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29/03/2009 © MS Consulting 1
Start-up in UkraineStrategy
Operation plan
29/03/2009 © MS Consulting 2
Strengths
• Unique product/offer: PHOTOBOOK
• Developed web-site/software
• Experience
• Flexibility
• Established supply chain (Logistics)
• Intention to establish own Sales Force
Weaknesses
• Start-up activity: lack of power
• No established Sales Force
• Lack of local knowledge/expertise
• Lack of customer base
• Lack of relationships/connections
• Limited “easy to use”: software requires certain Customer’s capabilities (and time)
• Customer experience fully depends satisfaction with Web
Opportunities
• Growth of Internet penetration
• Current wide offer to order print through Web
• Potential demand
• High penetration of digital cameras: “digitalization” of Customers’ behavior
• Globalization: knowledge and experience penetration (EU -> Ukraine)
• Low competition but print on souvenirs and photo through Web are available
• Customers’ readiness for innovations
• Supermarkets (SM) are the part of social life
Threats
• Trend for print at home due to sophisticated equipment availability (retail trend)
• Pro-photographers (PP) with home production could grow as alternative (substitution risk)
• Limited customers capabilities to make and manage their order online (skills)
• No customer experience
• Lack of awareness
• Political and economical uncertainty
SWOT analysis
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SO
• Offer unique product to the market through the mass retail (SM) with the full service support and merchandising support
• Active communication to potential customers in order to create awareness
• Enabling full Customer service in mass retail
• Bind retail chains with long-term contracts (min.18 months) and during that time penetrate whole Ukraine
Elaborated strategic directions
ST
• Focus on PP in order to create Ambassadors group
• Position PP as re-sellers
• Manage this channel with own Sales Force (regular workshops, meetings etc)
WT
• Focus on PP in order to create Ambassadors group, position PP as re-sellers
• Manage this channel through Web mainly (Ambassador Program, discounts)
WO
• Web-based market penetration, e-commerce
• Saved cost is relocated towards web adverts (banners)
29/03/2009 © MS Consulting 4
Offered marketing mix
SO ST WT WO
PRODUCT SUPERPHOTO PHOTOBOOK
PLACE Key retail, PP, WEBPP (served by Sales Force based on regular meetings)
PP, Web Web
PRICEFLAT, commissions to Retail, discounts for PP
Discounted offers to PP (identification by IP addresses)
Flat
PROMOTION
Availability, visibility in Retail, WEB (links to SM pages), PP, bundled offers for new customers
Word of mouth, links from SP site to PP sites, bundles
Web (banners), “hot offers” campaigns
PEOPLESales Force is required (FMCG experience is preferred)
Loyal PP (Ambassadors), SP Sales Force
Web specialists Web specialists
PROCESSESSales standards, targets, daily visits, reporting, supervision
PP Database collection, regular contacts by Sales Force
PP, customers database, regular e-communication to TA
Regular e-communication, Customers management (by volume, value)
PHYSICAL EVIDENCE
“Service retail”, POSMs, Photobooks samples
Fully under PP control E-letters, banners
29/03/2009 © MS Consulting 5
Checking strategic directions for appropriateness
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Strategy attractiveness
Com
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SO
STWT
WO
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Operational Sales Planning
Objectives Critical Success Factors Strategy
Company/Market Objectives• 1,500 photobooks in May 09• Steady monthly growth up to 4,500 books in Sep 09, 6,000 in Dec 09 • Trade channel focus with a following prioritized regional extension
• Speed to Market• Successful penetration to SM
• Growth based on Market penetration through mass retail and Ambassador group with focus on service quality
Brand/Marketing Objectives• Create Consumer demand by quality, innovations and presence
• Trade Marketing activity• Merchandising standards• Start-up promo (bundled products)
• Combine Innovations with “Easy to use” principle to establish a positive emotional brand relation
Sales Objectives• Create a Distribution and Sales system in line with the growth expectation• Establish own Sales Force• Penetrate to SM, PP• Show competence on Retail level• Visibility and availability
