High and Dry Towel, IncBudget Information Prepared By

Andrew Raboine

Ester williamsTo grow services

Expand to online sales after 4 years of operations.Establish Budgeting Plan

Use variances from original budget to create and maintain standard goals for future budgets. Complete by June 30, 2016.

Complete employee training on operating procedures by December 31, 2016. Establish Sales/Customer Service

Hire Sales Representative By January 1, 2016.Hire Customer Service rep by June 30, 2016.

Establish Online presenceBuild Company website by June 30, 2019.Train customer service in Web presence by September 30, 2019.

Admin/ Customer service personel

Control QualityReview

customer service logs at the end of each week and develop action plans for dissatisfaction as well as implementing prevention plans to ensure future satisfaction.

PT Employee PT Employee

1st Shift SupervisorComplete employee training on operating procedures by December 31, 2016.Control Waste

Compare weekly/monthly production numbers and monitor material and labor hours. Find opportunities to maximize efficiency.Control Quality

Review customer service logs at the end of each week and develop action plans for dissatisfaction as well as implementing prevention plans to ensure future satisfaction.

1st shift Seamstresse

s

1St shift Warehouse employee

1st shift Shipping and

Receiving Lead

2nd Shift SupervisorComplete employee training on operating procedures by December 31, 2016.Compare weekly/monthly production numbers and monitor material and labor hours. Find opportunities to maximize efficiency.Control QualityReview customer service logs at the end of each week and develop action plans for dissatisfaction as well as implementing prevention plans to ensure future satisfaction.

2nd shift Seamstresse

s

High and Dry will be the preeminent supplier of high quality swimming accessories. Our innovative products and outstanding customer service will allow us to provide maximum return to our shareholders.

Mission Statement

Before 2020 High and Dry will be a recognized brand, it will be the lead manufacturer of swimming accessories and be able to fulfill aliments to the swimmers needs from child to adult. Revenues should surpass 20 million dollars.

Vision Statement

To be Profitable To earn a profit in the first 3 years of

operations To grow Services

Expand to online sales after 4 years of operations.

Strategic Goals

Establishing a Budgeting Plan Use variances from original budget to create

and maintain standard goals for future budgets. Complete by June 30, 2016.

Complete employee training on operating procedures by December 31, 2016.

Tactical Goals

Establish Sales/Customer Service Hire Sales Representative By January 1, 2016. Hire Customer Service rep by June 30, 2016.

Establish Online Presence Build Company website by June 30, 2019. Train customer service in Web presence by

September 30, 2019.

Tactical Goals Cont.

Control Waste Compare weekly/monthly production numbers

and monitor material and labor hours. Find opportunities to maximize efficiency.

Control Quality Review customer service logs at the end of

each week and develop action plans for dissatisfaction as well as implementing prevention plans to ensure future satisfaction.

Operational Goals

The Market for our product is separated by demographic, psychographic, and geographic.

The population class or demographic our product is segmented for is girls that are the age of 0-10 years old.

The psychographic for our product is swimming or water based sports.

Finally, the regions of Illinois, Indiana, Wisconsin, and Missouri segment our product geographically.

How is the market for our product segmented?

To take segmentation even further, the products are marketed initially to only children’s boutiques; this is a combination of all of demographic, psychographic, and geographic.

Boutiques tend to be in upper scale areas, where families shop for not just girls but children including boys. Based on the boutiques that are chosen and their marketing will segment lifestyle and interest of shoppers.

Market Segmentation

Our product uses a niche marketing strategy, due to the higher amount of segmentation that it undertakes.

With only one product and a specific marketing mix for one market, it focuses on growing from small to big.

This is opposed to an undifferentiated marketing strategy that generalizes one product for the masses that is hard to do.

The other side to this is differentiated, that is, segmenting different markets and creating a different mix for each of them.

Target Market Strategy

Our company will have a functional position, which is consistent with our owner’s high skill of customer service.

It will drive quality and cost processes through implementation.

This position is opposed to an symbolic one like Hurley has, their position (looking back on past assignments) from their mission statement was to stay true to oneself and this is the feeling they want to position them within the market.

This is similar to Agon Sports, because they wanted to create unity in the teams that used their products. There is also experimental positioning, that is based on feelings created from use of the product.

Market Position

National Monthly Retail sales numbers EST - 379 Bil in Jan 14’ to EST – 387Bil in Feb 15’ increase of 2.1% Unemployment rate 6.6% in Jan 2014 to 5.5% in Feb 2015 decrease of 1.1% Per capita Income $41560 in 2011 to $42693 in 2012 increase of 2.7%

Illinois Unemployment rate 8.9% Dec 13’ to 6.2% Dec 14’ Per capita Income from $43721 in 2011 $44815 in 2012 increase of 2.5%

Indiana Unemployment rate 6.8% in Dec 13’ to 5.8% in Dec 14’ Per capita Income $35689 in 2011 to $36902 In 2012 increase of 3.4%

Michigan Unemployment rate 8.3% in Dec 13’ to 6.3% in 14’ Per capita Income $36264 in 11’ to $37497 in 12’ to increase by 3.8% in 2015

Wisconsin Monthly Retail sales numbers Unemployment rate 6.3% in Dec 13’ to 5.2% in Dec 14’ to decrease further by 1.6 Per capita Income $39575 in 11’ to $40537 in 12’

Market Analysis – Economic Forces

Unemployment has fallen significantly in Michigan and Illinois while Wisconsin and Indiana are close to the nation drop of 1%.

