Retail management project, picasso art gallery

PICASSO ART GALLERY RMS RETAIL PROJECT

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RETAIL MANAGEMENT STRATEGY

GROUP ASSIGNMENT Picasso Art Gallery

SUBMITTED BY:

ANURAG BISEN 1307

MUSTAHID ALI 1334

NIVEDITA SUBBARAM 1337


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TABLE OF CONTENT

1.0 EXECUTIVE SUMMARY…………………………………………………………………………………………………………………… 4

CHART: HIGHLIGHTS ................................................................................................................................... 6

1.1 OBJECTIVES ........................................................................................................................................... 6

1.2 KEYS TO SUCCESS .................................................................................................................................. 7

1.3 MISSION ................................................................................................................................................ 7

2.0 COMPANY SUMMARY ........................................................................................................................... 7

2.1 COMPANY OWNERSHIP ........................................................................................................................ 8

2.2 START-UP SUMMARY ............................................................................................................................ 8

TABLE: START-UP ........................................................................................................................................ 9

CHART: START-UP ..................................................................................................................................... 11

3.0 SERVICES ............................................................................................................................................. 11

4.0 MARKET ANALYSIS SUMMARY ............................................................................................................ 12

4.1 MARKET SEGMENTATION ................................................................................................................... 12

TABLE: MARKET ANALYSIS ........................................................................................................................ 13

CHART: MARKET ANALYSIS (PIE) ............................................................................................................... 13

4.2 TARGET MARKET SEGMENT STRATEGY .............................................................................................. 13

4.3 SERVICE BUSINESS ANALYSIS .............................................................................................................. 14

4.3.1 COMPETITION AND BUYING PATTERNS .......................................................................................... 15

5.0 STRATEGY AND IMPLEMENTATION SUMMARY .................................................................................. 16

5.1 COMPETITIVE EDGE ............................................................................................................................ 17

5.2 MARKETING STRATEGY ....................................................................................................................... 18

5.3 SALES STRATEGY ................................................................................................................................. 19

5.3.1 SALES FORECAST .............................................................................................................................. 20

5.4 MILESTONES ........................................................................................................................................ 22

6. BRAND PERSONALITY………..…………………………………………………………………………………………….………………22

7.LAYOUT…………………………………………………………………………………………………………………………………………….23

8.RETAIL MIX……………………………………………………………………………………………………………………………………….24


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9. OPERATION PLAN ……………………………………………………………………………………………………………………………26

10. CUSTOMER JOURNEY MAP…………………………………………………………………………………………………………….27

11. PRE AND POST TRANSACTION ………………………………………………………………………………………………………28

12. WEB PLAN SUMMARY ......................................................................................................................... 28

12.1 WEBSITE MARKETING STRATEGY ...................................................................................................... 29

12.2 DEVELOPMENT REQUIREMENTS ...................................................................................................... 29

13. MANAGEMENT SUMMARY ................................................................................................................. 29

13.1 PERSONNEL PLAN ............................................................................................................................. 30

TABLE: PERSONNEL ................................................................................................................................... 30

14.0 FINANCIAL PLAN................................................................................................................................ 31

14.1 IMPORTANT ASSUMPTIONS ............................................................................................................. 31

14.2 BREAK-EVEN ANALYSIS ..................................................................................................................... 31

TABLE: BREAK-EVEN ANALYSIS ................................................................................................................. 32

CHART: BREAK-EVEN ANALYSIS ................................................................................................................ 34

14.3 PROJECTED PROFIT AND LOSS .......................................................................................................... 34

TABLE: PROFIT AND LOSS .......................................................................................................................... 35


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1.0 Executive Summary

PICASSO ART GALLERY Creative Centre is the place where artists meet. PICASSO ART GALLERY is an

acronym for "No Artist Left Behind," with our company by-line stating: "Live Your Art." Picasso art

gallery is a specialty retail store offering a large array of artists' materials and supplies, crafters'

needs, a gallery, and an education centre. Picasso art gallery will provide a pleasant facility that will

inspire and support amateurs, professionals and crafters in the Big Place art community. PICASSO

ART GALLERY will sponsor art shows and competitions, art and craft fairs, scholarships for artists to

continue their formal education, and other community events. PICASSO ART GALLERY will facilitate,

organize and offer creative workshops and classes in a variety of techniques and media.

The Market

PICASSO ART GALLERY is at the forefront in an exciting and growing market. The India has many

stores exclusively offering art and craft supplies but neither of these stores is able to offer education

and hands-on opportunities. Neither currently supports the artists community in active ways. They

are also not able to give the high level of customer support that PICASSO ART GALLERY can. PICASSO

ART GALLERY is the only art supply store in Goa that is owned and operated exclusively by

artists. PICASSO ART GALLERY Creative Center will tap into the growing number of professional

artists in Goa. We will also fill the needs of the growing market of retirees (100% growth in the last

three years).Also PICASSO ART GALLERY encourages the thriving artists. PICASSO ART GALLERY will

actively market to teachers and students in the growing public and private education systems. We

have chosen Goa as it is the worldwide famous tourist place later on we will open our second store

in Jaipur because these places are more famous tourist place and popularly known for arts and

antics.


