1.0 Executive Summary
Riddle’s Jewelry is a start-up anticipating becoming successful in the jewelry market, selling branded diamond pins, pendants, and earrings. The firm hopes to grow and spread its operations across the US and globally. The production/marketing goals for the next three years:
- To utilize the company’s designs to meet the needs of 60% of target consumers.
- To sell the company’s branded diamond products in more than 30 retail shops.
Riddle’s Jewelry will be situated in Seattle, Washington, to design and manufacture branded diamond jewelry. The firm will market different designs of pins, pendants, and earrings. The company will sell its products directly to customers (mostly online) and through retail outlets.
Riddle’s Jewelry will operate in the jewelry market and sell its products to two customer segments, individual consumers and retailers. The market has three types of competitors:
- Large-scale designers and manufacturers of jewelry.
- In-house designers and manufacturer of jewelry.
- Jewelry distributes and marketers.
Riddle’s Jewelry will finance its operations using a bank loan. The capital will fund operations to break-even in the first year. The revenue will have grown to 300,150 in three years as conservative projections based on sales revenue.
- To create a business using a model that will meet and exceed customer expectations.
- To have Riddle’s Jewelry branded products in at least 30 retail shops in three years.
- To market the company’s branded jewelry to more than 60% of the target consumers
Riddle’s Jewelry’s mission is to become a manufacturer of innovative diamond jewelry products.
2.0 Current Marketing Situation
2.1 Market Description
Riddle’s Jewelry will operate in the jewelry market, targeting two primary customer segments: individual customers and retailers. The market has grown over the years as more consumers are inclined towards luxurious products. The individual customer will be the online buyer or those visiting convenience stores and other retail outlets to buy the product. The company will sell to retailers, acting as middlemen between the customer and Riddle’s Jewelry. Customers who buy jewelry are mostly middle- and high-income earners residing in cities and suburbs. They are also highly progressive, attracted to jewelry and other fashionable products. Retailers will offer the channels of distribution to enable the company to reach the target market. The company will use artisan jewelry shops and other stores specializing in jewelry. The company will sell a high quantity of the product using upscale and modern retail shops. Nonetheless, the chart below shows that individual customers will be the leading segment.
2.2 Product Review
Riddle’s Jewelry will sell branded diamond pins, earrings, and pendants designed by Ali Fazul. The diamond is the choice of materials because of the quality, value, and attractiveness to customers. The company targets customers willing to pay more for quality products. The diamond is one of the most valuable jewelry pieces and easy to shape and create appealing products. The management anticipates breaking even within the first year of its operations. The sales revenue by the end of the third year will be 300,150. The below chat shows how the company will perform in gross margin and net profit for the next three years.
2.3 Competitive Review
Riddle’s Jewelry will operate in a highly competitive jewelry market with thousands of companies manufacturing and marketing globally. The company’s main competitors include Signet Jewelers Limited, Compagnie Financiere Richemont, and Hennessy Louis Vuitton. The companies distribute their products via online and physical retail outlets where customers visit and buy. They have gained considerable market share due to the quality of their jewelry. As a result, their prices are relatively high, targeting customers seeking value for their money. They promote their products online and use other channels, such as exhibitions, to reach many customers. Generally, Riddle’s Jewelry will compete with various companies, including manufacturers designing and producing jewelry in bulk, companies that design their products in-house, and those that purchase from manufacturers for reselling. Riddle’s Jewelry will have the edge over competitors through creativity and innovativeness, such as designing branded pins, earrings, and pendants to add value to customers.
2.4 Distribution Review
Riddle’s Jewelry will distribute its products to the two customer segments, retailers and individuals. The company will use similar distribution channels with other competitors in the jewelry market. Targeting individual customers, the company will use the current trend, online marketing, and distribution to avoid challenges caused by the COVID-19 pandemic. Besides, the company will have physical distribution to retailers and end-users through physical stores. The channel is useful for customers who desire to meet marketers to obtain more information about the product. The company will use the catalog of retail shops to price and market the products to customers. Regardless of the company’s distribution channel, the goal is to ensure that the products are available to end-users conveniently and reliably.
