I.

Executive Summary

The name of the business is Clothing Rack by KM, it is a clothing

business that offers affordable trendy clothes and other beauty products. It was

established by Krizia Mae Austria which started online in October 2015 and on

February 18, 2017 she opened her first branch in San Fernando, Pampanga. The

marketing objectives are, to provide quality yet affordable clothes, to increase

loyal customers, to increase sales revenue by 8% until the end of December 2020,

to attain brand awareness level of 45% in Pampanga by December 31, 2020, and

to branch out. To be able to achieve this, the company keeps up with the latest

fashion trends and releases new clothes every quarter. Even though the clothes are

trendy, they still have to keep the clothes unique than their competitors by having

a customized design of clothes. The company also proffer style assessment or

outfit guide in accordance to how the customers want to look like to be provided

by the knowledgeable staff. The recommended pricing strategies are

psychological, promotional and anchor pricing. The company is also

recommended to branch out in populous place like Mexico. Social Media,

Tarpaulin Display, Thematic Windows Display, Photo/Video Marketing with

Influencers, and Fashion Show are recommended advertising strategies for the

brand. The proposed marketing budget is P151, 660 while the Net Income is

P461, 083.

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II. Study Background

A. Brief History of the Company

Krizia Mae Austria loves shopping, dressing up, and styling her

friends. Along with her hobbies, she also wants women to become stylish

without spending too much money. She wants to make women gain

confidence in themselves through the clothes they are wearing. Because of

these, she decided to put up a clothing line business called Clothing Rack

by KM which started online in October 2015. She also has a friend who

owns a production of clothes which also encouraged her in putting up a

business. The amount of capital she used for her online business was only

P25, 000.00. Then, in February 18, 2017, she opened her first branch in

San Fernando, Pampanga then branched out in Guagua and Angeles City

which the stalls are all rented.

B. Mission and Vision

Mission

To sell good quality yet affordable clothing.

To established branches within Pampanga.

Vision

To be known nationwide in selling good quality clothing.

To see every Kapampangan woman wear stylish yet cheap priced clothes.

To make women gain confidence in themselves through the clothes they

are wearing.

C. Product/Service Offerings

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 Clothing Rack by KM offers clothes, bag, head accessories,

jewelries, eyewear, footwear, beauty products and other trendy

women essentials. Their clothes start as low as P90.00.

III. Macro-Environmental Analysis

A. Economic

The business pay their taxes quarterly. Any inflation rate including

the latest increase up to 2.9% in January 2020 does not affect the business.

B. Politico-Legal

The policies and rules that the business needs to follow are almost

the same as the other businesses such as complete government permit, no

using of plastic, and 4 garbage cans for the wastes. The policy that affects

the business the most is the Plastic-Free Ordinance No. 2014-008 that

banned the usage of plastic. In this case, plastic can be a big help to reduce

hassle for the customers because it not easy to break and it is waterproof

but since plastic is non-biodegradable and hazardous, what they did is they

use eco-friendly bags that promotes clean and green environment which

are harmless and can help reduce plastic.

C. Socio-Cultural

In today’s generation, most people use social media in their

everyday lives. One of the things that they do is online shopping. Many

people prefer to shop over the internet that is why many company started

their businesses online. Even though they already opened some branches,

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 they still promote their products through online specifically in Facebook

and Instagram because that is how they gain their customers.

D. Demographic

The business’ target market are women ages 12-50 years old.

Increase in population benefits the business because there will be more

people who will likely to purchase their products. According to the census

2015, the population in San Fernando, Pampanga is 306 659 which almost

50% of these are women. The ages with have the most number of people

are ages between 10-69 years old making the business’ target market

perfect for this location.

E. Technological

The only technology that the business has right now is

smartphones, computers and internet. They use these for the promotion of

the business' products. Where in the usage of social media are being

exploit, because this is where most of the business target customers can

frequently be found.

F. Natural

Whenever natural environment occurs negatively, it affects the

business, this disasters have a significant impact on the economy as well

as in the business in more ways than one. Many effects occurred but one

of the effect is a decline in revenue. For example, when there is a typhoon

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 in the particular area as well as the place where the business is located, the

business closing time depends on how strong or weak the typhoon is.

