3. Sideline Sneakers
• Contract Manufacturing from China with 3
months lead time
• E-commerce centric distribution network
(Retail stores + Bookstores)
• Heavily digital focused marketing strategy –
Facebook, Instagram, SEM, Unpaid Social
media promotions
4. Attractive industry
Less rivalry – NCAA Licenses
Low – moderate bargaining power
No specialized raw materials/ technology
Industry Trends
Celebrity endorsements
Online to Offline marketing
5. PROBLEM 1 – IMPROPER MARKET STRATEGY
Problem
Identification
Proposed
Solution
Outcome
7. The Newbies
• Age: 18-24
• Current Students
• Male and Female
• Impulse Buyers
• Offline Buyers
The Loyals
• Age: 25-64
• Alums and Local Community members
• Female
• Planned and Impulse Buyers
• Online Buyers
The Reminisants
• Age: 65+
• Alums and Local Community Members
• Male and Female
• Planned Buyers
• Online and Offline Buyers
Solution: Target Segmentation
Overall Market Size: 190 million college fans
Target Market Size (6%): 11.4 million college fans
8. Units Bought 1 2 3 4 5
Transactions 10445 2321 3482 4642 5803
Total Units Sold 112500 112500 112500 112500 112500
% Online 9.3% 2.1% 3.1% 4.1% 5.2%
% Offline 90.7% 97.9% 96.9% 95.9% 94.8%
• 90% of sales online are for 1 unit
• 10% of units sold are laces and socks
• Average U.S. household had 2.58 people (Census)
The Loyals
• Search Engine
Optimization
• Social Media
Advertising
• Online Communities
• Promotional Discounts
Solution: Target Segmentation – The Loyals
9. The Newbies
• Increase visibility of
products in stores
• In game
promotional
activities
• In store discounts
• Game day
discounts
Units Bought 1 2 3 4 5
Transactions 10445 2321 3482 4642 5803
Total Units Sold 112500 112500 112500 112500 112500
% Online 9.3% 2.1% 3.1% 4.1% 5.2%
% Offline 90.7% 97.9% 96.9% 95.9% 94.8%
Solution: Target Segmentation – The Newbies
• Only 9.8% visit the website
10. Brick & Mortar Store Type Low Tops High Tops Slip-ons Youth Shoes Accessories
On Campus Bookstores X X
On Campus Fan Shops X
Off Campus Retail Stores
Off Campus Fan Shops X
On Campus Retail Stores X X
Airports
Solution: Strategy for Offline Presence
11. ROMI 4.7
Converted Customers (2%) 228,000
Incremental Revenue $7,018,507.80
Additional money spent on marketing $1,500,000.00
Short Term (within 1 year):
Units increased by 125,800
Revenue increased by 102%
Increase market share by 75% in U.S. Casual
Footwear industry
Long Term (sustainable):
Properly segmented market
Targeted marketing strategies
Increased market presence in 18-24 age group
Strengthened brand awareness
Optimized offline channel
Outcome: Proposed Marketing Strategy
Marketing Budget
Quarter 1 and Quarter 2 $500,000
Quarter 3 and Quarter 4 $1,000,000
Total $1,500,000
12. PROBLEM 2 – INACCURATE SALES DEMAND
FORECASTING
Problem
Identification
Proposed
Solution
Outcome
13. Problem: Inaccurate Sales Demand Forecasting
Seasonal Sales
(July to December)
• Approximately 83,333 units sold in 2016
• Predictions: Sufficiently Accurate
• Back to School Season
• Sport Season
Off Seasonal Sales
(January to June)
• Approximately 41,667 units sold in 2016
• Predictions: Inaccurate
• Stock-Outs
• Loss of Retail Locations
• Loss in revenue
• Loss of market presence
Cause
College
Spirit
College
Spirit
Cause
14. Solution: Sales Forecasting Model & Timeline
Distribute the Shipment to Retailers
Forecast Amount
Receive Delivery for Qt in US Design and Storage Facility
Forecast Amount Safety Stock for Qt – Leftover from Qt-2