• Precise execution• Effective management• Performance control and management
• Attack the Market bywin-win proposal for SM to retain Customers and gain new ones• Complementary product for PP (their portfolio extension)
Personnel / Structure Objectives• Winning attitude• High cost sensitivity
• Avoid mental blockage• Market success vs organizational size
• Establish winning spirit by acting based on detailed strategy and plan
Production Objectives• Site/soft updates
tbd tbd
Finance Objectives• ROI, break even
tbd tbd
29/03/2009 © MS Consulting 7
Channel analysis: SUPERMARKETS VOLUME PLANNED (KYIV)
Chain SM numberExpected
agreement to be signed
Covered SMPlanned sales volume/month
Furshet 20 50% 10 200
V.Kyshenja 19 50% 10 190
Silpo 37 50% 19 371
Fora 45 10% 5 90
Eco-market 16 10% 2 32
Billa 3 60% 2 36
Karavan 1 100% 1 20
Materik 2 100% 2 40
Magellan 1 100% 1 20
Total 144 35% 50 1,000
Average sales volume is 20 books per SM per month
29/03/2009 © MS Consulting 8
SUPERMARKETS (Cost expected, UAH)
• One service point in Retail will generate 32 K cost for one SM in 1 year
• Desktop is assumed to be available (SM-?), otherwise it is $200 additional cost
• Alternative solution: Cost of Desktop is to be paid by installments to SM in 6 months
Cost item Initial cost Monthly cost Annual cost
Salary (1 shop assistant)
2,500.00 30,000.00
Internet (3G modem)
800.00 800.00
Traffic (1 Gb) 70.00 840.00
Total 800.00 2,570.00 31,640.00
In order to support Shop Assistant in SM commission can be offered by SP
• Assumption: AVG order value is 300 UAH, commission rate is 10%
• With 2,636 UAH monthly cost the Break even for SM is 88 photobooks / month (3 / day)
29/03/2009 © MS Consulting 9
SUPERMARKETS (Cost expected, UAH): B Plan
• There is a need for a B Plan if Supermarkets will object to roll-out own POS with own person
• Then, as compromise, SP have to place own Shop Assistants
• Salary in this case will be the cost of SP
• It could be consisting of fix portion (1000 UAH) plus variable portion (% of Sales revenue)
• For 3 months till July (when sales will exceed 33 books/SM/month and salary will be equal to 25%
of it) it will create extra cost.
29/03/2009 © MS Consulting 10
Offer to SM
SUPERPHOTO offers:
• Training for shop assistant
• Merchandising materials
• Permanent support (technical, operational)
• Co-branding (links from SP site)
Benefits for SM:
• Extended service portfolio
• Loyalty increase from existent customers
• Opportunity to gain new customers
• Additional communication channel in Web (SUPERPHOTO site)
• No earning but retention activity!
Requirements to SM:
• Interior Kiosk/counter
• Shop assistant (capable and trained by SP)
• PC
• Cashier/collections
• Customer’s database (name, phone, e-mail), format is to be provided by SP
29/03/2009 © MS Consulting 11
Regular visits to SM
Objectives:
• Materials placement, renewal
• Consulting/assistance
• Info, orders, reporting
mo tu we th fri sa su mo tu we th fri sa su Total/SM
Rout 1
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Rout 3
Rout 1
Rout 2
Rout 3
Rout 1
Rout 2
Rout 3
Reserved
MINIMUM
SM 1 X X X 3
SM 2 X X X 3
SM 3 X X 3
SM 4 X X X 3
… X X 3
SM N X X X 3
TOTAL 6 6 6 6 6 6 6 6 6
Planned KPIs:
• 18 SM under direct responsibility for 6 weeks (start-up)
• 6 visits per day, 9 visits to every SM during start-up
• Staff: 3 Sales Reps are required
29/03/2009 © MS Consulting 12
Regular visits to SM
After Start-up (6 weeks):
• visits frequency/week will be reduced: from 1.5 to 1
• Visits per day: 5
mo tu we th fri sa su mo tu we th fri sa su Total/SM
Rout 1
Rout 2
Rout 3
Rout 4
Rout 5
Rout 1
Rout 2
Rout 3
Rout 4
Rout 5
MINIMUM
SM 1 X X 2
SM 2 X X 2
SM 3 X X 2
SM 4 X X 2
SM 5 X X 2
SM 6 X X 2
SM 7 X X 2
SM 8 X X 2
… X X 2
SM N X X 2
TOTAL 5 5 5 5 5 5 5 5 5 5
Planned KPIs:
• 25 SM under direct responsibility FOR 1 SR
• 5 visits per day, 1 visit to every SM per week
• Number of SR: 2 (1 SR is to be transferred to PP to promote AMBASSADOR program)
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Sales Process in SM (Customer reluctant for self-service)
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Channels analysis: AMBASSADORS
PROFESSIONAL PHOTOGRAPHERS
• 500 weddings per week in Kyiv (2,000 monthly), up to 200 PP
• Planned volume: 25% or 500 orders per month
• Assuming 4 couples/months for 1 PP it means 125 PP are to be involved
