I.

Executive Summary

The store is a retail company that sells fitness apparel that is

trendy, in demand, and competitively priced. The store additionally sells
sporting goods equipment for selected sports. Emphasis is placed on high
growth products driven by current social trends, such as exercise/fitness
equipment, golf and fashion sports clothing.
Three years ago the store opened as one retail location in a
traditional store format. This single sales channel generated all of the
company’s revenue, providing sales adequate for paying operating
expenses, but generating only narrow margins that limited the company’s
growth. Industry statistics show that sales of sporting goods and fitness
apparel through traditional store channels are forecasted to increase only
modestly over the next few years. However, online sales growth in these
categories is predicted to be in the double digits. During the last years the
store gained a second distribution channel by adding e-commerce
capability to its existing web site, and this new channel has proven
successful.
The store competes in a highly fragmented and competitive
market. It has carefully combined a variety of promotional strategies into a
unique marketing mix to gain as much market share as possible. This year
it will roll out an e-commerce marketing campaign based on web content,
search engine optimization and a brand promised that sets the store apart
from its competitors.

II. Introduction

Sports industry is developing one of the biggest in the world. More

& more people are participating in sport & recreational activities
throughout a wide spectrum of activities. Sports goods retail industry has
grown significantly over the years. Technology, coupled with few
government initiatives, leading to cost-effective production techniques,
would be the prerequisites for this highly evolving industry. The sports
goods retailing sector is becoming intensely competitive, as more and
more players are vying for the same set of customers and is witnessing a
radical transformation. The increase in the number of retailers across the
country indicates that sports industry will boom in a big way in the near
future. Retailing of Sports Goods Market in Philippines is growing due to
the rise in per capital income, changing lifestyle, and consumer
preferences Generally, a growing market is more desirable, not only there
is great sales potential but also usually easier to enter and build sales in a
 growing market place. For very small firms, however, a large market can
be a double edge sword. On the positive side of course there is a potential
for huge sales, negatively though larger firms with well-established access
to marketing channels and better financing might be tempered to enter
such an attractive market place.

III. Marketing Environment

Technological: micro environmental factors affecting the clothing

industry include availability of resources, demand and production.
Retailers may increase the prices of cotton clothing if they encounter
shortages of this raw material, as they must pay their manufacturers more.
The introduction of new clothing styles by a competitor can shift demand
away from older fashions. Hence, a small clothing manufacturer may need
to discontinue certain clothing lines and produce new ones that meet the
needs of consumers.

Economical: Economic factors can have both positive and negative

impacts on the clothing industry. During economic boom periods, people
have more disposable income. Hence, they may buy more clothing,
increasing sales for clothing manufacturers, wholesalers and retailers.
However, recessions have the opposite effect. Sales for these various
clothing entities may be significantly lower. Consequently, retailers may
be stuck with large amounts of inventory. And they may have to sell the
clothing at substantially reduced prices. Clothing manufacturers and
retailers may also need to sell lower-priced clothing brands to compete
with more generic brands. Consumers often shop for cheaper brands when
they have less disposable income.

Political: A number of legal and political macro environmental factors

affect small businesses in the clothing industry. Workers picketing their
clothing employers impacts production. This can cause delays for retailers
in getting spring or fall fashions on time. This negative publicity may
impact a small clothing retailers' sales and profits. Also, a trade embargo
against another company's imports would force clothing wholesalers to
find different suppliers.

Social: micro environmental factors include norms, lifestyle,

demographics and population changes. These factors affect the clothing
industry in different ways. Contrarily, clothing manufacturers, wholesalers
and retailers avoid creating too many clothing items that fall outside the
norms of society.
IV. Analysis of Issues

Strengths

 Very high gross margins

 Ability to sell products online
 Limited start up risk
 High barriers to entry

Weaknesses

 Limited startup cost

 High transportation costs
 Limited flexibility in pricing
 Competitors can offer similar products quickly

Opportunities

 Ability to develop additional stores

 Continued expansion for online sales
 Acquisition of additional rounds of capital
 Development of proprietary products
 Development of wholesale distribution relationships
Threats
 Changes in regulation can impact the business
 Insurance costs are continually increasing
 Products are already sold by major’s competitors
 Increases in price inputs can cause upward in pricing

V. Objectives
 The stores over- riding objective is to be a competitive player in
the sporting goods and fitness apparel markets. Current awareness of the
company is limited to its local community. the store wants to expand that
awareness nationally through the internet so it can reach a dramatically
larger consumer population. The implementation of this business plan will
enable the store to realize substantial sales growth over the next three
years so it can achieve specific financial objectives.

 Increase potential customer base from thousands to millions by

broadening exposure from local to national markets.
 Increase sales revenue, margins and profitability.
 Break- even by on new venture by the end of Year 1, increase
profitability in Years 2 and 3, and continue increasing company net
worth each year.

VI. Marketing Strategies

The store combines a variety of promotional strategies into a

unique marketing mix to gain as much market share as possible. All
strategies have one thing in common the use of the brand promise to set
the store apart from its competitors. All future marketing will include a
brand personality that personalizes the brand promise in an image. With
repeated exposure, shoppers will recognize this image and associate it
with the store. The image of the brand personality will remind customers
that the store is the place that brings them satisfaction in their shopping
search, and this will stimulate them to come back for repeat purchases.
The following promotional strategies, plus others, are described in
more detail in the E-Commerce Marketing Plan.

Merchandise Cross Selling and Up Selling

Products are displayed by activity, groups, such as golfing or

exercise equipment, both in the store and on the web site. Related items,
accessories and upgrades are visible to the shopper when viewing the
activity groups. Merchandising, cross-selling and up-selling persuade
customers to complete purchases and increase the value of their orders.

Discounts
 The Store occasionally offers limited time discounts to motivate
customers to purchase now.

 Discount of a dollar amount or percentage on a product or

whole order
 Discount for quantity purchases such as 3 for the price of 2
 Free shipping for orders over a certain dollar amount
 Free product if total order is over a certain dollar amount

Loyalty Program

Loyalty programs develop long term customer relationships, and

reinforce the Brand Promise of excellent customer service. The store will
implement a loyalty program base on the dollar amount of purchases, with
1 point for each $1 spent. The expected result is an increase in repeat
purchases and higher customer retention.

VII. Projected Income Statement

Based on our marketing plans, location, store size and product

offerings, we expect to collect annual sales of Php285,000 in year one,
Php375,000 in year two and Php525,000 in year three.

Our average cost of goods sold will be 40%, which leaves us with
a gross margin of 60%. Our minimum monthly fixed costs are Php15,500
per month, so we will need to generate sales of Php25,833 per month to
break even. We will become profitable on a monthly basis before the end
of our first year.

In our third year, we will earn net income of Php105,000. The

accompanying income statement demonstrates our company’s
profitability.

VIII. Evaluation
 We base our projections on the economy, consumer spending
habits and population growth in Philippines will continue for the
foreseeable future.

We must also assume that our present and future suppliers will
continue to sell inventory to us at prices that allow us to maintain our
present margins. It is also important that we are able to hire reliable
employees at reasonable wages.
 Marketing Management
Clothing Store Business Plan

Submitted by:
Cherry Mae Curiba

Submitted to:
Dr. Jeanete E. Parreno