Confidentiality Agreement
The undersigned reader acknowledges that the information provided by ________________ in this marketing plan is confidential; therefore, reader agrees not disclose it without the express written permission of ________________. It is acknowledged by reader that information to be furnished in this marketing plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to ________________. Upon request, this document is to be immediately returned to ________________.
____________________ Signature _____________________ Name (typed or printed) _______________ Date
Table of Contents 1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
2.0 Situation Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.1 Market Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.1 Market Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.2 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.3 Market Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.4 Market Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 2.2.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 Product Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 Critical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 Historical Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8 Macroenvironment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 3 3 4 4 5 6 6 7 7 8 9 9 9 10 11
3.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.2 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.4 Target Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.5 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.6 Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.7 Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.7.1 Product Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.7.2 Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 3.7.3 Promotion 14
The Boulder Stop 1.0 Executive Summary This marketing plan is designed to give us a blueprint for marketing our new retail store, The Boulder Stop. We have included a complete market analysis, target market summaries, a SWOT analysis, a detailed milestones table, and other relevant discussions. Our ambitions for this marketing plan include: •
Using our existing Internet and direct-mail marketing expertise to build local promotions and marketing literature. • Devising lucrative promotions that will draw sponsorships from possible strategic partners. These promotions are key to our strategy of increasing our strategic alliances through cross-promotions. • Identifying our strengths, weaknesses, opportunities, and threats. • Identifying the local market forces, target markets, and promotional opportunities. We hope this marketing plan creates a long-term growth model for our retail success. The Boulder Stop has been successful at direct mail and Internet sales, and we hope to make a smooth transition into retail.
2.0 Situation Analysis The Bend/Redmond area is growing faster than any other Oregon metropolitan area. This growth is fueled by the purchase of 2nd homes, from home-buyers nationwide and retirees, or those searching for an idyllic America. In addition, many people in Western Oregon make the two to three-hour drive from Portland, Oregon's largest city, or Eugene, site of the University and Oregon's and the state's second largest city, to escape the Spring, Fall, and Winter cloud cover and rainfall. We count all tourists and locals as potential customers, since
The Boulder Stop 2.1 Market Summary In a 1997 state-generated report, consumer expenditures for espresso beverages and rock climbing equipment combined rose to $4,000,000 in Central Oregon. We expect sales to increase steadily as Oregon's population grows and the rock climbing industry becomes increasingly popular. The proximity of several large cities in Western Oregon helps fuel our business, as does the status of Smith Rock as an international destination for rock climbing enthusiasts. Individuals from as far away as Japan, Europe, South America, and Australia travel to Smith Rock to 'recreate'. •
Direct Mail and Web Market
Our direct sales are fueled by our current list of customers and Web co-marketing. To date, we have allocated minimal funds to marketing over the Web. We have relied on word of mouth, free banner exchange programs, our printed catalogs, and Web reviews to drive revenues to the site. We count worldwide readers of such publications as Rock & Ice magazine and Outdoor Adventure among our target direct audience. •
Retail Market
Our three main target markets are weekend warriors, hard core climbers, and the curious. We predict that the number of hard core climbers will grow faster than the number of weekend warriors. Climbing is becoming more and more technical, an "insider's sport", and we believe this will fuel the growth of dedicated, highly sophisticated climbers. At the same time, amateur growth is leveling off. This market analysis is conservative when compared with Oregon's predicted population growth of 2% per year and Bend's 5% average gains over the last five years.
The Boulder Stop 2.1.1 Market Demographics Direct Mail and Web Market
Geography:
Age: Sex:
80% U.S. customers. 15% European customers. 5% Other countries 18-34 75% male 25% female
Retail Market
Geography:
Age: Sex:
90% U.S. customers 9% European customers 1% Other countries 15-45 62% male 28% female
Males buy gear through catalogs and the Web more often than women. This skews the direct sales toward male customers. In-store customers tend to be younger than catalog shoppers, and a larger % of them are locals or native to the United States. Table: Market Analysis
The Boulder Stop 2.1.3 Market Trends Trends are in our favor. We have three major trends that help us: •
The sport of rock climbing is enjoying growth. The success of rock climbing gyms in the Silicon Valley, Seattle, Eugene, and other locations offer clear evidence of this growth. • Central Oregon is booming as a vacation destination and recreation spot. Oregon in general is enjoying the growth of interest from Californians, Washingtonians, and former urban dwellers searching for small, friendly communities. • Gourmet coffee demand is very strong throughout the Northwest. Growing numbers look to their expensive espresso drink as a way to enjoy a moment, and as a natural part of an outing or activity.
