Download Document 8907089

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
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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
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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
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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
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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
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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.
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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