1. High and Dry Towel, Inc
Budget Information Prepared By
Andrew Raboine

2. Ester williams
To grow services
Expand to online sales after 4 years of operations.
Establish Budgeting Plan
Use variances from original budget to create and maintain standard goals for future budgets. Complete by June 30, 2016.
Complete employee training on operating procedures by December 31, 2016.
Establish Sales/Customer Service
Hire Sales Representative By January 1, 2016.
Hire Customer Service rep by June 30, 2016.
Establish Online presence
Build Company website by June 30, 2019.
Train customer service in Web presence by September 30, 2019.
Admin/ Customer service
personel
Control Quality
Review customer
service logs at the end of each
week and develop action plans
for dissatisfaction as well as
implementing prevention plans
to ensure future satisfaction.
PT Employee PT Employee
1st Shift Supervisor
Complete employee training on operating procedures by
December 31, 2016.
Control Waste
Compare weekly/monthly production numbers and
monitor material and labor hours. Find opportunities to maximize
efficiency.
Control Quality
Review customer service logs at the end of each week
and develop action plans for dissatisfaction as well as
implementing prevention plans to ensure future satisfaction.
1st shift
Seamstresses
1St shift
Warehouse
employee
1st shift
Shipping and
Receiving Lead
2nd Shift Supervisor
Complete employee training on operating procedures by
December 31, 2016.
Compare weekly/monthly production numbers and
monitor material and labor hours. Find opportunities to
maximize efficiency.
Control Quality
Review customer service logs at the end of each week and
develop action plans for dissatisfaction as well as
implementing prevention plans to ensure future
satisfaction.
2nd shift
Seamstresses

3. High and Dry will be the preeminent supplier of high
quality swimming accessories. Our innovative products
and outstanding customer service will allow us to
provide maximum return to our shareholders.
Mission Statement

4. Before 2020 High and Dry will be a recognized brand, it
will be the lead manufacturer of swimming accessories
and be able to fulfill aliments to the swimmers needs
from child to adult. Revenues should surpass 20 million
dollars.
Vision Statement

5.  To be Profitable
 To earn a profit in the first 3 years of operations
 To grow Services
 Expand to online sales after 4 years of operations.
Strategic Goals

6.  Establishing a Budgeting Plan
 Use variances from original budget to create and
maintain standard goals for future budgets. Complete
by June 30, 2016.
 Complete employee training on operating procedures
by December 31, 2016.
Tactical Goals

7.  Establish Sales/Customer Service
 Hire Sales Representative By January 1, 2016.
 Hire Customer Service rep by June 30, 2016.
 Establish Online Presence
 Build Company website by June 30, 2019.
 Train customer service in Web presence by September
30, 2019.
Tactical Goals Cont.

8.  Control Waste
 Compare weekly/monthly production numbers and
monitor material and labor hours. Find opportunities to
maximize efficiency.
 Control Quality
 Review customer service logs at the end of each week
and develop action plans for dissatisfaction as well as
implementing prevention plans to ensure future
satisfaction.
Operational Goals

9.  The Market for our product is separated by
demographic, psychographic, and geographic.
 The population class or demographic our product is
segmented for is girls that are the age of 0-10 years
old.
 The psychographic for our product is swimming or
water based sports.
 Finally, the regions of Illinois, Indiana, Wisconsin, and
Missouri segment our product geographically.
How is the market for our product
segmented?

10.  To take segmentation even further, the products are
marketed initially to only children’s boutiques; this is a
combination of all of demographic, psychographic,
and geographic.
 Boutiques tend to be in upper scale areas, where
families shop for not just girls but children including
boys. Based on the boutiques that are chosen and
their marketing will segment lifestyle and interest of
shoppers.
Market Segmentation

11.  Our product uses a niche marketing strategy, due to the
higher amount of segmentation that it undertakes.
 With only one product and a specific marketing mix for one
market, it focuses on growing from small to big.
 This is opposed to an undifferentiated marketing strategy
that generalizes one product for the masses that is hard to
do.
 The other side to this is differentiated, that is, segmenting
different markets and creating a different mix for each of
them.
Target Market Strategy

