* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Document 8907089
Sales process engineering wikipedia , lookup
Food marketing wikipedia , lookup
Marketing communications wikipedia , lookup
Consumer behaviour wikipedia , lookup
Multi-level marketing wikipedia , lookup
Guerrilla marketing wikipedia , lookup
Targeted advertising wikipedia , lookup
Market penetration wikipedia , lookup
Target audience wikipedia , lookup
Marketing research wikipedia , lookup
Pricing strategies wikipedia , lookup
Marketing plan wikipedia , lookup
Street marketing wikipedia , lookup
Product lifecycle wikipedia , lookup
Direct marketing wikipedia , lookup
Digital marketing wikipedia , lookup
Neuromarketing wikipedia , lookup
Multicultural marketing wikipedia , lookup
Customer engagement wikipedia , lookup
Viral marketing wikipedia , lookup
Youth marketing wikipedia , lookup
Integrated marketing communications wikipedia , lookup
Web analytics wikipedia , lookup
Green marketing wikipedia , lookup
Online advertising wikipedia , lookup
Target market wikipedia , lookup
Online shopping wikipedia , lookup
Marketing mix modeling wikipedia , lookup
Advertising campaign wikipedia , lookup
Global marketing wikipedia , lookup
Sports marketing wikipedia , lookup
Product planning wikipedia , lookup
Marketing strategy wikipedia , lookup
TITLE Sports Republic Online – Ireland Online Sports Retailer OBJECTIVE To develop a credible business plan and E-Commerce platform for a start up company. The business we have chosen is retailing of high value sporting goods. The Project plan define 3 distinct phases of growth and outline are approach in implementing best practice E-Commerce technology together with sound business and financial understanding. AUTHORS Julian Seymour Li Zhang Cathal Laffan Dinberu Degnetu SUBJECT PRACTICUM MECB1 (Business Focus) MECB1 (Technical Focus) MECB1 (Technical Focus) MECB1 (Business Focus) Declaration We hereby certify that this material, which we now submit for assessment on the programme of study leading to the award of Msc in Electronic Commerce is entirely our own work and has not been taken from the work of others save and to the extent that such work has been cited and acknowledged within the text of our work. Signed: ____Julian Seymour ID No.: ____92291571__________ : ____ Li Zhang ID No.: ____54144302__________ : ____Cathal Laffan ID No.: ____96345624__________ : ____Dinberu Degnetu ID No.: ____54157285__________ 1 TABLE OF CONTENTS 1 INTRODUCTION/ EXECUTIVE SUMMARY ..................................................... 5 1.1 ‘SPORTS REPUBLIC ONLINE’ - THE VISION .......................................................... 5 1.2 SRO CONCEPT BACKGROUND........................................................................... 5 1.3 ‘SPORTS REPUBLIC ONLINE’ – THE KEY GOALS ................................................. 6 1.3.1 1.3.2 1.3.3 PHASE 1 - START UP - GOALS (1ST 18 MONTHS) ................................................................................ 6 PHASE 2 – GROWTH - GOALS (FOLLOWING 24 – 36 MONTHS) ............................................................. 6 PHASE 3 – EXPANSION - GOALS (NEXT 24 – 36 MONTHS)................................................................... 6 1.4 ‘SPORTS REPUBLIC ONLINE’ – THE KEY OBJECTIVES ......................................... 6 1.5 BUSINESS PLAN LAYOUT –SCOPE ...................................................................... 8 1.5.1 1.5.2 1.5.3 1.5.4 1.5.5 1.5.6 MARKETING CONCEPT / MARKET RESEARCH ............................................................................................... 8 BUSINESS AUDIT ....................................................................................................................................... 8 MARKETING IMPLEMENTATION .................................................................................................................... 8 ORGANISATIONAL STRUCTURE ................................................................................................................... 8 TECHNICAL SPECIFICATIONS – IT SYSTEMS / WEB SPECIFIC ISSUES............................................................. 8 FINANCIAL DETAILS ................................................................................................................................... 8 2 CONCEPT / BACKGROUND RESEARCH....................................................... 9 2.1 CONCEPT EXPLANATION .................................................................................... 9 2.2 MARKET RESEARCH - BACKGROUND TO CONCEPT .............................................. 9 2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 2.2.6 2.2.7 DISCRETIONARY INCOME MOVE TO SPORT & LEISURE IN IRELAND .................................................................. 9 PLANNED ROLE OUT OF BROADBAND NATIONWIDE ........................................................................................ 9 INCREASE PROPENSITY TO BUY OVER THE INTERNET IN IRELAND .................................................................. 10 THE DEVELOPMENT OF A CONVENIENCE SOCIETY IN IRELAND ....................................................................... 10 FIRST MOVER ADVANTAGE....................................................................................................................... 10 ABILITY TO DIFFERENTIATE PRODUCT CONCEPT THROUGH THE INTERNET ...................................................... 10 BREADTH OF RANGE. HIGHER PURCHASE DECIONS .................................................................................... 11 2.3 MARKET RESEARCH – INDIVIDUAL SPORTS ....................................................... 11 2.4 KEY ASSUMPTIONS FOR SPORTS ONLINE.......................................................... 11 2.5 BUSINESS STRUCTURE .................................................................................... 11 3 BUSINESS AUDIT .......................................................................................... 12 3.1 EXTERNAL AUDIT ............................................................................................ 12 3.1.1 3.1.2 3.1.3 MACROENVIRONMENT.............................................................................................................................. 12 THE MARKET .......................................................................................................................................... 12 COMPETITION OVERVIEW / SWOT ANALYSIS ............................................................................................. 12 3.2 INTERNAL AUDIT ............................................................................................. 14 3.2.1 3.2.2 OPERATING RESULTS .............................................................................................................................. 14 STRATEGIC ISSUES ANALYSIS................................................................................................................... 14 3.3 SPORTS REPUBLIC ONLINE - SWOT ANALYSIS ................................................ 15 3.4 BUSINESS OBJECTIVES ................................................................................... 16 3.4.1 3.4.2 3.4.3 3.4.4 MARKET SHARE / GROWTH ...................................................................................................................... 16 SUCCESSFULLY DELIVERY OF THE MARKETING MIX .................................................................................... 16 ORGANISATIONAL STRUCTURE ................................................................................................................. 16 BRAND BUILDING .................................................................................................................................... 16 3.5 CORE BUSINESS STRATEGY............................................................................. 16 3.5.1 3.5.2 3.5.3 3.5.4 TARGET MARKETS .................................................................................................................................. 16 COMPETITOR TARGETS ............................................................................................................................ 16 COMPETITIVE ADVANTAGE ....................................................................................................................... 17 STRATEGIC RELATIONSHIPS .................................................................................................................... 17 4 MARKETING IMPLEMENTATION.................................................................. 18 2 4.1 PRODUCT ....................................................................................................... 18 4.2 PRICING ......................................................................................................... 18 4.2.1 4.2.2 4.2.3 PRICE SKIMMING ..................................................................................................................................... 18 COST PLUS PRICING ............................................................................................................................... 18 DISCOUNT PRICING ................................................................................................................................. 19 4.3 PROMOTION .................................................................................................... 19 4.3.1 4.3.2 4.3.3 ONLINE PROMOTIONAL STRATEGY ................................................................................................ 19 OFFLINE PROMOTIONAL STRATEGY .............................................................................................. 20 PUBLIC RELATIONS & PROMOTIONAL WORK ................................................................................ 21 4.4 PROMOTIONAL GANT CHART ........................................................................... 21 4.5 DISTRIBUTION ................................................................................................. 23 4.5.1 OUTBOUND PHYSICAL DISTRIBUTION OF PRODUCT ..................................................................................... 23 4.6 CONSUMER BEHAVIOURAL UNDERSTANDING .................................................... 24 4.6.1 4.6.2 4.6.3 EXTERNAL / ENVIRONMENTAL EFFECTS ..................................................................................................... 24 INDIVIDUAL DETERMINANTS ...................................................................................................................... 24 DECISION PROCESS ................................................................................................................................ 24 4.7 MARKETING CONCLUSION - SEGMENTATION AND AGGREGATION ........................ 24 5 PEOPLE & ORGANISATIONAL STRUCTURES ........................................... 25 5.1 ORGANISATION STRUCTURE – PHASE 1............................................................ 25 5.2 ORGANISATION STRUCTURE – PHASES 2 & 3 ................................................... 26 5.3 MARKETING JOB FUNCTIONS WITHIN SRO........................................................ 26 5.3.1 5.3.2 5.3.3 5.3.4 MARKETING DIRECTOR ............................................................................................................................ 26 PRODUCT MANAGERS.............................................................................................................................. 26 SPORT ONLINE BRAND MANAGER ............................................................................................................. 26 PROMOTIONAL MANAGER......................................................................................................................... 26 5.4 SALES JOB FUNCTIONS WITHIN SRO................................................................ 27 5.4.1 5.4.2 SALES DIRECTOR .................................................................................................................................... 27 REGIONAL SALES MANAGERS................................................................................................................... 27 5.5 LOGISTICS JOB FUNCTIONS WITHIN SRO .......................................................... 27 6 TECHNICAL DESIGN – WEB PORTAL ......................................................... 28 6.1 WEB PORTAL SYSTEM INFRASTRUCTURE.......................................................... 28 6.1.1 6.1.2 6.1.3 6.1.4 CLIENT INTERFACE LAYER........................................................................................................................ 28 INFORMATION AND PROCESS MANAGEMENT LAYER .................................................................................... 28 DATABASE LAYER ................................................................................................................................... 29 DOWNLOADS SPEEDS .............................................................................................................................. 29 6.2 DATA MANAGEMENT ....................................................................................... 30 6.2.1 6.2.2 6.2.3 6.2.4 DATA PROCESSING ................................................................................................................................. 30 CUSTOMER / FRONT-END ......................................................................................................................... 30 SITE ADMINISTRATION / BACKEND ............................................................................................................. 32 DATA MINING .......................................................................................................................................... 32 6.3 WEB MARKETING ............................................................................................ 33 6.3.1 6.3.2 6.3.3 6.3.4 6.3.5 6.3.6 6.3.7 6.3.8 DOMAIN NAMES ...................................................................................................................................... 33 AFFINITY SITES / USE OF SITES ................................................................................................................. 33 BANNER ADS .......................................................................................................................................... 33 SEARCH ENGINE RANKINGS ..................................................................................................................... 33 CRAWLER PAGES .................................................................................................................................... 34 LINK ANALYSIS........................................................................................................................................ 34 ATTRACTING NEW CUSTOMERS ................................................................................................................ 34 EFFECTIVE USE OF BANNER ADS .............................................................................................................. 34 7 INTERFACE DESIGN – WEB PORTAL ......................................................... 35 7.1 DESIGN RATIONALE FOR SRO PORTAL ............................................................ 35 7.1.1 7.1.2 7.1.3 FRONT PAGE LAYOUT .............................................................................................................................. 35 CHOOSING A CATEGORY: ......................................................................................................................... 37 SECOND PAGE DESIGN ............................................................................................................................ 37 3 7.1.4 7.1.5 DETAILED DESCRIPTION PAGE.................................................................................................................. 38 MAKING A PURCHASE .............................................................................................................................. 38 7.2 VISUAL LAYOUT RATIONALE ............................................................................ 39 7.2.1 7.2.2 7.2.3 7.2.4 USE OF COLOUR & IMAGE ........................................................................................................................ 39 INTERFACE & NAVIGATION ....................................................................................................................... 40 LOGICAL CHUNKING OF INFORMATION ....................................................................................................... 40 USER EXPERIENCE.................................................................................................................................. 