Professional Documents
Culture Documents
Marketing Management:
Marketing Plan
OTTO SHOES
TABLE OF CONTENTS
Title Page........................................................................................................................1
Table of Contents.......................................................................................................... 2
I. Executive summary.....................................................................................................4
II. Introduction.................................................................................................................4
III. Background of the Study..........................................................................................5
IV. Current Marketing Situation
Product Situation.................................................................................................6
Market Situation...................................................................................................6
Competitive Situation..........................................................................................7
Distribution Situation..........................................................................................7
Macro-environment..............................................................................................7
V. Opportunity and Issue Analysis
Strength................................................................................................................8
Weakness.............................................................................................................8
Opportunity..........................................................................................................9
Threat....................................................................................................................9
Issue......................................................................................................................9
VI. Marketing Objectives
Market Share......................................................................................................10
Profitability.........................................................................................................10
VII. Marketing Strategies
Product Strategies.............................................................................................12
Target Market Strategies...................................................................................15
Positioning Strategies.......................................................................................16
Pricing Strategies..............................................................................................16
Distribution Strategies......................................................................................17
Promotion Strategies.........................................................................................17
VIII. Financial Analysis.................................................................................................18
IX. Action Plan...............................................................................................................22
X. Appendices...............................................................................................................25
XI. Bibliography............................................................................................................26
I. Executive summary
OTTO Shoes is a men and women's shoe brand in the Marikina, Metro Manila,
Philippines. OTTO Shoes badly needs an upscale shoe designs for men and women
because the current stores have an inadequate selection.
OTTO will have a supreme, extensive selection of different designs for shoes.
Generally, the size of Passion Soles' selection is cost prohibitive due to all the different
sizes that must be stocked per style. OTTO Shoes has a unique business model that
allows them to have an extensive selection at the cost of only of affordable price with
unique designs. This is accomplished through a special relationship with the wholesaler
so OTTO Shoes can receive a customer's needed designs. While some people might
not like a store where shoes cannot be tried out before purchasing or ordering, men and
women's fashionable shoes are different. When it comes to trendy, nice looking shoes,
aesthetics are prioritized more than fit. Clearly these shoes are comfortable, and they
look so nice and that is what counts.
OTTO Shoes will have an extensive knowledge of the women's retail shoe
industry to quickly gain market share. Profitability will be reached by the end of the year
2013 and Php15 million will be generated in revenue by the end of 2013.
II. Introduction
OTTO general merchandise is a Retailer Shoes business in Marikina, Metro
Manila. An OTTO Shoes specializes in genuine and synthetic leather footwear for men,
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women and children. Marikina City has been the shoe capital of the Philippines where in
OTTO Shoes is located at. OTTO Shoes are purely made in Philippines and now are
spotted into different places and shopping mall in the country.
OTTO Shoes has come a long way from its first free-standing shoe store with five
employees. Since 1979, OTTO Shoes has been manufacturing high quality footwear
famed for being comfortable and trendy. Driven by passion for innovation and Filipino
pride, the people behind OTTO Shoes continuously strive to deliver only the best.
OTTO Shoes has not stopped evolving, each success serving as inspiration to further
sharpen their craft. It is this enthusiasm for great designs that keeps OTTO Shoes at the
top of its game. And the shoe brand is taking its quest for the next groundbreaking style
to an entirely new level.
companies engaged in this sector have their own take on what are trendy and
fashionable shoes at any given moment; according to colours, style, popular culture,
design theme, emerging trends, seasonality, etc. This provides consumers with
unparalleled opportunities to pick and choose across different brands and to combine
them in order to satisfy their increasing need for expressing their individuality and
to choose their own style of shoes.
with. And based on research, the population of Marikina has increased 1.4%growth
rate. Men and women with work, and children that goes to school are also targeted. The
income of the market can range with the average income that a working person can
have since OTTO Shoes has a premium price. People with a quality and style
conscious best suits the market of OTTO Shoes.
Competitive Situation
The competition creates threats and provides opportunities and to grow the
business, OTTO Shoes need to gain market share by drawing customers and
purchases away from competing companies. The OTTO Shoes faces a direct
competition among other shoe brands such as Mendrez, Gibi and Rusty Lopez that also
have the quality and style that the market wants. The other competitors can be the new
brands or the expanded offerings that the old competitors have.
Distribution Situation
In the shoe industry, the products are delivered to retailers, from the
manufacturers, who operate outlets that directly sell products to consumers. Most of
them also have outlets in retail establishments such as department stores. This helps
them reach more consumers alongside with their competitors. In some cases, the
producers sell their products directly to customers. Some dont use such intermediary
channels, like retailers, and put up factory outlet store.
