a new concept of event planning · web viewmarketing costs forecasting 18 5. operating plan 18 5.1....

EMOTION PROVIDERS Lifestyle Consulting You DO bring change in your life dayly(or Change/Customize your life daily)A new concept of event planningStrategic Management

MEMBERS

Alejandra BravoAngel trifonov

Bojana BislimovskaEduardo Espinal

Victor Hugo Durán

Politecnico di MilanoComo, May 2008

Emotion ProvidersA new concept of event planning

ContentExecutive summary..................................................................................................................4

1. General description of the firm......................................................................................5

1.1. Abel’s model..................................................................................................................5

1.2. Entrepreneurial team..................................................................................................5

2. General description of products/services...................................................................6

3. Strategic plan....................................................................................................................9

3.1. Vision and Mission.......................................................................................................9

3.2. Strategic Objectives......................................................................................................9

3.3. External Analysis (VH).................................................................................................9

3.3.1. Five forces..................................................................................................................9

3.3.1.1. Intensity of rivalry................................................................................................9

3.3.1.2. Bargaining power of suppliers...........................................................................2

3.3.1.3. Bargaining power of buyers................................................................................2

3.3.1.4. Threat of substitute products.............................................................................2

3.3.1.5. Risk of new entrants............................................................................................2

3.3.2. PEST Analysis............................................................................................................3

3.4. Internal Analysis...........................................................................................................4

3.4.1. Primary Activities.....................................................................................................4

3.4.2. Support Activities.....................................................................................................5

3.5. SWOT..............................................................................................................................6

4. Marketing plan..................................................................................................................7

4.1. Segmentation................................................................................................................7

4.2. Targeting......................................................................................................................11

4.3. Positioning...................................................................................................................12

4.4. Marketing mix.............................................................................................................12

4.4.1. Product (edu)..........................................................................................................12

4.4.2. Price (vh)..................................................................................................................13

4.4.3. Promotion (ALEJA).................................................................................................14

4.4.4. Place (BOJANA).......................................................................................................15

4.4.5. Personal relationship (ANGEL)............................................................................15

4.5. Demand Forecasting..................................................................................................17

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4.6. Marketing Costs forecasting.....................................................................................18

5. Operating plan................................................................................................................18

5.1. Logistic plan.................................................................................................................18

6. Human resources and organization plan...................................................................19

7. Financial plan..................................................................................................................19

8. Economic and financial projections............................................................................19

9. Conclusions......................................................................................................................19

10. Bibliography................................................................................................................19

10.1. Books........................................................................................................................19

10.2. Web pages................................................................................................................19

10.3. Magazines.................................................................................................................19

Index of tablesTable 1 - Numerical description of the geographical zone...........................................................8Table 2 - Market Size..................................................................................................................11Table 3 - Price Structure.............................................................................................................14Table 4 - Demand Forecast.........................................................................................................18

Index of figuresFigure 1 - Population Forecast......................................................................................................7Figure 2 - Age distribution of the population...............................................................................8Figure 3 - Geographical Area........................................................................................................9Figure 4 - Average expenditure per web shopper......................................................................10Figure 5 - Distribution of Italian eCommerce split by industry...................................................11

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Executive summary

Business Idea, Business Area attractiveness, Resources/competences, Expected results, Business Plan’s objectives

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1. General description of the firm

1.1. Abel’s model

Needs Time saving Consultancy (concept, design, information about utilization, location, procedures) Expressing yourself Entertainment Accessibility of products/servicesProduct/Service Different sets of “kits” Consulting (service) Rentals serviceCustomers/Buyers Late teens (16-18 years old) Young adults Working professionals Middle aged

1.2. Entrepreneurial team

Alejandra Brava PosadaAngel Trifonov Academic background:

o Business Intelligence systemso CRM systemso Public Relationso General managemento Management of Innovations

Working experience:o Distributed (online) e-learning systemso Globally presented multinational telecommunications company,

communications department – intranet solutions, promotional and publicity campaigns

Bojana BislimovskaEduardo Capetillo Espinal Mexico City, Mexico. Academic background:

o B.Sc. degree in Mechatronics Engineering from Instituto Tecnológico de Monterrey (2006).

Work experience:o Pepsico Mexico, Electrical Maintenance Department, Internship, 6 monthso Gillette de Mexico, the Value Chain Department, 1 year.o Condumex, Process Re-engineering Department, 6 months.

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Victor Hugo Duran Calero Santa Cruz de La Sierra, Bolivia. Academic background:

o B.Sc. Industrial & Systems Engineering - UPSA.o M.Sc. Petroleum & Natural Gas Engineering - UPSA – LSU – OU (2006).

