Methods in Business Research Notes Part 1

CHAPTER I BACKGROUND 1.1 Industry Background Fashion is something that helps people to express their personality and to set themselves apart from others. It reflects individuality of a person. The word fashion instantly brings to mind a flash of glamour. Every person desires to look good and feel accepted in a socio-economic culture. Especially, women and teens are fashion conscious. They take fashion as a very important part and try different new looks, styles and textures. The advertising media contributes a lot to the attraction of the people towards new styles and fashion. Fashion is something that is neither stable nor eternal. Fashion is ever changing. Every season comes up with something different and new fashion trends. Clothing stores, boutiques and other fashion houses are the means to present the fashion changes to the people. Boutique is a retail shop which focuses on selling unique, fashionable and specialized clothing, jewelry, etc. Generally, boutiques are considered as a shop selling expensive and unique designs and styles. In past, every small shop was considered a boutique. The word “boutique” is derived from the old French word botica. Around the 1950s, people started to use the word “boutique” for specialized and fashionable store. Generally, boutique is viewed as standardized clothing shop where latest designs and styles are offered to the customers in relatively high prices. The fashion and beauty market is dynamic and highly competitive. Fashion and beauty is constantly being redefined. Therefore, it should be updated with latest trend to provide the customers with what they want. There is a high competition in this industry. Therefore, the boutique business faces a high competition due to the presence of other clothing stores fashionable offerings. It becomes difficult for boutique to maintain its brand to continue to operate in long run. CHAPTER II INTRODUCTION 2.1 Company Background Diva boutique will be a retail shop focused on selling unique and fashionable apparels to its customers. Diva boutique will be a sole proprietorship business. Diva Boutique will be a stop for the people who require branded, fashionable, unique and latest designs cloths. It will be targeting women, providing them with a unique yet stylish collection of apparel and accessories that changes frequently. It will operate in retail clothing industry, especially providing women apparels. It will be a high class boutique which will offer not only the clothing products and other accessories but also offer services like wardrobe consulting, color analysis and complete makeovers. 2.2 Start up Summary Diva Boutique will be started with an initial investment of Rs. 1.5 million out of which 35% will be financed by equity and the remaining 65% will be financed by a bank loan. The bank loan will be a combination of both short term and long term loan. The start-up cost will consists of different types of expenses like purchase of furniture, registration fees, advance rent, decoration expenses and the initial marketing expenses. A summary of the start-up expenses is shown in the annex. 2.3 Location of the Business Diva Boutique will be located at Kumaripati, Lalitpur. The location is based on the economic factors of the area and its market opportunities. Many other retail establishments are present in that area. Most of these are local. The market consists of numerous clothing stores and one or two shopping malls. The area is a home for shopping for the people in Lalitpur. 2.4 Mission Our mission is to offer a comfortable and exceptional shopping environment by providing quality clothing and other accessories at affordable prices and assisting customers to come up with a unique, stylish and fashionable appearance. We focus on helping our customers to come out with a unique and unforgettable outfit within their budget and to help them feel that they a perfect example of style. Our mission is also to provide an excellent shopping experience to our customers. We will enhance customer’s wardrobe by expanding their choices of accessories, coordinating them and making a perfect match for a head to toe makeover. 2.5 Vision To become a leading brand providing unique, stylish and fashionable women clothing, jewelries and other accessories to help women express their personality and develop a feeling of satisfaction in them. Our goal is also to expand our brand throughout the Kathmandu valley. 2.6 Objectives To ensure customer satisfaction through unique and quality products at a competitive prices. To make people aware of new styles, designs and fashion. To hire associates who are enthusiastic, love fashion and have great interpersonal skills. To deal with the customers with honesty and courtesy. To educate customers about how to properly style their purchases. To be a reputed brand and maintain it. To provide a wardrobe consultation service. 2.7 Key success factors The key success factors of Diva Boutique are: Proper care while producing costumes. Proper inventory management i.e. keeping minimum inventory as per past sales trends. Designing dress according to the latest fashion trends. Designing costumes exceeding the customers’ level of expectation Focus on decoration in order to attract the customers to shop in our store CHAPTER III ORGANIZATION AND MANAGEMENT TEAM 3.1 Management Summary Diva Boutique will be a sole proprietorship firm. It will be owned by a single owner. The whole business will be handled by the person as a manager in the starting phase. Additional management personnel will be hired as the business grows in the near future. Ms. Roshani Ghimire, an MBA graduate, with an experience of 3 years in a retail business will be handling the whole business as a manager. As Diva Boutique is a small business, all the employees will be encouraged in the management issues. All the employees in the business will be experienced in the same field. 