2. TO: Edexcel International
FROM: Kunal Shukla
DATE: 31/07/07
DECLARATION OF ORIGINALITY
I declare that this project has been
carried out by myself.
I have acknowledged legitimate references.
I have read the assignment regulations and
I am aware of the potential consequences
of any breach of them.
Kunal Shukla
2
3. Contents
Page no.
Introduction………………………………………………….. 5
Executive Summary…………………………………………. 6
About the Company................................................................. 7
• Company Highlights 7
• Corporate Culture 7
Launching the Online Venture……………………………… 9
3
4. • Key success factors 9
• Objectives for use of Internet 9
• Vision for the future 12
Market Research and Analysis……………………………… 13
• Research methods to be adopted 14
• Research Analysis 15
• Audience Categories and Requirements 18
Competitive Analysis………………………………………… 19
Products & Services………………………………………….. 21
• Product Offerings 21
• Services to be Provided 22
Marketing and Promotion…………………………………… 23
• The Marketing Mix 23
• Marketing Strategy 24
• Promotional Campaign 25
o Internet-based 25
o Non-Internet based 28
Business Operations…………………………………………. 31
• Organisational Structure 31
• Product Delivery and Payment 32
Page no.
Integrated Website Solution………………………………… 34
• Online Security Threats and Solutions 34
• Hardware and Software requirements 36
• Securing Online Transactions 39
• Training personnel in IT skills 39
• Legal Issues 39
• Website Structure 42
4
5. Financial Plan……………………………………………….... 43
Conclusion…………………………………………………….. 56
Bibliography………………………………………………….. 57
Appendices.................................................................................. 58
• Appendix A 58
• Appendix B 61
Introduction
Petals etc. is a highly reputed chain of retail flower stores/shops spreading across major
cities and districts of India. It is well placed in an industry which is growing rapidly in
response to globalisation and expanding middle class. For over a decade it has been
associated with providing exceptional quality flower arrangements at par with
international flower brands. Its impressive variety of product offerings has earned it a
reputation as a one stop solution for all flower requirements, be it for daily or occasional
gifting or for floral decoration in weddings, corporate events and other such social events.
5
6. Owing to its tremendous success and ever-increasing customer base the company is now
considering enhancing and extending its operations by taking the business online.
In brief, the key things that the company will look to draw from this online venture are:
1. To extend its market reach by opening access and extending service to geographic
segments previously not reachable
2. To cut costs through the adoption of cost-effective online communication tools.
3. To better serve customers through provision of 24/7 online customer support.
In addition to this, the Internet has the potential to enhance business operations by
making them quicker, more flexible and cheaper. In essence, the Internet can add value to
each and every aspect of business practice right up to the end-product. Integration of key
business processes into one tightly knit unit holds the key to gaining a respectable market
share, it also helps to create a unified marketing message which strengthens brand image.
The Internet can greatly facilitate this process.
Taking the business online will require careful planning. The company realises that
Internet is a different platform all together, traditional offline strategies towards doing
business will need to be re-looked and revised to suit the online environment. Customers
form the core of all successful businesses. The company is aware that online customers
differ from offline ones in terms of characteristics. Factors influencing purchases also
vary. Hence a lot of research will be required in order to make this online venture a
success.
This plan is an effort to devise a suitable outline for the launch of Petals etc.’s online
business. Careful financial projections are also made with a view to secure approvals
from the board of directors and financiers. To put this report together input has been
sought from a host of professionals including management and marketing consultants,
accountants and IT specialists.
Executive Summary
Petals etc established its first store in 1990 in New Delhi. The Company has come a long
way since its establishment and has now earned itself franchisor status with franchises
spanning across the length and breadth of the country in all major metros and districts.
The Company with such an extensive and reliable network of distribution is well-placed
to further extend operations by going online. The Internet is a very exciting prospect for
the Company as it will, with minimal costs, expose it to a global customer base of NRIs
and the larger Indian community.
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7. This business plan aims to analyse the current position of Petals etc. in order to determine
where the Company’s strengths and weaknesses lie. Based on that, an effective online
implementation strategy will be formulated which will focus and build on the Company’s
strengths while suggesting measures to tackle weaknesses and making improvements
where necessary.
Detailed research and analysis will also be carried out on online competitors and
customers in order to determine their needs. Based on those needs, they (customers) will
then be segmented into well-defined target markets with a suitable product range to
match. Additional analysis will be focused on determining areas of opportunity through
which the company can secure a competitive edge.
In addition, a marketing plan will be set-out detailing the various promotional tools (both
online and offline) that will be made use of to spread awareness and draw traffic to the
Company’s website.
Other main areas that will be covered are operational analysis (processes and resources
involved in product fulfillment.) and a financial plan that will indicate the cost involved
in establishing an online presence along with other financial projections.
This business plan is only the first step, the next and more important step will be that of
execution. Ensuring that adequate controls are in place will be vital for successful
implementation of the plan.
About the Company
Company Highlights
Petals etc. is in constant pursuit of excellence, this is manifested in the Company’s key
features:
• Collaborating with growers to achieve high quality standards and
investing in state-of-the-art technology and production methods.
7
8. • Importing tulips, orchids and other exotic flowers from abroad. Petals etc.
has been awarded by the Delhi Florists Association for its pioneering
efforts in bringing rare domestic and exotic flowers to Delhi.
• Design and creation of floral arrangements and theme decorations for
weddings, parties, conferences, fashion shows and banquets for hotels,
corporate houses and individuals all over India.
Clientele
The testimony to the Company’s functioning, product quality, cost-effectiveness and
wide range of expertise is its ever-growing client list.
Petals etc. currently has exclusive tie-ups with several 5-star hotels in across India for
providing all their floral requirements. The Company also caters to the floral needs of
banks, coffee shops and several eminent personalities.
Corporate culture
Petals etc. strives to play a significant role in the growth of Indian flower business.
Promoting and organizing the yet unorganized Indian floriculture industry by acting as a
bridge between growers and the market is what drives the Company. The Company’s
principle strategy is to support the growers' produce by developing a route to market and
at the same time sustaining market growth by making quality flowers readily available at
reasonable prices.
Petals etc. is dedicated to ensuring flowers are delivered in the freshest possible state. A
dedicated team is present round-the-clock to ensure that the flowers are sourced directly
from growers and that they are delivered in timely fashion. Upon arrival there is a quality
check to ensure that the flowers are in the best of condition. It is only then that the
flowers are put on display ready to be sold.
Out of a sense of responsibility to the community, Petals etc. are promoting the use of
flowers as an environmentally-friendly decoration option for all types of occasion.
As mentioned above, Petals etc. feels responsible towards the growth of the Indian
floriculture industry and in bringing it at par with the international flower industry. This
is evident in the Company’s significant role in educating growers on the latest methods of
quality produce and quality maintenance hence helping them get optimum results from
their produce.
8
9. Launching the Online Venture
Key factors for online success
Petals etc. firmly believes that business operations at all levels should revolve around
providing superior customer service. Today’s customer is spoilt for choice, there is no
room for companies that do not give top priority to customer service. Petals etc. has built
a name for itself through its consistency in providing high quality service. It constantly
aims to create value by offering innovative products at highly competitive prices. It is
9
10. fully aware of the fact that not all customers are the same – needs and desires vary. In
response, the Company has tailored a highly diverse and effective product range to deal
with these varying needs and preferences.
Now that the Company is establishing a presence online, opportunities are limitless
provided the Company proves itself worthy to potential online customers. Online success
is hard to come by, in fact there have been many cases of successful offline companies
coming online only to see their business flop. Without proper management and
implementation the Company’s website could easily get lost in the ocean of other
websites. Driving away customers and losing traffic is easy but building traffic, gaining
recognition and reputation online is an uphill task. In fact, online customers require closer
attention and careful handling as they are a lot more sceptical and just a click away from
a competitor’s online store.
Hence the biggest challenge Petals etc. will face will be that of gaining customer loyalty.
There are many such online businesses already in operation but unfortunately many turn
out to be highly unreliable and untrustworthy. This further discourages customers who
are already sceptical of buying online. In order to tackle this problem, Petals etc. will
continue to follow a customer-centric approach and will focus on delivering superior
customer service to attain a competitive edge. The Company will take full advantage of
online CRM tools to nurture ties with new and existing customers.
Business Objectives for use of Internet
To facilitate market research
The internet is a great resource for gathering market information (information about
competitors, customers etc).
The internet will enable Petals etc. to efficiently monitor and gather information about its
competitors (competitive intelligence). This can be done by:
• Subscribing to Newswire services which will send the company email
notifications of any media coverage regarding competitors.
