Method of business research

Introduction

The method of business research depends on the problem that is needed to be solved. The graph from the book of William Zikmund (see appendix 1) depicts the scheme of business research including definition of the research question, discovery of management dilemma, research proposal, data collection and research reporting.

Thus, to start the research it is necessary to define the problem.

Fashion Belly Dance Company is one of the leading producers of Belly dance costumes and accessories worldwide. The production of the costumes is located in Turkey, headquarter of the company is in London. The company sells the costumes through its personal website and through eBay.

Fashion Belly Dance Company is a privately held organization owned by its founder, Mrs. Vanga Cansu, which runs the business from her home office. The company does not use child labor and unfair distribution of the profit.  The company guarantees good working conditions to all its employees.

Due to recent financial crisis all over the world and economical downturn the company found itself on the edge of bankruptcy. Reorganization of the company is the attempt to change the trend and to make budget profitable after two years of losses.

The organizational structure and culture

“Organizational culture creates a number of various concepts, strategies, and situations which affect every level of planning when it comes to any type of hierarchical institution. The implications of organizational structure and culture apply to companies, corporations, charitable organizations, governments, and even sports teams/organizations.”

The structure of Fashion Belly Dance could be described as centralized power culture.  The central figure of the group is Mrs. Vanga Cansu, the business owner. Her personal influence spreads all over the company. This style of leadership is called “autocratic” or “authoritarian.” As every leadership style, this one has its own pros and contras.  Professor Harrison in his lecture “Typologies of Organisational Culture: highlighted the following features of this structure:

“ADVANTAGES and DISADVANTAGES

Such organisations can be strong, proud and dynamic, react quickly to external demands.

However power cultures may suffer from staff disaffection. People in the middle layers may feel they have insufficient scope. The interventionist pressure and constant need to refer to centre may create dysfunctional competition and jostling for the support of the boss

The organisation is dependent on the ability and judgement of the central power - if weak then the organisation will struggle. As the power organisation grows, the centrist culture breaks down if it becomes impossible for the centre to keep up its interventionist, co-ordinating role. The large organisation may need to divisionalise (create other spiders webs linked to the central web). “

Individuals succeed as long as they are power oriented, politically minded,, risk taking with a low need for security. The power of members is based on control over resources and personal influence with the centre.

To be healthy for the long term, a corporation must have strong leadership and a strong organizational culture. Even though some of the strongest companies or organizations may be able to tread water for a long period of time, or even do well, if the culture starts to erode, it's only a matter of time until the larger structure collapses.

Plan of the future activities

The primary target group is the people who have a passion for all things linked to belly dancing. Belly dancers can have one or more costumes for dancing and different accessories

a3.5 million women who are pregnant each year. These woman often buy maternity clothes for themselves during their pregnancy.

The secondary target market is the over 25,000,000 people who shop for and buy collegiate clothing each year. By being made aware that collegiate maternity wear exists, they are able to purchase items as gifts for someone they know who is pregnant.

As an online store, we will focus on the portions of these market segments which are comfortable shopping online.

4.1 Market Segmentation

The two groups of people who would buy maternity clothes are pregnant woman, and those who would shop for a pregnant woman, perhaps a husband or a family member. Based on these segments, our projected sales forecast is conservatively set at less then 1% of the total potential market, as highlighted in the following table and chart.

Market Analysis

4.2 Industry Analysis

Fashion Belly Dance Company will be in a small segment of the clothing industry called Maternity Wear. Today the U.S. maternity wear industry generates sales of over $200 million and is comprised of over 2,000 retail stores and more than 500 websites that offer maternity clothing.

Pregnant women: There are over 3.5 million women who are expecting each year. The maternity retail business has come a long way from offering dowdy, baggy style maternity clothes to those that help women celebrate their style and look great even as their body changes. Clothes offered for pregnant women in the market now include hip and stylish maternity clothing, athletic wear and corporate clothes. After all, as pregnant women's waist lines balloon, their lives and careers go on as usual.  Women, for example, who are used to attending the sporting events for their favorite team would still want to show their support by wearing a fun and comfortable logo shirt. These women will be targeted through email campaigns, online advertising and direct marketing

Shoppers for Pregnant Women:  It is unknown how many people shop for someone they know that is expecting; however due to specific collegiate nature of our products, we will target those who are already shopping for collegiate wear to make them aware of our products and create gift ideas for the expectant women in their lives. We will use online advertising on existing collegiate sites to generate awareness and drive site traffic.

4.2.1 Competition and Buying Patterns

In this industry, customers choose their clothing based on personal preference. They often like to find items that represent their pre-pregnancy wardrobe so they can continue to keep their own style. By marketing our products to pregnant women, many are sure to connect with something as personal as their favorite sports team. It is a specialty item that will make them feel good to wear.

