TABLE OF CONTENTS
EXECUTIVE
SUMMARY…….……………………………………………………………………...2
PART 1
1. PRODUCT
CLASS....................................................................................................................3
2. STORE
DESCRIPTION............................................................................................................3
3. TARGET
MARKET..................................................................................................................7
4. EXPECTED COMPETITIVE
ENVIRONMENT.....................................................................8
5. COMPANY
GOALS.................................................................................................................8
6. STORE
NAME..........................................................................................................................9
7. POSITIONING......................................................................................................................
....9
8. SERVICES.............................................................................................................................
...10
PART 2
1. POTENTIAL
CITIES...............................................................................................................10
2. SITE
ANALYSIS.....................................................................................................................13
3. ESTIMATE OF FIRST YEAR
SALES...................................................................................14
PART 3
1. EXTERIOR
DESIGN...............................................................................................................14
2. INTERIOR
DESIGN................................................................................................................15
3. ESTIMATE
COSTS.................................................................................................................16
PART 4
1. ADVERTISING AND PROMOTION
BUDGET....................................................................18
2. MEDIA
OPTIONS....................................................................................................................18
3. PROMOTION........................................................................................................................
...21
Executive Summary
Mission: To enhance and encourage the active lifestyles of Fleet Feet’s customers through highend, quality footwear and athletic gear and apparel inspired by the continuous innovation of
athletic wear worldwide
2
Initial Development: Fleet Feet is an athletic shoe store that sells walking, running,
cheerleading, basketball, and hiking shoes. Customers of Fleet Feet will be people who value
being active and outdoors, as well as being comfortable and keeping up with the latest trends. As
an athletic shoe store, Fleet Feet will have a number of competitors in the market, but the
products and services offered by Fleet Feet will be of higher quality. Some special services
offered by Fleet Feet include skilled and knowledgeable employees who can assist customers on
finding the perfect shoe, shoe customization, and embroidery.
Market Area and Store Location: Fleet Feet will be located in the Cumberland Mall in Atlanta,
Georgia. With Atlanta boasting a higher population, higher population growth rate, and higher
median household income than Miami, Florida, which falls into the range for the target market
for Fleet Feet, it may be the best option for the store location. Also, the index of retail saturation
and total sales potential for Atlanta are higher than those of Miami. Atlanta is also the home of a
few major sports teams like the Atlanta Falcons, Atlanta Braves, and the Atlanta Hawks. Taking
all of these aspects into consideration, Atlanta seems like the perfect location for Fleet Feet.
Designing the Store: The design of the Fleet Feet store will be focused on giving customers the
feeling of being outdoors with the main color scheme consisting of blue. The blue will remind
the customers of the sky or bodies of water. Also, the mannequins in the front window will be
dressed in Atlanta sports team attire for the specific season’s sports (baseball, football,
basketball). The shoes will be placed strategically in the store to catch the eyes of the customers.
Also, the shoes will be separated in the store by type, making it easier for the customers to locate
exactly what they are seeking to find. The floors will be shiny hardwood that will resemble a
gymnasium floor.
Advertising: Fleet Feet will use media such as newspapers, coupons, and flyers to advertise to
the public. Also, Fleet Feet will have a Facebook page, Twitter account, and Instagram account
in order to be a part of the Omni channel trend and reach younger audiences. The advertising
budget for Fleet Feet will be approximately $46,000.
3
PART ONE - Initial Development
The NAICS Code for Fleet Feet is 448210. A NAICS code of 448210 is described as an
athletic shoe store that does not sell bowling, golf, spiked shoes. Fleet Feet is planning to sell
athletic shoes such as hiking, basketball, cheerleading, running, and walking shoes. Fleet Feet
also plans to sell energy drinks at the registers.
Variety/Assortment
Fleet Feet will offer athletic shoes ranging from running shoes to walking shoes.