IV. Opportunities and Threats

Opportunities

One of the opportunities of Clothing Rack is branching out

in towns which have far access from malls. It is also an

opportunity to branch out in places near schools or workplace since

most of the business’ customers are students or professionals.

People prefer quality but cheap priced clothes. The business should

also raise brand profile/ customer awareness through advertising.

Another one is an expansion of product range and clothes’ design.

Threats

The possible threat for Clothing Rack is cheaper products

from other boutiques. There are also too many local competitors in

this industry or new stores nearby. Possible disappearance or delay

of the products from international supplier can also be a threat.

V. Micro-Environmental Analysis

A. The Company

This business only started with a simple hobby of dressing up and

styling. Krizia Mae Austria, the owner, wants women being stylish

without spending too much money. She also wants women to gain

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 confidence through the clothes they are wearing. With this vision, she

started her clothing business through online then after 2 years she have

finally opened a physical store in San Fernando, Pampanga. Clothing Rack

by KM has now 3 branches. The stores have a very pleasing environment.

It is feminine and it gives a Coachella vibes. Staffs are very friendly,

approachable, and hard-working. The business only have 2 people that

helps with the marketing strategies. They have social media accounts for

people to see the updates of the business such as new arrivals, sale and

even inquiries.

B. Supplier

The items that are delivered are both from local and international.

Some of the clothes are from Bangkok and the footwear are from Laguna.

The beauty products are from partnerships with different brands.

C. Marketing Intermediaries

The business doesn’t have any marketing intermediaries.

D. Customers

The customers are mostly students, young professionals and even

mothers. The business make sure that customers are satisfied with the

products sold.

E. Competition

Other entrepreneurs are engaged with clothing business that makes

it hard to sell the products, but with the choice of style, price and the

quality makes the business stand out from other clothing businesses. The

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 weakness of the business is probably the place of the San Fernando branch

because it is not visible for people wherever they pass through the road

and it is also not spacious as the other branches.

F. Publics

The public can affect the sales of the business. The opinions of the

customers are important because it tells if the business should improve it

offers or change something for the sake of the company. Because of the

opinions, the business will know if it gives the satisfaction to the

customer.

VI. Strengths and Weaknesses

Strengths

Clothing Rack offers good quality of clothes with

affordable price. They have a variety of designs which can be mix

and match. Their clothes are both from local and international

which makes every clothes unique. The clothes offered are on

trend that is why they always get their customers’ attention. They

not only offers clothes but also trendy beauty products, bags,

accessories, headdress, and footwear. Clothing Rack promotes

their product via social media accounts which makes their business

known. They also have welcoming staff and environment. They

have 3 branches already which makes the clothes more available to

people in different places.

Weaknesses

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 One of the weaknesses of Clothing Rack is the branch in

San Fernando, Pampanga. It is located at the side of a supermarket

which makes it not visible to people. It is also not spacious as the

other branches. Since some of their beauty products are from brand

partnerships, they don’t really have much control on its pricing.

The prices of the beauty products are more expensive than on the

products in online shops. Even though the prices of their clothes

are already affordable, there are still some stores that offers much

cheaper clothes.

VII. The Market

A. Market Size

Bee One
3%

Juana Be
Pretty
9%

Xiaoo Clothing
35%
Clothing Rack by
KM
20%

Shoeless
33%

The figure shows that Xiaoo has 35% of shares which has the

highest percentage among the others, Shoeless has 33% of shares,

Clothing Rack by KM has 20% of shares, Juana Be Pretty has 9% and Bee
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 One has 3% of shares in the market. The population in San Fernando as of

2015 is 306,659 which the males and females have almost equal

distribution.

B. Market Needs

Quality clothes with affordable price are now being sought

after by people due to their different socioeconomic status and

personal preferences. People also want to wear different clothes

without spending too much money. Now they can buy affordable

trendy clothes starting at P90.00 at Clothing Rack by KM.

