Daniel Brockman Erin Durlesser Jessica Perez Spring 2010
Objectives Take the work of an artist, and find profitable ways to grow her business and personal income. Identify potential distribution channels Recommend product extensions, updated assortment and pricing options Evaluate revenue and profitability scenarios
Overview of a Microbusiness Ema is an artist Her medium: Handbags She prints unique images on fabric Assembles collages of the images Collage forms the surface of the bag Each bag is original, one-of-a-kind, unique Ema loves her work
Estimate of Current Business Quantities: Produces one or 2 bags over a period of 3 or 4 days Distribution: Personal website, art galleries and events Costs: Nearly match revenues. Insignificant profit. Price: Up to approximately USD 500 per handbag 2009 Estimates (no reliable records) Units 35 bags Revenues USD 15,000 Costs USD 12,000 Profit USD 3,000
Current Customer Profile
Market Research Marc by Marc Jacobs, I Heart Miss Marc Tee, USD MARC by Marc Jacobs Miss Marc Shopper, $ USD MARC by Marc Jacobs Miss Marc Mabel Tote, $ USD Carlos Falchi Hand-Painted Python Clutch $ USD Conduct Broad Market Handbag Survey Consider Potential Distribution Channels Produce New Channel Profiles Assess inventory levels/assortment within new distribution channels
Potential Distribution Channels Department Stores Trend Retailers Museum Stores Online Retailers Luxury Retailers High-End Department Stores
New Channel Profile Museum Stores
New Channel Profile Trend Retailer; i.e Urban Outfitters
New Distribution Channels
New Product Offering
Financial Analysis Financials Art Haute CoutureMuseum StoresTrend Assortment MSRP $ $ $ x Volume ,200 Wholesale Price $ $ Full Cost $ $ $ Product Cost $ $ $ 5.40 Screen Charge $ 3.20 $ 2.00 Pockets $ 3.00 $ 1.60 Finishing Costs $ 0.20 $ 0.15 Button/Zipper $ 1.00 $ 0.30 Freight15% Duty8% Marketing Costs15%0% Promotional Costs 0%30% Margin - Retailer2%51%52% Margin - WSn/a45%40% Rev $ $ 39, $ 61, $ 124, Profit $ $ $ 27, $ 49,485.80
Pricing Structure
Profit Estimates
Recommendation