40 7.3 BUSINESS DESIGN RATIONALE ......................................................................... 42 8 IT SYSTEMS (PROCESSES).......................................................................... 43 8.1 8.2 8.3 8.4 COMPANY NETWORK ARCHITECTURE ............................................................... 43 DISASTER RECOVERY / BUSINESS CONTINUITY ................................................. 44 SYSTEMS SOFTWARE ...................................................................................... 45 MIS / MKIS SYSTEMS ................................................................................... 45 9 FINANCIAL PLANNING ................................................................................. 46 9.1 9.2 9.3 9.4 INVESTORS ..................................................................................................... 46 FINANCE STRATEGY ........................................................................................ 46 CAPITAL INVESTMENT ...................................................................................... 46 3 YEAR PROJECTED ACCOUNTS ...................................................................... 46 9.4.1 9.4.2 9.4.3 P&L ...................................................................................................................................................... 47 CASH FLOW............................................................................................................................................ 47 BALANCE SHEET ..................................................................................................................................... 48 10 LONG TERM BUSINESS PLANNING & MARKETING RELEVANCE ......... 49 10.1 10.2 10.3 10.4 10.5 10.6 10.7 DESCRIPTION PHASE 1 – START UP ................................................................ 49 DESCRIPTION PHASE 2 – GROWTH ................................................................. 50 DESCRIPTION PHASE 3 – EXPANSION ............................................................. 50 RISK ANALYSIS ............................................................................................. 50 CONTROL & FEEDBACK ................................................................................. 50 FINANCIAL INTEGRITY .................................................................................... 50 RESEARCH & DEVELOPMENT ......................................................................... 50 APPENDIX A – PHASE 1 SPORTS SELECTION................................................ 51 APPENDIX B– STRATEGIC RELATIONSHIPS / MARKET OVERVIEW............ 51 APPENDIX C – PROMOTIONAL GANT CHART................................................. 52 APPENDIX D – MANAGEMENT ACCOUNTS..................................................... 52 APPENDIX E – PHASE 1 - PROJECT ROLL OUT............................................ 55 BIBLIOGRAPHY .................................................................................................. 56 4 1 Introduction/ Executive Summary The following business plan outlines the main considerations for creating Ireland first Online sporting goods company ‘Sports Republic Online’ (SRO). The concept is explained fully in section 2 of this plan. In summary, SRO aims to be an online retailer of high value sporting goods that delivers a breadth of range (within the selected sport segments offered), competitive prices and the convenience of a ‘doorstep’ delivery service. 1.1 ‘Sports Republic Online’ - The Vision Our vision is to create a company that will ultimately become the Largest Online Sports Retailer in Ireland within 5 Years. This will be a phased growth process, requiring investment at different stages of the development. We would see Phase 1 (Start up Phase) as focusing on high value goods in a selected number of niche sports. These goods would deliver higher margins and are less competitive. Phase 2 (Growth Phase) would see the addition of selected main stream sports to our sporting range. Phase 3 (Expansion Phase) would aim to establish SRO as the largest online sporting goods retailer in Ireland by completing the range of sports and look to establish overseas markets. The long term vision is that SRO would deliver the following Unique Selling Points. We acknowledge that during Phase 1 of the start up this will not be possible 1. Breadth of range (including provision of sporting goods not normally stocked in Ireland) 2. Competitive pricing (through lower overheads with no retail outlets and bulk procurement), 3. Convenience/speed of distribution (Centralised warehousing with ‘doorstep’ delivery to customers) ‘Sports Republic Online’ (SRO) will use its web portal as its main sales and information channel. All internal systems, marketing information systems will eventually be backed into this, although in Phase 1, cost constraints mean that investment in a complete IT system will not occur until sufficient critical mass is attained later phases of the project development. Within the bounds of practicality and cost, the organisation will utilise ICT technology not just in the outward sales channel but also in all internal processes. It is planned that in Phase 2 SRO will produce a bi annual catalogue, (similar to the Argos catalogue) which will enable users to browse offline and to order over the telephone as well. 1.2 SRO Concept Background As highlighted in the proceeding research, there has been significant growth in the sports & leisure industry in Ireland. This has been driven amongst other things by a buoyant economy, increased media exposure of sports, the merging of celebrity and sport, and a move in expenditure away from traditional ‘pub culture’ with disposable income being spent in the sport and leisure area. Moreover consumers have become more ‘brand educated’ about their chosen sports. This means that 5 increasingly consumers are no longer content to buy standard brands presented to them by traditional high street retailers. The growth in purchasing of ‘different’ brands over the Internet through the like of eBay has highlighted the massive potential for having an online retailer of these sporting goods located in Ireland for the local market. This will eliminate the ‘risk’ associated with overseas internet retailers and provide better selection and convenience to Irish consumers. 1.3 ‘Sports Republic Online’ – The Key Goals Stemming from our Vision outlined in 1.1, listed below are the key goals of the company. The goals have been split into phases as we believe there are distinct goals for each phase 1.3.1 PHASE 1 - START UP - GOALS (1ST 18 MONTHS) 1. Establish SRO as a legitimate Sports retailer of sporting goods in Niche segments with competitive pricing and original selection of goods 2. To deliver an operating profit by Q1of the second operating year 3. To build a strong foundation for attracting further investment for growth in phase 2 1.3.2 PHASE 2 – GROWTH - GOALS (FOLLOWING 24 – 36 MONTHS) 1. To expand the Range to cover 65% of Participative Sports in Ireland 2. To be delivering quarterly operating profit so as to attract further Investment and deliver equity growth/return to investors 3. To be an established choice amongst informed sports people, achieving key metrics in terms of recognition and brand awareness 1.3.3 PHASE 3 – EXPANSION - GOALS (NEXT 24 – 36 MONTHS) 1. To be the most recognised online sports retailing brand in the country 2. To have created through scale 3 sustainable competitive advantages are recognised by all Consumers as our key differentiators from other high street sporting goods retailers 3. For IT systems & our people to become the key enabler in attaining our competitive advantage and creating the success of the brand 1.4 ‘Sports Republic Online’ – The Key Objectives In order to achieve our vision and our key goals we need to outline strategic objectives. These strategic objectives form the core part of this business plan. This business plan focuses largely on Phase 1 of the project as it is the immediate concern and ultimately determines the successful achievement of the subsequent 2 phases. However supporting these objectives we need a robust ICT environment and systems structure to ensure attainment of the objectives. This is outline visually in Fig 1.1 on page 7 6 Fig 1.1 The conceptual business model of this Business Plan THE VISION To be Irelands Largest Online Sports Retailer by 2010 (Largest by Market Share / Sales Turnover / Brand Recognition) GOAL 1 To successfully complete Phase 1 of this plan enabling a sold base for future growth GOAL 2 To be delivering profitable business growth by phase 2 of the project GOAL 3 For IT systems and people to be the key enablers in growth and achieving our vision OBJECTIVE 1 – MARKET RESEARCH / CONSUMER BEHAVIOUR Ongoing Market Research and consumer understanding are essential in being customer focused GOAL 4 By the end of Phase 3 for all defined USP’s to be sustainable and recognised by the public OBJECTIVE 2 – ORGANISATIONAL STRUCTURE Appropriates Organisational Structures and Technology to be set to achieve all goals and specifically goal 3 OBJECTIVE 3 – PROMOTIONAL Focused Sales and marketing efforts related to Phase 1 product range are essential in achieving goals 1 & 2 OBJECTIVE 4 – DISTRIBUTION Management of Inbound/outbound logistics as well as supplier relationships are essential for prudent cashflow management OBJECTIVE 5 – PRODUCT / PRICE Our product range and pricing should be market led. Similarly pricing strategies will vary depending on supply & demand and other market factors BLOCK 1 PROCESSES / IT SYSTEMS BLOCK 2 – PEOPLE Relevant IT systems and Software are essential to achieving the outlined objectives above and the subsequent goals and ultimately the vision for the company. Without these in place the business plan will not work To consistently be Customer Centric, focusing on the customer needs and presenting choice at a competitive price with a quality service to the customer. 7 1.5 Business Plan Layout –Scope In this section we layout the scope of the business plan. The focus of this plan is primarily on Phase 1 – Start up as outlined in section 1.2, with occasional reference to the later phases of development. 1.5.1 MARKETING CONCEPT / MARKET RESEARCH Following on from our vision defined above, in section 2 we look in depth at the SRO concept, in particular how we plan to position the company within the market over the phases. We also detail the research utilised to identify both the ‘gap in the market’ and the ‘market in the gap’ for this project. 1.5.2 BUSINESS AUDIT In the Business Audit in section 3, a thorough analysis of the external environment in which we plan to operate is conducted in order to identify issues that will help determine our strategic objectives and core strategies. In particular we focus on a SWAT analysis of our main competitors and also a thorough evaluation of our own company in the market place. 1.5.3 MARKETING IMPLEMENTATION In section 4 a detailed marketing structure is presented combining an approach of the traditional marketing mix with a number of specific E-Commerce strategies. In outlining our approach we also analyse consumer behaviour recognising that it will change significantly in the future and that our business planning processes should reflect this to ensure that the organisation is positioned to deal with the changing face of the consumer and consumer markets. 1.5.4 ORGANISATIONAL STRUCTURE In this section we outline the proposed organisational structure for Phase 1 of the business and comment briefly on the planned structure in the latter growth phases. Key roles and responsibilities are defined. 1.5.5 TECHNICAL SPECIFICATIONS – IT SYSTEMS / WEB SPECIFIC ISSUES Section 6 & 7 look at the technical design, layout and architecture of the web portal. We define the supporting technologies used to create the portal and the effective management of Data through our web interface. We also detail appropriate IT Infrastructure and disaster recovery plans. Section 7 looks at the visual design of the portal, including our design principles and usability criteria, and how the portal is an essential marketing channel. We outline additional web marketing strategies and how we will drive revenue and usage through banner advertising and affinity sites such as www.pigsback.com . 1.5.6 FINANCIAL DETAILS Finally in the last section we look at the detailed accounts of SRO. We outline the funding mechanisms used to start phase 1 and show projected accounts for phase 1 and 2 of the business. We also consider long term planning issues and inherent risks, particularly in phase 1. 8 2 Concept / Background Research 2.1 Concept Explanation SRO Visions is to be Irelands No 1 Online Sports Retailer within 5 Years. The vision and objectives are outlined above in section 1.4. The long term aim is to create a company and brand which will ultimately be recognised as the leading online sports retailer in Ireland and to be recognised for our Unique Selling Points, Breadth & Depth of Range, Lower Prices, and Convenience of Distribution. It is recognised this will take place in 3 phases as outline above. Phase 1 however aims to focus on a limited selection of sports, but with a wide range of branded high value goods from those selected sports, delivering them at a competitive price. The Idea is that we will have a web catalogue and (from phase 2 onwards a physical catalogue of sporting goods similar to the ‘Argos catalogue’ in size that contains only sporting and leisure goods). Our focus will be on predominantly higher value goods where users have to make an informed purchasing decision. With such goods, price and brand selection are highly important purchasing decision criteria. Currently consumers in Ireland are currently limited in terms of breadth of range. We aim to deliver lower prices through reduced costs by eliminating all retail outlets and having a central distribution hub, and outsourcing all outbound logistics to a company such as DHL. As the business grows through phases 2 and 3 we also aim to achieve economies for scale in the procurement of stock. Further research which supports the market for SRO is outlined in section 2.2 below. 2.2 Market Research - Background to Concept Following broad research about general consumer behavioural trends in Ireland we identified that there was significant potential for retailing goods from Niche Sports over the Internet. In doing so we looked at current research available in the Irish market, which gives both qualitative and quantitative evidence that supports the set up of SRO. 2.2.1 DISCRETIONARY INCOME MOVE TO SPORT & LEISURE IN IRELAND Amarach Research show that in the ABC1 bracket alone, the per Capita spend on Sports & Leisure has risen to a staggering 2150 Euro per year (Amarach Online Omnibus 2004). As traditional areas of discretionary spend such as eating out / entertainment are shrinking, health and as a consequence Sports & Leisure are massive growth areas. People are spending more time on holidays and pursuing outdoor activities before as they move away from the traditional pub culture that has dominated Irish discretionary expenditure in recent years. 2.2.2 PLANNED ROLE OUT OF BROADBAND NATIONWIDE The management of SRO belief that online purchasing of goods and services is still near the bottom of what will be a very steep growth curve. As evidenced from OECD reports (OECD-ICT Diffusion 2003) on the diffusion of ICT in economy’s there are lag effects from the time a technology is rolled out to the time the effects of the technology can be seen on the economic performance. Internet Access / E Business are both becoming a very important issue both at political and social 9 levels. The prioritisation of broadband rollout and the development of alternative Internet Access technologies, which are being aggressively marketed, indicate Irelands ‘connectivity’ to the Internet will dramatically increase in the short to medium term. By looking at Asian economies that are on a consumer level 2-3 years ahead of Europe the figures for participants in online retailing are significantly higher.