Business Description

The company deals with women clothes. For this paper, the hypothetical name for the business is Sly Lady’s Wear. For a small business selling women’s clothing and accessories, it is difficult to ignore the vast market available through the digital platform. Online marketing allows small businesses to reach out to millions of customers at a little cost. Social media is at the epicenter of digital marketing (Smith & Anderson, 2018). Merely having a website does not provide a viable online presence. Social media, on the other hand, provides an organization with the opportunity to widen its online presence. It provides the organization with access to a large population of possible customers. Through social media, Sly Lady’s Wear will be able to showcase its products at a manageable cost. Social media can transmit audio-visual messages, thus providing the best platform for a clothing company. Through an increased business online visibility, the business can improve brand recognition. It expands the size of the consumer base through social media platforms. Online social platforms also increase traffic through content. As people view and share information on social media, they create opportunities to attract new customers. Social media profiles also act as the gateway to the company’s website. Posting content on a site’s timeline increases the traffic for the company website. Online media serves as a platform for data collection and direct interaction with customers. Therefore, it increases customer satisfaction and provides the company with marketplace insights. Digital marketing will improve Sly Lady’s Wear ability to convert possible customers into loyal customers. This paper will describe how the company can employ social media as the primary marketing strategy.

Marketing Plan

Customers

Human beings are social and enjoy the company of others. Social media provides people with an opportunity to interact with one another without having to travel or meet in persons. It is a form of technology that has reduced the world into a small village (Jiang, 2018). People can interact with others from farfetched areas including different countries, regions, and continents. People in the United States of American can freely communicate with friends in Europe and other parts of the world. According to Bernabe et al. (2015), social media provides an online space where people share content and views. It has grown in usage over the past decade. According to Jiang (2018), 92% of millennials, 85% of generation Xers, and 67% of baby boomers use smartphones. This move is an indication of the rate of technology uptake in America alone. A more interesting fact is that up to 85% millennials use social media for different purposes. As per platform usage, Facebook takes the largest share of usage with 76% of Generation Xers and 82% of millennials. Only 59% of baby boomers use Facebook. For female internet users, 89% use Facebook, 83% use YouTube, 65% use Pinterest, and 39% use Twitter. As of January 2018, 89% of Americans use the internet. Based on these statistics, approximately 290 million Americans use the internet. These figures indicate a vast population of possible and plausible customers. Statista (2018) projects the United States population to grow by 10 million by the year 2022.

The internet is a viable investment plan considering the percentage of online users has taken an upward trend since its inception. Social media also has an upward trend regarding usage. Hence, investing in social media marketing is a viable and reliable strategy. According to Mintel (2015), the number of women that purchase clothing online grew from 635 to 67% in 2015. Also, 35% of millennials consider social media to be very influential in their clothing decisions. In order to capture the attention of social media users, the best strategy is to use influencers. Influencers are people with a considerable social media following. This group of people has the power and ability to motivate their followers to comment about a product or like it. Using influencers to market products ensures a broader range of viewership. Also, social media platforms have developed premium marketing strategies that are affordable (Jiang, 2018). This is a secondary measure that will be available to the business to complement the use of influencers. The target population is American women, and in future, the company may expand to target to the rest of the world.

The product strategy defines the manner in which Sly Lady’s Wear will design and produce its products. The main aim of the strategic plan is to develop a marketing strategy through e-commerce that will outdo the existing competitors in pricing, quality, and delivery. The approach is the first step in developing a marketing mix capable of beating the current competitors. Thus, the business will focus on product uniqueness and quality that is unmatched. The company will be responsible for the designs but will source the production processes from a supplier who enjoys economies of scale. This move will allow the business to achieve specificity and maintain quality. Doing so will reduce the cost of production and maintain high quality. The company will also be able to retain control of the designs. The designers will also take up the responsibility of naming their plans and colors. However, for continuity and speed in design, the company will acquire design software and store the data manually in hard disks.

The distribution strategy for the products will include diplomatic channels and warehouse locations. The product will not have any physical shops. The only distribution channels will be the website and social media platforms. Thus, customers will have the opportunities to design their clothes through the website or submit designs through the platform. With advice from the design experts, the customers will get a unique opportunity to customize products. The business will also offer complementary products. If a customer selects a pair of shorts, the website will present complementary products that the customer can wear with the shorts. The customer will also get a chance to try products appearance on a mannequin and view the presentation. The venture will have warehouses in different parts of the country with only delivery riders as the employees. The location of the warehouses will depend on the number of orders from a particular region. The delivery riders will receive communications immediately a customer makes a request and will have to deliver the product within an hour. Therefore, the location of the warehouses will cover a radius that the riders can connect within an hour. If the order is from a region without a warehouse, the customer service representatives must inform the customer immediately.

