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MARKET ANALYSIS FOR
OWNERS
In February 2009, Level 7 Boutique, a merchant of the company Level 7 Group, LLC,
established itself to supply retail online services in the form of products and services
consisting of market related material addressed at women in the areas but not solely of
apparel, shoes/accessories, cosmetics, and health and well being products; this business
essentially can be said to be marketing to the appeal of young women in the spirit of all
things glamorous for the lady that is fashionable and savvy.
The site will maintain an interactive and updated approach and include additional
services beyond marketing products such as: blogs, tips, videos, themes, polls, pictures,
newsletters, articles, surveys, advertising space and membership areas.
Overall, the company can be characterized as the modern day approach to a woman’s
lifestyle, fashion and distinctive taste. Level 7 Boutique is an essential element in the
marketplace and its design is to fit the needs and wants that appeal to women today.
Company Overview
For many years, people have discounted the practicality of designing a site that appeals to
mainly women and that is gender specific and that women can regard as their source to
turn to not only for women’s changing demands but life’s fast paced shifting trends.
The condition of the industry today is such that women need to be kept current with
opinions, views and outlooks from every stance and yet keep personal sense of individual
and independent impression.
The legal form of Level 7 Boutique is through it’s entirely separate entity Level 7 Group
which has been formed as an LLC.
Level 7 Boutique’s business headquarters are located online but in the future may expand
to a permanent business address in the private sector.
Objectives
Based on our projected revenues for the current fiscal year and our projected annual
growth, we feel that within 3 years the company will be in a suitable position for
launching a campaign both online and off. Our objective, at this time, is to propel the
company into a prominent market position.
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Capital Requirements
According to the opportunities and requirements for Level 7 Boutique described in this
business plan and based on what we feel are sound business assumptions, there may be a
time when within our 3 year time frame or in the future beyond 3 years that we need
capital. In just predicting expected expenses there are costs including office space
leasing, wages, insurance, utilities, telephone, office supplies and equipment, shipping,
online technology improvements and related expenses for an amount to be approved by a
lending institution.
Once in a physical location cabinets, chairs, cubicles and other similarly related office
furniture, equipment and supplies will be required. Advanced rent will be needed as well
as hiring additional labor. Increases in marketing and insurance will be necessary, there
will be need for likely bulk product purchases and possible storage rental units and
shipping to houses, retailers, distributors, wholesalers or shipping stations.
Management Team
And,
Additionally, our outside management advisors provide tremendous support for helpful
decisions and guidance.
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Market Analysis
Market Definition
The women’s culture and its market are growing at a rapid rate. The clear social trends
are towards accommodating the switch to a more at home dichotomy, comfort and
convenience. Internet use and purchases have been on the increase with internet
purchases, products, services and technologies on the rise.
According to market research and industry sources, particularly the US Census bureau at
census.gov, the overall online market for the US is projected to reach 235 Billion in sales
in 2009, up from 204 Billion in 2008 and from 174 Billion in 2007. It is estimated to
reach 334 Billion by 2012.
Competition
Companies that compete in this market are few compared to the overall size of the
Internet and diverse range of markets, products and services. Expected growth of the
market is predicted as there are few sites designed for women in relation to all the sites,
industries and classifications of material especially an exclusive site catering to just
women in the spirit of style and fashion savvy glamour.
In all comparisons, Level 7 Boutique provides more features and has superior power to
expand than do competitors with fewer products and services. Sites do exist that have
large inventories but are of less quality, more generalized and these businesses lack
complete customer appreciation. In most cases, the number of differences is substantial.
Risk
The top business risk that Level 7 Boutique faces are unexpected alterations in the
economy and market that may diminish the government forecast and clear history of
growth in past, present and future expected online sales.
Distribution Channels
Level 7 Boutique’s marketing strategy includes plans to sell our product through several
channels. Our distribution channels include primarily drop-shipping, but in the near
future will involve possibly direct sales and marketing, and product delivery to
individuals, businesses and through bulk sales.
The determining factors in choosing these channels are profits related to drop-shipping
and initial investment and corresponding returns verses costs, expenses, time, efforts and
feasibility.
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Advertising and Promotion
The company’s overall advertising and promotional objectives are to position itself as the
leader in the market progressing safely and securely as a cautious but strategic and
conscientious organization.
For the next year, advertising and promotion will require no more than $2,500. On an
ongoing basis we will budget our advertising investment as 25% of total sales.
Public Relations
During 2009 Level 7 Boutique will focus on the following publicity strategies:
We will track, wherever possible the incremental revenue generated from our advertising,
promotion and publicity efforts. We anticipate at least 60% of sales will be generated
directly from our publicity.