Work experience:o Petrobras Bolivia, TI&T department as software developer (6 months

internship).o Petrobras Refinacion in the Marketing department as analyst (3 years)o Petrobras Refinacion in the Planning & Controlling department as manager

(1 year).(EACH ONE)

2. General description of products/services

The On-line product–service that “The name” company creates is mostly designed for young professionals and adults, which are normally people who works, and has many other activities to carry out and they don’t have time to organize a special event with friends, with the couple, with the family or someone special else, “The Name” delivers creates knowledge for them giving some tips, considerations and basically consultancy for this kind of events.

“The name” offers a unique, flexible and innovative solution for special events; this solution integrates service and product in one customized kit. As is well known, sometimes young professionals and adults are very busy people, and sometimes they are willingly to prepare a special event, but they have neither time nor the knowledge to prepare a stylish, trendy, emotive and creative environment for an event. Here it is when our service – product fits in the context, the customer goes directly to the web page and on it, will be already some pre-determined events to choose, like:

- Outdoor Activitieso Barbecue, picnic, camping, biking, trekking, etc.

- Indoor Activitieso Dinner, party,

- Special Eventso Valentines day, X-mas, costume party, promotion party, anniversary

- Urgent Eventso Board game party, forgotten birthday,

Then the customer goes through each category, and then selects all the items that he / she wants for the event, for example: cups, blankets, carpets, candles, cutlery, wine, crockery, decoration, special stuff and so on.

Each item could be customizable, this implies the color, size, model, quality, price and all the possible variables that a product could have. Then the Creative Team when the order is confirmed they start to work in an environment design in order to create the desired context of the customer, for example; a Painting Party, a Romantic Picnic on the Lake, a Formal Dinner with the Boss, an Improvise Party with your friends.

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As a final data asked to the customer is the exactly day that he/she wishes the kit, then finally the customer receives at home the package which includes the selected items for the event and also a paper with the knowledge.

As “The Name” is a start-up company we start by splitting our analysis of the critical success factors to long and short term ones.

Short-term critical success factors:

Build and test an effective online BI (Business Intelligence) system Build effective creative team Build a reliable/timely payment system Lay down the basic points of a logistics system in terms of routes, timing and

distances. Focus on punctuality and timeliness Establish training programs for the logistics department and for the franchising

teams Define and describe the basic procedures and responsibilities Establish contingency procedures for unexpected situations Choose the suppliers that are best to work with (in terms of effectiveness of the

logistics, willingness to cooperate, financial terms) Attract critical mass of customers

This short list reflects the criticality of our start-up in regards of the industry operations, temporality, environment issues, operations and core competences peculiarities. It is stressing on the complexity of the business of delivering services. In our case we have three major areas of criticalities. First of all we need to have effective creative teams that are able to come with innovative solutions within a time span planned for less than 10 min. Second is the business intelligence system which is going to be responsible for the customers’ relationship process, payment, coordination, inventories available in ur suppliers, logistics, availability of delivery teams etc.Third is the area of logistics. In it important are optimization of routes in terms of distance and time, punctuality of fulfilling the order, delivery address etc.

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By a perceptual map we could visually undestand the alignement of our vision about the criticalities of the service, the understanding about our customers and where we believe lyu our core strnghts.It is a tool very useful in the beginning mostly for the short-term critical success factors as they are related to the quality and the initial presentation of the service.

Long-term critical success factors:

Establish a long term relationship with the suppliers based on early involvement and the business specific conditions (speed of the sale, inventory availability, payment delay, preference prices)

Reach critical market presence Focus on additional activities that can generate positive cash flow and higher

margins, new sources of business by cross-selling or vertical diversification Evaluate and focus on value adding activities/customers (diversify selectively) Create and develop a franchising logistics program Expand nationally Optimize logistics and suppliers relationship (through the BI system) Incorporate the logistics optimization as a continuous process Create a CRM DPT Increase the number of creative teams and continuously evaluate the innovative

potential which can result either in desire to retain people or to rotate more often

The list of long-term CSF puts a focus on the strategic development of the company after the first 12-20 months. During this period the focus would lie mostly on protecting the newly created market by aggressive expansion on local/national/international level. In order to do this the company is going to need strong cash flows which can be assured in two major ways. Expand to additional cash generating activities and support the activities/customers are most value adding. To do

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this however we need to have built sustainably on our core competences which are the effectiveness of the logistics and customer relations. Both of these need a strong support from a BI or CRM system.

3. Strategic plan

3.1. Vision and Mission

Mission“The name” is an innovative company which provides on-line consulting service and products related to special life events, in a creative, trendy and fashionable way for young adults and

professionals.Our company is concerned about the people with a hectic lifestyle and tries to offer solutions to make their life easier offering this service in an efficient “way”, with appropriated service

levels to the region of Milano and surrounding cities.Vision

We believe that the direction of “the name” is to create day by day more creative solutions spreading in all Lombardy and later on in whole Italy by franchising the business model. The

event’s range will cover all the special events in the life of the customers and they will be totally customizable.

