Purchase this Plan - MS Word, PDF, and Marketing Plan Pro format - Over 70 additional plans included - Automatic financials - Software included Learn More

Home Decorating Fabrics
Marketing Plan

Interior Views LLC

1.0 Executive Summary

2.0 Situation Analysis

2.1 Market Needs

2.2 The Market

Market Analysis

Market Analysis (Pie)

2.2.1 Market Demographics

Market Demographics

2.2.2 Market Trends

Market Analysis (Trends)

2.2.3 Market Growth

Market Analysis (C.A.G.R)

2.2.4 Macroenvironment

2.3 The Company

2.3.1 Mission

2.3.2 Product Offering

2.3.3 Positioning

2.3.4 SWOT Summary

2.3.4.1 Strengths

2.3.4.2 Weaknesses

2.3.4.3 Opportunities

2.3.4.4 Threats

2.3.5 Historical Results

Historical Data

2.4 Competition

2.4.1 Direct Competition

Growth and Share Analysis

Competitive Analysis

Competitor by Growth and Share

2.4.2 Indirect Competition

3.0 Marketing Strategy

4.0 Marketing Mix

5.0 Financials

6.0 Controls

2. Situation Analysis

Interior Views is a retail store heading into its third year of operation. The store has been well received, and marketing is now critical to its continued success and future profitability. The store offers the most extensive selection of in-stock decorator fabrics as well as a resource for special ordered fabrics. The basic market need is to offer a good selection of decorator fabrics at reasonable prices, for the "do-it-yourself" and the "buy-it-yourself" customers, through a personalized retail store that offers excellent service, design assistance, and inspiration for people to redecorate their homes.

Interior Views is providing its customers the opportunity to create a home environment to express who they are. They have the choice to select their fabric and go whatever direction they choose -- to fabric it themselves or have it done for them. They have the opportunity to actively participate in the design, look, and feel of their home. They desire their home to be personal, unique, and tasteful as well as communicate a message about what is important to them. We seek to fulfill the following benefits that we know are important to our customers.

• Selection - A wide choice of current and tasteful decorator fabrics.
• Accessibility - The buyer can walk out of the store with the fabric they need to begin their project.
• Customer Design Services - Employees have a design background to make them a resource for the customer. This enables customers to benefit from suggestions regarding the selection of their fabric and related products in a manner to complement their design choice.
• Competitive Pricing - All products will be competitively priced in comparison to stores in the Portland, Oregon market (best price comparison) and other channels of distribution, such as catalog sales.

We possess good information about our market and know a great deal about the common attributes of our most prized and loyal customers. We will leverage this information to better understand who we serve, their specific needs, and how we can better communicate with them.

Market Analysis
		2006	2007	2008	2009	2010
Potential Customers	Growth						CAGR
Country Club Women	25%	73,500	91,875	114,844	143,555	179,444	25.00%
Boomers in Transition	20%	28,500	34,200	41,040	49,248	59,098	20.00%
Professional Youngsters	18%	23,000	27,140	32,025	37,790	44,592	18.00%
Home Builders	12%	18,000	20,160	22,579	25,288	28,323	12.00%
Total	21.48%	143,000	173,375	210,488	255,881	311,457	21.48%

Market Analysis (Pie)

Click to Enlarge

The profile of the Interior Views customer consists of the following geographic, demographic, psychographic, and behavior factors:

Geographics

• Our immediate geographic market is the Boise area, with a population of 168,300.
• A 50-mile geographic area is in need of our products and services.
• The total targeted area population is estimated at 568,800.

Demographics

• Female.
• Married.
• Have children, but not necessarily at home.
• Have attended college.
• A combined annual income in excess of $50,000.
• Age range of 35 to 55 years, with a median age of 42.
• Owns their home, townhouse and/or condominium valued at over $125,000.
• If they work out of the home, it's by choice in a professional/business setting.
• Belong to one or more business, social and/or athletic organizations, which may include:
  • Downtown Athletic Club.
  • Boise Country Club.
  • Junior League of Boise.
  • American Business Women's Association.

We know the following regarding the profile of the typical resident of Boise:

• 67% have lived in Boise for 7 years or more.
• 23% are between the ages of 35 and 44.
• 40% have completed some college.
• 24% are managers, professionals and/or owners of a business.
• 53% are married.
• 65% have no children living at home.
• 56% own their residence.

Psychographics:

• The appearance of her home is a priority.
• Entertaining and showing her home is important.
• She perceives herself as creative, tasteful and able, but seeks validation and support regarding her decorating ideas and choices.
• She reads one or more of the following magazines:
  • Martha Stewart Living.
  • Country Living.
  • Home.
  • House Beautiful.
  • Country Home.
  • Metropolitan Home.
  • Traditional Homes.
  • Victoria.
  • Architectural Digest.
  • Elle Decor.