It will also offer shoes for high school athletes, like basketball and cheerleading shoes. Fleet Feet
will partner with local high schools so that student athletes can buy the correct shoes for the sport
they are participating. Fleet Feet will offer walking shoes, running shoes, hiking shoes,
cheerleading shoes, and basketball shoes. Energy drinks like NOS, Monster, Red Bull and 5
Hour Energy will be available at the register. Fleet Feet will have a variety of four types of
products and will have differing assortments with each type of variety. For example, the
assortment for shoes will be 6 because 6 different brands of shoes will be carried. Most shoes
will be available for men, women and children around the age of 12 and older. Three different
types of energy drinks are also offered. In each assortment, Fleet Feet will offer Adidas, Nike,
Puma, ASICS, New Balance, and Reebok. Fleet Feet’s main competitors are Finish Line, Foot
Locker, and Champs. Even though they offer similar products to Fleet Feet, they do not offer
energy drinks or shoe customization. They also do not partner with local high schools to provide
the correct shoes for the student athletes. The variety is narrow because Fleet Feet only offers
shoes and a few shoe accessories. Since Fleet Feet offers many different types of shoes,
assortment will be deep.
4
Product information was taken from each store’s online website. Champs1, Foot Locker2, Finish
Line3.
1
"My Champs Sports." Athletic Shoes. N.p., n.d. Web. 16 Nov. 2014.
<http://www.champssports.com/>.
“Foot Locker.” Athletic Shoes. N.p., n.d. Web. 16 Nov. 2014. <http://www.footlocker.com/>.
“EVERYDAY SPORT. IT'S HOW WE ROLL." Finish Line: Athletic Shoes & Gear. N.p., n.d. Web. 16
Nov. 2014. <http://www.finishline.com/>.
2
3
5
Margin/Turnover
The shoe industry turnover is 1.63 with a gross margin of 60.5%4. Foot locker’s turnover
is 3.66 and the gross margin is 32.79%5. Finish Line’s turnover is 4.10 and the gross margin is
32.77%6. Fleet Feet’s turnover is 3.25 with a gross margin of 32.00%
4
Hoovers. Shoes Stores. Financials. Retrieved November 12, 2014, from
http://subscriber.hoovers.com.libez.lib.georgiasouthern.edu/H/industry360/financials.html?industryId=15
20
5
"Foot Locker Inc." Growth, Profitability, and Financial Ratios for (FL) from Morningstar.com.
N.p., n.d. Web. 16 Nov. 2014. <http://financials.morningstar.com/ratios/r.html?t=FL>.
6
"Finish Line Inc." Growth, Profitability, and Financial Ratios for (FINL) from
Morningstar.com. <http://financials.morningstar.com/ratios/r.html?t=FINL>. Web. 16 Nov.
2014.
6
Price/Service
Fleet Feet offers services that other competing shoe stores do not offer, this is why it is
positioned higher than them. Because Fleet Feet always has a “shoe coach” available on the floor
to assist customers in picking out the perfect fitting shoe, the amount of service offered is
greater. Also, Fleet Feet has an upper hand when it comes to shoe customization due to the
option of getting shoes embroidered. Because of these added services, Fleet Feet can charge a
slightly higher price than many of its competitors.
Store Image
Prices will be from moderate to high because of the name brand shoes that will be sold
like Nike and ASICS. The average price for a pair of shoes will be between $55-$80, depending
on the brand and type of shoe. Fleet Feet will offer a variety of athletic shoes, as previously
mentioned. Shoes for high school athletes will be offered as well. Twelve employees and two
managers will work in the store. Six employees will be working one shift and the other six will
work the other shift. The store will be small due to its location in a mall. The sign will be large
7
and lit up because it attracts the eyes of customers. The people who will shop at Fleet Feet are
athletes and people who like to work out. The store will be well lit and small. The music will be
a playlist of today’s pop music. The inside of the store will somewhat resemble a school
gymnasium, with shiny hardwood flooring and the walls will be shades of blue. The store image
will be designed to attract the younger population with the music, while still catering to the older
population with the classic gymnasium look.