Macro-environment
making,
are
political,
in interest
rates
changes
in
cultural tastes,
disastrous weather,
OTTO Shoes has established its image and credibility for decades.
Weakness
OTTO Shoes lacks advertisement and its style are already outdated.
Nowadays, OTTO Shoes has larger target market that can increase its sales and
good image.
It has also large profit that can be used for innovations and advertisements.
Threat
Its products have high prices that many people cannot afford.
Their stores are small and many of it are located in places that many of the target
markets do not go into.
Issue
OTTO Shoes have decreased in sales for the past years and it seems that it
does not exist anymore in the market.
QUANTITY
stitching 10
RATE
AMOUNT
Php80,000
Php800,000
machines
Sewing machines
10
Php10,000
Php100,000
Electrification
Php100,000
Php100,000
Packaging Machine
10
Php5,000
Php50,000
Php1,050,000
TOTAL
10
RAW MATERIALS
MATERIALS
QUANTITY
RATE
AMOUNT
Leather
1200 meters
Php1,000/meter
Php1,200,000
Zipper
1200 bundles
Php150,000/bundle
Php180,000
Buckles
1200 pieces
Php250/piece
Php300,000
Cloth
6,000 meters
Php100/meter
Php600,000
Php3,440,000
TOTAL
NUMBER
SALARY
AMOUNT
Manager
Php234,000
Php234,000
Supervisors
Php162,000
Php810,000
Employees
25
Php126,000
Php3,150,000
Php4,194,000
TOTAL
11
Table6.3. Estimated capital of OTTO Shoes in the salaries and wages in a year.
12
Shoes is an eco-friendly company that also appreciates the use of eco-friendly bags for
shopping.
Any complains will be entertained properly. Appropriate remedies to the products
deficiencies will be given. Receipts should be shown along with shoes that needs repair.
Products that has deficiencies can be replaced once proven that they are purchased
within a week.
13
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because of their husbands. Their love for shoes won't be a problem since they have
their time and money to get what they want to own. And OTTO shoes have designed
specific shoes for them - perfect for indoor use and for strolling.
Positioning Strategies
OTTO shoes will position itself as the best provider of fashionable high quality
shoes for men and women. The materials used to create the products are the best
materials that shoes should use. In line with our goal to set trends, the company will
position itself on the industry as a creative producer of shoes. New and unique styles
are innovated to rise from the usual styles that most competitors are common with.
Regular production of new styles will make it exciting for the industry and consumers to
buy OTTO shoes. The shoes will be available in outlet stores and in department stores
also. Reasonable prices will be given.
Pricing Strategies
The companys pricing strategy is penetration strategy which offers a high-quality
product at a much lower than expected price. This strategy would greatly help the
business enter a new market even a strong competitor comes and it builds loyalty with
the new costumers at the beginning. Once the company gained a large market share
and customer based, the company begins to increase the price of the said product. The
penetration strategy can also dramatically increase the lifetime value of the customers
because they're "hooked" with the outstanding first product offering and customers will
assume that the future products are just high quality.
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A pair of shoes would basically cost Php600 to Php2500 depending on its design
and materials used. Each OTTO Shoes store may be paid by cash, debit card or credit
card.
Distribution Strategies
Distribution refers to the methods used to sell products and the channels in which
products go by before reaching the end-consumer.
OTTO Shoes is marketed through regional and local specialty shops scattered
along metro manila, and in different Walter Mart, Robinsons and SM Malls nationwide.
By the end of 2013 OTTO Shoes seek out to expand its distribution throughout the
country.
The companys main distribution objective is to create relationship to its new
customers and as well as to continue its relationship to its brand loyal customers at
present. In addition, OTTO Shoes plans to expand online sales by offering customized
product line via Internet. The company would also like to build its own place at a certain
populous cities in the country. With this approach OTTO Shoes would greatly increase
the number of its customer.
Promotion Strategies
OTTO Shoes communicate with customers regarding with its products in a
variety of ways. The products are available via internet and direct mailings. The firms
promotional efforts also seek to differentiate its product from its competitors.
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The table below shows the summary of the income statement of the footwear
industry where in the increase sales revenues of EUR 192.7 million to Ph EUR 11,596.6
million in 2011/12, accompanied by an over proportional rise in the cost of materials, led
to a decline in gross profit. The gross profit margin declined from 50.0 % to 48.5 %
owing to developments in the Multichannel Retail segment.