“The name” will achieve a top service level and will be the consultancy online company preferred by young adults and professionals who wants to make their events in the most

effective and stylish way.

3.2. Strategic Objectives

Our strategic objectives are:

Propose (the intellectual) solution within 9min 59 sec. Deliver at least 15 min earlier in at least 95% of the orders. Create and Imbed standards for flexible reactions and contingencies within a year Go nationwide within three years Having 80% national market share at the end of the 4rth year Be known for providing the best price/quality ratio. Be in the most distinguishable local brand in the working area.

3.3. External Analysis (VH)

3.3.1. Five forces

3.3.1.1. Intensity of rivalry

Direct delivery companies

Do it by yourself

Tradditional event planners

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eCommerce

"The name” will be considered as an e-commerce company, because the activities of buying and selling products or services are made over the Internet. Is important to state that the e-commerce in Italia has an estimated value of € 4,87 billions in 2007, with a continuous revenues growth of 42.2 %. In 2007 there were registered 23 millions of on-line orders in Italia. The year 2007 has been the sixth consecutive year with a growth of almost 50%. In penetration terms, this numbers represents less that 1% of the value of the final goods and services bought from the final customer.

The e-commerce is used overall to buy goods which belong mainly to the next categories:

Tickets Trips Rent an Auto Electronics and Computer Items

Apparel Grocery Books and DVD’s.

In Italy the average value of a buy ticket on-line is € 180. The e-commerce leaders and their business are:

eDreams, Expedia, Lastminute Trips

Venere Hotels

Yoox Apparel Ibs Books, DVD’s, Video Games

The competence is not direct by the offer but because of the specificity of the distribution channel. The buying impulse and the opportunity of the offer are the main characteristics of the buying process, that is why the eCompanies are taken as competitors.

In a more logical classification we can see the direct delivery companies as direct competence, traditional event planners as broadened competence and as indirect competence.

3.3.1.2. Bargaining power of suppliers

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Direct delivery companiesDo it by yourself

Traditional event planners

eCommerce companies


(-) Low suppliers concentration

(-) Switching costs are very low

(-) We have clear information about the product price

3.3.1.3. Bargaining power of buyers

(-) Low customer concentration

(+) Switching costs are very low

(+) Could be seen as only a delivery service

(-) Value added is consultancy and optimal logistic, not only the products provided

(+) Do it by yourself

(-/+) They have clear information about the product price

(+) The products are a high percentage of the total cost

3.3.1.4. Threat of substitute products

(+) Do it by yourself, but low free time of customers

3.3.1.5. Risk of new entrants

(+) Business idea easy and cheap to copy

(+) Low capital requirement

(+) Low switching costs

(-) Agreement with supplier grant preferences and privileges to our company

As M. Porter said, “The Business Area’s attractiveness is inversely proportional to the level of competition of the competitive environment”, by this way we can measure the actual external competitiveness.

↑Internal Rivalry

↑Bargaining power of the suppliers

↓ Bargaining power of the customer

↓Substitute products

↓ New entrants

By this analysis we can conclude that there are important sources of external threats, mainly because of the possibility that the customer doesn’t perceive the value added to the offer and by that way accept new entrants or substitute products. In the other hand, eCommerce is a

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growing market in Italy and we can take advantage by applying innovation and differentiation strategies.

3.3.2.PEST Analysis

Socio-Cultural

Population demographics: the changes in population demographics favor our endeavor in two directions. First the population of Milan metropolitan area is constantly growing due to people coming to search professional realization and students settling after graduation. This would mean that the city is growing in exactly the customers groups that we target – young adults and working people. Second the trend of fewer and fewer people living in the urban area and moving to the metropolitan area results in people living in greater distance from some of the major suppliers of goods.

Income distribution: our product is directed to the people with high/highest income compared to the average.

Social mobility: being a strong social trend in the last 5 to 10 years the social mobility originated in by different reason results in a couple favoring elements. One could be the fact the when reallocated a person is normally totally unaware of how and where he could purchase consumer goods, which is the best quality/price ratio, time, routes and tens of other details which could direct a customer to go looking for our help. Another thing is that if being successful in our strategy of building a strong recognizable brand presented in most of the major cities, a newcomer in town could one - expect to find us there and two - easily spot us.