12.  Our company will have a functional position, which is consistent
with our owner’s high skill of customer service.
 It will drive quality and cost processes through implementation.
 This position is opposed to an symbolic one like Hurley has, their
position (looking back on past assignments) from their mission
statement was to stay true to oneself and this is the feeling they
want to position them within the market.
 This is similar to Agon Sports, because they wanted to create
unity in the teams that used their products. There is also
experimental positioning, that is based on feelings created from
use of the product.
Market Position

13.  National
 Monthly Retail sales numbers EST - 379 Bil in Jan 14’ to EST – 387Bil in Feb 15’ increase of 2.1%
 Unemployment rate 6.6% in Jan 2014 to 5.5% in Feb 2015 decrease of 1.1%
 Per capita Income $41560 in 2011 to $42693 in 2012 increase of 2.7%
 Illinois
 Unemployment rate 8.9% Dec 13’ to 6.2% Dec 14’
 Per capita Income from $43721 in 2011 $44815 in 2012 increase of 2.5%
 Indiana
 Unemployment rate 6.8% in Dec 13’ to 5.8% in Dec 14’
 Per capita Income $35689 in 2011 to $36902 In 2012 increase of 3.4%
 Michigan
 Unemployment rate 8.3% in Dec 13’ to 6.3% in 14’
 Per capita Income $36264 in 11’ to $37497 in 12’ to increase by 3.8% in 2015
 Wisconsin
 Monthly Retail sales numbers
 Unemployment rate 6.3% in Dec 13’ to 5.2% in Dec 14’ to decrease further by 1.6
 Per capita Income $39575 in 11’ to $40537 in 12’
Market Analysis – Economic Forces

14.  Unemployment has fallen significantly in Michigan
and Illinois while Wisconsin and Indiana are close to
the nation drop of 1%.
 More people are gainfully employed with salaries on
the rise.
 Retail sales month to month fluctuate but throughout
the year have risen quite largely. This allows people
more freedom in spending an will surely help us grow
Market Analysis – Economic Forces
Review

15.  There is a surprising trend of children that cannot
swim and the number is growing at an alarming rate.
 45% of school children cannot swim the required
national standard.
 Our brand could think getting involved in
organizations like swimming.org to sponsor and
promote awareness. This could help our growth in
the long run as well.
Socio – Cultural Forces

16.  Surprisingly there has been one political force that
has affected swimming.
 There was a government mandate proposed in 2012
to make all pools have disability accessible
wheelchairs available.
 This opens up pools to everyone with disabilities.
Political Forces

17.  Swimming markets are dominated by swimming
sports thus the prevalent market shares in sporting
equipment for swimwear.
 Quiksilver holds the highest market share in
swimming apparel, with annual sales of 1,570.40M
(taken from previous data in previous assignments)
Competitive Forces

18.  One technological force is the innovation in style and
use of each towel.
 The styles adhere to a higher demographic of women,
but can in a pinch be applied to both genders for
growth, and size for larger age variation.
 Our processes are designed to cut waste and
implement high quality that will be a driving force for
market.
Technological Forces

19.  Our place or distribution covers our marketing strategy by placing our product in niche
boutiques that only cater to our target market thus working together with our mission
due to size.
 With such a small target market we are able to promote our product very easily and
cost effectively to a much smaller segment, and with just the implementations of our
core principles of high quality and customer service.
 Our price will be competitive in boutiques as they are higher to cover specialization
and small capacity. With a high degree of networking and marketing that our owner
possesses we should be able to affectively discount our prices to cater to our retailers.
 Our product will represent quality from our mission statement while bringing the
warranted presentation of the likeness of children fascination with jewels and the
convenience of it being a backpack and hood, to cater to the parents of the children.
This will work in conjunction with our promotion and placement, as our customers will
most likely stumble upon our product and will be a relatively cheap accessory with a
high quality factor.
Marketing Mix, What is ours?

