Description of the company
Tushly Inc. is a small clothing store specializing in casual wear. It sells cloths under the brand name tushly, which is a brand that facilitates progression, exploration and discovering of new trends and style. The clothing store needs to grow and become more competitive in a crowded and highly competitive clothing business. The market is composed of high end clothing brands including retail fashion stores and fashion boutiques. For the purpose of growth in the market, I have proposed a new product line focuses formal wear including accessories that accompany the formal wear such as shoes, hats and belts. The new product will provide the firm with an avenue of capturing the huge market of formal up market professionals who would not have shopped in the clothing store because of the of specifically selling casual wear (Belz, 2011).
Formal wear is for specific events that involve state ceremonies, weddings, social functions and gatherings that involve have guests of honor. The color that is embraced by formal dressing is black and white. These colors portray relaxation and the organization of the mind in these events. In recent times, there has been increased need of formal dressing in various events. The demand in the formal clothing will hence propel the growth of the company. The formal wear will target men and women clothing. This will be done under a mass production where the clothes will be designed after evaluation of the current trends and the concepts will be developed in line will the goals of Tushly brand. One element of the tushly brand is the use of vibrant color, and this will be incorporated in the formal wear (Drummond, 2001).
Basis of recommendation
The formal wear under the brand name tushly will concentrate on the customer needs and will meet all their expectations. This will be possible through the provision of quality and fashionable merchandise to every variety of customers. The styles will be trendy reflection of the future. In addition, the service given to the customers will be superior and will include professional advice for the customer on the various matters relating to fashion for formal clothing. As noted, formal clothing is needed for various occasions and events. As such the formal wear designed by the company will cater for all occasions: be it high-powered corporate meetings, social gatherings, celebrations or a day in the office (Wilson 2005).
Tushly Inc. customer will derive various benefits in the new formal wear clothing line. The clothing line assures comfort and style all of which will fit every customer budget. This means the customer’s feeling of importance increases with occasion. Formal dressing will assist our customers to improve on their image in public or in the different events. Persons dressed in formal clothing are taken to be serious people and thus are respected. They also enjoy great service from various areas. The customers will deliver exceptional great value by purchasing quality products at low prices. The product line will also have a variety of products in which customers can choose from (Belz 2011).
The market size and revenues of formal wear companies have been steadily increasing from 2007 up to 2011. In 2011, the industry suffered a minor decline. However, in 2012 it recovered and all the projections indicate that the market will be growing both in the longand short terms. Tushly Inc. expects the market forecasts growth will be replicated in the formal wear product line. There is demand of affordable formal wear. This has been evidenced by the demand of the cheap formal wears from China. In this regard, the rental businesses for formal wear are dying; as such the retail business for affordable formal wear will have a significant growth.
A great market exists for this new product line. This can be attributed to the fact fashion is dynamic, and new trendy products will always capture the customers attention especially if they meet their expectations in terms quality, style and affordability. The clothing industry can be considered a perfect competitive industry. Consequently, the market has no barriers to entry, there is perfect information about the various products in the market, and there are huge differentiations of the products available. This means that success in the industry will be based on identifying the customer’s needs providing products that meet the needs and expectations (Mcdonald 2008).
Formal wear enable people to dress up for real. In most instances, women love formal wear based on the fact that they get an opportunity to wear a bit more makeup, wear shoes that sparkle and compliment the whole dress code with more jewelry. A majority of the companies require their employees to be dressed formally in the places of work. This is because there is an interpretation that employees’ productiveness increases when dressed formally. It is also assumed that if employees dress casually they will have a ‘casual’ attitude in carrying out their functions and thus this affects their behavior. This indicates that the demand of formal wear is unlimited.
Marketing and strategic fit
Tushly Inc. current product line is casual wear. An introduction of formal wear will deviate from the current product specification. However, this is the perfect strategy for the company. This is because in will have a chance to increase its customer base and market share. The customers of the tushly brand will have increased options; compared to previous times. A customer can shop for casual and formal wears in the same store; furthermore, the introduction of accessories such as shoes, hats and belts will enable customers to carry out their shopping in a central place (Drummond, 2001).
The marketing strategy of the formal wear will be a combined effort from various sectors. The target market will be our current casual wear customers. As such, the prototypes of every design of the clothes will form part of the look-book which the basis of the marketing campaign. Considering the size of the company hosting a large fashion show will be very costly, as such the company will host few Flash Mob Fashion Shows. This fashion shows will be held in up market urban areas where most professions are found. The Flash Mob Shows involve a group of people that come together in a public place; they perform an act for a short period. This may include walking around showing off the clothes for a short period of time. Tushly Inc. will also develop a friendly website and a blog site in which the interested customers can source out information about the company’s products. The company will also have a launch for its product line which will be graced by 30-40 people including buyers, bloggers, editors and high profile clients (Chartered Institute of Marketing, 2003).
The company will have friendly employees in its stores providing excellent service to customers. The quality of the products and the good price will for sure attract customers. The product line will grow through the use referrals and word of mouth from the customers. As such the product line will aim to establish brand Ambassadors (Wilson, 2005).
The capital requirements for the new product line will be facilitated from the current retained earnings of the company. In addition, the company will seek for debt capital from its financiers to enable it meet the necessary requirements. It is estimated that the company will need $1,500,000 to start the product line. From the estimated revenues and costs, the product line will break even during the second year of operations. The profits will rise as the company’s unit sales increases and the revenue this is as a result of more and more customers identifying with the brand. During the first year, the product line will make an estimated 10,000 units sales. This will increase steadily to 16,000 units in the fifth year. The revenue is estimated to be $2600000 in the first year and will grow to $3800000 by the five year. In this regard, the net profit is estimated to rise from $710000 to $1,590,000 to in the five year.
Various factors are necessary in the development of this product line. The company will negotiate with contractors for raw materials; similarly the company will negotiate will contractors who will produce the designs. The formal clothing line requires more expensive equipment, hence the company will adopt a strategy of outsourcing the designs and it will focus on the final stages of production. The products will be introduced in the market through the current stores as samples (Belz, 2011).
The product line will face various challenges in its development and selling of the product. Getting the necessary capital will be challenge the company has to first overcome. There is stiff competition in the market especially from the established brands and cheap imports. The brand name will have to take time before it can be accommodate in the minds of customers. The product line should be available in the market after 2 months of starting the production process, this is so as to create efficiency in the production process and reduce costs.
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Belz, A. (2011). Product development. New York, McGraw-Hill.