Market Forecast 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000
Weekend warriors The curious Hardcore climbers
The Boulder Stop Target Market Growth 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Weekend warriors
The curious
Hardcore climbers
2.2 SWOT Analysis The Boulder Stop recognizes the following strengths, weaknesses, opportunities, and threats (SWOT): Strengths:
The Boulder Stop 2.2.1 Strengths Our most significant strength lies in our management team's skills in both rock climbing and running a small business. After years of working the pro circuit, Bill Walsh has gained insight into the history, ethics, and progressive nature of traditional wall and sport climbing. Pan Silverton has worked a number of years with small business clients looking for direction and strategic cohesion. His insight has led to multi-million dollar finance deals that helped put some $100K-500K a year businesses on the map. The combination of experience and proven business acumen represent a strength for The Boulder Stop. With a nationwide direct marketing business that includes Internet and catalog sales of more than $50,000 per year, The Boulder Stop is in a natural position to expand into retail. Gateway Computer started as a small start-up direct assembly business in North Dakota and is now opening "Gateway Country" stores across America. Although The Boulder Stop is taking a more conservative approach, the company also enjoys strong brand recognition. The natural 'next-step' is to expand into retail, into Redmond, OR. During it's 10 years of operation in Eugene, The Boulder Stop has contributed over $13,000 toward community events and involvement. We have hosted "Boulder Green" for three years. A state wide bowling tournament, "Boulder Green" is about giving bowling balls and free bowling passes to the less fortunate in our community. We view this as one more win in the fight against badminton We are comfortable that our community involvement will only strengthen our business in Redmond, as it has in Eugene.
2.2.2 Weaknesses The Boulder Stop has access to a limited amount of cash. Initial financing will not be difficult due to solid credit and the low inventory depreciation rate, but ongoing financing will be more
The Boulder Stop 2.2.3 Opportunities The market for rock climbing and hiking gear, good coffee, and ice cream in Redmond is far below saturation level. Our two local competitors do very little in the way of marketing, be it advertising or community involvement PR. This gives us the opportunity to develop the market and brand ourselves as the market 'original'. The cost of selling via e-commerce and through mail-order has decreased tremendously in recent years. Internet domain names (www.yourname.com) cost $35 a year, and ecommerce servers may be set up for only $30 a month. Certain high-circulation catalogs will develop custom catalogs for vendors and mail them for a fixed fee. This is incredibly cost effective for companies that don't have costly relationships with printers, graphic artists, and the like. Both direct mail and Internet sales are a growing segment of our business. Weekend warriors and hard core climbers will pay anything to get into the latest gear. The average climber carries around $1,200 of equipment. Since climbers place their lives on the line when they use their equipment, the majority of them buy only name brand gear at a price premium. Climbers associate high price with premium quality. Hikers are similar, but to a lesser degree. Hikers look for gear that looks great and feels comfortable. Our typical curious customer is lodging in Sunriver (20 miles), hiking at Smith Rock, Newberry Crater, and lakeside trails in the mountains. They own a new VW, SUV, or 4WD station wagon, are married, have a stable job, and are responsibly putting enough in savings to retire early. In other words, they don't care what they pay for hiking gear, as long as it's not insulting. We categorize insulting as 110% or more above REI (Recreational Equipment Incorporated) prices. Rock climbing service companies offer us a unique opportunity. We can team up with these services to promote our events and store, and in return we will give them 'shelf-space'. This gives service companies cost-effective market exposure. We will partner with companies such as First Ascent LLC and other American Mountain Guides Association (AMGA) accreditees.
The Boulder Stop 2.3 Competition Direct Mail and Web Sales:
•
REI (REI.com) and L.L. Bean (L.L. Bean.com) sell climbing gear to our target market. They are large corporate entities, each with powerful online and retail presence. Fortunately, they have not opened any retail stores in the Bend/Redmond area, so we count them solely as direct mail and Web competitors. We hope to achieve .5-1% of their gross yearly direct sales.
Retail Sales:
•
[UnNamed#1] will be our toughest competitor, for they have already established themselves in the rock climbing community. They have a very experienced and knowledgeable staff of expert climbers, and they are located on the highway that leads directly to Smith Rock. They carry 75-80% of the same gear that we sell. • [UnNamed#2] sells limited gear (clothes), they do not promote, and they do not market their products extensively. On the other hand, they sell ice cream and carry more GenX apparel than The Boulder Stop. Their biggest weakness is small store size.
