Fabrica 5. Marketing & Sales Strategy

5.1 Marketing Objective

Fabrica's objective is to become the world standard sample source for order of woven-pattern fabrics where quality is critical, achieving sample sales equal to 20% of production runs after five years in each market. Specific sales targets are:

Sales value of Fabrica samples, 2001 - 2004 by country

5.2 Marketing plan

5.2.1. Product and service positioning

Fabrica will sell samples primarily on a contract basis since contact costs are too high on a piece-by-plece basis, and most mills will have continuous needs. Fabrica will source and (through a strategic partner) dye any kind of yarn required that is not in our standard range of 500 fiber/weight/color combinations; naturally there will be an additional charge for this service. For stock-yarn orders (or orders where the customer supplies yarn) in countries where we have production centers, we will guarantee sample delivery within three working days of receiving an order.

Key customer benefit

The Fabrica sample service lets you show prospective customers exactly what you will weave for them, at a cost so low there is no need to charge for the sample, and is so fast that no competitor without the service can hope to submit as quickly. Fabrica samples close the deals you need, when you need them.

Features

The outstanding characteristics of Fabrica samples - largely covered in the paragraph above - are

• Exact match of yarn color
• Real fabric texture
• Ultra-quick delivery
• No disruption of manufacturing operations
• Low cost

Target group

Our primary target group will be weaving mills, who are generally the party most interested in securing a fabric order. We will not, however, overlook fabric traders, designers and garment manufacturers, all of whom occasionally want samples either to show their customers, or as reference standards when ordering fabric. These subsidiary groups are unlikely to account for as much as 10% of turnover.

5.2.2. Price

All prices shown in tables are those to average-size contract customers, who will typically be ordering 5 to 20 samples in a batch. Larger customers will receive generous progressive discounts. Discounts to customers will be based on a combination of actual and forecast volume, with greater discounts for quantities in line with forecast, as shown in this example:

Thailand Sample Prices
Discounted according to Contract quantity and actual orders

Thus a customer always enjoys lower prices with rising volume, but must plan and adhere to the contractual amount to get the lowest price for any particular quantity. In each country our pricing is in rough proportion to the cost of labor, with a maximum of $400 for a standard sample (five-color cotton plaid) to small contract customers.

5.2.3. Distribution

Since each sample is a one-off custom order, the normal distribution options do not arise. Fabrica or licensee sales reps will make monthly to weekly calls on customers, but once a contract is signed this will be more to check customer satisfaction than to obtain orders. The customer will normally fax or e-mail a number of sample specifications, and a few days later receive the samples by courier.

5.2.4. Promotion

Our primary means of acquainting the target group with Fabrica will be personal selling. We will support this channel with a budget starting at 13% of net sales in 2000, running strong awareness and image-building campaigns through

1. Advertising

We will run striking and informative ads in trade journals such as, Textile Digest and Textile World, and in all major textile-related directories. We will also run periodic direct-mail campaigns, and - since the Internet cannot be avoided nowadays - maintain a lively web page.

2. Publicity and Public relations

We will join or associate with all possible influential industry associations in each country where we operate, such as (in Thailand) the Thailand Garment Manufacturers Association (TGMA), Union Textile Merchants Association, and Thai Weaving Industry Association, and will contribute to selected activities of these organizations.

3. Trade shows

The majority of our A&P will be devoted to trade shows, which provide the most effective and economical chance for face-to-face communication with large numbers of our target group. Currently planned:

• Garment Fabric Technology, June 2000, Bangkok. This show includes textiles, apparel, and textile machinery. It is the leading show for the textile industry in Southeast Asia.
• ITMA 1999 in France. The largest textile machinery exhibition of all takes place every four years. Here Fabrica will officially present itself to the international market during June 1-10, 1999.
• Leipziger Mode Messe in Germany. This exhibition of all things related to garment production will be held in August 2000. The show includes textile sourcing, Eurotex section, CAD/CAM, etc.
• Interstoff Asia - Spring in Hong Kong, a world-renowned fabric show. It is set not only to be the most comprehensive and diverse textiles event but also to gather new information and source of new products. A whole host of opportunities will arise for business people from all sectors of the industry. Fabrica intends to participate this show in March 2000.
• IFFE - The International Fashion Fabric Exhibition - in the USA. This show is North America's largest global sourcing event where Fabrica aims to present the company's product and services to the North America market during mid-April 2000, at the same time.