Marketing Plan of Archies Greeting Cards

Archies is in the business of manufacturing and selling greeting cards and other social expression products like gifts, posters etc. The company is presently market leader in social expression industry with more than 50% market share. The company has also set up a music division and has been expanding the range of products sold at its outlets.

The greeting card industry in Bangladesh is estimated at Tk 3.5bn with 50% in the organized sector and balance in the unorganized sector. Archies has exploited the opportunity well and has introduced greeting cards for all major Bangladeshi traditional festivals such as Eid, Puza, etc besides the usual Birthday, Anniversary, New Year, Valentine’s Day cards etc. With spread of western culture, increasing urbanization and improving standard of living the industry has got a good fillip.

Archies greatest strength is its retail reach. The company has around 440 retail outlets spread across 120 cities and 6 countries. It opened about 43 outlets in Bangladesh. It opened about 06 new outlets in Bangladesh.The company has aggressive plans for online sales of its products. A subsidiary Archies Online.com has been set up in May 2000 and has launched its website www.archiesonline.com that it plans to use for selling its products. The main proposition of the site will be third party gifting. The company is also in process of opening up Premium Archies Galleries, which will be huge outlets with area of 1000 sq. ft and will have the entire range of Archies products.

Objectives:

Broad objectives-

i)  To prepare a marketing plan on Archies Greeting Card.

Short objectives-

i)       To identify the environmental aspects of the product.

ii)    To identify the marketing strategy.

iii)  To identify promotion campaign plan.

iv)  To identify anticipated competitor’s actions.

v)    To identify the contingency plan.

 Methodology:

i) Data Sources: Both primary data and secondary data collection are used.

ii) Method of collection: The secondary data will be collected from the different journals, magazines, Internet, Archies shops and other sources. The fieldwork for the primary data collection will be conducted by questionnaire survey to consumers and authority or employee of Archies.

Sampling plan:

i) Sample unit– Students, professionals, business executives etc.

ii) Sample size– The report will be prepared from the survey results of 50 respondents.

iii) Sampling technology– To conduct this research, convenience sampling method will be used as a technique for collecting the primary data.

Data analysis And Report Presentation:

Tabulation of data: The data will be tabulated both manually and with the help of computer software.

Analysis and interpretation: The tabulated data will be analyzed and interpreted applying different research techniques.

Report Presentation: After analyzing and interpreting the data the report will be presented including all aspects of findings and results.

Name of the Company:

Doors International Limited

(Sole Agent/ Master Franchisee of Archies Greeting Cards and Gifts Limited.)

Product:

Archies Greeting Cards

Product Code (HS Code): 49.09

Product Categories:

  • Birthday General (BG)
  •  Birthday Relation (BRL)
  •  Birthday Age (BAG)
  •  All About Marriage (ABM)
  •  Anniversary (ANN)
  •  New Born (NB)
  •  General (GEN)

History:

History of the product in the Industry:

Greeting cards have been in the market for a long period of time but the culture of giving greeting card has expanded in years due to introduction of various galleries and card shops of both Archies and Hallmark. If we look into the history of Archies cards in the local market, in 1978-79 there were two traders who unofficially imported Archies cards in India. This type of import trend continued till 1985 with no notable local producers. From 1985 Azad, Ideal and other local manufacturers started producing mainly invitation cards and to some extent greeting cards. With this small number of local producers, unofficial importers of foreign brand were doing business with higher turnover. In 1997 Bridge House Company became the sole distributor of Hallmark in Bangladesh and developed the hallmark stores. In 1998 Archies started its operation with galleries in Bangladesh. With these branded cards the greeting card culture has bloomed.

History of the product in the Firm:

In July 1997 Doors International Received the official authorization for sole distribution of Archies Gifts and Greeting Cards. Greeting cards are the main product of Archies items. The first Archies gallery was opened in July 17, 1998 in Chittagong. In Dhaka the first gallery opened in Panthapath on 1st August 1998. At present there are 43 galleries and card shops operating in Bangladesh and 06 galleries are likely to be opened soon. All the galleries have significant space for greeting cards and these cards are the prominent sales item for all the galleries.

2.0 Situation Analysis:

2.1 Market Summary:

2.1.1 Market Demographics:

Age:

RangeNumber of person
Below 1203
12-1913
20-3021
30-4509
45 and above04
Total50

Income:

RangeNumber of person
0-999903
10000-1999913
20000-2999918
30000-3999912
40000 and above04
Total50

Occupation:

OccupationNumber of person
Student20
Professional08
Homemakers10
Business Executives09
Others03
Total50

Family Life Cycle:

StageNumber of person
Young, single17
Young, married27
Older, married06
Total50

Education:

The survey sample (50) covered the education class, which was defined by the number of people who are grade school goers and above.

