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Growing into an online business: shoes online shop - Assignment Example

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This marketing plan will examine the capabilities of building an online shoe store while creating the right approach to selling online. Specifically, there will be an understanding of how the shoe store will fit into the UAE with the ability to grow and develop within the online shoe industry. …
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Growing into an online business: shoes online shop
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?Introduction Growing into an online business is one of the most lucrative opportunities which are now associated with various corporations. For fashion and designers, this is offering even more capabilities of growth. The development of an online shoe store is one of the alternatives that offer more opportunities to grow within the fashion industry. This marketing plan will examine the capabilities of building an online shoe store while creating the right approach to selling online. Specifically, there will be an understanding of how the shoe store will fit into the UAE with the ability to grow and develop within the online shoe industry. Company Background The concept of “If the Shoe Fits” began with the ideology of offering high quality and fashion design clothes to the public. The shoe store is based on finding designer clothes and a wide variety of alternatives to assist individuals with the right fashion for shoes. The focus is based on athletic, women, men and children shoes at a lower price while offering the latest designs in shoes. Mission Statement The mission of “If the Shoe Fits” will be to provide designer and discount shoes to individuals in the United Arab Emirates. The company will provide high quality shoes for a lower price while allowing women, men and children to easily find the right style according to their shoes of preference. Company Goals and Objectives The goal of “If the Shoe Fits” will be to provide high quality and designer shoes to individuals living in the UAE. The goals will be inclusive of opening the shoes to a global basis with the types of shoes available. This will be combined with providing designer shoes that are a part of fast fashion. The online provider will ensure up to date styles and alternatives that are a part of the fashion world and which offer better brand name styles at a lower price. The objectives of the online shoe company are: To provide high quality shoes to those living in the UAE Ability to easily ship the shoes for convenience of wear Keep individuals up to date with the fashions in shoes Provide easy solutions for better fashion statements Offer global fashions through the UAE Use online shopping as a simplistic measure for up to date fashions and shoes Offer brand name items at lower prices The main objectives will work to provide customers in the UAE with more options for buying shoes while paying less. The online store will have the option to expand as needed to various regions without adding in extra prices with brand name shoes. This alternative will assist in changing the available fashion for shoes that are within the region. Business Philosophy The philosophy of “If the Shoe Fits” will be to provide high quality shoes at a low price. The company is based on offering all products with honesty, integrity and trustworthiness. All company policies will based on ensuring that every customer is satisfied with the quality of shoes while finding the best wear of the season. Industry The growth industry for online shoes and shopping is one which is continuing to grow. In the United States, there is an average of $21,627 billion sales per year with over 28,000 stores across the country. Athletic wear is the most popular style sold, followed by women’s shoes, then men and children’s shoes. The competition is one which is continuing to grow and which is noted by price, demographics and disposable income which each individual has. It is also found that styles of shoes alter according to the season and the trends that are within fashion. The growth in the United States is comparable to fashion shoes that are in every region of the world, specifically with the UAE beginning to follow with growth in the economy and new developments that are leading into more opportunities for development. However, the fashion trends and designer looks have not led to the stores completely moving into the region (Fulbright, 2011). The figures emerging with shoe stores in the US and globally continue with the expectations in the shoe industry, specifically with the focus of shopping online. The global figures are continuing to rise with those who shop online with over 86% shopping over the Internet on a global level. For the UAE and Middle East, the average shopper for online clothing or apparel is at 67%. This compares to Europe and North America, both which are at an average of 92%. The global average for shopping online is continuing with books and clothing being the two top purchases online with books averaging at 41% and clothing and shoes having purchases of 35% globally. For clothing and shoes, the Middle East and UAE has 16% of purchases over the Internet. This is compared to North America at 39%. An average of 43% of individuals buy from the same place continuously while 37% find information from a search engine for purchases. It is expected that this will continue to grow in the next five years, specifically with more popularity being a part of the Internet purchases and the ability to have convenience, better pricing and more fashion accessories available (Nielsen, 2008). The impact of the Internet and the expectation that this will grow in the future is one that is leading to more alternatives within the global marketplace. It is expected that the short term figures will continue to see the same impact and growth with online shopping for the Internet, specifically with clothing and books being the most on demand items. However, this is dependent on the growth of the economy and the fluctuations which are being made with those who are in the marketplace. The dynamics of the online