By positioning in the market as a specialty store, we are confident that word of mouth will help to create product awareness. Our market research shows that pregnant women today attend sporting events and often have to resort to buying men's large shirts or other make-shift clothing items. Pregnant women wearing our shirts in public will generate interest and lead to additional sales.

4.2.2 Main Competitors

While there are several large maternity retailers such as Motherhood and Pea in the Pod, they all carry a mainstream line of clothes that are appealing to the masses. Due to their mass distribution model, it would not be prudent for them to carry small amounts of regional specialty items, such as collegiate shirts, at each store. Online retailers also carry a wide variety of maternity clothes, but very few carry collegiate maternity wear. Those that do offer very little variety in school representation. There is a need for a specialty web store geared for this type of apparel.

Strategy and Implementation Summary

Our marketing strategy is to create product awareness among expecting women and their families by strategically placing Internet ads, using direct mail tactics sold and generating PR. We offer a unique product that we feel confident expecting women will find fun to wear during their pregnancy. It will be a novelty item that will allow them to stay connected to their interest in their collegiate team both at games and around town.

The possibilities of future development

5.1 Competitive Edge

The competitive edge offered by Fashion Belly Dance Company is our unique product. Currently, no major maternity retailer and few online stores offer collegiate maternity t-shirts. We will position ourselves as a specialty online store catering to expecting moms who want to maintain their support of their favorite team through their pregnancy. Because of our niche, we can effectively choose targeted sources to market our product to our customers.

Our primary weakness is that we are a new business and we offer a new product. To generate sales, we must first create awareness that our product exists, and make it easy for potential customers to locate our online store. By offering a fun product that many expecting women would like to have, we feel we an quickly establish our presence in the maternity wear industry.

5.2 Marketing Strategy

Fashion Belly Dance Company's marketing strategy is crucial to the success of our business. We must create awareness of our product to our primary target market, as our products are of little use to anyone outside of this group. We will do this by:

    * Utilizing the brand-name power of eBay and its popularity to establish credibility and increase awareness of our products

    * Strategically-placed ads on websites that are frequently visited by expecting moms, such as parentsplace.com, babycenter.com, americanbaby.com and babyzone.com

    * Placed ads on collegiate sites such as collegefootballnews.com and sports.yahoo.com

    * Adding our products to other sites as an affiliate provider

    * Direct mail and e-mail advertising to expectant mothers

    * New product PR in publications for expectant mothers

5.3 Sales Strategy

Sales are dependent upon creating awareness of collegiate maternity wear within our target markets, and therefore the sales strategy for Fashion Belly Dance Company is based on driving business to our website and our eBay store. Because we are a new product line, we understand that we will have to generate excitement about our apparel in order to generate business. We will strategically place pop-up and banner ads on websites relevant to both expecting mothers and sports fans, we will use direct mail and email lists, and we will seek public relations coverage in relevant media sources.

Fulfilling orders

Fashion Belly Dance Company will fulfill orders from our eBay store and later, our own website. All payments will be processed through PayPal in the first year, although we will evaluate the option to do Fax orders if customer demand it.

     E-orders:  Customer can purchase online 24-hours a day, seven days a week.

     Fax orders: Customers can fax in an order 24-hours a day, seven days a week if we implement this.

As the company grows, we will leave the option open to using a fulfillment center to take orders via the telephone.

5.4 Sales Forecast

The sales forecast for FY 2006 takes into account slower sales at the beginning as we create awareness of our product and website. Initially we will be selling one style of t-shirt, but will offer it with the logos of up to 132 different Division 1 universities. As the company grows, we will explore the demand for other types of collegiate maternity wear such as tank tops, sweatshirts and long-sleeved shirts. In the first three months, we will sell exclusively through eBay. Although this adds to direct costs (roughly $1 per shirt) because of eBay fees, we will save money on both marketing/advertising costs and website maintenance by holding off on fully developing our own site until we can see what items customers prefer. We anticipate that even after enabling sales on our website, eBay sales volume will continue to be higher.

The following table illustrates unit sales of 36,500 t-shirts for the first year. This would require us to sell to less than 1% of our primary target market.

The Monthly Sales Chart that follows indicates that we have some seasonality in our business. We expect sales to increase during the Fall, which is when football season occurs and when sales for collegiate goods are the highest.

Note that the direct costs shown in the Sales Forecast table represent only the direct inventory costs for t-shirts. There are other, non-inventory direct costs, including eBay fees and PayPal fees; these can be found in the projected Profit and Loss.

Real difficulties and milestones

The following are the key milestones for the first year of operations:

   1. Completion of strategic business plan by April 1

   2. Obtain all NCAA licensing by May 1

   3. Negotiate t-shirt costs with supplier and with screen printer by May 30

   4. Have first shipment of products delivered in house for fulfillment by July 1

   5. Have specifics for our advertising plan in place by June 1

Developmental opportunities

Web Plan Summary

The following sub-topics outline our plans to create and maintain our website. At first, we will have a simple text and image-based website which outlines our products and redirects customers to our eBay store. After the first three months, we will begin online ordering via our own website as well.