The promotional strategy defines the way through which a business communicates to its customers about a customer. Here, the primary means of promotion will be through different social media and the website. The social media profiles will provide gateways for access to the site. Through the platforms, the designers and the promoters will engage the customer directly. Direct conversations will allow the business to get immediate feedback and to direct promotions to the interested customers. The social media platforms will also gather information about the customers’ preferences and interests. As a result, the business will include the preferences and interests in the promotional strategies. The representatives will also develop a list of contacts with customers and companies. Customers will earn discounts and prizes for references. Customers with referrals will even win welcoming prizes.

Advertising

Advertising is at the epicenter of the marketing strategy. Given the number of female social media users, the return on investment in this project will be regarding possible customers that will participate. The team will calculate the number of customers that show interest in the products. It will also record the number of customers that will place orders through the accounts. The advertisement will involve videos, images, and themes circulating through social media. The content will contain significant factors of the strategy, including the pricing and the proximity to customers. Adverts will also carry different designs to show creativity and capture the customers’ attention. Most importantly, adverts will allow customers to provide comments about their view of the products and the prices. The influencers will take the responsibility of recording the comments and mining important data from the customers’ contributions.

The return on investment (ROI) is the ratio of the total profit from an investment less the cost of the investment divided by the cost of investment. . According to Statista (2019), 71 % of female online shoppers purchase fashion, clothing, and accessories. 52% of online shoppers in the United States were female. According to Statista (2019), approximately 220 million Americans shop online. A 52% of the same statistic indicates that approximately 114 million American women shop online and 71% of them buy clothing and fashion-related items. Assuming the company will be able to take up a 0.1% market share in a year, the estimated number of customers in a year would be approximately 81,000 customers. By taking an average price of 10 dollars per clothing item, the company will make projected sales of $810, 000. With a margin of 15%, the profit from the total sale will be $105,652. With an initial cost of $210,000, the first year’s ROI for social media advertisement and marketing will be as follows;

On the consecutive year, the company’s ROI will be as follows, assuming all factors remain the same;

Competitors

Several competitors specialize in female clothing and accessories. Competitors include Amazon, E-Bay, Alibaba, Stitchfix, Shein, Zaful, Rose Girl, Macy’s, and many others. The competition on e-commerce is very high, but the market is large. Most competitors enjoy economies of scale and market leadership due to their online presence. Competitors like Amazon have established brands. Given that most of the competitors have been in the market longer, they may have a vast knowledge of the market and a considerable financial might (Mintel, 2015). The current state of the market gives the major competitors a competitive advantage over any new business. But with millions of buyers to sell to, female clothing and accessories business in the United States is still viable.  The sellers’ vast knowledge of the market increases their bargaining power. Companies have the power to purchase cheap products in high quantities and sell them to customers at exorbitant markups (Mintel, 2015). Shipping from large producers with high economies of scale and low production costs makes the situation worse. Companies buy their products abroad, especially in China and India, where production cost is low. They then sell the products at high prices earning anomalous profits.

However, the increasing awareness of the customers enhances their bargaining power and the competition between sellers. Even with the high customer bargaining power, sellers still retain high prices because there are millions of customers (Mintel, 2015). The number of customers reduces the bargaining power of customers. The primary strategy to outdo the existing competitors is commodity pricing. Sly Lady’s Wear will use reasonable pricing strategies to sell competitively quality products. By having several warehouses distributed around the country, shipping and delivery will be comfortable and affordable. Instead of renting shops in urban areas, the company will lease small and manageable warehouses and hire delivery riders to manage the warehouses. The aim is to reduce the cost of storage and carriage costs, hence lowering the cost of delivery for the customer.

The business aims to offer quality products at an affordable price. To achieve value pricing, Sly Lady’s Wear will not overprice products to create a notion of quality. The firm will also not underprice the products with the aim of attracting many customers and maximize on quantity. Therefore, the company must come up with the best pricing strategy to attract customers from all possible segments of the market. The pricing policy should ensure that the company can generate a 15% margin on the total cost (Mintel, 2015) of production per item. Customized products must have a mark-up of 20% above the total cost of design and production. For complementary products, a 5% discount on the selling price will automatically apply. The prices will also change for customers who purchase products in bulk or a particular combination of complementary products.