stores are a part of the fluctuations with extra items that are a part of the marketplace. If the Internet is able to withstand and grow globally with the economy fluctuations then long term alternatives will be made available. The long term growth is one which will continue to grow and move into regions, specifically with the focus of different types of items. For instance, athletic shoes, luxury items and global fashion trends will continue to branch into different demands that are required on the Internet (Santos, 2009). Company Strengths and Competencies The expected changes in the marketplace are the basis of the company strengths and competencies. When looking at the rise of online trends in shopping for clothing and accessories, it is seen that there is the ability for the online shoe store to offer even more alternatives to those in the UAE. This is combined with the expected changes that will continue to grow in alternative regions with clothing and Internet purchases. The strengths of the store continue with the focus on brand quality, specifically which opens into a global marketplace and which introduces more alternatives to assist purchasers to tap into brand names that are easily available. Before, these would not have been available in the UAE. However, the newer purchases now allow those in the region to have access to the latest fashions and brand names while having access to the developsments of fast fashion. The strengths of having access to high quality and brand name items on a global basis combines with the innovations of the Internet which will allow individuals to have more alternatives for the purchases required. The competencies of the business are based on the lower prices with high quality. This is because of the changes in the economy and the fluctuations required. The fluctuation that will be available with the company will allow those who want to purchase the items to have more capacity to get the brand name items despite the economy. This is one of the weaknesses with most online businesses. However, there will be the ability to create more possibilities with the lower prices available. The strength of the company will be with the ability to offer the options to the UAE. The main target market is currently in the US and Europe, with the statistics showing that this is where the main purchase options are. This means that there is an open marketplace that is within the UAE which hasn’t been developed. Creating a regional influence within the UAE and working toward more ownership options will provide more dominance in the market while promoting items that are now on the cutting edge of the economy and which are continuing to develop with online components. This will help with development of the shoe store while allowing the trends with shopping online to become even more popular within the UAE. Legal Form of Ownership The form of ownership of the online shoe store will be a limited liability company (LLC). This will offer flexibility with the main owners and will create fewer restrictions with the expansion of the business when moving into the Internet and a global marketplace. If there is the desire to expand at a later date, then there will be the ability to create different options for the business and members. Products and Services The basis of the online shoe store will be to provide a wide variety of shoes to those in the UAE with specialization in designer and luxury brands. The products will consist of the following: 1. Athletic Shoes. Athletic shoes currently take up the majority of the market (Fulbright, 2011) and make for a large part of those interested in shoes. Designer brands in athletic shoes and available options for different types of sports will be available. These will be combined with global options and local brands that are known in the UAE. 2. Women’s shoes. Women’s shoes include both casual wear and formal alternatives. Sandals, boots, high heels, boots, casual shoes, slippers and dress shoes will be some of the several available options. The same approach to designer brands available globally will be the consideration. This will be combined with the local brands specific to the region. These will be available both for comfort and the seasons of the UAE. 3. Men’s shoes. Men’s shoes include both casual and formal wear. Boots, casual, comfortable, dress, outdoor, sandals and slippers are some of the many alternatives available. The designer brands with local and global consideration will be available for those interested in different styles. 4. Kids shoes. There will be a division of girl and boy shoes available. The division will continue with formal and casual wear that is available for all seasons. The kid shoes will be divided by age as well as season for the most comfort. 5. Accessories. A secondary outlet will be available with the online shoe store for accessories. This will consist of bags, extra wear, jewelry and other alternatives which accent the shoe store. There will be alternatives with gifts as well, allowing for well – rounded experiences with the online shoe store. The products which are available will combine with the various services available. This will be dependent on same day shipping, close proximity to shipping centers throughout the UAE and the ability to get the best service. Free shipping, free exchanges and other alternatives will be available for exchange. This will be combined with services for gift certificates and other options to help with both promotion and strong customer service. The advantages that are associated with this store are based on providing diversity with the brand name items at both global and local levels. This will combine with the ability to continuously expand the available selections because of the use of the online structure as the main component. The advantage of this will be based on automated and simplistic shipping as well as alternatives that are associated with getting the right footwear in a short period of time. The use of the online portal and the ability to continuously develop and expand the life cycles of the shoes are the main advantages offered through the products and services of the online structure that is made available. While