retail

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I. Company Description
The Online store Mount Scout Clothing Co. (MTSC) was started last April 14 2013
founded by Justin Roy Bernardino who lives at 173 Capt.I Bella St. Brgy. Poblacion D, Imus
Cavite and Odessa De Castro, who lives at 31-C Yakal St. Manuela IV- D Las Piñas City. The
company sells their products through social media sites and other online mediums and distributes
it through shipment of orders. Mount Scout (Since Twelve) is conceptualized way back 2012.
Mount Scout wanted to create a culture by having a concept of people that lead their
groups. A Scout is designed to instill character, citizenship and concern for nature. In this
attitude, the company wishes to present distinct urban street clothing. The company is selling
different kinds of men's wear especially T-Shirts, button-downs and pocket tees. It is a
contemporary, fresh epitome of a young and independent men's clothing brand. Mount Scout
Clothing co. is also a good provider of street clothing, featuring different designs for their
everyday wear. Today's young man seeks for uniqueness and purity. And that's what is Mount
Scout will continuously offer. The brand’s positioning is: Play. Chill. Leave No Trace.
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II. Situation Analysis
A. Macro- Environmental Analysis
• Demographic
Gender
Male
Age
Teens, Generation Y
Income
30,000-50,000 50,000-70,000/mos.
Education
High school student, High school graduate,
College student, College graduate and
undergraduate
Life cycle
Bachelor stage, newly married couples,
Solitary survivor
Population
51, 733, 400
Occupation
Professional, Company Employee,
Entrepreneur, Others
The population average annual growth rate in the Philippines is 2.90%. Projected
population specifically men is fifty one million, seven hundred thirty three thousand, four
hundred where 49.7% belongs to voting age and can be targeted by MTSC. Other demographic
factors as shown in the table will be considered as basis of specific target market.
• Cultural
Society is changing wherein people especially the young generation is able to adapt to
changes most likely when it comes to their buying behavior and preferences. From having simple
clothing lifestyle, young men nowadays become modernize, they are now have growing fashion
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sense and want to be always ahead on what’s in trend without sacrificing comfort and decency.
Part of Filipino values is to have a clean and neat appearance and these days, modern generation
young men get more conscious on their look that’s why they invest money for their outfit.
When it comes to fashion, men are said to be meticulous , they have different sense of style and
this style best reflect the kind of person they are, which tend them to look and easily be loyal on
the brands which they seen they belong. They are also into brand which is trusted, high quality
and will give them a feeling of high self-confidence and fulfillment upon wearing these brands.
Men are ideal to target because they have sense of brand loyalty especially in clothing
and like women, they also give value to their overall physical look that boosts their self-esteem.
• Political
Sellers have no rules to follow in putting up business online, on the other hand, for those
who are plan to put business /store in malls, there are government regulations that every
manager/owner needed to be aware of and follow for the protection of their product, employees,
and most especially the customers. Part of government law was to fully comply with the
business registration process of national government line agencies. As part of sole proprietorship
certificate of registration for a business name needed to get from Department of Trade and
Industry (DTI) and Municipal Permit. Part of business responsibility is they need to apply for
Bureau of Internal Revenue (BIR) to pay right tax and additionally, for employee protection, it is
required to register to agencies that will help to protect their rights such as DOLE, SSS, HDMF
and Phil health.
• Economic
The economy today in the country is developing. On the back of a better economic
performance and improved demand for casual clothing, apparel specialist retailers in the
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Philippines saw improvement in sales growth during 2012. The year saw total revenue growth of
4% while the entire channel generated PhP99.5 billion. The increasing number of teens and 2029-year-old demographic has stimulated demand for basic casual clothing, like jeans and t-shirts.
The higher disposable income among young professionals, especially those working in business
process outsourcing hubs also contributed to the rise in demand for clothing, footwear, and
accessories. Major trends also includes the retailing market being buoyed by better economic
performance, new players grace internet retailing landscape, local government units encourage
retailers to go green, private label gains more confidence among Filipino patrons, chained
retailers expand outside of Metro Manila, and retailers strategize in using social media This
implies that new players/entrants in the apparel industry have considerable chance to gain profit
and market share in the industry.