Conclusion
Level 7 Boutique intends to continue our advances and growth in the marketplace with
more unique and effective products, additional services and site visibility and expansion
and branching out into the marketplace.
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Mission
Level 7 Boutique is to provide innovative, modern and top-quality products that save
time and improve the way women look and feel about themselves. We believe our first
responsibility is to the dedicated clients who use our products and services. Our strong
financial position will enable us to carry out our day-to-day business as we strive to:
1. Treat our clients with the utmost respect and as the highest priority.
2. Follow the philosophy that our customers are principal and most deserving of our
attention and respect.
Company Overview
Level 7 Boutique
www.level7boutique.com
Legal Form of Business
The legal form of Level 7 Boutique is as a separate entity formed as Level 7 Group, LLC.
Business Location
This organization has obtained all necessary business licenses and is permitted to conduct
itself as a business online.
Strategic Alliances
There are no formed strategic alliances at this time however some very important
relationships with major companies in the industry may result in the future.
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Joint Marketing Agreements
Joint marketing with established companies will produce revenues, credibility, and
market presence.
Service Strategy
Current Services
Our principal service consists of meeting needs of every woman in an easy to reach and
understand methodology as well as efficient and economical format. Overall our existing
service line includes product sales including apparel, shoes/accessories, cosmetics, health
and well being, as a general advertising campaign slogan to encompass all things
glamorous to the woman of today.
Planned Services
Level 7 Boutique plans to continually develop new services and enhance existing
services. In response to the demonstrated needs of our market, new services and ones
being developed in the near future include:
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Mp3 downloads
Coupons
Discounts
Newsletters
Membership areas that include special features and rewards
Related site advertising
Classes
Advertising space
Directories
A search engine
Distributorship to future wholesaling
Service Process
The process used to produce our services begins with an online product base as well as
client stability and growth.
Key factors in this process are targeting the women in the market who have an interest in
the site and services and meeting their needs and changing demands.
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Costs
We take advantage of economies of scale by providing products and services that will
increase profits at an exponential rate and especially enough that at more trying times
would at a minimal be stabilizing the client base and allow for a plateau to gradual
increase in sales.
Shipping Terms
Since 2008 Level 7 Boutique has managed its shipping department proficiently.
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Market Analysis
Market Definition
Industry Analysis
The market is growing at a stable and gradual rate with a proven rate of return. The
market for these products amounted to 230 Billion Dollars in 2008.
Referenced sources agree that the major trend is towards purchasing more goods and
services online due to comfort, convenience, reliability, and more time spent in the home.
The overall online market for the US industry is projected to be over 300 Billion a year
by the end of 2012. The overall market potential for 2008 was projected by
USAtoday.com to increase 17% from 2007:
(www.usatoday.com/tech/techinvestor/industry/2008-04-08-online-sales-growth_N.htm)
Market Segment
Key points in defining the market segment are that the web is not only shared by
everyone in the US but is worldwide. One can market throughout the entire world and
there are no limits to the potential of the Internet and selling and advertising on it as was
the position before the days preceding the world wide web.
The stability of this market segment is expected to grow as predicted by the census
bureau and as can be forecast in electronics and technological advances and cheaper
technology to access the Internet, and increased goods, services, users and surfing speeds.
Women’s Goods.
A) Apparel
Shoes
Purses
Jewelry
Cosmetics
Health and Beauty
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The segment of the market is generally based on products with retail prices in the range
of $50-$100. The vast majority of sales will be handled by www.Level7Boutique.com,
Ebay, Craigs List, auction.com, yellowpages.com, and corresponding distribution
channels. The minority of sales will be through advertising inserts and mailers.
Strengths
In terms of product strength, Level 7 Boutique has several distinct advantages over the
competition. First, it has advancements in web design, flow and features as well as real
time credit card processing, not paypal or google checkout which dissuades viewers with
an indirect account setup and off-site payment. Quickness and simplicity of purchasing
products are the strengths of the company as well as offering fast and dependable support
both through email and telephone. Other product strengths include increased market
demand and a host of advertising and marketing methods.
Weaknesses
While there are some weaknesses inherent in our product, the only notable marketplace
disadvantages are competition, advertising costs, product price, site visibility and brand
recognition. Those are mainly predicated upon financial limitations at the moment. By
year end we should be able to position ourselves as an established and recognized leader
in the market and thereby reduce this weakness considerably.