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The Organization

PICASSO ART GALLERY is owned and operated by practicing artists. It is founded on the idea that

maintaining satisfied customers is essential to the bottom line. With this in mind, PICASSO ART

GALLERY Creative Centre will be working hard to ensure that all of their customers' expectations are

exceeded in all transactions. To maintain a presence within the art and craft community and close

relationships to customers, PICASSO ART GALLERY will be an active member of the local art scene

through participation and education. PICASSO ART GALLERY staff will receive training in the most

current trends and products. Picasso Art Gallery owners will both anticipate and set consumer

trends in creative work.

Products, Services, and Delivery

PICASSO ART GALLERY will be located in the commercial business Panjim, in a 3,000 square foot

store. The previous tenants were cabinet makers and much of their handiwork remains to our

benefit. PICASSO ART GALLERY will have the floor space to offer a wide variety of art and craft

supplies. Due to our size, we will also have the purchasing power to buy from manufacturers

directly, thus avoiding middle man mark-ups. We will offer discounts to regular customers. We will

also offer free delivery in near Goa and Mumbai for orders of Rs300 or more. PICASSO ART GALLERY

will offer Artist's Oasis holidays to travellers by arranging local accommodations, renting equipment,

selling supplies, and offering maps and guides.

Financials

PICASSO ART GALLERY will show modest profit from month one. Margins are forecasted to be at

50%, due to the ability to buy wholesale. Sales in the first full year will be slightly over

Rs13,35,500. We are projecting conservatively a growth rate of 5% the first three years and 20%

thereafter, even though existing art supply stores are reporting growth of over 30%. We budget

conservatively, but have great vision.


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Chart: Highlights

1.1 Objectives

1. Customer Satisfaction: To create a shopping environment that caters to the needs of the art and

craft community of the Big Place by offering knowledgeable and professional customer service.

Customer satisfaction will be measured through repeat business (our goal is that 50% of our

customers will return within 6 months for an additional purchase) and multiple sales (our goal is

that 30% of sales are accompanied by an additional purchase).

2. To earn 80% market share and become the number one art and craft supplier on the place.

3. To achieve a 50% profit margin within the first year.

4. To be an active and vocal member in the community and to provide continual re-investment

through sponsorship of community activities and celebrations, including: supporting art and

craft events, hosting classes, providing scholarships.

0

500000

1000000

1500000

2000000

2500000

3000000

YEAR 1 YEAR 2 YEAR 3

All

term

in R

s

Years

Highlights

SALES GROSS MARGIN NET PROFIT


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5. To develop, in year two and three, Artist's Oasis of Panjim. In this program we would arrange

local accommodations and materials rental for visiting/vacationing artists.

1.2 Keys to Success

In order for PICASSO ART GALLERY Creative Center to succeed we must:

Provide for the satisfaction of 100% of our customers and vendors.

Advertise and promote in areas where our target customer base will learn about our store.

Continuously review our inventory and sales and adjust our inventory levels accordingly.

Sell products that are of the highest reliability and quality. We must offer as many or more

premium products than our competition offers. Offer loss leaders and other promotions that

bring customers into the store to buy goods, explore our line of services, and sign up for future

events.

Be an active member of the community.

Provide in-store classes, demonstrations, and events.

1.3 Mission

PICASSO ART GALLERY Creative Center's mission is to support and contribute to the community of

artists and crafters by offering quality, name brand supplies to accommodate customer needs; by

hosting and supporting shows, events, classes and contests; and by promoting the place as an artist's

oasis and destination.

We will strive, constantly, to supply what the consumer is asking for; we will continually review what

is available in the marketplace. We will provide new products and services to the areas of need. We

will maintain PICASSO ART GALLERY as a place for artists to gather.

Success will ultimately be measured by our customers choosing us because of their belief in our

ability to meet or exceed their expectations of price, service, and selection.


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2.0 Company Summary

PICASSO ART GALLERY Creative Center is a startup, to go into business in the Summer of this year.

We will offer a large variety of art and craft supplies, focusing on those items that are currently

unavailable on this place. The Internet will continue to be a competitor, as artists use websites to

buy familiar products. We will stock products that artists don't necessarily have experience with.

We will maintain our price comparisons to include those available on line.

We will offer classes in the use of new materials and techniques.

