Gift Novelty Souvenir Sample Business Plan

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Gift Novelty Souvenir Business Plan

Executive Summary

Yeti Card & Gifts (Yeti) is an established retail business that offers a wide range of cards and gifts. Yeti’s motto is “Fun, Functional, & Funky, that’s Yeti.” Yeti opened two years ago as a retail gift store specializing in Asian gifts and home decor. Yeti quickly out-grew its original space and is now located in the Wigman Hospital/Physicians & Surgeons South Building, open Monday through Saturday 10 am – 6 pm. Yeti is currently finishing tenant improvements on their second location, a space in University Heights. The grand opening is slated for July 4th.

The Market
Yeti has been successful in doing something that no other retail card/gift store has been able to do, successfully appeal to two distinct target market segments. Yeti’s first target segment is university students. This segment is identified by their younger age and higher disposable income relative to their household income. For many students, the years at university is the first time they are living away from home and away from their parent’s often watchful and restrictive eyes. This means that students like to use their disposable income to its full potential, sometimes (unfortunately for them) beyond their financial means. There are over 38,833 potential customers in this market segment.

The second distinct segment that Yeti has been successful in appealing to is the university faculty and staff, Wigman Hospital staff, and the greater Cleveland Heights/University Heights community. This segment is an older, more mature market relative. They are looking for a safe and friendly atmosphere that provides a sense of nostalgia mixed with youthful excitement. This segment has over 191,590 potential customers.

Competitive Edge
Yeti’s competitive edge is their ability to effectively serve both market segments at the same time, a feat that no other gift/card shop has been able to do. Yeti has accomplished this by leveraging two competitive advantages. The first element is a wide product selection that appeals to both target markets. Yeti’s other motto, “Risque not Raunchy” captures this idea well. While some of the products come close to pushing the limits of good taste, nothing is offensive or outrageously obscene. This creates an atmosphere that has an edge, but one in which anyone would feel comfortable. This wide product span helps allow Yeti to serve two distinct sets of customers. A wide product selection is not inherently enough on its own to serve two customer segments however. The second element of their competitive edge is the high level of customer service that supports the broad product selection. The store provides outstanding service to customers who feel like they are truly welcome and enjoy the entire shopping experience. All of the Yeti employees are trained to create a helpful, gracious, welcoming experience for all customers. The sales staff recognize that it is their job to provide the customer with whatever type of assistance they may need. The customer will leave the store feeling that Yeti exists to cater to their individual needs.

Having been open now for almost two years, Yeti Cards & Gifts has proven that they have been successful in meeting the needs of two distinct customer segments. The Yeti concept is being led by the husband and wife team of Dan and Ishada Gordon, both of whom bring a wealth of experience and skills to the company. Yeti is currently preparing for the grand opening of their second location and its overall growth looks quite promising. Sales forecasts indicate revenue of $169,000 for Year 3 and $180,000 for Year 4 with net profit of 5.96% and 7.59% respectively.

1.1 Mission

Yeti Cards & Gifts’ goal is to provide new and exciting products in an environment that is fun and friendly for customer and staff alike. Customer service is our #1 priority.

“Fun, Functional & Funky, that’s Yeti.”

1.2 Keys to Success

The keys to success are:

• Offering items of a high quality-value relationship which are not available everywhere. This is essential for maintaining the niche market sectors mentioned in the Executive Summary.
• Advertising and promoting in areas that our target customer base will learn about our store.
• Continuously reviewing our inventory and sales and adjusting our inventory levels accordingly.

1.3 Objectives

Yeti has two objectives for the organization. The objectives are lofty, yet achievable. By developing and tracking progress toward the goals, the organization will push everyone to perform their best.

• Open a second store in the University Heights community, increasing visibility and sales potential.
• Open a third store in Year 4.

Company Summary

Yeti Card & Gifts is a retail gift store specializing in cards, health and beauty products, novelty, candy, beverages, and Japanese products. Yeti currently has two locations, their current store located at the Wigman Hospital/Physician & Surgeons South Building, and a University Heights community store (opening soon) in the Madison Plaza in-between existing tenants Starbucks and Noah’s Bagels.