Competitor by Growth and Share
20% 15%
UnNamed#1 UnNamed#2
The Boulder Stop 2.4 Product Offering Espresso is the big money maker for The Boulder Stop, with coffee peripherals coming in a close second. Straight espresso bean re buys arrive on Mondays and Thursdays, ensuring the freshest beans possible. Modified re buys begin on the first of each month. Bill Walsh will oversee all purchases, shipments, and deliveries. The Boulder Stop sells high-quality rock climbing gear to serious climbers. Rock climbing gear is a long-term sales project that will rely on future catalog and "word-of-mouth" sales. The gear is checked by knowledgeable employees who use and recommend equipment to customers and management. The gear is purchased from well-known manufacturers like Metolius Mountain Products, Black Diamond, Boreal, and Petzl. Management will rely on employees and customers to shorten the feedback loop in product and service offerings. Climbing gear is delivered every Thursday via UPS.
2.5 Keys to Success To succeed in this business we must: •
Sell products that are of the highest reliability and quality. We must offer as many or more high-end products than REI offers online and through their Eugene and Portland stores. This means we must carry all high-end brands of harnesses, active protection, passive protection, helmets, ice climbing gear, camping gear and mountaineering gear. • We will offer loss leaders and other promotions that bring customers into the store, to buy goods and to generate awareness of promotional events. • Provide for the satisfaction of 100% of our customers. Our customers are very valuable to us, and we will design a customer care plan to manage complaints,
The Boulder Stop conservatively and spend accordingly. Projects must be kept on budget and on time, marketing programs must be cost efficient and backed by solid data gathering and a high potential for success, measured or otherwise.
2.7 Historical Results Our marketing strategies have always revolved around direct Internet and mail sales. We have done little tele-sales, as that does not fit into our business practices model. To date, our direct sales model has been successful in (1) keeping costs down, (2) giving us great ROI, (3) building a business from nothing to $150,000 a year, and (4) restraining our growth to match our level of financing. As we expand into a new market and grow with a new business model, we will need to put our direct mail sales experience to work. We will need to be just as aggressive about getting our message out to the locals. Our direct mail sales experience will help us determine which direct market tactics and programs work, and which ones don't. From flyers to magazine and newspaper ads, we will use our connections and resources gathered through national direct sales to focus our retail marketing on one region. In addition, our Website and Website sales will be of much use to us. We will synch Website sales orders with in-house ordering systems, to ensure that customers may buy over the Web and pick up merchandise in the store if they wish, free of shipping charges. By adopting this marketing program, we will gain from historical experience, while adapting to our retail direct business model. Things have changed tremendously in the direct catalog (mail) and especially the Internet sales category. Major players such as REI and L.L. Bean now rely on Web sales to boost catalog sales. Both companies put out the same number of catalogs, but use the Web for product real-time pricing, order tracking, and customer feedback. Since 1995, Web business has grown by 3,000%. Direct market growth, and our sales stability in the direct market, give
The Boulder Stop 2.8 Macroenvironment Rock climbing
The rock climbing industry is growing faster than ever. Although the gear is expensive, people buy it because it provides them with long-term fun. Coffee and Espresso
High profit margins on coffee sales and low overhead costs lead to high profit margins in the espresso industry. Expansion of coffee and espresso retail outlets has increased exponentially in the last five years as large companies such as Starbucks[tm] have increased their reach to the East Coast in cities such as Boston, New York, and Washington D.C.
3.0 Marketing Strategy •
We will build strategic partnerships with climbing service companies.
•
We will differentiate The Boulder Stop from competitors through aggressive advertising and promotional campaigns that demonstrate our community support and commitment.
•
We will build retail store awareness through our direct mail and Web campaigns, leading to greater word-of-mouth marketing.
3.1 Mission
The Boulder Stop 3.2 Marketing Objectives 1.
To make The Boulder Stop the number one destination for rock climbing equipment customers in Oregon, and to achieve the largest market share in the region for rock climbing gear. There are no resources for gauging market share for our local market, but the State of Oregon provides yearly economic data by region. We will use this data to compile an estimate of market share goals for 1998.
2.
To be an active and vocal member of the community, and to provide continual reinvestment through participation in community activities and financial contributions. We will sponsor two to three events during the year, including the Pacific Amateur (PA) Golf Classic, charity events, and celebrity-hosted competitions.
3.
To achieve 30% market share by August of 2000.
3.3 Financial Objectives Our financial objectives are as follows: • • • •
To To To To
always maintain a minimum cash balance of $10,000. maintain year-end minimum contribution margins of 40%. grow direct retail sales by a conservative minimum of 12% per year. achieve sales of $190,000 in year one.
