Strategy and Implementation Summary
Emphasize Customer Service
Hisarlik Hardware will build a reputation of fantastic customer service, building upon what Building Blocks stores and the Building Blocks brand have already established. We will establish our business, by offering a clear cut leader in retail hardware in downtown Wilusa.
Build a Relationship-Oriented Business
Fantastic service will lead to long term loyal relationships with our customers and clients. The goal is to have our customer base become reliant on Hisarlik to stock items and have solutions for their needs. The customers will soon understand the value of the relationship.
Focus on Target Markets
Hisarlik will focus on the market segments identified earlier in this document. Each of the market segments will have sales initiatives to focus on each group.
Differentiate and Fulfill the Promise
Hisarlik Hardware can’t just market and sell products and services, we must actually deliver as well. We need to make sure we have the knowledge-intensive business and service-intensive business we claim to have. This service has to be consistent and deliver what the customer is looking for.
5.1 Marketing Strategy
The Building Blocks Power Events are advertising programs supported by national advertising during peak buying periods for planned home care products. Power Events focus on those high traffic times of the year with a multimedia campaign. A strong mix of national television and radio advertising, circulars, Sunday supplements, and POP sign kits deliver a sense of urgency to visit the store. A small 8-page and large 12-page circular are available for each Power Event to help carry the theme and promote the sale. There are four Power Events each year.
Hisarlik Hardware will also place ads in the Yellow Pages. The Yellow Pages continue to be a source of a good number of customers.
Hisarlik Hardware will also rely on the media to help spread the word about this new business downtown. Fox Television’s local morning TV show goes on location to promote local businesses. Radio can be used in many different ways, radio remotes for the opening of the store. Wilusa Magazine has already identified an issue, a follow up story is very appropriate. The Wilusa Star covers new and significant businesses in Wilusa, Hisarlik feels this store will fit that description.
5.1.1 Potential Customers
Every person is a potential customer of a hardware store. Hisarlik Hardware will carry items everyone needs. The average household spends $135 per year on items found in a hardware store according to Yorikle, a research firm retained by Building Blocks. The key to getting the potential customer to spend their $135 or more in Hisarlik Hardware are include the following attributes:
- exceed customer expectations
All of these attributes will be present in Hisarlik Hardware. In order to be convenient, Hisarlik will have to adapt to its environment, the location will be key to making it easy for customers to get to the store. The store must also be open when the customers arrive. In addition, a delivery service will be available to make it easier for regular customers to not have to leave what they are doing to get the products they need. There will also be accounts set up to make it easier for regular customers to get items, without having to deal with petty cash, company credit cards, or company checks for each visit to the store.
Customers expect to get great service at Building Blocks Hardware stores, which is evidenced by the fact 50% of all hardware shoppers will avoid the “Big Box” retailers and opt instead for the personal service like Hisarlik Hardware. We will also need to be reliable, which means that customers will depend on us to inventory what they need and understand and anticipate their needs. Customers want to come into a hardware store having the confidence they will find what they need. The store will possess a knowledgeable and friendly staff. The staff has to understand and interpret what the customer needs and find the product that will fit that need. Hisarlik Hardware will also be progressive, by that we mean we will continue to evolve and understand what the customer needs and develop new markets where the need exists.
5.2 Sales Strategy
Hisarlik Hardware will be offering a convenient solution which all downtown residents need. Customers will be introduced to Hisarlik through targeted advertising, direct mail, signage, and word of mouth. Hisarlik will also take advantage of all the Building Blocks programs that help create loyalty and awareness among the potential customers in the market.
The direct sales force will consist of two seasoned sales people led by Hector Priamson. The focus will be on property managers and all downtown businesses to create an awareness of the store location and the fact that the store is a potential solution for retail hardware needs.
Glaucus Sarpedon will also work on the commercial accounts and government accounts located in the downtown market.
5.2.1 Sales Forecast
The sales projections start in the month of March, 2004. Sales steadily increase along with the awareness of the store through September. In September, there is a small dip in sales then a steady rise through the Christmas season and December the stores best month of the year. There is a traditional slow season that runs through January and February each year. The goal of Hisarlik Hardware will be to develop programs that take as much slack out of the sales as possible and get them in line with the rest of the sales year.