3.2 Organization Structure Diva Boutique will begin its operation with five positions. They are as follows: Manager Ms. Roshani Ghimire, an MBA graduate, with a 3 years experience in retail business, will hold the position of manager in Diva Boutique. She will be responsible for making all the decision regarding the business activities. Accountant The accountant will be responsible for keeping record of sales, purchases, debtors, creditors, receipts, payments and reporting daily activities. The accountant will be a graduate with finance specialization with at least 3 years’ experience in retail business. Fashion Designer Fashion designer will be responsible for designing the costumes and suggesting a best outfit for the customers. He/she will be also responsible for supervising the back end of the business. This position will be held by a person who has completed fashion designing course and has at least 3 years’ experience in the related field. Sales people Sales people will be responsible for dealing with the customers visiting the shop. They will be responsible for attending the customers at their ease, suggesting them regarding their outfit and help the customers find their desired outfit. They must have sufficient fashion sense. Mostly, teenage girls will be encouraged for this position because they are fashion conscious and are updated throughout. Tailor Tailor will be part of back end of the business. They will be working on getting the costumes ready as desired by the customers. For the people in this position, Diva boutique will contact tailoring training centers. Manager Accountant Fashion designer Sales Person Fig: Organization Structure of Diva Boutique Tailor CHAPTER IV PRODUCTS AND SERVICES 4.1 Products and Services offered Diva’s Boutique will offer ready to wear clothing products and accessories for women. It will provide customized and specialized products supported by quality materials. It will be committed towards providing its customers with a feeling of self confidence with a great outfit. It will provide its customers with unique and standardized collection of costumes and accessories. Diva Boutique will offer following product categories for women: Casual Wears This product category includes normal wears. It includes products like tops, pants, normal wear kurtas and sarees. Formal Wears This product category includes party wears kurtas, sarees, formal tops and pants, special occasion dress like wedding dresses, cultural dresses and other. Other accessories Other accessories include jewelries. Diva also offers the jewelries that match the outfit selected by the customers. Jewelries and other accessories include necklace, ear rings, purses, nail polish, makeup kits, etc. Diva Boutique will not only provide its customers with the products they are in search for but it will also offer services like wardrobe consulting, color analysis and entire makeover. It will help customers find their desired outfit and also suggest them about the costumes and accessories that will look best on them. Diva Boutique will be focused on giving the best shopping experience to its customers and creating a feeling in them that they look the best. It will also educate its customers regarding the latest fashion and styles and how to style their purchases. The costumes will go through a production process including designing, pattern making/cutting, stitching and finishing. And finally, the costume will be presented to the customer. 4.2 Competitive comparison Fashion changes in no time. With this, the preferences of the customers change. This rapid change in the fashion has created a competitive environment in the market. A business which cannot change with time and meet the changing customer need has seldom survived in the market. Therefore, fashion trend is the main competitive factor. Other retail clothing stores present in the market are the main competitors of boutique business. Sales of the fashionable costumes in comparatively low price have created a tough competition for Diva Boutique. The presence of numerous retail stores has made it necessary for boutiques to adopt competitive strategies and establish themselves as a specialist in the clothing industry. Diva Boutique will be setting high end prices to reflect the quality and exclusiveness of the products. Costumes designed with the better quality materials and making the customers realizing the worthiness of the price paid for the costumes will be our focal objective. 