Strategy and Implementation Summary
Sportsuchtig will leverage its expertise, product offerings, and marketing strategy to increase its customer base while driving sales and profit. The following sections review the various strategies that will support this effort.
5.1 Sales Strategy
Sportsuchtig will approach retail 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. The current Point-Of-Sale system is already set up to collect the customer’s name, address, and purchases. 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.
- Offering products 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.
- Increase awareness of Sportsuchtig within the retail consumer marketplace.
- Develop future sales opportunities that allow for continued growth of the business.
We want our customers to come back and specifically ask for a salesperson by name, because they were so satisfied with the service previously provided.
Currently the format of the retail store separates the customer from the merchandise. The customer must be assisted by a salesperson or they cannot touch or browse the merchandise. We believe this leads to walk-outs when all the available salespeople are tied up assisting other customers. Usually, these customers will leave and never return. We plan to reformat the store so that the 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.
In order to provide the customer with the most up-to-date products on the market and a wide selection, we will attend sporting goods trade shows which showcase all of the products manufactured within the sporting goods industry. Attending shows and seminars will not only allow us to ensure our product mix is current and up-to-date, but will also provide us with fresh, new store merchandising and display ideas. To stay abreast of market and product trends, we will utilize trade publications, trade associations, and their associated Web sites.
It is the goal of Sportsuchtig to offer selection and quality at a value to the consumer. Our pricing structure will support a 25-35% gross margin and position us competitively within the marketplace. Seasonal promotional offers, discounts for end of season, and sale “events” will encourage additional sales and multiple unit purchases.
Employees of Sportsuchtig are an integral part of the shopping experience for the customer. All employees will be developed for growth and advancement, and compensated fairly with effective training that will enable them to confidently service and sell the customer.
Currently there is no sales force to actively pursue sales to the League, School, and Team market segments. Key to the new sales strategy is direct sales calls on these market segments. Currently these sales calls are made by the current owner, by virtue of his background and knowledge of the products and competitors. Experience has proven that the more time he devotes to sales, the more sales result. Initially, this sales task will be transferred to the new managing owner, John Johnson. However, it is strategically necessary to hire and develop a sales team to attack these markets. The competition well-established with many of our potential customers, so a full-time team sales manager will be found and added as soon as possible. His/her task will be to grow the sales in these segments and to build the sales team. Without this person, too much of John Johnson’s time will be deflected away from his major role of strategically operating and growing the business.
There are currently 2 part-time commissioned external sales people. One of them is a well-known Softball pitching coach who has a small training facility/store in the area. She sells Sportsuchtig’ products to her students and others that come to her store. Her commission is 50% of the margin gained from these sales. There is another saleswoman who pulls a trailer of Sportsuchtig products with her when she goes to softball tournaments around the region. Her commission is also 50% of the gross margin on the sales. These relationships and channels for sales will be investigated and formalized into a sales program if deemed beneficial.
Web sales are handled electronically via the internet store Shopping Cart or via phone sales representatives taking calls on the 800 telephone number. There are currently 4 computer/phone stations for these sales reps. These sales representatives need to be thoroughly trained in product offerings and have good phone communication skills. They need to be trained to follow a general sales script when dealing with customers. Having good images of products and detailed product benefits and features on the Web site is critical to getting the customers to commit to an online purchase without talking with a sales representative. A functioning site search engine that helps customers locate product also needs to be added to the internet site.
5.1.1 Sales Forecast
The following table and chart give a run down on forecasted sales. We expect sales in year 1 to be flat as the new owner comes into operating the business. Businesses generally see a sales decline in the first year of new ownership. We believe, however, that this business is strong and that we can at least maintain the current level of sales ($2.5 million) in year 1.
We have projected 20% sales growth in years 2-5, reaching over $5 million in sales by the end of year 5. This growth forecast is based on the assumption that the company acts on the keys to success outlined earlier in this plan: upgrade the website, relocate the existing retail store, negotiate optimal agreements with the major suppliers, expand the product line by offering equipment for additional sports, create an outside sales team that calls on schools, leagues, and associations, train employees, train or hire a store manager, advertisement and promotion, build a reliable operations infrastructure, be an active member of the community, and ensure through daily management practices that the values of The Sportsuchtig mission are followed.
