Strategy and Implementation Summary
Our strategy is based on serving the niche of collectors and shoppers. The Avant-Garde Shop will leverage its competitive edge to quickly gain market exposure. We will support our product selection with excellent customer service, allowing visitors to the store to feel equally at “home” as the Tenants of the landmark building and to create a memorable visiting experience.
The Avant-Garde Shop will rely on two forms of media for their marketing campaign. Our main priority is to raise awareness of the Avant-Garde Shop among the first main target markets, the Tenants. Simple banners or a standing post will be put on the areas with largest traffic. Additional prints such as flyers and catalog will also be put into consideration and distributed during the first couple of months after the re-launching day, December 9th 2004.
Our second strategy is to use Customer Relationship Management to pull customers to coming into the Avant-Garde Shop by putting the Avant-Garde Shop as the last destination in its guided tour, or offering discounted prices in cooperation with retail food establishments inside the Avant-Garde Building, such as Daily Bread or Rice & Co. Another proposed relationship strategy is creating a loyalty card program that can be “annexed” to several other programs, such as discounts at favorite restaurants, corporate gift discount, etc.
5.1 Competitive Edge
The Avant-Garde Shop’s competitive edge can be summed up as the recognition of Avant-Garde Building as the symbol of successful commerce in Indonesia. There is a sense of prestige to buying merchandise based on the Avant-Garde theme. Our complete assortment and latest product designs will also immediately appeal to customers.
Once established, our selection of items and services will set us apart from similar stores. For example, Hard Rock Cafe is identified with “hip, cool, young”, while our Avant-Garde brand is associated with “Indonesia’s finest, global sophistication and money.” The other edge that we want to develop in the future is to become a platform of ordering other merchandise for PT. ABC Company in helping with the SSI development in manufacturing sectors.
Indeed, our store should appeal to a wider selection of the population. Some items may seem to push the limits of taste to build positioning of the Avant-Garde brand. Part of a customer’s desire to explore the store is their curiosity about the historical context of Avant-Garde and Avant-Garde Building, a total experience where they can feel first hand what it’s like to be inside the most important building that runs the nation’s commerce. Also, the customers must feel that they were treated professionally and that the sales staff truly wanted to help the customer in any way possible. Having this level of customer service helps support the Avant-Garde brand and product selection in appealing to a wide range of customers.
The Avant-Garde Shop believes it has a significant competitive advantage over these chains on non-Avant-Garde-themed merchandise because of the following benefits:
- Sense of Belonging – Community.
- Valued Image.
- More Substantial Customer Service.
- Greater Product Selections.
- Higher Product Quality.
- Loyalty Program.
5.2 Marketing Strategy
The retail marketing strategy of the Avant-Garde Shop centers on creating a corporate identity that clearly defines our market niche in terms that benefit our customer. Other specific strategies that will be used follow:
- Print Ads – Keeping the Avant-Garde Shop name in all theme merchandise will be necessary. We plan on running banners inside the Avant-Garde Building. In addition we plan on utilizing our catalog as a method of increasing our sales revenue.
- Press Releases – Also posted in our newsletter and website (both Avant-Garde Building’s website and Avant-Garde Shop’s website). The local business magazines: Prospektif, SWA and others that have close relationship with PT. ABC Company and PT. Avant-Garde to run releases and/or stories concerning the opening of Avant-Garde Shop.
- Grand Opening – A Grand Opening is the most successful of any in-store promotions. December 9th of 2004 will be set as a momentum to introduce the new Avant-Garde Shop day of the Avant-Garde Shop along with an exhibition sponsored by PT. ABC Company.
- Word of Mouth – By giving first-time customers great service and a wide selection of products, the word is sure to spread. Also, the many contacts that we already have in the area will prove to be most beneficial in spreading the word.
All marketing decisions with regard to specific media choices, frequency, size, and expenditures will be conducted on an ongoing basis with careful considerations of returns generated.
5.2.1 Pricing Strategy
We will encourage impulse buying, so it is important that we maintain a flexible pricing strategy.
- Our pricing strategy will be based on competitive parity guidelines. We will not exceed our margin by more than a normal of 70% on all of our theme merchandise.
- Price says a lot about a product. The products that are unique and not available elsewhere in the region will be marked up to meet the demand curve. We are not afraid of premium pricing a premium product.
We will allow a 10% discount for all PT. Avant-Garde staff, available by showing their ID tags to the sales staff. Seasonal discounts will also be offered during special events, such as end-of-year clearance sale.
5.2.2 Promotion Strategy
Brand identity is the key issue with consumers. Direct mail is planned in the form of post card-sized mailings. Our form of advertisement will be put out in Press Release and through the Public Relation channels. Giving away promotional merchandise such as apparel and stationary is a must, especially during events that are sponsored by Avant-Garde. To enhance our brand-building strategy, we will establish cooperation from many vendors to participate in our sales program, for example, sweepstakes of two round-trip airline tickets to Bali.
5.2.3 Distribution Strategy
Our customers will buy our products at our location. However, we anticipate a significant amount of mail order sales in order to meet or exceed our Sales Forecast. We will receive orders by mail, phone, or fax, process them immediately, and ship the goods via a courier service.
In the event we are out of an item or we don’t stock it, PT. ABC Company vendors will have to offer drop shipping as a service to the Avant-Garde Shop. This will allow us to keep our service at a high level, yet let us keep our inventory levels in check.
In the future, electronic commerce with a secure website will be thoroughly investigated for feasibility, but for now, all website orders will be handled by phone or fax with various payment options (bank transfers, COD).
All telephone orders will be taken at the store through either our local number. Mail orders will be processed at the Avant-Garde store and shipped from the store. All debits and credits, order transactions, charge backs, and price discounts will be accounted for on our accounting system at the ABC Company office.