(Newsweek Asia – January 2005). The Irish Governments – eGovernment initiative for all public interfacing government departments to move communications to an online environment will see traditional ‘laggards’ become more internet aware. At a European level the i2010 follow up to the Lisbon eEurope 2005 Strategy is highly significant and had actively caused European governments to take measure to ensure it is adhered to 2.2.3 INCREASE PROPENSITY TO BUY OVER THE INTERNET IN IRELAND Through the likes of Ryanair (who sell 95% of tickets online) the general Irish public has become used to purchasing services online. Moreover 34% of people are more likely to purchase from an Irish website even if it means paying more. These statistics from Amarach’s ongoing online Omnibus research, highlights Irish consumers attitude to the Internet. From this we can infer the potential for a quality Irish site is significant. (Amarach Online Omnibus 2004) 2.2.4 THE DEVELOPMENT OF A CONVENIENCE SOCIETY IN IRELAND As travelling / parking becomes increasingly more time consuming and costly at shopping centres, and the opportunity cost of going shopping (in terms of lost leisure /recreational time) increases, consumers are looking to spend less time looking for things that can be directly compared over the internet means so as to have more discretionary time for other leisure activities. Both of these factors benefit the SRO concept. Amarach research found that the 57% of online purchasers cited the convenience and the removal of hassles as the reasons for buying online, while 49% of purchasers said it saved time and money and 38% cited online retailing as offering a wider choice. These statistics bode well for online retailing and support the assumptions for our SRO concept. 2.2.5 FIRST MOVER ADVANTAGE From our analysis of research today we believe there is a clear gap in the market place for a fully fledged online sports retailer and the size of the Irish market is significantly large enough to create this business. We have seen in the past that the online market leader is often the company that helped define that particular Online retailing concept first. By becoming the first mover in this market place, the aim is to be perceived as the Market Leader / Number one in online sports retailing. 2.2.6 ABILITY TO DIFFERENTIATE PRODUCT CONCEPT THROUGH THE INTERNET Amarach Research show that in the ABC1 bracket the per Capita spend on Sports & Leisure has risen to a staggering 2150 Euro per year. People are spending more time on holidays and pursuing outdoor activities before as they move away from the traditional pub culture that has dominated Irish People expenditure in recent years. (Amarach Online Omnibus August 2004) 10 2.2.7 BREADTH OF RANGE. HIGHER PURCHASE DECIONS As mentioned, people shop around on the Internet and compare prices. Moreover people are often looking for brands not readily available in all shops and that have a less ‘common’ feel to them. The majority of sports retailing is very generalist in Ireland at the moment. Although no specific research of the online sports retailing market has been conducted, key facts are that currently there are no high street sports retailers with a credible range of sporting goods that they are also retailing on line. This is dealt with in more detail in the SWOT Analysis. 2.3 Market Research – Individual Sports Having looked at the existing generic research available into the attitude to purchasing over the Internet / the growth in sport & leisure expenditure, we conducted research into the market size of the selected sports. We also researched the current sports retailing market in Ireland and also the participation rates and distribution of selected sports in the country. The initial results are highlighted in appendix B. 2.4 Key Assumptions for Sports Online Sports Republic Online’s development success is based on significant investment from a Venture Capitalist. In phase 1 of the plan initial Investment in terms of IT systems will be minimal. Until sufficient scale is achieved, it is envisaged IT investment will be relatively low. Stock Procurement and Marketing spend, represent the 2 most cost intensive overheads in Phase 1. SRO would be funded from 3 main sources. Firstly the 4 owners would each initially invest 25000 Euro each in the business. Secondly we would receive a Business Expansion Scheme (BES) grant of 100000 Euro and finally by the second quarter we would receive equity investment from a Venture Capitalist of 350000 Euro over 2 years. It is estimated that the payback time for the capital invested would be in the range of 4-5 years. Following Phase 1 of the business we aim to have built considerable brand equity and to attract a further cash injection of 1 million euro, for an increase equity stake in the business. Phase 3 would again be based on receiving a further equity cash injection. 2.5 Business Structure Electronic Marketing is more than Internet marketing. This plan must be based on sound business principles. The model below outlines the 4 core pillars on which a successful Internet business is built and how they relate through each other. Within this business plan we pay strong attention to Product Innovation/ Differentiation, the Importance of effective infrastructure, the importance of customer focus and finally the Financial Structure as all being critical elements of creating a sustainable business. These 4 elements form a large part of the focus of this practicum document. 11 3 Business Audit In this section we conduct a comprehensive and systematic examination of SRO’s business environment. As this company is a start up and this is the first business plan, the internal element of the audit will be somewhat limited as all processes are being put in place and there is no historic performance to analyse. 3.1 External Audit 3.1.1 MACROENVIRONMENT The Macroenvironment has been effectively covered in the market research outlined in section 2. As part of the ongoing business plan, we would continue to analyse the variables of the research and amend our business focus accordingly. 3.1.2 THE MARKET We believe the Online Sports retailing market in Ireland is seriously lagging behind other countries and this represents sizeable opportunities. Technology is stripping out the cost of retailing, giving smarter and more accurate information, resulting in more cost efficient businesses. In addition to the research outlined in section 2; looking at overall economic wealth in the Irish economy, discretionary income remains high and Irish consumers have a high propensity to spend. Looking across the goods and services industry in general we can see a proliferation of disintermediation of Industries as organisations look to strip out cost to stay competitive. Moreover looking at consumer behaviour, attitudes to sports and leisure are changing for the positive. Early movers into these disintermediated markets tend generally to be the winners/leaders of the sectors. The New Economy has created a customer that is short on time, attention and trust and created a ‘must have now’ culture. 3.1.3 COMPETITION OVERVIEW / SWOT ANALYSIS The Competition is analysed below in classic SWOT format. From the proceeding analysis, it is clear that the online sports retailing market is far from being crowded. The strategy we create will be based on information from both the audit below and from the research in Section 2. It must counter their strengths, play on their obvious weakness, account for their potential opportunities and SRO must also aim to become relevant as a threat. Figure 3.1 Competitor SWOT Analysis CHAMPION Description SPORTS Strengths No1 Retailer, National Coverage, Strong Buying Power, Strong Brand Recognition, May Have exclusivity contracts, Deep pockets, Good Marketers Weaknesses Strong ‘Leisure’ focus, ‘Scobe’ image, Not a true sports equipment retailer, Internet retailing is not core business, Intellectual & Organisational Capital, Focus on Clothing and Football, High Cost base in terms of maintaining retail presence, Above the line marketing. Have never diversified from core range of sports & Leisure. Brand devalued since sale to the footlocker 12 Opportunities Online Store in Development-could be good Threats SRO, Large Multinational Sports Superstores LIFESTYLE Description SPORTS Strengths National Coverage, Strong Buying Power, Brand Recognition, May Have exclusivity contracts, Deep pockets Weaknesses Strong ‘Leisure’ focus, ‘Scobe’ image, Not a true sports equipment retailer, Internet retailing is not core business, Intellectual & Organisational Capital, Focus on Clothing and Football, High Cost base in terms of maintaining retail presence, Above the line marketing. Poor Cousin to Champion, Common Feel Association with Quinnsworth still exists, No strong/positive brand image, Weak Marketers, Have never diversified from core range of sports & Leisure. Opportunities Online Store in Development-could be good Threats SRO, Large Multinational Sports Superstores ELVERYS Description Strengths National Coverage, Relatively strong Buying Power, May Have exclusivity contracts, Broader Range of Sports covered Weaknesses Old Family Business etiquette and Old image, Narrow range of a lot sports equipment retailer, Internet retailing is not core business, Online presence is through Buy4Now portal. , High Cost base in terms of maintaining retail presence, Above the line marketing is poor. Core strength is not driven home, Poor Customer service, Association with Intersport never took off. No core competence in IT or Marketing, Have never diversified from core range of sports & Leisure. The association with Inter-Sport never took off Opportunities Management could wake up and see potential for a rebrand Threats SRO, Large Multinational Sports Superstores. Incumbent sports retailers could eat their pie by expanding focus. Online retailing could start eating their lunch GREAT Description OUTDOORS Strengths National Coverage, May Have exclusivity contracts, Broader Range of Alternative Sports covered, Good Brand Image. Web Site is good Weaknesses Has never deviated past the most ‘common’ of alternative sports, Internet retailing is not core business, Online presence is limited. , High Cost base in terms of maintaining retail presence, Above the line marketing is poor, Not ubiquitous enough, No core competence in IT or Marketing. Knowledge of more ‘outdoor’ sports is high, Not possible to Purchase on line Opportunities Management could wake up and see potential Threats SRO, Large Multinational Sports Superstores. Champion Sports could broaden 13 focus and eat their lunch. Online retailing could start eating their lunch Independent Description Specialists Strengths Specialist knowledge in their relevant arena very strong, Have generated strong grass root level links with consumers, High loyalty in Customer base, Stronger Customer service and Product knowledge Weaknesses Limited Range. No core Competence in IT or Marketing. No National Presence, Above the line marketing is poor/non existent, No Buying Power Opportunities Could broaden their scope to sew up their market nationally Threats SRO, Large Multinational Sports Superstores. Champion Sports could broaden focus and eat their lunch E - Bay Description Strengths Ease of Browsing, Well Recognised Brand Weaknesses Location, Insecurity of Payment, Poor User Interfaces, Difficulty in searching, Difficulty in Importing, Difficult in Returning goods overseas Opportunities Could become more nationally focused in Ireland Threats National High Street stores Other Internet Description Retailers Strengths Ease of Browsing, Strong Individual Sports, Breadth of Range Weaknesses Location, Insecurity of Payment, Poor User Interfaces, Difficulty in searching, Difficulty in Importing, Difficult in Returning goods overseas Opportunities Could become more nationally focused in Ireland Threats Indigenous e-Retailers such as SRO 3.2 Internal Audit As the business plan is at the Phase 1, the internal audit is not possible in great depth. Important Strategic areas are outlined below. 3.2.1 OPERATING RESULTS SRO Management will set relevant Performance Targets, in relevant financial metrics and performance of the different functions against specified targets. 3.2.2 STRATEGIC ISSUES ANALYSIS Our focus will initially be on outdoor and hiking gear, Wintersports, Watersports, Boxing and Martial Arts, Exercise & Fitness Equipment, Cycling, Fishing, GAA, Golf, Hunting & Equestian-Country Sports, GAA. Most of these are to an extent Niche Outdoor Sports with high participation in Ireland. 14 And also significant growth rates in active participation. We have included GAA really to test the waters with regard to lower value main stream sports. 3.3 Sports Republic Online - SWOT Analysis Outlined below is a SWOT analysis of SRO. Through this internal SWOT analysis, Competitors Analysis, together with all information from our market research and consumer behaviour understanding we will be able to define more clearly our strategic Marketing approach. SRO DESCRIPTION IMPORTANCE ONLINE Strengths 1. Clear Focus on our Concept High 2. New Firm – No Historic Organisational Culture to Medium impede business 3. New Firm – No Mish Mash of Legacy Systems High 4. New Firm – Attention being paid to Operating Systems High from the start Weaknesses Opportunities 5. Lower Cost Base High 6. No Retail Outlets / Retails Staff Medium 7. Clear Focus as an Irish Company Medium 1. No In depth experience of the Sporting Industry Medium 2. Competitors have a large Market Share High 3. Building Brand from the start Medium 4. Competitive Market place Medium 5. Banking on Research to be correct Medium 6. No Buyer Power High 7. Reliant on Venture Capital High 8. Not part of the ‘sports retailing’ family Low 9. Takes time to generate the economies of scale High 10. Initially Low Breadth of sports covered HIgh 1. The Exponenential growth of the Internet High 2. Growth in the Sports & Leisure Market High 3. Absence of a quality Online Sports Retailer Medium 4. Breadth of Range High 5. No Focus on high Value – Sporting Hard wear by Medium Competitors Threats 1. Incumbents could have well advanced structures Medium 2. Incumbents could possess strong political and market High influential power 3. Existing Internet Retailers such as E-Bay offer competitive prices 15 Medium 3.4 Business Objectives This section looks at our business objectives based on out understanding of the research and business audit to date. It is loosely based on the model from Electronic Marketing which shows a dynamic model of an e-marketing plan (O’Connor et al., 2004), which places the customer and technology at the core of how the business is structured. 3.4.1 MARKET SHARE / GROWTH Within the context of each sporting segment SRO will set market share and growth rates for the business on a yearly basis. Achievement against these objectives will represent key business metrics. These metrics will be broken down by a number of criteria ( e.g. Market Share/ Market Growth by Type of Sporting Good, By Demographics, by Product Range). Selection of subsequent product and market segments will be driven by ongoing market research. 3.4.2 SUCCESSFULLY DELIVERY OF THE MARKETING MIX All elements of the marketing mix, but in particular the promotional strategy will be carefully monitored to ensure marketing effort is accurately measured. The success of the marketing mix is integral to building our brand. In addition attention to product selection will be important. Due to the selected range of products, keeping our product range relevant and up to date will help to ensure our relevance to customers. Supplier relationships and managing the supply chain is a vital part of the mix. Developing strategic relationships also represents cost effective marketing methodology 3.4.3 ORGANISATIONAL STRUCTURE The organizational structure, the employees and the E-commerce technologies employed form the business case for sustainable long term competitive advantage. However it is acknowledged in phase 1 (the start up phase) that scale economies and IT cost efficiencies will not occur. IT costs in Phase 1 will be kept to a minimal until sufficient scale and sales exist to invest in best-in-class systems. Management of this overall organizational structure is a key business objective. 3.4.4 BRAND BUILDING A core objective based on our overall marketing plan is to successfully build a brand that is recognised by all consumers as the leading authority in sports retailing in Ireland. Phase 1 of brand building. 3.5 Core Business Strategy 3.5.1 TARGET MARKETS The promotional part of the marketing mix is the most essential ingredient in defining and promoting to our various target markets. Segmented and aggregated marketing strategies for Phase 1 based on our market understanding of each different sport are outlined in section 4. 3.5.2 COMPETITOR TARGETS Our strategy will be mainly a frontal strategy (in terms of marketing/sales pitch), aimed head on at our competitors, as well as a fragmented approach to cover the areas where we offer a range of 16 products that are not commonly available through Irish sports retailers (Target Account Selling, Siebel Training 2002). 