3.4 Target Markets
The Boulder Stop 3.5 Positioning For climbers who need a place to stop for gear and coffee near Smith Rock, The Boulder Stop offers high quality climbing gear, gourmet espresso drinks, and a comfortable place to meet and talk. We will position The Boulder Stop as a community-involved organization that creates value for the community while minimizing environmental impact.
3.6 Strategies Our main marketing strategy is to focus on the overall experience needed by each customer. Some of our customers will seek a friendly gathering place to discuss climbs and prospects. Others want to shop in a semi-sterile retail environment. Still others don't want to linger at all, but wish to get their 'treat' and enjoy the outdoor weather. Therefore, our strategy is to fulfill these various customer needs while minimizing possible friction between these customers. That is our focus.
3.7 Marketing Mix Our marketing mix relies heavily on our promotions. Our unique promotions set us apart from our local competitors, which sponsor few promotions. From the Perry Claw Rock Festival to The Llama races, The Boulder Stop will seek to create high-impact local events that create consumer recall and increase foot traffic. Our prices are competitive, but we do not compete on price. We will not match prices; we will simply perform monthly competitive shopping trips to gauge the average prices for goods.
The Boulder Stop cafe, away from their nemesis: 'yuppie tourists'. The weekend warriors won't feel excluded from the gear, and will also partake of the bargain bin. The warriors will find comfort in the cafe area, where they can talk about their pursuits rather than challenge them on the rock face. These people are not in great shape, and are likely to flock to the store as early as 3:00 p.m. for ice cream and cookies. We'll have extra staff on hand during these times. The curious are difficult to gauge. They will flow in and out all day, and are likely to peruse our magazine rack for hours (we've allowed for the magazine write-offs). This customer base is our most lucrative, and is most likely to buy an iced espresso and/or ice cream before or after their short day hikes. Since espresso is a cash cow for us, we'll offer them a solid selection of beverages so nobody's disappointed.
3.7.2 Price We are a store that is positioned for impulse buying; therefore, it is important that we maintain a flexible pricing strategy. •
Our pricing strategy will be based on competitive parity guidelines. We will not exceed competitors' prices by more than 10%. • Price says a lot about a product. The products that are innovative and not available elsewhere in the region will be marked up to meet the demand curve. We are not afraid of premium pricing a premium product. • Espresso beverages will be priced a little below the industry average. Although we will still make money off the beverages, we consider this a "Loss Leader" strategy whereby word-of-mouth advertising brings customers in for the drinks, simply to make them aware of our additional products and services.
The Boulder Stop 3.7.4 Service Service is important to our mix. We have an obligation to provide quality products and cheerful service, fast and efficiently. Our service goals are simple and easy to maintain. We will make plain our policy that we do not accept returns or exchanges without receipt and proof of product failure. We are in this to make money, as a business, and cannot afford to give our value to free riders or people with 'buyer's remorse', who choose not to take responsibility for their purchase(s).
3.8 Marketing Research We will obtain market research through in-store customer comment cards and the local Chamber of Commerce.
4.0 Financials •
Sales are expected to grow from $193,000 the first year to $262,000 by year three.
•