5.2.4 Marketing Programs
The new revamped logo will be easy to recognize and attach to the existing Avant-Garde image of exclusivity, prestige and wealth. The team of ABC Company will work closely with Avant-Garde’s staff to bring the solid brand name in the re-positioning effort of the Avant-Garde Shop.
The new store will maximize the efficiency of the total 33 square meters space, as well as adding exclusivity and a modern ambience to the existing store. ABC Company will appoint our trusted interior designer and contractor who has expertise in revamping the interiors of several prestigious establishments in the Jakarta Metro Area.
Advertising and Promotion:
In the first year, the Avant-Garde Shop plans to set aside Rp. 200,000 for advertising and promotion each month, with the program beginning in December of 2004, after the launching of the new store. This would not be considered a serious advertising budget for any business, but we feel the exposure will come from publicity and promotion, so most of the funds will be spent on a good publicist who will get the word out about the charitable contribution program and positive image it projects to the public. We also believe that word-of-mouth advertising will be valuable.
5.2.5 Positioning Statement
From “just-another-store” at the Avant-Garde Building we will transform this space into the official store of the Avant-Garde. The Avant-Garde Shop is the only place in Indonesia that carries the official merchandise of the Avant-Garde brand.
5.3 Sales Strategy
The Avant-Garde Shop will approach sales from a salesperson-customer relationship basis. All sales associates will be trained and encouraged to assist customers in a personal manner, utilizing first names and asking 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 more effectively.
- Developing product offers and merchandising formats that will increase sales.
- Developing services that enhance the shopping experience.
- Training and developing sales associates in order to effectively service the customer.
- Develop future sales opportunities in wholesale that allow for continued growth of the business.
Products will be showcased via lifestyle merchandising that inspires and promotes multiple purchases. We look to create a strong visual impact, creating an invitation to touch and purchase.
Proper software must be implemented to enhance our CRM system, features include:
- Customer transactions: receipts, gift certificates, special orders, gift registry.
- Bar code scanning.
- Price check.
- Inventory lookup.
- Gift receipts.
- Track and review each register transaction.
- Daily summaries by store and register.
- Multiple ship-to addresses.
- Advanced reporting: minimum purchases within inventory class, geographic.
- Item entry: matrix, 12 customizable categories, unlimited bar codes.
- Pricing: markdown, price changes.
- Physical counts.
Purchase Orders & Receiving
- Quick receiving.
- Order approval process.
- Full contact management.
- Multiple contacts for a single vendor.
- Link multiple brands.
- Link multiple remit to contacts for payable generation.
- Track terms and payment.
- Complete inventory performance profiling.
- Ordering analysis.
- Search multiple unrelated brands, classes, styles, etc.
- Exceptions based on: on-hand levels, sell-thru performance, sales performance, aging.
- Data export to excel.
- Store management: centralized administration from a single location.
- Employees: complete rights-based security.
- Integrated Accounting with QuickBooks.
5.3.1 Sales Forecast
The following table and chart give a run-down on forecasted sales. We expect sales to increase at a rate of 1% per month for each product in the first few months and a modest yearly 6% growth each year, while cost of goods sold increases 2% each year. This is a conservative rate, given the 8% average economic growth rate in Indonesia, which is considerably higher in the metro region.
Note: For company purchases, the per-unit price of inventory purchases includes cost of shipping.
|Year 1||Year 2||Year 3|
|Traditional Arts & Crafts||$3,805||$4,033||$4,275|
|Books & Magazines||$5,073||$5,377||$5,700|
|Direct Cost of Sales||Year 1||Year 2||Year 3|
|Traditional Arts & Crafts||$1,065||Rp.1,087||Rp.1,108|
|Books & Magazines||$1,420||Rp.1,449||Rp.1,478|
|Subtotal Direct Cost of Sales||$25,282||$22,530||$22,980|
5.4 Value Proposition
Our message to the audience is that we will sell only 100% made in Indonesia products; a tag specifically made by ABC will be attached to each item to promote the buying local campaign. This will give added value for the Avant-Garde shop in communicating its identity as a helping institution to create more jobs and economic growth among Indonesia’s small size businesses.
To encourage further buying and positive communication of the new store, Avant-Garde Shop will provide a substantial community value to patronizing the development of Small Scale Industries (SSI) in Indonesia through the LB-ABC (non-profit association of helping small scale business and industry in Indonesia). For every purchase a customer makes from the Avant-Garde Shop, LB-ABC will donate up to 5% of the sale for various small business funding, shown in the Pro Forma Profit and Loss below under Marketing Expenses.
The Milestone table reflects critical dates for renovating, redesigning, preparing and launching the new Avant-Garde Shop. The table defines our break-even month and other key markers that will help us measure our success.
|Milestone||Start Date||End Date||Budget||Manager||Department|
|Concept Development||10/5/2004||10/20/2004||$0||Nicko W.||Department|
|Identity Development||10/5/2004||10/20/2004||$0||Eric W.||Department|
|Set Pricing||10/27/2004||10/29/2004||$0||Nicko W.||Department|
|Business Plan Review||10/28/2004||11/2/2004||$0||Nicko W.||Department|
|Refinement and Revision||10/28/2004||11/2/2004||$0||Eric W.||Department|
|Brief Supplier and Contractor||11/11/2004||11/12/2004||$0||Donny T.||Department|
|Interior Revamp Design||11/13/2004||11/16/2004||$0||Havidhi||Department|
|Marketing Collateral and POS||11/19/2004||12/6/2004||$0||Eric W.||Department|
|Weekly Progress Report||11/19/2004||12/8/2004||$0||Donny T.||Department|