Hypnotic Apparel

Marketing Communications 2203Term Project

Andrew Jang, Matt MacDougallH. John El Rayess

Situational Analysis

Internal Analysis & External Analysis

Current Situation

• Exclusive to fashionably-conscious men

• Designer brands, high-end clothing lines

• North Shore location leased

• Online Store w/ E-Com• Unpretentious shopping

experience

Promotional Capabilities

• New start-up business• No customer base• No awareness of the

company• Limited promotional

capabilities• But lots of potentially

profitable customers

Product Lines

Competition

• Men’s Club– Located in Park Royal– Sell similar lines– Recognized by customers– Premium on location– Negative publicity

Indirect Competition

• Club Annex• Below the Belt• Mantique• Hills on Kerrisdale• Nacional Clothing• Ray Rickburn• Leone Vancouver• Below the Belt• Harry Rosen• Holt Renfrew

• Boys Co.• Latitude• Plenty• Brooklyn Clothing• Enve

Market, Consumer, Economic & Industry

Trends

Retail Market Conditions

Retail Market Conditions

Retail Expenditures

• In BC (06/07)– from $52,837,107

to $56,365,394

Consumer Behavioral Analysis

• Purchasing trends:– Spending on clothing

increased a strong 13% to an average of $2,870 in 2006 (Canadians)

– 2002-06, Statistics Canada, average expenditure by household on clothing in Vancouver increased from $2575 to $3145

Consumer Behavioral Analysis

• Consumer Trends:– Number of young adults from 15-29 years old

will rise by almost 6% from 1990 to 2015 with an even faster increase from 2000 to 2015• Discretionary spenders• Make up 20.56% of the population in 2005.

– Consumer confidence increased globally including Canada

– Increased growth in spending on luxury brands (Nielsen Media Report)

– American labels most coveted (Calvin Klein)

Customer Behavioral Analysis

• Online shopping gaining popularity

Online Shopping

Online Shopping

Online Shopping

• Highlights:– Growing participation in Canada and globally

• Research and purchase goods

– 85% of the world’s online population has used the Internet to make a purchase

• Up 40%

– Trust and word of month influence online store choice

– Men vs. Women• $2,401 vs. $1,527

Economic Issues

• High Canadian Dollar

• Import & Export Prices

• Labour Market Situation

• World Economy is Slowing

Positioning Statement

• Hypnotic Apparel is… – high-end apparel, footwear and accessories

retail store exclusive to men who are brand and fashionably conscious.

– Cater to those who want a relaxed environment, and an accessible and unpretentious shopping experience.

– Offer those who want to keep up with the trends the luxury of buying designer brands at reasonable prices.

SWOT

• Strengths– Owners and managers– Customer database– Designer brands are in

demand, and there is growth

– Low operating costs, free rent

– Wide target group• Build equity with young

consumers

• Weaknesses– Owners and

managers & retail?– Furious competition

across the lower mainland

– Company is unknown

– Vancity financing– No data and history

to look back on

SWOT

• Opportunities– Growth in retail

expenditures and markets in BC and Canada

– More people shopping online

– Ladies wear– Relationships with club

owners to sponsor events– High loonie, cheaper

imports, savings to consumers

– E-commerce and international reach

• Threats– Shortage of labour– Difficult to recruit right

people– High dollar bad for US– High Euro– Counterfeiters & fakes– Large retailers

Marketing Objectives

Strategies & Tactics

Marketing Objectives

1. Create awareness of the retail store among 90% of the target audience within a year.

– Strategy: Team up with high-profile local businesses to create awareness.

• Tactic: Sponsor a popular nightclub event on a weekly basis to create brand awareness

• Tactic: An agreement with Kid Carson, morning radio host of the Beat 94.5, to advertise our store by sponsoring a contest over the radio with the prizes being items from the store.

Marketing Objectives

2. Capture 25% market share and attract new customers by offering sought-after high-end fashion brands and for all product lines at a reduced cost compared to competitors within two years.

– Strategy: Capitalize on consumer spending trends in our target audience while building a database of all our customers and communicating with them on a regular basis.

• Tactic: Record contact information for attendees of our club night to be entered into a database and used as a foundation for a direct e-mail campaign.

• Tactic: Promote loyalty amongst our customers by offering an embracing, un-intrusive environment while capitalizing on our competitions lost business due to bad publicity.

Marketing Objectives

3. Generate retail and online sales to break-even after one year of operations.

– Strategy: Minimizing overhead costs by maintaining low inventory levels, while also having low shop rental expenses, and upkeep costs—allowing us to charge low prices.

• Tactic: Make smaller volume purchases from distributors, allowing us to charge lower prices than the current competition.

• Tactic: Promote the growth of our online business by joining popular ad networks, allowing our advertisements to be directly targeted to interested consumers across the

globe at a very low cost.

Profile of Target Audience

• Geographic Region:– Major cities throughout

North America– City Size 100,000 +– Urban, Suburban areas

• Demographic– Ages 12 – 54

• Sociographic• Occupation

– Any

Profile of Target Audience

• Income: 15,000 +– Wealthy family/parents

• Education– High School, Some post

secondary, degrees, masters

• Psychographic• Personality

– Outgoing– Fashionably conscious– Ambitious– Flamboyant

Communications Choices

Hypnotic Apparel will utilize every aspect of the communications mix as best

to penetrate market.

Hypnotic’s Communication Mix to Success

Night Club Promotion

Radio Advertising

Grand Opening

Event

Direct E-Mail Campaign

Personal at Home

Shopping

Communications Choices

• Public relations: – nightclub– opening gala

• Internet Marketing: – e-commerce– direct e-mail

• Personal Selling: – VIP personal shopping– telephone ordering

• Radio:– the Kid Carson show– promotional giveaway

• Sales Promotion: – university student

discount– affordable luxury

Budget Considerations

An analysis of first quarter results will then form our marketing strategy with regards to budget considerations. For the time being Hypnotic will utilize a top down approach, perhaps not the most effective.

Hypnotic’s goal objective is to be sustainable, and an extremely conservative approach to our marketing strategies will be taken, with an objective of capitalizing on existing relationships to receive near-zero cost marketing

Budget Considerations

• Costs:– Renovation: $2,000– Web Site development: $3000– Inventory (Reserved Funds):

$10,000– Grand Opening: $ 3000– Radio Advertising: $10,000– Employees’ wages: $2000– Percent of Sales method will be

used after first quarter.

Implementation & Evaluation

• Roll-Out Schedule – May: club night begins on a weekly basis, begin

collecting sample for our database.– July 1: club night continues, and we being our direct

e-mail campaign containing an exclusive invitation to our opening gala S

– July 15: second direct e-mail piece sent to potential customers as a reminder to RSVP for the invitation-only party

– August 1: Hypnotic opens for business, the next month is spent collecting contact information for physical customers we attract during the first weeks of opening, in order to contact them with information regarding the opening gala.

Implementation & Evaluation

• Roll-Out Schedule – September 1: Opening gala, more gathering of

customer information, establishing a personal rapport with the individual customers to gain an understanding of their wants and needs

– 3-6 Months: On-going monthly direct e-mail pieces with special offers in order to entice response with customer feedback form. Possible refer-a-friend roll-out to go live in order to expand database.

– 6 Months-2 Years: Continuing direct e-mail efforts while building an established customer base and reputation for success through feedback from our database.

Questions?