2.1 Company Ownership

Yeti Cards & Gifts is a single member Ohio registered L.L.C. owned wholly by Dan Gordon.

2.2 Company History

Yeti was originally founded two years ago. The popularity of Yeti was quickly apparent and the business out-grew the location. The business soon moved into the Wigman Hospital/Physicians & Surgeons South Building to take advantage of the 1,144 square foot highly visible retail space. The Wigman location was chosen to leverage its high density of people. Wigman Hospital is Cuyahoga County’s largest employer. On the east side of Yeti is The Case Western Reserve, the state’s largest private university with over 20,933 students, faculty, and employee. The move to the Wigman building was also strategically timed to fill the vacancy of Jabberwocky Cards & Gifts which had just closed their doors.

Yeti is currently in the tenant improvement stage of opening their second store in University Heights. This 800 square foot store is located in the Madison Plaza in-between Starbucks and Noah’s Bagel. This location was chosen because of the high traffic counts (1,800) and the close proximity to two nationally known tenants.

Products

Yeti carries a wide range of products chosen to be aligned with the private motto of “Risque, not Raunchy.” Yeti’s products can be grouped into five main categories: cards, health and beauty, novelty, candy and beverages, and Japanese products. The following list shows examples of products within their respective categories:

Cards (vendors include: Winking Moon Press, Tetter Saw Cards, Mik Wright, Clayboys, Mojo Ryzen, Image Connection, Unusual Cards, Cara Scissoria, Shag/Roger La Borde, Paper Troupe, Palm Breeze, Smart Alex, and Classico San Francisco)

• Birthday (boy, girl, romantic)
• Blank
• Wedding
• New baby
• Get well
• General humor
• I love you
• Engagement
• Missing you
• Friendship
• Encouragement
• Sympathy
• Postcards

Health and Beauty (vendors include: Blue Q, Fridge Fun, San-X, Tsukineko, T-n-T Candles)

• Hand soap
• Body wash/detergent
• Shampoo
• Moist towelettes
• Lip balm
• Moisturizer
• Bubble bath
• Body powder
• Glitter ball/lotion
• Compact mirror
• Foot/hand/body cream
• Large & small tampon case
• Air freshener
• Tweezers
• Temporary body tattoos
• Candles

Novelty (vendors include: Accoutrements, Hobbs & Dobbs, San-X, Lantor, Dark Horse, Blue Q, O.R.E., Three by Three, Lucy Lu, Hot Properties, Fridge Fun)

• Stationary
• Wigs
• Glasses
• Picture frames
• Hats
• Coffee mugs
• Bags
• Purses
• Clocks
• CD cases
• String lights
• Bookmarks
• Action figures
• Antenna toppers
• Magnets
• Key chains
• Toothpick/toothbrush holders
• Mist makers
• Toilet seats
• Stickers
• Clothes hampers
• Whoopee cushions
• Squirt guns

Candy and Beverages (vendors include: Garvey, Hobbs & Dobbs, Golden Pacific, JFC Trading)

• Hello Kitty Hi-Chew & Jelly candy
• Gummi Bears/Army Guys/Hamburgers/French Fries/Donuts
• Now & Later
• Big Hunk
• Bottle caps
• Jolly Rancher
• Blow Pops
• Sugar Daddy
• Nerds
• Tangy Taffy
• Sweet Tarts
• Smarties
• Sixlets
• Dorks
• Shock Tarts
• Ducle de Leche
• Abba Zabba
• Sour Patch
• Rocky Road
• Runts
• Spree
• Gum
• Soft drinks
• Jones
• Suntory-CC Lemon
• CC Grape
• Natchan (honey lemon, apple, grape, fruit punch flavors)
• Woolong tea
• Asahi cold asian tea drinks
• Kirin cold tea drinks (milk tea, lemon tea)
• Milk, coffee
• Otsuka Pocari Sweat
• Sokenbi-cha
• JT peach water
• Sapporo fruit & milk
• Cream melon soda
• Caffe latte
• Citrus mix
• Green tea
• Chinese tea

Japanese products (vendors include: San-X, Masudamasu, Enadi, Kitamura, Tokyo-Inn, Etoile Kaito, Okutani)

• Stickers
• Plush toys
• Bottle caps
• Movie merchandise
• Mouse pads
• Cell phone accessories
• Zipper pulls
• Patches
• Animation fun packs

Market Analysis Summary

Yeti has identified two distinct market segments for each of the two different stores. For the Cleveland Heights location there is the Case Western Reserve University students and the Wigman Hospital/Cleveland Heights community. For the University Heights location there is the John Carroll University students and the local community.

