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Developing a Formalized Marketing Plan for Eden Creations

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Problem Statement/Issue(s) Identification: It is August 2nd, 2004, and Melissa Jean, Designer and Owner of Eden Creations, must develop a formalized marketing plan – including target market, positioning and marketing mix – to ensure the continued success of her company. Jean designs and crafts specialty beaded jewelry as accessories for weddings and other bridal occasions, and primarily sells through bridal retailers in London, Ontario, and surrounding areas. Jean’s decisions to reach her financial goals for the next year must be made before returning for her postgraduate education in September.

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Recommendation (be specific): Jean will forego adding a second daywear jewelry collection to Eden Creations and will not create an online presence at this time. Her marketing plan will be to advertise Eden Creations’ brand image as a bridal collection at the Canada’s Bridal Show in September and distribute semi-annual newsletters to her current 6 retailers while arranging sales meetings with Tiffany’s Bridal and Ballet’s Wedding Specialist (exhibit 1). Jean’s jewelry collection will receive notoriety and exposure to approximately 28,000 patrons at the bridal show and allow Eden Creations to sell directly to the end consumer, providing an opportunity for increased profitability.

Rationale/Key Points of Analysis (that most directly relate to your recommendation): Eden Creations’ bridal collection offers a contemporary style at low prices, targeting younger brides (planning their first wedding), bridesmaids and other women of the wedding-party in Southwestern Ontario. Jean’s experience as a sales associate with Nicholas and Elizabeth Bridal allowed her to become very familiar with the clientele and the retail bridal industry, and having maintained her relationship with its management has allowed Jean the credibility to approach other bridal stores. Jean, on the other hand, has limited knowledge of the mainstream retail business.

Creating a second collection with an entirely different focus from bridal jewelry (daywear jewelry) would mean creating a new brand, reconsidering the customer base, distribution and pricing strategy, and devising a promotional plan – very time consuming for Jean, who’s primary focus is her postgraduate education. This alternative would expand to a larger customer base; however, with a 20% lower price point than the bridal industry, Eden Creations’ units’ contributions would consequently drop (exhibit 2).

Jean is content with breaking even in the coming year if it includes all fixed costs (i.e. $200 store display accessories, $400 supplies, and $500 miscellaneous costs). To break-even with a daywear jewelry collection would only succeed in achieving 58% of the sales goal Jean has set for the coming year. Simply extending pieces of Eden Creations’ current bridal collection to mainstream retailers would have a similar affect as creating a second collection, coupled with the possibility of cannibalization and jeopardizing the brand image. If Eden Creations sold to Tiffany’s Bridal and Ballet’s Wedding Specialist, Jean could expand her customer base outside of Southwestern Ontario without altering her brand image. Although motivating existing retailers to reorder is extremely time consuming and frequently uncomfortable, Jean could distribute a semi-annual newsletter the months leading up to the coming wedding seasons to provide information on reordering – only an additional marketing expense of $640 to circulate to 8 retailers.

Maintaining and strengthening Eden Creations relationships within the bridal industry guarantees Jean access to a larger customer base within her target market and in keeping with the brand image. If Jean registered for Canada’s Bridal Show (10’x10’ booth) in September at the Metro Toronto Convention Centre, it would significantly lower her net profit (exhibit 3); however, being that she is content with breaking even in the coming year, the benefits of exposure out-weigh the costs (i.e $1450 rental, $500 preparations, $150 materials, and $200 giveaways). In keeping with Jean’s primary focus as a postgraduate student – wanting a healthy work-life balance and not allowing Eden Creations to become her full-time career – expanding to an online presence, whether through a personal domain name or www.theweddingring.ca, could create such growth in demand that these factors would be compromised and/or customers’ expectations would be disappointed.

Exhibit 1

0-6 Months
6-18 Months
Sales
$4,000.00
$12,000.00
Cost of Goods Sold
Earring Sets
$1,170.00
$3,510.00
Necklace ($11.00)
$861.10
$2,583.30
Necklace ($19.50)
$591.60
$1,786.40
Supplies
$200.00
$400.00
Gross Margin
$1,177.30
$3,720.30
Marketing Expenses
Advertising Expenses
$700.00
$640.00
Bridal Show (September, 10’x10′ Booth)
$0.00
$2,300.00
Store Display Accessories
$200.00
$200.00
General & Administrative Expenses
Miscellaneous
$0.00
$500.00
Start-Up Costs
$500.00
$0.00
Net Profit Before Tax
($222.70)
$80.30

Exhibit 2

Necklace ($19.50)
Mainstream Retailer
Eden Creations
Selling Price
$23.40
Selling Price
$15.60
Variable Cost
$15.60
Variable Cost
$11.60
Unit Contribution
$7.80
Unit Contribution
$4.00

Necklace ($11.00)
Mainstream Retailer
Eden Creations
Selling Price
$13.20
Selling Price
$8.80
Variable Cost
$8.80
Variable Cost
$7.90
Unit Contribution
$4.40
Unit Contribution
$0.90

Earring Sets
Mainstream Retailer
Eden Creations
Selling Price
$7.20
Selling Price
$4.80
Variable Cost
$4.80
Variable Cost
$3.90
Unit Contribution
$2.40
Unit Contribution
$0.90

Break-Even Analysis
Necklace ($19.50)
Unit Contribution
$4.00
Fixed Costs
$366.67
Unit Volume
92
Necklace ($11.00)
Unit Contribution
$0.90
Fixed Costs
$366.67
Unit Volume
407
Earring Sets
Unit Contribution
$0.90
Fixed Costs
$366.67
Unit Volume
407

906

6-18 Months Daywear Jewelry

Sale Price
Units Sold
Total Sales
Contribution
Total Cost
Necklace ($19.50)
$15.60
92
$1,435.20
$4.00
$368.00
Necklace ($11.00)
$8.80
407
$3,581.60
$0.90
$366.30
Earring Sets
$4.80
407
$1,953.60
$0.90
$366.30

906
$6,970.40

$1,100.60

Exhibit 3

0-6 Months
6-18 Months
Sales
$4,000.00
$12,000.00
Cost of Goods Sold
Earring Sets
$1,170.00
$3,510.00
Necklace ($11.00)
$861.10
$2,583.30
Necklace ($19.50)
$591.60
$1,786.40
Supplies
$200.00
$400.00
Gross Margin
$1,177.30
$3,720.30
Marketing Expenses
Advertising Expenses
$700.00
$0.00
Bridal Show (September, 10’x10′ Booth)
$0.00
$2,300.00
Store Display Accessories
$200.00
$200.00
General & Administrative Expenses
Miscellaneous
$0.00
$500.00
Start-Up Costs
$500.00
$0.00
Net Profit Before Tax
($222.70)
$720.30

Cite this Developing a Formalized Marketing Plan for Eden Creations

Developing a Formalized Marketing Plan for Eden Creations. (2016, May 04). Retrieved from https://graduateway.com/eden-creations/

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