3.5.3 COMPETITIVE ADVANTAGE As outlined in section 1, our 3 core Competitive advantages / Unique Selling Points (USP’s) of the SRO concept will be as follows, - Breadth of Range – During phase 1 – this will not be a core competitive advantage. Breadth of range will exist only within selected sports. The focus will be on sourcing high value sporting goods, many of which are currently not available in Ireland. - Price Competitive – Through no requirement for retail staff, retail outlets and associated costs, through one centralised point of distribution, together with efficiencies through effective IT systems with no legacy Infrastructure and through bulk procurement, we aim to be able to deliver significant end price savings on the products we retail over other high street retail prices (In line with our pricing strategy outlined in section 4). As profitability per retail square metre is not as important as in standard retailing and we operate out of one centralised warehouse, we can manage stock a lot more effectively at lower cost. The set up cost and low bulk orders will preclude SRO from attaining cost advantages during phase 1 - Direct Distribution -By having fixed distribution costs, and a centralised distribution facility we will be able to control costs and manage the distribution channel more efficiently which will lead to long run cost economies of scale. 3.5.4 STRATEGIC RELATIONSHIPS We have defined in Appendix B, the key influential bodies that we wish to form strategic relationships with. Key sporting organisations, associations and business will be identified and mutually beneficial business propositions, where appropriate will be defined. These will possibly be reflected through reciprocal advertising banner ads and joint marketing initiatives on the ground. 17 4 Marketing Implementation This section looks at SRO’s application of both classical marketing theory and also looks at key elements of its e-Strategy. The SRO ‘Product’ is a mix of both Product and Service. Ultimately we aim to build towards creating three core competitive advantages. These are Product breadth & depth, Lower Pricing through lower overheads and scale economies and Convenience of delivery. 4.1 Product Through out our Marketing Mix we will seek to reinforce the SRO brand values to the consumers. SRO packaging and public brand image will be developed as part of the communication processes with the customer to ensure the consumer has a consistent product and/or service experience each time they purchase from SRO. Where possible all products will be distributed with SRO packaging. All pre packed products must have SRO branding them. The defined product range will be monitored and revised on an ongoing basis. The product range for Phase 1 is outlined in appendix A. Specific Sport and/or product marketing strategies will be implemented through strategic placing on the portal. E.g. New Stock will be highlighted and be given prime placement under a particular search. Old Season stock that is slow moving will be place in the ‘Outlet store’. SRO will also use premium website product placement to leverage favourable rates 4.2 Pricing In this section our pricing policy is outlined. In phase 1, SRO will deliver competitive pricing of differentiated goods. Scale economies of bulk procurement and reduced unit operating overheads are not expected to materialise until later in Phases 2 and 3. Even in Phase 1 Pricing will be seen very much as a strategic tool. We can use it to define quality, as a competitive tool, to control demand or to enter new profit markets. The following pricing strategies where suitable would be implemented. 4.2.1 PRICE SKIMMING For all products/product ranges that are not readily available in Ireland, we will operate a policy of price skimming. We will retail at a premium price delivering maximum margin. Should the product become more readily available or move toward obsolescence the price will be reduced accordingly. For products in high demand, particularly seasonal products we also charge a premium price as we envisage that our delivery service offers extra value to the consumer. 4.2.2 COST PLUS PRICING For products / product ranges that compete head on with our main competitors we will initially operate a strict cost plus margin, pricing policy. This area will be vital to building the reputation of SRO as a serious competitor with high street retailer and help to establish the brand as a viable shopping option. 18 4.2.3 DISCOUNT PRICING For stock that becomes obsolete or that is not moving, we will have an SRO Outlet Store section of the website where buyers can purchase stock close to cost price. 4.3 Promotion The promotion plan is budget dependent. Outlined overleaf (fig 4.4) is a cross section of our promotional map, with promotion type and time guidelines. The rationale behind each promotion type is outlined. The timing and delivery of each side of the promotional mix is budget and time dependent. The provisional timing of the promotions is based around, individual sporting seasons, national & world sporting events, yearly financial timelines, ad-hoc brand building opportunities and the availability and existence of online promotional opportunities. The full chart can be seen in Appendix D. The key goals of the promotional strategy are • To grow sales through online purchasing • To remove any fear consumers have about purchasing high value sports goods online • To move towards establishing SRO as the no1 Online sports retailer in Ireland • To reinforce SRO’s unique selling points • To drive traffic to the SRO web site • To build a solid reputable Brand • To create a solid reputable Internet brand • To build brand preference and loyalty • To differentiate ourselves as being an Irish Online Retailer 4.3.1 • ONLINE PROMOTIONAL STRATEGY Meta Tagging - In order for us to maximise the traffic through our Internet site, part of the web design brief will be the careful use of meta tagging to ensure our presence at the forefront of search engines. Pay per click promotion and search engine optimisation will take place. The website will also be created in XML to allow for future opportunities that may arise through the semantic web and web services • Recording consumer behaviour via logons – In order to use the site, there will be basic requirement to log on and enter basic details, including key areas of interest. This will enable us to analyse consumer behaviour trends and also how we tailor our product offering on an ongoing basis • Direct Marketing / Data base marketing – Based on the consumers who log on and customers transactions made, we will be enable to engage in relevant direct E marketing and cross selling. Initially as part of a promotional push we will also use direct marketing to inform sports clubs around the country of our presence. • Advertising – We will both take out relevant banner advertising on other websites to direct traffic towards the SRO site and sell banner advertising on our own website to suppliers. We also may look at engaging with shopping search engines (‘bots’) to pull information from our site. 19 4.3.2 OFFLINE PROMOTIONAL STRATEGY SRO will use a combination of both below the line and above the line promotional strategies in the off-line environment. As per the draft outline in the promotional gant chart (fig 4.4) the timing and type of promotion will be based on the criteria listed in section 4.3. In phase 1, the SRO promotional strategy will be constrained by budget as we aim to gain critical mass. Each promotional activity will seek to deliver measurable returns on the expenditure. PHASE 1 PROMOTIONAL STRATEGIES • Advertising – We will primarily use online media, print and local radio as the main vehicle for advertising. Where possible free media opportunities will be use. Direct advertising will be limited to Organisation and Association web sites and publications. Where appropriate local press may also be used. In terms of outdoor advertising, this may occur based on strategic locations and sporting events. Cinema advertising is also a consideration • Sales Promotion – Sales promotion will be quite aggressive in terms of promoting where our competitors promote. This may also involve the use of promotional staff. We will also look at promoting SRO directly at grass roots level at national and regional events of the selected Phase 1 sports. • Discounting – We will look at the use of seasonal discounting and discounting at the time of particular events to drive sales. • Affinity Marketing – We will look to engage in relationships with pigsback.com as a means to driving traffic to the SRO website. • Online Promotion – Monitoring and Management of customer browsing patterns will enable us to understand our consumers better and strategically target them with promotions, through causal analysis of browsing and purchasing behaviour. Compulsory registration of purchasers together with their locational data will provide a detailed understanding of our market and enable us to structure promotional activity in a more strategic and focused manner. PHASE 2 & 3 PROMOTIONAL STRATEGIES In addition to Phase 1 strategies, As the business grows, and the marketing budget grows , In phases 2 and 3 we would also aim to add additional channels of sales and also to engage in event sponsorship. • Sports Online Bi Annual Catalogue – As well been a means of generating sales. Our Catalogue which users will be able to acquire through calling a low cost call number will be a key promotional tool. The vision is to have this catalogue like the Argos catalogue (i.e. every house will have one) • Event Sponsorship – Red Bull have successful associated themselves with many smaller, more alternative sporting events. We would aim to look at promoting at these types of events or sponsoring them with the aim of building the SRO brand. • Telemarketing – Phase 3 may see telemarketers recruited to seek to build the brand through generating the brand as grass roots level, i.e. sport clubs and leisure centres 20 around the country as part of a national sales campaign in conjunction with the Area Sales Managers. • Lo-Call – We will consider using either a Low-cost or freefone service as part of the promotional strategy, so there are no reasons, not to call. 4.3.3 PUBLIC RELATIONS & PROMOTIONAL WORK The Public Relations effort will be directed by the Marketing Manager A minimal budget has been allocated for this in phase 1. However the aim would be to utilise where possible opportunities to gain free/low cost PR. For the delivery of field marketing, such projects will be put out to tender to promotional agencies. Design of brand image and standards would also be done by a design agency. All other marketing activities and where appropriate media buying activities will be kept in house. 4.4 Promotional Gant Chart In Figure 4.3 on the following page the promotional strategy is mapped out for Q1. This is a rough cross section comprising of the first 3 months. The purpose of this is to illustrate the mix of promotional strategies that would be used. This is naturally event and budget dependent. In some cases areas have been marked to represent that promotional activity will happen under that particular title. The exact timing, type and duration of it would only be firmly decided when the SRO concept goes live. The Chart is shown in greater detail in Appendix C. 21 Fig 4.2 Cross Section of Promotional Gant Chart TRADITIONAL ABOVE THE LINE TV Advertising Local Radio Advertising Outdoor Advertising Print Media Advertising Local Press National Press Magazine Online Banner Ads TRADITIONAL BELOW THE LINE Sales Promotion National /Event Sponsorship Brand Association Opportunitiies ONLINE PROMOTION Generic Promotion Website Promotion End of Q promotions Direct E-Mail Promotion Internet Search Advertising Association with Bots Banner Ads on Other sites Seasonal Event Promotion (eg World Cup/Olympics) Winter Holiday Season Irish Angling Festival National / Regional Water sports events Specific Sport World Chapionships Specific Sport European Championships Summer Outdoor Sports/Leisure The Horse Show Olympics Milk Ras / National Mountain Biking Chps Irish Martial Arts tournaments Year 1 BUDGET 25000 YEAR 1 W1=Jan01 w1 w2 w3 w4 w5 w6 w7 w8 w9 w10 w11 w12 w13 20000 25000 GAA Hurling Chm GAA Footbal Chm Product / Brand Specific Promotion Sporting Goods Batch A Sporting Goods Batch B Sporting Goods Batch C Sporting Goods Batch D Sporting Goods Batch E PUBLIC RELATIONS STRATEGY Strategic Media PR Internal Site Investor Relations Press Release National Level Local Level Recruitment Advertising 10000 22 4.5 Distribution SRO sees its website as the main channel of distribution. The diagram below highlights a very important part of the distribution channel that we would ignore at out own peril. Until the Internet is generally ubiquitous and the skills of the population have also increased not every one will be able or will want to order through the Internet. Early In phases 2 we will consider developing a paper based catalogue and also having a telephone ordering channel. When considering the distribution channel we look at hybrid marketing theory (O’Connor etal, 2004). This recognises that the Internet is only one distribution channel and that consumers use one source to browse and then buy it in another area. The arrows represent the browse to buy direction. E.g. 21 % of consumers will browse a catalogue and then purchase over the internet. Fig 4.4 Hybrid Marketing TELE MARKETING Phase 2 Distribution Channel 33% 6% 45 % 17% Phase 1 CATALOGUE 21 % INTERNET 8% Distribution Channel 4.5.1 OUTBOUND PHYSICAL DISTRIBUTION OF PRODUCT The actual physical distribution of the product will be outsourced to a courier company such as DHL that have a nationwide network and 48 hour delivery service. The cost of this is 5 Euro regardless of weight up to 30 Kilos nationwide. This is a cost effective, robust delivery system with low set up costs. A management accounting process has been used to define an administrative and logistical unit overhead associated with order fulfilment. 23 4.6 Consumer Behavioural Understanding This section first outlines how basic consumer theory will be used in defining long term marketing strategies, particularly in phases 2 and 3. However for the start up Phase 1, this may not be high priority due to human and financial resource constraints. This information can then be revisited on an ongoing basis particularly together with consumer understanding gained from our own Marketing and Management Information systems. 4.6.1 EXTERNAL / ENVIRONMENTAL EFFECTS In terms of defining our marketing strategies it will be vital to look at the consumer behaviour patterns of our target market. Out target market is likely to be very diverse as the Sports and Leisure segment spans a broad demographic range. Looking at it from an environmental point of view SRO will be marketing across a number of different social classes and to a certain extent sub cultures. As the Internet becomes increasingly prevalent, general consumer behaviour towards it as a purchasing tool as well as an information channel will also change. In our research we also mentioned Irish society’s swing to Sports & Leisure. There will be a mass movement effect which will see consumers getting involved in things as the ‘latest fad’. All of these factors will determine the type and timing of promotional activity we will take into account these factors. 4.6.2 INDIVIDUAL DETERMINANTS Different consumers have different attitudes toward products. Increasingly the sports people play and the equipment they use is an important part of their self image. The type of skis they buy or the mountain bike they use, together with the gear is all part of their self concept. Sporting items are no longer functional items alone. As part of ongoing research, we would look at the personality profiles of participants amongst the various sports we sell and where appropriate have specific marketing strategies for these brands that appeal to the attitudes and self concepts of the target market. 4.6.3 DECISION PROCESS Finally we look at the decision process of the consumer. How the consumer moves from been aware of a need, to searching for information, evaluating it, purchasing it and then their experience with the product post purchase. By understanding the key processes that people buying sports goods go through we can in time define our marketing mix more clearly. 