We will build an Artist's Oasis tour program. We will book local Bed and Breakfasts, rent easels and

materials; sell paint and other supplies and ship completed work to the clients when dry.

We will expand the store into an art center including: A fine art gallery, offering original art at, or

near, wholesale prices; Musical instruments/studio space; Classrooms for art/music lessons;

Art/Music books; Live music/coffee bar; Do-it-Yourself crafts such as specialty T-Shirts, signs, cards,

ceramics for the tourist trade.

2.1 Company Ownership

PICASSO ART GALLERY Creative Center is a subsidiary of PICASSO ART GALLERY LLC, a limited liability

corporation equally owned and operated by Mustahid Ali and Nivedita. Additional subsidiaries

include PICASSO ART GALLERY Design (Interior/Web), PICASSO ART GALLERY Fine Art, PICASSO ART

GALLERY Music.

2.2 Start-up Summary

PICASSO ART GALLERY Creative Center's start-up costs are listed below. The company will start

with 10 months inventory on hand as this is the main revenue generator. The majority of the

company's assets will reside in inventory.


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There will be other normal business costs such as a liability umbrella, rent, interior design costs, and

opening day promotions.

Current (short-term) assets, acquired during interior build-out, shelving, slotwall, fixtures, signage,

display cases, etc., come to Rs 8,00000.

The operating capital cash on hand balance will be Rs11,00000.

The purpose of this business plan is to drive the company direction in accord with its vision and to

secure a Rs45,00000 loan. This supplemental financing is required to work on site preparation,

inventory, and operational expenses. Other financing will include the owner's investment of

Rs10,00000 and a short-term revolving line-of-credit for inventory replenishment during months of

high receipts.

Successful operation and the building of a loyal customer base will allow PICASSO ART GALLERY

Creative Center to be self-sufficient and profitable in the first full year.


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Table: Start -up

Start-up

Requirements

Start-up Expenses

Legal Rs10,000

Stationery etc. Rs5,000

Insurance Rs5,000

Office Space Rs10,00,000

Travel: Trade Show Rs3,50,000

Set-up Banking Rs1,000

POS System Rs20,000

Security System Rs15,000

Advertising Rs20,000

Phone System Rs10,000

Computers Rs50,000

Other Rs10,000

Total Start-up Expenses Rs14,96,,000

Start-up Assets

Cash Required Rs5,00,000

Start-up Inventory Rs5,00000

Other Current Assets Rs8,00000

Long-term Assets Rs17,00000

Total Assets Rs30,00000

Total Requirements Rs49,96,000


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3.0 Services

PICASSO ART GALLERY Creative Center will provide a wide variety of products of interest to artists

and crafters. Our wholesale suppliers will include: Sai handicrafts, Mona Lisa fine art production, art

Alley, Athena art arena. There are thousands of products available, we will offer many that are

unusual, or new, as well as the basics that every artist needs on a regular basis. We will offer lines

to include bargain, mid-range and professional quality products.

Management will rely on customer feedback, suggestions, and daily sales reports to introduce or

eliminate certain brands or products.

In year two we will begin marketing our Artist's Oasis tour packages, as well as art/craft equipment

rental. Rentals will include equipment items that are too bulky to carry on vacation, or too

expensive, or used only periodically, for the average artist or crafter to justify purchase. An example

would be a Giclee Printer.

0

5,00,000

10,00,000

15,00,000

20,00,000

25,00,000

30,00,000

35,00,000

40,00,000

45,00,000

Expenses Assets Investment Loans

14,96,000

30,00,000

17,00,000

45,00,000

Rs

START-UP


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4.0 Market Analysis Summary

PICASSO ART GALLERY Creative Center will market to four primary customers:

1. Professional artists.

2. Amateur artists and crafters, including hobbyists.

3. Businesses, such as architects, graphic designers, interior designers, or direct mail advertisers.

4. Teachers and students.

4.1 Market Segmentation

Average household income has steadily grown with about 36 percent of Big Place households

reporting incomes of Rs25,000 - Rs50,000 and another 36 percent in the Rs50,000 - Rs75,000 range.

Predictions for Goa and Jaipur include continued population growth, economic growth and business

opportunity.

1. Professional artists. There are currently at least 30 Fine Art Galleries in Goa and Jaipur. Each

gallery represents several artists.

2. Amateur artists and crafters, including hobbyists. Many of the amateurs are retirees* with

relatively high disposable income levels.

3. Businesses. Architects (30 companies on place), technical drawing, interior/graphic design (18

companies on place), advertising/direct mail companies (12 companies on place).

4. Teachers and students. This group will include K-12 teachers and students as well as those

attending art classes at the store. (25,000 public school students).

*The total population of Goa and Jaipur has grown by about 14.9 and 26.91% percent in the past

decade respectively, the older segments - such as those from 45 - 54 and those 55 and up have

increased at rates of 100 percent and 64 percent, respectively.