Expenses will increase with the rate of inflation (3%) minus diminishing cost of goods (1%).
4.1 Break-even Analysis
The Boulder Stop Break-even Analysis $2,000 $1,000 $0 ($1,000) ($2,000) ($3,000) 0
400
800
1200
1600
Monthly break-even point
Break-even point = where line intersects with 0
Table: Break-even Analysis
Break-even Analysis Monthly Units Break-even Monthly Revenue Break-even Assumptions: Average Per-Unit Revenue
1,333 $4,000 $3.00
2000
The Boulder Stop Sales Monthly $30,000
Carabiners
$25,000
Ropes $20,000
Books and Magazines Cookies and Cones
$15,000
Espresso Regulars Espresso Shakes
$10,000
Gear Rentals All Other Gear
$5,000
Other
$0 May Jun
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
The Boulder Stop Table: Sales Forecast
Sales Forecast
FY 2002
FY 2003
FY 2004
FY 2005
FY 2006
3,577 331 181 17,358 23,867 2,387 362 2,172 0 50,234
4,007 370 203 19,441 26,731 2,673 405 2,433 0 56,262
4,488 415 227 21,773 29,938 2,994 454 2,725 0 63,013
5,026 465 254 24,386 33,531 3,353 508 3,052 0 70,575
5,629 520 285 27,313 37,555 3,755 569 3,418 0 79,044
Unit Prices Carabiners Ropes Books and Magazines Cookies and Cones Espresso Regulars Espresso Shakes Gear Rentals All Other Gear Other
FY 2002 $9.13 $141.95 $12.15 $1.01 $1.77 $2.68 $4.05 $20.30 $0.00
FY 2003 $9.50 $147.63 $12.64 $1.05 $1.84 $2.79 $4.21 $21.11 $0.00
FY 2004 $9.88 $153.54 $13.14 $1.10 $1.92 $2.90 $4.38 $21.95 $0.00
FY 2005 $10.27 $159.68 $13.67 $1.14 $1.99 $3.02 $4.56 $22.83 $0.00
FY 2006 $10.68 $166.07 $14.21 $1.18 $2.07 $3.14 $4.74 $23.74 $0.00
Sales Carabiners Ropes Books and Magazines Cookies and Cones Espresso Regulars Espresso Shakes Gear Rentals All Other Gear Other Total Sales
$32,669 $46,946 $2,197 $17,574 $42,287 $6,403 $1,464 $44,084 $0 $193,623
$38,052 $54,682 $2,559 $20,470 $49,256 $7,459 $1,706 $51,349 $0 $225,532
$44,323 $63,694 $2,980 $23,843 $57,373 $8,688 $1,987 $59,811 $0 $262,700
$51,628 $74,191 $3,472 $27,773 $66,828 $10,120 $2,314 $69,668 $0 $305,993
$60,136 $86,417 $4,044 $32,350 $77,841 $11,787 $2,696 $81,149 $0 $356,421
Unit Sales Carabiners Ropes Books and Magazines Cookies and Cones Espresso Regulars Espresso Shakes Gear Rentals All Other Gear Other Total Unit Sales
The Boulder Stop 4.2.1 Sales by Mail and Web Direct Sales Our direct sales are seasonal in nature, yet, unlike retail sales, we can maintain small margins throughout the Northern Hemisphere's Fall/Winter months. We will maintain these sales by temporarily discontinuing our direct mail sales in favor of Web sales. Website management costs are between $25-50 a month. Banner advertising on sites such as outside.com, rockandice.com, and others will cost under $1,500 and will help us maintain market exposure during the off season. We will create direct mail catalogs again in April.
4.2.2 Sales by Retail Store Sales Retail store sales will end in November and begin again in April. Retail sales figures rely heavily on espresso and carabiner purchases. The average climber loses one carabiner every trip, and The Boulder Stop will be there to provide them with the best selection of 'biners in the Redmond area. We will price the 'biners competitively, but not too competitively. At an average price of $9 per 'biner, we priced higher than REI, but lower than any of our local competition. In-store espresso sales are driven by our marketing promotion machine. As people learn that we are a community-involved, neighborhood organization, we'll gain the trust of locals who will choose to drive five miles to the The Boulder Stop, at scenic Smith Rock, rather than visit the local 'strip malled' ice-cream parlor for a cone. This goes back to our main objective: To become a place where locals and expert climbers can mingle to enjoy good gear, coffee, ice cream, cookies, etc.
The Boulder Stop Monthly Expense Budget $12,000 $10,000 $8,000
Advertising/Promotion
$6,000
Sponsored Activities Other