3.0 Threats and Opportunities
Riddles Jewelry’s management should identify and mitigate the threats in the market that might affect its operations. One of the threats is the increasing demand for sustainability, which is problematic in case the company’s supply chain fails to comply with global environmental standards. The market is highly competitive, which is another threat. The company will compete directly with major firms in the market, such as Signet Jewelers Limited, Compagnie Financiere Richemont, and Hennessy Louis Vuitton. COVID-19 is another threat due to social distancing policies. Nonetheless, the company has various opportunities, such as technology and innovation. The products will be branded to add value to consumers. Besides, social media presents an opportunity, especially during the COVID-19 pandemic, that prevents customers from buying from physical stores. Online platforms provide an opportunity to counter the negative effects of the pandemic. The company can expand to global markets, such as China and India, whose economy is growing.
4.0 Objectives & Issues
The table below reveals the firm’s objectives regarding increasing sales revenue in the next five years. The revenue will grow by 8 percent and 10 percent in the individual customer market in the next five years from the retail segment.
First year Second year Third year Fourth year Fifth year
Potential Customers Growth CAGR
Retailers (Galleries) 8% 9,537 10,264 10,9624 11,625 12,515 8.00%
Individuals 10% 621,624 679,424 738,128 804,137 876, 648 10.00%
Other 0% – – – – -. 0%
To achieve the objectives, the management should address issues, such as lack of customer contacts with existing retailers to increase the sales over the five-year period. The management will face a challenge convincing retailers to stock a new line of jewelry. However, they can provide samples and allow time to create trust and customer loyalty. The company faces the issue of a lack of a physical location for displaying its products. Addressing the problem might increase the cost, but the management can address the issue using online platforms to display and sell.
5.0 Marketing Strategy
Riddle’s Jewelry should position itself effectively in the market to reach customers and build long-term relationships. The company will create an attractive image for its products and send a targeted market by taking advantage of technology to brand and create an appealing brand. Effective positioning will counter completion and address the issue of lack of physical locations.
5.2 Product Strategy
Riddle’s Jewelry will sell three diamond products, pendants, earrings, and pins mostly used accessories. The product targets new and emerging markets with middle- and high-income earners. The designer will apply exceptional skills to create branded jewelry that appeals to customers and create a competitive advantage.
The company will sell the product at a price that adds value to the customer. Since the company will manufacture quality branded jewelry for middle- and high-income markets, it is expected to cost relatively high. Customers will pay the price considering the value they will generate.
Riddle’s Jewelry will market the products through social media to take advantage of the emerging market opportunity. The management will also implement an integrated media campaign, including traditional and new media, to market the new product line. The integrated model will allow the company to reach as many of the target audience as possible.
6.0 Action Programs
Riddle’s Jewelry management will begin by doing market research to understand the segments and what makes customers buy a specific product. The manufacturer will begin marketing the new products and market them to the target customers. The planning process (market research and manufacturing) will take three months. The marketing team will engage in extensive promotion lasting for three months even after the product launch. The specific action programs will include extensive market research, developing a marketing plan, creating a calendar, and measuring results.
The cost of beginning the business will include various items to support the production, marketing, and distribution of the new product. The budget includes itemized costs, with raw materials costing the highest. The total budget will be 54,350, as shown in the figure below. Finances to cater to the budget will be from different sources (see chart below).
|research and development||3,850|
|Website creation fees||3,850|
|Computer and printer||2,100|
|Copier and fax machine||1,600|
|Raw materials (Diamond)||38,000|
Controls will be necessary for the company to maximize its returns on investment. They will help to track the progress towards achieving the short- and long-term goals. Riddle’s Jewelry management will use various controls to track its progress and mitigate potential failures. They will use Determinants Analysis to generate information regarding the difference between the projected and real performance as per the business plan. The data will also inform the management about the need to make changes to the marketing plan. Other controls for Riddle’s Jewelry include feedback from individual customers and retailers, sales revenue when they begin operating, budget realization, and actual market share. The information will help the company track performance and establish whether it achieves its goal or need for change.