20.  Our base products of regular hooded beach towel backpacks are not relatively new,
however they are not marketed or sold by anyone on the net after doing some
research.
 There are some hooded beach towels but none that combine both aspects. There are
tutorials for making them. The beach towel industry is definitely tried and true. Beach
towels are always needed but the PLC doesn’t seem to be based in years, it seems to
be based in seasons.
 Having worked in retail I can say that beach towels and swimming apparel are sold in a
highly seasonal fashion.
 The towels go through a full cycle every beach season. The introduction part of the
cycle is in the spring season when it starts to get warm. New designs and fashions
come new to the market. Right when it gets hot and summer hits prices are
competitive and sales increase, this is the growth part of the cycle. Towards the
middle of the season the growth stymies and levels off or is in maturity. Finally when
summer ends, towels go on clearance and profits fall, no promotions or advertising is
done.
Product Life Cycle

21.  90 day exchange and return policy
 Full refund or exchange for craftsmanship failures or
damage not including wear and tear with receipt of
purchase
 Returns can be made to our boutique customers or
directly to our manufacturer through various mail in
options ( easy return label, or shipper of the customer
choice.)
Returns and Exchange Policy

22.  Initially our product will be sold in the business market. Our
product is sold to boutiques where they will sell them to
the consumers.
 Our product is typical for business and consumer
 . Our product is non-perishable. It is a product for the end
user, and can also be sold for resale.
 Since we have a relatively small customer base to begin
with it is wise to sell to businesses, more cost would be
involved if we decided to retail the towels ourselves.
 It is also important to note, that we do not yet know if we
have the capacity for large scale distribution.
What Market do we sell to?

23.  In our role of selling to boutiques, the boutiques
might have owners/and or managers.
 If the manager owns the store, most likely they would
be the deciders as well as the gatekeepers.
 They would pass information about the products they
stock to the users and influencers (being their store
employees that interact with everyday customers).
Our Business Buying Center

24.  Our product is a consumer product.
 It is a limited decision making purchase because it is
not something that can be bought within a matter of
seconds.
 People want beach towels with different designs and
features.
We sell a Consumer Product, SAY
WHAT?

25.  Market share research evaluates us at a little below the average market
share of total US companies at .15%.
 Given that our market is highly saturated this seemed reasonable. This
would give us an approximate sales volume of 27,555 units.
 After comparing our initial sales in units to how many units we would need
to breakeven, it was impossible at the sales price I originally forecasted, and
would also go over our capacity of work hours. Adjustments to not only
price by $10 for each product but also slight reductions in wages allowed for
us to come to a profit of est. $44600.
 With these adjustments it allowed us to be at around 97% capacity to our
workforce allowing for growth once our efficiency is increased, and leaving
no need to reduce workforce.
 Subject to Change in Forecast.
Market Share Analysis

26.  Overall Economy
 With unemployment rates dropping at least 1% in every state annually and Per capita income raising it allows for people to spend
more money on vacations, accessories, and clothes.
 Company
 Capacity has been estimated to ensure that it can accommodate sales projections. In a similar fashion our sales in units has
been compared to what we need to breakeven. Changes in price and salaries had to be made to ensure that we could see
any profit without going over our capacity.
 Sales History Pattern
 No pattern has been established due to lack of prior sales. Although apparel sales are set to rise up to 20% through 2016.
 Competition
 The leading swimming apparel leader holds just half of a percent showing how saturated the market is. About 6200
companies whose financial statements are public take up the whole US, 94% of them being smaller companies with annual
sales of less than $5 million.
 Company Strategy
 Our strategic Goal is to be profitable in the first 3 out of 5 years of operation. Keeping low cost as well as accurate
projections will allow this.
 Corporate Culture
 As President and Manager Ester is in control of the company culture but allows it to be shaped by employees and offers a
generous production profit sharing incentive plan.
Market Share Analysis Assumptions