C. Market Trends

Over the decades the fashion trends has been changed due

to different styles have appeared. Things have changed, and also

the fashion styles of the todays’ generation. Back then the popular

fashion trends from 90’s was the American-British styles with the

high-waisted miniskirts, plastic chokers etc., associated with the

school girl look and conservative but hot chic looks. Then during

Generation Z, the American-Korean fashion styles appeared. They

wanted chic but elegant fashion looks with the fitted floral dress

and a blaze with some sporty shoes, as wearing comfortable

footwear is also one of the most important elements of the

millennials fashion. This change in the fashion styles helps the

market direction moves in the financial market over time. That's

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 why many people buy outfits in different clothing lines that have

affordable price and trendy designs.

VIII. Marketing Objectives

To provide quality yet affordable clothes

To increase loyal customers

To increase sales revenue by 8% until the end of December 2020

To attain brand awareness level of 45% in Pampanga by December 31,

2020

To branch out

IX. Marketing Strategies

A. Product/Service Strategy

The company aims to provide quality yet affordable clothes and to

increase their loyal customers. They are very committed to bringing

quality clothing to women and the prices will reflect a range of low to mid

pricing. To be able to achieve this, the company keeps up with the latest

fashion trends and releases new clothes every quarter. Even though the

clothes are trendy, they still have to keep the clothes unique than their

competitors by having a customized design of clothes. They use eco bags

for their products as a sign of being an eco-friendly company. The

company also proffer style assessment or outfit guide in accordance to

how the customers want to look like to be provided by the knowledgeable

staff. Focusing on the products’ value and satisfying the customers’ needs

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 creates referral marketing or “word of mouth” marketing. Also keeping a

good relationship and having a trust to the suppliers helps.

1. Target Market

The company’s target market are women ages 12-

50 who are looking for quality but affordable priced

clothes. Most of the customers are students, young

professionals and adults.

2. Brand Positioning

The brand positioning is Symbolic Concept because

the business's target is the self-enhancement of the

customers through their products. The company aims to

boost the customer’s confidence with their looks. Being

confident with how people look also motivates them in

doing their work. The clothes reflect the personality they

have with the style they choose. Clothing Rack focuses on

the value their products offer and the connection formed

with their consumers.

B. Pricing Strategy

➢ Psychological Pricing

This strategy will help to increase the customers. Setting

the prices with odd numbers can appeal to the customers who use

emotional rather than rational responses when it comes to the price

of a product. The psychological pricing make the customers

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 believe that the product is cheaper than its true price. It is a good

pricing strategy to a Clothing Rack because it can make an appeal

to the customers and also they will believe that the price is lower.

This practice is based on the belief that customers do not round up

these prices and they will treat them as lower prices than they

really are. This can be done when the price of a product is set in

less than the whole numbers.

➢ Promotional Pricing

Clothing Rack aims to increase customers and drive more

revenue with this pricing strategy. This pricing strategy carries strong

psychological weight in the value-oriented market. Placing a red or

yellow sales tag on a product causes a good proportion of customers to

perceive that it is cheaper than other boutiques – and that it is

definitely less than the original asking price. The company runs a sale

every quarter especially during the peak season of the year. There will

be more sales and decent profit margin if the price is perceived as

good value.

➢ Anchor Pricing

In relate to promotional pricing, this type of strategy also

helps to increase customers and drive more sales. People love to

compare when valuing products and having an anchor price allows

them to do that. It's a human tendency to perceive a purchase price

like this.

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C. Distribution Strategy

The company aims to attain brand awareness level of 45%

in Pampanga so branching out will be a good strategy for this.

Branching out in places that has a big population like in Mexico is

needed for it will become more known and also there will be less

advertising expense.

D. Advertising and Promotions Strategy

➢ Social Media

Since the company aims to increase customers, they

promote their products through social media. Social media is being

used globally by every individual to connect, to entertain and even

to promote. It is one of the fastest way to market the business'

products because it can reach anyone in social media in a short

amount of time. Starting with creating your own business account

then followed by regularly updating it.