Target Customer Base
The business’ customers will be an equal mix of males and females ranging from 12-50
years of age. Most of the customer base will be part of the middle to upper-middle class, with
household earnings between $45,000-$100,000. The store will be located in a city. The
customers will live either in the city or on the outskirts of the city. The target customers are
people who value the outdoors, comfort, and health and fitness. Many of the customers’ hobbies
include both sports and physical activities. The customer base is also interested in fashion,
trends, and name brand merchandise. Benefits sought by the customers are high-quality, durable,
and reliable shoes. They also seek friendly interactions with knowledgeable associates who can
help them pick out the perfect shoe for their type of activity.
The reason that this market was chosen is because many 12-50 year olds take part in
sports through school and college. Many children in school are part of the football, softball, or
track team and are interested in buying athletic shoes. Also, college students and young adults,
ages 18-50 are becoming more and more concerned with their health and physique. This
information is supported by the CDC, in which statistics show that adults ages 18-44 are the
most physically active out of all ages7. Athletic shoes are a very important accessory for playing
sports or exercising. Also, people who live in the city will likely have a higher income than those
who live in a rural area and will probably be more apt to pay higher prices for high quality
merchandise.
The target market’s basic shopping motivation is to buy a pair of high quality,
comfortable, name brand athletic shoes in which their value exceeds their expense. The
customers get value from the actual shoes they purchase, as well as the service they receive from
7
CDC: Vital and Health Statistics. (2013, May). Health Behaviors of Adults: United States, 2008-2010.
pg.45-46. Retrieved October 12, 2014, from http://www.cdc.gov/nchs/data/series/sr_10/sr10_257.pdf
8
friendly and knowledgeable store associates. The store associates will be very knowledgeable on
the kind of shoes work best for different activities. They will be called “shoe coaches.” The store
will also have a return policy in which returns will be accepted on shoes that do not perform the
way they should. For example, if a customer purchases a pair of shoes from Fleet Feet and finds
that the shoes are causing discomfort due to ill fit, they can be returned or exchanged for a new
pair of shoes that will be better suited for their foot shape. This will help reinforce the fact that
the shoes carried in the store are expected to perform well and are of high-quality.
Expected Competitive Environment
Fleet Feet’s competition will be stretched across the board. They will have both inter and
intra type competition. The biggest competition will be Champs because Fleet Feet and Champs
both sell the biggest brands and are very similar with store layout and customer service. Fleet
Feet will be located in Atlanta, Georgia so there will be plenty of competition. Fleet Feet will
have to compete with Champs, Foot Locker, and Finish Line along with intertype competition
stores such as Rack Room Shoes, Shoe Carnival, Payless, and discount stores. Rack Room Shoes
sell some of the brands carried by Fleet Feet at a lower cost and always run a BOGO sale. Rack
Room Shoes offers lower quality Nike shoes. That is why they are able to offer a BOGO sale.
Fleet Feet will offer higher quality Nike shoes. Shoe Carnival and Payless also run sales just like
Rack Rooms. While Rack Room Shoes, Shoe Carnival, and Payless tend to have lower prices,
they do not specialize in athletic shoes like Fleet Feet does. Fleet Feet has an upper hand when it
comes to knowledge, service, and variety of athletic shoes.
Fleet Feet Goals
Mission:
“To enhance and encourage the active lifestyles of Fleet Feet’s customers through high- end,
quality footwear and athletic gear and apparel inspired by the continuous innovation of athletic
wear worldwide”
■ Aggressively pursue a strong brand image in promising business segments
■ Position Fleet Feet as one of the top high- end retailers of athletic gear
■ Seek brand growth opportunities and expansion, both domestically and globally
9
■ Build strong relationships with suppliers and manufacturers
■ Increase the productivity of the assets of Fleet Feet
■ Deliver sustainable products and methods to reduce the carbon footprint
■ Continuously seek product enhancements and innovations
■ Increase the loyal customer base of Fleet Feet
■ Create an upbeat, clean environment for customers
■ Give back and support the communities surrounding Fleet Feet through
fundraisers, sponsored community programs, and generous donations
Store Name
The name of the athletic shoe store will be Fleet Feet. The word Fleet means “swift in
motion.”8 This reflects the target market because with most sports and physical activities, it is
important to be quick and agile. For example, in baseball, the players are expected to run to bases
swiftly. Another example is track, where the athlete must run the track in the shortest amount of
time to win the competition.
