BUSINESS IDEAS Forum

5.0 Strategy and Implementation Summary

Image is a key factor in making in-roads into the higher echelons of interior designers. Their work is desirable because it is less price-sensitive. Cutting Edge Drapery's strategy is to lift its image, through advertising in prestigious trade publications, joining and net-working ASID membership, and actively marketing a selected group of 15 interior designers located in close proximity to the company's target market area.

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5.1 Competitive Edge

The company seeks to establish a competitive edge in its new target market segment by increasing the level of customer contact and service that other competitors seem to oftentimes lack. Additionally, Cutting Edge Drapery possesses the necessary skills to produce the high quality products that are needed in this field. The establishment of the previously mentioned work processes that will ensure greater service will strengthen the contacts that promote word of mouth marketing and networking.

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5.2 Marketing Strategy

As mentioned in the previous section, it is important to the marketing strategy to develop an attractive image to the trade. This can be done in a number of ways:

• Advertising. Most designers interviewed suggested Design Times as the best place to advertise. Draperies & Window Coverings and Interiors and Sources are others. A quarter page ad in the regional edition runs $1,080 for Draperies and Window Coverings, and the same for Interiors and Sources runs $700 for black and white. These two latter publications have directories. There is no charge for inclusion in the directories. In Design Times, a color 1/4 page ad would run $3,634 for three insertions if signed by December 1, 1997, which provides a 15% discount. This averages out to $1,211 per insertion, even less for black and white.
• Join ASID. The image of Cutting Edge Drapery would be elevated by joining ASID. This would cost only $285 for the first year. Advertising in the ASID directory is worth considering. The present directory which comes out once per year has a full page color ad for Paul Brown and a full page black and white for Outside Inlook, both of whom are mentioned in the competitive analysis section of this plan. A small black and white ad by The Drapery Man can also to be found.
• Advertising. Development of a top quality logo and photography which can be used in ads, brochures, name cards, etc. Not counting printing costs, which relate to quantity and quality of paper chosen, the design costs for this would run about $1,500. A day's photography would be an additional $850-1,600.
• Participation in Showhouses. Another image-building marketing ploy is participating in showhouses. These showhouses are usually for the benefit of some charity event. This would require time and effort, but not much in the way of money. This should be coordinated with the company's favorite designer to insure satisfaction with the design concept when doing a showhouse room.

In addition to the above-mentioned activity designed to elevate the company's image, it is essential to market directly the selected 15 target clients who are all members of ASID. Most of them are associate members while some are professional members. Success in making in-roads into these names would set the stage for entry into the more prestigious Boston designers.

Marketing these prime prospects must be carried out in a thoughtful organized way. Color literature including the newly designed logo should be completed as a first step. When marketing these prospects it will be important to present a portfolio of Cutting Edge Drapery's most innovative work. A relaxed face-to-face meeting, resulting in good communication between designer and the owner, should be all that's needed to generate a first order.

Networking is also very useful. It is important, once the logo and artwork materials have been completed, for the owner to make a point of introducing herself to important players in the design world surrounding Boston. A good example is major upholstery businesses, custom carpets, suppliers of tile, etc. who often need to color-coordinate or fabric-coordinate with workrooms.

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5.2.1 Pricing Strategy

Pricing of workroom products is not cut and dried. An attempt was made to compare prices charged by various workrooms. Three rather generic items were chosen and interior designers were asked to submit prices based on what their workrooms charge. The three items were:

• Swag and Jabot (40"wide 50" long). Formal style, coordinated lining in jabot, welted edges.
• 1 1/2 panel each side (3 widths) draperies lined and interlined. Applied fringe on lead edges. Pinch pleat heading. (finished drape 60"X90").
• Working balloon shade on clutch roller. 45" wide 60" long. Shirred heading.

The few respondents quoted:

* * All names have been omitted for confidentiality purposes.

The fact that so few designers contributed to the survey is an indication of the relative unimportance of the workroom cost. The fact that only one was willing to share the name of his/her workroom is an indication of how close to the chest designers/decorators hold their cards in respect to workrooms. Cutting Edge Drapery's pricing, based on the scheme mentioned elsewhere in this plan, and which is used for purposes of financial projections, places the company slightly below the average for item one, slightly over the average for item two, and 30% more expensive for item three. None of the respondents quoted prices charged by the high-image workrooms (see section on competition) which have been tagged as members of a community of workrooms to which the company would like to belong. All indications, based on numerous interviews, is that prices charged by the more prestigious workrooms are at least double the prices of the company, and perhaps even more.

In view of the image that Cutting Edge Drapery intends to create, consistent with its quality and skill level, it is advisable from a marketing point of view not to try to be the cheapest price-wise.

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5.3 Sales Strategy

The marketing strategy discussed previously in this business plan will generate the desired sales. These sales will begin with a phone call to Cutting Edge Drapery. It is a stated objective to transfer the administrative burden away from the owner, freeing up her time to meet with clients, to network at ASID and Design Center functions, and to market the list of 15 prospective clients. This means that someone else will be answering the incoming calls. This person must be carefully trained to recognize who must be called back immediately by the owner. The interior designer needs--and expects--close contact with the workroom principal. The designer is under pressure to get a quotation together, for example, and being told that "she isn't here right now" is not going to foster sales. The owner must be armed with a cell phone and a pager. The important caller should be told that the owner will "call right back." The more successful the marketing strategy is in making in-roads into the designer share of the workroom market, the more important this communication response will become.

In respect to the prospect list of clients, it is essential that a "salesman's" approach be adopted to insure an organized, orderly approach to each prospect. Notes need to be kept on each client. Follow-up and persistence will pay off.

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5.3.1 Sales Forecast

The Sales Forecast is divided up into the major categories of sewing products the workroom creates. Unit sales includes the yearly forecast of each unit per category, based on an average of 10-15 labor hours per item and forecasted capacity given the personnel changes mentioned in the Personnel Section. The unit prices reflect the average cost per item, based on past pricing strategies. Since the company deals with providing custom services, this can vary wildly between items. Due to target market shift, estimated increase in unit prices is reflected in years 1999 and 2000. Direct unit costs reflect direct costs in producing the items but does not including labor and fabric.

It is estimated that by year 2000, revenues will reflect an 11% market share of the local soft window treatment market.

Sales Monthly

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5.4 Milestones

Cutting Edge Drapery has a big year forthcoming. In order to achieve the sales and marketing goals that have been outline in this business plan, the company has deadlines to meet and ideas to implement. Some of these are outlined below:

• December 1, 1997 is the date mentioned by Design Times as being the deadline after which a 15% discount is no longer offered for ads to be placed in 1998. Budgeted are 1/4 page four color ads (price $1,425 assuming 3 insertions). Total = $4,275. After 15% discount = $3,634.
• January 29, 1998 is the deadline given by Design Times to submit final films for ads to appear in the April/May edition of Design Times.
• Joining ASID is key to the marketing/networking effort. Should be effective immediately after submitting application and membership fee.
• Participating in a showhouse is mentioned as important to desired image-building for MRS. Expenses are difficult to predict. The workroom does not get paid for its work. What about fabric? Budget $2,000. By March 1, 1998 plans should be fixed up for participation in at least one showhouse during 1998.
• Networking materials. Printing costs are involved in printing brochures, name cards, and in putting together portfolios of work. This can't be done until after the photo/logo design work (costing $2,700) has been completed.
• An additional $3,000 is available from the total marketing budget for 1998. These funds have not yet been earmarked.

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