We will look to relocate the store near the end of year 1, which should help position us for increased retail sales beginning in year 2. The website and internet store will be redesigned after the first 6 months and the Web marketing strategy will be timed to coincide with the implementation of the new site. Expansion into at least one new product participant segment will be planned for each year, beginning in year 1. An outside sales team manager will be hired in year 1 but ramp up of the sales team is not planned until early in year 2.
The other assumption built into the forecast is that gross margins will be flat in year 1 but able to be continually improved through years 2-5. This assumption is based on improved purchase agreements with major suppliers and better inventory management, so that fewer products have to be discounted at product season end.
The sales forecast could turn downward if the outside sales team has difficulty gaining traction. The competition is comfortably entrenched in the segments to be targeted, so success is not guaranteed.
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Sporting Goods Sales||$2,288,184||$2,745,821||$3,294,985||$3,953,982||$4,744,779|
|Direct Cost of Sales||Year 1||Year 2||Year 3||Year 4||Year 5|
|Cost of Goods Sold||$1,806,461||$2,109,877||$2,427,803||$2,788,505||$3,246,320|
|Subtotal Direct Cost of Sales||$1,806,461||$2,109,877||$2,427,803||$2,788,505||$3,246,320|
The accompanying milestone table highlights our plan with specific dates. This schedule reflects our strong committment to organization and detail. Milestone responsibility is assigned to the functional departments in the company – Sales, Marketing, HR, Operations, and President’s Office.
The Milestone table reflects critical dates for the acquisition and takeover schedule, systems reviews and upgrades, the website re-design and deployment, the retail store relocation, and new product identification and rollout. We also define our target dates for policy definition and implementation as well as documented employee training and evaluation processes.
|Milestone||Start Date||End Date||Budget||Manager||Department|
|Initial Business Plan||9/8/2004||9/19/2004||$200||JJohnson||Acquisition|
|Letter of Intent||9/17/2004||9/24/2004||$500||JJohnson||Acquisition|
|Apply for Loan||9/20/2004||9/24/2004||$0||JJohnson||Acquisition|
|Contract to Purchase||10/4/2004||10/22/2004||$2,000||JJohnson||Acquisition|
|Loan Authorization Obtained||10/15/2004||6/6/2009||$0||JJohnson||Acquisition|
|Secure Insurance – Business & Key Man||10/25/2004||11/12/2004||$2,000||JJohnson||Acquisition|
|Owner Training Period||12/1/2004||1/15/2005||$0||JJohnson||President|
|Computer Systems Disaster Recovery Evaluation and Implementation||12/1/2004||12/31/2004||$500||JJohnson||Operations|
|Inventory System Review and Plan||12/1/2004||12/31/2004||$0||JJohnson||Operations|
|Implement Staff Uniform||12/10/2004||12/20/2004||$500||JJohnson||President|
|Retail Store Layout Modification Design||1/2/2005||1/31/2005||$500||JJohnson||Sales|
|Shipping & Receiving Process Review & Plan||1/2/2005||1/31/2005||$0||JJohnson||Operations|
|Accounting System Review & Plan||1/2/2005||1/31/2005||$500||JJohnson||Operations|
|Policy and Procedures Manual||1/2/2005||2/28/2005||$500||JJohnson||HR|
|Hire or Promote Store Manager||1/15/2005||2/15/2005||$200||JJohnson||President|
|Business Plan Review||1/15/2005||1/31/2005||$0||JJohnson||President|
|Point-of-Sale System Review & Plan||2/1/2005||2/28/2005||$0||JJohnson||Operations|
|Hire Team Sales Manager||2/1/2005||3/1/2005||$200||JJohnson||President|
|Retail Store Format Change||2/20/2005||2/21/2005||$500||JJohnson||Sales|
|Begin Sunday Operation||2/27/2005||2/27/2005||$0||JJohnson||Sales|
|WEB Site Development & Implementation||3/1/2005||6/1/2005||$10,000||JJohnson||Operations|
|Determine League & Tournament Sponsorships for 2005||3/1/2005||3/15/2005||$0||JJohnson||Marketing|
|Flyer Marketing to Leagues||3/1/2005||4/15/2005||$5,000||JJohnson||Marketing|
|Flyer Marketing to Mailboxes||3/1/2005||4/15/2005||$2,000||JJohnson||Marketing|