➢ Tarpaulin Display

Since the location of the San Fernando branch of Clothing

Rack is not that visible to the mass, tarpaulin or a poster is needed

to inform people where the boutique is located.

➢ Thematic Windows Display

Changing of mannequins’ clothes along with the theme of

windows display can attract customers. They will be able to see

range of outfits which can be found from the clothes offered. Also,

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 customers are able to see right away the clothes offered by the

boutique. The theme can be by colors or seasons. The theme is

advised to be change at least twice a month.

➢ Photo/Video Marketing with Influencers

The company will send 6 clothes to 10 influencers

(Youtubers, Fashion Bloggers/Vloggers etc.) biannual and upon

sending the clothes, they will be given a month to post a video or

photo about it. Doing these will help the company to be well-

known and build a good reputation in public. It is a good way of

increasing brand awareness, which helps to generate consumer

preference and to foster brand loyalty.

➢ Fashion Show

Staging a fashion show could also help in promotion of the

products. With this strategy, the clothes are able to show off to the

public and it helps increase brand awareness. The venue will be on

Robinsons Starmills Pampanga and will be held annually. Fashion

show will help to let the people see the different styles and designs

that the business offers. Models and influencers can persuade the

public by wearing the products gracefully that can make people

buy the same style for themselves.

X. Tactical Implementation

Tactics Operating Details Timetable

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Train/Teach San Fernando Training undertaken to April 2020

staffs about knowledge in maximize customer service

fashion or clothes by giving fashion advice to

customers.

Produce customized This is to increase May 2020

clothing designs customers by providing

unique and trendy clothes.

Conducting a meeting with

the supplier is a must.

Open a branch in Mexico This is to increase brand August 2020

awareness and take

advantage of the potential

market size in Mexico.

XI. Marketing Budget

Marketing Budget 2020

Tarpaulin Expense P660

Influencers Marketing (worth of clothes) P40, 000

Thematic Windows Display (worth of designs) P6, 000

Fashion Show Expenses includes the following:

Venue – Robinsons Starmills Free

Event Design P20, 000

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Lights and Sounds P5, 000

Professional Fees :

➢ 20 Models P60, 000

➢ 5 Make-up Artists P10, 000

➢ 5 Hairstylists P10, 000 P105, 000

TOTAL: P151, 660

XII. Feedback and Control

Action Plan: Train/Teach San Fernando Timetable: April 2020

staffs about knowledge in fashion or clothes

By the end of April, all the employees should have been trained and

screened. For April 1, the business will inform the employees the start of the

training. April 22, the employees will then have face-to-face contact with

customers to see how they interact. By the end of the month, they should know

the proper etiquette and how to be presentable. Employees by then, should know

how to respect and give the best customer service.

Action Plan: Produce customized clothing designs Timetable: May 2020

The company will set a schedule with the supplier on the first week of

May to talk about the products that are going to be customized. There will be a

meeting for the new trends and styles of clothes. By the end of May, the designs

and styles are already set to be tailored. Lastly, the clothes are expected to be

done at first week of November.

Action Plan: Open a branch in Mexico Timetable: August 2020

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 By the end of September, the business should be able to open a branch.

First, the business should look a place where they can rent a place and expand

their business which is going to be done on August 1-21. On August 22-

September 6 make a plan about how will you construct your business plan. For

September 7- 21 is the start of establishing their store. For September 25 make a

program when you can introduce it finally to your customers. Lastly by the end

day of September you can finally launch your business.

XIII. Financial Projections

Clothing Rack by KM
Statement of Comprehensive Income
For the Year Ended December 31, 2020

Net Sales P 2, 332, 800

Gross Profit P816, 480

Less: Operating Expenses

Selling Expenses P 120 000

Administrative Expenses 84 000

Marketing Expenses 151 660 355, 660

Net Income Before Tax 460 820

Income Tax 46 082

Net Income P 414, 738

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XIV. Documentations

XV. Bibliography

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optimize-your-pricing-strategy

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of-mouth-marketing

Moira, M.(2016). Why use Promotional Pricing?: Black Curve Solutions Limited.

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