Towel Tote Bags
These bags reduce the inconvenience and risks of carrying towels on the shoulder and also carrying a bag to the beach. It acts as a towel, a mat, and a handbag for storing things. While relatively easy to make, it requires some items to make two towels (one big and another one small), pair of scissors, needle, wool and a rubber band. It, however, becomes easy and cheaper to mass-produce the bags, which allows a lower price than that of making it individually. It is also possible to sell the product at a lower price than that of buying a conventional bag for carrying towels to the beach, which enhances its viability. As such, the followings are our marketing and financial objectives:
Marketing Objectives
Towel Tote bags are relatively cheap, going for between $2 and 5, and we intend to sell within this range. To break even, however, we have to sell many towels, hence the need for more marketing avenues. We intend to enter into contracts with large retailers, but our main avenue for sale will be using rented branded trucks at various points on various beaches. This is intended to position us not at the retail store, but at the point of need. We intend to create awareness for the product by creating flyers and also through interactions with people at the beach, through the local radio, and through creating pages on social networking sites. We also intend to sponsor small local events such as beach soccer where our towels will be the main thing sold to spectators. What makes our product different from the rest is that it is entirely handcrafted, unlike the machine-sewn ones. We can also customize the towels to brand them with one’s name at no extra cost, another key advantage. We also aim to make the towels of different shapes, sizes, towel qualities, and colors to meet the diverse requirements of clients. We aim to make the company label a well-recognized household name in the next four months, and attain a 20% market share by the end of the same period.
Financial objectives
To break even, costs need to stay down, and sales need to stay up. The price of the bags will be between $2-5 depending on the quality of the towels. We plan to have a profit margin of 30% for every towel after accounting for all production costs. The first two months are intended for breaking even, with profits being expected to increase to 20% by the fourth month. As advertising costs decrease over time and economies of scale kick in, we intend to achieve a 20% increase in profits, driven majorly by an increase in sales. This is through a proportionate reduction in cost per unit. To further reduce costs, we intend to use some retained profits to purchase small kiosks from which to sell from, instead of renting vans and stalls from outside. We also intend to teach some teenage kids from the local community who are unemployed on how to sew and make these towel tote bags. We will not only be helping the local community and building a brand for ourselves but also getting available cheap labor, which will increase our profits. The raw materials for the bags will be gotten from local suppliers which is much cheaper than purchasing them wholesale from a store.