The name of the store corresponds with the image of the store. The main product sold in
the store is athletic shoes. The store will have shoes lining the walls, which will relate back to the
word “feet” in the name of the business. Also, as stated earlier, the music that will be played in
the store will be current, upbeat music that will relate to the word “fleet” in the name, due to the
fast beat of the music.
Positioning
8
Merriam-Webster Dictionary. Fleet. Retrieved October 17, 2014, from http://www.merriamwebster.com/dictionary/fleet
10
Services
The expected services offered by Fleet Feet are friendly customer service, acceptance of
exchanges and returns, layaway option on purchases greater than $100, store credit card, and gift
cards. The store hours will be Monday through Saturday from 9:00 am to 10:00 pm and Sundays
from 12:00 pm to 6:00 pm.
Augmented services offered by Fleet Feet will be free site to store shipping, shipping to
home, embroidery options, a mobile app to help customers shop more efficiently, a loyalty
program, and shoe customization. The loyalty program will reward customers who shop at the
store at least 2 times a year by sending emails with coupons and notifications of when sales are
happening. Also, when a customer pays to get their shoes embroidered, they receive a free pair
of shoelaces or socks. There will always be at least one employee on the floor, known as a “shoe
11
coach”, that will be an expert on shoe fittings and pairing the correct type of shoe with specific
types of physical activities. Other store associates will also be situated around the store in order
to be available to help customers with questions.
PART TWO - Market Area and Store Location
Potential Locations
Miami, Florida is a possible location for Fleet Feet. Miami has a population of 417,650
people with 20.8% being under 18 years old and around 65% being in the age range of 19-64
years old6. The median age for Miami residents is 39.2 years old. The percent of unemployed
persons over the age of 16 in Miami is 7.1%, with 55.7% persons employed, 37.1% not in the
labor force, and 0.1% in the armed forces6. The median household income in Miami, Florida is
$29,762, which falls below the target market range for Fleet Feet6. The per capita money income
for Miami, Florida was $20,8866. The retail sales (2007) in Miami were $5,622,524,000 with
retail sales per capita equaling $13,2406. The three most dominant industries in Miami are
educational services, healthcare, and retail trade6. The job growth in Miami is 3.0%, which
exceeds the national growth rate of 1.9%910. The population has also grown in Miami from
399,508 in 2010 to 417,650 in 2013. That is a population growth of 4.5%6.
All of the job and population growth in Miami, Florida may indicate that it is a prime
spot to put a Fleet Feet store. The age range of the people who reside in Miami fit the
demographics that Fleet Feet is targeting, while the income level is lower than the target market
range. With the growth in Miami also comes more competition. The target market for Fleet Feet
includes people who like being outdoors and active. With Miami being on the coast, many of its
population will fit in that category. Many people move to Miami to enjoy the beach and
outdoors, so this location may be perfect.
A total of 417 NAICS 448210 stores exist in Miami, Florida11. The index of retail
saturation for shoes stores (NAICS 448210) in Miami, Florida is $872,459 per store. The total
9
U.S. Census Bureau. (2014, July 8). State & City Quickfacts: Miami, Florida. Retrieved October 28,
2014, from http://quickfacts.census.gov/qfd/states/12/1245000.html
10
Bureau of Labor Statistics. (July 31, 2014). Miami Area Employment-June 2014. Retrieved October
30, 2014. http://www.bls.gov/regions/southeast/news-release/AreaEmployment_Miami.htm
11
U.S. Census Bureau, 2007 Economic Census. Retail Trade: Miami, Florida. Retrieved October 28,
2014, from
12
potential retail sales for stores similar to Fleet Feet are around $15,454,244. The information
used to calculate these two numbers were taken from the 2007 Retail Trade Census.
