Marketing Plan: Prada-Lite's Boutiques

1 Introduction

Prada is a world-renowned fashion label that specializes in the design and sale of luxurious fashion wear and accessories for men. Over the years, the company has emerged as leading amongst its competitors in the provision of quality, high-end products that have gained a world-known status (Prada Group, 2012).

Although its products have been widely acknowledged and accepted in the market, there exists a widening gap between the company and the customers in regards to sales and product availability. This marketing plan aims at bridging the gap between the consumer and the company by the introduction a chain of mini-boutiques (hereby referred to as Prada-lite’s) chain that will be co-owned with local investors.

1.1 Overview

Prada-lite’s will be a chain of mini-boutiques co-owned with local investors across the United States. These boutiques will serve as sales outlets as well as delivery centers for products ordered online within their geographical locality.

2 Executive Summary

Prada-lite’s will stock designer and contemporary apparel as well as accessories. In addition, Prada-lite’s will handle all online sales made within their geographical location. Through extensive market research, the chains will eventually center on the most viable market segment. By following the customers’ purchasing preferences, they will aim at focusing on styles, fits and colors that flatter a wide range of customers. Meeting these customer’s personal needs will be the boutique’s specialty.

The boutique outlets are intended to provide customers with unique and innovative services such as personalized shopping, special ordering as well as Style Assessments done by style concierges trained within the Image Industry. Style Assessment, a major innovative service, will help our customers develop their own personal styles and enhance our reputation as a truly unique retail store.

The store will be financed with $200,000 of the owner’s money and $400,000 by the parent company, Prada. Sales are estimated to be $ 150,500 per year in the first year with a positive cash flow being recorded.

3 Situational Analysis

3.1 Industry Analysis

The fashion industry is a multi-trillion industry that can be split into five segments according to a company’s clientele. Prada caters for high-end customers and celebrities. Despite the company’s success in the fashion industry, it faces stiff competition from other fashion and design firms such as Dolce & Gabbana, Hermes, Gucci, Marc Jacobs and Zac Posen among other companies.

3.1 SWOT Analysis

Although Prada’s competitors have ventured into the retail sector, notably Hermes, none has achieved considerable success. Prada aims at marketing its products through a series of boutiques, Prada-lite’s, that will be co-owned with local investors. Therefore, its strengths lie in the fact that co-ownership will spur these owners into formulating highly innovative business strategies that will ultimately lead to market domination. However, precautions must be taken to ensure that products sold in a certain market segment meet the desires of the clientele.

3.3 Competitor (s) Analysis

Although Prada’s products face stiff competition from the aforementioned companies, the company has already established its brand amongst its customers. Hence, these products shall be widely accepted by the company’s customers. The fact that these products will be delivered to the customer’s doorstep and/or will be easily accessible will aid in popularizing the company’s brands. In addition, the company aims at deploying a Personal Style Assessment strategy at no extra cost which will edge out its competitors (O'Brien, 2007,12).

4 Strategic Plan and Focus

The main objective is to retain the existing customer base as well as create a new one. This will be achieved through personal Style Assessment which enables the client to purchase matching products without the necessity to buy an entire wardrobe. In addition, the boutique’s staff will aid clients in purchasing clothing and accessories that match with what a customer already has. As a result, customers will rely on our expert advice on their personal styles which will help establish a strong clientele base. This will also help customers save money while at the same time enjoy shopping in a well inventoried and service-minded store.

The total sales reported in the United States retail industry in 2009 including automotive and food service were estimated to be over $4.5 trillion. Market segmentation and group targeting will be of major concern if Prada-lite’s are to succeed. For instance, in Pleatsville, Florida, the current population is around 40,000 with 54% of this population being women with a median age of 40. With majority of the stores focusing on the youth, Prada seeks to tap into this population. Though the boutiques shall initially seek local customers, the Prada-lite’s shall aim at increasing their customer base as they continue building the brand and securing its image.

4.1 The Web Plan Summary

Prada plans on holding the official launch of these boutiques with the launch of its new website simultaneously. This site will serve as a source of information for online visitors and will also include the development of editorial content. 