Psychographics Descriptors:

The variables used are:

  • Social class: Middle, Upper-Middle, Lower-Upper, Upper-Upper.
  •  Lifestyle: Achievers, Modern.
  •  Personality: Ambitious, Outgoing, Confident.

Purchase Behavior Pattern Descriptions:

The variables used are:

  •  Occasions: Both Regular and Special
  •  Benefits: Quality, Service, Economy
  •  Attitude Toward Product (Greeting Cards): Positive, Enthusiastic
  •  Usage Rate: Light, Medium, Heavy
Frequency per yearNumber of Person
Light (1-10)07
Medium (10-30)19
Heavy (30 and above)24
Total50

2.2 SWOT Analysis:

2.2.1 Strengths:

  •  A large variety in greeting cards for all walks of life
  •  Selected placement/ distribution based on showrooms
  •  Distribution by traders apart from show rooms
  • Wide range of products as extension to greeting cards

2.2.2 Weaknesses:

  •  Disruption in supplies in the recent past
  •  Shops are often not optimally merchandised
  •  No local product source

2.2.3 Opportunities:

  •  The market is  expanding at the rate of 5.2% and only 40% of the overall market is the present market size
  •  As the numbers of brand competitors are very much limited there is a good scope for capturing the market.
  •  Cross-culture impact plays a significant role in increasing the number of occasions and relation in the calendar year.
  •  Manufacturing of the cards locally will lower the cost and ultimately resulting lower price.
  •  Sub-urban market can be tapped.

2.2.4 Threats:

  •  Political instability resulting in disruption of timely supply.
  •  Local production units by Hallmark will be set up this will lower the selling price and create stiffer competition.
  •  Local manufacturers are gradually improving their productions and thus there will be increase in competition.
  •  Economy is stagnant and the standard of living is generally low.

2.3 Competition:

There are two kinds of competitors in market. Those are;

  • Competitor A: Hallmark Cards provide the greetings and its extention products.
  • Competitor B: Azad, Ideal and others local products provide greeting cards and other paper product.

Product Differences:

ArchiesHallmarkAzad/Ideal
Archies is for many walks of life even suburban.More focused to the structured upper stratum of the urban societyFocused to the beginners of greeting culture
Almost every occasion and emotion has been covered by its production.Less variety and concepts in productsLimited variety and poor concepts
Better quality and designBetter quality and designLess quality and design3.0 Market Strategy

3.1 Mission Statement:

 We are putting our level best to ensure that our customers are provided with a retail chain that specializes in “social expression” products. We cater to the needs of the up- as well as the mid-scale segment of society through enhanced quality and range of greeting cards and gift items. We employ the latest the technology in developing new graphics, designs, and prints. We aim at maximizing the value of our stakeholders through continued and concerted efforts. We achieve ambitions in a calculated, responsible way ensuring the company’s health and stability. Our marketing strategies are focused on the rich sub-continental culture and traditions. We offer attractive and competitive prices to our valued customers.

3.2 Goal Statement:

  •  To become undisputed leader in greeting card industry.
  •  To maintain a steady mix of greeting cards with variety and new    design/concepts, at any point of time.
  •  To utilize display and point of sale merchandising in creating buying impulse.
  •  To promote Archies franchise shops as the teenagers and lovers’ haunt.
  •  To offer an environment inside the shops, which makes consumers, feel at home and allured to meandering and impulse buying.

3.3 Marketing Objective:

  •  Maintain position, strong growth each quarter
  •  Achieve steady increase in market share.
  •  Decrease customer acquisition costs.

 3.4 Financial Objective:

  •  Increase the profit margin.
  •  Maintain a significant research and development budget to spur product developments.

Target Market:

 3.5.1 Segmentation Variables:

To find out the market structure the segmentation variable we used are:

  • Geographic: Geographic segmentation calls for dividing the market into different geographical units such as nations, regions, cities, etc.
  • Demographic: Demographic segmentation divides the market into groups based on such variables as age, gender, occupation, education, etc.
  • Psycho graphic: Psycho graphic segmentation divides buyers into different groups based on social class, lifestyle, or personality characteristics.
  • Behavioral: Behavioral segmentation divide the buyers into groups based on their knowledge, attitudes, uses, or responses to a product.

3.5.2 Target Market Components:

The total potential market for greeting cards is 7.2 million people out of which only 2.88 actually purchase the product. Out of this 2.88 million people, Archies commands a total of 0.72 million people, that is, about 25% of the total market.

The target market consists of student, professional, business executives, homemakers and others. The following table shows the estimated total number and the market share percentage that each of the components have a hold on.

