Big Skinny

In 2010, extended scrubby chief executive officer Kiril Alexandrov was looking to transcend from retail statistical distribution and print advertising to the instauration of online market to achieve maximum set upth. The retail gross sales pitch was an promiscuous one, as Alexandrov focused on the value of the bag and the impulsiveness of consumers (Benjamin & Kominers, 2012). Unfortunately, translating this type of sales pitch was much harder to do in the world of cyberspace. titanic c nod off-fitting centered their online market efforts around display Ads, keyword searches, social media and relationships with online distributors and complex implicationed invests much(prenominal) as Amazon and Groupon respectively.The expansion caused much hardship, as gargantuan cheeseparing received ostracise feedback on the review website Yelp that stemmed from their Groupon experiment. They likewise faced a glitch in their online promotion that allowed 4,000 people to dictate free wallets from their online store. bear-sized tight unavoidably to refocus their online merchandising system by throwting rid of display Ads, refining keyword searches and severing ties with deep discounted sites. larger-than-life close tail end manufacture value for their product and conduct their put ins better by being much(prenominal) discriminating with who distributes their product and by guarding the expense steady.A more seasonal approach surrounding keyword searches stick out create new revenue enhancement from those who ar looking to make tender and impulsive bribes. Lastly, by being responsible for who distributes their products, thumping jagged brush aside deliver their product in prompt and seas moreover manner, which will squ be up the majority of guest complaints once morest macroscopic bony. Problem Statement Despite booming in-somebody sales campaigns, long skinny struggled to find an effective online merchandise platform that would grow and connect them to their consumer base. prodigious Skinny as well ran into glitches with their current online market campaigns that brought unwanted negative attention and resentment towards the smart set. Data Analysis When oversized Skinny transcended into the world of online marketing, it had to develop a way to attract visitors to the website darn attempting to convince these visitors to get wallets. Since most of their wallets were being sold at merchandise shows or retail stores that centered on a straight-forward approach regarding impulse and value, the translation of this strategy to the internet proved to be a in height(predicate) task.Big Skinny looked at various means of advertising such as display ads, algorithmic search, sponsored search, A/B Testing and social media. uncover ads carryed a two-frame animation however, the click-through rate of general display ads in 2009 was solely . 1% (Bejamin & Kominers, 2012). Algorithmic searches use algorit hms that the search engine deems most germane(predicate) to the users query. The websites that most resemble the query appear the highest on the search engines list. Sponsored searches use keywords that the advertisers specify that they want to target.These are mostly sold on a per-click basis however the phoner loses money if the clicks arent converted into sales. A/B testing is a marketing technique that shows different advertisements to different users to compare the response evaluate between the two. Lastly, social media utilizes websites such as Facebook and Twitter to pass judgment and create an interactive relationship with consumers. Alternatives 1. Big Skinny could eliminate their means of online distribution and paid online marketing, plainly utilizing social media and their website to conduct advertising and job transactions. 2.Big Skinny could be more selective in their selection of online distribution, while tailor their paid sponsored searches to generate inter est and sales. 3. Big Skinny could scrap their online marketing plans, with the exception of social media, and reallot their advertising money strictly on deep discounted sites like Groupon and Living Social. 4. Big Skinny could focus their efforts on expanding in more brick and mortar retail stores by target marketing towards different demographics. They could use traditional media such as TV and piano tuner to drive these efforts. Key Decision Criteria 1.Increase customer satisfaction and corporate word-painting 2. Increase sales and market share 3. Improve (or at to the lowest degree maintain) profitability 4. Ease or speed of implantation 5. Be arranged with corporate dischargeion or strategy 6. Within our present resources or capabilities 7. Within acceptable risk parameters 8. Minimize environmental impact 9. defend and build employee morale and pride Alternatives Analysis 1. By limiting their online marketing to free social media sites such as Twitter or Facebook, Big S kinny can greatly reduce their marketing costs. With display advertisements notwithstanding getting clicked through .1% of the time the money is essentially thrown away. expend in A/B testing requires the hiring of a permanent person and huge overhead. Getting rid of online distributors allows Big Skinny to eliminate the 7-15% fit they dedicate to Amazon and eBay while being able to manage their order load. Social Media is more than enough because 71% of social media participants say they are more likely to purchase from a pit they follow online. 91% of local searchers say they use Facebook to find local businesses online (Bennett, 2013). The cons of this are that they are missing out on a lot of potential customers by eliminating Amazon and eBay.While online paid marketing can be expensive, there is alleviate benefit to sponsored searches. Some of the cost per conversions are profitable and by in all eliminating these searches would be throwing away potential opportunities. 2. The pros of Big Skinny being more selective with their online distributors allows for a happy customer base. There subscribe to been several(prenominal) negative reviews on the Yelp site regarding slow delivery and non-existent customer service. By eliminating deep discounting sites such as Groupon, Big Skinny can manage their order load and keep customers happy.Big Skinny would as well as keep the revenue from the top paid sponsored searches rather than eliminating them all together. The negatives of this are that Big Skinny could miss out on a lot of revenue by not using Groupon or Living Social. They could also miss out on the repeat customers that are generated by these sites as easy as missing out on the people who want to try their product without having to pay full price. 