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Table: Market Analysis

Chart: Market Analysis (Pie)

4.2 Target Market Segment Strategy

1. Professional Artists. With only one existing art supply store in Goa and jaipur, if the

professional's need for customer service is not met, they will utilize the Internet and mainland

20%

30%

10%

40%

Growth

Professional Artists Amateur Artists Business to Business Education

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Professional Artists 20% 200 240 288 346 415 20.02%

Amateur Artists 40% 1,000 1,400 1,960 2,744 3,842 40.00%

Business to Business 10% 66 73 80 88 97 10.10%

Educational 20% 10,000 12,000 14,400 17,280 20,736 20.00%

Total 22.16% 11,266 13,713 16,728 20,458 25,090 22.16%


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stores. The area we can impact most heavily is having the actual products in the store that artists

can manipulate, study, etc. This would especially apply to products that a customer may not take

a chance on ordering from an Internet site (because of variations in quality, or new

techniques/products).

2. Amateur artists and crafters, including hobbyists. In general, this segment has the same needs,

desires, and fulfilment requirements as the professional artists. Some will be purchasing from

lower and mid-priced product lines, but many are avid in pursuing their avocations, and

appreciate, buy and use the professional quality materials.

3. Businesses such as architectural, technical drawing, interior/graphic design, advertising/direct

mail companies. Currently, this segment is not served in any way on the west side of the place,

except by casual shopping at the existing art supply store. Much of the purchasing by this

group is done on the Internet.

4. Teachers and students. This is a much neglected segment on our place. Students and teachers

currently have access to products in Wal-Mart, K-Mart, a small school supply specialty shop

(open part-time), and the sole existing art supply store. We plan to have a store big enough to

accommodate the art supply needs of the education community.

4.3 Service Business Analysis

PICASSO ART GALLERY Creative Center is a specialty retailer filling an underserved niche market on

the place.

Currently customers can buy low end art products at Wal-Mart, K-Mart, Long's, and Ace Hardware.

The products offered at these outlets is severely limited. Products include: a few small canvases, a

small selection of papers in limited sizes, a few paint sets, and writing pens and pencils. The same

stores offer limited selections of craft and hobby products as well, usually aimed at general interest

and unsophisticated shoppers.


pg. 15

Goa Printing Corp. and Panjim Coast Office Supply, Inc. stock a limited variety of drafting supplies:

pens, pencils and paper products that could be used for arts and crafts but are usually associated

with writing.

Art and craft products can also be purchased at Art Supply Panjim in the old industrial area. This

store offers a much better selection in terms of variety, type and quality, but has a reputation for

poor customer service satisfaction.

4.3.1 Competition and Buying Patterns

Art Supply of Gallery attic in Panjim is the closest competitor to Picasso art gallery. It is a small two-

story facility of 1,300 sq. ft. The store has been in business for 10 years, seven years in Hilo and three

years in Panjim. They offer a variety of fine art supplies, canvas, paints, stained glass, ceramics,

oriental arts, beads, textile arts, crafts, scrapbooking, and children's craft kits. The store is currently

for sale with an asking price of Rs395,000. According to their advertising, the store serves a growing

local artist community, retirees and both public and private schools.

Many artists known to the owners, refuse to shop at Gallery attic because they are dissatisfied with

the level of customer service, and generally uncomfortable in the shopping experience. They

currently shop off the Internet, and in mainland stores during infrequent visits out-of-state. These

artists represent a significant customer base for PICASSO ART GALLERY Creative Center.

Customers in the educational segment buy at the discount stores, due to the convenience of one-

stop shopping for all their household needs as well as school supplies for the kids. We will market

directly to the art teachers in the local schools. We will supply order forms to the classrooms, and

deliver directly to the schools.

Many professional artists buy from Internet sources due to the still limited selections in the local

marketplace in the quantities needed. With a store space nearly three times the size of ASH, we will

be able to stock appropriate quantities, styles and sizes, and deliver orders much more quickly than

Internet sources. We will provide free delivery to the North Kona area on purchases over Rs300. We

will also provide friendly, professional customer service. We'll provide a generous return and


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exchange policy. We'll provide hands-on access to materials and make Picasso Art Gallery a

gathering place for artists. None of these benefits are available through Internet sources.

5.0 Strategy and Implementation Summary

Picasso Art Gallery goal is to provide products, service and education to the underserved creative

community on the Big Place. The current population is underserved due to a perceived lack of

customer service in the few existing outlets for supplies.

Our intention is to gain 80% of the market share by focusing on our customer service, niche

positioning, convenient location, quality brands, special promotions and becoming a gathering spot

for artists. While we will focus on our primary customer segments, we offer products that virtually

every artist/crafter requires. We will create an atmosphere that is appealing to the true artist,

whether amateur or professional. The balance of customers will come because they will see this as

the center of creative people.

