The Damn Heels case study is about a female business student form Ryerson University in Canada. She came up with the idea to turn heels into flat bottomed shoes. The reason behind this was to allow women to wears heels during the main events they were attending, and then when the events were over they could then transform the heels into heelless flat bottomed shoes. These shoes are planned on being issued at a lowered price point of $20 dollars compared to their competitors. There is no other product like there so it is important for Coleman to expand her brand name. She is currently focusing on the Chinese and North American retail markets. This case study goes further detail about her SWOT Analysis and other marketing strategies.
Question1: Conduct a SWOT analysis for Damn Heels.
Strengths: One Strength of Damn Heels is that it is in high demand according to the surveys stated in the case study. 93% of women say their feet hurt by the end of the night due to wearing heels. One if the areas she will be marketing to is the Canadian footwear industry which is on the rise with a projected value of $5.7 billion in 2014. She also has an experienced designer along with a manufacturing company in China..
Weaknesses: She is a small company and has to compete with large rivalry retailers that dominate the market. Since manufacturing is overseas she must wait 2 weeks by air or 6 weeks by sea to receive her finished product. She also does not have a lot of capital due to financing the business through her student loans and personal line of credit.
Opportunities: She has a unique product idea that will stand out to customers. She has opportunities through selling online and selling at consignments with rates at 20% to push retailers to sell their product. She can also use the promotional power of social media to establish her brand until she makes enough profit to advertise through other promotional strategies.
Threats: One threat is that her idea is not patented. Any larger retailer can use her idea and become a direct competitor with her. Another threat is that she chooses to have her product delivered by air instead of sea. This may allow for a quicker turnover but since it is a startup business it might have been a better idea to have product shipped by sea which would be cheaper since capital is low.
Question 2: From a qualitative viewpoint, discuss the pros and cons of launching this venture.
From a qualitative viewpoint the positives consist of the product being made up of high-grade material. She has also hired an experienced designer for shoes designs as well as planning on creating a high-end websites for which to sell the product off of. The negatives of launching this venture from a qualitative view point are that the shoes are being manufactured in China. Customers may see this as low quality manufacturing and might feel more comfortable with the product if it was made in North America.
Question 3: Identify all costs associated with this venture. Categorize these costs as fixed or variable. Fixed Cost:
Apartment space and Utilities per month = $300
Website Creation Fee = $1,500
Delivery by air (2 Weeks) = $600
Delivery by sea (6 Weeks) = NA
Packaging cost = $0.08 per pair
Brand Labeling cost = $0.25 per pair
Question 4: Calculate the product’s (shoes and bag combined) unit
Cost per pair = $20.00
Packaging cost per pair = $0.08
Brand Labeling cost per pair = $0.25
Delivery by air (2 Weeks) = $600.00 (2,000units / $600) = $3.33 $20 – $.0.08 – $0.25 – $3.33 = $16.34
$16.34 = Unit Contribution Margin
Question 5: How many pairs of foldable flats must be sold for the venture to break even?
Break – even Point = Fixed Expenses per week + Contribution Margin per pair Break – even Point = $1,800.00 / $16.34 = 110.16
Break – even Point = 111 pairs
Question 6: As Coleman, would you launch the venture? Why or why not?
Yes, if I was Coleman I would launch the venture. I think she can fulfill a niche market that is untouched by her competition. She seems to have the necessary marketing plan / manufacturing plan in place that will allow her to be successful. I feel as though her break-even point of 111 pairs a month is not a hard quota to make. I believe in the market demand and I believe in the product based off all her recorded survey data.
Question 7: Assuming Coleman was to proceed with the venture, offer suggestions for each element of her marketing strategy.
I suggest that she expect her sales to be between her low and probable projected sales range for the first few months. Looking further into the future, I would expect her to adjust her sales projections accordingly to past month’s sales and potential future sales. b. Target Market:
I suggest the main target market to be women ages (18 -35). To be more Costsspecific I would market to any college females, professional women, and or any person who is likely to go to a bar or party on a consistent basis. These are the people who wear heels most often. c. SWOT Analysis:
One suggestion for the SWOT Analysis would be to patent her idea. If she does not patent her idea then her competitors will soon follow her product idea and steal some of her market share. It is crucial for her to control this patented concept. d. Message:
The message should be clear and state what the brand actually is. It is an efficient and helpful way to remain fashionable and be in less pain at the same time. I can’t tell you how many times I leave a bar and watch a girl walk out with her shoes in her hand. I have even had to carry girls back to their rooms because the pain in their feet was so bad. e. Activities:
For activities dealing with promotion I would suggest using all forms of social media to promote the brand. She needs to educate and popularize her brand name since it is a startup business and is not very well known.