6.1 Website Marketing Strategy

Our website will provide information about us and our products as well as order processing to purchase our products online. We will include our web address in all of our advertising to reinforce to our customers how to find us online. Our company logo and motto will also need to be eye catching and easy to remember so that once our customers find us, they will remember us and suggest us to their friends and family.

6.2 Development Requirements

Initial Development

We will be working with an outside contractor to design the layout of the site. Initially, our site will provide an overview of the company, describe our products and services, and redirect visitors to our eBay store to purchase a shirt. The estimated costs for initial website development are listed in our start-up costs.

Some of the features included on the website will be the ability to search for logos by school name as well as by "team name" (such as the University of Alabama "Crimson Tide," the UCLA "Bruins" and the University of Oregon "Ducks"). Good-quality pictures of our products and the logos on the products will be available, so the customer can see what they will be getting.

Full website (including online ordering)

In the third month of the plan, when we have a better sense of customer preferences, we will finish the development of the site to include online order processing (via PayPal). Starting in November (heavy football season) customers will have the choice of buying either directly from our website, or via our eBay store. Additional security functions are required for doing PayPal sales on our own website. Expenses for this further website development are listed in the Profit and loss table.

The order processing will include the ability to provide both a billing and an optional shipping address and will be able to process credit cards as well as payment by check (using PayPal).

Once the website design is complete, we will contract for ongoing maintenance and support of the site. These monthly cost estimates are listed in the expenses section of the Profit and Loss table.

nitially the only employee will be Mary Lenton, the company founder. She will oversee product development, the online store and marketing efforts. Outsourcing will be used on some initial tasks, specifically the website store design.

7.1 Personnel Plan

As the company launch date approaches, one part-time (30 hours/week) employee will be hired to help with fulfillment with a second part-time employee scheduled for the third month, entering into the highest potential selling time frame, football season. As the company grows, more personnel will be added as needed. If projections for October through December are correct, temporary seasonal help will need to be hired to assist in fulfilling the order processing.

Part-time staff will be responsible for processing all Internet and Fax orders, PayPal payments received, and will handle all shipping functions.

Subcontractors will be used to help with website design and marketing, and these subcontractor costs can be found in the Profit and Loss tables Expenses section.

Personnel Plan

              Year 1               Year 2               Year 3

Owner               $36,000               $40,000               $45,000

Fulfillment Representative 1               $12,000               $23,000               $25,000

Fulfillment Representative 2               $10,000               $23,000               $25,000

Total People               3               3               3

Total Payroll               $58,000               $86,000               $95,000

Fashion Belly Dance Company projects the gross margin to be at approximately 65% percent. Sales projections for Year 1 are over $1,000,000. A monthly breakdown of the cash-flow analysis, balance sheet, business ratio, break-even analysis, and other financial details are shown in the appendix. Annual projections will be highlighted in the following sub-topics.

8.1 Start-up Funding

The company owner, Mary Lenton, will use personal funds to finance the start of this business. Since a home office is already established and there is a large area in the basement available for inventory storage, the primary start-up costs are associated with website store design, starting inventory, and licensing approval.

We must track our eBay and PayPal fees to make sure they are projected appropriately in the Other Cost of Goods section in the Profit and Loss statement. As we gain experience with what the average cost is for Item Fees, Final Value Fees, and PayPal fees, we may need to change the Profit and Loss table to reflect the correct cost. At this point we have placed high estimates to make sure that we are realistic about the cost of doing business on eBay.

The fees are based on the following:

eBay fees (only apply to eBay store sales):

Insertion fee of $.35 per item, plus Final Fee at 5.25% of total sale price on each sale

PayPal fees (apply to all sales):

First two months: Standard rate of $0.30 per sale, plus 2.9% of total sale price on each sale

Afterwards: Merchant rate of $0.30 per sale, plus 2.5% of total sale price on each sale*

These fees are very conservative, assuming that each unit sale is one complete sale. It is likely that at least 1/5 of our sales in the heavy sales months will be for multiple shirts, since pregnant couples often know other pregnant couples and buy each other gifts.

We will also be spending marketing dollars to promote our products with eBay's promotion tools. We want to make sure that we have enough money to buy some search placements as well as buying "bolded" listings in the eBay search results. As we sell more items we will adjust the marketing expenses either lower or higher -- depending on what is working for us.

Obtaining the lower merchant rate requires qualifying, both in terms of account in good standing and dollar amount of sales in previous month. Based on our research, we don't expect any problems meeting either of those goals early in our plan.