The store will merchandise in a manner consistent with our values and the fundamentals of good

retail space use. We will provide a bulletin board for all manner of communications among the

community. We will provide space for classes and creative hands-on experimentation.

Strategic Assumptions:

1. Every resident on the Goa and Jaipur is a potential customer. By marketing to our two target

segments, we will expose ourselves to additional new customers.

2. Our proximity to Costco and Home Depot will bring in those travelling from outside Kona.


pg. 17

3. We will continue to be involved in the art and craft community as participants, suppliers and

encouragers.

5.1 Competitive Edge

Picasso Art Gallery competitive edge involves five areas:

1. Customer Service as priority one.

2. Location. The store is located in the Panjim Commercial Industrial Park. The location will attract

more customers from out of the Panjim area because a visit to the art supply store can be

consolidated with a trip to Goa, a store with an established draw on customers from all over the

place.

3. PICASSO ART GALLERY will be an art education center. We will have a large classroom available

for instruction in various media and techniques.

4. PICASSO ART GALLERY will be a gathering place for artists. We will dedicate a portion of the

warehouse area to a cafe style lounge where customers can read art magazines, look at the art

gallery, drink coffee, listen to music, or visit with other artists.

5. We will provide percentage discounts for repeat customers.

Each of these is a competitive advantage because none is being addressed, by an art supply outlet,

in panjim at this time.


pg. 18

5.2 Marketing Strategy

Our marketing strategy will focus heavily on customer service with loyalty and retention in sales; on

sales promotion, and on niche positioning in the market.

In addition to price and item promotional announcements, PICASSO ART GALLERY Creative Center

will focus its marketing efforts via several key direct-to-consumer advertising vehicles:

Local and Regional Magazine Publications. (Goacom magazine, Goa Groove)Each of these papers

provide a demographic base that lines up nicely with that of Picasso Art Gallery.

Direct Mail Postcards: PICASSO ART GALLERY will look to increase consumer awareness, retain the

existing customer base and promote increased sales via postcard mailings. These mailings will be

targeted around special events, and are intended to liquidate slow moving products or showcase

vendor negotiated specials.

Spring Open House--15% to 20% savings opportunity.

Fall Open House--15% to 20% savings opportunity.

Holiday Open House--15% to 20% savings opportunity.

Annual Anniversary Postcard--promotes in-store design seminars, special events and savings

opportunities.

Website Marketing: As we establish our on-line education and gallery segment, we will support

the business via search engine marketing, URL links and e-mail marketing on all correspondence.

This third channel of business will increase the customer base, sales potential and service

opportunities provided by PICASSO ART GALLERY.

Direct Calls on professional artists, architects and designers.

Word of mouth. By giving first-time customers great service and a fair price, the word is sure to

spread.


pg. 19

In-store events and celebrations.

All marketing decisions with regard to specific media choices, frequency, size, and expenditures will

be analyzed on an on-going basis with careful consideration of returns generated and consistency

with our mission and vision.

5.3 Sales Strategy

PICASSO ART GALLERY Creative Center will approach sales from a relationship basis. We will assist

customers in a personal manner, using personal names and displaying our names on badges. We

will ask the questions needed to provide the customers with the services they desire. Gathering key

customer information and seeking performance feedback on the products and services offered will

assist us in the following ways:

Targeting our marketing efforts most effectively.

Developing product offers and merchandising formats that increase sales.

Developing services and perks that enhance the shopping experience.

Increasing awareness of Picasso art gallery within the retail consumer marketplace.

Developing future sales opportunities that allow for continued growth of the business.

Key to the sales strategy is direct sales calls on all market segments targeted in this plan. These sales

calls need to be made by the owners, by virtue of their background and knowledge of the customers,

products and competitors. Experience has proven that the more time we devote to sales, the more

sales result. A full-time team member needs to be found and added as soon as possible. Without

this person, too much of the owner's time is deflected away from their major tasks.

We will utilize the POS software with every sales transaction. With each purchase the software will

record and maintain in its database the customer's name, address and purchases. This information

will be used with our direct mailing program to focus on our top 50% of customers. This will also

make inventory control easier and more effective.


pg. 20

We will offer the best return/exchange policy possible, to build trust with our customers and

maintain retention and loyalty. At least 50% of returns will be sent back to the distributor or vendor.

For in-store sales, our strategy will be to maintain as much on-site point-of-purchase literature as is

physically possible. We will remember that selling art and craft supplies is about educating and filling

a need, not pressuring the customer to buy.

Most importantly, we need to sell our company, not necessarily the products. We will need to push

our service, education, and support capabilities. This will be done through relating with customers,

drawing out creative dreams and aspirations, stretching customers into new creative arenas, and so

forth.