• Subscribing to Change Alert services that will monitor competitor websites and
inform the Company of any changes made to them.
The internet will also be useful for conducting primary research. Online surveys in the
form of customer feedback forms (placed on the website) will provide valuable
information on what customers think about the service provided and on what further
improvements can be made.
10
11. Apart from this, Web analytics software tools will provide valuable insight into customer
behavior such as purpose of visiting the website and how they got there, click streams
(how the website is navigated by a customer) etc.
To facilitate the Company’s growth
The internet will play a vital role in the Company’s growth in 2 ways:
1. Market Penetration – Petals etc. will use the internet to further penetrate into
existing markets.
Remixing the mix (4 Ps) is essential to increasing market share. The internet
provides an ideal platform for doing so. For example:
Price – The internet helps in cutting costs (in turn reducing product price) through
cheaper promotion and customer service. A lower price would mean more buyers.
Place – The internet as a distribution channel has major advantages such as
enabling shopping at the comfort of being at home and the ability to serve and sell
to the customer be it any time, any where. Such a facility will inevitably increase
the company’s sales.
Promotion – Online promotional tools such as search engine marketing (key-
word marketing), opt-in emails, viral marketing, banner ads, referral links and the
website itself will increase market exposure and facilitate prospect generation – a
perquisite to market penetration.
2. Market Development - The internet will be instrumental in helping Petals etc. to
exploit new markets that were previously not reachable. The biggest advantage of
Internet marketing is that it will make accessible far flung geographically
dispersed markets (requiring little or no infrastructure) hence dramatically
extending the horizon of opportunities for the company. A major market that will
become accessible to the Company as result of an online presence would be the
international market, that is, people wishing to gift flowers to friends and family
back in India.
To better serve customers (relationship marketing)
Forging close customer relationships is very important for the Company. The Internet
allows for effective CRM (Customer Relationship Management) by creating a
personalized and dynamic dialogue with the customer that is instantaneous, relevant and
value adding. In other words, using eCRM software tools, the Company can get closer to
their customers by enhancing its ability to understand them, satisfy them and to provide
value-added offerings. It is this that forms the basis of brand loyalty and lifetime
customer relationships.
11
12. The following are various online customer support tools / value-added services which, as
mentioned above, will help deepen ties with customers:
• Online Registration forms to profile customers for accurate targeting.
• FAQ section will help the customer towards solving any problems they may face
prior to or after making a purchase.
• A Customer feedback section on the website will provide the Company with
useful information on what improvements customers seek etc. In addition, an
online chat facility will be available whereby customers can discuss their
problems in real time.
• A straight-forward and simple Check-Out process along with confirmation emails
detailing the order placed and status of delivery.
• Personalizing website content according to customer preferences
• Keeping customers engaged by notifying them of current special offers via the
Site and Email.
To enhance organizational efficiency
A high degree of responsiveness is crucial for the success of any e-business. The internet
will make communications easier, faster and cheaper and will facilitate in information
and knowledge sharing. This, in turn, will bring about greater efficiency in business
operations and increased work-force productivity.
Vision for the future
Initial operations will be limited to the major cities of India. In time the business will
diversify, offering other gift related products as well as expanding coverage in India. Our
underlying aim is to be a premium online florist offering high quality and affordable fresh
flower delivery services to almost any location in India.
Once maximum coverage has been achieved in India, the Company will consider looking
beyond Indian shores and extending its reach globally.
12
13. Successful expansion of the business in these directions will depend on the Company’s
unwavering endeavour to:
• Recognise and respond to customers' changing needs.
• Provide a seamless service to customers.
• Lead the industry in innovation and design.
• Continue improving quality, service, processes and costs.
• Enable employees and associates to give their best.
Market Research and Analysis
Establishing an online presence for the Company will be more or less like starting up a
new business. This is because the online world is very different to the offline world. A
company may have a very different online marketing strategy because of fundamental
differences between the online and offline ways of doing business. Customers, Market
trends and Competitors can not and should not be compared to the respective offline
counter-parts. The online world brings with it an entirely different market-place, it is
because of this that companies need to start from scratch with regards to how to approach
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14. the online market place. The basis of formulation of a marketing plan or strategy is, of
course, market research. Understanding online customers, online market trends and
online competition will form the basis of the Company’s market research and any
marketing strategy that might follow. As all these 3 elements constantly change (for
example, customer needs and perceptions), therefore market research will be an on-going
process for the Company to ensure its keeps abreast with these ever-changing market
conditions.
Effective market research is all about gathering vital information at the right time.
Information gathered through research can help the Company in spotting a marketing
opportunity such as an untapped market which can do wonders to any business.
The company will, therefore attach great importance to market research. It firmly
believes that achieving market leadership is all about seeing things before anyone else
does.
A variety of research methods will be adopted by Petals etc. for identifying market
opportunities and thereafter for formulation of a marketing strategy. As mentioned
earlier, research and will facilitate in obtaining information regarding:
• Customers (their levels of awareness, buying behaviour, motivations etc.)
• Markets (market size, shares, trends, key players, prices etc.)
• Competitors (their product offerings, marketing strategies etc.)
There are two types of research sources:
1. Primary research/data – where data is collected specifically for and commissioned
by an organization for a particular purpose (for example, a research survey to find
out about levels of awareness amongst customers)
2. Secondary research/data – this is data which already exists, which has been
gathered by someone else for some other purpose (for example, published reports,
government statistics etc.)
Secondary research costs significantly less than primary research in terms of time and
money and hence will form the first phase of market research. However primary data will
also be required as such data will be better tailored to the information needs of the
business.
Types of research:
There are two broad categories/types of research:
1. Quantitative research – in this form of research, surveys are used based on a
representative sample of the population or target group. It delivers hard data, for
example, numbers and percentages of people who purchase a product or who
remember a particular advertisement.
14
15. 2. Qualitative research – this involves an in-depth, unstructured exploration with
either small groups of people (focus groups or group discussions) or with
individuals on a one-one basis (in-depth interviews). It delivers soft data which
reflects on WHY buyers buy or WHY they remember.
Research methods to be adopted by Petals etc.:
Secondary data collection
As mentioned above, the first stage in conducting research will involve looking up
secondary data sources. Market reports are frequently published in financial newspapers,
trade journals etc. Such reports will provide valuable insights in to current market
structure and trends at a very nominal cost.
Qualitative primary data collection
• Research relating to competitors will be gathered by observing websites that
provide similar services to that of Petals etc. Such a method will provide valuable
information on competitor product offerings, promotions, prices and other valued
added services they provide. Also talking to people involved in similar businesses
will reveal information on how they operate and manage business activities.
• Mystery shopping - This technique of research will involve posing as a customer so
that actual service delivery can be recorded/experienced first-hand. This method will
provide valuable information to Petals etc. as to how similar companies actually
operate rather than how they claim to operate. Identifying areas of customer service
that need improving can spell marketing opportunities for the Company. Petals etc.
firmly believes that providing superior customer service is the key to success for
businesses of today.
• Focus groups – In this form of research a discussion amongst a group of people (6-
10 people) is initiated. The discussion is loosely structured and the moderator (whilst
keeping in mind a set of objectives or anticipated outline) encourages free flow of
ideas. Sessions are tape-recorded (audio/video) to facilitate an accurate and
comprehensive analysis of the proceedings.
Focus groups deal with motivational research, that is, the influences of attitudes and
perceptions towards buying behaviour and hence will enable the business to cater
more effectively to customer expectations and needs. Also analysis of such
discussions will provide an insight into how to enhance product offerings to achieve
high levels of accuracy in matching customer needs.
Quantitative primary data collection
15
16. These qualitative findings will then open up and identify areas that will require
examination on a larger scale. Therefore quantitative surveying (using questionnaires)
will be required to find out how important certain aspects are among a statistically valid
sample. Customer surveys are carefully structured questionnaires which will be used to
measure customer attitudes (for example, towards purchasing online), levels of awareness
(e.g. of the presence of online florists), intentions to purchase etc. A representative
sample size of 50-100 people will be used for the purpose.
Qualitative findings will help to effectively phrase and position questions and eliminate
ambiguity (in questionnaires/surveys) by providing a platform on which to better
understand customer language and perceptions.
The findings that will emerge from the above mentioned research methods will be crucial
in formulation of effective marketing objectives that will steer the business towards
success.
Research Analysis
The Company has already conducted research, gathering information from various
primary and secondary sources including interviews with well established florists such as
Ferns and Petals. It has also conducted a survey (please refer to appendix A) which has
provided a very useful insight into who our online customers will be and what they want.