It will be developed so that users can easily access the site on their computers or web-enabled phones, add/remove items from their shopping carts and make payments via an assortment of means such as credit cards and Paypal. Reservations forms for Personal Style Assessment and Personal Shopping appointments will be available within the site.

The website will leverage the brand personality and corporate identity of these boutiques: elegant and simple. The overall strategy of the website will be to provide users with a clear and simple architecture that will allow them to obtain all the information they need.

4.2 Mission

To offer our customers with quality, well-constructed, fashionable assortment with styles and sizes that accommodate all varying body shapes.

To offer top-notch exclusive and innovative services that will generate buzz, create and boost sales.

4.3 Vision

To deliver quality products and services to customers as well as maintain financial balance. Also to provide fair compensation and a rewarding work environment to employees, ultimately providing a fair return to owners and an excellent value to customers.

4.4 Goals and Objectives

4.4.1 Non-Financial

To create an elegant yet comfortable shopping environment that caters to the clothing needs of the whole population, regardless of age, size or gender. Customer satisfaction, as well as the highest quality standards, will be upheld at all levels. In addition, this business venture will continue upholding all corporate responsibility programs that have been initiated by the parent company. Finally, Prada-lite’s will offer good employment opportunities for newly-hired employees as well as career-advancement opportunities for existing employees.

4.4.2 Financial

The chief aim of this marketing venture is to earn a 75% market share and become the leading retail designer-clothing store in the United States, hence achieving name and brand recognition within the local community within a span of 5 years.

In addition, the company intends to have a customer base of more than 1,500,000 customers by the end of the first operating year with a profit margin of 50%.

4.5 Customer analysis

Most of Prada’s customers are the youth and those with high income levels. Although the parent company mainly caters for this market segment, an independent survey shall be conducted in order to identify specific wants and needs of these customers. However, at the outset, the Prada-lite’s shall adopt existing parent-company literature.

5 Market-Product Focus

5.1 Target Market

Prada-lite’s will offer designer's lines as well as casual clothing for the whole family. With a ready-to-wear lines such as Miu Miu and exotic perfumes, it will provide a variety of clothes with different styles to fit target market base. A greater majority of merchandise will be designer apparels, hats, gifts and accessories (Tsang, 2011, 6-10).

5.2 Marketing Strategy

Prada-lite's shall be introduced with bridging the gap between the company and customer as the main objective. Therefore, Prada-lite’s will adopt Style Assessment as the chief marketing strategy. This sill aim at helping customers, more so women, determine their appropriate personal styles that match their personality. The assessment will help customers develop their personality by providing style words to choose from along with tips on what clothing designs augments their personal style. This will not only aid in creating a close relationship between the customer and the boutique, but also aid in customer retention. Ultimately, this will boost product sales.

5.3 Product Pricing

All products will be priced by the parent company, Prada. Products bought online will be purchased at the stipulated price on the site plus a product delivery charges.

5.4 Market Position

Prada-lite’s boutiques will be a business-to-consumer retail company with target customers being celebrities and the upper-middle class. With a peripheral products such as scarves and handbags, it is likely to attract younger women. It’s important that Prada does not offer products that are exclusive to the older demographics. Hence, a portion of products will be tailored to meet the desires of the younger generation

5.5 Business Process Promotion

With continued success, Prada-lite’s boutiques will aim at utilizing the social media so as not only to promote themselves but also to connect with the clientele, handle public relations as well as customer service inquiries. The website will not only serve to provide the user with required information but will also be used to leverage the boutique’s brand personality and corporate identity. A Twitter account and a Facebook page will also be created and maintained in order to reach the youthful clientele.The stores will also aim at using fashion magazines and trade shows to create a buzz which will in turn help boosting sales.

5.5 Online Marketing

The boutiques will handle the delivery of all items sold online within their geographical location. However, the online trading platform and software will be regulated by the parent company, Prada. Hence, Prada-lite’s will not be charged with the responsibility of maintaining the online trading sites.

5.6 Point of Sale

The store will use Pro Store software for cash registers that will not only add sales tax, but will process coupon codes, scan item barcodes as well as update store inventory after every purchase. A modern payment system at the point of sale will scan debit and credit payment as well as run personal checks that guard against fraud will also be used.