• Natural/Environmental
Consumer goods industry in the Philippines including apparel industry has been one of
the advocates of Corporate Social Responsibility to our environment and natural resources. The
companies are now mindful of the materials they use in the production of their products like
fabrics, dye, buttons, and others. They also extended their environmental responsibility through
using paper bags instead of plastic bags in packaging.
• Technological
Technological advancements become factors that change the selling landscape of many
businesses nowadays. Aside from directly selling product via stores or retail outlet, most people
see the advantage of selling and buying online due to the benefits they get such as convenience,
time and cost saving. Aside from websites who sell online and through the use of various social
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networking sites, Mobile shopping also strengthen this activity
through the use of mobile
applications where in customers could compare prices and would figure out their perfect fit
online. Online shopping’s infiltrate the way we shop for clothes as it keep us always in touch on
the product or seller and allows us to customize our product. From these benefits get through
online shopping most of us can’t deny the fact that it is more valuable to have great in store
experience rather than online.
Clothing Fashion also driven by advancement in technology where in people continues to
innovate to serve the changing needs of the market. Trend will include 3d printed fashion, laser
etched fashion, illuminated fashion (LEDs and laser) and also environmental responsive fashion.
B. SWOT Analysis
Strengths
Weaknesses
• Provides unique clothing for men
• New to the industry
• Feasible and clear objectives
• Has no product lines
• Has different variety of items
• Limited distribution channel and promotions
• Easy to manage
• Limited resources
• Has minimal expenses
• Concentrated target market
Opportunities
Threats
• Value of physical retail store to market
• Entry of international brands
• Increasing fashion-conscious men
• Economic fluctuations
• Increasing sporty men
• Unpredictable market demand
• Use of indigenous materials
• Legal constraints
• Product exports
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III. Competitor Analysis
Mount Scout’s competitors are Team Manila and Daily Grind which are locally built in
Philippines. Just like Mount Scout, they have their own marketing strategies and here are their
competitive strategies.
Team Manila
History Overview
Team manila is a multi-disciplinary graphic design studio based in Manila. It is founded by
Jovee Alviar and Mon Punzalan way back 2001. They got the attention for their work on 2003,
Best Director Numb by Slapshock. From a small brand of limited edition t-shirts, it has
developed into a full lifestyle brand, with products ranging from apparel to home accessories, all
carrying passionate messages of nationalism.
Product
They Offer Shirts, lanyards, notepads and etc. They also do fashion layouts and music video.
Some of the music video they made is Manila by Sandwich, and Numb by Slapshock. They are
known for designs with uniquely Filipino influence. Their ideas came from what they see on
streets, vendors to a great piece of art
Distribution
Now it has four of its own stores throughout the metro, over forty authorized resellers throughout
the country, eight overseas distributors and a fully functional online store that caters the
provincial and international market.
Pricing
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The price of t-shirts depends if the new product is released or it’s a new arrivals. The price
ranges from 500 up. In new arrivals it comes from a little bit pricy it ranges from 600 up. For
international shipments, it ranges to $16 dollars. They also have online shop; they have their
prices in dollar.
Promotion
Much of its success is due to word-of-mouth influence through online social networks and the
local press. To reach Filipinos abroad, it has an online shop that supports online distribution.
They used Rizal as an icon. They reintroduce to the youth our national hero in a more
modernistic view: to be hip in tune with the youth of today and to be able to keep up with the
changing times.
Vans
History Overview
In 1960’s, Vans Doren set out to make the most durable and affordable causal deck shoe in the
market. Unlike other shoes manufacturers, Vans sold its sneaker directly to customers out of its
own retail store in Anaheim, California. In 1970’s Vans became the choice of “Z-boys” which
perfectly matched limiting conventional skateboarding. Vans' competitive advantage were
durable, affordable, customized and popular. Vans fulfilled customers' needs and consuming
ability, it also became a trend of that time.
