Panache

Business Analysis June 2009

Table of Contents
Executive Summary......................................................2 Product Description.....................................................3 Logo............................................................................4 SWOT Analysis............................................................5 SWOT Analysis Summary.............................................6 Marget Segmentation...................................................7 Competitive Analysis...................................................8 Targeting and Positioning.............................................9 Targeting and Positioning............................................10 Focus Group...............................................................11 Survery.......................................................................12 Survey Results.......................................................13-14 Quantitative Analysis..................................................15

Executive Summary
Panache is a new and exciting clothing store in Rexburg that sells fashionable, low-priced clothing that targets price-conscious, trend savvy college females. Panaches main competition in the area includes Wal-Mart, Down East, Maurices, and Target. The four main market segments that make up clothing shoppers are Divas, Wealthy Fashionistas, Thrifty Fashionistas, and Basics. Divas live to shop, Wealthy Fashionistas enjoy shopping, Thrifty Fashionistas have a limited budget, and Basics only shop when necessary. The focus group and survey determined that price was the number one concern among Panaches target market. This makes Panaches products very desirable among the Wealthy Fashionistas, Thrifty Fashionistas and Basics. Despite Panaches strengths, research indicates that they have room to grow within the market because many people havent heard of them. Bottom Line: People want what Panache has to offer.

Product Description
Most college women enjoy clothes shopping, but many lack the money to buy new clothes and keep up with the latest styles and trends. Panache is the solution for these women. Panache offers fashionable new womens clothing at warehouse prices. They carry a variety of popular brands and styles that are appealing to a large segment of college aged women. Another advantage that Panache has on its competition is location. Many students travel to Idaho Falls to do their clothes shopping. Panache is only a few blocks from campus, so a college consumer does not even need a car to get there. According to dictionary.com, panache is a noun meaning a grand or flamboyant manner; verve; style; flair. The name is compelling, but the current logo could be changed to reflect the values and attitude of the store. The current logo for Panache is ritzy and appears expensive. In our focus group, we found that the upper-class, expensive appearance has deterred some potential customers from exploring the store. A more fun, outgoing logo would better attract the targeted market segments. One of Panaches main market advantages is its ability to offer quality clothing for very low prices. The owners are able to find low prices online from a variety of retailers. Its inventory is marked up 100% from the buying price. Until Panache has a loyal customer base, this markup should not increase. Panache needs to increase brand loyalty and frequent customers before they increase prices. Currently Panache has a single location, the store on Main Street. There is potential for Panache to expand and open a store in Idaho Falls, but it is not in their immediate plans. Panaches current advertising mediums include Facebook, text messages, and flyers. Panaches Facebook page is not very informative or compelling. Panache could update its Facebook page and add a website. A detailed website depicting the weekly deals and new inventory would be very beneficial. This would help form an image of Panache for potential customers and be a great advertising tool. On the website, Panache could offer online clothing reservations. Further research could determine if a website would be cost effective.

Logo

SWOT Analysis
Strength Panache -Low Price -Close Proximity -Fashionable -Customer service -Low fixed and variable costs -Quality Clothes -Management Weakness -Small Selection -Limited inventory -Lesser known brands carried - Sizing availability -Visibility -Interior displays not as appealing -Not as well known -Weak advertising Opportunity -Only store in Rexburg with fashion and price as priority -Expand store and increase inventory -Bad economy, inexpensive clothes more appealing -Affordable to college students -Develop website Threat -Competitions offers similar prices and brands -Suppliers increase price -Good economy, expensive clothes more appealing -Changing fashion trends

Panache
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Maurices

-Large selection -Fashionable clothing -Selection -Fashionable -Location -Modest clothing -Price -One stop shopping

-Expensive -Curb appeal -Pesky sales associates -Poor quality of used clothes

-Capitalize on brand equity

-Changing fashion trends -Suppliers increase price

Down East

-Expand selection -Modesty niche

-Suppliers increase price

Wal-Mart

-Poor quality -Unfashionable -Reputation

-More fashionable brands

-Changing fashion trends

SWOT Analysis Summary

The analysis of Panache and its competitors shows that Panache has a market niche in fashion and price. While there are several strengths of Panache, the most important strength to leverage is the low prices. This aspect of Panache will attract customers and increase sales. Panaches biggest weakness is that they are not well known due to lack of effective advertising. This weakness can be overcome by successfully pursuing their opportunities. These opportunities include pursuing additional advertising strategies through the internet, flyers, and sales signs. This would help position Panache as the fashionable and price oriented clothing store in Rexburg and increase the difficulty for other stores to compete directly with them. The threats of changing trends could be avoided by staying up-to-date on the latest styles by actively gathering market research.