The second possible location for Fleet Feet is Atlanta, Georgia. In 2013 the estimated
Population was 447,841 with 19.4% persons under the age of 18 years old12. Around 64% of the
population range from 19-64 years old8. The median age for both male and female is 32.9 years
old. The median age for just males is 32.6 and for females are 33.18. The median household
income from 2008-2012 was $46,146, which falls in the target market for Fleet Feet8. The retail
per capita sales from 2007 was $10,767 and the retail sales ($1000) from 2007 were 5,594,1268.
The total number of NAICS 448210 stores in Atlanta, Georgia is 15013. The Index of
Retail Saturation (IRS) for shoe stores in Atlanta, Georgia is $1,215,000 per store. The
information to calculate this number was taken from the 2007 Retail Trade Census. The total
sales potential for Atlanta, Georgia is $82,921,469.
With Atlanta boasting a higher population, higher population growth rate, and higher
median household income, which falls into the range for the target market for Fleet Feet, it may
be the best option for the store location. Also, the index of retail saturation and total sales
potential for Atlanta are higher than that of Miami. This indicates that it may be more plausible
to make a higher profit in Atlanta than in Miami.
INDEX OF RETAIL SATURATION (IRS) - Worksheet
Area 1: Miami, Florida
http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_44A1
&prodType=table
12
U.S. Census Bureau. (2014, July 8). State & City Quickfacts: Atlanta, Georgia. Retrieved October 30,
2014, from http://quickfacts.census.gov/qfd/states/13/1304000.html.
13
U.S. Census Bureau. (2014, July 8). 2007 Economic Census. Retail Trade: Fulton County, Georgia.
Retrieved October 30, 2014.
http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_44A1
&prodType=table
13
Area 2: Atlanta, Georgia
Sales area 1
$96,843,0000
Number of stores in area 1
IRS = $872,459
111
Sales area 2
$182,250,000
Number of stores in area 2
IRS = $1,215,000
150
TOTAL SALES POTENTIAL - Worksheet
TOTAL
City
Name
County
Name
County
Sales SIC
City
County
SALES
Populatio
Population
POTENTIA
n
Miami
Miami-Dade
$459,895,000
(*)417,650
L
÷ 2,617,176
(=)
$73,390,229
Atlanta
Fulton
$182,250,000
(*)447,841
÷ 984,293
(=)
$82,921,469
Miami Numbers7
Atlanta Numbers9
14
Site Analysis:
Based on the highest results total from the multi-attribute model, the best choice is having
Fleet Feet in the mall. The mall offers high traffic and low building cost. Parking will be
provided in a parking lot. Expansion is possible in a mall but not as easily as in other location
types. Fleet Feet could move their location to a large section in the mall if needed. The mall that
Fleet Feet will be in will be in a high area population and a high income area.
15
First Year Sales
The city of choice for Fleet Feet is Atlanta because the total sales potential reveals a more
favorable outcome than the Miami location due to several factors, including the median
household income and index of retail saturation of both areas.
If Fleet Feet were to enter into the Atlanta-Fulton County market, then its first year
budgeted sales would total $1,215,338 given that the starting inventory cost would be about
$254,215 with a markup of about 32%, and an inventory turnover rate of 3.25. This will yield
budgeted sales of about $1,215,338 in the first year.