Product
Vans are offering shoes in different styles like, team shoes, signature shoes, pro classics, core
classics. Vans also offer apparels for men and women. They also offer boardshorts, pants and
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denim, and some fashion collection like Joel Tudor Collection. They also offer bags, woven,
knits, fleece, outerwear, t-shirts, accessories, hats, and shorts.
Distribution
Vans are sold internationally and locally. Here in Philippines it is mostly found in SM stores,
Ayala Malls and the like. Their store is boutique type and very manly designed for them to be
consistent of the street wear idea. It also has online shops offered for the people who want to
exercise their online buying habit.
Pricing
Vans are competitively priced for the segment they are in. Customers know that Vans are a little
bit pricy but they are assured in the quality of it. Vans have been in the market for quite some
time they are really a well built in store that caters for everyone.
Promotion
Vans promotional strategy seems to be that they want to offer consumers the opportunity to look
at what they have and even allow a consumer to go online and design their own shoe. Vans do
not want to push the product on the consumer but excite the consumer about their product so
they buy it and encourage others to want a Vans product. Vans website has several stories,
articles, events and educational pieces that support the sport of surfing. Vans do not use TV
commercial as a channel on their promotions instead they do sponsor events like a musically
inclined events. They also have the “Vans Coupon Codes”, promo codes, deals, and discounts.
The major competitors identified are the brands that Mount Scout will be challenging
when its own physical store is built and used as distribution channel. Mount Scout will mostly
gain market share from these two brands that targets the same market and creates alike clothing
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styles in price ranges that are near to the prices of the products that MTSC offers. Other
competitors are The Man on the Street (online), Artwork, and Illest.
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IV. Marketing Objectives
• Launch two retail physical stores for Mount Scout to increase brand awareness to more
effectively reach the target market and to establish brand as exclusive urban street wear apparel.
• Develop product lines and complementary products
• To have more appeal to customers and generate a higher profit margin of individual items
• Increase sales by 10% in the first three months of store launch
• Establish at least 5% market share through the launching of the physical store and achieve it a
year after the launch
• Reach PhP 2 000 000 sales from the two Mount Scout stores annually to gain at least PhP 500
000 profit.
• Reach an average inventory turnover of four in the first year of store launch then increase and
maintain it into five into succeeding years
• Achieve return on investment after at least two years of store launch
• Build strong brand loyalty of customers
• Expand business through adding retail stores in different malls and offering more apparel after
three years of first store launch.
• Augment new target market- women and initially serve them online then expand business
through putting up separate store focusing on them
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V. Target Market
The proposed target market will be the existing market of Mount Scout. The brand will
focus on young men who belong to social classes B and C who are fond and may seek about,
clothing designs that are necessarily stand for uniqueness and purity. They are considered to be
those who are fond of:
•
Street Wear clothing
•
One of a kind T-shirts:
-
Pocket tees
-
Button Downs
Mount scout will also targeting independent men, who may want to adapt fashion that
would make them feel comfortable and may allow them to freely express themselves. As well as
those who loves fashion with a distinctive style and voice that would reflect, both upon their
passion and personality. These men include:
•
Skateboarders
•
Bikers
•
Surfers
•
Musicians,
•
DJs
•
Others : Those men who wants to look hip and extraordinary
In the near future, the brand will also be targeting women who are also fond of
fashionable and chic urban street wear clothing which will be catered online then eventually, in
the physical store.
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VI. Marketing Mix
A. Product Strategies/Tactics
The brand Mount Scout is focused on everyday street wear clothing. The products will
center on clothing factors such as fashion, style, ease and comfort, durability and overall quality.
The original branding strategies, which were uniqueness, purity, and individuality, will be
obtained through opting for a limited collection.
Mount Scout will enforce hype around new products released by being the first in setting
the seasonal themes relating to trends in the popular culture and adapting it to a fusion of the
concept and style of Mount Scout. The atmosphere of the brand will revolve around the concept
of a lifestyle of “Play. Chill. Leave No Trace.” The products released here will have a style and
design that is exclusive for the Mount Scout brand. This will serve as a transformation and
upgrade for the brand making it more competitive as it enters the current physical market. Their
limited products will include the following which will have different sizes (S, M, L and XL).