Behaviors

• She takes pride in having an active role in decorating their home.
• Her home is a form of communicating "who she is" to others.
• Comparisons within social groups are made on an ongoing basis, but rarely discussed.

Market Demographics
Market Segments	Age	Annual Income	Average Sale	Focus	Characteristic
Country Club Women	35-60	80000	High	Social and High Profile	-
Boomers in Transition	50-60	Varies	High	Time and Security	-
Professional Youngsters	25-35	50000	Moderate	Image and Climbing	-
Home Builders	30-45	60000	High	Image and Security	-

The home textile market, considered to include sheets, towels, draperies, carpets, blankets, and upholstery, accounts for 37% of all textile output. The trade publication "Home Textiles Today" estimates the size of the U.S. home textiles market at the wholesale level, excluding carpets, to be between $6.5 billion to $7 billion annually. The industry is expected to realize a steady increase over the next few years.

The industry is driven by the number of "household formations" which is expected to continue through the first years of the new millennium. This is primarily due to the solid growth in the number of single-parent and non-family households. This growth also comes from baby boomers needing bigger houses to accommodate growing and extended families and, as people get older, they are buying homes rather than renting to realize tax and equity building benefits. Favorable mortgage rates will also enable others to invest in their existing home.

The "do-it-yourself" (DIY) market continues to grow and closely parallels the professional home-improvement market. DIY market growth is attributed to an increased presence of products, the personal satisfaction experienced, and the cost savings customers realize. A portion of the do-it-yourself market is the "buy-it-yourself" (BIY) market. Consumers are buying the product and arranging for someone else to do the fabrication and/or installation. This is more expensive then the do-it-yourself approach, but less costly than buying finished products from other sources. It also provides similar feelings of creativity, pride, and individuality associated with direct creative involvement. This sense of "participation" in home decorating is an important factor for many of these committed customers.

Market Analysis (Trends)

Click to Enlarge

The publication, American Demographics, projected the number of U.S. households will grow by 16% between 1995 and the year 2010, an increase from 98.5 million to 115 million. Of the households comprised of people from 35 to 44 years old, almost half are married couples with children under the age of 18. Based on research by American Demographics, households in the 45 to 65 age range were estimated to grow to 34 million by the year 2000. These households will increase another 32 percent to 45 million in 2010 as baby boomers add to this peak-earning and spending age group. With approximately 46.2% of the nation's 93.3 million dwellings built before 1960, many of these homeowners are also expected to update. These factors contribute to an increased need for home decorator fabrics for window treatment, upholstering, pillows, bedding, and other fabric accessory needs. This demand is expected to be complemented by the growth in the Boise market. The majority of homeowners spend a large percentage of their disposable income on home goods within two years after buying a new house. Therefore, positive trends in new housing activity represents growth and opportunity for home textiles.

One important factor is that married couples in the 35 to 65 age range represent a growth segment and enjoy larger incomes than other family structures. They enjoy the choice to spend their disposable income on life's amenities. They may demonstrate "cocooning" by making their home a more comfortable and attractive haven. They choose to spend resources here rather than on vacations and other discretionary options. This group represents a larger sub-segment of the target market.

Market Analysis (C.A.G.R)

Click to Enlarge

The following trends and issues impact the success of Interior Views.

• National economic health -- The store does better when the country experiences "good times" regardless of its direct impact on the local economy. Sales decrease when the stock market falls. An upbeat State of the Union address correlates with an increase in sales.
• New home construction activity -- More closely related to what is taking place in our local economy, new home construction has a significant impact on sales across all product lines.
• Shifts in design trends -- Major changes in design trends increase sales. The Boise market lags behind metropolitan design trends by 6 to 12 months. This offers a buying advantage for the store, offering a preview of what is coming and how we should adjust our in-stock inventory.

Interior Views is a retail home decorator fabrics and complementary home accessories and services concept. This destination store offers the advantages of providing fabrics specifically designed for home decorator use in fabric widths of 54 inches and greater. Over 900 fabrics are available on the floor at any time with more than 3,000 sample fabrics for custom "cut" orders. Customers see, touch, feel, and take the fabric to their home as they work through their purchase decision.

Judy Wilson, the owner, is the one primarily responsible for marketing activities. This is in addition to her other responsibilities, and she does depend on some outside resources for mailing (Donna at Postal Connection) and some graphic design work. Judy does delegate responsibilities to Julie Hanson to assist with television advertising. Julie and the other staff members are also responsible for at least one special event throughout the year.

