Sit n' Caddy
Strategy and Implementation Summary
Garden Crafts will sell its entire production of the Sit N’ Caddy to Home Depot. Distribution will occur in select stores within the southeastern district. Marketing will be based on in-store promotions as well as packaging concepts. These promotions will be tied directly to Home Depot sales and promotions.
Garden Crafts has identified several key dates, known as milestones. These milestones are important events that must take place by a certain date. Several of these events will transpire prior to the first day of production, such as the incorporation process and the contract negotiation with Home Depot. Other events, like materials and equipment purchases, will take place when production starts.
5.1 Value Proposition
Research has not yet discovered a direct competitor for the Sit N’ Caddy. The dual purpose of this product gives it added value by combining two distinct and useful functions, each of which can stand on its own in the marketplace. The ability to paint and customize the look of this product will appeal to crafters, while the beauty of it without the paint will appeal to those looking strictly for functionality. Because the product can be shipped unassembled, space and stacking on the retail shelves becomes less of an issue than similar, bulky products.
5.2 Sales Strategy
Since Home Depot was selected as our initial target for sales, our strategy will revolve around the merchant that Home Depot uses as their regional buyer. Initial contact was made with Tiffany Dowling at corporate headquarters. From Ms. Dowling, we expect to receive a submittal package that will detail the documentation needed to submit our product for approval and acceptance.
As part of this approval process, we must sell the merchant on such features as safety, quality of materials, production capacity, and our commitment to Home Depot.
5.2.1 Sales Forecast
With a single product and a standard price, the three-year forecast shows a direct result of the projected 11% growth rate. The following chart gives projections on a monthly basis, and the table provides yearly estimates. The variety in sales comes from the seasonal nature of this type of product.
5.3 Competitive Edge
Our competitive edge is our product’s unique and functional ergonomics, coupled with traditional high-quality furniture workmanship. Sit N’ Caddy can create comfort and utility, while also displaying the aesthetic beauty of a finely crafted decorative wood. The market is flooded with examples of cheap plastic garden stools and tool boxes with limited durability and eye appeal. Sit N’ Caddy is the ideal gift, but can also function as value-added gift packaging for small garden tool products.
5.4 Marketing Strategy
Garden Crafts seeks to be positioned as the best utility garden tool in the retail chain market by offering a top-quality, fair priced, high-value product. Garden Craft Inc. will continue to target its present retail chain market, depending on product demand.
5.4.1 Promotion Strategy
Promotion will be handled in two sections. The first deals with in-store promotions, such as display units or strategic placement. The second section relies on piggy-back promotion in the Home Depot sales flyers.
In-store promotions to be explored are seasonal displays, product partnership with companies such as Scotts or Burpee seeds, cash-register placement, or do-it-yourself (DIY) in-store seminars. Home Depot uses regional merchants who act as account managers. They will be our main contact for this sort of promotion.
Mail-order coupons and piggy-back advertisement will constitute the bulk of our second phase of promotion. These will accompany local sales flyers placed by Home Depot. This section of our promotion plan will probably not be implemented until we cover a large region to justify the expense.
5.4.2 Distribution Strategy
Using Home Depot’s merchant services, distribution for Sit N’ Caddy will be dependent on available shelf space and POS promotion. Each store varies its inventory to fit the climate and customer demand. Garden Crafts will push for placement in those stores with the highest lawn and garden sales.
5.4.3 Marketing Programs
Our marketing strategy is to target the largest player in the home improvement retail chain, since that customer could purchase our entire annual production run. The National Garden Association’s survey estimates 11% of home improvement sales are in lawn and garden products. That figure is estimated to grow by double digit percentages.
Garden Craft Inc. has approached the Home Depot merchant program coordinator at their Atlanta headquarters for application into the program. Once the agreed-upon unit pricing and delivery schedule is finalized, a production schedule can be formulated. November 1, 2000 is the budgeted start-up of the operation.
5.4.4 Positioning Statement
Garden Crafts seeks to achieve preferential positioning for Sit N’ Caddy by having the product sold in the top home improvement retail chain in the country: Home Depot. Customers have developed a trust for Home Depot’s product line quality. Positioning our product in this retail market gives our product’s instant credibility for value.
5.4.5 Pricing Strategy
With Home Depot as our sole customer, pricing is dictated by their merchant pricing system. Based on our costs, we have decided that $20 will be the lowest price that we will be willing to accept from Home Depot.
5.5 Strategic Alliances
With a single customer such as Home Depot, Garden Crafts will be in a promotional partnership. The product will only be sold in Home Depot stores, which means that promotional events by Garden Crafts will have to include information on Home Depot. Because Home Depot is such a large company, Garden Crafts will benefit from the use of the large promotional division of Home Depot. Currently, there are no plans to market to other companies until a general sales trend has been established.
Several of the milestones must be accomplished prior to the first day of business. These include the incorporation process, contract negotiations, and promotional materials.
Milestones that are scheduled for the first day of business are those that generally relate to the construction of the product, such as facilities, materials, and equipment.
The only element scheduled for a date after the business first opens is that of the website development. Since this site will be for informational purposes only, it was decided that it should be designed after the company has been in a productive state for a few months.