MARKETING PLAN FOR STRATEGIC MARKETING

Case study : Musette

Authors :

Bechir Adriana (group 1)Clenciu Irina (group 1)

Custura Ruxandra (group 1)Imre Botond (group 2)

Bucharest2013

ACADEMY OF ECONOMIC STUDIES BUCHAREST

FACULTY OF BUSINESS ADMINISTRATION IN FOREIGN LANGUAGES

____________________________________________________________________________________________

Table of contents

1. Situation AnalysisA. Industry Analysis B. Sales Analysis C. Competitive Analysis D. SWOT AnalysisE. Analysis of Marketing Activities

2. Marketing Objectives

3. Marketing StrategyA. Market Segmentation StrategyB. Targeting Strategy C. Product Life Cycle

4. Marketing ProgramsA. Marketing MixB. Loyalty ProgramsC. Customer Service & SupportD. Market ResearchE. Trust and credibilityF. Trade Promotions

5. Implementation Plan A. Product Design and DevelopmentB. Marketing & SalesC. DistributorsD. Scheduling GANTT

6. Performance Evaluation and MonitoringA. Monitoring AD CampaignsB. Customer ProfilingC. Sales force Evaluation

7. Financial InformationA. BudgetsB. Sales Projection for 5 years

4. Marketing Programs

A marketing program is coordinated through a numerous sets of activities that help the company to achieve its marketing objectives and therefore, build strong relationships and maximize sale.

A. Marketing Mix

The marketing mix is probably the most famous marketing term. Its elements are the basic, tactical components of a marketing plan. Also known as the Four P's, the marketing mix elements are price, place, product, and promotion.

Pricing strategies is very important to a company refers to the methods by which a business calculates how much it will charge for a product or service. There are many pricing strategies that have to be taken into consideration when deciding a product’s price.

Cristina Batlan, the creator of Musette has chosen two pricing strategies: premium and geographical pricing. Premium pricing basically means using a high price where there is a uniqueness about the product or service. Since Mussete operates in the fashion industry which is very dynamic and there are even some products that are created in limited editions only for the Romanian stores or only for the U.S. stores, this company also falls into this category, as well as most companies of its type. Geographical pricing is evident where there are variations in price in different parts of the world. For example, prices are slightly higher in America, even if the U.S. taxes are lower than our VAT. 

The price is established by Musette’s local partners reported to the market, the store’s position and purchasing power of Americans, which is far larger than the Romanians. In addition, Musette has also adopted a promotional price strategy. Twice a year, the company offers significant discounts.

Another element of Neil H.Borden's Marketing Mix is Place. Place is also known as channel, distribution, or intermediary. It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer. The Musette Exim SRL has opted for a direct marketing strategy, i.e. they produce the products themselves, in their own factories and then they sell them in their own shops. However, in the U.S., the Internet is also used as a Channel Intermediary. The customers can therefore go online, on Musette’s Web page and buy the products they desire. This technology is not yet available in other countries, although the owner has confessed this is one of the company’s future goals, because of the shift in commerce and consumption which benefits distribution via the Internet.

Concerning the third element of the Marketing Mix, Product, we have to take into consideration the Three Levels of a Product, the Customer Life Cycle and the Product Life Cycle.

The three levels of a product, as they can be depicted in the picture are: Core Product, Actual Product and Augmented Product. The Core product is the benefit of the product that makes it valuable to you. For example, if you buy a car, the core product is the convenience or speed. When it

comes to fashion however, things are not so clear. Ask any man about the benefit of a shoe or a bag and he will definitely tell you there is none. Ask a girl and you will get your answer: the core products or benefits of Musette are fashion sense, beauty and quality. The owner of Musette handpicks the materials for everything herself. She also tries every product first. If a show has a defect, does not fit perfectly the shape of her leg, that shoe will not go into production. When she created the flats, she gave the first products to her employees to test them for six months and then report what bothered them. That is why when buying from Musette, you are confident that every penny you spent is worth it. The actual product is the tangible, physical product, in this case a pair of shoes or a bag. The augmented product is the non-physical part of the product, for example the warranty or the possibility of returning the product if you are not pleased with it.

A product life cycle comprises of five stages: introduction, growth, maturity, decline, withdrawal. Generally speaking, the Musette products’ life cycle is a season, because new products are introduced seasonally. Also, new catalogues and advertisement are created when a new collection is introduced in order to increase customer awareness. However, one cannot really say that when a season end is close, the product enters the decline stage. Because of the promotions, maybe more persons will buy the product than they have in the maturity stage.

Needless to say, the customer life cycle is related to the product life cycle. Essentially, the customer life cycle is a summary of the key stages in a customer's relationship with an organisation. Musette appeals to women who appreciate quality and comfort but also desires pieces that are distinct and rare.