Lifestyle changes: it can be viewed from some different angles but by all means lifestyle changes take time and resources especially in the beginning. Moreover if a lifestyle change would mean a change in the social status it is very important that it is done in accordance with the “etiquette” and accordance with the new social group’s norms and understandings. In this respect, as there’s a visible turbulence in peoples’ lifestyles related to the increasingly dynamical world we live in, this is a factor that strongly supports our product

Attitude to work and leisure: building on the previous point we could say that a trend in working peoples’ lifestyles is to have fewer and fewer time for leisure. Because of this it is very probable that our targeted customers would prefer to have somebody do the preparation for their leisure activities for them. In this way they could spend their free time enjoying the leisure activities instead of preparing for them.

Level of education: we intend to offer a relatively innovative service with a concept that is not quite so simple. The vision we have for our customers is as people that are willing to explore, open minded and accepting. The level of

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education is tightly related to these factors. As we target professionals in a developed country we believe that we can strongly benefit from the expected high level of education as it normally creates exactly the type of personalities we are willing to target.

3.4. Internal Analysis

This stage of the business plan describes the competitive advantage of “the name” concerning to strengths and weakness, as well as the primary and support activities that the firma will carry out in order to add value to the final product that the customer will perceive when acquiring the consultancy service.

“The name” Competitive Advantages

3.4.1. Primary Activities

Inbound Logistics

The inputs are the orders of the consumers, which are made on line, according to the needs of each special event, the database of the items to choose is quite wide and is updated everyday. The consumer chooses all the items that will be including in his/her kit, in a customizable way. Once that the order is confirmed the operational people will collect the items from either the transit point or from the warehouse of the long term suppliers or from the retailers. This activity is carry out in a “SUV” by the operational staff, who is picking up the items and take them to the transition point, which is a small Warehouse located in a strategic position in Milano.

Operations

The operations will be divided in two segments:

Value proposition:

1st Scenario: Existing Solution for the Event: The consumer chooses the stuff that is already created. Then the Creative Team just creates the customized solution.

2nd Scenario: Non Existing Solution for the Event: The consumer wants a solution for an event, and then the Creative Team creates the action, actors, items and context for the event in a customizable way.

Physical:

The Operational Team once that the Inbound Logistics is carried out, packages the customized kit with all the items issued as well as the guide with the instructions to create the wished context in the customer environment.

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Outbound Logistics

The output is the issued kit with all the items and the consultancy service in one package, then the Operations team will be in charge of deliver the box from the transit point to the final customer using a “SUV” as transportation, and the deliver service should be within the predetermined time that was specified to the customer in the moment that he / she confirmed the order.

Marketing & Sales

The sales will be executed on-line through the web site of the company; first of all, the database will be updated everyday with all the products, the new ones and the existing ones, then, the customer chooses what he needs, could be either just the products necessary for the event or also the knowledge about how to create a stylish context of a special event.

Service

????

3.4.2. Support Activities

Firm Infrastructure

The main offices of the firm will be in a building located in a strategic point in Milano, the decision about where the offices are located will be based on an economic ratio analysis that studies the transportation, warehouse and distribution costs.

The administrative offices will be a small flat or room which will have only the computers with the Information System Team supporting the activities, the Creative Team could work on-line from where ever they are, is not necessary their presence in the place. The Transit point will be in the same building but on the ground floor.

The Transit point is a small warehouse where just the some items are going to be storage, the scope is to have a Just In Time system, but with some products is not possible to have this system or the costs are lower if the company keeps an inventory. This place is the physical place where the Operative Team will package the kits, and prepare them to the delivery.

The Information System team will work with the database of the products and solutions available for the customers, as well as the processing of the orders.

The Operative Team who is going to be in charge of either Inbound or Outbound logistics will have radios in order to make easier and efficient the communication between them and the Central Base.

Human Resources Management

Organizational structure is composed of three levels of hierarchy:

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1. General Manager: responsible for strategic decisions and financial issues2. Managerial support3. Operational level

Managerial teamo General Manager: responsible for strategic decisions and financial issueso Managerial Support: To analyze competitors and market; coordinating human

resources, operations, information technology, relationships with suppliers Creative team

o Designers, to create knowledge concerning developing consultancy Informative system team

o Webpage developers: to create and update the webpageo Data Base Administratoro Help Desk, to take care and allocate the orders to the operative team.

Operative teamo Inbound Operators who receive the orders, and pick up items from either the

transit point or the suppliers warehouse.o Outbound Operators they prepare the kit and deliver it to the customer

Marketing team Financial operations team

Technology Development

All the technology to support the web page, such as Servers, DSL Connection, Data Base System, Radio Technologies.

Procurement

“The Name” will work with both wholesalers and retailers and will have long term relationships depending on the product and also on the ratio between the costs of transportation and the costs of the product.