An analysis of research conducted by the Company up till now is given below:
Research that was conducted sought information mainly on customer perceptions
regarding internet usage as a means of making purchases.
It was found that that the Company’s decision to establish an online presence had a very
positive response overall. There were, however, some people who were a little skeptical
about the introduction of online services. The main reason for this was the questionable
reliability of such online businesses already in operation; various issues and complaints
were sited such as: late delivery of flowers, lack of follow-up on behalf of the Company
on placing an order etc.
This is clear indication of the fact that a highly effective and efficient management
process needs to be in place given the high-degree of responsiveness required from these
businesses. Failing to meet customer expectations means low levels of customer
satisfaction and will be a major set-back to any business.
Another issue that came up was that of Internet security. When asked about purchasing
online, some people did express concern over exchanging confidential information such
as card details and personal information over the Internet. This concern however mostly
came from the relatively new section of internet users and not from the heavy/regular
users. This possibly indicates that the Internet security threat is more of a mind-set than a
reality. Online shoppers are on a rapid increase, new technologies have made websites
16
17. more secure and reliable than ever before. Therefore, this image of the Internet being
plagued with security loop holes is bound to become a thing of the past in the near future
and therefore does not pose a serious weakness or threat to this online venture.
Analysis of the Indian Florist Industry
The idea of flower gifting is a relatively new concept in India, it is still pretty much a
Western-concept. Now, with the emergence of technology that this revolutionising the
way we communicate, cultures are beginning to mingle. Western concepts and ideas are
being are being adopted at a never before seen rate. However this said, in India
technological advancements are enjoyed only by a minority section of the society this is
because the majority of the Indian population is rural which is synonymous with
economic and technological backwardness. Hence although the this market is picking up
at quite a speed we must not forget that only a small section of the Indian population is
responsible for this change. This section mainly belongs to the highly progressive upper
mid-segment. This small but powerful segment of consumer is rapidly moving upwards
and so too is their disposable income. The floral-gifting business is therefore highly
lucrative with an annual growth rate of almost 25% rising to as much as 40% in the
online sector.
The Indian floriculture industry is still very primitive as compared to those of the West.
The flower industry suffers from inefficient and out-dated growing-techniques, logistical
bottlenecks and inadequate post-harvest infrastructure. Also growers are poorly informed
and lack market information and linkages. All these put together, in turn, have an adverse
impact on the quality of Indian flowers reaching the consumer.
In India, majority of flower sellers are either pavement flower sellers or small florists. An
emerging trend is that of up-market flower parlors, but at the moment they form a
minuscule percentage of the flower trade in India.
Flowers in India form an integral part of Hindu pooja and are predominantly used for
decorative and symbolic purposes in various Hindu ceremonies. The marriage season
between October and February as also the months of April, May and June is a time of
roaring business at the flower market. The flower-gifting business, in particular, is season
based with sales concentrated around various social occasions and celebrations such as
New Year’s, Valentine’s and Mother’s Day etc.
Delhi is India’s biggest flower market. The city is the convergence point of dealers in
flowers and alone accounts for business worth over Rs.100 crore annually.
Despite the growth and sale of flowers having spread over most of the country, India's
annual flower production stands at around 1,500 tonnes and the country's floriculture
industry has a miniscule 0.01 per cent share in the international market.
17
18. The industry is in great need for better infrastructure facilities. Given that flowers are 100
per cent perishable, having proper facilities for storage and transportation is absolutely
crucial. This situation is further aggravated by unsupportive government policies and
overall negligence towards this industry, however, in recent years the government has
launched some initiatives towards uplifting market conditions.
According to a report of the International Labour Organisation (ILO) - ‘The world cut
flower industry: Trends and prospects’, China and India dominate in terms of area under
cultivation but their yield per hectare is low. “In India and China, purchasing power is too
low for sizeable imports to take place and quality is too low for sizeable exports to
develop”.
There is however a bright side. India is blessed with geographical assets such as abundant
light, good climatic conditions and low land costs as well as low cost of manual labour.
This indicates the tremendous potential of the Indian floral industry. With the
introduction of better physical infrastructure, innovation and quality research this
industry can pull itself out of the jaws of inefficiency and under-utilization. This will
empower India to achieve a leading position on the global floriculture map.
It would be fitting to close this section by the following extract:
“A long but promising road ahead
In the last few Five Year Plans, the government has consistently shown some
commitment towards improving marketing infrastructures for both traditional and
commercial cut flowers.
The Department of Agriculture and Co-operation, (Ministry of Agriculture,
Government of India) runs an ‘Integrated Development of Commercial
Floriculture’ program. It aims to improve production and productivity of traditional
as well as cut flowers through availability of quality planting material and transfer
technology, improve human resource capabilities for growing flowers
scientifically, promote production of off season and quality flowers through
protected cultivation, and improve on farm post-harvest handling of flowers.”
(http://www.indiatogether.org/2004/nov/eco-flower.htm)
Audience Categories and Requirements
Analysis of research on potential online customers has led the Company to determine
various customer segments to be targeted. Targeting and segmentation is crucial for
accuracy in formulation of a product range that best meets the needs of a diverse
customer base:
Petals etc. segments its customers to facilitate the offering of a product range that meets
the needs of its highly diverse customer base. Customers vary on the basis of spending
18
19. power, purpose of purchase, characteristics etc. Keeping this in mind, the company has
segmented its customers into the following categories:
1. Non-Resident Indians – The Company’s main target market will be
Indians living abroad (NRIs) who wish to send gifts to their
friends and family back in India. Within this segment, Indian
youth living and studying abroad will be a particularly lucrative
market given their medium-high internet usage trend. Concessions will be made
available to students along with other attractive deals and packages. The email
reminder service will remind registered students of occasions such as birthdays,
father’s and mother’s day etc.
2. Upper-M.I.G households - The Indian upper middle class is fast moving
upwards. With ever-growing employment opportunities coupled with a booming
Indian economy, the mid-segment consumer has evolved from being a highly
price-conscious low-spender to a fast-moving, dynamic spend-thrift. Also given
the hectic lifestyles of a typical double income earning middle class family, the
prospect of being able to shop online would be welcomed given its benefit of
being able to shop from home at anytime.
This category of customer will generally make purchases for:
1. Occasional gifting, for example, on occasions such as Diwali,
anniversaries etc.
2. For in-house floral decoration on a daily basis or for party events.
To target this market the Company will offer gift packages to suit a particular
Occasion/Festival. Schemes will be available for those ordering flowers on a
regular basis (say for personal use). Decoration tips will be given along with floral
combo packages to match.
3. Corporate clients - The Company has and will continue to forge ties with the
corporate world, (including Hotels, Guest houses and Banqueting halls) to
undertake floral decorations in corporate events/gatherings. This segment will
form good business owing to regular demand and high volume purchases. As this
segment generally involves bigger purchases, a combination of online and offline
marketing will be required for capturing and closing orders.
Competitive Analysis
As discussed earlier the Florist market in India is still in the early growth phase. The
market is pre-dominantly served by petty pavement vendors. Such a method of selling
flowers is plagued with problems especially in terms of quality maintenance. As flowers
are sold out in the open, they are exposed to the harsh Indian climate. This therefore leads
to wiltering and significantly reduced life of these flowers.
19
20. The Company saw this as a market opportunity. It’s firm belief was (and still is) that by
providing a high-quality, high value service to customers it can secure a competitive
edge. It did just that, Petals etc. makes sure that its flowers reach customers in the
freshest possible state this has resulted in a lot of highly satisfied customers many of
which have become regular purchasers. All put together the Company has achieved a
very healthy foot-hold in the flower market and enjoys market-leader status.
Petals etc. is one of only two branded retail chains in India (the other being Ferns n
Petals). These retail outlets mainly cater to the upper-mid segment of customers. This
type of consumer expects premium quality arrangements, which one would be hard-put to
find at a small road-side stall. Customers have the benefit of choosing from a wide-range
of expertly and uniquely arranged flowers. The indoor aspect of our chains is another
highly appealing feature to customers, as opposed to the hustle and bustle of road-side
purchasing, one can shop in the comfort of a quiet and air-conditioned environment.
Basically everything about the stores revolve around complimenting the lifestyles of the
consumers. This uniqueness in approach has set the Company apart from the traditional
flower sellers and has allowed it to capture the lion’s share of market demand.
The Company intends to follow the same principles in its online business too. It will
build on the recognition and reputation it has earned in its offline line operations and use
it as a spring-board to attain an online competitive edge.