Interior Views LLC is a store for discerning, quality-conscious buyers of decorator fabrics and complementary home accessories and furniture. The store celebrates the home through the color and texture of fabric. The experience informs, inspires, and shows people how to transform their home into a unique and personalized expression of themselves. Interior Views seeks to encourage people to imagine what can be, and help make their vision a reality.

Our primary points of differentiation offer these qualities:

• The most extensive access to in-stock, first quality decorator fabrics within 100 miles of our primary geographic market and offered at affordable prices.
• The largest selection of special-order fabrics, with arrangements to have most of those products shipped to the store within 10 days of placing the order.
• Personal assistance from a design-oriented staff that is qualified and capable of meeting the needs of discerning customers with high expectations.
• Complementary product offering, including hard-covering window treatment, hardware, home accessories, made-to-order upholstered furniture, and antiques that are designed, selected, and displayed in a way to emphasize the use of fabric in home design.

Interior Views will qualify for the most attractive retail discount through these suppliers, offering greater profit margins and more competitive pricing for bolt purchases in quantities of 50 to 60 yards, or in half of that yardage with a "cutting fee" that increases cost per yard by an average of 50 cents. The primary product lines will include fabrics from the following textile sources:

• Robert Allen Fabrics
• Fabricut
• Waverly Fabrics
• Spectrum
• Art Mark
• Covington
• P/Kaufmann

Complementary accessories, including fabric trims, drapery hardware, and hard-covering window treatments, are supplied from the following sources:

• Hunter Douglas -- Hard-window coverings.
• Kirsh -- Rods and selected window hardware and accessories.
• Conso -- Trims and Fabric Accessories.
• Petersen-Arne -- Trims and Accessories.
• Graber -- Selected window hardware.
• Grumman -- Threads.

For the person creating a personalized and unique impression of her home, Interior Views is the best local source for selection and price points of the fabric, customer-oriented design services, and a variety of other home accessory and furniture products. Customers will be impressed with, and return for, the great in-stock selection, value-oriented pricing, and excellent customer service. Unlike JoAnn's, Warehouse Fabric, or catalogs, Interior Views is a pleasant and tasteful resource that encourages everyone in the process of decorating their home. Unlike employing an interior decorator, Interior Views allows the individual to participate in their design choices to the extent they choose, and realize greater value for the dollars they invest.

The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing Interior Views.

• Strong relationships with suppliers that offer credit arrangements, flexibility, and response to special product requirements.
• Excellent and stable staff, offering personalized customer service.
• Great retail space that offers flexibility with a positive and attractive atmosphere.
• Strong merchandising and product presentation.
• Good referral relationships with complementary vendors, local realtors, and some designers.
• In-store complementary products through "The Window Seat" and "Antique Bureau" add interest, stability and revenue.
• High customer loyalty among repeat and high-dollar purchase customers.

• Access to capital.
• Cash flow continues to be unpredictable.
• Owners are still climbing the "retail experience curve."
• Location is not in a heavily traveled, traditional retail area.
• Challenges of the seasonality of the business.

• Growing market with a significant percentage of our target market still not knowing we exist.
• Continuing opportunity through strategic alliances for referrals and marketing activities.
• Benefiting from high levels of new home construction.
• Changes in design trends can initiate updating and therefore sales.
• Increasing sales opportunities beyond our "100-mile" target area.
• Internet potential for selling products to other markets.

• Competition from a national store; or a store with greater financing or product resources could enter the market.
• Catalog resources, including Calico Corners and Pottery Barn, are aggressively priced with comparable products.
• Continued price pressure, reducing contribution margins.
• Dramatic changes in design, including fabric colors and styles, creates obsolete or less profitable inventory.

The following tables shows estimated industry revenue as well as estimated market share, expenses and net margin for Interior Views.

Historical Data
Variable		2003	2004	2005
Industry Revenue		$1,305,000	$1,650,000	$2,062,500
Company Market Share		11%	12%	13%
Company Revenue		$143,550	$198,000	$257,813
Industry Variable Costs		$717,750	$750,000	$1,179,750
Company Variable Costs		$78,953	$90,000	$147,505
Industry Gross Contribution Margin		$587,250	$900,000	$882,750
Company Gross Contribution Margin		$64,597	$108,000	$110,308
Marketing Expenses		$1,150	$12,560	$15,920
Company Net Contribution Margin		$63,447	$95,440	$94,388

Competition in the area of decorator fabric comes from three general categories: traditional fabric retail stores, catalog sales, and discounters. The other local fabric retailers are direct competition, but we have seen strong indirect competition from catalog sales and discounters.

Retail Stores
Current local competition includes the following:

• House of Fabrics -- Nationwide recognition and buying power of numerous types of dated fabric with strong product availability. This store has experienced financial difficulty in recent years and has closed several locations throughout the country.