$4,000 $2,000 $0 May Jun
Jul
Aug Sep Oct Nov Dec Jan Feb Mar Apr
Table: Marketing Expense Budget
Marketing Expense Budget Advertising/Promotion Sponsored Activities Other Total Sales and Marketing Expenses Percent of Sales
FY 2002 $3,000 $11,250 $49,500 -----------$63,750 32.92%
FY 2003 $3,000 $9,000 $42,000 -----------$54,000 23.94%
FY 2004 $3,000 $9,000 $42,000 -----------$54,000 20.56%
FY 2005 $3,000 $8,000 $42,000 -----------$53,000 17.32%
FY 2006 $3,000 $7,000 $42,000 -----------$52,000 14.59%
The Boulder Stop Contribution Margin Monthly $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 May Jun
Jul
Aug Sep Oct Nov Dec Jan Feb Mar Apr
Table: Contribution Margin
Contribution Margin Sales Direct Costs of Goods Other Variable Costs of Sales Cost of Goods Sold
FY 2002 $193,623 $66,356 $0 -----------$66,356
FY 2003 $225,532 $76,549 $0 -----------$76,549
FY 2004 $262,700 $88,306 $0 -----------$88,306
FY 2005 $305,993 $101,870 $0 -----------$101,870
FY 2006 $356,421 $117,518 $0 -----------$117,518
The Boulder Stop 5.1 Implementation The first milestone is distribution of a flyer to announce our grand opening celebration. The flyer will appear on telephone poles (where legal), in outdoor stores, and will be mailed to our list of direct-mail customers. Our celebration will consist of an outdoor barbecue, gunny sack races, climber-dunking festivities, and llama racing. Local vendors have been invited to set up booths and participate, subject to prior approval. During the flyer campaign, Pan Silverton will arrange for Yellow Pages print ads and Internet Web banner advertising within the Bend/Redmond area, as well as the Portland area. The Yellow Page ads are purchased through a flat-fee to USWest Dex, and The Yellow Pages company. Banner ads are more complex and require a media kit with a value-added offering to retailers with Internet websites. The pitch will be - help us market ourselves and we will add your company to our online listing of outside resources. The first annual Llama Run is a special event for the St. Charles Medical Center in Bend. Llamas and their owners will converge on Redmond for races that include 1st, 2nd, and 3rdplace winners. First prize wins $1,000, 2nd wins $750, and 3rd wins $250. The Most Colorful Llama award will be given to one winner at the end of the show, and will include a bag of llama feed and a $100 gift certificate to the Heathman restaurant. The entry fee will be $100 per llama, and all fees will go directly to St. Charles Medical Center. The Perry Claw Rock Festival will bring big-name climbing stars such as Louis Baruqe and Sheri Lassiter to Smith Rock for a full day climb. Climbers will be available to sign autographs on gear and such. Admission will be $7 and all proceeds will go to support prostate cancer research. The Boulder Stop will be one of the sponsors of the PA Golf Classic held in Bend, OR on Sept. 1, 1999.
The Boulder Stop 5.2 Marketing Organization We are a small company where sales and marketing consist of two to three people. Bill Walsh and Pan Silverton will lead and implement the marketing programs, while part-time employees will carry out many of the tasks. The marketing organization is very informal, but tightly managed, with clear obtainable goals, and a thorough list of deadlines. Details are very important to the implementation of our marketing plan, the most important being those that are unseen. Marketing will do its very best to plan for the unforeseeable.