5.7 Organization’s resources

The store will be financed with $200,000 of the owner’s money and additional $400,000 from the parent company which shall be repaid within a span of 5 years. Additionally, net profits of 10% will be reinvested into the company for growth initiatives and service enhancements.

5.8 Information Systems Structure

Prada-lite’s Boutiques will invest in communication infrastructure and information technology to enable streaming of up-to-date trend information to people making business and product decisions. The store owner and manager will be at the leading edge of research and will zap orders over the internet on customized handheld computers based on what they observe as the catchiest product. This will also apply to fabrics, cuts or even a whole new fashion line.

These researchers will draw upon customer comments or totally new styles that could be implemented into Prada-lite’s Boutiques. This will provide a dynamically updated picture of the current market which traditional daily sales report cannot achieve.

With the advent of the Internet, the boutiques aim at investing heavily in this technological development. Customers will enjoy easy 24 hour shopping a day. This will not only serve the local clientele but will also help in reaching the larger global market.

6 Financial Data and Projections

6.1 Expenses and their distribution

Initial expenses per Boutique

An initial capital outlay of $ 600,000 will be made to meet various expenses such as those accrued in leasing the premises ($ 100,000 per annum), premise modification ($ 50,000), equipment ($ 70,000), legal fees ($ 30,000), miscellaneous ($60,000) and any unforeseen expenses.

Expected Net Revenue per Boutique

Year 1

Year 2

Year 3

Year 4

Year 5

Sales

150,500

180,000

210,000

230,000

250,000

Cost of Goods

135,000

150,000

175,000

190,000

205,000

Gross Profit

15,500

30,000

35,000

40,000

45,000

(-expenses)

10,000

12,000

15,000

16,000

17,000

Net Profit

5,500

18,000

20,000

24,000

28,000

Prada aims at achieving annual sales of $150,500 with an operating profit margin of about 25% in the first year. The company expects to turn a profit in the first year due to the fact that its products are well-known and recognized in the market. Gross margins are expected at 51%, which, though, is 5% higher than the retail industry average, is in line with the retail boutique averages. Overall, we project to reinvest net profits of 10% into the company for growth initiatives and service enhancements. The store is, hence, expected to remain very liquid, with no current liabilities with startup costs estimated at $250,000 with more than half of these costs being used in purchasing the startup inventories.

6.2 Operating Expenses

Expense

Year 1

Year 2

Year 3

Year 4

Year 5

Staff

60,000

70,000

80,000

90,000

100,000

Utilities

5,000

6,000

7,000

8,000

9,000

Marketing Strategies

10,000

12,000

13,000

13,500

14,000

Capital-Repayment (plus interest)

30,000

33,500

35,000

40,000

45,000

Totals

105,000

121,500

135,000

155,500

168,000

6.3 Profit-sharing

Since the boutiques will be co-owned with local investors, the company will reward these investors on a commission basis, equal to the proportion of capital contributed. Hence, profit forwarded to the local investors will be (200,000/600,000) * annual net profit.

7 Security and Ethical Challenges

One of the most explosive ethical issues concerning the quality of working standard conditions in an e-business is computer monitoring. This issue has elicited a lot of controversy due to the fact that it is continuously used to specifically monitor an employee and not just the work. In this case, it violates an employee’s privacy and violates their personal freedom.

In an attempt to counteract some of these challenges, the online trading sites shall be run by Prada. However, the software deployed in boutiques shall be maintained and secured by a competent Information Technology department (Sachenko, 2005,2-5).

7 Implementation Strategy

Stage

Implementation Strategy

Stage 1

Prada will identify suitable store location sites according to existing data on customer behavior and purchase patterns. Once these sites have been identified, the company will demarcate geographical regions which will be assigned to each sale point.

Stage 2

Prada will seek to cooperate with various local investors. This will be a transparent, open-bid process. Once identified, the investor and the company will seek to lease a suitably-located premise for the location of the Prada-lite’s Boutique.

Stage 3

The premise will be renovated and modified to fit the business’ needs. An initial inventory based on past research on consumer preferences in the target market will be conducted.

Stage 4

A continuous evaluation of the businesses’ profitability will be made to determine appropriate strategies within a particular geographical region.

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