First Year Budgeted Sales Worksheet
Inventory Costs=IRS (1-margin)/turnover
Inventory Costs= $1,215,000(1-.32)/3.25=$254,215
First Year Budgeted Sales= inventory x markup x turnover
First Year Budgeted Sales= $254,215 x 1.471(32% markup) x3.25= $1,215,338
PART THREE - Designing the Store
Exterior Design
Fleet Feet will be located in a mall, so only the storefront needs a design. It will have
large glass windows so that mall shoppers will be able to see the merchandise when walking by
the store. Two mannequins on either side of the doorway, making four total, will be dressed in
the current season’s athletic local team gear, such as football in the fall, baseball in the spring,
etc. The shoes on the mannequin will be the focal point, so the mannequins will have a foot
propped up on a ledge. The shoes that the mannequins will wear will be highlighted by lights
strategically placed to shine on them.
Signs on the windows will promote the store’s current sales, new merchandise, and
special promotions. The sign for Fleet Feet will look like the one on the following page. A large,
lit sign, like the one on the following page, will be above the doorway to the store.
16
The following is a drawing of how the storefront will be set up, architectural aspects, and the
colors of the exterior of the store.
Colors of Exterior:
The design of the front of the store is appropriate for the Fleet Feet target market because
it focuses on athletics. Most of the prospective customers will be interested in athletics, sports,
and sport teams. The Fleet Feet logo is also appropriate because it emphasizes speed and agility
with the lightning bolt. The blue colors that will be on the exterior of the store will remind the
customers of the outdoors, like the sky or a body of water. All of these things are related to Fleet
Feet’s target customers.
II.
Interior Design
Atmosphere
Fleet Feet will have dark blue walls similar to the logo. The floors will be made of
hardwood that will be kept clean and shiny, similar to a gymnasium floor. The store will be well
17
lit. The newest shoes will have spotlights on them, so that they will be the most noticeable. The
music is going to be a hit list of today’s pop music and sounds of nature. The aroma will be a
nature scent, like pine, to remind customers of the outdoors.
Layout, Space Allocation, and Product Location
The layout for the interior of Fleet Feet, as illustrated above, will be streamlined, making
it easy for customers to locate the shoes they want. The walls are similar to the dark blue color of
the logo. The yellow circles represent the lighting. The store will be well lit, especially around
the newest shoes. As stated earlier, the energy drinks will be sold next to the cash registers. A
selection of different shoelaces and socks will also be available near the cash registers. Running
shoes, walking shoes, basketball shoes, cheerleading shoes, and other different types of athletic
shoes will be separated by type. This will make it easier for the customers to shop for the type of
shoe they need. The newest shoes will be in the left side of the store because it will attract the
18
eyes of incoming customers. There will be chairs in various places of the store so people can sit
down and try on shoes. Also, between each section of shoes, there will be large mirrors so that
customers can see what the shoes look like on their feet. There will be 2 iPads set up in the store
where customers can choose shoes to customize with different colors, laces, and embroidery that
can be ordered in the store, and then shipped to the customer.
Estimate Costs
Fleet Feet will be located in Fulton County at Cumberland Mall. Here, they have wellknown merchants such as Macy’s, Sears, and Foot Locker, which will help to draw in business to
the newly established store14. According to research, an average size of a small shoe store is
about 3,000 sq. ft.15. After speaking with ACA Remodeling and Restoration in Statesboro, GA,
the estimated price per square footage for a 3,000 sq. ft. store in a mall would range from about
$90- $100 per sq. ft. Using $95/sq. ft. as the average cost per sq. ft. for building this site, Fleet
Feet will be looking at about $285,000 ($95/ sq. ft. x 3,000 sq. ft.) to add a 3,000 sq. ft. store
onto the mall. The price given was an overall cost for building the store, including associated
variables (Labor, construction, lighting, etc.). To show the breakdown of costs, the Chain Store
Age’s 2012 Store Construction and Outfitting Survey, a survey conducted to track retail building
and construction costs, was used to calculate approximate estimates for Fleet Feet’s vendor and
construction costs. According to Chain Store Age’s 2012 Store Construction and Outfitting
Survey, construction costs on average for a shoe store presented in Figure A were $43.33/ sq. ft.,
which would be a total of $129,990 (Wilson 2012)16. The total construction estimate was
calculated using the “combined average” of a shoe store, referred to as “Big Box” in the chart,
multiplied by 2,000 sq. ft. for the size of Fleet Feet’s store15. The outfitting systems such as,
flooring, lighting, etc. presented in Figure B, would be around $24.98/sq. ft., which would make
a total of $74,94015. The outfitting systems’ total was estimated by adding the averages of each
system in the “Big Box” column, then multiplying that total by 3,000 sq. ft. The rest of the costs
14
General Growth Properties, Inc. "Tenants List: Cumberland Mall."
