GAUTAM BUDDHA UNIVERSITY

INTERNATIONAL MARKETING PROJECT ON SPORTS CLOTHING (MENS GEAR) MANUFACTURING & RETAILING Tj99

SUBMITTED TO: Dr. RITU SHRIVASTAVA ASST. PROFESSOR SCHOOL OF MANAGEMENT GBU

SUBMITTED BY:

11/PMB/033 SEC. A

COMPANY
COMPANY & INDUSTRY TJ99 is a startup clothing manufacturing company located in Gurgaon (INDIA). TJ99 sells a wide variety of male-only clothing for sports such as cycling, racing, running, cross country skiing, cricket, football and snowshoeing. These industries have grown tremendously in recent years, and the target market has an affinity for clothing designed by and for fellow active lifestyle athletes. The main common element of the products for sale is NO cotton. Cotton is the worst possible fabric to make sportswear out of, PERIOD. Cotton absorbs and holds water which is undesirable because when saturated with water clothing loses almost all of its insulating characteristics. It also becomes much heavier because of the water weight. LEGAL ENTITY & OWNERSHIP The company is organized as a Limited Liability Company in the Gurgaon( INDIA) , and is currently owned by single person. License will be taken from the respective authority. An additional equity percentage of the company has been set aside for new investors. PRODUCTS TJ99's mantra is "keep dry." The following is by no means an exhaustive list of the products that are for sale: Shorts Long and short sleeve shirts Tights Water repellant shells Assorted fleece wear (jackets, pants, vests, hats, gloves) Socks Briefs, including wind briefs (with a wind resistant front panel)

PRICING The firm is not concerned with setting high prices to signal luxury or prestige, nor is it attempting to achieve the goals of offsetting low prices by selling high quantities of products. Instead value pricing is practiced so that customers feel comfortable purchasing new clothing to replace the old, even if it is just because they like the new colors and fabric. The pricing strategy also makes TJ99 products good gifts for graduations, vacations or just because. The customized clothing will sell for 500 to 800 Rs. more than the regular TJ99 logo clothing. The luggage will be priced competitively, offering a good value against it competition.

COMPETITION
Competition in the apparel industry is fierce. The direct competitors are large corporations, such as Hurley, Volcom, Reebok, Adidas and Puma. All of these competitors have grown very large and are no longer solely targeting the active lifestyle market. TJ99 will carve a niche by specifically targeting the active lifestyle market. Indirect competition is varied and includes clothing manufacturers of all types. We do not see these competitors as much of a threat, as our market segment values brand loyalty and prefers brands that are not mainstream. COMPETITIVE EDGE/BARRIERS TO ENTRY Only the biggest international apparel brands have rosters comparable to ours. Our design team will be world-class. We have taken idea from international Apparel makers, experts which are major suppliers for organic, fitted apparel. Startups in this industry rarely have the strengths and capabilities to match ours. DEVELOPMENT TJ99 will start lining up manufacturers for several product lines, including tees and walk shorts, which will be available for sale by late Spring of Year 1. In addition to product manufacturing, a website will be developed, which will further increase product awareness. In Year 2, a retail shop is planned in Srilanka, Pakistan, Malaysia and European countries- Australia, California, America, Africa, Spain . By Year 3, five more retail stores will be opened in the Los Angeles and San Diego metropolis, as well as in Las Vegas.

MARKET ANALYSIS
TARGET MARKET TJ99 will target active lifestyle participants. The demographics of this initial segment are typically aged 16 - 30 males and females that have grown up near urban areas, specifically near the West Coast, beach areas. These customers are active in skateboarding, snowboarding, surfing, motocross, and other extreme sports or they closely relate to those that do participate in this lifestyle. This segment frequently shops at specialty stores located in mall areas, and can easily be reached through the internet, as well as through various events and magazines. This is a trend-setting group, and they influence other audiences nationwide. As awareness in this initial market grows, secondary markets will open up across the United States and even internationally. MARKET SIZE The market size for the active lifestyle segment is large and growing at a tremendous rate. The surf wear market alone bring in over Rs.3000000 annually. The total market size that TJ99 targets is approximately 50 million people and Rs 10000000 in sales a year. As this market is large, our company will target the Los Angeles and San Diego areas later, which are estimated to be at 2 million active lifestyle participants.