For the medium and long purchase time products we will have strategic relationships and for the short purchase time products they could be bought with the retailers. (EDUARDO)

3.5. SWOT

Strengths WeaknessesCustomization High dependence on logistic costsFlexibilityOn-line orderingReal time deliveryProfessional consultancyKnow howTechnology based solutions

Opportunities ThreatsHigh growth of internet transactions and Could be seen as only a delivery service

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reliabilityLow supplier switching costs Components are a high percentage of the

total costClear information about items’ price Do it by yourself trendLow capital requirement Business idea easy and cheap to copyAgreement with supplier, grant preferences and privileges to our company???

4. Marketing plan

4.1. Segmentation

According to the description given in the chapter 2 of the present work, our customers will be university students, young professional and workers, who are going to be in the age range between 18 and 40 years.

Potential Market

The geographical place selected is the region of Lombardy located in the north zone of Italy. This zone has a total population of 13.3 million people. If we consider only the age range selected the population are 4.11 million people. An important characteristic of this region is that, according to the ISTAT, has a forecasted population growth rate negative by 2.1% for the scope of study of the present work. In the following figure we can see the overall forecasted population for Lombardy for the next 40 years.

Figure 1 - Population Forecast

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10

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14

16

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047

2049

Mill

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inha

bita

nts

Men Women

An important data is that the age range selected represents a 30.9% of the total population. In the next figure we can see the age percentage distribution.

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Figure 2 - Age distribution of the population

Actually there are around 27 million internet users in Italy1, which represent a 45% of the population. If we apply this percentage to the obtained population we have a Potential Market 1.85 million people, who are the internet users in Lombardy in the age range 18-40.

Available Market

The region of Lombardy has a total area of 23.859 km², try to cover this area in the first attempt would be very ambitious, so is needed to restrict the geographical coverage to the Province of Milan, more specifically the city of Milan and the surrounding cities that are shown in the next table.

Table 1 - Numerical description of the geographical zone

City Population density (inh/km2)

Area (km2)

Abbiategrasso 27.541 589 47

Assago 6.332 915 7

Bollate 42.923 2.942 15

Brugherio 29.849 3.044 10

Cassina de' Pecchi 12.881 1.622 8

Cernusco sul Naviglio 27.160 2.024 13

Cesano Boscone 26.260 5.913 4

Cinisello Balsamo 76.262 5.673 13

Cormano 18.860 4.058 5

Cornaredo 18.817 1.471 13

Corsico 37.385 6.162 6

Gorgonzola 16.258 1.653 10

Lainate 21.320 1.830 12

Liscate 3.117 365 9

Melegnano 16.256 3.204 5

1 B2C eCommerce, 2008. Mangiaracina, Riccardo.

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Milano 1.369.295 6.900 198

Monza 120.651 3.640 33

Nova Milanese 20.620 3.786 5

Novate Milanese 20.357 3.636 6

Opera 13.245 1.762 8

Paderno Dugnano 43.963 3.218 14

Pantigliate 4.872 900 5

Pero 10.667 2.075 5

Peschiera Borromeo 18.539 863 21

Rho 51.848 2.251 23

Rozzano 37.660 3.023 12

San Donato Milanese 31.331 2.524 12

San Giuliano Milanese 33.106 1.019 32

Segrate 32.368 1.904 17

Sesto San Giovanni 86.657 6.716 13

Settimo Milanese 15.036 1.591 9

Trezzano sul Naviglio 19.423 1.685 12

Vermezzo 2.168 506 4

Vignate 7.087 908 8

Vimodrone 14.700 2.895 5

TOTAL 2.334.814 2.665 876

In table 1 we can also see the population, area and population density for each city. The criterion to select the cities was their proximity to main avenues and highways, this logistic advantage would permit us to optimize the management of the supply chain. In the next figure is showed the geographical distribution of the covered cities.

Figure 3 - Geographical Area

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The population of Milano and surrounding cities are 2.33 million people, but considering only the age range selected are 720,359 people. If we apply the 45% who are internet users we obtain an Available Market of 324,162 people considered in the present business plan as the internet users between 18 and 40 years old who live in Milan and surrounding areas.

Served Market

Actually there are around 27 million internet users in Italy, from which only 9 million are web shoppers2. That represent that the 15% of the population in Italy are web shoppers. If we consider only the age range 18-40 we can find that the 60% of the web shoppers are included in this range. By this way the available market is 194,497 people, who are the web shoppers from 18 to 40 years old living in Milan and surrounding areas. In the following figure we can see the relation between web shoppers-internet users in different countries and their average expenditure.

Figure 4 - Average expenditure per web shopper

UK1.900

FRANCE1.100

Average expenditureper Web shopper

(€/year)

Webshoppers

(mln)

InternetUsers (mln)

ITALY600

2729

36

ITALYFRANCE

UK

9 16 27

Penetrated Market

In the Italian market the actual distribution of the purchases based on internet has the following behavior:

2 B2C eCommerce, 2008. Mangiaracina, Riccardo.

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Figure 5 - Distribution of Italian eCommerce split by industry

1.990€mln

2004

343€mln

2000

710€mln

2002

1.159€mln

2003

2.822€mln

2005

4.107€mln

2006

5.328€mln

2007

Books, CDs, DVDsInsurances

Grocery

Tourism

Consumer electronics

Apparel

Others (ticketing,Mobile top ups, C2c, collectables, etc.)