Marget Segmentation
Market: Women Shoppers
Segmenting Dimension Psychographic: Attitude toward shopping Demographic: Life Stage Behavioristic: Frequency of Activity Behavioristic: Benefits sought Psychographic: Amount spent on Clothing Divas Live to shop! Wealthy Fashionistas Thrifty Fashionistas Basics

Enjoy shopping, Enjoy shopping Will only shop fun activity but have limited when necessary budget Single, young women age 18-24 1 time a month Married or single, age 18-27 5 or 6 times a year Married or single, age 18-27 3 times or less in a year Inexpensive Will last long $20 or less per month

Single, young women age 18-24 2-3 times a month Appearance Brand name Unique

Appearance Appearance Good deal/price Inexpensive Feel good Feel good $20 or less per month

$40 or more per $20-40 per month month

Competitive Analysis
Maurices Apparent Target Wealthy Markets fashionistas Strengths Quality, Variety Down East Divas & Both Fashionistas Brand names, Inexpensive Target Both Fashionistas & Basics Quality, Inexpensive, Durability Wal-Mart Basics

Targeting & Positioning

Divas Size of segment Inexpensive, brand recognition Appearance of Wal-Mart Competition Satisfied with Competition? Unmet Needs Smallest Down East, Idaho Falls mall Not always Few Wealthy Fashionistas Medium Down East, Maurices No Style, good deals/prices Promotions & Sales, brands carried Thrifty Fashionistas Largest Down East, Target No Style yet inexpensive clothes Promotions & Sales Basics Medium/small Wal-Mart Somewhat satisfied Few, cant afford other stores Clearance

Weaknesses

Expensive

Sometimes poor Sometimes run quality out of certain items, location

Are target segments loyal to store? Summary

No, love to shop Partial loyalty, many places but like to shop around

Very loyal, but Not loyal, will shop around looking for best price

Targetability

Brands carried

Mauricess primary market is the wealthy Fashionistas where style and good deals are a priority. They could also target thrifty Fashionistas, but some may not be able to afford Maurices high prices. Down East Outfitters is well positioned and targets the Divas and both Fashionista groups. Its clothing style and variety of brands appeal to the Divas. The low prices appeal to both Fashionista groups. Target appeals to both Fashionista groups and the Basics who value quality and good deals. Wal-Mart targets the Basics group whose main priority is price and do not enjoy shopping. Their salespeople are not knowledgeable about the products. They also have an image of having cheap clothing.

Targeting & Positioning

Primary Target Market: Thrifty Fashionistas Rationale: The thrifty Fashionistas are the largest sized segment and are not satisfied with the competition. Their unmet need is to have style yet be inexpensive. They will be relatively easy to target through advertising the stores promotions and sales. Secondary Target Market: Wealthy Fashionistas Rationale: The wealthy Fashionistas care about style but are more willing to spend money on clothing. However, they wouldnt pass on a good deal to purchase clothing. We will use a combined target market approach for these similar market segments. Panaches style appeals to both segments as well as offer decent prices. Positioning Statement: Panache will provide great clothing with fashion and style at affordable prices.

Focus Group
A focus group was held on Thursday, May 28 at 7:30 p.m. The focus group included 11 girls both single and married college students. Questions relating to the clothing market were discussed for 45 minutes, and the participants were very responsive. The majority of the participants cared most about price and style, but there were a few extremes. Some girls spent a lot more money than originally anticipated by the target market. Another segment was discovered, the loyalists, who are loyal to their brands. This group spends a lot at a certain store or on a certain item, because the clothes fit them well. One surprise is that people do not like advertisements on Facebook, one of the only ways Panache is currently advertising. They were more likely to go to a store if they had heard of it from someone else or if there was a flyer on their door. The conclusions about the target market were supported. The focus group confirmed that Panache is a great store and the products they offer are what girls are looking for. The participants want inexpensive, high quality, in-style clothes. The target market is bigger than we originally thought. People in all the markets, with the exception of the Divas, want the inexpensive, fashionable clothing that Panache offers. One of the unmet needs expressed by participants is the shortage of quality clothing stores in Rexburg. Many participants would enjoy the convenience of a clothing store within walking distance. Panache offers the high quality, low price items that people are looking for; however, most participants had little knowledge of the store.