A quick Google search will reveal that there are many such e-businesses in operation.
Petals etc. will face stiff competition from the following:
• http://www.fernsnpetals.com
• www.indiafloristonline.com
• www.floristofindia.com
• www.allindiaflorist.com
• www.flowersforindia.com
• www.indianflorist.com
• www.onlinefloristindia.com
• www.indianonlineflorist.com
• www.phoolwala.com
• www.floraindia.com
• www.indiaonlineflorists.com
The biggest challenge Petals etc. will face will be that of gaining
customer loyalty. There are many such businesses in operation but
unfortunately many turn out to be highly unreliable and untrustworthy,
this is mainly due to their inadequate infrastructure to maintain a
high degree of responsiveness to customers. This further discourages
customers who are already skeptical of buying online. Petals etc. will
seek to allay such fears of customers by securing on-line transactions
20
21. and making the website customer friendly, thus effectively fighting off
competition.
The Company plans to build customer belief through the provision of superior and
reliable service delivery (starting right from the initial stages of purchase such as
browsing and finding information on the website to the actual delivery of the purchase).
This way, Petals etc. will be able to out-shine others in the online world and will be the
key to achieving and sustaining a healthy online market share.
Petals etc. also realizes the importance of marketing and advertising for the purposes of
drawing customers and generating sales. Research has revealed that many companies
tend to neglect or undermine this aspect of business which ultimately translates into lost
business. Petals etc. will thus adopt an intensive marketing strategy which will form the
back bone of their online venture.
Competitive research and analysis will be a continuous process for the Company. This is
because keeping track of what competitors are doing will help the Company to formulate
counter-strategies on how best to retain and win-over customers. Research will revolve
around gathering information regarding:
• The sales of competitors & their highest selling products & services.
• Strategies used by them to attract and induce customers to buy.
Products & Services
Product Offerings
21
22. At Petals etc. customers can enjoy the experience of choosing from a wide-range of
flowers and other gift-related items.
The product-range typically represents the varieties abundantly available in the season
(local varieties) such as: Roses, Lilies, Carnations, Gerberas and Gladioli etc.
The Company also deals in imported / exotic varieties such as: Orchids, Tulips, Bird of
Paradise, Anthuriums etc
Petals etc. creates its flower arrangements keeping in mind the various purposes or
occasions that customers typically buy flowers for. All arrangements will be delivered
with a greeting card containing a personalized message from the sender. Petals etc.
serves customers belonging to a wide economic spectrum. This is reflected in its carefully
constructed product price-range. For example, the exotic flower range caters to the upper
income bracket while the local flower varieties cater mainly to the lower income groups.
Given below are the occasions our products will specifically cater to along with the price
range of each category:
Occasion Price Range
Anniversaries Rs. 699 - Rs. 3999
Birthdays Rs. 549 - Rs. 1999
Condolences Rs. 769 - Rs. 3299
Congratulations Rs. 525 - Rs. 1499
Get Well Soon Rs. 579 - Rs. 1399
Love Rs. 349 - Rs. 2899
New Born Rs. 599 - Rs. 1499
Various flower arrangement packages offered will include chocolates, cakes and cuddly
toys. Furthermore, during the festive seasons of Holi, Diwali and Raksha Bandhan Indian
sweets will be offered with certain flower packages.
Once the Company has established a firm foot-hold in the online market it will consider
further diversifying its product range.
Services to be Provided
The following are various value-added services that the website will offer:
22
23. • Special discounts will be offered during festivals and occasions such as
Valentines Day, Father’s /Mother’s Day etc.
• A customer support department will be in place that will deal with any issues that
may occur right from placing an order to receiving an order during an online
transaction. Non-satisfied customers are entitled to refunds or vouchers which
they can redeem on future purchases.
• Customers can sign up for a reminder service which will send out email reminders
for any approaching occasion/event (as opted by the user) along with
offers to suit that particular occasion.
• Visitors of the site on registering are entitled to a 5% discount
on all items and can opt to receive a periodic newsletter
containing current promotional offers and latest products.
• In addition to paying online (via a credit card) an offline
payment facility will also be available to customers through
which payment can be made by Cheque or Demand Draft.
• To enrich customers’ online experience, a facility for
customizing products will be made available (this service is
still under consideration).
• Once an order has been placed, customers will be able to track
their order to check at what stage of the delivery process their
order is at.
• Orders can be delivered on the same day provided the order is received by
3 P.M IST (Indian Standard Time). For convenience, current India
time will be displayed on the website. Once online operations are
well established the Company will introduce midnight deliveries
for occasions such as Birthdays.
• Another service still under the process of being considered and developed is an
efficient system whereby the Company, and henceforth, customers
will be informed on successful delivery of the gift. Since this
system will require information to be sent over email,
implementation however will not be easy (owning to the current
absence of a tech-savvy network of filling florists).
Marketing and Promotion
23
24. Initially the Company will be aiming to generate awareness about its online business.
This will require aggressive marketing, right from advertising (using a variety of offline
and online promotional tools) to encouraging prospects to make a purchase by offering
discounts, incentives to buy (such as a free gift) etc.
The Marketing Mix
Marketing will also require careful planning and decision-making regarding the other
fundamental elements of marketing, better known as the Marketing mix – the 4Ps (i.e.
Product, Price, Place and Promotion.) Getting this mix right will be a crucial step towards
ensuring healthy sales. This is explained clearly below:
Product - If the Company does not devise a product range that meets the needs of its
target consumers, this will lead to low satisfaction levels and hence lost business. Petals
etc. has always strived to go beyond customer expectations. It constantly revises its
product range as an effort to provide accurate and value-enriched services to match ever-
changing customer needs.
Price – Similarly, product pricing will have to be in-tune with the spending level of the
intended audience and what they perceive as good value. It does not always work to set
prices to the lowest level, this will not only squeeze profit margins but can also be
detrimental to the image of the Company as there is a risk of customers perceiving the
products and services as inferior (in terms of quality) to others in the market. As
mentioned earlier the Company’s selling point will be delivery of superior customer
service, hence a strategy of cost-leadership may not be the best strategy for the Company
to adopt. This will be discussed in further detail later.
Place – This is concerned with distribution/delivery of the product. An effective
distribution strategy will be essential to ensure that deliveries are made as and when
specified by customer. Failing to do this will drive away customers and dent the
Company’s reputation. Details of how products will be delivered will be discussed in-
depth in the ‘Business Operations’ section of this plan.
Promotion –The Company’s spend on advertising and promotion will be high in the
initial stages of online operation (first six months). This will be done to generate
awareness among potential customers and to encourage them to use the website for
making purchases. However as mentioned earlier since the company attaches great
importance to advertising and promotion, it will continue making considerable
investments in this aspect even after the initial the phase.
Marketing Strategy
24
25. The strategy that Petals etc. should follow is the Differentiation Strategy.
Given the highly competitive nature of the industry and with so many newcomers
entering the market a strategy of differentiation is recommended. This basically involves
incorporating features that will induce customers to prefer the Company’s offerings over
that of other competitors. It is about developing a unique selling point or competitive
edge.
The Company can attain this through the delivery of superior quality service in all aspects
of sales, right from prospect generation to post-sales service. High quality service has
been the Company’s strength in its offline operations. The task in hand is to continue this
trend into the online world and to build on it to ensure that a high level of customer
service is maintained which will ultimately help the Company to create a firm place for
itself in the online market just as it has done offline.
Delivery of high quality service will create value. Pricing is crucial for this purpose and
will be kept competitive so that the customers do not feel they are being over charged and
that services offered are perceived as being of higher value than that of other such
businesses.
The ideal situation is if Petals etc. can create such an appeal for its services that it is in a
position to command a premium price for it. This will only be possible through
consistently delivering high quality service to customers and will be a gradual process.
The major benefits of this strategy will be to boost unit sales by delivering service that
is superior to that of competitors. This will also help in generating brand loyalty which
is crucial amid the intense online competition the Company will encounter.
Petals etc. can also achieve differentiation by focusing on its other strength - product
innovation. The Company is known for its highly exclusive and creative range of flower
arrangements. The Company can therefore capitalize on this unique feature in order to
effectively fight-off competition.
Online marketing success will require a high degree of responsibility, dedication and
commitment from the Company’s employees. They need to be highly motivated which is
only possible through high quality training and keeping them happy (for example through
incentives).
Customer Perception vs. Quality of Service is an issue that Petals etc. has to tackle if
this strategy is to be effective. As discussed earlier, majority of people are still skeptical
of the Internet as a medium for conducting transactions. Online businesses are looked at
with a ‘raised eyebrow’ in terms of reliability and product quality. Therefore if customers
do not perceive the value the Company is offering, there is very little chance of them
paying for it. For this purpose making customers aware of such value will be as important
as its actual delivery.