40%

12%

14%

25%

9%

37%

19%

20%

32%

15%

18%

29%

43%

11%

12%

26%

46%

10%

9%

28%

1%3%

3%

27%

49%

9%

1%

8%

3%

14%

31%

17%27%

3%

“The name” ’s offer could be considered to be included into the Grocery and Apparel segment which combined represent 4% of the overall eCommerce. This value applied to the already calculated available market gives us a served market of 7,780 people who are the web shoppers in Milano and surrounding cities who use to make e-purchases of grocery and apparels.

Market Segmentation

According to the previous consideration the next table summarizes the factor that influences each step of the sizing and the size of the market in all the dimensions for the first year. A more detailed and forecasted description of the market size will be given in the Demand Forecasting inside the Marketing Plan chapter.

Table 2 - Market Size

4.2. Targeting

Delighters and explorer segments, high incomes and more familiarized with e-commerce and the other characteristics.

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Describe the attractiveness according business strengths.

4.3. Positioning (ANGEL)

Perceptual map!!!

4.4. Marketing mix

4.4.1. Product (edu)

The customer should take into account the attention and delivery time, according to this information the time to deliver the package will be restricted regarding to the day and time that the Order was generated.

“The name” has created two categories of items in order to make easier the comprehension of the business process, these are:

Common Items are the items that are cheap, easy to store and the most required items according to the 80-20 rule.

Special Items, which are the items that are not in the Transit Point because either they are expensive or the customers normally doesn’t ask for them frequently. These items are related to the customization.

Our conditions to deliver the package are shown below:

If the Order is generated from Monday to Saturday between 7:00 am and 4:00 pm we can deliver the Order in 8 hours if the customer wishes.

If the Order is generated from Monday to Saturday after 4:00 pm or on Sunday we can deliver the Order in 8 hours if the customer wishes, just if the items are not special and with a high level of customization, if the Order contains special stuff then the Order will be delivered in the next day early in the morning if the customer wishes.

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The package will consist in an esthetic card box or a stylish basket which will contain the items, the package could vary in size, but always will have the colors and the logo of the company, also in the front face of the box, a label will be stick, which contains the itemization of the content.

BRANDY HUEVOTOTOTE (BRANDING)

4.4.2. Price (vh)

Introduction paragraph

One of the most important characteristics of our offer is the fact that the customer have to see very clear what is he paying for. The transaction are going to be generated from the order to the payment on the web page, by this way a real time pricing strategy is going to be applied in this case. Each time that the customer selects the set of components for customized kit and according to the delivery address, a detailed description of the price structure is going to be showed. The best price structure for this case is to adding a fixed desired return to the overall cost of each single order.

Another important characteristic of our business is that is needed to achieve a critical volume to ensure low costs, because of that we should apply a penetration price strategy. The price structure is coherent with our pricing strategy, achieving the lowest price in order to reach economy of scale in a relative short period.

According to the previous assumptions, has been calculated the final prices for each family product taking into account variable and fixed costs, mark-up based in the WACC and the inflation for the scope in which will be calculated our project. All values are described in the following table:

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Table 3 - Price Structure

4.4.3. Promotion (ALEJA)

We can have different ways to promote our product, thinking about kits for students, to use university boards, to paste our weekly offers.

We can use both ways of promotion, direct and indirect method. For a direct way, the word of mouth is the most important, because has the biggest impact, we also know that is the most expensive, but if we try to focus in our target it will produce the best results.

Billboards on the street around Milan city could be a good at the beginning for people to know us and our offers, only in launching phase.

Made advertising on web sites like facebook, my space, and those kinds of websites that are so popular on young people.

Use of technological devices as mobile phone to create a strong relationship with our consumer throws MMS, SMS, etc. (promotion codes, publicity)

Send to our consumer mails with news and new ideas, but this kind of mail adjustment to the past purchase that they had been doing, so selective mails, like the way Amazon do, data mining.

We have to create a slogan that represents our mains strengths, customizable, at the correct moment, with the perfect time, etc, etc

The most important Milan’s newspapers, flyers deliver around all the city, in metro and train stations.

Launch event.

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Build budget for 3 years

4.4.4. Place (BOJANA)

“The name” will provide services in direct interface with the customer. The customer will make the order online and the operational team of the company will distribute the order most efficiently. The operational team’s compensation will be based on fixed salary.