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Survey
1. What is your first Priority when shopping for clothes? a) Price b) Style c) Brand d) Comfort e) Other___________ 2. What is your second priority when shopping for clothes? a) Price b) Style c) Brand d) Comfort e) Other___________ 3. Where do you purchase most of your clothes? a) Maurices b) Connection 23 c) Down East Outfitters d) American Eagle e) Target f) Other_______________ 4. How often do you go clothes shopping? a) 2-3 times a week b) Once a week c) 2-3 times a month d) Once a month e) 5-6 times a year f) 3 or less times a year 5. What is the most frustrating aspect about shopping for clothes? a) Store doesnt have items that fit b) Prices are too high c) Unfriendly sales staff d) Store cleanliness/organization e) Other_____________ 6. Are you married? a) Yes b) No 7. Approximately how much do you typically spend on clothes in a month? a) $20 or less b) $20-$40 c) $40-$80 d) $80-$150 e) $150 or more 8. How much do you typically spend on a T-shirt? a) $5 or less b) $5-$10 c) $10-$15 d) $15-$25 e) $25 or more 9. How much do you typically spend on a pair of jeans? a) $10 or less b) $10-$20 c) $20-$40 d) $40-$60 e) $60 or more 10. What is the most likely reason you would visit a clothing store youve never heard of? a) A huge sale sign in front of the store b) A flyer on your door c) A Facebook Ad d) Other___________ e) Not Sure 11. Have you shopped at Panache? a) Yes b) No

Survey Results
Priceorientedshopper
Mostshopped? Maurices 10% Connec?on23 3% DownEastOut 4% Am.Eagle 4% Target 16% JCP 3% WalMart 10% Aero 4% Ross 4% Anywhere 4% PacSun 1% OldNavy 1% Other 23% Notsure 10% Typicallyspend/month? $20orless 63% $2040 23% $40$80 5% $80$150 1% $150ormore 0% Notsure 7% Tshirt? $5orless $5$10 $10$15 $15$25 $25ormore Notsure Howo9entheygoshop? Onceaweek 1% 23?mes/month 12% 1/month 27% 56?mesyear 38% 3orless/year 14% Notsure 7% Jeans? $10orless $10$20 $20$40 $40$60 $60ormore Notsure Mostfrustra=ng? Itemsdon'tt 30% Pricestoohigh 53% Unfriendlysta 3% Cleanliness 10% Modesty 1% Unsure 3% Married? Yes No Percentof totalsurveyed

45%
Adver=sing? Salesign 72% Flyer 11% Facebook 0% Friend 11% Notsure 6% distance 0% style 0% storewindow 0%

8% 48% 37% 7% 0% 0%

1% 38% 44% 12% 3% 1%

29% 71%

HeardofPanache? Yes 6% No 94%

Style,thenpriceshopper
Mostshopped? Maurices Connec@on23 DownEastOut Am.Eagle Target JCP WalMart Aero Ross Anywhere PacSun OldNavy Other Notsure 9% 2% 4% 20% 11% 5% 2% 0% 2% 4% 2% 4% 25% 13% Typicallyspend/month? $20orless 48% $2040 27% $40$80 14% $80$150 4% $150ormore 2% Notsure 5% Tshirt? $5orless $5$10 $10$15 $15$25 $25ormore Notsure Howo9entheygoshop? Onceaweek 4% 23@mes/month 13% 1/month 39% 56@mesyear 32% 3orless/year 11% Notsure 2% Jeans? $10orless $10$20 $20$40 $40$60 $60ormore Notsure Mostfrustra=ng? Itemsdon'tt 32% Pricestoohigh 43% Unfriendlysta 7% Cleanliness 11% Modesty 4% Unsure 4% Married? Yes No Percentof totalsurveyed

34%
Adver=sing? Salesign 52% Flyer 11% Facebook 0% Friend 18% Notsure 14% distance 2% style 2% storewindow2%