the online structure will provide a variety of options in terms of flexibility and sending to others, there are also disadvantages with the main structure used. The ability to get global shoes in the UAE is one which is available through other online stores and which leads to more competition. More important, it is easy to not have individuals move into online shopping because of mistrust or uncertainty about the shoes which will be received. A challenge that is a part of the shoes is with the sizes expected and the way in which these should fit with an individual. The ability to gain customer trust over competitors with the industry then remains one of the main challenges that are a part of selling the online shoes. The pricing that will be available with the shoes will be on offering discounts with the shoes. Even though there will be costs associated with the shoe price and shipping fees, these will be reduced dramatically from physical locations. An advantage with the pricing will be on offering designer shoes at a lower price and without the main problems often associated with physical locations. It is expected that the fees will remain low as the overhead costs reduce in the warehouse orders and the lack of space needed to sell the shoes. The legal structure can assist with this, specifically with the group that will be able to create the right alternatives for those interested in the shoes available through online portals. Economics The size of the market is one which is currently growing and is expected to continue to move toward larger sizes. Globally, the online shoe business is at a $3 billion option with a 4% increase from the years of 2007 – 2008. The largest amount of growth has been in South and Central Asia at 13%, the Middle East by 16% and Central and Eastern Europe by 20%. Even though Europe and the US are at higher percentages with online shopping, shoes and clothing online is continuing to expand rapidly in these three regions. This is combined with the market that is increasing in demand by the type of shoe with running at $550 million and basketball at $118 million. The market demand is now taking between 16 – 27%, depending on the region, accessories and season in which online shoes are required (NPD, 2008). The growth that is a part of the online shoe trends is one which is expected to rise in trends, specifically with the current demands that are taking place. It is now noted that Internet business and e- commerce is becoming an accepted way to do business, specifically among the younger demographic groups that are within the UAE. It is noted that this is changing because of social media, such as Facebook. This is leading many to move into the Internet with more security and belief that it is safe and acceptable to shop online. The convenience and ease that is a part of the online networks and the shopping areas is leading to more demands and expectations for individuals to create online areas where they can shop at. The increase in demand is also leading many to have to find new outlets to allow individuals to shop online and to create a stronger market with more available alternatives. The increase is allowing newer Internet stores to move beyond the barriers and into a continuously growing market (Ligaya, 2009). The trends and demands are noting the growth potential that is a part of online stores and which will provide more options for those interested in being online. The current stores that have established in the region are expecting a large amount of growth by 2015. The current growth is one which has led a 50% increase in the past year to occur. The same turnover is expected to move from $3.8 billion to $5 billion by 2015 in the UAE. An example is with the Shoe Mart in the UAE, which is experiencing an average of a 25% increase of shoppers every year. This is leading to more alternatives with those that are interested in growing with online businesses and the ability to establish stronger capabilities with the marketing position that is available for those in the business (John, 2011). The several areas which show growth and potential with the business also have barriers to overcome with the products. The main barriers are as follows: Consumer Acceptance: Currently, there are providers that are in the UAE such as the Shoe Mart and Zappo, both which are taking a large amount of the consumer population. A new business is required to build a reputation against the competition. This will need to occur in terms of trust that is built online as well as building the main identity of the business. Without a strong marketing plan, there will be the inability to create the right alternatives to assist individuals with using the online portal. Brand Recognition: A new business requires an establishment of a brand that provides more opportunities to those who are interested in the business. The online business requires this because of security, trust and the ability to compete against others that are already a part of the brand. This will continue with more innovations and features that will provide better alternatives to those who are interested in the brands. The brand recognition will be offered through the shoes; however, this will need to be followed by the overall name of the shoe store as a trusted and reputable place to shop. Unique Technology: Currently, e-commerce stores rely on specific components in technology to establish the necessary components. Payment gateways, shopping portals and the ability to provide information to others are some of the various ways in which the technology is used. This will need to be combined with updated technology to enhance the security and associations with those that are shopping online and which are interested in the shoes. Upgrading to the latest features of the Internet and moving into new alternatives will assist in overcoming barriers while creating more options for e-commerce. However, establishing these with stability may become difficult while building an online reputation. Shipping: The main association with the store will be based on free shipping, low costs and no barriers to the UAE. However, there may be difficulties because of the automated system which will be