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Mount Scout will introduce new product line that will serve as complimentary products.
It will cater to the other needs of customers in the market in the accessories area such as watches,
belts, hats and shades. These products will complement the style of the apparel and also be
exclusive to the brand.
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The packaging of Mount Scout is a paper bag with logo and brand name on its center. It
comes to two sizes (one for accessories and another for clothing). The style of the bag depicts an
urban street feel and simplicity at the same time. The design is easily recognizable helping in
awareness and reinforcement of the brand.
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B. Distribution Strategies/Tactics
Since Mount Scout is an online store making their head start on internet channels, it
would be a great idea for the company to expand its distribution channel by setting up its own
retail outlets. And it is far better for the brand to focus on their existing market so as to achieve
brand awareness, perception and customer loyalty. Focusing on increasing the company’s sales
in existing markets is well worth the effort, because as what other entrepreneurs said, it’s a
business growth strategy that will grow with your business.
Considering the financial capability of the brand, two physical retail stores in the form of
kiosk will be launched: one at Southmall and the other one at the Megamall. The criteria used in
choosing the malls are the location where young men usually shops, profitability to ensure the
return on investment and the suitability of the mall for the image that the brand wants to position
to its customers.
Kiosk Layout
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Kiosk Urban Street Paint
C. Promotion Strategies/ Tactics
The original promotional strategies will be continued (online promotions and
advertisements, joining bazaars like street wear conventions and sponsoring active musicians and
DJs as brand ambassadors). Mount Scout will sponsor and its merchandise will be present at
sport events such as surfing competitions to increase brand awareness, gain wider audience and
penetrate the market. The promotional materials will be lamp post banners, and street print ads.
Mount Scout will also open accounts in YouTube, Vimeo and Tumblr to facilitate the video
release featuring the latest season collections. All the promotional videos, collection features,
and print advertisements will be played and flashed to the flat screen television in the kiosk to
entice and inform customers. The store will also participate during SALE of the malls where it is
situated; a discount of ten to twenty percent on its selected merchandises shall be given to
customers.
The different promotional mediums will be implemented in the combination of
continuous and flighting media schedule.
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Print Advertisement
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After a year of store launch, Mount Scout will offer loyalty cards where the customers are
given incentive to buy more and the more they buy, the more rewards and privileges (choice to
reserve new styles yet to be released) they get along with some freebies. The customers will be
ranked according to how many points they have. The customer will start from Second Class then
onto First Class, Star, Eagle. Customers will also get freebies when they purchase in the time of
their birth month. And as we all know, one regular customer is worth ten times or more, than
new customers.
Front and Back View of Second Class and First Class Loyalty Card
Front and Back View of Star and First Eagle Loyalty Card
D. Pricing Strategy
The pricing strategy for Mount Scout is a combination of competitive pricing and price
lining strategy. The price ranges are expected to rise because of the additional expenses for
promotions and cost for rent. The Mount Scout prices will range from PhP 600- PhP800 (t-shirts
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and pocket tees), PhP 1400 (short sleeved button downs) and Php 1500 (long sleeved button
downs), Php 300-1000 (watches, belts, shades and hats). Merchandises sold online will also
adapt the same pricing policies to avoid confusion to both seller and customers. Mount Scout
stores will be accepting payments through debit cards and credit cards.
VII. Budget and Schedule (Initial Store Launch)
Description
Kiosk (PhP10 000 for each branch x 2 branches)
Rent Expenses
SM Southmall
SM Megamall
Legal Expenses
Salaries P466 minimum wage x 26 days
(2 personnel per kiosk x 2 branches)
Product
Summer Collection
Trend Collection
Promotions
Social Media Accounts (Facebook, Twitter,
Instagram, Youtube, Vimeo, and Tumblr)
Streetwear Conventions
Musicians and DJs Sponsorships
Lamp Post Banners
Street Print Ads
Freebies for loyal customers
TOTAL BUDGET
Estimated Budget
PhP 20 000
PhP 30 000
PhP 30 000
PhP 1 536
PhP 48 464
PhP 10000
PhP 10000
Free of charge
PhP 20 000
PhP 10 000
PhP 5 000
PhP 10 000
PhP 5 000
PhP 200 000
Shown in the table is the breakdown of costs from constructing the two kiosks of Mount
Scout up to the promotional costs. All the expenses are calculated with a reference to the total
budget that Mount Scout owners have which is for two hundred thousand pesos. The budget
allotment is maximized for each strategy to be executed by Mount Scout upon store launch.