7% 34% 41% 18% 0% 0%

2% 13% 64% 21% 0% 0%

18% 82%

HeardofPanache? Yes 11% No 89%

Survey Results
Pricedoesn'tma/er
Mostshopped? Maurices Connec3on23 DownEastOut Am.Eagle Target JCP WalMart Aero Ross Anywhere PacSun OldNavy Other Notsure 3% 0% 12% 21% 18% 0% 3% 9% 0% 0% 6% 3% 21% 6% Typicallyspend/month? $20orless 26% $2040 47% $40$80 24% $80$150 0% $150ormore 3% Notsure 0% Tshirt? $5orless $5$10 $10$15 $15$25 $25ormore Notsure Howo:entheygoshop? 233mes/week 3% Onceaweek 3% 233mes/month 18% 1/month 26% 563mesyear 32% 3orless/year 12% Notsure 6% Jeans? $10orless 0% $10$20 9% $20$40 56% $40$60 21% $60ormore 12% Notsure 3% Mostfrustra>ng? Itemsdon'tt 44% Pricestoohigh 32% Unfriendlysta 15% Cleanliness 0% Modesty 3% Unsure 6% Married? Yes No Percentof totalsurveyed

Quantitative Analysis
The purpose of the survey was to quantify the potential market, confirm interest in the products, and to acquire information to aid in promotions, pricing, and distribution decisions. The survey consisted of eleven questions and was given to a random sample of 163 individuals (see attached survey). The first two questions were designed to classify the participants into our target market. The first group, which consists of 45% of the total market, was respondents who listed price as their number one priority when shopping. The second group, making up 34% of the market, was women who listed price as their second priority when shopping. Consequently, the final group, at 21% of the market, was those who had at least two priorities above price when shopping for clothes. Based on the core strengths of Panache, we will use the combined results of groups one and two to evaluate Panaches market positioning. Potential Market and Interest The main goal and focus of Panache is trendy clothes at an affordable price. In the Rexburg clothes market, 79% of women have price as their priority number one or two. There are approximately 8,000 college girls, so 6,300 fit into this category. According to our survey results, the aggregate amount that these groups spend a year is approximately $1.7 million. This data confirms that there is enough demand and interest in the product to be worthwhile as long as the Panache can compete with their competitors. Competition The survey results determine which stores the targeted segment shops at most frequently. There is not really a dominant player among clothing retailers in the area. The more frequented stores in the area are Maurices, American Eagle, & Target. The focus group and survey confirmed that girls shop where they feel they will get the best deal for the style they want. Panache could capture a large portion of consumers by showing them that the best deals and styles are at Panache. Pricing The survey also gave valuable information about the prices consumers are willing to pay for clothing. The results show that the targeted segment is willing to pay $5-$15 for a t-shirt and $10-$40 for jeans. A good pricing strategy would be to stay on the lower to middle end of this range. Distribution and Promotions Unfortunately, our survey shows that most people have never heard of Panache. Their biggest form of advertising right now is Facebook. 0% of our survey participants said that Facebook was the best way to reach them. The best way to reach the target market would be through sale signs, flyers, and word of mouth. Informative door flyers would be a very effective advertising medium. These flyers could also highlight a weekly deal or the type of inventory found at Panache.

21%
Adver>sing? Salesign 47% Flyer 9% Facebook 0% Friend 29% Notsure 12% distance 0% style 0% storewindow 3%

12% 24% 29% 26% 6% 3%

24% 76%

HeardofPanache? Yes 15% No 85%

Priceoriented&style,thenprice
Mostfrequentlyshopped? Maurices 10% Connec@on23 3% DownEastOut 4% Am.Eagle 11% Target 14% JCP 4% WalMart 7% Aero 2% Ross 3% Anywhere 4% PacSun 1% OldNavy 2% Other 24% Notsure 11% Typicallyspend/month? $20orless 57% $2040 25% $40$80 9% $80$150 2% $150ormore 1% Notsure 6% Tshirt? $5orless $5$10 $10$15 $15$25 $25ormore Notsure Howo=entheygoshop? Onceaweek 2% 23@mes/month 12% 1/month 32% 56@mesyear 35% 3orless/year 13% Notsure 5% Jeans? $10orless $10$20 $20$40 $40$60 $60ormore Notsure Mostfrustra?ng? Itemsdon'tt 31% Pricestoohigh 49% Unfriendlysta 5% Cleanliness 10% Modesty 2% Unsure 3% Married? Yes No Percentof totalsurveyed

79%
Adver?sing? Salesign 63% Flyer 11% Facebook 0% Friend 14% Notsure 9% distance 1% style 1% storewindow 1%

8% 42% 39% 12% 0% 0%

1% 27% 53% 16% 2% 1%

24% 76%

HeardofPanache? Yes 8% No 92%

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Business Analysis developed by:

Bre Christensen Chase Jones Andrew McBride LeaDawn Grant Kelcie Kellogg Steve Baret Casey Schumacher