Another one of the 4P's is Promotion. This includes all of the tools available to the marketer for 'marketing communication'. If we look to the promotion mix from Musette’s point of view, we can easily notice that Sales Promotions, Advertising and Public Relations are the most used tools. Musette has discounts twice a year and by through its advertising campaigns, it strives to create a long term relationship with the customer. Exhibitons have also been adopted recently by the company, since it currently operating a showroom in Dusseldorf, Germany.

To sum up, the marketing mix is a crucial element a company has to pay attention continuously to, since an appropriate marketing mix helps the organisation  in ways that both targeted consumer groups are reached, as well as organizational objectives are reached.

B. Loyalty Programs

Loyalty programs are structured marketing efforts that reward, and therefore, encourage loyal buying behavior, which is beneficial to the firm.

Musette thought of giving fidelity cards for those that buy once for more than 1000 RON. This card has several advantages. To begin with, the client has a discount of 10 % at each buy and for her or his birthday it is added an extra-discount of 5%. Thus, all discounts are applied only to products which do not benefit of other promotions.

In addition, possessors of those cards are invited to presentations of future or exclusive collections and have the possibility to buy them before coming into stores.

Musette also collaborates with the initiatives of other companies. The firm is partner with a special concept designed by AFI Palace Cotroceni Mall, which means a VIP card. It offers a 10% discount, which can be cumulated with other promotions, but not exceed 50%.

Musette has also had many collaborations with the media. An example is a popular website among Romanian women, www.perfecte.ro, where women could post their special outfits on the website and the one who received most of the votes, would win a full range of leather accessories from Musette. The firm is also involved in campaigns. “Glamour Stilleto Run” is a running contest on heels organized by Glamour Magazine and had as main prize a 1500 Euro Mussete voucher.

All these associations are explained as a strategic partnerships, designed for customer loyalty, and also known as coalition programs.

Turning the clients’ loyalty into a game is a way of encouraging customers to buy again and help solidify the brand’s image. Musette organizes a contest each week, where the rules are that a product is nominated as the product of the day and whoever buys it, will compete for the prize at the end of the week. This contest takes place during the sales period, where the nominated products are part from the previous collection and the prize is a new pair of shoes from the new collection.

C. Customer service and support

Customer service and support (CSS) is the part of a company's customer relationship management (CRM) department that interacts with a customer for their immediate benefit.

First of all, all the shop assistants from the shops are available to offer all the needed information. They are the most reachable and capable to direct the clients how to solve the

issues. Secondly, Musette is also available on the

most important social platforms, such as Facebook, Instagram or Twitter, including also a website, where questions can be addressed and solved in a short time.Moreover, the firm assures technical help

for the products. Tailoring belts or change components of shoes are offered within every Musette shop and it is often solved on the spot. Also, if a specific size of a product is not available in one shop but it is in

another one, the company will assure the transport to the closest shop to the client.Adding to this, any product from a previous collection can be requested be the buyer and

bought at the usual price, even though it is not anymore present on the shelves.If for any reason the client is not satisfied with the purchase, he or she may return it for

the exchange or refund of the purchase price, within 15 days from the day of the buy and with the receipt and the original package. Any sign of wrong usage will cancel the right of refund.

D. Market research

It is important to test the shoes and purses in order to see how the audience will receive it. The main method used by Musette is focus groups. The firm chose it because it is very good for exploratory, qualitative research. These are formed by the employees and they test the products in order to discover future flaws and improve them. This method has been introduced since the beginning of the company and it has been proved to have very good results, since it has conquered a large number of buyers.

Moreover, the company uses field trials. The stores receive different parts of the collection and after a while, they switch products between them. Therefore, the firm can measure which shoes and purses are more appealing for some regions and which are less successful. By employing this simple market research, Musette performs better.

Observation is also used, more specifically – in-store observation. Shoppers are watched in action and notice how they go through stores and what they notice. Lately, all the shops have a new design with the focus on the stars of the collection. The correlation between cupcakes and shoes seems to be attracting more and more buyers.

So, through these market research methods the company understands better the customers, competitors and industry. Musette has identified the products that the market needs and how to be competitive, reduce business risk, spot current and future problems in the industry, and identify sales opportunities.

E. Trust and credibility

Every business wants to be perceived well by the people in its target market. Trust and credibility are not new concepts, and marketing departments have tried to foster these qualities in their brands for decades.

Traditionally, companies have tried hard to convey trust and credibility through advertising. Musette does not use television advertising or billboards. The only commercials advertisements, which are rare, can be seen only near some shops.

The virtual world is a huge opportunity and the company takes full advantage of it, by building trust. It speaks directly to thousands of people through their Fabook, Twitter, Instagrams accounts and the website. The information from the social networks is updated almost daily, introducing well-crafted and targeted content.