5.3.1 Sales Forecast

The following table and chart highlight forecasted sales. We expect sales to start off conservatively

and increase extensively during the holiday season and during the months of July and August

as the education systems start their new year.

PICASSO ART GALLERY has planned for a rate of growth at 5% for the first year as we build name

recognition and status in the community. In the second year we project a growth rate of 10%. In the

third year we look to see an increase of revenue of 20% as we gain a larger percentage of the market

share and increase our customer base beyond the Kona area.


pg. 21

Table: Sales Forecast

Sales Forecast

Year 1 Year 2 Year 3

Sales

Painting Supplies Rs6,00000 Rs8,00,000 Rs10,00,000

Drawing/Illustration Rs2,00000 Rs2,50,000 Rs4,00,000

Books/Media Rs25,000 Rs30,000 Rs50,000

Cutting Tools Rs10,000 Rs15,000 Rs25,000

Adhesives Rs5,000 Rs5,000 Rs10,000

Glass Rs30,000 Rs40,000 Rs60,000

Ceramics Rs8,000 Rs10,000 Rs25,000

Crafts Rs50,000 Rs75,000 Rs1,00,000

Gifts/Studio Environment Rs25,000 Rs35,000 Rs50,000

Print Making Rs10,000 Rs15,000 Rs30,000

Sculpture Rs25,000 Rs30,000 Rs40,000

Portfolios/Transporting Rs15,000 Rs25,000 Rs40,000

Gallery Sales Rs50,000 Rs60,000 Rs1,00,000

Fabrics/Yarn Rs15,000 Rs20,000 Rs30,000

Equipment Rs10,000 Rs20,000 Rs15,000

Clothing/Accessories Rs25,000 Rs40,000 Rs50,000

Paper/Boards Rs30,000 Rs50,000 Rs75,000

Classes Rs2,500 Rs5,000 Rs15,000

Canvas/Surfaces Rs2,00000 Rs3,00,000 Rs4,00,000

Total Sales Rs13,35,500 Rs18,25,000 Rs25,15,000

Direct Cost of Sales Year 1 Year 2 Year 3

Inventory Rs4,45,166 Rs6,08,333 Rs8,38,333

Other Rs0 Rs0 Rs0

Subtotal Direct Cost of Sales Rs8,90,333 Rs12,16,666 Rs16,76,666


pg. 22

5.4 Milestones

The accompanying milestone chart highlights our plan with specific dates. This schedule reflects our

strong committment to organization and detail. During the 6-month and 12-month evaluation

period, we will complete a detailed evaluation of all aspects of the business:

Financials/Bottom Line

Sales

Customer satisfaction

Goals for next period

We will have in place a "Plan-B," for implementation, should the evaluation show that it is ill-advised

to continue the current endeavor. Product diversification, location, advertising, new markets, will

be considered if PICASSO ART GALLERY needs to be more liquid.

6. Brand Personality

A set of human characteristics that are attributed to a brand name. A brand personality is something

to which the consumer can relate, and an effective brand will increase its brand equity by having a

consistent set of traits. This is the added-value that a brand gains, aside from its functional benefits.

There are five main types of brand personalities: excitement, sincerity, ruggedness, competence an

sophistication. Our brand is totally related to the Arts and creativeness, so it shows the personality

of artistic, as the name and the logo “PICCASO ART GALLERY” gives an impact of the best and


pg. 23

unique designs and arts, logo is full go colours which give the experience of happiness , joy and all

phases of life.

Ultimately its all about personality which pertains the creativity and artistic.

7. Layout:

Layout is according to the displays and the various departments. There are many departments

depends on the type of the products like paintings, drawings, sculptures, tools, crafts, handmade

items and so on. We have mostly transparent windows and displays so that people see it easily.

The entrance is of totally mirror and automated so that outside people can see inside the shop

easily and thus it can attracts them hence increase more sales.






pg. 24





8. Retail Mix

1. Merchandise Mix :- Generally as we have products which are different from each other and

have unique attributes, so we have their different- different departments, like drawing

department, painting department, art and tools department, crafts and handies departments,

sculpture department, so its more of departmental retail store.

People have their own perception and hence their own choices that what they want to like and

buy, according tit heat they can visit their respective departments.

2. Price : we have different prices depends on the product type, paintings are ranging from 5Rs

5000 to Rs 1,000,00, drawings, handy crafts, sculpture every product has their own price ranging

from Rs 500 to Rs 50000.


pg. 25

3. Location: Location is very prime in Panjim , Goa, as it is the one of the famous tourist place not

even only for Indians but also for foreigners.