Target Market ComponentsEstimated total number (in number)Market share percentage
Student0.28840
Professional0.115216
Business Executives0.129618
Homemakers0.14420
Other0.043206
Total0.72100

3.6 Strategies:

1. Providing large varieties of card to satisfy the need of all types of customers and sentiments.

2. Addressing various occasions in the calendar year to increase the awareness about the greeting cards culture in the local market.

3. Increasing the number of outlets and making them large and spacious so that customers can more options varieties.

Marketing Mix:

3.7.1 People:

In the face of competition and expanding market it is not only essential to assemble the best people to work for the company but provide the employees with various training opportunities to develop better skill. To cope up with the customer’s needs and provide m ore customer satisfaction, employees should be oriented towards the customers. A good working environment and atmosphere reflects and promotes a high level of loyalty and commitment among the employees. It is required to identify the strength and weakness of the employees so that they individual training needs can harness creativity and self-development of its employees. All the parts of the organization has harmony in their activities so that smooth operation can take place

3.7.2 Customer Service:

Customer service is not currently being considered as an important component of the marketing mix by Doors International. Customers’ services should be a part of the marketing mix to cater to the more demanding consumers requiring higher levels of service to place importance on customer service, and to build closer and more enduring relationship with customers (retailers and wholesalers).

Relationship marketing is the first and foremost measure the company should undertake toward a better customer service. The action plans needed to implement the strategy should be:

  •  Focusing on customer retention providing good service quality, trustworthiness, and fair prices.
  •  Placing emphasis on shorter lead time.
  •  Placing emphasis on high customer commitment by offering discounts, special offers, premiums, free information and anything else that customer perceives as having value.
  •  Friendly attitude towards customers.
  •  Generating goodwill by being available to answer all queries from customers.
  •  Communicating with customer when not trying to tell them something-periodic customer surveys are a good way to gauge satisfaction and to find out where the small problems are they have a chance to turn into large problems.
  •  Flexibility-provisions should be made whereby products can be returned by the Galleries, Card Shops, and Wholesalers.

Market Share

Before Doors International and Bridge House Company came into the market as the authorized sole distributor of Archies and Hallmark cards respectively, in the market there were local importers of different foreign brands and some local manufacturers of greeting cards namely, Azad and Ideal. The local importers had high turn over during that time because local manufacturer did not have the same quality card for the customers and as the prices are not fixed they could have charged more and had a good bargain. The following figure shows the market share of Archies, Hallmark, Azad/Ideal and local importers from the year 1997 to the projected year 2003.

4.0 Financials:

Analysis of Financial Data (Forecasted) 

Variable

2002

2003

Industry Sales (Tk.)

5500000

7500000

Company Market Share

25%

27%

Average price per unit

13

13

COGS per unit

9

9

Gross Contribute margin per unit

4

4

Sales Volume

13,75,000

20,25,000

Sales Revenue

1,78,75,000

2,63,25,000

Gross Contribute margin

55,00,000

81,00,000

Variable Overhead (20% of Gross Margin)

11,00,000

16,20,000

Fixed Cost (45% of Gross Margin)

24,75,000

36,45,000

Net Operating Profit

19,25,000

28,35,000

Archies Gallery

Average Price per Unit (Tk.)24
COGS per unit13
Gross Margin per unit11
Variable Overhead (10% of GM)1.1
Fixed Cost (30% of GM)3.3

Net Operating Profit

6.6

Control:

Contingency Plan:

Product:

Customized cards can be introduced by Archies in order to compete with Hallmark in this card category. Providing a wider variety of cards addressing most of the local cultural occasions and relations they can maintain a strong heart share.

Pricing:

If some of the cards are manufactured with local assistance then price will reduce and be competitive.

Placement:

Increasing the number of outlets so that existing market can be reached and propective market can be addressed.

Promotion:

Increasing the promotional activities in the form of point of sales activities as well as sponsoring youth events like concerts, debates and other shows.

Conclusion:

In the report different problem areas of Archies have been identified through analysis of the marketing mix and strategies under taken by the company. A marketing plan consisting of five different strategies have been designed to address these problems including incentive packages to the sales representatives and retailers, image lifting, developing packaging and fragrance and educating the distributors as well as monitoring them. The cost of implementation of each of the strategies in the marketing plan has been provided in a detailed budget for one year, keeping in mind the budget limit of 5 millon  Taka.  Possible responses of the competitors and Archies secondary plan to counter those responses of the competitors are also part of the Plan. By keeping the expenses limited to the budget available, we believe that the recommended changes can enable Archies Greeting Cards to increase its market share significantly by expanding its sales volume.