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26. Thus, from the above it is clear that Petals etc. first needs to effectively communicate its
differentiation if this marketing strategy is to be successful. Building a strong brand
image through effective marketing and advertising will be the key.
Promotional Campaign
Once the website has been designed and registered, it is necessary to inform people of its
presence and to help them find it. It is straight-forward – the more traffic generated to the
website, better the sales would be.
The Promotional campaign will need to be targeted and strategically implemented to
ensure that it reaches the intended audience. A mis-placed marketing
message/communication will only draw the wrong traffic to the website leading to a
failed campaign. The Company will be using a mixture of online and offline promotional
tools. This will be described in detail later.
Till now the company has used a range of offline promotional tools to generate awareness
amongst its customers. With the introduction of the Internet, the company will have
access to highly efficient and cost effective online promotional tools. Apart from being
cost effective, online methods also have global reach and will thus play a vital role in
bringing in the highly lucrative segment of customers living abroad.
In order to achieve maximum market exposure for the newly launched website, an offline
and online promotional strategy will be adopted. This is because customers use several
different ways to find out about products and companies. This is discussed in detail
below:
Internet based:
Search engines – Being easily accessible through search engines is crucial since
most of customer traffic is directed to websites through search engines.
Search engines reflect a site’s popularity and form the back bone of awareness
building and promotion on the Internet. Listing the website in well known search
engines (such as Google and Yahoo!) is crucial as they generate almost 90% of
total web searches.
There are several factors that will go into achieving a high ranked site in terms of
search results:
• Choosing a good domain name will increase the site’s relevance to search
engines.
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27. • Home pages are particularly relevant in terms of search engine indexing so
emphasis will be placed on including as many keywords and phrases as
possible on this page.
• Website content will be regularly updated as it is fresh content that search
engines feed on.
• The website will be linked with as many websites as possible. Incoming
links to a website are also considered as a criterion in search engine
indexing. Each link increases page rankings.
Keyword marketing – This form of online advertising is highly effective as it is
targeted. Such ads appear on major search engines such Google and Yahoo and
are triggered by specific keywords and search terms. The ads appear along-side
search results. For example, keywords such as ‘online florist’, ‘flowers to india’
will trigger Company ads. Hence, this method of online promotion will be highly
effective in drawing prospects (potential buyers) as it will target those actively
seeking to buy flowers.
Banner ads – this form of internet advertising is highly popular. A banner ad is
different to a traditional ad (in a printed publication such as a newspaper or
magazine) in that it has the added ability to bring a potential customer directly to
the advertiser's website.
A banner ad also differs from a print ad in its dynamic capability. It stays in one
place on a page, like a magazine ad, but it can present multiple images, include
animation and change appearance in a number of other ways. Therefore banner
ads can have a higher creative appeal and can prove more effective in attracting
customers.
A basic static Banner ad is easy to set up, also there are Web sites that offer free
of cost banner ad creation services. The key to using banner ads effectively will
be to post as many as possible on related websites so as to attract the right kind of
traffic, for eg. placing such ads in commonly visited Indian portals (e.g.
rediff.com). In addition, banners can also be placed on websites of financial
institutions such as Indian banks frequented by Indians living both locally and
abroad. A highly cost effective way of doing this will be to join a banner
exchange program in which banner ads are exchanged with other sites.
Opt-in emails – Email based campaigns are very similar to traditional direct mail
campaigns. The key to a successful email campaign is that it should be permission
based. Prior to receiving emails, a recipient should be given an option to either
opt-in or opt-out, for instance, by checking a check box to subscribe to a mailing
list. This is done to avoid people not interested in the mail’s content and hence
treating it as SPAM. The Company will use emails to maintain close contact with
customers by communicating latest offers or to remind customers of an up-
coming event/occasion.
27
28. Trading links (Referral links) – These can prove valuable in attracting
customers, it is simple, the more links coming to a site the more doorways you
open for visitors to find the site. Links should be formed with companies whose
content or products compliment those on the site, for example, linking the Petals
etc. website to e-greeting card sites or well known portals etc.
Viral Marketing – this is basically an online form of word-of-mouth. This type
of online marketing facilitates and encourages people to pass along a marketing
message. For example, by giving the user the facility to email a particular page on
a website to a contact.
If a large percentage of recipients forward something to a large number of friends
the message spreads very fast. The online world makes this possible and hence
makes it much faster than traditional offline word-of-mouth.
The great potential of viral marketing as a promotional tool can be understood
from the following example: Hotmail used their own free emailing service to
promote themselves by attaching a tag at the bottom of each email sent which
read: “Get your private, free email at http://www.hotmail.com”. Hence the
message was rapidly multiplied and spread to millions of people world wide.
Like traditional word-of-mouth marketing campaigns, recipients are incentivised
in order to encourage them to pass on the promotional message to their network of
friends (for example: “Forward this newsletter to 10 friends and get a FREE gift
hamper!”
The website itself – It is but obvious that the Website is a way of representing
business on the Internet. In other words, the website creates an image of the
Company in the mind of a potential customer, it is this image that can either drive
away visitors or turn them into customers and better still loyal customers.
A good website is one that is easy to use and navigate, it should also be quick
loading and regularly updated with relevant content. There is no point of having a
good-looking website loaded with wonderful web technology if it does not serve
its core purpose of meeting customer needs and adding-value.
The website should also have the ability to keep customers engaged so that they
stay longer and keep coming back. This can be achieved by calls-to-action which
involves incentivising the visitor in order to trigger an action such as signing up
for a newsletter or making a purchase. Displaying attractive deals and top selling
products on the home page will encourage users to explore the site further.
Apart from this, provisions will be in place to make sure the website’s transaction
process is as efficient as possible. The check-out stage will be straightforward and
seamless, this is crucial as many sales fail at this stage given the skepticism
surrounding online buying. The customer needs to assured that a highly secure
28
29. and reliable transaction system is in place and also that any sensitive information
provided is handled with utmost care (this will be laid out clearly in the
Company’s privacy statement).
Customers who are new to the Company should have easy access to information
about the Company, especially its strengths (keeping in light other competitors)
this will establish the credibility of the Company. The website will also have a
section on customer experiences whereby their comments will be displayed
regarding what they think about the service provided to them (a kind of word-of-
mouth).
Non-Internet based
Various traditional offline advertising and marketing techniques that could be used by the
Company are listed below:
Ads in print media (newspapers, magazines etc.) - Ads will be placed in
leading newspapers in key locations. Customers will be informed about the
products and services provided including current schemes and promotions.
Contact details will be clearly mentioned including the Company’s URL. Placing
ads in relevant magazines will be highly effective in terms of generating enquiries
and leads.
Pamphlets and Brochures - Brochures will give the customer an over-view of
the Company, highlighting what makes it different to competitors, awards
received etc. It will also include detailed contact information about its outlets,
website address etc.
Pamphlets and brochures will be made available at the Company’s outlets. They
will also be handed out at strategically selected locations such as at malls,
supermarkets, community centres etc.
Registering the company with directory services - Such services can be in
printed form for example. Yellow pages or telephone based. These services will
be immediately informed in case of any change in contact details. The Company’s
website URL will be listed in all such records.
Television commercials - T.V can be a highly effective medium for advertising
provided the right channels and the right timings for airing are chosen. Such
decisions should be based on identifying the type of audience the commercial is
likely to be most appealing to.
29
30. Radio Advertising - The use of radio is on the rise across India with more and
more people on the move. Also all sorts of stations have come up, each dedicated
to a different finely defined segment of listener. This will enable better targeting
as ads can be aired on a radio station that is likely to consist of the ‘right’ type of
listener.
Telephone marketing - This method of marketing will involve calling up
prospective customers to inform them of new offers etc. These call centres can
also act as customer care centres for dealing with enquiries, customer complaints
etc. A centralized toll-free number will be made available.
Direct Mail - Information on promotional offers etc. can be sent by mail.
However care will have to be taken in selection of appropriate mailing lists
otherwise such campaigns can be rather ineffective in terms of recipient response.
Word of Mouth - Research has shown that customers value and respect personal
sources more than commercial sources, such is the influence of “word of mouth”.
The Company could initiate this form of 1-2-1 marketing by NGN (Neighbour get
Neighbour) type campaigns which involve offering incentives to customers that
introduce a neighbour or a friend.
In addition to the above, the Company will add its website url to store banners, invoices,
business cards, shopping bags and packing material in order to provide maximum
exposure to the website.