used. The customer will place an order which will then be processed by those who are working online. This will then allow the item to be shipped. The barriers are inclusive of the warehouse or drop ship options associated with the store. There may also be difficulties with the shipping after it is received. The wrong shoe size or problems with the items will need to be considered as a part of the structure to assist customers in receiving the right items. Each of the barriers will be overcome by offering more solutions to those who are shopping online. The barrier of consumer acceptance and brand recognition will be overcome by developing a system of security and trust. Customer service, continuous assistance with the store and the ability to create strong relationships will be established. There will also be marketing items which will continue to offer more to those shopping online. This will consist of email and social media as well as alternatives for continuous promotions and advertising. The concept of brand loyalty will then be available to those who are shopping online while providing individuals with more opportunities to create the needed trust among consumers while being recognized over other competitors. The technology and shipping will also combine for more effective solutions to the needs of consumers. The technology upgrades will based on the new components of the web, specifically with Web 3.0. The main association will be developed with personalization as the main measure, specifically to build trust, combined with the ability to offer better technology solutions. The concept will be combined with the shipping with the idea of stopping the wrong items from shipping out and from having the right measures for effectiveness in the shipping. Instead of creating automated items, there will be a combination with customer service and the ability for customers to easily contact the store. This will provide more alternatives to the e-commerce store which others don’t have and will provide development with the use of customer trust and solutions to the main concepts of the web. Features and Benefits The features that are a part of the store will be based on the upgrade to other online stores. The main features are: 1. Designer shoes. These will be available from local stores as well as global markets to offer the latest and best in apparel. 2. Enhanced technology. The use of personalization will be added in and developed for trust and to make sure that customers are always satisfied. 3. Extra savings. The development of the shoe store will offer lower costs, even though the items are brand names. 4. Ease of use. The technology and the combined customer service will be used for easier purchasing. The benefits will combine with this to create a different approach to the market and to assist in developing the brand name for the market. The free shipping will be one of the main benefits. There will also be alternatives to return items, specifically because apparel shopping online often leads to complexities. A 365 day return guarantee will be made available to all customers. There will also be extra promotions and deals for returning customers and during various seasons. These will be used to build trust and loyalty while creating more alternatives to those who are interested in buying online items. Target Market The main target market will be identified by the demographics that are associated with the region. Consumers will be between the ages of 15 – 30. This will be identified first because it is the largest market that is online, most which are associated with the online portals and social media that is continuing to connect individuals by region. The target market will continue with both men and women. However, these will be divided by different promotional plans because of the fashion statements available and the expectations which are associated with the business. This will combine with fashions that are more accessible to both markets and which provide new and congruent plans to alternative needs that are within the region. These target groups will be divided and segmented by offering discounts and deals dependent on season, occasion and event while making a fashion statement with the shoes. The target market will continue to be segmented by the activities in which one is a part of. The largest selling shoe is athletics with specific sports being the main ideology. Advertisements and campaigns will be created with the athletic styles in mind, specifically with a focus on the sports which are the fastest selling. There will also be a secondary market that is dependent on the events that are popular in the UAE and the need to have the right fashion statement for each event. The lifestyle of those between the ages of 15 – 30 will be researched with the main events leading to different focuses and segmentation with the target market. Competition Factor Me Strength Weakness Shoe Mart Zappos Imp. To Customer Product 1 -Diversity of products - focus on target markets - not established within the region Diverse Diverse 1 Price 1 - lower price than retail complexities with profit Low Low 1 Quality 1 - designer name on global / local level Not established with quality expectations High High 2 Selection 1 Diversity by global, brand names, target market Gap of knowledge with selections available Diverse Diverse 1 Service 1 Extra customer service and personalization New technology and unknown risks Focus on customer service, fast shipping, easy, reliable Focus on customer service, fast shipping, easy, reliable 1 Reliability 1 Shipping, technology extras Not yet established and easy to have glitches while developing High focus High focus 2 Stability 1 Large brand name items Not yet established Continuous Continuous 1 Expertise 1 Brand name items, use of technology Not yet established Too diverse, expertise not required for online portal Too diverse, expertise not required for online portal 1 Company Reputation 1 Use of trust, security as methods Not yet established Strongest in UAE Strongest in UAE 2 Location 1 Growing location of the Internet Large competition, easy to access other deals Internet – ability to easily grow and be recognized Internet – ability to easily grow and be recognized 1 Appearance 1 Use of technology Not yet established Strong – easy to recognize Strong – easy to recognize 1 Sales Method 1 Focused on building trust, personal relationships Not yet established Online security – simple to use Online security – simple to use 1 Credit Policies 1 Focus on security Technology needs to be established Secure – simple to use Secure – simple to use 1 Advertising 1 Several segmented markets Not yet established – large risk in the target markets Continuous and segmented Continuous and segmented 1 Image 1 Growing within the industry Not yet established Strong Strong 1 The two competing shoe stores are easily recognized in the UAE and have noted continuous growth with those interested in the online portals. The establishment is one which is further identified with the understanding of a fully established system that meets consumer needs. The establishment of a new online store is taking a risk because of the established reputation with others. Most items which are important to the image of the shoe store come from not having the right establishment and being unable to meet the specific needs of those who are already online. Creating a different approach to establish a reputation against the competitors is the main approach which will need to be used. Niche An advantage that the online shoe store has above the others is with the focus of shoes and designer items. The other stores competing in the UAE are expanding into accessories and other items for mega stores that are online. To begin building a reputation, the online shoe store will use a focus on women between the ages of 15 – 30 with luxury shoes and designer brands for specialized occasions. This first niche will establish a strong target market and will begin to create the necessary reputation. From this, there will be expansion into athletics, men’s shoes and casual items for women. This will be combined with establishing an alternative approach to begin to find niche markets and to establish a strong reputation against the competition already in the online stores for shoes. Strategy The strategy used for “If the Shoe Fits” will be based on combining the new technologies with different advertising campaigns for those interested in the shoes. There will be a launch of campaigns every 4- 6 weeks, all with the focus on segments in the market. This will begin with luxury and designer items for women between the ages of 15 – 30. This will continue with more alternatives for other segmented markets while focusing on highlights and deals that are a part of the shoes. Seasonal shoes, discounts and other deals will be added in with this main strategy. The strategy for reaching the desired target market will also be inclusive of high – end technology and new alternatives within the website. The basis of the website will be inclusive of the necessary design with a logo, brand name and the shoes that offer the designer looks. This will be combined with the brand name continuously promoting both quality and low price for those in the UAE. The newer technology will incorporate video, multimedia and live customer support to enhance the efforts and collaboration online. The strategy will also be inclusive of a backend database that is associated with high – end security and the ability to reach clients in an alternative manner. This will be combined with the marketing strategy to continue to reinforce those who are going to the website. Promotion The promotion will be based on a holistic approach to organizing the website and getting interested visitors to the website. This will be inclusive of the need to have the necessary strategies as followed in Figure 1: Figure 1: Emarketing Strategies (What’s Up? Social Media, 2011). The main objective will be to work with the four levels of the Internet marketing strategy, including the internal technology, company strategy and external factors. This will be combined with the search engines, link development, affiliations, PPC campaigns and email marketing as well as directory methods. The offline methods will be inclusive of print adverts in magazines and with connections to those in the UAE fashion industry with ads. Each of these will be based on the target market required for the promotional materials. Promotional Budget and Pricing The promotional budget before startup will be inclusive of building the website with high – end technology. This will average at $500,000 for the initial mock-up of the site and the extra features that are a part of the website. The ongoing money will be inclusive of promotions and advertising campaigns that will include the various methods organized in the chart above. It is expected that $120,000 will be spent per year to create the right requirements for the website. The pricing for competition is similar to this and allows the online portal to compete easily with the other known entities. References Fulbright, Jenny. (2011). “Starting a Shoe Retail Store.” Power Home Biz. John, Isaac. (2011). “Landmark Group Eyes $5 Billion Revenue by 2015.” Khaleej Times Online (October). Retrieved October 11, 2011 from: http://www.khaleejtimes.com/DisplayArticleNew.asp?col=§ion=business&xfile=data/business/2011/October/business_October90.xml. Ligaya, Armina. (2009). “Internet Shopping Wins Over UAE Consumers.” The National (November.) Retrieved October 11, 2011 from: http://www.thenational.ae/business/retail/internet-shopping-wins-over-uae-consumers. Nielsen. (2008). “Trends in Online Shopping.” Retrieved October 11, 2011 from: http://th.nielsen.com/site/documents/GlobalOnlineShoppingReportFeb08.pdf. NPD. (2008). “Global Sports Equipment, Apparel and Footwear Market Nearly $280 Billion.” Marketing Charts. Retrieved October 11, 2011 from: http://www.marketingcharts.com/direct/global-sports-equipment-apparel-and-footwear-market-nearly-280b-5548/. Santos, Jessica. (2009). “Capturing and Maintaining the Essence of Luxury in the Dynamic Global Marketplace.” University of Southern California. What’s Up? Social Media. (2011). “Internet Marketing Planning.’ Retrieved October 12, 2011 from: http://whatsupsocialmedia.com/?p=9. Read More
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