More people are gainfully employed with salaries on the rise.

Retail sales month to month fluctuate but throughout the year have risen quite largely. This allows people more freedom in spending an will surely help us grow

Market Analysis – Economic Forces Review

There is a surprising trend of children that cannot swim and the number is growing at an alarming rate.

45% of school children cannot swim the required national standard.

Our brand could think getting involved in organizations like swimming.org to sponsor and promote awareness. This could help our growth in the long run as well.

Socio – Cultural Forces

Surprisingly there has been one political force that has affected swimming.

There was a government mandate proposed in 2012 to make all pools have disability accessible wheelchairs available.

This opens up pools to everyone with disabilities.

Political Forces

Swimming markets are dominated by swimming sports thus the prevalent market shares in sporting equipment for swimwear.

Quiksilver holds the highest market share in swimming apparel, with annual sales of 1,570.40M (taken from previous data in previous assignments)

Competitive Forces

One technological force is the innovation in style and use of each towel.

The styles adhere to a higher demographic of women, but can in a pinch be applied to both genders for growth, and size for larger age variation.

Our processes are designed to cut waste and implement high quality that will be a driving force for market.

Technological Forces

Our place or distribution covers our marketing strategy by placing our product in niche boutiques that only cater to our target market thus working together with our mission due to size.

With such a small target market we are able to promote our product very easily and cost effectively to a much smaller segment, and with just the implementations of our core principles of high quality and customer service.

Our price will be competitive in boutiques as they are higher to cover specialization and small capacity. With a high degree of networking and marketing that our owner possesses we should be able to affectively discount our prices to cater to our retailers.

Our product will represent quality from our mission statement while bringing the warranted presentation of the likeness of children fascination with jewels and the convenience of it being a backpack and hood, to cater to the parents of the children. This will work in conjunction with our promotion and placement, as our customers will most likely stumble upon our product and will be a relatively cheap accessory with a high quality factor.

Marketing Mix, What is ours?

Our base products of regular hooded beach towel backpacks are not relatively new, however they are not marketed or sold by anyone on the net after doing some research.

There are some hooded beach towels but none that combine both aspects. There are tutorials for making them. The beach towel industry is definitely tried and true. Beach towels are always needed but the PLC doesn’t seem to be based in years, it seems to be based in seasons.

Having worked in retail I can say that beach towels and swimming apparel are sold in a highly seasonal fashion.

The towels go through a full cycle every beach season. The introduction part of the cycle is in the spring season when it starts to get warm. New designs and fashions come new to the market. Right when it gets hot and summer hits prices are competitive and sales increase, this is the growth part of the cycle. Towards the middle of the season the growth stymies and levels off or is in maturity. Finally when summer ends, towels go on clearance and profits fall, no promotions or advertising is done.

Product Life Cycle

90 day exchange and return policy Full refund or exchange for craftsmanship

failures or damage not including wear and tear with receipt of purchase

Returns can be made to our boutique customers or directly to our manufacturer through various mail in options ( easy return label, or shipper of the customer choice.)

Returns and Exchange Policy

Initially our product will be sold in the business market. Our product is sold to boutiques where they will sell them to the consumers.

Our product is typical for business and consumer . Our product is non-perishable. It is a product for the end

user, and can also be sold for resale. Since we have a relatively small customer base to begin

with it is wise to sell to businesses, more cost would be involved if we decided to retail the towels ourselves.

It is also important to note, that we do not yet know if we have the capacity for large scale distribution.

What Market do we sell to?

In our role of selling to boutiques, the boutiques might have owners/and or managers.

If the manager owns the store, most likely they would be the deciders as well as the gatekeepers.

They would pass information about the products they stock to the users and influencers (being their store employees that interact with everyday customers).

Our Business Buying Center

Our product is a consumer product. It is a limited decision making purchase

because it is not something that can be bought within a matter of seconds.

People want beach towels with different designs and features.

We sell a Consumer Product, SAY WHAT?

Market share research evaluates us at a little below the average market share of total US companies at .15%.

Given that our market is highly saturated this seemed reasonable. This would give us an approximate sales volume of 27,555 units.

After comparing our initial sales in units to how many units we would need to breakeven, it was impossible at the sales price I originally forecasted, and would also go over our capacity of work hours. Adjustments to not only price by $10 for each product but also slight reductions in wages allowed for us to come to a profit of est. $44600.

With these adjustments it allowed us to be at around 97% capacity to our workforce allowing for growth once our efficiency is increased, and leaving no need to reduce workforce.