Even taking a rise in Other Operating Profits of Php124.4 million into account, the
evolution of personnel costs, other operating expenses and the investment result led to
a
decline
in
earnings before
interest, taxes,
depreciation and
amortisation
(EBIT-DA).This declined in comparison with the previous year by EUR 127.9 million to
EUR 538.9 million.
Depreciation, amortisation and impairments in particular as a result of lower
unscheduled write downs declined in the 2011/12 financial year by EUR 9.4 million to
EUR 279.8 million, leading to earnings before interest and tax (EBIT) of EUR 259.0
million (2010/11: 377.5 million). The EBIT margin amounted to 2.2 % following 3.3 % in
the previous year.
The footwear industrys net financial result for the year under review, at EUR
203.9 million, lay distinctly below the previous years level (EUR 121.0 million).Net
interest amounted to EUR 170.7 million (2010/11: EUR 144.5 million). Other net
financial income amounted to EUR 33.2 million following EUR 23.5 million in the
preceding year.
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2011/12
2010/11
million
million
euros
euros
11,597
11,404
(EBITDA)
539
667
259
378
55
257
23
181
Sales revenues
Earnings before interest, tax, depreciation and amortisation
2010/11
PHP 000
PHP 000
Revenue
11,596,565 11,403,913
895,404
20
770,962
12,491,969 12,174,875
19,301
32,772
5,928,066
5,668,563
44,100
38,013
Personnel expenses
2,053,394
1,961,268
4,030,593
3,980,808
83,738
107,724
82,332
106,643
1,406
1,081
538,855
666,719
241,887
235,396
37,933
53,802
259,035
377,521
25,639
36,479
196,339
181,014
33,232
23,529
55,103
256,515
Earnings
before
interest,
tax,
depreciation
amortisation (EBITDA)
and
21
32,184
75,389
22,919
181,126
40,080
125,349
27,439
45,517
10,278
10,260
22
OTTO Shoes will also provide an eco-friendly bag for shopping. With the newest
and unique design for its packaging it will surely get more consumers that will make the
company more appealing to them. Any dissatisfaction from the consumer will be
attended properly by the respectful employees of OTTO Shoes. Products that were
purchased with damage can be replaced if and only if it was a week after the purchase.
OTTO Shoes is also targeting professional men and women so the company
created products that are long lasting that will fit for busy people. Also comfortable and
good looking shoes for teens. They made it perfectly for their preferred events, for
indoor and even for outdoors. OTTO Shoes made it affordable and yet high quality for a
long-lasting footwear. OTTO Shoes will position itself as the excellent providers of
trendy shoes for men and women. The materials used for creating the footwear they are
offering were the best materials. New and unique styles are innovated to rise from the
usual styles that most competitors are common with.
The Company is setting a penetration strategy for its price by which they offer a
high-quality product at much lower than they what expected. This will help the company
to cope up with the strong competitors to build a loyalty from the targeted consumers. A
pair of shoes would cost Php600 depending on its design and materials used. Each
shoe can be purchased by cash, debit card or even credit card. OTTO Shoes will be
marketed through regional and local shops scattered along metro manila, especially SM
malls, Robinsons, Walter Mart nationwide. For the next three years OTTO Shoes seek
out to expand its distribution throughout the country. The companys main distribution
goal is to build relationship with its newest consumer as well as to maintain their
relationship to their product by their loyalty on purchasing it. In line with their distribution,
23
OTTO Shoes is planning to expand online sales by offering customized product line via
Internet.
OTTO Shoes will communicate with their customers as to concerning with its
product in many ways. The product will be available in many outlets nationwide and also
you can purchase it via Internet. The Companys promotional strategy will be through
print ads that will be located at different malls, billboards, and few post banner ads
along selected highways and expressways and together with the online advertising.
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Appendices
APPENDIX A
Figure7.1. OTTO Shoes improved logo
Figure7.2. OTTO Shoes new shoe packaging
Figure7.3. OTTO Shoes new product packaging
APPENDIX B
Table6.1. Estimated capital of OTTO shoes in the equipments in a year.
Table6.2. Estimated capital of OTTO shoes in the raw materials in a year.
Table6.3. Estimated capital of OTTO Shoes in the salaries and wages in a year.
Table7.2. shows the Consolidated Income statement of the footwear industry
25
Bibliography
Wells, W., Burnett, J & Moriarty, S. (2009) Advertising Principles and Practices, 8th
Ed. Pearson
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