Corporate weaknesses, at this time, consist only of limited sales force and team members
that will be offset by increased profits and recognition in the market and online, as well
as increased funding and advertising effectiveness. However, we are taking steps to
obtain sales members, find more cost-effective suppliers, grow our own brand of products
and services, market them to individuals and suppliers, and to find financial funding
which we feel should alleviate this problem.
Environmental threats include market collapse, natural disasters, and military concerns.
Opportunities
The upside potential for our products and services in the currently addressed markets
over the next two years are as stated prior increased online users, increased online
technology not limited to surfing speeds and computer technology services. We will be
making and producing our own products eventually and intend on being a distributor for
retailers, distributing products to individuals and retailers and possibly soon after to other
distributors and one day being a wholesaler.
Based on the conditions introduced in the above analysis, it is apparent that the cost
verses all expected benefits outweigh the foreseeable profits verses any unforeseen sector
strains.
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Threats
The possibility of increased pressure on the market system seem to have a stabilizing
effect with the new system that will be put in place by President Elect Obama. The
military concern seem to be also diminishing with the offsetting of the President to power
and office as well of areas of deflation as can be seen through lower gas prices and
mortgage industry bailout financing.
Pricing
The prices for our products are determined first and foremost by amount of investment
and funding available factoring in supply and demand, cost benefit analysis and sales
support through team members. Secondly by marketing effectiveness as well as finding
distribution channels to be able to sell not only to clients and customers but to other
distributors and retailers as well.
It is important to know that pricing is essential to our market profile and compared to the
competition our prices are reflective of non-generic goods, distinctive origins such as
India and Japan which may have increased value and durability with lower costs.
Different seasonal aspects of our market affect our pricing because in better times of the
season more people tend to have the want and ability to purchase outside the home.
Upward expenses would occur as can be seen in travel costs, and product placement,
marketing and retailing costs.
Also at less peak seasonal times verses productivity in more temperate weather these two
considerations would shift invariably due to factors such as importing products that
tended to be cheaper where weather in other countries was better, increased supplies were
foreseen and prices were cheaper due to less expensive material and labor costs.
We will be exploring the benefits of incremental, coordinated direct mail programs in the
future. We anticipate a strong profit potential as we strengthen our direct response
capabilities. We will be approaching this scientifically as we improve our customer
targeting ability.
Telemarketing
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International Market
Winter:
Mexico
Japan
India
Summer:
Russia
Switzerland
Finland
Netherlands
United Kingdom
For first entry into the market, the specific market area we have selected is the Internet
and we are concentrating online on people within the US. We may expand gradually into
other countries and provide different languages on the site then possibly look for different
distributors externally.
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Customer Service
Our experience has shown that customers emphasize that service and support is one of
their major concerns. Hot-line service is currently available to all customers enrolled in a
maintenance/support program. The purpose for this service is to assure customer
satisfaction and loyalty allowing us to increase sales as well as maintaining a high profile
within our service area.
Another service that may be added is to provide warehousing of customer inventory. This
allows us to book larger orders and provide faster order response.
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Returns and Adjustments Policy
At this time, general trade customs for handling returns are 30 day money back guarantee
with receipt. Our customary policy is this:
"If for some reason the product is not right for your personal needs or business you may
return it for a full refund within 30 days of receipt of product. You must call for a Return
Authorization number (RA#). Refunds are made only on the price of the package plus
applicable taxes and do NOT include shipping costs."
"Credit card refunds are credited to your account and cash/check payments are refunded
within 30 days of receipt of returned merchandise in good condition with a RA#."
Promotion
The number of trade shows attended will be increased each year. These shows will be
attended independently and with companies with which we have joint marketing/sales
agreements.
Reports and papers will be published for trade journals and technical conferences.
Direct Mail
In addition to using direct mail to distribute our products, we will exercise our direct
customer communications through leaflet attachments, brochures with special incentives,
coupons and discounts, select/exclusive products and services, sub-mailing only for
exclusive members, and other respective specials only to members. The direct mail
objective will never be entirely for profit and will be used as a catalyst to promote
products and services both online and off.
Advertising Budget
For the next year, advertising and promotion will require no more than $2,500. On an
ongoing basis we will budget our advertising investment as 25% of total sales.
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Break-Even Analysis
The Break-Even Analysis included in our Supporting Documents indicates that the break-
even point will be reached at the onset of the company.
Conclusion
Level 7 Boutique seeks to succeed in the market and continue in the sale of its expanding
goods and services. This company intends on growing exponentially on and off line with
more unique and effective products and services as well as based on the projected sales
increases. Based on the attached financial projections we believe that this venture
represents a sound business investment.
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