Also, regular customers will enjoy adjustable discounts that change with the number of times they purchase from the website. In other words, the site will offer a price promotional strategy that classifies customer loyalty in several categories. Bronze customers will buy products at the original selling price. Silver customers will purchase products at an automatic 5% discount, gold products will have an 8% discount, and platinum customers will enjoy a 10% discount. The cuts will apply automatically when the customer logs in to the website. The loyalty pricing strategy will involve the number of site visits, the number of purchases, the number of referrals, and the total value of products. The formula for loyalty calculation will be a geometric mean of the above factors. The website will then classify the customers based on the weight of their loyalty. For social media platforms, the customer will have to link the social media account to the website to get the score. Linking the social media accounts to the site will also provide the customer with a chance to receive updates on new products of choice. Customers who purchase recommend products will also earn certain discounts on prices.

Pricing

This marketing solution has some cost implications for the business. One is the cost of developing the website, which is a one-off cost of $200,000. However, there will be a site maintenance cost payable once a year at $1000. Another expense will be the cost of a social media management tool that allows the user to view messages from all the company platforms. The social media management tool also allows the business to collect data about the performance of the company in social media. It also evaluates product performance and customer reactions. The cost of social media management tools varies depending on the tool of choice. However, the price of a standard account per month ranges between $100 and $200. Considering the value added to the business, the cost of the management tool is fair. The company will bear the responsibility of setting up social media accounts and hiring the necessary employees. However, the value of the recruitment process for influencers will lie on the developer at no extra cost to the company.

Delivery

The strategy revolves around the website and social media platforms. Social media platforms will operate through a social media management tool like Google Analytics or Sprout Social. The leading technology for the solution is the company website. However, the social media management tool lies with a third party. After the website development, selected company employees will receive training on how to manage the website and the social media management tool. Once the training is complete, the company will have to run the two technologies with very minimal assistance. For technical support, visits to the company offices will be chargeable. Website maintenance will be on a yearly basis or otherwise as the client may suggest at a cost as stated above. The maintenance cost for social media management tools is inclusive in the monthly charges.

The timing for the delivery of the project for commencement includes the website development period and the training period. Website development can take up to one month. However, a blueprint of the website will be available for scrutiny and evaluation. The developers will consider users’ recommendations and make improvements where applicable. The training will take one to two weeks depending on the interest and understanding capability of the select employees. The employees may also take part in evaluating the website prototype to familiarize and raise questions where necessary. The developers will monitor the operation ability of the website for a period not exceeding one week after delivery. Upon request, the developers can also prepare a website manual for the users to ease the operation.

Research and Development

Currently, competitors like Amazon use a combination of marketing strategies that aim at capturing the attention of the customer. This type of marketing is a viable option for any organization, but it is very costly. For example, advertising through mainstream media like television commercials is expensive. Similarly, advertising through brand ambassadors is expensive and may not be tenable (Smith & Anderson, 2018). However, social media provides an opportunity for smaller businesses to promote and market products to a broader population of viewers at a manageable cost. According to Constantinides (2014), social media has revolutionized the world of marketing. Many of the competitors like Stitch fix and Shein operate websites that act as the main gateway for marketing and sales. Through the site, the organizations sell their products and showcase the differences in prices and quality. Similarly, the social media marketing strategy is a complementary strategy to the website. Through the social media, the business will provide gateways to the site. People who use social media platforms will have direct links to the business website where they can view different products and make orders. However, the strategy will employ social media to place orders and view products. The platform gives customers the opportunity to make purchases and pay for their products without visiting the website (Jiang, 2018). Through different account managers in different platforms, the business will showcase the products images and description. The influencers will be the account managers. The social media accounts will also collect data on customer reactions and complaints. The account managers will respond to the comments and resolve customer complaints in real time.

Risks

There are three significant risks of using social media as the primary marketing strategy. Social media presents the risk of unwanted behavior. Unscrupulous users may take advantage of the freedom that users possess in social media platforms to link sites with unwanted content (Smith & Anderson, 2018). Users may also post inappropriate content and connect it to the business’ accounts. Also, social media increases exposure to criminals. As a result, the disclosure may lead to risks like hacking and information leaks. Criminals may get attracted to companies that do well because they present several crime opportunities. Social media presence exposes businesses to such risks where cybercriminals may target important information or company financials. Another negative risk response from the customers is the effect of unhealthy competition. Competitors have the freedom to pose as customers or hire users to react negatively to online posts.