Place Order for Qt
Forecast Amount Safety Stock for Qt – Leftover from Qt-2
Forecast for Qt
Historical Sale in Qt (1+Market Growth) + QRMOIt
Mid. Qt-2
Beg. Qt-1
Mid. Qt-1
End Qt-1
15. 2017 Q4 Projections
• Historical Sales = 37,500
• ROMI ~ 4.7
• QROMIt ~ 37,500
• Market Growth ~ 8%
• Forecast Amount ~ 78,000
• Safety Stock ~ 1823
• Leftovers from Q2 ~ 0
• Order Amount ~ 79,823
• Forecast Time = Q2
• Order Time = Q3
2018 Q1 Projections
Solution: Forecasting Model Continued
• Historical Sales = 18,750
• ROMI ~ 4.7
• QROMIt ~ 18,750
• Market Growth ~ 8%
• Forecast Amount ~ 39,000
• Safety Stock ~ 260
• Leftovers from Q3 ~ 0
• Order Amount ~ 39,260
• Forecast Time = Q3
• Order Time = Q4
Seasonal Quarter Off-Seasonal Quarter
16. Outcome: Sales Forecasting Model
• Gain in Revenue Profit
• Reduced Stock - Out Situations
• Gain in Profit > Cost of Overestimation
• Happy Customers
• 1 happy customer = 9 referrals
• Accessible at all times
• 65% respondents said they buy “anytime they feel like it”
• Satisfied Retailers
• Customer Traffic Higher revenue
• Efficient Marketing Strategy
Implementation
• Lean Inventory Management
17. PROBLEM 3 – OPERATIONAL ISSUE
Problem
Identification
Proposed
Solution
Outcome
18. Product
development
Manufacturing
complete shoes in
China
Design printing
Ship to fulfillment
center
Finishing touches
Assemble
Division of
shipment
• Takes 3 months to get a consignment
of shoes after order is placed
• Unable to meet demands
instantaneously
• Unable to test product lines due to
minimum order capacity
requirement
Problem: Operational Issue
19. Manufacture
White shoes
only in China
Design
development
Print design on
white shoes
Assemble
Package
Ship
Short-Term Solution
Solution: Operational Strategy
Manufacture
White shoes
only in Brazil*
Design
development
Print design on
white shoes
Assemble
Package
Ship
Long-Term Solution
*Comparable low wages and better craftsmanship
20. Component Cost Remarks
Printing Machines $40,000/machine • At least 2 3D printing
machines
Packaging Machines $15,000/machine • At least 2 printing
machines
Warehouse Cost $62,258/year • Approx. 10,229 sqft
Wages for additional labor $414,720/year • At least 8 extra employees
• Approx. salary for printing
press employees $18/hr
Packaging material for boxes $706,720 • $1.20/sheet
One- time Cost
Fixed Cost
Variable Cost
Solution: Operational Strategy - Cost
21. Lead Time
• Lead time to customer reduces
Control
• Better control over the design part of the process
Flexibility
• More flexible re-order process
New Product Lines
• Flexibility is testing new product ideas
Outcome: Operational Strategy
22. Current
• Implicit Cost
• Unable to meet demand due to stock out
• Loss of customers due to stock out
• Explicit Benefit
• Save on relocation - $1.20 per shoe
New Proposal
• Explicit Cost
• Designing shoe - $1.20 per shoe
• Implicit Benefit
• Customer saves $2.00 on shipping - $5.00
• Able to meet demand
• Gain customer loyalty
New
Proposal
Current
Online Channel
Outcome: Operational Strategy – Cost and Benefit Analysis
23. Current
• Implicit Cost
• Unable to meet demand due to stock out
• Loss of customers due to stock out
• Explicit Benefit
• Save on relocation - $1.20 per shoe
New Proposal
• Explicit Cost
• Designing shoe - $1.20 per shoe
• Implicit Benefit
• Able to meet demand
• Gain customer loyalty
New
Proposal
Current
Offline Channel
Outcome: Operational Strategy – Cost and Benefit Analysis