• At the same time AVG order per couple is 2.5
assumption; reasons:
wedding order is more than 1,
book can be offered to existent clients)
• Plan: 50 PP are to be converted as AMBASSODRS in 2 months (April, May)
PHOTOSCHOOL (www.photoschool.kiev.ua)
• Competence and learning centre in Kyiv
• Assumed 50 people converted with 2 books ordered per months result in 100 books extra
29/03/2009 © MS Consulting 15
Channels analysis: AMBASSADORS
AMBASSADOR PROGRAM
• Will be particularly addressed to PP
• Every registered PP will get own ID (login, password) to be identified
• Discount will be offered based on cumulative value of orders: 5%, 10%, 15% with “YOU SAVE”
indication (Alternative: collected bonuses to be exchanged for following orders)
• For this discount PP can charge their audience
• Extra: forum (Q&A section) in SUPERPHOTO site for Professionals
29/03/2009 © MS Consulting 16
SALES PLAN: BY CHANNELS (KYIV ONLY)
0
1,000
2,000
3,000
4,000
5,000
6,000
Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
SM Ambassador (PP) Public Photoschool
Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
Current 50 50 50 50 50 50 50 50 50
Public 50 70 110 150 190 240 290 350 410
SM 200 850 1,300 1,700 2,100 2,500 2,900 3,200 3,500
Ambassador (PP) 400 500 650 800 1,000 1,200 1,300 1,500
Photoschool 100 110 120 130 150 160 170 180
Total 250 1,420 2,020 2,620 3,220 3,890 4,550 5,020 5,590
29/03/2009 © MS Consulting 17
Launch road-map
Steps
• Meeting with SM: 2 groups, 9 SM chains -> 1 week (2 meetings / day)
• 50 PP After training Assistants will receive Certificate of SUPERPHOTO designing skills
Note/proposal
• After training Assistants will receive Certificate of Master in SUPERPHOTO designing skills
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Rout to market
CONSUMERS
SM PP Photoschool
70 / 410410
5% / 7%7%
850 / 3,5003,500
60% / 63%63%
400 / 1,5001,500
28% / 27%27%
100 / 180180
7% / 3%3%
70 / 410410
5% / 7%7%
May’09 / Dec’09Dec’09
Total Sale volume
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Planned Trade Marketing budget
MaterialsSM PP Photoschool
Total
50 50 1
Poster/Banner (Spider) 1 50
Photobook (sample) 1 1 1 101
Sample kit
T-shirt 1 50
Mouse pad 1 50
Pazzle 1 50
Cap 1 50
Note
• Quantity and items could be revised depends on number of Retailers
29/03/2009 © MS Consulting 20
P&L analysis (excluding fixed cost)
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STRATEGIC PRIORITIES
Short term (till Sep’09): establishing channels
• Supermarkets in Kyiv
• Ambassadors (PP, Photoschool)
Mid term (till Dec’09): reasonable “suburbs” regional expansion, channels development
• Supermarkets, shopping malls
• B2B activity (souvenirs, Photobooks)
Long term (from Jan’10): National expansion
• Supermarkets
• Ambassadors
• B2B
• Mass market with active communication in Web
29/03/2009 © MS Consulting 22
Marketing campaigns
1. For Mass market
Objective: to increase demand
Mechanics: to print special double-side coupon.
One side: description of PHOTOBOOK.
Back side: Offer to owners of coupons “Order one PHOTOBOOK till the end of May and get
another with 50% discount”. Addresses of SM are indicated.
This Program could be communicated to SM as additional marketing benefit for them
Distribution place: maternity homes, kindergardens.
2. For Ambassadors: same mechanics could be applied
29/03/2009 © MS Consulting 23
Marketing campaigns
2. “End of school” campaign
Objective: to boost sales
Mechanics: visit schools and offer PHOTOBOOK for graduates
End of lessons: 25.05.09
Exams: till 20.06.09
School leaving ball: 20.06.09
Time required: 200 schools / 3 SR / 5 visits per day = 9.5 days
Expected Sales volume: 200 schools x 3 classes x 30 people x 25% = 4,500 photobooks
Offer is to be carefully prepared: e.g.
PHOTOBOOK + T-shirt (with phaces of classmates) + Cap
29/03/2009 © MS Consulting 24
“End of school” campaign
Visits frequency
• Because of Campaign visits frequency will be reduced
• 2 days in 1st, 2nd weeks + 3rd week will be used for schools: 2+2+5=9 days
• Number of daily visits: 200 / 3 SR / 9 days = 7.5
mo
tu we th fri sa su mo tu we th fri sa su mo tu we th fri sa su
Rout 1
Rout 2
Rout 3
SC
HO
OL
SC
HO
OL
Rout 1
Rout 2
Rout 3
SC
HO
OL
SC
HO
OL
SC
HO
OL
SC
HO
OL
SC
HO
OL
SC
HO
OL
SC
HO
OL
SM 1 X X
SM 2 X X
SM 3 X
SM 4 X X
… X
SM N X X
TOTAL 6 6 6 6 6 6
29/03/2009 © MS Consulting 25
Thank you!