Ladies Fashion Shoe Company will be a women’s shoes designing, manufacturing, and selling enterprise located in Oregon in an untapped market. The management acknowledges that the community needs high quality and diverse shoe styles that meet their different needs and occasions. Therefore, the firm will provide a broad selection of shoes by ensuring that it has ready-made shoes that meet clients’ needs. The firm aims at leveraging the existing market opportunity in the women shoe industry within the community, which has the inadequate selection, compelling women to travel to other regions to find the right shoe that meets their needs and preferences. The company will be a sole proprietorship business requiring a starting capital of $100,000. Ladies Fashion Shoe Company will target female customers across all the age groups, ranging from children to adults. This will provide the firm with a broader market niche to sell and market its products. The firm will reach even after selling 500 units of shoes. The projected sales for year 1, year 2, and year three will be $200,000, $280,000, and $350,000, respectively.
Description of Product, Service, or Business
Ladies Fashion Shoe Company will focus on designing, manufacturing, marketing, and selling its products to the community and beyond. The company will design and manufacture unmatched, high-quality shoes, thereby providing the target market with a wide selection of shoes that meet their needs and preferences. Therefore, the firm will sell different high-quality shoes ranging from heels, sandals, dress shoes, loafers, stylish work shoes, and canvas athletic shoes. The firm will also provide customized shoes to attract more clients by meeting their unique and individual needs and preferences.
The Industry Analysis
Ladies Fashion Shoe Company will operate in the footwear industry, which operates in a monopolistic market structure. The market has a variety of sellers with differentiated products, thereby making the industry very competitive. The firm will compete with small and medium shoe manufacturing companies like Danner Factory Shoe, West Coast Shoe Company, Keen Inc, and Shoe Mill. The company also aims at manufacturing quality products that meet customers’ varying needs. Thus, Ladies Fashion Shoe Company will also compete with large organizations like Nike, Adidas, and Under Armor.
Description of the Industry
Competition in this industry will determine how the firm maintains its market share. Therefore, this industry’s competitive rivalry is intense as there are numerous designing and manufacturing shoe companies located within Oregon. There is low market growth because of high market penetration and saturation. The company’s clients will directly influence the firm’s performance. Thus, the firm’s clients’ bargaining power is moderate due to low switching costs and substitute availability. The low switching costs will make it easy for potential clients to buy shoes from other firms. Substitute availability will also enable customers to access and buy shoes from competing firms. The company’s supplier’s bargaining power is weak due to the high number of raw materials suppliers. Hence, the high number of suppliers reduces the effects of suppliers’ actions on the business. The threat of substitutes in this industry is moderate. The company will compete with other rivals leading in the shoe industry like Adidas and Nike. Hence, the availability of substitutes will impose a threat on the firm as clients will have viable options to Ladies Fashion Shoe Company. The threat of new market entrants is low in this industry due to the minimal start-up capital required to start a small business.
Accordingly, the footwear industry comprises shoe-only retail stores that sell shoes for either men or women. The sector also has large departmental stores that sell various products, including women’s shoes. Lastly, the industry has small and medium women’s retail shoes that focus on selling female products like shoes and clothes.
Market segmentation is the procedure of categorizing a market along with some commonalities and similarities (Camilleri, 2018). Market segmentation aims at providing a company with a competitive advantage by enabling the firm to design and sell products in a segment, thereby meeting the specific needs of that market. The firm management will understand that different components require diverse marketing programs as diverse clients are often targeted using different offers, promotions, prices, and distribution channels. Various market segments have disparate expectations. Some customers will be price-sensitive, while others will value differentiation and high quality over price. Hence, the firm will segment its market based on demographic factors, including variables like income, occupation, age, and gender. The firm intends to target low, middle, and upper-income market segments, thereby reaching out to all the market segments by providing different shoes with varying prices. Therefore, the firm will design diverse shoe styles that meet the needs of working-class women, businesswomen and stay at home customers. Accordingly, the firm will focus on the psychographic segmentation, which considers variables like values, beliefs, social status, and lifestyle. The firm aims at designing female shoes that meet the diverse lifestyles of the targeted market. Hence, Ladies Fashion Shoe Company will target a broad market by creating shoes that meet various lifestyles like partying, social events, and sporting activities for females.
Target Market and Positioning
A target market is a group of plausible clients to whom the company wants to target and sell its products (Aghdaie & Alimardani, 2015). Thus, the company will target females, both young and old. The firm will design shoes for female kids, teenagers, and the elderly population, thereby targeting a broader market niche. The market target strategy will include aggressive marketing to increase product awareness to target clients. The firm will also have sponsorship programs to local sports clubs to create a psychological connection with the products. Market positioning is the clients’ perception of the products (Fayvishenko, 2018). Hence, to remain competitive in the market, the firm will position its products as superior, high quality, and affordable to all females. The company will use quality and environmentally friendly products to design and manufacture its products.
The company’s primary focuses on acquiring a market share in the women shoe market by delivering quality and good shoes that the targeted market needs. Therefore, the firm will produce innovative, trendy, and quality products to the target market. Ladies Fashion Shoe Company will employ a pricing strategy as one of its marketing plans. The company will use a value-based pricing strategy to provide clients with the price they value. The system will allow the firm to sell its products at varying costs based on customers’ value, thereby attracting a broader market. The firm will also use expansion strategy through its distribution channels. Hence, the firm will utilize company-owned brick and mortar stores, wholesalers, and its website to sell its products.