|Article in Times Dispatch about Business Purchase||3/1/2005||3/31/2005||$0||JJohnson||Marketing|
|Team Sales – Sales Plan||3/1/2005||3/31/2005||$0||JJohnson||Sales|
|Identify New Fall Sport Segment(s)||3/1/2005||3/31/2005||$0||JJohnson||Sales|
|Determine New Store Location||3/1/2005||5/1/2005||$0||JJohnson||President|
|Negotiate and Order New Sport Inventory||4/1/2005||4/30/2005||$0||JJohnson||President|
|Marketing Plan for New Product(s)||4/1/2005||4/30/2005||$0||JJohnson||Marketing|
|Employee Training Plans||5/1/2005||5/31/2005||$500||JJohnson||HR|
|Supplier Agreements/Relationships Review & Plan||5/1/2005||5/31/2005||$0||JJohnson||President|
|Sign New Location Lease Agreement||5/1/2005||5/15/2005||$1,000||JJohnson||President|
|New Store Layout Design||5/1/2005||6/1/2005||$1,000||JJohnson||Sales|
|New Warehouse Design||5/1/2005||6/1/2005||$1,000||JJohnson||Operations|
|Inventory System Upgrade||5/15/2005||6/15/2005||$3,000||JJohnson||Operations|
|Employee Review Process||6/1/2005||6/30/2005||$500||JJohnson||HR|
|New Location Buildout||6/1/2005||7/31/2005||$5,000||JJohnson||Operations|
|New Store Marketing Plan||6/1/2005||7/15/2005||$0||JJohnson||Marketing|
|Website Live Deployment||6/15/2005||6/15/2005||$0||JJohnson||Operations|
|Web Marketing Plan Execution||6/16/2005||12/31/2005||$15,000||JJohnson||Marketing|
|New Store Marketing Execution||7/15/2005||12/31/2005||$20,000||JJohnson||Marketing|
|New Store Stock and Set-Up||8/1/2005||8/12/2005||$0||JJohnson||Operations|
|New Product(s) Marketing Plan Execution||8/1/2005||12/31/2005||$10,000||JJohnson||Marketing|
|New Store Opening||8/15/2005||8/15/2005||$0||JJohnson||President|
|New Store Grand Opening||8/20/2005||8/21/2005||$0||JJohnson||President|
|Identify Non-Profit Partner||10/1/2005||10/31/2005||$0||JJohnson||President|
|Accounting System Upgrade||11/1/2005||11/30/2005||$1,000||JJohnson||Operations|
|Company Christmas Party||12/15/2005||12/20/2005||$200||JJohnson||President|
|Evaluate Discount Card Program||1/2/2006||1/31/2006||$0||JJohnson||Marketing|
|Order Spring Inventory||9/15/2009||11/1/2005||$0||JJohnson||Sales|
5.3 Marketing Strategy
The marketing strategy of Sportsuchtig centers on defining our market niche in terms that benefit our customer. Retail and internet store marketing will be integrated and synchronized. We plan to establish a consistent and coherent marketing plan and calendar that take into account and utilize all effective forms of publicity, advertising, and other marketing tools. Specific strategies that will potentially be used are as follows:
- Newspaper/Print Ads – It will be necessary to keep the Sportsuchtig name in front of the customer while getting established will be necessary. We plan on running limited-space ads in the local newspapers to keep our name and phone number in front of the consumer. We may offer clip out coupons as an incentive to visit the store and also as a way to track revenue from the ads. Use of magazine print ads is deemed to have little potential return.
- Press Releases – The local paper has regular sections that highlight business purchases and new business openings. We will make sure they give coverage to the grand opening when the store relocates and any time we sponsor or are involved with local nonprofit organizations.
- Team/Tournament Sponsorship – We will selectively sponsor local teams and leagues, preferably by providing equipment or uniforms versus cash. We will encourage links to/from our Web site with these entities. We will look to sponsor a “Sportsuchtig” softball and/or baseball tournament once a year.
- Event Sponsorship – We will investigate opportunities for being sponsors of large area events, especially those managed by the local sports facilitation group, such as a marathon, and biking or ironman events.
- Decals – We will have decals/stickers manufactured with the Sportsuchtig logo. We will include these with all of the orders that we ship. Children in particular enjoy displaying decals/stickers on just about everything.
- Apparel – We will outfit our retail staff with Sportsuchtig branded shirts and have shirts, hats, and other apparel available for event and sales giveaways.