Once prospects have been drawn to the website through the above mentioned marketing
communication techniques, they then have to be qualified or profiled whereby
information is collected about these potential customers regarding:
• Contact details
• Characteristics that help in segmentation
• Their intent to purchase - whether they are ready to buy or interested some time in
the future
This step is essential as it will help to develop the generated lead and will facilitate in the
‘prospect to customer’ conversion process. Those who opt to be contacted by the
Company can be sent newsletters and other promotional material (regarding offers,
reminders about approaching occasions etc.) to keep the prospect/customer in touch and
engaged with the Company. An SMS facility will also be available for those who choose
to be contacted that way.
Maintaining a list or database of profiled contacts will form the backbone of the
Company’s online marketing system and will help in building effective promotional
campaigns by ensuring that marketing messages are directed to people who will find it
relevant and best suited to their needs.
30
32. Organisational Structure:
A dedicated team of employees will be required to ensure that online operations are
carried out smoothly and efficiently. The IT department amongst other things will be
responsible for keeping the website in working order by performing regular website
maintenance operations.
Given the significant differences between offline and online operations, the Company
will employ additional personnel into existing departments who will be responsible for
managing the online side of the business.
The major changes to be made to the existing organizational structure of the Company
are given below:
IT Department
The Company will hire IT personnel for the development and maintenance of the
website. Petals etc. fully understands the importance of having an up to date and properly
functioning website. A site with out-dated content, broken links etc. will leave a very bad
impression on users and ultimately will just be discarded. Therefore the Company will
spend considerably on web maintenance activities.
In addition to the above, this department will look after the Company’s internal network
including any hardware and software issues that may arise. It will also be responsible for
ensuring that all systems are secure from threats at all times and that regular maintenance
operations are carried out such updating software etc.
Online sales and Marketing Department
A separate department will be setup for dealing with the online side of sales and
marketing activities. However a close contact will be maintained with the offline
counterpart to ensure that a unified marketing message is delivered to reinforce brand
image. The main areas of operation of this department will be online promotions,
ensuring proper coordination and timely delivery of orders and a research and
development division which will act as an information and knowledge powerhouse based
on which effective marketing decisions will be made.
Customer Service Department
As emphasized earlier providing superior customer service will be of utmost importance
to the Company. In light of this, an online customer support department will be setup
whereby customer queries and complaints will be dealt with. Having an effective and
responsive support team is crucial especially for an online business where customers tend
to be rather skeptical about making purchases over the Internet. Therefore supporting
customers before, during and after the sales process will be vital for achieving healthy
32
33. online sales. Customers can locate the Company’s contact details under the ‘Contact Us’
section of the website.
This department will also perform regular quality auditing activities to make sure that a
high level of customer service is maintained. In order to do this the department will
randomly select and contact order recipients by phone to make queries about the quality
of products and services received as well as general customer satisfaction.
Given below is a diagram depicting the organizational structure the Company will adopt
on extending its services online:
Product Delivery and Payment
Given the nature of this business, the Company will have to adhere to high standards of
product delivery. Petals etc. will commit to next day delivery services which means
highly efficient systems will need to be in place for processing orders to minimize lead-
time.
Described below is the process by which products will be delivered (from the point of an
order request to its actual delivery and receipt):
When a customer places an order, the order details are reflected in the Company’s
database, this information will be accessed via the administrator section of the website
(which will be password protected to avoid unauthorized access).
First of all the mode of payment is checked, if the customer has paid by credit card the
order will go on to be processed. However if the payment is pending (for example, if the
Managing Directors
Finance and
Accounting
Department
Marketing
Department
Sales Division
(distribution)
Promotions Division
IT Department
R&D Division
Customer
Service Dept.
33
34. user decides to pay by cheque) then the order will be carried out only after receipt of
payment.
The next step is to inform the franchise nearest to the place of delivery about the order.
This will be done by email (or phone if email facility is not available). The order is then
delivered to the designated address on the specified date and time via courier service. In
the unlikely event that the destination of delivery is in a city or district that does not have
a company-owned outlet or a franchise, orders will be sourced from a florist local to that
area. The Company will pay this third-party florist the amount he would normally charge
for the particular arrangement plus some more to cover the cost of delivery. In most of
these cases the Company will be able to manage a profit margin despite the added costs
incurred in such delivery situations.
to ensure that such transactions are conducted securely and are threat-free. Failing to do
this will lead to unpopularity and ultimately lost business opportunities. The various
security threats that the website will need to be protected against as well as the various
technologies that can be used to do this will be discussed in the following section:
Online Security Threats and Solutions
Despite the tremendous benefits the Internet can bring to a business, lack of adequate
security measures can send an online business tumbling Integrated Website
Solution
Setting up an online business will require considerable financial investment. Apart from
the major costs of designing and hosting the website several other costs will be incurred
to fully establish online operation.
Another major consideration of e-commerce is security. The online world is plagued with
hackers and malicious programs that feed on security loop-holes to gain access to
confidential data. Overcoming such threats, therefore, will be an on-going effort and will
require the installation and maintenance of adequate mechanisms and technologies to
ensure 100 percent protection of the Company’s computers and network at all times.
It bears repeating, the biggest hurdle the Company will face in going online is that of
winning-over the confidence and trust of its customers in using the website for submitting
personal information and performing commercial transactions.
The Company can tackle this problem by making sure that the online sales process is as
efficient and reliable as possible. The design of the website should be such that users can
easily and quickly search, locate and select a suitable offering. The check-out stage is
crucial as this is when sensitive and highly confidential information is exchanged. For
this purpose adequate measures will need to be taken out of operation. Described below
are some of the major online threats that the Company will need to take care of along
with how best to curb them:
34
35. Malicious Code (Spyware/Viruses/Trojan Horse/Worms)
Malicious software are computer programs secretly installed on a business’s computer
and can either cause internal damage to a computer network like deleting critical files, or
can be used to steal passwords or unlock security software in place so a hacker can steal
customer or employee information. Most of the time, these types of programs are used by
criminals for financial gain through either extortion or theft.
Solution -
• Installation and use of anti-virus programs, anti-spyware programs on all
computers in the business. It is equally important to ensure that this software (and
for that matter any software) is kept up-to-date with the latest security definitions
and patches.
• Ensuring that computers are protected by a firewall. Firewalls are used to block
intruders (hackers) from accessing the computers on a network they are generally
in software form and come with many commercial security suites. Moreover,
nowadays most business local area networks (LAN) routers include a built-in
firewall technology.
Stolen or lost storage devices
Theft or loss of devices (for e.g. a laptop) containing critical data such as that relating to
customers can be very detrimental to a business. In worst cases this could result in
customers having to be informed that their financial or personal data has either been lost
or stolen which could lead to a loss of consumer confidence, damaged reputation and
even legal liability.
Solution –
• Encrypting customer data stored and transported on a portable device. Encryption
programs encode data or make it unreadable to outsiders until a password or
encryption key is entered. Therefore if a laptop with sensitive data is stolen or
lost, it is highly unlikely that anyone will be able to read the data if it is encrypted.
Encryption programs are generally built into popular financial and database
software.
• Backing-up data: This will enable the restoration of lost data. Data will be
backed-up in various ways:
o Recording data on back-up tapes
o Mirroring data on to remote machines
o Using a raids array to spread information over several hard drives. This
will keep data intact even if one of the drives fails.
o Backing-up data on internet-based remote storage facilities.
35
36. Fraudulent emails (Phishing)
This is a serious form of spam. These emails appear to be genuine and are sent to all the
employees within a certain company. This message might look like it has come from an
employer, or from a colleague who might send an email message to everyone in the
company, such as the head of human resources or the person who manages the computer
systems, and could include requests for user names or passwords, a link or an attachment.
The truth is that the e-mail sender information has been faked. Phishing scams work to
gain access to a Company’s entire computer system and hence if responded to can put a
business at risk.
Solution - The Company should install spam filters to protect employees form fraudulent
emails. However despite this measure some fraudulent emails may still go through to
employees. Therefore it is important to make employees aware of such scams and that
they remain vigilant for anything in their in-box that looks suspicious. If an attempted
phishing attack is detected everyone in the Company should be informed immediately
before anyone loses any personal information. Moreover it should be stipulated that no
sensitive information is passed on via email by any employee in any case.
Insider/Disgruntled Employee sabotage
A dissatisfied employee/insider can be more dangerous than the most sophisticated
hacker on the Internet. Some insiders of a company may have direct access to critical data
and as a result can easily steal it (for financial gains) or even, simply delete it causing
irreparable damage.
