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MEMORANDUM
TO:
JOHN SUSTERSIC
FROM:
GURSHARNDEEP SINGH
SUBJECT:
DAMN HEELS INC.
DATE:
FEBUARY 12, 2018

INTRODUCTION

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The beginning of the sole-proprietorship of Hailey Coleman was extraordinarily eventful during the year of 2010. She registered her business in August 2009 after continuous work and innovation into her foldable flats that women can wear after wearing their heels to various day time and night time occasions. She received a grant of $7,000 from the Ontario Partnership for Innovation and Commercialization which then forward was invested into promoting the company and product along with public relations.

During her decision period of choosing to expand her business, Coleman was deciding if she wanted to invest in the Canadian market or the U.S. market, and ultimately decided that it was best to choose Canada for the stable costs and security. She also considered investing into coat check sales at bars and night clubs which included her vending machine idea or to invest into a sales team.

Coleman received various promotion from different sources in television and editorials. She analyzed the strengths, weaknesses, opportunities, and threats of starting her business in Canada. Upon analyzing, she realized that there is a high chance of profit to invest into the market and started to receive production of her foldable flats merchandise.

SWOT ANALYSIS

STRENGTHS WEAKNESSES
Additional assets from winning the Ryerson Sleight Business Plan Competition ($25,000).

The appeal to the target market which is women from ages of 19 – 30 who have an active night life.

Proper website that is easy to navigate.

Product cost ($20) is affordable and covers costs with remaining profit.
Non-availability of funding for the vending machine business venture.
No store location.
Air delivery costs and struggling to maintain proper number of inventory.
OPPORTUNITIES THREATS
Product relativity in night clubs in the Canadian establishments.
Unique product placement idea which leads to less to no competitors.
Huge female residents in targeted market. Delivery malfunctions from China factory and late shipments.
Established retail and outlet stores.
Online shopping.

COAT CHECK SALES vs SALES STAFF

Coat Check Pros and Cons

The Pros of choosing the coat check option are:
– A very active nightlife in the target market area (mainly Toronto) which causes high demand of product.

– Direct sales with customers who visit night clubs.

– Coat checks profits are increased due to interaction with customers, which is a good way to sell the sales pitch of the product to club owners.

– Women, often under the influence, get tired of wearing heels and will look for another option.
The Cons of choosing the coat check option are:
– No direct control over the selling of product

Sales Staff Pros and Cons

The Pros of choosing the sales staff option are:
– Direct control over the selling of product

– Easy time and management

– Big number of clubs in target area

The Cons of choosing the sales staff option are:
– Salary payment

– Dependent on staff skills

BEAUTIFUL VENDING

Launching the vending machine idea has various pros and cons to it. The pros would be that there is machine involvement which reduces the need for task force. Clubs are usually fully booked so a huge target market is available which increases the chances of product sales. The target market can easily and directly buy the product with no middle man needed. The profit can be directly acquired through the machine by Coleman herself.

The cons of launching the vending machine idea have an aspect towards it. Since the coat check idea and sales staff idea already have an ideal funding, it leaves no funds for the launch and promotion of the vending machine. Coleman would have to take out another loan to launch the vending machine, therefore risking her finances.

CONTRIBUTION ANALYSIS

Selling Price: 20$
Manufacturing cost: $3.07
Bag Cost: $1.89
Packaging: $0.33
Shipping: $0.35
Total cost: $5.64

Sales = 2000 units’ x 20$ = $40,000.
Cost = 2000 units’ x 5.64$ = $11,280.
Total Revenue: $29,720.

CONCLUSION
Coleman profits more revenue by doing the sales staff option.

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