SWOT ANALYSIS Strengths: athlete endorsements, industry expert contacts, manufacturing experts , marketing partnerships, expandable building space, location. Weaknesses: new brand in established market, dependent upon outsourcing for production, formal distribution channels being created from scratch. Opportunities: recruit other athletes to endorse inexpensively, demos at various events and competitions (X-Games, Actions Sports Tour), forming distribution and marketing relationships, creating a new brand with fresh designs. Threats: competition, modest funding, manufacturers' ability to perform

STRATEGY & IMPLEMENTATION

PHILOSOPHY TJ99 will offer high quality, stylish clothing made by athletes for athletes. Our clothing will help our target audience look their best while doing what they love the most. PRODUCT DEVELOPMENT Product design has will begun, with manufacturing of some tees in progress. Design efforts have been led by the management team, alongside our graphic designers. Additionally, we use fit models to ensure the apparel fits different body types as intended. We select manufacturers based on quality, price and reliability. Some manufacturing is done in, Malaysia, or, Srilanka with major products being produced domestically. INTERNET STRATEGY TJ99 will employ an aggressive internet marketing campaign. This will be anchored by our online community, where customers can interact with others, while posting videos and pictures of themselves participating in their favorite active lifestyle sport. This viral marketing technique will not only attract new consumers, but also specialty retail stores that have an interest in carrying our product line. Alongside the online community, an online store will be available for instant purchases to be made. This will ensure that our products are always available, no matter what the customer's location may be. MARKETING STRATEGY Our marketing strategy will include targeted online and print media advertising. Major magazines, such as Transworld Motocross, Transworld Surf, and Transworld Skate are a few publications which we will regularly advertise in. Additionally we will use athlete endorsements, which will give TJ99 virtually free media coverage on television and in print when are our athletes excel. We will also have a strong presence at major events, as well as hold various demos and contests to attract new customers.

SALES STRATEGY Our primary sales goal is to have our product available in all specialty retail outlets that focus on the skate, surf, snow, and moto markets on the West Coast. TJ99 will utilize independent sales reps to ensure that each retailer has superior support, and that new product is being presented to every retailer. Once a strong brand image has been secured on the West Coast, we will focus on expanding sales to the rest of the targeted area. OPERATIONS The team will focus on product design, sales and manufacturing initially. As distribution channels are lined up, the concentration will be shifted to marketing and online order fulfillment. EXIT STRATEGY It is the goal of TJ99 to follow in the footsteps of other well-known apparel companies, such as Volcom and Quiksilver. This will include an exit through either an acquisition by one of these larger companies, which are well known to buy up-and-coming industry companies, or more preferably to go public through an IPO. Volcom's IPO in 2005 successfully raised over $90 million, and has reached $125 million in sales with annual profits of $25 million.

FINANCIAL PLAN
First year sales of Rs.15000000, with an annual growth rate of 25% will ensure that the company stays profitable. With a 70% product margin, TJ99 will be able to accumulate enough cash to become attractive as a takeover target by a larger apparel company, such as Quiksilver. Founder investments, as well as outside equity investments, will help the company maintain cash reserves, while helping the company grow at a rapid rate. FUNDS REQUIRED & USE The company will raise Rs.10000000 through founder investments, and is currently seeking an additional Rs.2000000 from an equity investor. These funds will be used to cover inventory, staffing, rent, production costs and general operating expenses. COMPETETIVEESS Tj99s competitive edge is its unsurpassed selection. It is able to offer the same complete selection as the sport specific stores, but Tj99 has multi sports all under one roof. This creates a truly one stop shopping option where a customer can stop by and have the most complete selection available. As the demographics indicate, the target customers participate in more than one sport so the value in being able to go to one store and find a anything you might want or need is of tremendous value. While having a large selection is not an inherent sustainable advantage, for now there are no indicators that would suggest that any other competitors are going to try to enter this same space. The retail space seems to be content in not getting too specialized in any one or groupings of activities.

INTERNATIONAL THEORY USED

Uppsala Internationalization Model Stage 1: no regular export activities (sporadic export) In starting no exporting will be for sports apparels. These will be produced in home country itself and developed, innovate further to make TJ99 international brand. Stage 2: Export via independent representatives (export modes) After development in home country TJ99 will consider to go foreign market as discussed earlier and will set up its own retail stores in many countries with the help of independent suppliers and other distribution channels .retailing is the main and direct channel to go abroad. Stage 3: Establishment of a foreign sales subsidiary When TJ99 starts retailing it will develop its own sales subsidiary in foreign market in starting at some places but later most of the places where we want to develop the business. Stage 4: Foreign production/manufacturing units After developing its own sales subsidiary TJ99 will start manufacturing in other countries with help of experts and the production team in targeted countries.

SOURCES: http://www.morebusiness.com/ www.google.com