• Warehouse Fabrics -- Locally owned, offering low-cost products with a wide selection of discontinued fabrics and only a limited number of "current" fabrics. This warehouse concept offers marginal customer service with what many "upper end" customers consider to be an "undesirable" shopping environment.


• JoAnn's -- Nationwide chain with strong buying power. They have a broad fabric selection for clothing with a limited number of in-store decorator fabrics available. Their primary target markets are the clothing seamstress, with an increasing emphasis on craft items.


• Interior Designers -- Interior designers make profit off mark up of fabric in addition to their hourly services charges. Their costs per yard are typically higher since they do not benefit from retail or volume discounts. Therefore, their costs to their customer is often two to four times higher than the price per yard from Interior Views.


• Website Providers -- Fabric sales over the Web are limited at this time, and this will be a source of competition for the future to watch. Currently, there is no measurable impact on our market through competitive websites.

Growth and Share
Competitor	Price	Growth Rate	Market Share
House of Fabrics	$80	5%	18%
Warehouse Fabrics	$75	8%	23%
JoAnn's Fabrics	$80	6%	16%
Interior Designers - Combined	$205	12%	25%
Interior Views	$135	25%	29%
Average	$115.00	11.20%	22.20%
Total	$575.00	56.00%	111.00%

Competitive Analysis
	#1	#2	#3	#4	#5	#6
Competitor	House of Fabrics	Warehouse Fabrics	JoAnn's	Interior Designers	Interior Views	Name me
Product and/or Service	House of Fabrics	Warehouse Fabrics	JoAnn's	Interior Designers	Interior Views	Name me
Quality	7	8	6	2	6	0
Selection	6	7	3	1	8	0
Price	5	8	2	2	8	0
Other	0	0	0	0	0	0
Location and Physical Appearance	House of Fabrics	Warehouse Fabrics	JoAnn's	Interior Designers	Interior Views	Name me
Visibility	8	7	8	3	6	0
Convenience Factors	6	6	6	3	8	0
Other	0	0	0	0	0	0
Added Value Factors	House of Fabrics	Warehouse Fabrics	JoAnn's	Interior Designers	Interior Views	Name me
Pre and Post Sales Service	5	4	5	8	9	0
Experience	4	4	4	7	7	0
Expertise	6	5	6	9	8	0
Reputation	2	8	6	8	8	0
Image	3	3	3	6	8	0
Stability	0	0	0	0	0	0
Strategic Alliances	0	0	0	0	0	0
Other	0	0	0	0	0	0
Other Marketing Activities	House of Fabrics	Warehouse Fabrics	JoAnn's	Interior Designers	Interior Views	Name me
Established Sales Channels	6	6	4	3	6	0
Advertising	6	7	4	5	7	0
Post-purchase Support	4	4	8	9	7	0
Incentives	4	5	2	1	8	0
Loyalty Components	6	5	2	1	8	0
Other	0	0	0	0	0	0
Total	78	87	69	68	112	0

Competitor by Growth and Share

Click to Enlarge

Catalog Competitors
An increasing level of competition is anticipated from catalog sales. Recent trends, such as those demonstrated in the well established but evolving catalog Pottery Barn, indicates increased interest in offering decorator fabric, window designs, and other home decorating products through this increasingly popular channel of distribution. Catalog sources do not offer customers the option to see, touch, and have the fabric in their homes. Price is the most significant competitive factor this product source presents. The most aggressive catalog competitor is Calico Corners followed by Pottery Barn and other home-accessory-based providers.

Discounters
Channels of distribution continue to shift in favor of discounters, who account for a significant portion of the growth in the industry. As consumers experience lower levels of disposable income, discounters leverage frequent store promotions to entice frugal, value-oriented consumers. One of the biggest criticism of discounters is their failure to offer a quality service experience and their failure to present inviting displays to promote sales. These discounters, along with specialty store chains, present one of the most severe competitive threats for individually-owned specialty stores. This is partially due to extensive promotional efforts, price advantages, and established relationships with their vendors. One example of these discounters is the "home improvement" chains, such as Home Base. This aggressive retailer has adopted a strategy to include complete decorator departments in their metropolitan stores. Currently existing in the Los Angeles market, this strategy is anticipated to be introduced into the Seattle area and other select metropolitan markets within the year. Although the Boise Home Base store sells basic curtain rod hardware and other hard cover window treatment, there are no known plans at this time for the Boise Home Base store to implement this in the foreseeable future. This will be an important issue to monitor for competitive purposes.

Purchase this Plan - MS Word, PDF, and Marketing Plan Pro format - Over 70 additional plans included - Automatic financials - Software included Learn More

Copyright ©2010 Palo Alto Software Inc. All rights reserved.
Go to Bplans.com