4.7 Marketing Conclusion - Segmentation and Aggregation Understanding our consumer is vital to providing a useful web portal. We recognise that through the diversity of products on offer that the profile of our consumers will very greatly. For this reason from the promotional marketing mix above you can see that the promotional plan spreads a very broad area and segments and aggregates based on individual general consumer behaviour respectively towards sporting goods. 24 5 People & Organisational Structures The successful / harmonious integration between the business plan and the sales effort is essential. In section 5.1 we look at the planned organisational structure. This is at conceptual level. In this section we look briefly at the roles of the key individuals within both functions. These are not intended to be full job descriptions. 5.1 Organisation Structure – Phase 1 Outlined in figure 5.3 is a proposed organisational structure. The Organisational design is a fairly flat one with a matrix like structure and cross functional teams. As there are no retail outlets and one central stock distribution point, we envisage the organisation to have a small workforce initially. The approximate number of employees in each phase are outlined by the shaded segments in fig 5.1 below. In Phase1, initially logistics and finance functions would be performed by the same person, similarly marketing & IT administration functions may also be performed by the same person. They will also take care of the management and distribution of merchandise between them until scale is sufficient that a full time stores person is required. In total it is estimated that no more than 4 people will be employed in the early stages of phase 1. Fig 5.1 Basic Organisational Outline P h a s e 1 P h a s e 2 P h a s e 3 CEO Logistics Director Finance Director Sales Director Purchasing Manager Pricing Manager Regional Distribution Manager Credit Manager Regional Sales Mgr Sales Mgr Stores Operative Stores Operative Regional Sales Mgr Regional Sales Mgr Marketing Director IT Director Procureme nt Mgr Product Manager Core IT Infrastruct CRM Team Product Manager Web Systems Telesales Execs Promotions Manager MIS Systems CRM Team Brand Mgr MARKETING Executive 25 5.2 Organisation Structure – Phases 2 & 3 As the organization and product line expands in Phases 2 we may see the addition of direct line reports to each of the directors’ outline in figure 5.1. This may see the addition of additional staff in finance, one or more regional sales managers who may work in growing sales/promoting the concept to organizations across the country. One or more product managers may also be added to manage the relationship with suppliers, and research relevant target markets for new product lines within the country. Phase 3 will also see the addition of additional sales resource, including in house sales /CRM resources. Additional marketing staff may be added as well as a web / information specialist. Figure 5.1 is an indicative guide of how the organization would expand and is dependent on sales and also the decision to set up in overseas markets. 5.3 Marketing Job Functions within SRO The job functions outline in all 3 phases of figure 5.1 are detailed below, however in Phase 1 it would be the responsibility of the marketing director to undertake the marketing roles of his/her potential director reports in phases 2 and 3. 5.3.1 MARKETING DIRECTOR The role of the marketing director is to ensure all elements of the marketing plan are executed successfully and all elements of the Marketing Mix are adhered to. In addition they would have overall responsibility for all line employees beneath her/him. It is envisaged they will work closely with the Sales Manager and the Online Brand Manager in latter phases as well as the other directors to ensure the right products are been offered at the right price to the right people and that the technology to do so is being optimised fully. 5.3.2 PRODUCT MANAGERS Product Managers are responsible for working cross functionally to ensure that we have the optimal range of products that are up to date, price competitive and strategically placed to maximise the relationships with suppliers. They are also responsible for the overall supplier relationship matters for the respective portfolio of products that they manage. 5.3.3 SPORT ONLINE BRAND MANAGER The Sports Republic Online Brand Manager works cross functionally and has overall responsibility for the SRO portal. They must ensure that technically, visually, legally, financially, everything is working perfectly. They also have overall responsibility for the development of the Corporate Brand image, for building brand equity, ensuring brand consistency in all communications both online and offline. 5.3.4 PROMOTIONAL MANAGER The promotional manager is responsible for management and coordination of all promotional activities. They may have people working below them. They manage all agency relationships and 26 are responsible for working cross functionally and ensuring all elements of any promotional activity are coordinated with the necessary elements of the company. 5.4 Sales Job Functions within SRO The sales job functions outline in all 3 phases of figure 5.1 are outlined below; however in Phase 1 it would be the responsibility of the sales director to undertake all these roles. 5.4.1 SALES DIRECTOR The sales director has overall responsibility for ensuring sales targets are met and for managing the team below him. He/ She would work closely with all the functional managers in directing the overall strategy of the company. 5.4.2 REGIONAL SALES MANAGERS The regional sales managers work on a provincial basis. They are responsible for developing corporate accounts with independent small sports retailers and ensuring successful below the line promotion in their region, particularly at grass roots level 5.5 Logistics Job Functions within SRO The role of the logistic director is multifaceted. Firstly they must ensure that products are procured at the optimal price. They will be responsible for managing all supplier relationship and stock flows. They will also have direct contact with marketing and sales functions on a regular basis to ensure that we are selling the best selection of merchandise and to understand how products are performing in the market place, thus enabling him/her to better forecast supply and demand issues. In latter phases they will also work more closely with the IT director on Integrating stock management systems and despatch systems with the web site. (This is based on the assumption that sufficient scale exists to justify expenditure on advanced IT systems). 27 6 Technical Design – Web Portal 6.1 Web Portal System Infrastructure The SRO web portal system that has been implemented is a typical three-tier application made up of the client interface layer, the Information and Process management layer consisting of the web server, and finally the database layer that holds information such as customer data and order information. 6.1.1 CLIENT INTERFACE LAYER This layer provides the connectivity between the user and the core business logic, it is responsible for all interaction the customer has with the website. JSP and Servlet have been employed to implement such interaction. JSP allow regular HTML files to contain embedded JAVA code and they work on the established servlet architecture by compiling a JSP into a servlet the first time it is called. A user using the established servlet API the Servlet Engine interacts with the Web-Server and sends and receives HTTP requests and responses. 6.1.2 INFORMATION AND PROCESS MANAGEMENT LAYER In order to ensure business continuity and to avoid negative marketing perceptions of the company, the business continuity plan to ensure no loss of service would involve us hosting our website on our own servers. In this project, we chose Apache Tomcat as the web server to run the web application, not only because it is an open source but also because of its comprehensive supporting documentation. The Apache Tomcat server provides response to the client tier based on the request and the database information. It incorporates XML in the deployment of the web applications it contains. The server parses WEB.XML when it is starting up. 28 6.1.3 DATABASE LAYER SRO uses MySql Database server as backend database, it is the world’s most popular open source database with straightforward setup procedure and powerful functionalities. WinMySQLadmin was set as Service on WinNT, database server will start as soon as the computer was switch on, otherwise using command c: \net start mysql and c:\net stop mysql to Stop/Start MySQL as a stand-alone application. All technologies are on open platform and can be deployed in low cost. The use of the framework will make our team focus more on business and the usability. 6.1.4 DOWNLOADS SPEEDS As we intend to engage in a substantial amount of e-commerce involving high bandwidth content, a dedicated leased line to company premises with a certain capacity (e.g. 2 Mbps) is required. We believe a high-speed, ‘always on’ broadband is the optimal solution for the business. Of the Internet Service Providers that operated in the Irish market, we are keen on the BT broadband for business solution, it has no restriction on download limitation and allows to connect as many employees as needed. The following are the two options that BT provides for business broadband. Product Installation Charge Special Offer 1/2 monthly rental charge ADSL FREE €45 1M/256K ADSL FREE €87.50 2M/256K ** Basic Networking Terminating Equipment provided 29 Price Equipment ** Included Included 6.2 Data Management This section looks at the data flows within the organization, both within our own internal business system and in particular through our website. The data flow schematic diagram is outline in fig 6.2 on page 31. DATA PROCESSING 6.2.1 This data processing levels comprise of all data storage, retrieval and manipulation. Data processing will involve all information relating to product management, supplier management and customer transactions management. There are number of different user levels, each of which deals with separate functionalities entirely. (see fig 6.2 Data Flow schema). All data entered through the front end regardless of purchase or no purchase is processable data which gives us useful consumer behaviour knowledge. 6.2.2 CUSTOMER / FRONT-END The following are areas where the customer inputs data into our systems and how we use this data: - Temporary shopping cart for guests and permanent shopping cart for registered customers, are required to login properly in order to process the order. - Customers can create accounts by registering and can also maintain and update their accountsinformation by changing the details which will upload to the database - We did not implement the order tracking section in the prototype, We would view this as a functionality that would be implemented late in Phase 2 when the organization had sufficient scale. - We have included standard search and advanced search features to speed up navigation to desired products when a customer know exactly what they are looking for. - When checking out the cart, the shipping address is confirmed, credit card details evaluated after which all purchase details and confirmation of the transaction are confirmed on screen to the customer and emailed to them with a reference number. The credit card details that are stored in our database are all encrypted using Public Key Cryptography. The private key for decrypting is stored separately offline and only the site administrator will have access to this key as s/he will be handling all payment transactions. We will use SSL services provided by our ISP. Based on the weekly sales history, loading of the global and per-category best seller items on he opening screen will occur as soon as user click on the website. Furthermore slow moving stock will be displayed in the special offer section with relevant slow moving products extracted according to the user’s search criteria. 30 Refused login 1.1.1 1.1 Browse product Browser by Brand 1.1.2 Browser by category User 1.5 Create my account D2 Customer data 1.2.1 Search by product number D1 Product data 1.6 Confirm shipping address 1.2.2 Search by sports category 1.2 Search product D1 Product data 1.2.3 Search by genders D1 Product data D3 Credit card data Continue shopping 1.3.1 Gifts search 1.3 Gift centre 1.3.2 D6 Gift vouchers 1.7 Process payment details 1.8 Review my account 1.10 Products management user data 1.11 Site Administrator Fig 6.2 Data Flow Schematic 1.4 Customer sign in 1.9 User log in Shipping data D5 Order data Product data Stock management D7 Stock level data 1.12 Customer & suppliers management D8 Suppliers data 1.13 Distribution management 1.14 31 D1 D4 Order management Level one Data Flow Diagram for SRO D2 Customer data D4 Shipping data D5 Order data 6.2.3 SITE ADMINISTRATION / BACKEND This section detail how data is managed and administered from the back end administrator interface (see schema in figure 6.2). - The administrators’ rights to the web authoring tool will provide them with the capability to Add/Edit/Remove categories, products, manufacturers, customers, and suppliers. - The back end of the web interface will print invoices, packaging lists and shipping information from the order screen periodically in real time basis to a printer in the warehouse. Initially due to cost constraints in phase 1, invoices go to the account department, packaging lists go directly to the warehouse, and shipping lists are forward to the DHL after packing. This will be manually done until the cost of a fully integrated platform is justifies. - In Phase 3 we would envisage suppliers having restricted access to our database via so that they could add/edit content to the web site. This could potentially be done via web services. - Late in phase 2, maintaining minimum stock levels may become important and necessitate, automatic ordering system linking directly to our product databases. - In phase 2 and 3 of the project. Marketing information may be sent to registered customers who agreed to receive promotional material. 6.2.4 DATA MINING Through intelligent use of data gathered from users of the site we will be able to generate marketing activities to actively target specific users and user groups. We can use data mining in two distinct ways: The content mining is the information discovery from various sources, in particular the customer personal Information through the sign in process such as age, sex, region etc, and through specific marketing approaches such as sending out regular newsletter and web. Content mining produces highly detailed consumer behaviour. Understanding the traffic flows through the site and the key activity parameters of activity on the site is the second important area of data mining. The web log data records the logs of user browsing and access. User-centric data can discover details such as time spent on the site, including each section, pages viewed, product viewed, information can even be mined from the search query log. A key challenge will be to identify which information we can utilise to promote products successfully and to deliver perhaps more personalized content to individual users in later phases. 32 6.3 Web Marketing As mentioned in section 4, the marketing effort will be both online and offline. This section deals with the core online marketing issues. 6.3.1 DOMAIN NAMES We would reserve the name under both dot i.e. and dot com domain to avoid popular misspellings or trademark infringement. While initially in phase 1 the primary market for the business is in Republic Ireland, we believe having an. i.e. domain to be highly important inform a marketing perspective. We will register ‘sportsrepublic.ie’ and ‘sportsrepublic.com’ domain. We will also apply the domain name under category of Registered Business Name in our application. 6.3.2 AFFINITY SITES / USE OF SITES We are interested in using affinity sites such as Pigsback.com to drive traffic to our site. Pigsback.com acts as a gatekeeper between consumers and brands, ensuring that brands only engage in focused marketing activity are displayed to willing consumers. While not a priority it is a low cost, low risk action. 