Financial

Social media marketing is cost friendly to small businesses. The significant cost involved in this strategy is the cost of hiring the influencers. The influencers will earn a rate of $300 for every target they meet. The influencers will also receive a retainer of 5$ an hour for eight hours a day and 10$ for every complaint they resolve outside working hours. Another significant cost of running a social media marketing campaign is the cost of graphical design. The business will have to hire a graphical designer to develop the content, videos, and images of the products. The designer will earn an hourly rate of $12. The designer’s responsibilities will include expanding the materials for social media usage subject to the influencer’s approval.  Once the designs are complete, the influencers will circulate them on social media platforms. At this stage, the other costs of managing the accounts may include risk assessment and quality management. These are free costs that the business may choose to ignore. The initial cost of running the social media platform will be $400 and $500 daily. The price will reduce gradually as the business trains employees on running and managing the accounts. Eventually, the company may choose to reduce the number of influencers and employ permanent employees to run the marketing accounts. Training internal employees will cut the cost to almost zero. The company will have to retain the graphics designer.

The other cost of the plan will include the website costs, social media management costs, and maintenance costs. The total budget estimate for the plan setup and delivery will be $210,000 which will cover the marketing strategy for the first year. The value will fall the next year rapidly as it will only cost the company $10,000. Given the low cost of maintenance for the social media accounts, the business may find it necessary to retain the influencers as part of the employees. Maintaining the influencers will save the company a lot of money in the long-run. Using influencers as permanent employees is a sustainable strategy. However, the cost of retaining the influencers remains with the company management as the decisions are at the discretion of the business. The cost of hiring an influencer as a permanent employee is not specific as most influences may choose to freelance as opposed to permanent employment. Hence, the price may or may not be favorable to the company.

The budget for the first year implementation is as follows:

Timeline

Since the strategy will be the company’s leading marketing and sales platform, the business aims to use the project continuously. However, the critical deadlines for the project include commencement and running. The hiring of the influencers will take approximately two weeks after setting up the business and registration. The hiring process of the graphic designer will take a week after. After the hiring process, the new team will hold meetings to develop the plan for the marketing strategy. The planning will only involve setting targets and requirements for the project. The influencers will also use the sessions to layout their design requirements for videos and images for use in the management of the accounts. After the planning stage, which will take a week, the influencers together with select company employees will set up social media accounts in all social media platforms.

The influencers will then use their accounts to share the reports and some of the content. These actions will mark the beginning of the project. The social media marketing project will commence in four weeks after the approval of the plan. Since social media is time-consuming and requires continuous monitoring, the project is a 24-hour process that requires the influencers to monitor the accounts throughout. The team will run weekly reviews of the progress and the stake of the strategy uptake. The team will prepare reports for submission to the management on a weekly basis, which will then present reviews of the reports and recommendations for improvement.

References

Bernabé-Moreno, J, Tejeda-Lorente, A, Porcel, C, Fujita, H, & Herrera-Viedma, E (2015) ‘CARESOME: A system to enrich marketing customers acquisition and retention campaigns using social media information. Knowledge-Based Systems, 80,163-179.

Jiang, J. (2018). Millennials stand out for their technology use, but older generations also embrace digital life. Retrieved from: http://www.pewresearch.org/fact-tank/2018/05/02/millennials-stand-out-for-their-technology-use-but-older-generations-also-embrace-digital-life/

Mintel. (2015). Over a third of us, millennial women say social media is a top influencer for clothing purchases. Mintel. Retrieved from: http://www.mintel.com/press-centre/fashion/over-a-third-of-us-millennial-women-say-social-media-is-a-top-influencer-for-clothing-purchases

Reynolds, R., & Chiu, M. M. (2016). Reducing digital divide effects through student engagement in coordinated game design, online resource use, and social computing activities in school. Journal of the Association for Information Science and Technology, 67(8), 1822-1835.

Smith, A., & Anderson, M. (2018). Social media use in 2018. Retrieved from: http://www.pewinternet.org/2018/03/01/social-media-use-in-2018/

The Statistics Portal. (2019). Percentage of female internet users in the United States who access selected social networks as of January 2018. Statista. Retrieved from: https://www.statista.com/statistics/249802/percentage-of-female-us-internet-users-who-use-social-networks/

Constantinides, E. (2014). Foundations of social media marketing. Procedia-Social and Behavioral Sciences, 148, 40-57.

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