27.  What is the goal of our promotional campaign?
 We want to increase sales in our existing market, whilst gaining a reputation for
excellent customer service, as well as, quality products.
 Product will be presented in the quality of our product, its various uses, and the
excellent customer service.
 Place, our product will be sold in small boutiques that get our product delivered by
UPS freight until we can expand. By maintaining a smaller niche market, we can firmly
establish a precedent of quality products and customer service.
 With competitive pricing that is below or matches our leaders in the industry, it allows
us to expand. We also have credit terms and discounts in place to promote stocking
our products.
 Promotion will be used in terms of direct mail and coupons that will allow our
customers a reason to shop for our product but visit our business customers’ stores as
well.
Promotional Goals

28.  How much do we figure it out?
 An objective budget was used in our promotional budget.
This is due to the detrimental facts of other methods.
 For example, growth is hindered in an affordable method. A
percentage of sales would not be wise because we have a
seasonal sales trend. Finally, we cannot compete with major
competitors when it comes to marketing in a comparative
parity. I believe objective task method can be used to
combine our goals while still maintaining a relatively small
cost.
Promotional Budget

29.  We Obtained a schedule of promotional events. As in what we will need in terms of
timing for advertising, promotion, trade shows, etc.
 According to www.parkconcessions.com, in order to sell on the beach in Chicago it
cost $75-$125 to obtain a business license to do so. This will apply to personal selling.
 Seasonality index will allow for proper scheduling of coupons and direct mail.
 Using the reference of business 2 consumer in the book
http://www.business2community.com/social-media/increasing-the-average-coupon-
redemption-rate-019372 we can assume 1% of coupons are redeemed.
 www.Zairmail.com will be used to determine direct mail costs.
 According to IRS standard Mileage Rates for business are $0.575 while Per Diem Rates
in Chicago are $71 a day.
 Using www.Factfinder.census.gov we can assume that
 Illinois families with kids ages 6-17 amounts to 219893 people
 Indiana families with kids ages 6-17 amounts to 109054 people
 Wisconsin families with kids ages 6-17 amounts to 92650 people
 Michigan families with kids ages 6-17 amounts to 150573 people
Promotional Budget – Putting it all
together

30. • Direct Mail- There are a total of 512,170 households with
children 6-17, which is a little more than our market but
it will help expand our reach a little with awareness.
With each card costing $0.35, it would be wise to stay
around 3% of the total households. This allows postage
costs to stay low but still get a good chunk of
advertising in.
• Social Media Sites will be made on Twitter, Facebook,
and Instagram and be maintained by owner to ensure
goals and objectives are portrayed to customers.
Marketing Budget Assumptions –
Advertising Costs

31.  Coupons will come with direct mail postcards. Offering 5%,
10%, and 15% off for a basic, basic with design, and designer
with rhinestones and appliques respectively off the
purchases of one of each.
 With the redemption rate at 1%, we can expect 172 out of
the 3% of households that coupons were sent to, to be
redeemed.
 Direct mail will be sent out in March and June to take
advantage of our seasonality. We will assume coupons will
be redeemed equally during April, May, July, and August or
$70.09 each month.
Marketing Budget Assumptions –
Sales Promotions

32.  Ester will personally sell product at the beaches in
Chicago through the months of May to September.
 Cost calculations are going to be in the analysis. They
take into account information from the IRS regarding
per diem and mileage.
 Also takes into account business licenses that are
required to be a beach vendor in Chicago.
Marketing Budget Assumptions –
Personal Selling

33.  I think that with our high amount of production and sales with a
relatively new crew, our inventory is necessary in case of
shortages.
 After a deeper, denser history is obtained of customer
information and sales records, we can predetermine if our safety
stock levels are necessary in business with highly identical and
non-perishable goods. This is a benefit that we have.
 This will allow our employees to gain experience and give us
goals to obtain to make ourselves better.
 We can slow down production after the first 6 months of sales
and chip away at our safety stock levels to increase our
inventory turnover.
Inventory Budget Review

34.  After Completing the budget, it is clear we will be
relying on our revolving credit accounts to get us
through at least the first two years.
 Without doing a workup of another year we are in the
dark of our goals.
 As it stands right now, it seems we could make goal
with the budget we have.
Budget Review