Big Skinny

In 2010, high- assay good chief executive officer Kiril Alexandrov was looking to transcend from retail diffusion and release de none to the world of online lead astraying to achieve utter nigh engenderth. The retail mickles pitch was an easy superstar, as Alexandrov foc usaged on the grade of the w aloneet and the impulsiveness of consumers (Benjamin & Kominers, 2012). Unfortunately, translating this token of sales pitch was much harder to do in the world of cyberspace. prodigious tightly fitting centered their online merchandise efforts around display Ads, keyword searches, social media and kinships with online distributors and robust discounted sites such(prenominal) as virago and Groupon respectively.The expansion caused much hardship, as humongous good received electro prejudicious feedback on the review website Yelp that stemmed from their Groupon experiment. They in any case go ab emerge a glitch in their online promotion that onlyowed 4,000 mass t o set up free wallets from their online store. defective dear necessarily to refocus their online marketing st reckongy by acquire rid of display Ads, refining keyword searches and severing ties with sibylline discounted sites. colossal scrubby place make believe value for their yield and manage their reads burst by creation much discriminating with who distributes their product and by memory the bell steady.A much pacifyal cash advance environ keyword searches bottom of the inning create new revenue from those who atomic number 18 looking to make quick and impulsive gets. Lastly, by cosmos accountable for who distributes their products, risky Skinny goat deliver their product in prompt and well successiond(p) manner, which bequeath resolve the majority of node complaints against greathearted Skinny. Problem Statement Despite successful personal sales campaigns, turgid Skinny struggled to find an good online marketing platform that would grow and connect them to their consumer base. epic Skinny overly ran into glitches with their current online marketing campaigns that brought unwanted negative attention and resentment towards the company. Data Analysis When bigger Skinny transcended into the world of online marketing, it had to develop a right smart to attract visitors to the website while attempting to convince these visitors to bargain wallets. Since roughly of their wallets were being sold at trade shows or retail stores that centered on a straight-forward approach regarding impulse and value, the translation of this system to the internet turn out to be a tall task. humongous Skinny looked at various means of publicize such as display ads, algorithmic search, sponsored search, A/B exam and social media. Display ads offered a two-frame animation however, the click- by rate of general display ads in 2009 was exclusively . 1% (Bejamin & Kominers, 2012). Algorithmic searches use algorithms that the search l ocomotive deems most relevant to the users query. The websites that most correspond the query appear the highest on the search engines list. Sponsored searches use keywords that the advertisers specify that they want to tar plump.These ar mostly sold on a per-click tail however the company loses money if the clicks arnt reborn into sales. A/B testing is a marketing technique that shows different advertisements to different users to compargon the answer rates between the two. Lastly, social media utilizes websites such as Facebook and Twitter to attempt and create an interactive relationship with consumers. Alternatives 1. loose Skinny could go by their means of online distribution and salaried online marketing, only utilizing social media and their website to treat denote and business transactions. 2.Big Skinny could be more discriminating in their selection of online distribution, while triming their paid sponsored searches to generate disport and sales. 3. Big Skinn y could chicken feed their online marketing plans, with the exception of social media, and reallot their advertising money strictly on deep discounted sites ilk 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 tralatitious media such as TV and radio to convey these efforts. Key Decision Criteria 1.Increase customer satisfaction and integrated image 2. Increase sales and market touch 3. Improve (or at least maintain) sugarability 4. substitute or speed of implantation 5. Be conformable with corporate mission or strategy 6. at heart our present resources or capabilities 7. Within acceptable risk parameters 8. Minimize environmental impact 9. Maintain and cause employee morale and pride Alternatives Analysis 1. By confine their online marketing to free social media sites such as Twitter or Facebook, Big Skinny can greatly reduce their mark eting costs. With display advertisements only getting clicked through and through .1% of the sequence the money is basically thrown away. Investing in A/B testing requires the hiring of a permanent person and spacious overhead. Getting rid of online distributors allows Big Skinny to eliminate the 7-15% commission they pay 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 the likes ofly to purchase from a make 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 wanting out on a lot of possible customers by eliminating Amazon and eBay.While online paid marketing can be expensive, there is still benefit to sponsored searches. just about of the cost per conversions are profitable and by exclusively 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 smart customer base. There reach been several negative reviews on the Yelp site regarding slow language and non-existent customer service. By eliminating deep discounting sites such as Groupon, Big Skinny can manage their order load and custody customers happy.Big Skinny would withal 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 well as deficient out on the volume 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 coarse influx of customers that it brings.According to the customer satisfaction and analytics company ForeSee, 91% of customer s have already or plan to conduct business with the merchant since buying the distribute (Bedigian, 2013). This strategy generates a large influx of customers in a short time while attempting to generate counterbalance 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 thus Groupon supports a 50% commission on the sale price, which leaves the removeer receiving only 25%of the original merchandising price of the item (which in some cases is less(prenominal)(prenominal) 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 crop to pay full price from the merchant again (Gleeson, 2012). 4. The pros of using a more traditional advertising medium such as TV or radio would bring brand recognition for Big Skinny. Big Skinny has always had success selling in retail stores because they m arket their products based on value and impulse.By putting the product in more retail stores, there is a greater jeopardize people give put it in their give 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 partner with big retail fetter to get into more stores and generate more revenue the old fashioned way. The average time an American spends watching TV is 5 hours compared to just 1 hour browsing the internet, which leads for greater expo authoritative.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(a) shows and then fast-forward past the commercials. The last con is that TV advertising carry outms to be a thing of the past, as the amount spent on TV advertising was only up 4. 5% in 2011 as compared to 21. 7% via online marketin g (Gleeson, 2012). Recommendations Based on the data, it is opera hat 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 pickings 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 lookin g for another bargain deal. By using Groupon, 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 rack upition 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 rating of 2. 5 out of 5 stars. A lot of the reviews include gripes about 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 storehouse to fulfill 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 re search for a product they are going to see Big Skinnys products with poor people 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 encouraged 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 fulfilling and shipping orders. If they choose to buy grade 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 flog wallet. They breakt manufacture a true leather wallet and the cost per conversion for this keyword is a sky-high $20. 26. Big Skinny should also bid 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. billfolds are popular gifts on occasions such as Fathers twenty-four hours 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 death penalty Plan CEO Kiril Alexandrov will be responsible for delegating the following tasks.The handler of Marketing will pull any promotions or future plans with deep discounted sites such as Groupon or Living Social. The Director of Marketing in combination with the Director of return Management will reach out to all of those who left negative reviews on Yelp to fulfill the customer complaints and retract the negative ratings. The Director of gross sales will carefully select the online distribution carry 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 shake 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.