6.3.3 BANNER ADS As part of the sales mix and to encourage favourable relationships with suppliers, a section of the web page will be allocated for banners ads. By including banner ads we aim to be able to leverage better supplier pricing and contracts through premium placing on our web portal interface. The banner ads can also drive click through and create a small amount of click through revenue for SRO. 6.3.4 SEARCH ENGINE RANKINGS From our research META tags and search engine submissions while highly recommended, will not alone achieve a high search engine ranking. At SRO will invest in Search Engine Optimization or Positioning which is acknowledged as by far the best, smartest and most affordable investment we could make in Internet Marketing. Search engine optimization, also known as search engine placement and search engine positioning, is the process of improving a web site for higher search engine rankings. SRO will develop a proprietary and customized technique for our web site to achieve a top 30 listing on all the major search engines. Although we expect the majority of our traffic to derive initially from promotional activities, we will focus our search optimization on the top 6 search engines and monitor their performance at regular intervals. 33 6.3.5 CRAWLER PAGES Searchers won't find your pages if the search engines haven't found them first. Most search engines try to crawl as much of every site as they can, but this is a difficult and complex process especially if your site features dynamic content. SRO will develop crawler pages which will list every URL we want indexed by the search engines. This list will be placed at the top of the site, this way the crawler will be more likely to grab it (therefore all our favourite URLs) before it gets lost chasing ad banners and links to other sites. 6.3.6 LINK ANALYSIS Every major crawler-based search engine uses link analysis as part of their ranking algorithms. This is done because it's very difficult for webmasters to "fake" good links; As a result, link analysis gives search engines a useful means of determining which pages are good for particular topics. By building links, we can help improve how well our pages do in link analysis systems. The key is to understand that link analysis is not about "popularity." In other words, it's not an issue of getting lots of links from anywhere. Instead, you want links from good web pages that are related to the topics you want to be found for. SRO has spent a lot of time researching link analysis in the construction of our site and so we can identify the individual page where we would like the link, write the text for the link as we would like it and as fits within the context of the target site, and then issue a well written professional plea for a link. We expect on occasion there will be two or more requests needed before there is a reply from the site. The process can clearly take a lot of time and effort, but can be accomplished by our technical personnel who know the web and how to design web sites. 6.3.7 ATTRACTING NEW CUSTOMERS When determining the size of our market several important factors are revealed. One primary factor is what our customers are searching for specifically. When we analyze this information we can categorize the intentions of the user who searched a specific term. If we can understand the intentions, we can cater the content of the site to that user. We do this by targeting specific phrases to specific pages. When the user finds the site they land on the specific page that targeted their intentions. This type of site speaks to that user which increases the chance that they become a new customer. 6.3.8 EFFECTIVE USE OF BANNER ADS As part of the promotional effort we will place banner ads on selected sporting websites. These sites will be chosen based on the sports we have chose for phase 1 of the project and generic sporting interested websites. These sites are outline in Appendix E. Attention will be paid to the design of the ad to ensure it is customized and relevant to the target user. 34 7 Interface Design – Web Portal 7.1 Design Rationale for SRO Portal This section briefly outlines the design rationale of our SRO Web Interface and how we will map our business plan and our understanding of consumer behaviour onto the site. We begin by looking at the design criteria. 7.1.1 FRONT PAGE LAYOUT On the front page we outline the mission statement of our business. This reinforces our USP’s to the consumer and is in line with our strategic objectives. The user can see the breadth of offering from a brief glance at the page and also see in the offers straight away that we are price competitive. The general design of the Web site will be simplistic and easy to use. When a user logs on to Sports Ireland, they will be presented with the following page: 2 3 1 7 8 4 5 6 9 10 11 11 This page has been designed so that the user can find his/her way around the site with ease. At the top of the page there will be a number of options such as: 1. My Account: This will allow users to log into there own account and retrieve their own personal details from the database. 35 2. Help : This will provide help and tutorials to users on how to use the site. It will also outline the rules and regulations of the site. 3. Cart: This will detail the items that the user has selected for possible purchase. Items can be easily added and deleted from the shopping cart. 4. Gift Centre: This area will be subdivided into gifts for men and women, young and old etc, for each of the relative categories we will display the most popular gifts for each, this will aid the customer who is unsure what to buy. Once they have decided on what to buy they will be able to type a message to their loved one, which will be displayed on the card at time of delivery. 5. Team Sales: Team sales section is for clubs and societies who will be purchasing in bulk. Because of the quantity that they will buy, they will receive discounts. 6. Outlet Authority: The outlet authority section provides the user with information on reduced to clear stock. This section will change daily. Once the user clicks on the icon a search will be done in the database for stock that has been flagged to clear. Customers can also sign up to be notified by mail of reduced stock that must clear. 7. Underneath the company banner the user will be able to search for their required item. If they know exactly what product they want, then they can search our database by using the search field. If the item exists in the database they will be brought to the page detailing information about that particular product. 8. If the user is unsure what they want and would rather browse for ideas they can do so by selecting a category from the drop down menu, all categories in this menu have been listed in alphabetical order. 9. The next section down will be used to advertise new stock that has arrived. These advertisements will change daily, as new stock comes in a flag will be set in the database to say that that category has received new stock. When the user opens the page an advertisement will appear for that category, this will encourage users to click on the icon and view the new stock. 10. On the left hand side off the screen there will also be Billboard advertising, this space will be reserved for certain products and brands. If a company wants to promote the release of a new product they can rent this space for advertising. 11. Under Sports Republic Online advertising space and to the right of the Billboard advertising space there will be Browse the Store area. All the categories will be listed in alphabetical order the user just has to point and click to move to that page. Beside the Browse the Store there will also be Browse by Brand for those customers who will only buy certain brands. 12. Underneath the Billboard advertising section there will be an option to Sign Up and Save. This allows users to register with us by entering their email address, we will then notify these users about specials deals that are coming up. At the end of the screen there will be some links to general information such as: Buyers Guide, Sizes and Selection, Gift Shop, Gift Certificates/Cards, Shipping, Returns & Warranties, Privacy Statement and About Us. 36 7.1.2 CHOOSING A CATEGORY: There are several methods of selecting product; 1. First they could use the “Search by keyword or online item” search method, here the user just types in some keywords and a search for that item will be carried out. 2. Second they could use the Browse the store option where they can select a category from a drop down menu. 3. Thirdly the user can select any of the categories from the list that is presented to them in the centre of the front page. Choosing any of the above 3 ways to access their desired category, will bring the user to the same page. Once a user clicks on a category that category is sent to the database and all products related to that category will be returned and displayed on the second page. 7.1.3 SECOND PAGE DESIGN The second page will hold much the same design as the first page. The page will start by presenting the user with My Account, Help etc. options. Under this will be the Company Logo and under this will be the search options. 1 1 2 3 4 Since the user has gone a page deeper it will be necessary to display this, this is done under the search bar. As the user goes in a page it is displayed, for example: 37 Home > Cycling (see item 1 in diagram) The next section is divided into 2 columns, the column on the left will display sub categories (see item 2) for the Category the user selected, for example if the user selected cycling category on the front page then the left hand margin will contain sub categories such as men’s bikes, women’s bikes etc. The second column will contain the top five products that have been sold (see item 3). These products will be listed from the most expensive down. Each product will have a picture and a brief description. The description will be a link to a page with a more detailed description. On the right of the page the user will have an option to view all products (see item 4) like the one that is being displayed. There will also be an option to view buyers guide about the product this will provide the user with information about what the user should be looking for when buying this product. The user can then make an informed purchase. Under the sub category section there will also be a small section for advertising. Companies will be able to rent this space to promote specific products. The end of the page will contain some general information such as Buyers Guide, Sizes and Selection, Gift Shop, Gift Certificates/Cards, Shipping, Returns & Warranties and About Us. 7.1.4 DETAILED DESCRIPTION PAGE Once the user clicks on the description link on the second page they will be brought to the detailed description page. The detail description page will display pictures of the product on the right hand side of the page. These pictures can be enlarged by clicking on the icon ‘larger image’. The centre of the page will contain a more detailed description of the product, price and the delivery cost. On the far right of the page will be an option to click through all the products in this sub category one by one. This page also contains a related product section, which will display closely related products. If the user is interested in the product they can click on add to cart button and the product will be added. 7.1.5 MAKING A PURCHASE Once the user clicks on ‘add to cart’ button they are brought to the next page. This page will detail and the information that you have selected, as regards size and colour of the product. It will also indicate if the product is in stock or not. If the product is in stock then it will specify when the product will leave the warehouse. If the product is not in stock then it will detail when we expect the product in and a rough estimate of the time we will send it. 38 Once the user has checked over the details they can click on ‘Proceed to Secure Checkout’ to continue to the payment section. This page will have two main options and that is to sign in as a registered user or to set up an account for the first time buyer. Each way will eventually lead to the same place but a new user must first enter some details. Once the user has entered their username and password or signed up for a new account they will proceed to the shipping page. Here the user will be given details of shipping times and cost. The user can select which option best suits their needs. This cost will be added on to the bill. The user will then proceed to the payment page where they will enter their credit card details into a secure page. Once the details have been entered the user will click on proceed to checkout button, this will lead the user to the review page. Here the user can check their details one final time if everything is ok, the user can click on the payment button and a printable receipt will appear on the screen detailing the purchase. 7.2 Visual Layout Rationale The main navigation is on the left hand side of the site and across the top banner. The products that appear in the middle of the screen, with large visual images are current seasonal offers of bulk stock that we currently have. We recognise the site is not optimal for retailing and would include many more features given the budget for web development. 7.2.1 USE OF COLOUR & IMAGE We have purposely used ‘non aggressive’ colours so the user stays focused on the page. On the front page we highlight our current offers that we will use to move stock and we also have a link to our outlet store where we sell discounted stock. Where possible we want to limit the use of animations and pop ups. - Throughout the web site, colour usage has been minimal. The design team decided on a simplistic style and colour usage so that images and special text could be highlighted and very visible to the user. - On every page through out the site the background colour is white. This is to ensure that the customers’ attention is drawn to the advertisements, special offers and promotions which will all be in bright, attracting colours. - Colour is also used when users click on links to other pages. Once the user has clicked on a link it will change colour. This will further aid customers with navigation. - Images play a very important role in the web site. Images are used for advertisement and also for viewing products. It is important that these images are clear and stand off the page so that the user has a clear view. - Advertisement images are used on the Front Page to direct users to SRO new stock. Images are also placed on the Front Page to advertise new products for our suppliers. 39 - There is also an image in the database for every product that exists in our database. Since we are an online company the only way the customer can get a feel for the look of the product is through good imagery. Each product has many images from many angles, this is to give the customer the feeling that they are physically holding the product and can view it from any angle. 7.2.2 INTERFACE & NAVIGATION We have kept navigation simple, so the user can search by sport, brand or by using the search engine. The main sports are also included in a Navigation bar at the top of the screen. The site will aim to cater for customers of all ages because of this the design team decided to keep the interface and navigation very simple. It is evident from viewing the page that everything is well spaced out and that there are never too many functions happening on a page. From our own experience we feel that sites such as Amazon can be off putting as too much is happening on one page and the page can be clustered to look at. Navigation on the site is very easy, just point and click. Users will know when they have visited a page because the link will change colour once they have clicked on it. As the user goes deeper into the site there will be a tracker on the top of the page indicating what page the user is now on and what pages he/she has clicked through to get there. 