4. Advertisement and promotion: As it a unique store with its unique USP’s and the

competition is very less in Panjim, so it require very less advertisement and promotion , but

initially for the awareness it is very essential. So, we have strategy of Below the line (BTL) to

aware and promote our targeted audience, ads in local newspaper especially on the tourism

section, organising cultural and art events and trade fairs, ads to colleges.

5. Store layout and design: Layout is according to the displays and the various departments.

There are many departments depends on the type of the products like paintings, drawings,

sculptures, tools, crafts, handmade items and so on. We have mostly transparent windows and

displays so that people see it easily. The entrance is of totally mirror and automated so that

outside people can see inside the shop easily and thus it can attracts them hence increase more

sales.









6. Customer services and selling: we have pre and post transaction services for our customers.

Pre services full details and catalogues for the costumers that will make their purchase easy,

even for loyal customer we provide personal assistant, for touristic we are also providing route

map and location map, so that can makes their traveling a fun without any inconvenience .

We are also providing the basic art, painting and drawing training to our register customers, it

will be online and offline.


pg. 26

Secondly for post transaction free advises that in what pattern the painting, drawing will look

good, apart from this in background to which colour. Replace and second hand services will also

be there.

So it will be complete plan that will fulfil the requirement of the customers.

9. Operation plan

Sourcing

Artists

Amateurs

Museums

Sculptures

Tool suppliers

Cultural & art

exhibition

Picasso art

gallery

Order

Online(website)

offline

Delivery

Free delivery

within GOA and

MUMBAI

Private education Provides artists

oasis holiday

Packaging

Robust

packaging

Managing inventory using POS

software, which keeps the track

of every product .


pg. 27

10.Customer journey map

Picasso

art

gallery

Receptionist

Books

section

Musical

instrument

Art section

Crafts

section

Sculptures

Classroom

for art and

music

Live music

/coffee bar

Do it

yourself

Section

Order

received

Leave


pg. 28

11. Pre and Post Transaction

12.0 Web Plan Summary

Picasso Art Gallery Web presence will be informational and educational with a contact form for

requesting additional information. Our URL will be on all print items coming from the store

(advertising, sales promotion sheets, letterhead).

Management will rely

on customer feedback, suggestions, and

daily sales reports to introduce or

eliminate certain brands or products.

Online feedback

Artist oasis tour

Cultural and art exhibition

Location information to tourist

Trade fare and event organization


pg. 29

Customers will be able to search our inventory and place orders.

Customers will be able to access a calendar of educational opportunities, and sign up on line.

Customers will be able to use the website as a portal for art related research: technical, historical

and local.

Customers will be able to view and print coupons.

Off-place customers will be able to read about our tour packages, and request additional

information.

Customers will be able to view our on-line art gallery.

12.1 Website Marketing Strategy

We will direct customers to our website in the following ways:

Direct e-mail through addresses given to us voluntarily.

Printing on everything that comes from the store (letterhead, business cards, direct mail,

shopping bags and wrapping paper, promotional items, print advertising).

Links from local business pages and Hawaii Tourism portals.

Links from/to national art resource pages.

Advertising on all company vehicles.

12.2 Development Requirements

Our parent company website is already in place. Through PICASSO ART GALLERY Design, we have

trained staff, domain names, and software in place to build a web presence for PICASSO ART

GALLERY Creative Center at nominal cost.

13.0 Management Summary

PICASSO ART GALLERY Creative Center is managed by the owners/founders.

We will open with the two owners operating the store.


pg. 30

As our business expands, we will hire additional employees, our projections include six

employees, with the owners managing the store and cold-call selling.

o Employees will be encouraged to work within their creative, physical, and intellectual

boundaries.

o All duties will be divided and delegated according to strengths and weaknesses.

o At PICASSO ART GALLERY we will expect a high degree of customer service skills and

personality as this is essential to our success.

13.1 Personnel Plan

PICASSO ART GALLERY will be operated in the first few years by the owners. Additional part-time

help will be provided by family members.

As PICASSO ART GALLERY grows over the next years, we will need two additional full-time sales

clerks, and two part-time clerks. This will free the owners to concentrate on building the business,

and expanding into the other areas of Picasso Art Gallery vision (tours, competitions, music, gallery,

special events, etc.).

Table: Personnel

Personnel Plan


1 cashier/receptionist Rs1,20,000 Rs1,30,,000 Rs1,30,,000

Other ( 1 People) R1,20,000 Rs1,30,000 Rs1,30,000

Other (1 extra will add on 3rd year) Rs0 Rs0 Rs1,20,000

Total People 2 2 3

Total Payroll Rs2,40,000 Rs2,60,000 Rs3,80,000


pg. 31

14.0 Financial Plan

The growth of PICASSO ART GALLERY will be moderate and the cash balance will always be

positive.