Projected Annual Total Cost
COST
FIXED COST
Description
Kiosk (PhP10 000 for each branch
x 2 branches)
Rent Expenses (PhP30 000 per
Estimated Budget
PhP 20 000
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month)
SM Southmall
SM Megamall
Salaries (PhP 48 464 per month)
P466 minimum wage x 26 days
(2 personnel per kiosk x 2
branches)
TOTAL
VARIABLE COST
PhP 360 000
PhP 360 000
PhP 581 568
PhP 1 321 568
Product
Summer Collection
Trend Collection
Promotions
Social Media Accounts (Facebook,
Twitter, Instagram, Youtube,
Vimeo, and Tumblr)
Online Advertisements
Streetwear Conventions
Musicians and DJs Sponsorships
Sports Events Sponsorship
Lamp Post Banners
Street Print Ads
Loyalty Cards Production (500
pieces)
Freebies for loyal customers
TOTAL
TOTAL COST
PhP 10000
PhP 10000
Free of charge
PhP 3 000
PhP 20 000
PhP 10 000
PhP 20 000
PhP 5 000
PhP 10 000
PhP 5 000
PhP 5 000
PhP 98 000
PhP 1 419 568
Shown in the second table is the projected annual cost of the two Mount Scout kiosks for
its operational and promotional activities. The total cost which is the summation of the fixed and
variable cost is estimated to be one million four hundred nineteen thousand five hundred sixty
eight. Projected cost is significant for the business because this will determine the basis for
setting projected sales and profit of Mount Scout to achieve return on investment.
Gantt Chart for Strategies Execution
Gantt Chart for Strategies Execution
Jan Feb Mar Ap Ma Ju Jul Au
r
y
n
g
Summer Collection
Sep
Oc
t
No
v
Dec
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Trend Collection
Sales Promotions
Social Media Accounts
Online Advertisements
Street wear Conventions
Musicians and DJs
Sponsorships
Sports Events
Sponsorship
Lamp Post Banners
Street Print Ads
Loyalty Cards
The Gantt chart presents the schedule for Mount Scout’s strategies execution. Seasonal
collection such as summer/spring will be released in months of April and May then trend
collection will be released from the months of September to December which is the shopping
pick seasons. Sales promotions of Mount Scout will be in line with the mall SALE which is
usually done during months of January as the treat to customers for opening of the other year,
June because of class opening and December as part of holiday season.
There is also schedule for promotional activities. As presented in the chart, the utilization
of social media accounts and loyalty cards will be done in continuity scheduling. Conversely,
promotions through online advertisements, street wear conventions, musicians and DJs
sponsorships, sports events sponsorships, lamp post banners, and street print advertisements will
be done in flighting scheduling.
Mount Scout’s social media accounts such as Facebook, Twitter, Tumblr, Instagram,
Youtube, and Vimeo will be thoroughly used for the whole year. Updates, promotions and the
release of new products will be announced through these websites. Online advertisements will be
released every three months. Mount Scout will also participate in a street wear convention that
will take place in April. Sponsorships for musicians and DJs will be done in the months of
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March, June, September and December. The store will also contribute sponsorship efforts for the
International Surfing Cup in Siargao in May. Lamp post banners will be posted for the months of
January, February, March, July, August and September. Alternatively, street print ads will be in
the summer months of April, May and June as well as the months of October, November and
December – just in time for the Christmas season. Lastly, loyalty cards will be given to
customers who will avail of the store’s customer loyalty card. The loyalty cards will be available
for the whole year.
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