The transparency of the company is obvious on any virtual platform. All the information about its history, locations, founders, collaborations and so forth, can be found easily. This honesty creates a connection with the actual and potential buyers. Also, the values of Musette are comfort, quality and design. The newest trends are always adopted by the firm before their competitors. The Facebook account is updated daily with photos of the shoes that will make the difference in trend.

Credibility is earned through evidences. Beside the sustained quality of the shoes that can be proved easily through the manage of the products, the buyers are always informed about the latest news about the company. Each collaboration with a famous designer is recorded and showed to the people who enter the virtual platforms. Or articles in newspapers that proves once more the value of Musette.

To conclude with, Musette chooses the virtual world because in this way they can communicate better with their purchasers, becoming more human. Any question can be addressed and opinions can be shared.

F. Trade Promotions

Launching trade promotions can impact positively the business. In-store displays are used at every collection. The main products are advertised through the association with different things, like cakes. Also, the windows usually have one or two products, making more them more appealing to the consumers.

Temporary price reductions are used by the company. At the end of each season, Musette has its sales. The percentages increase gradually, from 20% to 50% at shoes and from 20% to 30% at purses. They last for 2 months and in the last month, both previous and new collections are present in the shops. Beside the final season reduction, Musette also has mid-season sales. These temporary reductions are just for some elements of the collection and the percentages do not go over 20%.

In addition to this, promotions are another method. For Black Friday, Musette offered a 20% discount at all products. Collaborations with different companies are another way of reducing the price of leather accessories. Different magazines gave coupons that meant the reduction of the price with a specific amount or percentage.

Contests are organized often. As mentioned before, one item from the previous collection was chosen as the product of the day and whoever buys it, gets the chance to win at the end of the week a new pair of shoes belonging to the newest collection. Sweeptakes are also preferred by Musette. Many magazines and websites collaborated with the company. One example is the one organized by www.perfecte.ro, where it was required to post a photo wearing Musette items and the one that received the highest number of votes would win a new pair of shoes.

Even though statistics show that trade promotions seem to have some issues, the chosen ones by Musette seemed to have the desired result and they will be applied also in the future.

7. Financial Information

A. Budgets

The company started with only 700 $, when the founders Cristina Batlan and her husband started the business. Everything was done by them, including the manufacturing of shoes, since the a part of her family used to work in the shoe industry. Marketing and other departments were performed empirical, but times have changed and the firm evolved.

Nowadays, the marketing department has other expenses in order to sustain the success.

Below is an example of the company’s business development and marketing budget in 2011:

Business Development & Marketing Budget

Tactic CategoryProject NameCost ComponentsProject Costs

Business Development

Client Meetings/LunchesMeeting Costs€4,200

30 meetings/quarter = 120 meetings/yearTravel Costs€800

€35/meeting = €4,200/year

€5,000

Subtotal

5,000Branding

Direct Mail CampaignDesigner€500

Q = 1,000 mailers/quarter; 4,000 postcardsPrinting

3,000

Postage

400

Unique URL

100

800 #

250

€4,250

Subtotal€4,250Public Relations

PR Tracking ServiceBacon's Media Services€1,200

Yearly Subscription

€1,200

PR Clipping ServiceBacon's Clipping Services€100

€1.00/clipping - Anticipated 100 clippings/year

€100

Subtotal€1,300Internal Communication & Events

Annual MeetingRoom/AV Rental€500

Event logistics, food & rentalsCatering€2,000

€2,500

Subtotal

2,500Marketing Supplies

Paper, Pens, Misc. Supplies

€2,000

InDesign Software

€1,500

Camera Supplies

€100

Shipping

€1,500

Color Scanner

€800

Binding Machine

€1,200

€7,100

Subtotal€7,100

Total Budget€20,150

The planning of the budget has helped the company in this time of financial crisis, when conditions have changed and it had to adapt to the environment. Problems were also identified before they arouse. Therefore, the resources were controlled and the performance of the firm was visible.

B. Sales Projection for 5 years

A sales projection is the amount of revenue a company expects to earn at some point in the future. It's a prediction that is synonymous with a sales forecast. Both help determine the health of a company and whether sales will trend upward or downward.

In the last years, the financial crisis made it difficult for the company to have profit. The cost of producing have increased in the last years, but Musette decided to adopt a different strategy than other companies in the industries and in general – keep the prices at the same level. Despite the increase in cost of production, customers did not feel it. And it proved to have been successful. Sales did not decrease. Therefore the company estimates that for the next 5 years to keep the same strategy, maintaining the same level of quality. Moreover, in the next 5 years it is estimated that the financial crisis will eventually end and the economic recovery will be felt by every agent.

Turnover of Musette

In addition, there are no new entrants on the market announced; the last ones were Humanic and Deichman, belonging to the same Austrian group. Also, the majority of present clients of Musette are young, meaning between 20 and 30 years old, and in 5 years they will still be included in the targeted range of clients.