7.2.3 LOGICAL CHUNKING OF INFORMATION We have listed the sports alphabetically and also listed the brands alphabetically both on the main page and within each sports page. This means that the user can instantly search by whatever variable they want to and get to the desired product area quickly. Since must users of the web generally scan a site from top to bottom and rarely use scroll bars to view the end of the page, we decided to implement a hierarchical system for the layout of information. The most important information was at the top of the screen and always in view when the page opened. Less important information will be stored at the lower end of the page. 7.2.4 USER EXPERIENCE Once a user has decided what they would like to view they have several methods of selecting it: First they could use the “Search by keyword or online item” search method, here the user just types in some keywords and a search for that item will be carried out. Secondly they could use the Browse the store option where they can select a category from a drop down 40 menu. Thirdly the user can select any of the categories from the list that is presented to them in the centre of the front page. By choosing any of the above 3 ways to access their desired category will bring the user to the same page. Once a user clicks on a category that category is sent to the database and all products related to that category will be returned and displayed on the second page. My Account: This will allow users to log into there own account and retrieve their own personal details from the database. Help : This will provide help and tutorials to users on how to use the site. It will also outline the rules and regulations of the site. Cart: This will detail the items that the user has selected for possible purchase. Items can be easily added and deleted from the shopping cart at any stage. The next section of the page will display the company logo and some of the sites options. These options will include: Gift Centre: This area will be subdivided into gifts for men and women, young and old etc, for each of the relative categories we will display the most popular gifts for each, this will aid the customer who is unsure what to buy. Once they have decided on what to buy they will be able to type a message to their loved one, which will be displayed on the card at time of delivery. Team Sales: Team sales section is for clubs and societies who will be purchasing in bulk. Because of the quantity that they will buy, they will be offered generous discounts. Outlet Authority: The outlet authority section provides the user with information on reduced to clear stock. This section will change daily. Once the user clicks on the icon a search will be done in the database for stock that has been flagged to clear. Customers can also sign up to be notified by mail of reduced stock that must clear. Underneath the company banner the user will be able to search for their required item. If they know exactly what product they want, then they can search our database by using the search field. If the item exists in the database they will be brought to the page detailing information about that particular product. If the user is unsure what they want and would rather browse for ideas they can do so by selecting a category from the drop down menu, all categories in this menu have been listed in alphabetical order. The next section down will be used to advertise new stock that has arrived. These advertisements will change daily, as new stock comes in a flag will be set in the database to say that that category has received new stock. When the user opens the page an advertisement will appear for that category, this will encourage users to click on the icon and view the new stock. 41 On the left hand side off the screen there will also be Billboard advertising, this space will be reserved for certain products and brands. If a company wants to promote the release of a new product they can rent this space for advertising. Under Ireland Online Sports advertising space and to the right of the Billboard advertising space there will be Browse the Store area. All the categories will be listed in alphabetical order the user just has to point and click to move to that page. Beside the Browse the Store there will also be Browse by Brand for those customers who will only buy certain brands. Underneath the Billboard advertising section there will be an option to Sign Up and Save. This allows users to register with us by entering their email address. We will then notify these users about specials deals that are coming up. At the end of the screen there will be some links to general information such as: Buyers Guide, Sizes and Selection, Gift Shop, Gift Certificates/Cards, Shipping, Returns & warrranties and About Us. 7.3 Business Design Rationale The design rationale outlined in 7.2 and 7.3 have been so defined in order to fulfill a number of key criteria which we outlined at the start of the project. These are 1. The site should aim to achieve our business objectives. 2. The site should have a professional look and feel to it. This means clear navigation and no clutter. 3. The site should be flexible in terms of its administrative back end. 4. The site should offer us the ability to promote some products more intensively than others. 5. It should provide the ability for supplier to advertise. 6. The use would not be intimidated by the site and could browse by sport, by brand or directly through an internal search function. 7. The site should allow for personalization. 8. The site should appeal to a broad range of people, in terms of potential buyers. Ie are they are part of a team, are they buying a gift , are they looking for a bargain. We wanted to create an inclusive feel so everyone regardless of whether they were buying for themselves or for somebody else would feel they could use the site. 9. The site should inform the customer through a high level of detail and price comparison. 42 8 IT Systems (Processes) IT systems are at the core of ensuring our business model is successful. They span every element of the extended marketing mix and are the building block on the internal functioning of the organisation. The planning behind a company network structure and its IT systems is a vital ingredient in ensuring most effective use of resource in the Marketing and Sales effort. 8.1 Company Network Architecture As the web platform is a key distribution/ information channel, we attach great importance to the security and robustness of this channel. In terms of the environment set up we have created the following IT Environment to ensure that we are able to trade at all times, even in the event of a major incident. Fig 8.1 on page 44 show the planned IT architecture for the company. The company’s network can be divided into external and internal. The Clients interact with the web application via Internet connection, client requests are dealt with through the web servers, the application server responds to the third party providers, and e.g. the web system connects to the credit card payment gateway for the payment approval. In later phases as part of a businesses continuity plan, data/servers may be housed/replicated in a data warehouse as shown in the fig 8.1. The core business server has all our software, including our customer/supplier databases which will originally be designed in MS Access for cost saving reasoning. In phases 2 and 3 custom designed CRM, Financial and Stock Management systems may be used. We may also consider using EDI (Electronic Data Interchange) systems if sufficient scale is achieved, to receive and deliver supplier and customer billing. When this phase is reached we would look at an overriding Management Information System that would deliver real time performance data. The diagram also shows built in redundant links for both our main business server and our web server. In the event of a disaster, we can redirect the IP address of either servers over the Internet. These servers will initially be backed up over 2 internet VPN’s (Virtual Private Networks) and regular intervals throughout the business day. We have also demonstrated the possibility for suppliers and distributors to be able to log directly into certain parts of our business server (in latter phases) so they can amend relevant data and receive relevant information on their particular interest. (E.g. DHL could log in to see what amounts of goods were being dispatched so they could send the appropriate sized vehicles). 43 Fig 8.1 Network architecture 8.2 Disaster Recovery / Business Continuity When considering a Disaster Recovery Plan for Sports Republic Online we took into consideration 2 main factors: 1. Recovery Point Objective (RPO) - The RPO denotes the amount of data that can be lost before our organization begins to suffer. Recovery Time Objective (RTO) - The RTO indicates how much time the IT staff can take to bring the application back online after a disaster occurs. 2. Cost vs. Probability – This will take into account the cost of the software and hardware needed for the Recovery System and the probability of a disaster happening. Apart from standard back up tapes in the local company environment, We will have a back up server housed on an employees personal premises initially (for cost control reasons) and in phase 3 we will move to having back up servers at a secure data warehouse. Initially both servers will be backed up twice daily on a standard tape back up system. We will also have an Un-interruptible Power supply (UPS) that delivers 1 hours power dedicated for the core IT Systems in the event of a power outage. After 5 years we anticipate the company to grow substantially and so does the importance of faster recovery. Remote mirroring would be Introduced such a system. Remote Mirroring uses redundancy to guarantee data availability. A remote mirrored data volume consists of two identical copies of the data connected by a Fibre/dedicated DSL Channel. Both sides of a mirror process read and write I/Os to ensure each copy is a real-time duplicate of the other. 44 The mirror copies are housed in separate data centres, connected over a local- or metro-area network (LAN or MAN). If a disaster interrupts access to one side of a mirror, the surviving copy will continue to service application I/O requests and therefore minimize the disruption to business users. 8.3 Systems Software E-Commerce pertains not just to the Internet but also to the use of ICT within the business to drive efficiencies. The purpose of this section is to outline the key software requirements. There will be some basic requirements that span all elements of our IT Requirements. These will include the importance of scalable systems that can adapt as the organisation grows. Initially the web platform will be built in house using the technology outline in section 6. Other Applications will run on standard Microsoft applications as there is already in house competence in this area. Customer Relationship Planning and Enterprise Resource management will be run using a database designed internally using MS Access using inhouse expertise. As the organisation grows, the ‘integratability’ of the systems with other systems in place in the organisation is important. It is envisaged that late in Phase 2 professional software system procurement would be done via tender. In the RFQ document for the tender, Management should outline their key requirements from the different applications. - Enterprise Resource Planning (ERP) Software - Financial / Stock Management Systems - Electronic Data Interchange (EDI) Systems - Dispatch & Distribution Software - Customer Relationship Management (CRM) Software 8.4 MIS / MkIS Systems In phase 1, information reporting would be delivered through Access Reporting, through low cost web management software and also reporting functionality from the sequel database that runs our website. In phases 2 & 3 Management Information System (MIS) and Marketing Information would be derived from the 5 applications listed above. In these cases we would attempt to use it for Causal modelling, recording the impact of playing with variables of the marketing mix on sales. E.g. looking at promoting during world cups etc. 45 9 Financial Planning Section 8 outlines the key funding sources for the SRO project. The funding amounts are based on discussion with a number of venture capitalists companies, and the government run Business Expansion Scheme as to what would realistically be available. It is envisage that after year 5 that the Owners would quite likely see their shares to the venture capitalists and they would then assume responsibility for the company. 9.1 Phase Investors Amount Invested Phase 1 Owners * 4 100000 Business Expansion 100000 Scheme Venture Capital 150000 Funding Phase 2 Additional Owner 70000 Investment Further VC Funding 200000 Note: These are only indicative equity stakes 9.2 Investor Total Equity 60% 15% 40% 35% 55% Finance Strategy Initial investment in Phase 1 will consist of cash for equity provided by the 4 directors of the company. Total phase 1 Funding will be 350000 Euro. Phase 2 funding will be further funding through cash injections by the current owners and the venture capitalists. 9.3 Capital Investment Capital investment will only occur in IT Infrastructure and one service Van. There will be no other capital outlays outside of standard Office fixtures and fittings. 9.4 3 Year Projected Accounts This section details the forecast accounts based on the investment received outlined in section 7.1. The Revenues are conservative estimates based on achieving extremely low market penetration in each of the sporting areas we have decided to enter. Included in this section are Profit & Loss, Balance Sheet and Cash Flow statements as well as a cash budget management account. Further detailed Management accounts are outlined in Appendix E. 46 9.4.1 P&L Sport Ireland Cash Budget For the year ended Dec. 31, 200x Quarters 2006 2007 2008 0 30320 125265 665520 880020 1324810 0 264645 0 250000 100000 350000 1015520 200000 70000 270000 1180340 0 100000 100000 1550075 186200 95200 0 281400 143325 91000 0 234325 578200 297000 110000 985200 725625 309450 20000 1055075 1031490 354475 70000 1455965 101805 30320 30320 125265 94110 2008 4 140,000 1,600 141,600 2006 Total 700,000 8000 708,000 2007 3 210,000 2,400 212,400 875,000 16000 891,000 1,312,500 40000 1,352,500 183,750 28,650 102,500 -73,850 122,500 19,100 92,500 -73,400 612,500 95,500 341,000 -245,500 735,075 155,925 371,750 -215,825 1,050,000 302,500 393,625 -91,125 1 0 2 106370 3 170805 4 101805 99120 191160 212400 162840 Financing: BES / Venture capital…. Enterprenuer contribution Total financing Total cash available 100000 100000 200000 299120 150000 0 150000 447530 0 0 383205 Less disbursements: Merchandise purchases Selling and administrative Capital Purchase Total disbursements 80850 45900 66000 192750 167825 64900 44000 276725 Cash balance ending 106370 170805 Product Sales Service Revenue Total Revenue 1 140,000 1,600 141,600 2 210,000 2,400 212,400 Less cost of goods sold Gross margin Less selling and administrative expense Net operating loss 122,500 19,100 68,000 -48,900 183,750 28,650 78,000 -49,350 Cash balance, beginning Add receipts: Collections from customers 0 Total Sport Ireland Budgeted Income statement For the year ended Dec. 31, 200x Quarters 9.4.2 CASH FLOW Sport Ireland Statement of Cash Flows For the year ended December 31, 200x 2006 2007 2008 -245,500 -215,825 -91,125 22000 -12250 68550 -42,480 -209,680 26000 -3050 48800 -10,980 -155,055 40000 -7000 24660 -27,690 -61,155 110000 -110000 20000 -100000 0 0 350000 350000 30,320 0 30,320 270000 270000 94,945 30320 125,265 0 0 -31,155 125,265 94,110 Operating activities Net income (loss) Adjustment to convert net income to a cash basis Depreciation expense Increase in merchandise inventory Increase in accounts payable Increase in accounts receivable Net cash provided by operating activities Investing Activities Additions to property, building and equipment Net cash used in investing activities Financing Activities Equity investment Net cash used in financing activities Net increase in cash Cash balance at beginning of year Cash balance at end of year 47 9.4.3 BALANCE SHEET Sport Ireland Budgeted Balance Sheet December 31, 200x Assets Current assets Cash Accounts receivable Merchandise inventory Total current asset Plant and equipment: Equipment Less Accumulated depreciation 2006 2007 30320 42,480 12250 125,265 53,460 15,300 85050 110000 22000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Stockholder's equity Common stock Retained earning Total stockholders' equity Total liabilities and stockholders' equity 48 94,110 81,150 22,300 194025 130000 48000 88000 Plant and equipment, net Total assets 2008 197,560 200000 88000 82000 112000 88000 173050 82000 276025 112000 309,560 68550 117350 142010 350000 -245,500 173050 620000 -461,325 276,025 720000 -552,450 309,560 10 Long Term Business Planning & Marketing Relevance The long-term goal is to get to the top and achieve our vision of being the number one online retailer of sports goods in Ireland. Within the context of this vision we recognise that in our environment there will be significant technology and social changes it is envisaged that our business plan is essentially a working document. The organisation needs to be flexible to adapt to changes in the environment, this will mean revisiting our marketing, technology and sales plans on a quarterly or twice yearly basis. Outlined below is a synopsis of each phase of the planned business growth, how we envisage the company / staff working and expectations from each stage. 