5.3 Contingency Planning Contingency planning is an important part of the marketing organization, as noted in the previous topic. Our biggest potential problems, the ones that will limit our ability to create programs, are financial. Our budget relies on sales figures that are reliable and well-researched, but are also affected by such things as weather and political difficulties. Our first plan is a 'scale-down' plan; that is, we will eliminate the Llama run, Rock festival, and PA Golf sponsorship and wait out the year, relying on website and direct sales to cover our cost of doing business. The direct business alone will not support our financial commitments, but with excellent credit, inventory as collateral, and basic Smith Rock foot traffic, we will survive without popular marketing programs. If we lose a part-time employee, there will be plenty to find elsewhere. If we lose Pan Silverton, his skills will be difficult to replace, but we will have plenty of quality applicants living in the Bend/Redmond area. Will also have the option of hiring away competitors' employees, as they are poorly paid and are given very little company ownership.
Appendix Appendix Table: Sales Forecast
Sales Forecast
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
420 40 25 2,400 3,300 330 50 250 0 6,815
428 41 26 2,448 3,366 337 51 255 0 6,951
437 42 26 2,497 3,433 343 52 260 0 7,090
446 42 27 2,547 3,502 350 53 265 0 7,232
455 43 27 2,598 3,572 357 54 271 0 7,377
432 41 26 2,468 3,393 339 51 276 0 7,027
108 10 0 0 0 0 0 69 0 187
108 10 0 0 0 0 0 69 0 187
108 10 0 0 0 0 0 69 0 187
108 10 0 0 0 0 0 69 0 187
108 10 0 0 0 0 0 69 0 187
420 30 25 2,400 3,300 330 50 250 0 6,805
Unit Prices Carabiners Ropes Books and Magazines Cookies and Cones Espresso Regulars Espresso Shakes Gear Rentals All Other Gear Other
May $9.00 $140.00 $12.00 $1.00 $1.75 $2.65 $4.00 $20.00 $0.00
Jun $9.03 $140.47 $12.04 $1.00 $1.76 $2.66 $4.01 $20.07 $0.00
Jul $9.06 $140.93 $12.08 $1.01 $1.76 $2.67 $4.03 $20.13 $0.00
Aug $9.09 $141.40 $12.12 $1.01 $1.77 $2.68 $4.04 $20.20 $0.00
Sep $9.12 $141.88 $12.16 $1.01 $1.77 $2.69 $4.05 $20.27 $0.00
Oct $9.15 $142.35 $12.20 $1.02 $1.78 $2.69 $4.07 $20.34 $0.00
Nov $9.18 $142.82 $12.24 $1.02 $1.79 $2.70 $4.08 $20.40 $0.00
Dec $9.21 $143.30 $12.28 $1.02 $1.79 $2.71 $4.09 $20.47 $0.00
Jan $9.24 $143.78 $12.32 $1.03 $1.80 $2.72 $4.11 $20.54 $0.00
Feb $9.27 $144.26 $12.36 $1.03 $1.80 $2.73 $4.12 $20.61 $0.00
Mar $9.30 $144.74 $12.41 $1.03 $1.81 $2.74 $4.14 $20.68 $0.00
Apr $9.34 $145.22 $12.45 $1.04 $1.82 $2.75 $4.15 $20.75 $0.00
Sales Carabiners Ropes Books and Magazines Cookies and Cones Espresso Regulars Espresso Shakes Gear Rentals All Other Gear Other Total Sales
$3,780 $5,600 $300 $2,400 $5,775 $875 $200 $5,000 $0 $23,930
$3,868 $5,731 $307 $2,456 $5,910 $895 $205 $5,117 $0 $24,489
$3,959 $5,865 $314 $2,514 $6,048 $916 $209 $5,237 $0 $25,063
$4,052 $6,002 $322 $2,572 $6,190 $937 $214 $5,359 $0 $25,649
$4,146 $6,143 $329 $2,633 $6,335 $959 $219 $5,485 $0 $26,249
$3,952 $5,855 $314 $2,509 $6,038 $914 $209 $5,613 $0 $25,405
$991 $1,469 $0 $0 $0 $0 $0 $1,408 $0 $3,868
$995 $1,474 $0 $0 $0 $0 $0 $1,413 $0 $3,881
$998 $1,478 $0 $0 $0 $0 $0 $1,417 $0 $3,894
$1,001 $1,483 $0 $0 $0 $0 $0 $1,422 $0 $3,907
$1,005 $1,488 $0 $0 $0 $0 $0 $1,427 $0 $3,920
$3,921 $4,357 $311 $2,489 $5,990 $907 $207 $5,186 $0 $23,369
May $3.50 $55.00 $0.75 $0.10 $0.25 $0.40 $0.25 $12.00 $0.00
Jun $3.51 $55.14 $0.75 $0.10 $0.25 $0.40 $0.25 $12.03 $0.00
Jul $3.52 $55.28 $0.75 $0.10 $0.25 $0.40 $0.25 $12.06 $0.00
Aug $3.53 $55.41 $0.76 $0.10 $0.25 $0.40 $0.25 $12.09 $0.00
Sep $3.54 $55.55 $0.76 $0.10 $0.25 $0.40 $0.25 $12.12 $0.00
Oct $3.54 $55.69 $0.76 $0.10 $0.25 $0.41 $0.25 $12.15 $0.00
Nov $3.55 $55.83 $0.76 $0.10 $0.25 $0.41 $0.25 $12.18 $0.00
Dec $3.56 $55.97 $0.76 $0.10 $0.25 $0.41 $0.25 $12.21 $0.00
Jan $3.57 $56.11 $0.77 $0.10 $0.26 $0.41 $0.26 $12.24 $0.00
Feb $3.58 $56.25 $0.77 $0.10 $0.26 $0.41 $0.26 $12.27 $0.00
Mar $3.59 $56.39 $0.77 $0.10 $0.26 $0.41 $0.26 $12.30 $0.00
Apr $3.60 $56.53 $0.77 $0.10 $0.26 $0.41 $0.26 $12.33 $0.00
$1,470 $2,200 $19 $240 $825 $132 $13 $3,000 $0 $7,898
$1,503 $2,250 $19 $245 $844 $135 $13 $3,068 $0 $8,076
$1,537 $2,300 $20 $251 $863 $138 $13 $3,137 $0 $8,258