Solution - To avoid such a situation, critical functions and responsibilities should be
divided among several employees within the organization therefore limiting the
possibility that one individual could commit sabotage or fraud without the help of the
other employees. Also strict password and authentication policies should be in place to
limit the chances of an employee gaining unauthorized access.
In addition the Company’s log files should maintain a record of employees accessing
sensitive records.
Hardware and Software requirements
Software Requirements
• Operating System - Windows Vista Business This version of Windows has many
useful features that can enhance the Company’s productivity.
36
37. • MS-Office Small Business 2007 – for word-processing, building databases,
accounting etc.
• Anti-virus & firewall software - ZoneAlarm Internet Security Suite (Small
Business Edition). This software is a complete internet protection package which
will protect the Company’s computers and network against intruders, viruses,
spyware etc.
• Web-designing software
o Macromedia Dreamweaver – Being a graphical-based html-editor, this
web-development tool is highly user friendly - users with non-expert
knowledge can create full sites using this software. It also allows for
creation of simple JavaScript without the need of coding knowledge.
Javascript can be used in addition to HTML to enhance the website’s
functionality, for example, to check web-form values to make sure that
they will be accepted before they are submitted to the server.
ASP coding will also be written (using Dreamweaver) to interact with
company databases.
Hence given its effectiveness and at the same time simplicity of use,
Dreamweaver will be ideal for constructing and maintaining a website for
Petals
o Macromedia Flash – This software can be used to create graphics,
animations and sound applications which have interactive capability. This
will not only increase the attractiveness of the website but also its
functionality.
o Adobe Photoshop – This is a professional-level graphics editor
application. Its comprehensive toolset and powerful creative options will
help create customized images and graphics for uploading onto the
Company’s website.
o Shopping-cart software - This is an essential part of the e-commerce set-
up. It automates the sales process on the website by taking orders,
calculating shipping and sales tax, and sending order notifications.
Hardware requirements
• Computers - The Company’s LAN (Local Area Network) will comprise of 4-5
desktop PCs details of which are given below:
37
38. DellTM
InspironTM
530s
• Intel®
Pentium®
Dual-Core Processor
E2140
• Genuine Windows®
Vista Home Basic
• 17" Dell Flat Panel LCD Monitor
• 1GB DDR2 SDRAM at 667MHz
• 160GB1
SATA 3.0Gb/s with Native
Command Queuing
• Internet connection - 2Mbps DSL Broadband connection for supporting the
LAN.
• Networking hardware (Ethernet cabling, adapters, hubs)
• UPS (Uninterrupted Power Supply) - to keep systems running incase of a
power-cut and also to protect hardware against voltage fluctuations.
• HP LaserJet 3055 All-in-One - for printing, scanning, faxing and copying. To be
shared on the Company’s LAN.
• Web Hosting – The Company has decided to outsource the hosting of its website
as opposed to having its own in-house network server as it will be the more cost-
effective option. This way the Company will be able to better focus on its core
competencies. However, in time, when online operations expand it will make
more sense to have a company-owned server as it would provide greater
flexibility and the ability to perform more complex operations that a bigger
business would require. Also the Company, at this stage, would be in a better
position to invest in the technical knowledge and expertise that setting-up and
maintaining a server would demand. Hence considering the above, the Company
will lease a server in its initial stages of operation.
38
39. Securing Online Transactions
Conducting a secure online transaction has 4 fundamental security aspects:
1. Privacy – Ensuring that the information transmitted over the Internet is not
captured or passed on to an unauthorized third party.
2. Integrity – Ensuring that information that is sent or received has not been
compromised or altered.
3. Authentication – Proving that the identities of the parties involved in a transaction
are valid.
4. Non-repudiation – Legal proof that that a message was sent and received.
To achieve this the Company will use Secure Socket Layer (SSL) technology and a
Digital Certificate issued by the Certification Authority, VeriSign, SSL will protect
private information (for example, customer credit card details) by encrypting it as it
passes from the customer to the Company’s server and vice vice-versa over the Internet.
The Company’s digital certificate will be legal proof to customers that they are dealing
with a genuine merchant (authentication).
Training personnel in IT skills
Online operations will necessitate investment towards training existing employees in the
use of IT. It is only then that the potential of technology to support and enhance business
operations can be fully appreciated. The Company will attach considerable importance to
developing IT skills of its personnel and therefore will set aside a good amount of
investment for the same.
Legal Issues
Incorporation
Incorporating Petals etc. will be of primary concern. This means the Company will
become a separate legal and financial entity from its owners. The main benefit of
incorporation is that it limits personal liability towards the business, that is, personal
assets of those heading the Company will not be at risk in case it (the Company) goes
into debt. It also helps with taxes as corporations are generally taxed at a lower rate than
individuals.
Apart from this incorporation adds to the professional look of a business and will be
helpful in facilitating the growth and expansion of the Company.
39
40. Taxation
Petals etc. will be operating a website engaging in commercial activity and hence will
have to comply with tax obligations relevant to it.
GST (Goods and services tax, also know as value-add tax or simply sales tax) will apply
to the business’s sales (in some cases taxes may have to be withheld). Prices displayed on
the website will have to include sales tax; a tax invoice will also have to be provided if
requested.
These are rather complicated matters and qualified legal advice will have to be obtained
for such matters.
Internet Service Provider (web hosting etc.)
Choosing an ISP will require careful consideration. Terms and conditions laid out by the
ISP must be carefully examined and should be suitable for business operations. Key
questions that must be considered are: Will the server space and bandwidth be sufficient
for the business? Will it scale up if the business expands?
Intellectual Property
There are many kinds of intellectual property, but the ones most important to online
businesses are:
1. Copyright concerns: The Company will have to make sure that it does not
infringe others’ copyright when obtaining content for the site as well as the
reverse. The essence of this law is that copyright owners have the right to prevent
others from reproducing (copying), modifying, publicly displaying or distributing
a piece of work (be it text information, graphics, icons, audio-visual clips, Java
programs or other types of works commonly placed on Web sites).
A copyright’s main function is to protect the creative effort of the owner of a
hand-made item especially if it is a source of livelihood/income. In other words,
to protect the owner of copyrighted material from any potential damage to
revenue prospects caused by unauthorized use of that material is thus of great
relevance to commercial websites. Copyright maybe registered but it exists
automatically upon creation without registration.
Avoiding copyright infringement
Incase a contractor is hired to develop the website, the Company must have a
written agreement in order to transfer the ownership of copyright (which will
enable the control of future website designs and amendments). Without such an
40
42. Financial Plan (2007 - 2009)
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42
43. 1.1 Set up Costs
Expenditure Cost in Rupees (lakhs)
Website
• Designing
• Hosting & Domain Name registration
• Charges of payment gateway
2
Electronic Equipment (Computers/
communications etc.)
5
Office Development (furniture, set-up etc.) 2.5
Legal and other Consulting Charges 0.5
Working capital and contingences 40
Total Financial Requirement 50
1.2 Means of Finance
Means
Cost in Rupees (lakhs)
Equity 50
Loan (or any other) 0
Total 50
Petals as a successful company has sufficient reserves to finance the online
venture. As such the online business will be financed by equity of Rs.50
lakhs. Petals will be the sole shareholder in this enterprise.
43
45. Revenue
Quantity(inunits)
Sales
Othermeansof
Revenuelike
Advertisementsetc.
SubTotal
2.2 - Quarterly Revenue Expected in Rupees (lakhs) for
Second Year
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Quantity
(in units)
17800 19600 21600 23700
Sales 178 196 216 237
Other Source
of Income e.g.
Advertisements
1 1 1 1
Any Other - - - -
Total Revenue 179 197 217 238
Means of
Revenue
2.3 - Quarterly Revenue Expected in Rupees (lakhs) for
Third Year
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Quantity
(in units)
25800 28100 30600 33400
Sales 258 281 306 334
Other Source
of Income e.g.