Age is a significant determinant in differentiating between the different segments. The student segments are generally of a lower age than the surrounding community.

4.1 Market Segmentation

Cleveland Heights Store

Case Western Reserve community
20,044 students total. Largest private university in Ohio.

• Female students, 53.6% of student population (10,747)
• This group makes the most “lifestyle” purchases. They are either buying for themselves to give their living space a personal touch, or buying items as a gift for a friend or relative.
• Male students, 46.4% of student population (9,297)
• Male students are known for their infrequent shopping habits. They make occasional purchases. These occasional purchasers will need to be converted into impulse buyers. This can be accomplished by offering more items that appeal to their sense of independence.
• Case Western Reserve Univ. faculty (889) and employees
• This segment makes less frequent purchases than the students

Wigman Hospital community/Cleveland Heights community
Wigman Hospital is the county’s largest employer. Administrative offices have recently been moved to this location, further consolidating the hospital into a dense employer.

• Wigman Hospital community. Total population 2,700.
• Higher income levels than students
• Their work site is in very close proximity to Yeti, less than a block.
• Cleveland Heights community. Total population 140,550. Ages:
• 15-19: 11,585 (8.4%)
• 20-24: 17,390 (12.6%)
• 25-34: 20,591 (14.9%)
• 35-44: 18,656 (13.5%)
• 45-54: 20,184 (14.6%)
• 55-59: 5,864 (4.3%)

University Heights Store

John Carroll University community 18,789 students total

• Female students, 47.6% (8,937)
• This group makes the most “lifestyle” purchases. They are either buying for themselves to give their living space a personal touch, or buying items for a friend or relative to give as a gift.
• Males students, 52.4%, (9,852)
• Male students are known for their infrequent shopping habits. They make occasional purchases. These occasional purchasers will need to be converted into impulse buyers. This can be accomplished by offering more items that appeal to their sense of independence.
• John Carroll Univ. faculty (830) and employees
• This segment is likely to make fewer purchases than students

University Heights community. Total population 51,040. Ages:

• 15-19: 5,662 (11.5%)
• 20-24: 9,896 (20.1%)
• 25-34: 7,317 (14.8%)
• 35-44: 5,991 (12.1%)
• 45-54: 5,570 (11.3%)
• 55-59:1,603 (3.3%)

4.2 Target Market Segment Strategy

The market segments were chosen for two specific reasons, location/proximity and customer demographics, specifically age:

Location/Proximity
In the case of both the Cleveland Heights and University Heights stores, the location is quite convenient to both the students and the surrounding communities. As our days become busier and busier, with less and less free time, we tend to choose stores that are the most convenient. The more convenient the location, the more free time that we have for ourselves.

Cleveland Heights. The store is within several blocks of a large university campus. Students are continually walking off campus, looking for food, shopping, and diversions from school, all convenient enough so that they can easily get back on campus for the next class. For the Wigman Hospital community, the largest single employer in Cuyahoga County, Yeti is located below their offices. Many people can just walk downstairs to the ground floor, and at most they may have to walk a block to get to Yeti. Customers who need to do a bit of shopping on their break or before they leave for home are able to get to Yeti within five minutes.
University Heights. Again, location is key in University Heights. The store is also only a few blocks from the large campus making it quite accessible to students, faculty, and campus employees. Yeti was able to secure a desired location within Madison Plaza, one of the premier shopping areas. The fact that Yeti is situated next to Starbucks is significant. Starbucks is nationally known for their real estate prowess, in addition to their marketing. Starbucks is very good at choosing good retail locations for their stores, a prime reason that they have closed so few poor performing stores in their history. On the other side of Yeti is another national retail tenant, Noah’s Bagel. Being surrounded by two national tenants, one of them being the mighty Starbucks is quite material. Additionally, this retail space has customer daily walk-by traffic of 1,800, an impressive number.