$1,572 $2,352 $20 $257 $882 $141 $13 $3,208 $0 $8,445
$1,607 $2,405 $20 $262 $902 $144 $14 $3,280 $0 $8,635
$1,531 $2,291 $20 $250 $859 $137 $13 $3,354 $0 $8,454
$384 $574 $0 $0 $0 $0 $0 $841 $0 $1,798
$385 $576 $0 $0 $0 $0 $0 $843 $0 $1,803
$386 $577 $0 $0 $0 $0 $0 $845 $0 $1,807
$386 $578 $0 $0 $0 $0 $0 $847 $0 $1,812
$387 $580 $0 $0 $0 $0 $0 $849 $0 $1,816
$1,511 $1,696 $19 $247 $848 $136 $13 $3,084 $0 $7,553
Unit Sales Carabiners Ropes Books and Magazines Cookies and Cones Espresso Regulars Espresso Shakes Gear Rentals All Other Gear Other Total Unit Sales
Direct Unit Costs Carabiners Ropes Books and Magazines Cookies and Cones Espresso Regulars Espresso Shakes Gear Rentals All Other Gear Other Direct Cost of Sales Carabiners Ropes Books and Magazines Cookies and Cones Espresso Regulars Espresso Shakes Gear Rentals All Other Gear Other Subtotal Direct Cost of Sales
0% 0% 0% 0% 0% 0% 0% 0% 0%
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Appendix Appendix Table: Sales Breakdown by Mail and Web Direct Sales
Sales by: Mail and Web Direct Sales Sales Name me Name me Other Total Average
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
0 0 6,815 6,815 2,272
0 0 6,951 6,951 2,317
0 0 7,090 7,090 2,363
0 0 7,232 7,232 2,411
0 0 7,377 7,377 2,459
0 0 7,027 7,027 2,342
0 0 187 187 62
0 0 187 187 62
0 0 187 187 62
0 0 187 187 62
0 0 187 187 62
0 0 6,805 6,805 2,268
Appendix Appendix Table: Sales Breakdown by Retail Store Sales
Sales by: Retail Store Sales Sales Name me Name me Other Total Average
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
0 0 6,815 6,815 2,272
0 0 6,951 6,951 2,317
0 0 7,090 7,090 2,363
0 0 7,232 7,232 2,411
0 0 7,377 7,377 2,459
0 0 7,027 7,027 2,342
0 0 187 187 62
0 0 187 187 62
0 0 187 187 62
0 0 187 187 62
0 0 187 187 62
0 0 6,805 6,805 2,268
Appendix Appendix Table: Sales Breakdown by Region
Sales by: Region Sales Name me Name me Other Total Average
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
0 0 6,815 6,815 2,272
0 0 6,951 6,951 2,317
0 0 7,090 7,090 2,363
0 0 7,232 7,232 2,411
0 0 7,377 7,377 2,459
0 0 7,027 7,027 2,342
0 0 187 187 62
0 0 187 187 62
0 0 187 187 62
0 0 187 187 62
0 0 187 187 62
0 0 6,805 6,805 2,268
Appendix Appendix Table: Contribution Margin
Contribution Margin Sales Direct Costs of Goods Other Variable Costs of Sales Cost of Goods Sold Gross Margin Gross Margin % Marketing Expense Budget Advertising/Promotion Sponsored Activities Other Total Sales and Marketing Expenses Percent of Sales Contribution Margin Contribution Margin / Sales
May $23,930 $7,898 $0 -----------$7,898
Jun $24,489 $8,076 $0 -----------$8,076
Jul $25,063 $8,258 $0 -----------$8,258
Aug $25,649 $8,445 $0 -----------$8,445
Sep $26,249 $8,635 $0 -----------$8,635
Oct $25,405 $8,454 $0 -----------$8,454
Nov $3,868 $1,798 $0 -----------$1,798
Dec $3,881 $1,803 $0 -----------$1,803
Jan $3,894 $1,807 $0 -----------$1,807
Feb $3,907 $1,812 $0 -----------$1,812
Mar $3,920 $1,816 $0 -----------$1,816
Apr $23,369 $7,553 $0 -----------$7,553
$16,031 66.99%
$16,413 67.02%
$16,804 67.05%
$17,204 67.08%
$17,614 67.10%
$16,951 66.72%
$2,070 53.51%
$2,078 53.55%
$2,087 53.59%
$2,095 53.62%
$2,103 53.66%
$15,817 67.68%
May $900 $3,500 $6,000 -----------$10,400 43.46%
Jun $350 $0 $6,000 -----------$6,350 25.93%
Jul $350 $2,000 $6,000 -----------$8,350 33.32%
Aug $350 $3,500 $6,000 -----------$9,850 38.40%
Sep $350 $2,000 $6,000 -----------$8,350 31.81%
Oct $350 $0 $6,000 -----------$6,350 25.00%
Nov $0 $0 $1,500 -----------$1,500 38.78%
Dec $0 $0 $1,500 -----------$1,500 38.65%
Jan $0 $0 $1,500 -----------$1,500 38.52%
Feb $0 $0 $1,500 -----------$1,500 38.39%
Mar $0 $0 $1,500 -----------$1,500 38.27%
Apr $350 $250 $6,000 -----------$6,600 28.24%
$5,631 23.53%
$10,063 41.09%
$8,454 33.73%
$7,354 28.67%
$9,264 35.29%
$10,601 41.73%
$570 14.73%
$578 14.90%
$587 15.06%
$595 15.23%
$603 15.40%
$9,217 39.44%
