines we want to carry, and we will begin developing our catalog program as well.
Begin training Sales Associates - Training of our Sales Associates will be an ongoing effort. Our staff will function in a team situation allowing each associate to work towards specific areas of our intended sales goals.
Begin Catalog Program - Initially, 250 sets of custom catalogs will be ordered. We anticipate developing up to 1,200 catalog clients during the 4 years projected in the plan. The products available for resale in our intended catalog offering are 300,000 to 400,000 industrial items.
Begin development of Integrated Sales Apps - Our corporate Intranet will be developed with help from the JTB Integrated Technologies Division. The intranet will be a custom developed sales tool for our sales associates.
Begin Outside Sales Campaign - JTB will begin its outside sales campaign by following up on our initial letters of introduction, and by following up on clients utilizing our Industrial Services Divisions services, following through on our goal of 250 new clients per year.
Begin integration of manufacturing partners - With our marketing sites completed, JTB will solicit additional products and services to resell via our distributor partner network. Utilizing our custom developed technology, our clients will have a Internet version of our sales and marketing tools.
5.5 Sales Strategy
JTB's Industrial Sales Division's strategy is summed up in three words, Marketing, Engineering, and Sales. Our unique marketing environments will allow established and potential customers cost-free access to our products and services via Phone, Fax, EDI, and the Internet. The marketing environment will be integrated with sales capabilities. Customers can access their accounts via the Internet to review purchases, request quotes, and place orders.
Pre-sales engineering will be available for the clients when consultation is needed. JTB will develop online databases about the products we represent; these will be available to our staff to converse with clients about projects. CAD and other engineering software will work out potential issues on specialty projects prior to ordering. After the pre-sale process is complete, the staff will generate a formal quote to be sent to the client in the format they prefer.
The most prominent components of our sales process are ease of use and a knowledgeable staff to promptly fulfill orders. Having purchased from all types of businesses, including tool manufacturers, industrial distributors, and industrial catalog houses, JTB will blend the best features from our purchasing experiences into a comfortable, customer-oriented purchasing environment.
5.5.1 Sales Forecast
Our sales forecast table uses the following assumptions:
- Tooling average growth rate of sales 29.5% annually.
- Commercial, Contractor, Utilities average growth rate of sales 25% annually.
- Safety Products average growth rate of sales 66% annually.
- Holding Products average growth rate of sales 49.3% annually.
- Precision Measuring Products average growth rate of sales 49.3% annually.
- Catalog Industrial Products average growth rate of sales 34.3% annually.
- Specialty Purchased Components average growth rate of sales 66.7%
- Tool related Services average growth rate of sales 34.5% Annually.
The sales growth is affected by numerous factors, including:
- JTB's ability to quickly develop its internal sales staff.
- JTB's ability to rapidly redevelop management's previous industry relations channels.
- The development of the JTB's Products and Services Division's services.
- The development of JTB's Integrated Technologies Division's marketing products.
JTB's Industrial Sales Division's forecast highlights the key products to be initially offered. Remaining flexible, management will be seeking additional avenues of business to develop, adding further sales capability. We feel strongly about developing a very good local customer base here in Louisiana, allowing quick growth and establishment of cash flow. Additionally, we anticipate better margins as we become established as direct distributors for many of the lines we would initially offer from catalogs, and through out of state purchases from other distributors.
Our sales forecast has an average margin of 36%. As an established direct or stocking distributor we previously had discount arrangements of up to 68% off list pricing these changes would result in an additional 15 - 30% reduction in our direct costs of goods picture.