4.3 Future Services Diva Boutique’s long-term goal is to establish itself as a leading brand providing unique and stylish products. Diva boutique will open its stores at different locations in the coming future. In addition, as the boutique grows, it will diversify its business and also target additional segments. Diva boutique will also be continually researching to identify potential opportunities for future sales. CHAPTER V MARKETS AND COMPETITION 5.1 Market Segmentation and target market Diva Boutique has segmented its market on the basis of demographic, psychographic and behavioral aspects. Demographic aspects The demographic aspects of the customers of Diva Boutique are as follows: i. Residing in Lalitpur district. ii. 16-35 year old female iii. High school/college student or young professional iv. Income greater than or equal to Rs. 50,000 Psychographic aspects The psychographic aspects of the customers of Diva Boutique are as follows: i. Highly social ii. Finding excitement in trying new looks and styles iii. Reading fashion magazines like Naari, Vivacity, etc. iv. Appearing in fashion events frequently. Behavioral aspects Diva boutique has based its behavioral segmentation on the buying pattern of the customers. They are: i. ii. Keeping updated with latest trends Seeking for unique yet versatile pieces iii. Shopping rarely but looking for a high price and high quality products. iv. Spending minimum Rs. 10,000 on a costume. 5.2 Market Needs Diva Boutique is located at Kumaripati, Lalitpur which is a shopping centered area. It is the place where most of the people residing in Lalitpur go for shopping. Numerous retail clothing stores are present in this area. Besides this, it does not have a boutique. The people in Lalitpur tend to go to Koupondole or New Road in search for unique and stylish costumes. Time is precious. People go for the option where they can get their desired costumes in less time. The people residing in Lalitpur find it difficult to travel a long distance to buy the products. Diva Boutique can save the customers’ time. Therefore, Diva Boutique has identified the market need of the location. 5.3 Market Trend Fashion market is one of the trendy markets. Fashion keeps on changing. This trend has increased the number of retail clothing stores, boutiques, lounges, etc. in the market. It has increased the level of competition in the market. People often desire low price costumes. There are less number of people who go for a high quality product paying higher price. Therefore, it creates a threat for the boutique business. 5.4 Competitors Increasing number of retail clothing outlets, boutiques and lounges will give a high level of competition for Diva. The retail outlets in Kumaripati are the main competitors of Diva. They sell their products in comparatively low price than the boutiques. Therefore, the customers preferring lower price goods are attracted to those retail stores. They have been using several pricing and promotional strategies in order to face competition. Diva boutique can also face competition from numerous boutiques established in the nearby area i.e. Koupondole. Some of these boutiques are: Chahat Boutique, Odhni Boutique and Smile Wear Boutique. CHAPTER VI BUSINESS ENVIRONMENT ANALYSIS 6.1 SWOT ANALYSIS 6.1.1 Strengths Strong management can help to reach its potential by utilizing strengths and eliminating weaknesses Customers typically rebel against price increases by switching to competing products, but if a company has pricing power, customers will continue using products and services. Diva has the ability to charge customers higher prices Unique products help distinguish from competitors. Diva can charge higher prices for their products, because consumers can’t get those products elsewhere Specialized, aspirational, specialized designs A strong supply chain helps to obtain the right resources from suppliers and delivery the right product to customers in a timely manner 6.1.2 Weaknesses An inefficient work environment Weak cost structure i.e. high cost of production Small product range 6.1.3 Opportunities Greater innovation can help to produce unique products and services that meet customer’s needs Increase product range Additional market segments Use innovative printing methods New services help to better meet their customer’s needs. These services can expand business and diversify their customer base New technology helps to better meet their customer’s needs with new and improved products and services. Technology also builds competitive barriers against rivals 6.1.4 Threats Intense completion can lower profits, because competitors can entice consumers away with superior products Competition from other boutique brands Consumers can change their tastes very quickly. It depends on knowing which goods and services consumers want. Economic recession 6.2 PEST ANALYSIS 6.2.1 Political and legal environment Political and legal environment has a great effect in any business . Political instabilities can hamper the production and sales of Diva Boutique. It will lead to high cost of production. The costumes ordered by the customers should be prepared in time which will require high cost of labor. Ultimately, it leads to increase in the cost of production. 6.2.2 Economic environment Various economic factors like inflation rate, economic growth, economic stability, etc. does affect our business. The increase in inflation rate will increase our cost of materials. Economic growth increases the per capita income which results in the increasing buying power of the customers. It can increase the revenue of Diva Boutique. 6.2.3 Socio-cultural environment Socio-cultural factors that affect Diva Boutique’s business are change in the taste and preferences of the customers, consumer behavior, religion and culture, etc. These factors affect the ranges of products to be delivered by Diva Boutique. 6.2.4 Technological environment Technological advances have a great impact on Diva Boutique’s business. Many machines are developed in order to make the tailoring work easy and fast. Thus, Diva boutique will adopt these advancements in order to save both the time and money.