Customer Demographics
University communities, both Case and John Carroll. While students do not have the highest household income, since the majority of their time is spent in school instead of working, they have a very high rate of disposable income. This can be explained by two reasons. First, when students enter university, this is often the first time that they are no longer under the watchful eye of their parents, who have controlled or affected the purchasing behavior and lifestyles of their offspring. For many of the students, they suddenly have more freedom in the lives and how they spend their money.

A second explanation of this phenomenon is that students tend to spend money in a short-sighted manner. The overwhelming majority of students receive financial aid and it is uncommon for all of the money from financial aid to be spent solely on books and tuition. Frequently a good portion becomes their disposable income. Many students take the viewpoint that if they are going to be taking on debt to complete school, then a little more debt, which provides them ample disposable income, is OK, as they will eventually pay it off years down the road when they are making good money. These two explanations offer insight into why students, those with low household incomes have high levels of disposable income. Yeti recognizes this reality and caters to these students with products that appeal to them.

Surrounding communities, both Cleveland Heights and University Heights. The members of the community population, older than the university students, want a safe and friendly atmosphere where they can enjoy a sense of nostalgia mixed with youthful excitement. The problem with most card and gift shops is their inability to cater to a wide cross section of the population. They are either too hip or trendy and turn off the more mature crowd, or they are too safe and secure so that only your grandparents would shop there. This “hallmarkification” of gift and card shops is quite common as evidenced by (name omitted), (name omitted), and (name omitted). Yeti has been successful in appealing to both the young and hip crowd (students) as well as the more mature crowd (university faculty, Wigman staff, and the surrounding city communities). Yeti has accomplished this feat in part by offering a wide product selection with the two target segments in mind and offering every customer benchmarked customer service, a way of treating customers so that every customer that enters the store recalls their experience as a pleasant experience that exceeded their expectations.

4.3 Industry Analysis

As mentioned in the previous section, gift and card shops typically fall into two distinct categories, trendy and hip shops that appeal to a younger crowd, and conservative, “hallmarkified” stores that appeal to an older, safety conscious crowd. It is unusual for a store to be able to straddle both categories successfully.

Some stores will try by just carrying merchandise that appeals to the other category, but this approach rarely works. In addition to having the merchandise for the desired market segments, the store must have the look, feel, and customer service to make each market segment feel like they are wanted, that make them feel like they are the typical individual that the store is catering to. Please review section 5.1, the competitive edge for more information on how Yeti is able to accomplish what most in the industry has been unable to.

4.3.1 Competition and Buying Patterns

Competitor #1
Pros: Massive purchasing power (over $30 million in sales last year including a computer and book department); good location; guaranteed customers from the sale of text books.
Cons: Little to no parking; poor customer service; difficulty in selling anything but conservative merchandise for fear of being offensive; youthful customer base keeps adults away.

Competitor #2
Pros: Good location next to Case Univ.; good selection of women’s apparel; established customer base.
Cons: Little to no parking; very poor customer service; lack of diversity in customer base with young women being their primary customer.

Competitor #3
Pros: Chagrin River Center tenant; plenty of parking; a national chain; average customer service.
Cons: Primary customers are 12-19 year olds; too loud background sound system; main focus is on apparel (T-shirts); little to no advertising.

Competitor #4
Pros: Capitol Mall tenant; plenty of parking; national chain; large selection of movie paraphernalia.
Cons: Merchandise selection focused on too small of a customer base; poor customer service; little to no advertising; distance from Case Univ. requires car or bus ride.

Competitor #5
Pros: Eighth St. Market tenant; average amount of parking; established customer base.
Cons: Poor customer service; poor merchandise selection.

Competitor #6
Pros: Two stores within walking distance of John Carroll Univ.; established customer base; large merchandise selection.
Cons: Merchandise selection focused on older customers; too much merchandise clutters aisles and creates claustrophobic conditions.

Competitor #7
Pros: Large national chain with ample parking; large selection of goods; average customer service.
Cons: Cannot respond to customer requests and the latest trends; focused on general merchandise, not cards and gifts; distance from John Carroll Univ. requires a car or bus ride

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