“The company” will have one transit point, located in Milan and its products and services at first, will be available for the population of Milan and its surrounding area. Through this transit point the company will distribute its products. The distribution network will be organized in a way that the city of Milan and its surrounding area will be divided into zones. When the customer will make the order, he will leave his address. According to the location of the order, the system will give information of the approximate delivery time. The goal is to minimize the waiting time for the customer.

As “the company” will spread its operations in other cities in the region, and other regions, as well as nationwide, franchising will be implemented. In this phase, different commercial channels may be used, in addition to the internal sales force, in order to satisfy the customers’ needs.

Supply chain description

Service level reached by zonification

Partnership with suppliers?? In operating Plan

4.4.5. Personal relationship (ANGEL)

The way we understand it, in our business key points are to provide innovative solutions, consult, be precise, on time and efficient. On top of that we also would like that the service we provide to be highly customizable. In other words we build a user-centered system. Such system can be very turbulent, unpredictable and to a very big extend out of our control. On the other hand it gives us the great advantage to have our customers deeply involved, sharing and participating. This is giving us the perfect opportunity to implement a Customers Relationship Management System.

There are many examples how CRM has failed and the justification of the expenses is questionable. In our case however implementing such system is inevitable as we strongly depend on the relationship with our customers. The 4P marketing strategy is a good tool but a bit too static and also does not regard the post-sales process.

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As can be seen from the diagram, we would like to focus on some points:

Customers acquisition – done by the 4P model, aim

Customers value estimation, retention – a key issue is to be able to estimate the value that the certain customer brings to our shareholders. In this way we can target better and focus our efforts thus increasing both efficiency and effectiveness in retention

Customers purchase habits, shopping cart analysis, click stream analysis – supporting growth and retention, using innovative IT to personalize the relationship, when we understand our customers better we could work with them in direction of exploring new aspects of their customers experience

Contributors, Authors recognition – another use of innovative IT techniques that aims at extending the service level by integrating our customers within the system. In this way eventually you have a system that is self-expanding by the customers themselves, also lead by their needs and understandings

For a start this could be done with implementing an Operational CRM but it should either be integrated in the whole BI system or have an Analytical CRM added later on.

In particular our model should implement a complete customer lifecycle management which closes with repurchase, trend and added value analysis. Example of there could be:

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1. Sales force automation

a. Solution request ( customer - front office, BI system)

b. Alternative solutions proposal, lead routing, opportunity management (back office, creative team – front office, BI system - customer)

c. Choice and personal customization (customer – front office, BI system)

d. Customer self-service, placement of order (customer - front office, BI system)

e. Quotes, orders, forecast & quota management, commissions (front office – back office, logistics)

2. Customer service

a. Logistic execution of the order, billable time tracking (front office – back office, logistics team)

b. During/Post-sales experience evaluation, escalation rules, case management (front office – customer – front office – back office)

c. Targeted offer, cross-sales, extended business proposal (customer - front office – back office –front office - customer)

d. Case capture, knowledge management (front office – back office – front office)

3. Marketing automation, analysis

a. Up-sale, repurchase or new service demand( front office - customer – front office)

b. Statistics and ROI, ROA analysis (front office – back office)

Online lead capture, trend profitability analysis (front office – back office)

4.4.6. People and Process (ANGEL)

4.4.7. Physical evidence(ANGEL)

4.5. Web

The web site of the company will be designed in a way that its products and services will be presented clearly and will be easy accessible to potential customers (visitors of the web site).

Home page, as a main page of every web site, will have the following content:

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-links to the products divided into following categories:

- Special Dinners:o Romantico Small / Big with friendso Unique

- Picnic:o Romantico Small / Big with friendso Unique

- Partyo Randomo Unique

In each category pre-determined kits will be offered with the description of the content and the price, as well as individual items with their description and picture, which the customer can choose to make his own kit.

Also, a search box would exist for the customer to enter directly the desired products.??

- Description of provided services (free?? online consulting) that will be fulfilled by filling in a simple questionnaire by the customer and after certain time he will receive the desired advice ??

- Opportunity for web site registration (registered users would receive e-mails for special offers and new products as well as discounts)

- Special offers and new products

The following content is equal for all web pages of the site:

- Links to the company’s partners on the right side (other e-tailers or offline partners)

- Information for the accepted credit cards and the payment gateway (partner of the company), to offer safe and secure credit card and electronic check transactions for the customers at the bottom.

- Information for the payment security (description of the payment processing)

- Terms and conditions of sale which will include explanation of the policies of credit card charges, credit card security and fraud control, declined credit cards, return order, lost orders, wrong items and damaged merchandise

- Privacy –use of cookies for identifying the shopping cart, order forms, external links, information automatically logged

- Contact us direct sending of e-mails to the company

- About us which includes information concerning the company

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- Site map for easier navigation around the site

- Opportunity to view the shopping cart with information for the number and the total cost of the items that will be purchased

BLOG???

