A.
Marketing Plan
Although grey
imports are easy to be obtained in Hong Kong, there is little price
different between the original products and the grey products
nowadays. Besides, the supply of grey import is not stable and may
take long lead-time for some rare edition. There is also a risk of
getting some fake items from unreliable agents.
There are several
official distributors of Swatch watches in Hong Kong. One supplier
has agreed to give a 28-35% discount on the list price and no
minimum quantity is required. Although there are a number of sources
of grey imports for swatch watches, the prices are not that much
lower and there is a risk of the products being counterfeit.
Moreover, there could be problems with the international warranty.
Therefore, Ziwatches have decided to use official rather than grey
imports.
B.
Sales Strategy
1)
Product Selection
There are
thousands of design for Swatch watches and more than 140 different
styles are created annually. It would be difficult to carry all of
them. ZiWatches will focus on selling Asian editions to N. American
and European markets and selectively listing some hot items. If a
customer has any particular model in mind, ZiWatches can still offer
by request.
2)
Pricing Objectives
Although there is
a prominent growth in the top luxury segment, these items may not
suitable for selling online. Apart from the security reason, it
requires much more cost to run and bears a high risk on credit card
frauds and depreciation on any returned goods. Besides, there is an
imposition of import duties. In United States, the import duties for
luxurious watches (especially the gold watches) are very heavy.
There is actually a different tariff rate for the watch case, the
movement and the strap, basically the actual duty charged is
extremely unpredictable. Moreover the duty varies between different
countries. However, in our experience, items declare less than
US$100 can pass through the customs successfully. Therefore,
ZiWatches determine to define the price range of its product carry
mainly between US$50 to US$200.
ZiWatches is
adopting a medium to low price strategy. With the advancement of
Information technology, people are able to compare prices of the
same product through the Internet before making a purchase. In the
market, most of the competitors are offering prices that are around
5% less than the prices in the official Web site. ZiWatches decided
to do the same in order not to initiate unhealthy competition in the
market. It would periodically offer additional 5%-10% discount for
some selected items for promotion purpose. It also aims to provide
value-added services that make ZiWatches stand out of from its
competitors.
3)
Selling Tactics
ZiWatches
encourages people to join its fans club. It is an interactive
communication and it is also the most direct way to get in touch
with the customers. By viewing the message post by the members,
ZiWatches is able to get some hint on the market trend. The
moderator can also generate some questions to its members, most
people are willing to voice their opinions through Internet (as they
are not being seen). All these information is very valuable for
market analysis and allow ZiWatches to fast react to the dynamic
market.
All people are
welcome to join the ZiWatches Club in free subscription. There are
two types of membership in ZiWatches Club:
Ordinary Member
·
No
entrance requirement, just to sign up
·
Pre-sale
notice
·
Enjoy a
monthly e-newsletter, often with promotions and discounts
·
Can post
in the message board
·
Can
Buy/Sell in the Auction site
VIP Member
·
People
with any purchase in ZiWatches will automatically become a VIP
member unless they opt out.
·
Enjoy an
additional discounts and promotions off for any purchase (including
on-sale items and new arrivals) than ordinary members.
·
Enjoy a
monthly e-newsletter
·
Can post
in the message board
·
Can
Buy/Sell in the Auction site
4)
Just-in-Time Inventory Policy
There are
thousands of design for Swatch watches, the trend and demand is ever
changing in the market. Therefore, it is very risky to stock up the
watches. The supplier has agreed to deliver orders on the same day
with no minimum quantity require. If the item is not in stock, it
will try to deliver within a week. This will help ZiWatches to
execute the just-in-time inventory policy and reduce the risk.
5)
The Sales Terms and Conditions of the supplier are as
follows:
There is no
minimum quantity required but the orders in the first month have to
be paid C.O.D or 100%T/T (money is paid up front 100% by telegraphic
transfer). The discount (28%-35%) will be rebated according to the
sale volume by the end of the month. From second month onwards,
there is a 40-days payment period. If the sales volume up to 50
pieces of watch per month, there is a 30% discount. If it reach to
100 pieces per month, the discount is 32%. If there is more than 300
pieces, 35% discount will be offered. After further negotiation with
the distributor, a maximum 40% discount is available if the sales
volume is more than 1000 pieces of watch per month.
If there is any
defective item, the supplier will replace a new one in the same
model. However, if there is any return item (provide it is in good
condition), the supplier can only offer an exchange of watch in
other model instead of refund.
6)
Return Policy
ZiWatches sell
only brand new watches, and therefore it will not encourage returns.
It will show the watches exactly as they are, with its scanned
images to the customer so that they can choose carefully before
buying. ZiWatches of course is willing to accept returns, in certain
circumstances, but the watch must be unworn and in perfect
condition, and still in it's original packaging.
Therefore, people
order from ZiWatches know that they will not be receiving a watch
which has been sent out to somebody else, and tried on, and
returned. It will be perfect and in brand new and factory fresh
condition. There will also be a P+P charges for any replacement.
Orders for refund must be returned within 7 days and there is a 15
percent re-stocking fee to cover the costs of packaging and staff
time involved in processing and shipping the order.
7)
Complaints
Most of the
complaints are on the shipment time. Normally, all the orders can be
delivered within 3-weeks time. However, if the customer is located
in a small or remote village, or if the place is politically unrest,
(for example, after the 9-11 terrorist attack, it can take up to 6
weeks’ time for delivery to United States) it may take much longer
time to clear in custom. Most of the orders were sent in registered
airmail, there is a tracking number for each order. If there is any
inquires, ZiWatches is able to track them by phone or through
Internet. ZiWatches will reship any order that is lost after
confirmation by the Post Office.
All the goods are
carefully inspected before sending out to minimize the chance of any
defective item. However, sometimes damages may occur during
delivery. ZiWatches will replace another one if the goods are
damaged and returned within 7 days upon delivery. ZiWatches will
absorb all the shipping charges involved.
Since all Swatch
watches are original, they all come with a 12-Month International
Warranty that allows people to get the watches repaired in their
home country if there is available. Alternatively, any watch
purchased from ZiWatches that requires repair or replacement under
the terms of the warranty can be sent back to it for repair or
replacement, but there is a charge fee based on the current postage
& package for that article.
ZiWatches will try
to answer and handle all complaints and inquiries within 24 hours to
show its concern to customers. This would at least ease their anger
at an early stage and things can then be settled more smoothly later
on. ZiWatches will also include a FAQ section in its Web site so
that most of the common questions were already answered in advance,
it also save a lot of labor hours to answer repeated questions.