http://www.ggp.com/properties/tenant-list/cumberland-mall. GGP, n.d.
15
Hoovers. Athletes Foot 21, Atlanta, Georgia. Retrieved November 17, 2014, from
http://subscriber.hoovers.com/H/company360/overview.html?companyId=17314371
16
Wilson, Marianne. "Store Construction." SPECS: Store, Planning, Equipment, Construction and
Facilities Services (2012): 35-40. New Market Advisors. Web.
<http://newmarketadvisors.com/assets/Uploads/ConstructionSurveyCSA2012.pdf>.
19
were allocated to Labor and materials ($95/sq. ft.- ($43.33+$24.98)) to give the total the average
cost estimate to design Fleet Feet of about $95/ sq. ft. or $285,000, as previously stated15.
Figure A. Construction Costs
Figure B. Cost of Store Outfitting
Calculations:
Construction Costs= $43.33 * 3000= $129,990
Outfitting Costs= ($2.61+$0.94+$10.88+$3.22+$0.98+$3.41+$2.06+$0.88) * 3000= $74,940
PART FOUR - Advertising
Advertising and Promotion Budget
The method used to calculate the advertising and promotion budget was the percent of
sales method. According to the previous calculations for NAICS 448210 stores in Atlanta,
20
Georgia, the estimated net sales of Fleet Feet is $1,215,338. According to Hoovers, the industry
average for an advertising budget is 3.8% on the income statement17. The advertising budget for
Fleet Feet will be approximately $46,000, which will be approximately 3.8% of net sales.
Media Options
Fleet Feet has a budget of $46,000. Fleet Feet will allocate these funds into advertising.
Fleet Feet will mail out coupons and flyers closer to the grand opening of the store. Coupons will
be used to help promote upcoming sales and events, introduce new product lines, and build brand
equity by sending potential customers discounts and weekly ads. Using this method of
advertising, Fleet Feet will be looking at about $.039/ record - $.034/ record or about $500$2,000 to purchase the mailing list from about 10,000- 20,000 records of consumers in the
area18. For a book of coupons to reach these ten thousand households, Fleet Feet will spend
$1000-$200019. The use of newspaper ads in the Atlanta Business Chronicle will be used to
reach the older crowds in the area. Following is an example of a newspaper ad that Fleet Feet
will run. To run a black and white, eighth page ad in the newspaper with a colored logo for a
month, four times, Fleet Feet will spend $2,77520 . For the rest of the year, Fleet Feet will run
this newspaper ad sporadically during holiday/seasonal months (i.e. Christmas, Black Friday
summer, etc.) about four times each year. Fleet Feet will use the rest of the funds allocated to
advertising to create an iOS app for the iPhone. To create a basic iOS database app it can cost
around $4,000-$50,00021. Fleet Feet will budget $20,000 for a store app.
17
Hoovers. Shoe Stores. Financials. Retrieved November 1, 2014.
http://subscriber.hoovers.com/H/industry360/financials.html?industryId=1520.
18
"Mailing List Pricing - DirectMail.com." Mailing List Pricing - DirectMail.com. N.p., n.d. Web. 15
Nov. 2014. <http://www.directmail.com/directory/mailing_lists/pricing.aspx>.
19
FitSmallBusiness.com. Coupon Pricing for Small Businesses. Retrieved November 13, 2014,
from http://www.ideatoappster.com/how-much-does-it-cost-to-make-an-app-an-infographic/
20
"Atlanta Business Chronicle." Atlanta Business Chronicle. American City Business Journals, 2014.