3. Instead of eliminating sites like Groupon and Living Social, Big Skinny could embrace the huge inflow of customers that it brings.According to the customer satisfaction and analytics company ForeSe e, 91% of customers move over already or plan to conduct business with the merchant since corrupting the deal (Bedigian, 2013). This strategy generates a large influx of customers in a short time while attempting to generate quietus income by repeat customers. The cons of this are that companys often lose money during the initial Groupon. The product is discounted by 50% or more and then Groupon takes a 50% commission on the sale price, which leaves the trafficker receiving hardly 25%of the original selling price of the item (which in some cases is less than the cost of the item). Forbes has found that 1/3rd of businesses have lost money on a Groupon deal and there is no guarantee that the customers ever return to pay full price from the merchant again (Gleeson, 2012). 4. The pros of using a more traditional advertising middling such as TV or radio would bring brand recognition for Big Skinny. Big Skinny has always had success selling in retail stores because they market their products based on value and impulse.By displace the product in more retail stores, there is a great chance people will put it in their hands and buy on impulse. Instead of targeting just one big audience, Big Skinny should advertise by target market such as Big Skinny Sport or Big Skinny Women. By doing this they could coadjutor with big retail chains to get into more stores and generate more revenue the old fashioned way. The average time an American exits watch TV is 5 hours compared to just 1 hour browsing the internet, which leads for greater exposure.The cons of doing this are that TV advertising is much more expensive than online marketing (Nielsen, 1997). Another con is Tivo allows people to record their favorite shows and then fast-forward ago the commercials. The last con is that TV advertising seems to be a involvement of the past, as the amount spent on TV advertising was only up 4. 5% in 2011 as compared to 21. 7% via online marketing (Gleeson, 2012). Recommendat ions found on the data, it is best for Big Skinny to be more selective of their online distribution, while tailoring their paid sponsored searches to generate interest and sales.In regards to online distribution, Big Skinny should keep eBay and Amazon, however, should drop deep-discount sites such as Groupon or Living Social. To offer a Groupon deal, Big Skinny is guaranteed to be taking a loss. To be eligible to offer a Groupon, Big Skinny must discount the price of their wallet by at least 50%. This turns a $20 wallet into a $10 wallet. Groupon takes a commission of 50% on the sale price, which leaves Big Skinny walking away with only $5 for every wallet sold (Bice, 2012). Essentially, they are taking a loss with every wallet they sell on Groupon.The goal of a Groupon is to try and get repeat customers however, the people that use Groupon are bargain-hunters. They wont return to Big Skinny, but rather, they will return to Groupon again looking for another bargain deal. By using G roupon, Big Skinny also decreases the value of their brand (Gibbard, 2011). Why would a customer pay full price for a $40 wallet when they just bought it on Groupon for $15 or $20 just a short time ago? In addition to dropping Groupon, Big Skinny needs to manage their online distribution better because of customer satisfaction issues.On the review site Yelp, Big Skinnys wallets are only receiving a rate of 2. 5 out of 5 stars. A lot of the reviews include gripes closely not receiving their order for 3-4 weeks or non-existent customer service (most of the negative reviews are from users who bought a Big Skinny wallet on Groupon). If the online distributor doesnt ship your product in a timely manner, your company risks a tarnished reputation. Whether Big Skinny didnt have enough stock to effectuate orders or whether Groupon didnt ship the products in a timely manner, Big Skinny is taking the fall and abuse from customers.When people do query for a product they are going to see Big Skinnys products with poor ratings. These poor ratings can scare potential customers away. Big Skinny should only use Amazon, eBay and their website to sell their wallets. This allows them to manage their inventory, not get behind on orders and make sure their product gets shipped in a timely manner. Big Skinny has excellent Amazon ratings and should continue to grow their product through the sterling reputation of Amazon. They should sell the product for a higher price on their website so that people are promote to buy through Amazon.This is a win-win for Big Skinny because if people buy through Amazon then Big Skinny doesnt have to waste time and effort accomplishing and shipping orders. If they choose to buy ask than Big Skinny receives a larger profit on their wallets. Lastly, Big Skinny needs to tailor their sponsored keyword searches. They need to eliminate the term lash wallet. They dont manufacture a true leather wallet and the cost per conversion for this keyword is a sky-high $20. 26. Big Skinny should also tenderise less for the term thinnest wallet. The cost per conversion for thinnest wallet also has a high cost, which is $10.53.After replacing leather wallet and lowering the bid for thinnest wallet, Big Skinny should add keywords centered on holidays. purses are everyday gifts on occasions such as initiates daytime and Christmas. Big Skinny should add season keywords such as Fathers Day Wallet, Wallet for Dad, Best Wallet for Gift and Wallet for Christmas. This will bring seasonal shoppers into the mix who are looking to spend quickly and impulsively. Action and Implementation Plan CEO Kiril Alexandrov will be responsible for delegating the following tasks.The coach of Marketing will pull off any promotions or future plans with deep discounted sites such as Groupon or Living Social. The film director of Marketing in combination with the Director of mathematical product Management will reach out to all of those who left negative rev iews on Yelp to satisfy the customer complaints and retract the negative ratings. The Director of Sales will carefully select the online distribution channels which Big Skinny will sell through. Big Skinny will only sell through Amazon, eBay and any online outlets of the retail stores that they are currently have in.The Director of Sales will also raise the prices of wallets on the Big Skinny Website by 10-15% to create value for the product and promote customers to purchase through the select online distribution. Doing this saves Big Skinny the time it would take to fulfill and pack orders, however, if a customer decides to purchase direct, then Big Skinny recoups the 10-15% it would pay Amazon or eBay to sell and fulfill the order. This new price point will be conveyed in a message from the Director of Sales to Big Skinnys distribution channel.