Being a retail environment we will not be selling on credit. We will accept cash, checks, Visa and

MasterCard.

Marketing and advertising will remain at or below 5% of sales.

We will finance growth mainly through cash flow. We recognize that this means we will have to

grow slowly.

It should be noted that the owners of PICASSO ART GALLERY Creative Center do not intend to

take any profits out of the business until the long-term debt has been satisfied. Whatever profits

remain after the debt payments will be used to finance growth, mainly through the acquisition

of additional inventory.

14.2 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following

table. The key underlying assumptions are:

We do not sell anything on credit. We accept cash, checks, debit cards, Visa, MasterCard.

A slow-growth economy/customer base, without major recession.

Monthly sales are the largest indicator for this business. There are some seasonal variations,

with the months October through January being the highest sales months.

We assume access to capital and financing sufficient to maintain our financial plan as shown in

the tables.


pg. 32

14.3 Break-even Analysis

Our break-even analysis is summarized by the following chart and table.

Table: Break-even Analysis

Total expected expenditure = Rs 14,96,,000 (from start-up table)

So,

Monthly expected expenditure will be ,

= Rs 14,96,000/12

=Rs 1,24,667

Now expected sales per year (From sales forecast table)

Year 1 = Rs 8,90,333

Year 2 = Rs 12,16,666

Year 3 = Rs 16,76,666

Expenditure recover in first year = Rs 8,90,333

Remained expenditure to be recover in 2nd year is Rs 14,96,000 – Rs 8,90,333

i.e = Rs 6,05,667

Expected earning in 2nd year is Rs 12,16,666

So, remained expenditure will be recover in first 6 month of 2nd year as the monthly average

sales will be Rs 1,01,388. (Rs 12,16,666/12 = Rs

1,01,388 monthly)


pg. 33

Break-even Analysis

Monthly Revenue Break-even for 1st year

Monthly Revenue Break-even for 2nd year

Monthly Revenue Break-even for 3rd year

Rs74,195

Rs 1,01,388

Rs 1,39,722

Assumptions:

Average Percent Variable Cost 50%

Estimated Monthly Fixed Cost Rs 52,550

0.00 890333 1216666 167666

Expenditure (In Rs) -1496000 -1496000 -605667 0

-1496000 -1496000

-605667

0

-1600000

-1400000

-1200000

-1000000

-800000

-600000

-400000

-200000

0

EXP

END

ITU

RE

(IN

RS)

SALES (YEARLY IN RS)

BREAK EVEN ANALYSIS (YEARLY)


pg. 34

Break Even Analysis (Monthly)

14.4 Projected Profit and Loss

We predict that during the second year of operation, our high level of customer service and strong

assortment will allow us to generate approximately 5% profit. This will be above the normal two to

three year period required for a start-up retailer. Our sales projections are conservative. Should

sales increase as we anticipate, the profit-to-sales ratio could be as high as 10% by the end of year

three.

The following chart and table will indicate projected profit and loss.

-2000000

-1500000

-1000000

-500000

0

500000

1000000

Mo

nth

ly E

xpec

ted

Exp

end

itu

re (i

n R

s)

Monthly Sales (In Rs)

Break Even Analysis (Monthly)


pg. 35

Table Profit And Loss:

Pro Forma Profit and Loss


Sales Rs 13,35,500 Rs 18,25,000 Rs 25,15,000

Direct Cost of Sales Rs4,45,166 Rs6,06,333 Rs8,38,333

Other Costs of Sales Rs0 Rs0 Rs0

Total Cost of Sales Rs8,90,333 Rs12,16,666 Rs16,76,666

Gross Margin Rs445167 Rs608334 Rs838334

Gross Margin % 66.67% 66.67% 66.67%

Expenses

Payroll Rs2,40,000 Rs2,60,000 Rs3,80,000

Marketing/Promotion Rs10,000 Rs20,000 Rs20,000

Depreciation Rs0 Rs0 Rs0

Utilities Rs5000 Rs5,000 Rs5,000

Insurance Rs5,000 Rs5,000 Rs5,000

Payroll Taxes Rs0 Rs0 Rs0

Other Rs0 Rs0 Rs0

Total Operating Expenses Rs2,60,000 Rs2,90,000 Rs4,10,000

Profit Before Interest and Taxes Rs1,85,167 Rs318334 Rs428334

EBITDA Rs1,85,167 Rs318334 Rs428334

Interest Expense Rs20,000 Rs15,000 Rs12,000

Taxes Incurred Rs15,000 Rs18,000 Rs20,000

Net Profit Rs150167 Rs285334 Rs396334

Net Profit/Sales 6.56% 16.20% 20.19%


pg. 36

Over all this Project is totally feasible and will be great Retail Business.

Date post:	14-Sep-2014
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Retail management project, picasso art gallery

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