Web. 30 Nov. 2014.
<http://www.bakersman.com/projects/acbj_atlanta/pdfs/2014/2014RatesProducts.pdf>.
21
Blue Cloud Solutions. (March 6, 2011) How Much Does It Cost to Develop an App? Retrieved
November 25, 2014. http://www.bluecloudsolutions.com/blog/cost-develop-app/
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The use of the internet, social media, and apps will be heavily utilized to reach majority
of its customers. Fleet Feet will have a Facebook page, Twitter account, and an Instagram to
promote new items and specials, all of which incur no extra costs. Fleet Feet advertisements for
the company and upcoming sales will be placed on Google. The cost is dependent on the number
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of “clicks” the link generates multiplied by the chosen flat fee of $2,000, the price Fleet Feet
chooses to pay to have the link presented above the search engine’s results22 .
In addition, Fleet Feet could hire a company to do the promotions for them, such as
Managed Outsourced Solutions Search Engine Optimization or MOS SEO services that will
perform email marketing of Fleet Feet and its products. The cost for these outsourced services
can range from $200- $4,000, depending on the type of promoting Fleet Feet chooses for the
company to handle23. The total for the above media options will total about $37,100 ($2,000
mailing lists + $2,000 coupon books + ($2,775 ad x 4 months/yr.) + $20,000 IOS app + ($2,000
Google flat fee).
Promotion
Corresponding with the company goals, Fleet Feet will offer summer internship programs
to high school students in the area, as a way to support the youth in the community. Fleet Feet
will also host community events to familiarize people in the area with the company. The cost to
offer two additional positions in the summer for the internship program will be about $2,400,
given that the program will be six weeks paying the interns $8/hr. The cost to host the
community events in the area will vary depending on the budget set by Fleet Feet. Fleet Feet will
place flyers and ads in public schools and universities on bulletin boards in order to reach the
student athlete population. The company could sponsor different clubs, schools, and/or athletes
in the area, depending on the budget. In addition, Fleet Feet can announce to its employees
volunteer opportunities to local events and charities in the area, all of which will be free. During
these events, Fleet Feet’s employees will be wearing company t-shirts and gear, and pass out
pens, sweat bands, etc., which will aid in promoting the business. As people get familiar with the
logo and the company colors by wearing and giving away the promotional items, the community
will know that the company is involved. The employee t- shirts, if purchased from
DesignAShirt.com, will be about $400 if Fleet Feet decides to use screen printing or about $900
if the company decides to use digital printing when getting a regular blue Hanes t-shirt with the
“Ads.” Google for the New Online Advertisers- New Advertiser - Google. N.p., n.d. Web. 13 Nov.
2014. <http://www.google.com/ads/new/>.
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"SEO Services." Search Engine Optimization Company. N.p., n.d. Web. 15 Nov. 2014.
<http://www.viralseoservices.com/seo-services.php>.
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company logo, and purchasing 5 of each size shirt24. The cost to purchase 6,000+ eco stick pens
with the Fleet Feet logo will be $1020 total or $.17/ pen25. Fleet Feet’s total for promotions will
be $4,320 ($2,400 internship program + $900 digital printed shirts + $1,020 logo pens). The
grand total for the amount spent on advertising and promotions will be about $41,420 with
respect to the variable cost of the number of “clicks” the Google ad will generate ($37,100
media option’s total + $4,320 promotion’s total).
“QUICK QUOTE." Need Pricing for Your Custom Shirts? Use Our Quick Quote Calculator. N.p., n.d.
Web. 15 Nov. 2014. <http://www.designashirt.com/QuickQuote.aspx>.
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"The EcoStick." Promotional Pens. N.p., n.d. Web. 15 Nov. 2014. <http://promotionalpens.pensrus.com/PRU-UP920-p-IMPRINTED-STICK.html>.
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