10.1 Description Phase 1 – Start up A Phase 1 – Roll out plan is shown in Gant chart format in Appendix 6. This details the key tasks that would take place in phase 1. As illustrated by the chart a large proportion of the preparatory work would take place prior to a ‘trading launch’. Naturally the financial and legal aspects of the company would first have to be confirmed. This includes securing investment capital initially from the BES and later from Venture Capitalist, establishing the company legally and drawing up all legal documentation. IT HW Infrastructure would also be procured and the web portal infrastructure designed together with operational software for managing the companies’ databases. From a product perspective, the product starting range would be clearly defined and suppliers sourced, together will supply and delivery contracts/ terms and condition decided. This would enable the financial models to be loaded on to the server. All marketing design work would also be completed prior to official trading launch, as far as practicable. Simultaneous to all of the above happening, premises on the north M50 ring would be sourced and fitted out. During this period delivery contracts would be negotiated and the necessary on site infrastructure installed Once the trading launch occurs, this is when some of the positions in 5.1 will begin officially working full time with SRO. They will implement the marketing strategy in sections 4 and actively start selling and promoting the concept around the country. As the demand for product grows additional part time staff may also be required. It is hope by 12 months that all staff outline in phase 1 of fig 5.1 (with the exception of the IT director), will be operating at full capacity and that their will be sufficient sales to attract further Venture capital Investment to move to the Growth Phase and take on additional employees The focus in Phase 1 will be a limited number of specific sports where we can attain higher margins. We will look to source quality brands, in particular some of which are currently not available in Ireland. A key challenge will be signing exclusivity supplier deals. Promotion in phase 1 will be about getting distribution of the name through the ‘grass roots’ channel of the selected sports in addition to the ‘nationwide’ promotions we will undertake. 49 10.2 Description Phase 2 – Growth Phase 2 will naturally encompass a review of business to date. Within that review period some product lines will be discarded, but we will look to expand into more main stream sports on a phased basis over the course of phase 2. With additional resource we will also seek to increase the promotional spend in more mainstream media and event sponsorship, while still focusing strongly on grass roots promotions through Sporting associations and sporting interest publications 10.3 Description Phase 3 – Expansion In phase 3, we will look at establishing overseas markets. SRO may also consider selling the business to large multinationals. With venture capitalists involved they will quite likely want to change management and sell off or take their own direction following five years. 10.4 Risk Analysis Managing Risk with a new business is an important part of the planning process. We see the main risks existing in low market uptake of the concept. We have tried to counter this by keeping the cost base in phase 1 very low. 10.5 Control & Feedback Management will bear responsibility for making sure this document is a living document. Of particular relevance is that the business audit and marketing mix are reviewed on a quarterly basis. Any new information generated from this review should be then fed back through the relevant channels to the different stakeholders within the organisation. 10.6 Financial Integrity This project is based on gaining significant Venture Capital funding. The key financials would involve being fully profitable by year 4 and turning an operating profit by the end of year 1. 10.7 Research & Development A key issue is staying in touch and not falling behind in the technology stakes. By ignoring what is happening in the tech world particularly in the areas of procurement & logistics management, supply chain management and dispatch systems organizations can lose their competitiveness. Key areas of Interest will be emerging 3G Technologies (shopping online may occur through mini-browsers on hand held devices). Other areas of Interest, particularly in stock management will be in embracing RFID technology. However it is recognized it is wrong engage in technology for the sake of technology. The IT director will be responsible for managing this process and we will wait and see how the market responds to new technology before integrating it into the business. 50 Appendix A – Phase 1 Sports Selection Level 1 Menu - Sporting Goods Cycling Boxing & Martial Arts Outdoors - Camping/Hiking Fishing Wintersports Bikes - Men Bikes - Women Bikes - Youth Bikes - Kids Bikeboards BMX Shop Footwear & Apparel Helmets Hydration Packs Parts & Accessories Racks and Storage Gloves Heavy Bags Speed Bags Bag Sets Boxing Rings Clothing / Apparel Handwraps Jump Ropes Mouth Guards Protective Equipment Golf Fitness / Exercise Accessories Clothing / Apparel Boats / Rafts Electronics Fillet Knives / Tools Fishfinders / Accessories Fly Fishing Ice Fishing Kids Fishing Line Reels Rod & Reel Combos Rods Vests Waders / Shoes Clothing / Apparel Back Country Gear Bags / Packs Bindings Boots Cross Country Goggles Helmets Protective Gear Racks / Storage Ski Poles Skis Snowboard Bindings Snowboard Boots Snowboards Left Handed Shop Accessories Clothing / Apparel Bags Balls Drivers Fairway Woods Footwear Gloves Golf Pull Carts Hybrid Clubs Putters Sets / Irons Wedges/Loose Irons Treadmills Elliptical Machines Home Gyms Ab/Bun/ThighTraining Clothing / Apparel Bikes Club Equipment Core Training Fitness Balls Footwear Heart Rate Monitors Rowers Steppers Air Beds / Cots Clothing / Apparel Canopies Cookware Coolers / Warmers Electronics First Aid / Survival Footwear Hydration / Water Treatment Navigation Optics / Telescopes Packs / Carriers Sleeping Bags / Gear Stoves / Burners Tents Tools / Knives Vehicle Accessories Wrist Computers / Altimeters Water Sports GAA Hurling Football Camogie County Clothing / Apparel Equipment Equestrian Aquatic Fitness Boating / Marine Bodyboarding Footwear Life Vests Snorkeling/S.C.U.B.A. Surfing Swimming Kite Surfing Waterskiing Wetsuits & Rashguards Windsurfing Horsewear Saddlery Equipment Rugs Hats Boots Yard Equipment Tack Room Appendix B– Strategic Relationships / Market Overview Martial Arts SPORTS Cycling Outdoors Boxing Karate Judo Fitness Active Irish Particpants 35000 250000 2350 5600 3800 150000 No of Registered Clubs 163 No offical registrations 95 145 111 N/A Key Associations Irish Cycling Federation Influential Print Media What Mountain Bike Cycling Weekly Mountain Bike Magazine SPORTS Walking World Ireland Irish Amatuer Boxing Association Irish Karate Association www.iaba.ie http://www.martialarts.ie/ Irish Judo Association http://www.martialarts.ie/ Irish Fighter Martial Arts Martial Arts Golf Equestrian Fishing GAA Watersports Active Irish Particpants 250000 25000 30000 450000 45000 No of Registered Clubs 408 223 N/A Key Associations Influential Print Media Golfing union of Ireland www.gui.ie Golf Digest Ireland Irish Golf Review 7600 Irish Horse society Irish Showjumping association N/A GAA Horse & Hound Eventing Horse Deals Irish Angler Anglers Digest Peil Gaelic World 51 Irish Windsurfing Association Irish Sailing Association Afloat FINS Irish Watersports Kitesurf N/A Wintersports Appendix C – Promotional Gant Chart TRADITIONAL ABOVE THE LINE TV Advertising Local Radio Advertising Outdoor Advertising Print Media Advertising Local Press National Press Magazine Online Banner Ads TRADITIONAL BELOW THE LINE Sales Promotion National /Event Sponsorship Brand Association Opportunitiies ONLINE PROMOTION Generic Promotion Website Promotion End of Q promotions Direct E-Mail Promotion Internet Search Advertising Association with Bots Banner Ads on Other sites Seasonal Event Promotion (eg World Cup/Olympics) Winter Holiday Season Irish Angling Festival National / Regional Water sports events Specific Sport World Chapionships Specific Sport European Championships Summer Outdoor Sports/Leisure The Horse Show Olympics Milk Ras / National Mountain Biking Chps Irish Martial Arts tournaments Year 1 BUDGET 25000 YEAR 1 W1=Jan01 w1 w2 w3 w4 w5 w6 w7 w8 w9 w10 w11 w12 w13 w14 w15 w16 w17 w18 w19 w20 w21 w22 w23 w24 w25 w26 w27 w28 w29 w30 w31 w32 w33 w34 w35 w36 w37 w38 w39 w40 w41 w42 w43 w44 w45 w46 w47 w48 w49 w50 w51 w52 ` 20000 25000 GAA Hurling Chm GAA Footbal Chm Product / Brand Specific Promotion Sporting Goods Batch A Sporting Goods Batch B Sporting Goods Batch C Sporting Goods Batch D Sporting Goods Batch E PUBLIC RELATIONS STRATEGY Strategic Media PR Internal Site Investor Relations Press Release National Level Local Level Recruitment Advertising 10000 Appendix D – Management Accounts Sport Ireland Sales Budget For the year ended Dec. 31, 200x Sales of merchandise Sales of services 1 140,000 1,600 141,600 2 210,000 2,400 212,400 Quarters 3 4 210000 140,000 2400 1,600 212400 141,600 2006 2007 Total 700,000 875000 16000 8,000 708,000 891,000 2008 1312500 40000 1,352,500 Sport Ireland Schedule of Expected Cash Collection For the year ended Dec. 31, 200x Accounts Receivables beginning balance First quarter Second quarter Third quarter Fourth quarter Total collection 1 2 99120 42480 148680 99120 191160 * Y/E Accounts receivable Quarters 3 63720 148680 4 63720 99120 212400 162840 2006 Total 2007 2008 42,480 141600 124740 212400 240570 212400 267300 99120 204930 665520 880,020 53,460 189350 365175 405750 311075 1,324,810 53,460 81,150 42,480 Assumptions: 70% of sales is collected in the quarter of sale the other 30% in the following quarter The co. is to start business in January (sales are higher in the summer and slightly lower in winter). 52 Sport Ireland Merchandise Purchases Budget For the year ended Dec. 31, 200x Budgeted cost of goods sold Add desired ending inventory Total needs Less: Beginning Merchandise inventory Required purchases 1 2 122500 12250 134750 0 134750 183750 18375 202125 12250 189875 Quarters 3 2006 Total 2007 2008 4 183750 122500 18375 12250 202125 134750 18375 18375 183750 116375 612500 12250 624750 0 624750 735075 15300 750375 12250 738125 1050000 22300 1072300 15300 1057000 2006 Total 2007 2008 4 73500 69825 186200 143325 134750 189875 183750 69825 578200 46550 88575 191913 221438 177150 725625 59050 126840 274820 317100 253680 1031490 46550 59050 84560 Sport Ireland Schedule of Expected Cash Payments for merchandise purchases For the year ended Dec. 31, 200x 1 Accounts payable beginning balance First quarter: Second quarter purchases Third quarter purchases Fourth quarter purchases Total cash payment 0 80850 80850 2 53900 113925 167825 Quarters 3 75950 110250 Accounts Payable from merchandise purchase Assumptions: 10% expected sale of the quarter is required for inventory 60% of purchases is paid in the quarter of purchases and the rest in the following quarter Sport Ireland Selling and Administrative Expense Budget For the year ended Dec. 31, 200x 4 100000 0.05 5000 2006 Total 700000 0.05 35000 2008 Budgeted sales Variable selling and Administrative Expenses Budgeted variable expense Budgeted fixed selling and administrative expense Advertising Excutive salaries Insurance Rent expense Depreciation Total Total budgeted selling and administrative expense Less depreciation Selling and adm. Expense Quarters 2 3 250000 300000 0.05 0.05 12500 15000 2007 1 50000 0.05 2500 875000 0.05 43750 1,352,500 0.05 67625 20000 30000 4000 6000 5500 65500 68000 5500 62500 20000 20000 30000 50000 4000 6000 6000 6000 5500 5500 65500 87500 78000 102500 5500 5500 72500 97000 20000 50000 6000 6000 5500 87500 92500 5500 87000 80000 160000 20000 24000 22000 306000 341000 22000 319000 50000 200000 16000 36000 26000 328000 371750 26000 345750 30000 210000 10000 36000 40000 326000 393625 40000 353625 Cash payment for selling and administrative exp 45900 64900 91000 297000 309450 354475 22000 68550 58300 117350 57450 142010 Accounts Payable from Sell. Adm. Total Accounts payable 95200 Assumptions: Variable selling and administrative expense is assumed to be 5% of sales. Three personnel are assumed to start job at the beginning and two more on the third quarter Additional building will be rented during the second year. Depreciation is calculated on straight line method assuming assets have 11 years life. Lease hold is for 10 years and 2000 rent per month and additional lease 0f 1000 a month starting second year. Salaries are to be paid monthly and other disbursements are to be made 60% in the quarter of occurrence and the rest in the following quarter. 53 Sport Ireland Capital Budget For the year ended Dec. 31, 200x Equipment purchases Software purchases Total Cash payment 1 90000 20000 2 0 0 Quarters 3 0 0 4 0 0 2006 Total 90000 20000 2007 2008 20000 20000 50000 110000 0 0 0 110000 20000 70000 66000 44000 110000 20000 70000 Sport Ireland Cash Budget For the year ended Dec. 31, 200x Quarters 2 3 106370 170805 2006 Total 0 2007 2008 4 101805 30320 125265 99120 191160 212400 162840 665520 880020 1324810 Financing: BES / Venture capital…. Enterprenuer contribution Total financing Total cash available 100000 100000 200000 299120 150000 0 0 150000 0 447530 383205 0 0 264645 0 250000 100000 350000 1015520 200000 70000 270000 1180340 0 100000 100000 1550075 Less disbursements: Merchandise purchases Selling and administrative Capital Purchase Total disbursements 80850 45900 66000 192750 167825 186200 64900 95200 44000 0 276725 281400 143325 91000 0 234325 578200 297000 110000 985200 725625 309450 20000 1055075 1031490 354475 70000 1455965 Cash balance ending 106370 170805 101805 30320 30320 125265 94110 Cash balance, beginning Add receipts: Collections from customers 1 0 1st 8.55% 3578947 -141.87% 13.49% Contribution Margin Break-even sales Return on investment Gross Profit Margin 54 2nd yr 12.59% 2605242 -78.19% 17.50% 3rd yr 17.37% 1876799 -29.44% 22.37% Appendix E – Phase 1 - Project Roll Out Sports Republic Online - Phase 1 Project Roll Out Month TECHNICAL IT HW Procurement TRADING Mth 1 Prior Mth 2 Prior to Launch to Launch J F M A M J J A S O N D Main Server Web Server PC's & HW Communications Infrastructure installed IT SW Procurement Web Portal Sales Systems Designed Business Application SW Installed Software written and robustly tested Staff trained in Administration of the Portal LOGISTICAL Premises Secured Warehouse Fitted Out Offices Fitted Out Fixtures Acquired 2nd Hand Van Acquired DHL contract negotiated DHL Equipment Installed Packaging Equipment acquired Logistics Processes defined PRODUCT Supplier Contracts Negotiated Product Range Selected Products Ordered Cost Pricing Calculated Terms & conditions negotiated End prices determined MARKETING Brand Logos & Standards Developed Website Commissioned Domain Names Acquired Packaging designed, sourced and ordered Product Promotional Strategies Devised Launch Date and Process decided Individual Promotional Activities delivered FINANCIAL & LEGAL Legal Status of Company defined BES Investment Secured Venture Capital Secured Legal Contracts drawn up Equity Stakeholding defined OPERATIONAL Business Continuity Planning Processes Defined Ordering Returns Discounting Web Portal Commisioned for use Other Policiies defined PROMOTION Launch promotional strategy defined Ongoing promotional strategies defined SALES Strategic Business relationships sought /intiated Sales Promotions planned 55 Bibliography Print Media Bradley F, 1995 Marketing Management- Providing Communicating and Delivering Value, Prentice Hall Hannan M, 1999, Consultative Selling, American Management Association Loudon D & Della Bitta J, 1993, Consumer Behaviour, McGraw Hill Malhotra N, 1991, Market Research – An Applied Orientation, Prentice Hall Mc Donald M & Wilson H, 1999, e-Marketing-Improving Market Effectiveness, Financial Times-Prentice Hall O Connor et al 2004, Electronic Marketing – Theory & practice for the 21st Century, Prentice Hall Price Waterhouse Cooper 2004, Guide to Venture Capital, PWC publications Siebel Systems 2002 , Target Account Selling Training, Siebel Training Limited. Online Media www.amarach.com www.cro.ie www.domainregistry.ie/RegistrationPolicy.php#RegBusName www.enterprise-ireland.com www.esatbt.com www.forfas.ie www.ican.ie www.irishsportscouncil.ie/ www.revenue.ie 56