- Grand Opening – A Grand Opening is the most successful of any in-store promotions. With manufacturer support, a large number of door prizes can be given away while instantly building a mailing list. Loss leader pricing on a few high volume consumable products will attract in-store traffic. Vendors will subsidize loss leader pricing with a rebate. Appearances by local celebrities would also expose potential customers to Sportsuchtig. A planned series of events, such as demonstrations, free clinics, celebrity appearances, registration for free prize giveaways, and competitions can all be utilized to extend the grand opening and continually draw customers back so they become familiar and comfortable with the store.
- Trade Shows – We will attend industry trade shows in order to keep abreast of new products and trends. This will also allow us to make and maintain industry contacts.
- Word of Mouth – By giving first-time customers great service and a fair price, the word is sure to spread. Also, the many sports contacts that we already have in the area will prove to be most beneficial in spreading the word.
- Yellow Pages – We will advertise in the local yellow pages.
- Flyers – Flyers will be distributed to all local leagues at season start. These flyers will offer discounts for purchasing from the retail and internet stores. These discounts could be structured so that a certain percentage of the discount goes directly to the customer and other percentages go to the customer’s league or a nonprofit entity being sponsored by Sportsuchtig.
- MailBox Flyers – We will also evaluate placing flyers in local area neighborhood mailboxes.
- Customer Discount Card – The implementation of a customer discount program and card will be investigated to entice customers to shop repeatedly with Sportsuchtig. Information gathered through this program can be utilized to feed direct mail and email campaigns for special program discounts or information.
- Business Networking – Business networking organizations, such as Business Network International, will be visited and potentially joined as a way to increase awareness and create a virtual sales force.
- Direct Mail – A direct mail program utilizing low-cost postcards or other mechanism will be evaluated.
- Radio – A radio campaign will be investigated. Happy Sports recently ran a campaign with some success.
- Catalog – The creation and distribution of a product catalog will be evaluated.
- Web Marketing – A variety of Web marketing channels and vehicles will be researched and tested.
- Press releases, articles, and/or advertising on local internet sites.
- Search engine marketing
- Banner Ads
- URL Links to/from organizations, teams, leagues, co-marketers
- Email marketing
- Trivia questions with weekly winners
- Sports Tickers
- Retail store event publicity and schedule
- Participation Areas and Contests – When the store is relocated we will, if possible and feasible, leverage the TrueSports product line from the owner’s other business and build a basketball court and putting green into the layout and flooring of the new store. This will allow us to have areas where promotional competitions, demonstrations, clinics, and customer product tryout can be conducted. This will draw customers to the store and also allow a showcase for the TrueCourt and TrueTurf product lines.
- Non-Profit Relationship(s) – Sportsuchtig will build a relationship with, and be an on-going sponsor for, at least one nonprofit organization. Events will be held or sponsored in order to raise money for the nonprofit, or a percentage of profits for certain Sportsuchtig promotions will be credited to the nonprofit for its use in exchanging that credit for Sportsuchtig products. In addition to giving back to the community, we anticipate significant free publicity because of this community support program. Because we are giving help to these organizations, they will get the word out to their benefactors/customers/employees/partners about Sportsuchtig. Word of mouth has always proven to be the greatest advertising program a company can instill. In addition, the media will be more than willing to promote the charitable aspects of Sportsuchtig and provide the opportunity for more exposure every time we provide assistance to another organization.
All marketing decisions with regard to specific media choices, frequency, size, and expenditures will be conducted on an on-going basis with careful considerations of returns generated. All marketing vehicles and channels will be tracked for results.
5.4 Competitive Edge
Sportsuchtig looks to establish itself competitively as a unique sporting goods provider in the local metropolitan area and internet sports market through its product offerings, the scope and level of services it provides, and the expertise of its employees.
Products: Sourced through established and internationally-known manufacturers, the products offered provide a high level of quality and value to the consumer. The depth and range of products will be extensive, separating us from others in the marketplace.
Services: Connecting with the customer is a key focus for Sportsuchtig. It is our desire that customers look to us as their valued resource to obtain the equipment, apparel and accessories that meet their needs. Our internet store will provide prompt courteous service, and deliver products at reasonable shipping rates within expected time frames.
Employees: Employees of Sportsuchtig will enjoy a friendly, fair and creative work environment, which respects diversity, new ideas and hard work. Development through experience and training will be a primary focus. It is our desire that employees are long-term, ensuring an expertise that will support the customer experience. Our employees will be a competitive advantage because their technical product knowledge will be superior to that of the competition. We want customers to form a relationship with a salesperson and ask for them by name when they return for a subsequent purchase.