One of the primary competitive advantages that Ladies Fashion Shoe Company will utilize as part of its marketing plan will be technology. The firm aims at using the latest technology to design its products and market the products. The company will leverage the latest technologies like Augmented Reality and Virtual Reality, to provide potential and existing customers with outstanding experience when making buying decisions. Thus, the firm will have a virtual dressing room for online clients where a client can try the shoe and assess it before making any buying decision. Accordingly, the company will leverage its manufacturing cost by having a global outsourcing strategy. The strategy will enable the firm to acquire low-cost production, thereby selling its products at affordable prices. The firm intends to use its patents as a competitive advantage. Ladies Fashion Shoe company will have precious and non-imitable products produced distinctively for the market. The company will also carry out research and development aimed at understanding the market needs. The information acquired from the market analysis will be used in designing quality and new products that meet and surpass customers’ expectations.
The firm will utilize the following elements of the marketing mix:
The company will provide a wide range of female designed shoes that will meet diverse preferences’ needs. Ladies Fashion Shoe Company will design quality shoes, guaranteeing the customers high quality using the finest leather and quality materials. The company will be dedicated to creating unique and beautiful shoes with exemptional production quality. Hence, with the latest technology’s help, the firm will design modern and trendy shoes offering unapparelled and superior comfort that customers can rely on and unique only in individual colour and style. The company will provide a brand the clients will love, trust, and feel most comfortable wearing.
The firm will price the products predicated in the target market, thereby enhancing its competitiveness. The company will also aim to command a high premium to high-end market using a value-based pricing strategy that will allow the firm to offer the products at a low price to low-end market segments. Therefore, Ladies Fashion Shoe Company will target those customers with low income and high income without compromising quality.
Ladies Fashion Shoe Company will also distribute its products using different channels. First, the firm intends to use brick and mortar retail stores to market and sell its products. The management acknowledges that focusing on the company’s brick and mortar retail stores will allow the firm to control the customer experience, thereby increasing its sales through increased customer satisfaction. Second, the firm will also use wholesalers to market and distribute its products. Notably, with the advent of e-commerce, Ladies Fashion Shoe Company will leverage its website to market and direct the customers to the nearest retail stores.
Ladies Fashion Shoe Company will be a sole ownership enterprise. The company will require $ 100,000 as start-up capital. The capital will be raised from individual savings and 40% from borrowing.
Table 1: A table illustrating the Start-up capital funding and requirements
|Start-up Capital Funding|
|Total start-up expenses||$15,000.00|
|Other current assets||$10,000.00|
The above chart indicates that the company will break-even at 500 units.
Projected Sales and Gross Margin
Table 2: A table illustrating the firm’s projected sales for the first three years
|Year 1||Year 2||year 3|
|The direct cost of sales||50,000||74,000||90,000|
|The total cost of sales||50,000||74,000||90,000|
|Gross Margin %||75%||74%||74%|
The production system will focus on attaining excellence and quality products that meet customers’ expectations. The firm will ensure manufacturing safety and quality products. Thus, the production system will use the latest technology to provide a reduced carbon footprint by reducing water usage in the production process and energy consumption. As a result, this will culminate in reduced production costs. The firm will also ensure that the suppliers and vendors are reliable and dedicated, eliminating the delay and low-quality products. Notably, to enhance productivity, the firm will reduce the duplication of roles by streamlining the administrative roles and functions and adopting an organizational culture that promotes teamwork and collaboration.
Ladies Fashion Shoe Company will use a flat organizational structure in which there will be fewer management levels between employees and management. The management will exercise reduced supervision and promote increased involvement of employees in decision making. Therefore, the company will have the chief executive office, chief operating officer, chief financial officer, sales director, and marketing director. The management team will comprise line managers focused on quality, customer care, and human resource. Thus, Milton Fisher will be the COO who will oversee the daily operation of the company. Mary Jones will be the CFO who will manage the financial reporting, including the accounting and balancing the financial statements. The Director of marketing, Jayden Lincoln, will oversee the marketing and sales department. Thus, the firm will have three central functioning departments: general administrative, sales and marketing, and production unit.
The operational plans will focus on meeting the firm’s objectives. Therefore, the production department function will include designing quality and trendy products that meet customers needs. The department will oversee the effective implementation of procuring quality products, meeting the quality criteria, reducing production cost, and manufacturing the customer’s orders on time. The marketing department will oversee the marketing plans, like advertising, promotions, and discounts. The administrative department will lead the company policy’s effective implementation, employees productivity, and compensations.
Ladies Fashion Shoe Company will focus on designing, manufacturing, and selling high-quality shoe products to the targeted market. The firm will target low-end and high-end customers, using a value-based pricing strategy. Accordingly, the company will use the brick and mortar stores, the company website, and wholesalers to distribute its products to the target market.
- Aghdaie, M. H., & Alimardani, M. (2015). Target market selection based on market segment evaluation: a multiple attribute decision-making approach. International Journal of Operational Research, 24(3), 262-278.
- Camilleri, M. A. (2018). Market segmentation, targeting, and positioning. In Travel marketing, tourism economics and the airline product (pp. 69-83). Springer, Cham.
- Fayvishenko, D. (2018). Formation of brand positioning strategy. Baltic Journal of Economic Studies, 4(2), 245-248.
Table 3: A table illustrating the break-even analysis
|Units Sold||Fixed price||Variable cost||Total Cost||Total Revenue|