Advertisement
s
2 2 2 2
Any Other - - - -
Total Revenue 260 283 308 336
2.4 - Units expected to be sold for Three Years
First Year Second Year Third Year
Units 33800 82700 117900
45
46. 2.5 - Expected Revenue for first Three Years in
Rupees (lakhs)
First Year Second Year Third Year
Revenue 338 831 1187
Assumptions:
1. Quarterly growth = 10%, approximating to 40% annual growth rate.
2. Average order amount = Rs. 1000
3. Seasonal variations will be evened out by variations in product-mix demanded.
3.1-MonthlyExpenditureExpectedinRupees(lakhs)forFirstYear
12
36
7
1.25
0.25
1
0.1
0.2
46.1
11
32.4
7
1.25
0.25
1
0.1
0.2
42.5
10
28.8
7
1.25
0.25
1
0.1
0.2
38.9
9
25.2
7
1.25
0.25
1
0.1
0.2
35.3
8
21.6
7
1.25
0.25
1
0.1
0.2
31.4
7
18
7
1.25
0.25
1
0.1
0.2
27.8
6
14.4
8
1.25
0.25
1
0.1
0.2
25.2
5
10.8
8
1.25
0.25
1
0.1
0.2
20.4
4
7.2
8
1.25
0.25
1
0.1
0.2
16.6
3
4.8
8
1.25
.25
1
0.1
0.2
15.6
2
2.4
8
1.25
0.25
1
0.1
0.2
13.2
46
48. Expenditure
3.3 - Quarterly Expenditure Expected in Rupees (lakhs) for
Third Year
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Product
purchase
155 169 184 194
Advertising 20 20 20 20
Telephone
and Internet,
Office Rent
5 5 5 5
Salary and
Perks of
Employees
5 5 5 5
Maintenance
and updating
of website
1 1 1 1
Stationary and
Printing
0.6 0.6 0.6 0.6
Electricity and
Power
1 1 1 1
Total
Expenditure
187.6 201.6 216.6 226.6
3.4 - Expected Expenditure for first Three Years in
48
49. Rupees (lakhs)
First Year Second Year Third Year
Expenditure 325.3 611.2 832.4
Assumptions:
Average cost per order = Rs.600
4.1-MonthlyOperatingProfit/LossExpectedinRupees(lakhs)forFirstYear
12
60
46.1
13.9
11
54
42.5
11.5
10
48
38.9
9.1
9
42
35.3
6.7
8
36
31.4
4.6
7
30
27.8
2.2
6
24
25.2
(1.2)
5
18
20.4
(2.4)
4
12
16.6
(4.6)
3
8
15.6
(7.6)
49
50. 2
4
13.2
(9.2)
1
2
12.3
(10.3)
Revenue
Expenditure
OperatingProfit/Loss
4.2 - Quarterly Operating Profit/Loss Expected in Rupees
(lakhs) for Second Year
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Revenue 179 197 217 238
Expenditure 135.5 146.6 158.5 170.6
Operating
Profit/Loss
43.5 50.4 58.5 67.4
4.3 - Quarterly Operating Profit/Loss Expected in Rupees
(lakhs) for Third Year
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Revenue 260 283 308 336
Expenditure 187.6 201.6 216.6 226.6
Operating
Profit/Loss
72.4 81.4 91.4 109.4
4.4 - Profit/Loss for first Three Years in Rupees
(lakhs)
50
51. First Year Second Year Third Year
Revenue 338 831 1187
Expenditure 325.3 611.2 832.4
Operating
Profit/loss
12.7 219.8 354.6
5. Cash flow analysis
Projected cash balances form the cash flow analysis. It alerts the business of
liquidity problems. Liquidity i.e. availability of cash is so Important that
even a profitable company can run into crisis if it does not have cash to pay
for its obligations as they fall due.
The cash flow analysis below suggests that the Company will have healthy
liquidity position by the end of the first year and this obviates the need for
further cash flow analysis.
51
54. 7.1 - Projected closing Balance Sheet for first three years
3rd
Yr 2nd
Yr 1st
Yr
Assets 538.6 269.3 59.3
Fixed assets 0 3.3 6.6
(depreciated at 33.3% p.a.)
Current assets 538.6 260 52.7
(Initial cash + Profits + Reserves)
Liabilities 193.6 56 50
(Liability to share holders)
Profit/Loss before Tax 345 213.3 9.3
Taxes @ 35.5% 122.5 75.7 3.3
Net Profit/Loss 225.5 137.6 6
Dividend - - -
Reserves/Retained Profit 225.5 137.6 6
Cumulated Reserves 366.1 143.6 6
54
55. Interest earnings on the cash deposits will make the picture even better.
On this projection business will be highly profitable after first year.
Financial Assumptions
1) The income tax has been considered at the rate of 33.9%
2) Depreciation on CAR @ 10% p.a.
3) Electricity Rs. 3.5/unit
Financial Analysis
Gross Profit for first Three Years
0
50
100
150
200
250
300
350
400
1 2 3
Year
GrossProfitinRupees(lakhs)
55
56. Net Profit for first Three Years
0
50
100
150
200
250
1 2 3
Year
NetProfitinRupees(lakhs)
Conclusion
The internet holds plenty of opportunities for Petals. Not only is it a powerful marketing
tool but it is also highly cost effective. The global exposure that the company will get
from establishing itself online can boost sales substantially.
Unlocking these benefits of the Internet, however, requires careful planning by the
company. Without proper management and sound marketing strategy the Company’s
website could easily get lost in the ocean of other websites. Driving away customers and
losing traffic is easy but building traffic gaining recognition and reputation online is an
uphill task. In fact, online customers require closer attention and careful handling as they
are a lot more sceptical and just a click away from a competitor’s online store.
However, there is plenty of room for optimism in the tried and tested customer centric
focus of this business. Careful market research and financial projections suggest that
upward potential of this enterprise is very high and downward risk fairly low. The
business is likely to break even in six months and there after yield high returns on the
capital invested.
I recommend this business plan for your favour.
56
59. Business / Self-employed
(d) City: Delhi Mumbai Bangalore
(e) Email (optional): ________________________
2. How often do you use the Internet (in a week)?
< 1 hr 1 - 5 hrs 5 - 10 hrs
10 – 20 hrs > 20 hrs
3. How do you typically access the Internet?
28.8kbps 56kbps or faster modem
Direct connection (T1, cable modem, DSL, etc.)
4. Have you ever purchased online? Yes No
If Yes, please go to question 6
If No, please go to the next question
5. Would you like to try purchasing online Yes No
in the future?
If No, please state your reasons
______________________________________________________________
______________________________________________________________
{Please go to question 7}
59
60. 6. Have you bought flowers online? Yes No
If Yes,
• Please mention the website URL __________________________
• How did you find out about it? __________________________
• What was the purpose of purchase? Personal use Gifting
• Were you satisfied with the service? Yes No
If No, please state reasons
___________________________________________________________
___________________________________________________________
7. Have you heard of the Petals etc. Yes No
retail chain?
If Yes, how did you get to know about it?
______________________________________________________________
If No, that’s it! Thank you.
8. Have you made a purchase there? Yes No
If Yes,
• How did you find the service? Excellent Very good Good
Fair Poor
• How could we improve?
______________________________________________________________
______________________________________________________________
60
61. A sample size of 100 was used. This survey was conducted on Internet users across 3
cities - Delhi, Mumbai, and Bangalore. The questionnaires were distributed at places of
leisure and recreation including restaurants, cinema halls and shopping malls.
Appendix B – Product Catalogue
Flowers by Occasion
Love
‘Emotions’
Rs. 349
‘Beary Love’
Rs. 549
‘A Basket of Love’
Rs. 549
‘Lover’s Delight’
Rs. 599
‘Close to my heart’
Rs. 629
‘Cuddly Affair’
Rs. 699
61
62. ‘Romantic Affair’
Rs. 749
‘Red Alert’
Rs. 769
‘Basket of Wishes’
Rs. 769
‘Every Rose has a Silver
Lining’
Rs. 799
‘Exotic Treat’
Rs. 799
‘Love Treat’
Rs. 829
‘Delicate Love’
Rs. 899
‘Lily Cluster’
Rs. 899
‘Stick Around’
Rs. 999
‘Feelings’
Rs. 999
‘Entwined in Love’
Rs. 1099
‘Encaged in your Love’
Rs. 1299
‘Ladder of Love’
Rs. 1299
‘Passionate Love’
Rs. 1399
‘Lily Split’
Rs. 1499
62
63. ‘Majestic Love’
Rs. 1599
‘Stand by me’
Rs. 1599
‘Elegant in Pink’
Rs. 1599
‘Life Size Arrangement’
Rs. 1999
‘Ruby Red’
Rs. 2199
‘Exotic Life Size
Arrangement’
Rs. 2499
Birthdays
‘Roses all the way’
Rs. 549
‘Cuddly Affair’
Rs. 699
‘A Lasting Friendship’
Rs. 699
‘Chocolaty Love’
Rs. 749
‘Sunshine’
Rs. 769
‘Total Eclipse’
Rs. 799
‘Exotic Orchids n Cake’ ‘Love Treat’ ‘Wire Cocoon’
63