Description of the online purchase process

When the customer will select for purchase a predetermined kit or will make his own kit by selecting individual items, the cart will be filled with the selected items. In the latter case, the customer will choose the type, the size and the color of each item according to his needs and will add them to the cart. The customer can also choose the package of the kit. When all the desired items will be in the shopping cart and the customer will choose to proceed with the payment, he will have to leave his delivery address and choose (optional) to receive notification e-mails for new products and services or special offers. After this procedure, the system will return the approximate fastest delivery time of the product (optional more times are offered and, hence, different price???). The customer may choose to accept the offered time or quit the purchase procedure. In the next step of the procedure, the credit card details are required. If the credit card is accepted, the purchase will be enabled and the customer will receive his order in the specified time. If the credit card is declined, the customer will have the option to reenter the details of the credit card or choose another type of credit card, or quit the purchase.

Out of stock kits /items???? Debit card???

4.6. Demand Forecasting

The estimated penetrated market has been described in the market segmentation, on this market niche all our marketing effort is going to be directed. In order to determine a monthly demand we have to understand first the behavior and the relevant expenses habits of a Milanese citizen.

According to a research carried out by the Corriere della Sera, in average a Milanese family is composed by 2 people and spends in average also around € 2,500 per month. In average, a Milanese family saves € 335 per month while a single guy saves € 20 per month. A relevant amount, around 10% of the expenses are destined to superfluous expenses, as is named in the cited research, taking into account self care, weekend trips or eat outside. In the other hand the increase in the price of basic products have changed the habits in the consumers, there is a increasing attention in discounts and promotions in order to get the lowest prices, e.g. the discount products purchases in supermarket are 20% of the total purchase.

A weighted average price of the offer of “The name” is around € 77.5. xxxxx, by this way in average each one of the customers of the penetrated market is going to buy at least 1 kit each

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10 months, which translated in terms of a consumption rate (kits/(people*month)) we obtain the value of 0.10 considering in the calculations for determining the demand.

For forecast purposes all the factors to determine the penetrated market have being estimated in a 3 years scope.

The internet users’ percentage is going to remain constant in 45%. The population growth decreases by 2.1% each year. Web shoppers’ percentage increases by 5% each year over the basis of 60%. Sector Share starts at 4% and increases by 20% each year on the original value. Consumption rate increases by 30% each year, the same that the Italian eCommerce

average yearly growth rate.

It has been also considered that our offer has different family products, as it has been mentioned in the product/service description. For each one of the families has been forecasted different shares of the total demand varying along the time. In the case of the Meal start with a high value (50%) because is the most common product and similar to actual market solutions. Along the time decreases in percentage share, but not in absolute values, to give place to the growth of the Sport family product, which will increase as well as the market begin to know “the name” and the characteristics of this family product, which is the highest margin contributor in the product portfolio. The Party family product remains constant during the scope of the project in terms of percentage.

In the following table are shown the forecasted values for the demand and the factors influencing on it.

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Table 4 - Demand Forecast

4.7. Marketing Costs forecasting

5. Operating plan

5.1. Operative facilities and equipment (EDUARDO)

Office with the transit point

2nd transit point in third year

Computers, 1 per administrative person + 1 server

2 VAN and another 2 the 3rd year

Shelves

Office furniture

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5.2. Production and operation procedures

Order placing

Open the page create a user search for solution customize online consultancy visual presentation of the kit delivery terms put in shopping cart purchase payment mail confirmation with detail

Purchase inventory order generation

Based on forecast

Purchase order generation

Receiving the order picking list generation automatically assignation guy checks picking list on PDA send purchase order to supplier guy pick the purchase order if necessary delivery to transit point

Kits assembly

Order detail generation Receiving components Picking components from Warehouse assembly the kit hand in to delivery guy

Creative team

Receive request define objectives brainstorming design solution to marketing department/Customer

Outbound delivery

Receives the kit (completed or partial) check on PDA the optimal delivery route if complete, deliver if not, PURCHASE ORDER GENERATION deliver customer sign delivery confirmation

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Contingent situation management

Customer service

In internet during purchase (online consultancy), by mail with offers

Quality Control

Checklist to ensure completeness, check the quality of the supplier when register him,

5.3.

5.4. Logistic plan

6. Human resources and organization plan (ANGEL)

7. Financial plan

8. Economic and financial projections

9. Conclusions

10.Bibliography

10.1. Books

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10.2. Web pages

www.milano.consumi.info

www.corriere.it/vivimilano/

10.3. Magazines

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http://www.corriere.it/vivimilano/

http://www.milano.consumi.info/

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