Subject to Change in Forecast.

Market Share Analysis

Overall Economy With unemployment rates dropping at least 1% in every state annually and Per capita income raising it

allows for people to spend more money on vacations, accessories, and clothes. Company

Capacity has been estimated to ensure that it can accommodate sales projections. In a similar fashion our sales in units has been compared to what we need to breakeven. Changes in price and salaries had to be made to ensure that we could see any profit without going over our capacity.

Sales History Pattern No pattern has been established due to lack of prior sales. Although apparel sales are set to rise up to 20%

through 2016. Competition

The leading swimming apparel leader holds just half of a percent showing how saturated the market is. About 6200 companies whose financial statements are public take up the whole US, 94% of them being smaller companies with annual sales of less than $5 million.

Company Strategy Our strategic Goal is to be profitable in the first 3 out of 5 years of operation. Keeping low cost as well as

accurate projections will allow this. Corporate Culture

As President and Manager Ester is in control of the company culture but allows it to be shaped by employees and offers a generous production profit sharing incentive plan.

Market Share Analysis Assumptions

What is the goal of our promotional campaign? We want to increase sales in our existing market, whilst gaining a reputation

for excellent customer service, as well as, quality products. Product will be presented in the quality of our product, its various uses, and

the excellent customer service. Place, our product will be sold in small boutiques that get our product

delivered by UPS freight until we can expand. By maintaining a smaller niche market, we can firmly establish a precedent of quality products and customer service.

With competitive pricing that is below or matches our leaders in the industry, it allows us to expand. We also have credit terms and discounts in place to promote stocking our products.

Promotion will be used in terms of direct mail and coupons that will allow our customers a reason to shop for our product but visit our business customers’ stores as well.

Promotional Goals

How much do we figure it out? An objective budget was used in our promotional

budget. This is due to the detrimental facts of other methods.

For example, growth is hindered in an affordable method. A percentage of sales would not be wise because we have a seasonal sales trend. Finally, we cannot compete with major competitors when it comes to marketing in a comparative parity. I believe objective task method can be used to combine our goals while still maintaining a relatively small cost.

Promotional Budget

We Obtained a schedule of promotional events. As in what we will need in terms of timing for advertising, promotion, trade shows, etc.

According to www.parkconcessions.com, in order to sell on the beach in Chicago it cost $75-$125 to obtain a business license to do so. This will apply to personal selling.

Seasonality index will allow for proper scheduling of coupons and direct mail. Using the reference of business 2 consumer in the book

http://www.business2community.com/social-media/increasing-the-average-coupon-redemption-rate-019372 we can assume 1% of coupons are redeemed.

www.Zairmail.com will be used to determine direct mail costs. According to IRS standard Mileage Rates for business are $0.575 while Per Diem Rates

in Chicago are $71 a day. Using www.Factfinder.census.gov we can assume that

Illinois families with kids ages 6-17 amounts to 219893 people Indiana families with kids ages 6-17 amounts to 109054 people Wisconsin families with kids ages 6-17 amounts to 92650 people Michigan families with kids ages 6-17 amounts to 150573 people

Promotional Budget – Putting it all together

• Direct Mail- There are a total of 512,170 households with children 6-17, which is a little more than our market but it will help expand our reach a little with awareness. With each card costing $0.35, it would be wise to stay around 3% of the total households. This allows postage costs to stay low but still get a good chunk of advertising in.

• Social Media Sites will be made on Twitter, Facebook, and Instagram and be maintained by owner to ensure goals and objectives are portrayed to customers.

Marketing Budget Assumptions – Advertising Costs

Coupons will come with direct mail postcards. Offering 5%, 10%, and 15% off for a basic, basic with design, and designer with rhinestones and appliques respectively off the purchases of one of each.

With the redemption rate at 1%, we can expect 172 out of the 3% of households that coupons were sent to, to be redeemed.

Direct mail will be sent out in March and June to take advantage of our seasonality. We will assume coupons will be redeemed equally during April, May, July, and August or $70.09 each month.

Marketing Budget Assumptions – Sales Promotions

Ester will personally sell product at the beaches in Chicago through the months of May to September.

Cost calculations are going to be in the analysis. They take into account information from the IRS regarding per diem and mileage.

Also takes into account business licenses that are required to be a beach vendor in Chicago.

Marketing Budget Assumptions – Personal Selling

I think that with our high amount of production and sales with a relatively new crew, our inventory is necessary in case of shortages.

After a deeper, denser history is obtained of customer information and sales records, we can predetermine if our safety stock levels are necessary in business with highly identical and non-perishable goods. This is a benefit that we have.

This will allow our employees to gain experience and give us goals to obtain to make ourselves better.

We can slow down production after the first 6 months of sales and chip away at our safety stock levels to increase our inventory turnover.

Inventory Budget Review

After Completing the budget, it is clear we will be relying on our revolving credit accounts to get us through at least the first two years.

Without doing a workup of another year we are in the dark of our goals.

As it stands right now, it seems we could make goal with the budget we have.

Budget Review