Sales are estimated by Building Blocks to be $125 to $175 per square foot of the total area of the store. The Gross Margin will range from 40% to 45%. There is a 25% growth predicted for the second year of sales driven by awareness, growth in rentals and growth in commercial sales.
The immediate goal is to achieve robust sales in the first year. It is thought that double digit percentage total sales increases can be achieved and maintained throughout the five years of this business plan.
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Monthly Net Sales||$1,410,502||$1,757,402||$2,108,883||$2,214,327||$2,325,043|
|Direct Cost of Sales||Year 1||Year 2||Year 3||Year 4||Year 5|
|Cost of Goods Sold||$818,091||$1,019,293||$1,223,152||$1,284,310||$1,348,525|
|Subtotal Direct Cost of Sales||$818,091||$1,019,293||$1,223,152||$1,284,310||$1,348,525|
5.2.2 Sales Programs
Building Blocks has loyalty programs like Building Blocks Rewards that Hisarlik Hardware will participate in. This program has been developed to build a loyal following of customers that use the card for shopping benefits.
By the second year accounts will be set up for businesses, property managers, and contractors to make shopping easy for them. This program will allow these customers to shop and make it easy for them to pay for items on account. This program will have to be managed very carefully, and Hector Priamson’s financial background will prove to be very useful in managing these accounts.
5.3 Strategic Alliances
Hisarlik Hardware has already contacted Scamander’s Food Market and have the word of the General Store Manager that they would be interested in developing programs to work together with Hisarlik for the betterment of both businesses. Both will stand to benefit from each other.
Hisarlik True Value has worked with True Value to establish a realistic time line to work within to have the store open for business in March of 2004. The time line is listed in the Milestones table below.
|Milestone||Start Date||End Date||Budget||Manager||Department|
|Research Feasibility||9/1/2003||11/15/2003||$0||Hector Priamson||Department|
|Prepare Business Plan||10/15/2003||12/1/2003||$500||Hector Priamson||Department|
|Secure Financing||11/15/2003||12/15/2003||$0||Hector Priamson||Department|
|Finalize the Lease||12/15/2003||12/15/2003||$0||Hector Priamson||Department|
|Sign Building Blocks Member Agreement||12/15/2003||1/15/2004||$6,000||Hector Priamson||Department|
|Start Work on Interior of Proposed Site||12/15/2003||2/1/2004||$4,000||Hector Priamson||Department|
|Review Fixture Layout Plan||12/20/2003||1/15/2004||$0||Hector Priamson||Department|
|Order Exterior Signage||12/22/2003||1/15/2004||$25,000||Hector Priamson||Department|
|Order Fixtures||12/23/2003||12/23/2003||$50,000||Hector Priamson||Department|
|Begin Interviewing and Hiring Employees||1/15/2004||3/1/2004||$0||Hector Priamson||Department|
|Initial Merchandise Order is Placed||1/5/2004||1/15/2004||$0||Hector Priamson||Department|
|Leasehold Improvements Complete||1/15/2004||2/1/2004||$0||Hector Priamson||Department|
|Order Interior Signage||1/15/2004||2/1/2004||$7,500||Hector Priamson||Department|
|Fixtures Arrive||1/25/2004||2/1/2004||$0||Hector Priamson||Department|
|Merchandise Arrives||2/5/2004||2/15/2004||$0||Hector Priamson||Department|
|Merchandisers Set Up Store||2/10/2004||2/25/2004||$0||Hector Priamson||Department|
|Exterior Signage Installed||2/10/2004||2/15/2004||$0||Hector Priamson||Department|
|Run Local Advertising||3/1/2004||3/15/2004||$0||Hector Priamson||Department|
|Open Informally||3/10/2004||3/14/2004||$0||Hector Priamson||Department|
|Grand Opening||3/14/2004||3/15/2004||$0||Hector Priamson||Department|
5.5 Competitive Edge
The competitive edge has been covered throughout this document. Location is the biggest key to this business. There are no true competitors in our business in downtown Wilusa. Our future customers have had to work harder to get the same or lesser service less conveniently. We will be in their back yard and be easy to work with and have products they need.
Hisarlik Hardware have staff that understand customer service and how to treat customers so that they want to shop in the Hisarlik Hardware environment.