Chapter 9: Market Reviews Completed with Online Surveys | Powerhouse Marketing Plans(c) 14 Outstanding Real-Life Plans and What You Can Learn from Them to Supercharge [... ]aigns

Overview

Now that we are in the twenty-first century, the completion of a market review for your marketing plan may have been made easier by the Internet. We discussed in an earlier chapter how to use the Internet to gather secondary information. This can sometimes be more effective than other methods of gathering this information because of the global nature of the Internet. The Internet can sometimes also be effective for gathering primary research data. One example of this is online surveys.

An online survey is similar to a telephone survey, except that it is conducted over the Internet. Rather than answering questions over the telephone, respondents simply fill in a questionnaire on their computer screens. The value of this method of data collection is that it can be done globally and can be done at the participant s leisure. Some respondents actually prefer the anonymity of quietly filling in a questionnaire on their computer rather than giving their answers to a telephone interviewer.

Generally , Internet surveys are conducted by market research organizations-that specialize in this type of research. Some of these organizations have preestablished panels of consumers who have agreed to participate in Internet surveys. It is not unusual for panels of this type to have several million members. The panel members are recruited by telephone, by publicity releases, and by advertising banners on different web sites and search engines. The research company generally monitors the composition of the panel, and adjusts it as needed in order to keep the panel balanced in terms of major demographic variables .

If you would like to conduct an Internet survey for your products, you can pull samples for the whole United States, for individual states, or for large metropolitan areas within states. International Internet surveys can also be conducted for a large number of countries around the world. Once a representative sample is drawn, the next step is screening that sample over the Internet to identify users of the targeted product category.

All of the interviewing is completed over the Internet. Normally participants have to enter a unique access code before they can respond to the survey. This prevents people from filling out more than one questionnaire or from taking the survey without being invited. As the survey progresses, the data are transferred to the research company s internal computer. These data are then used to create statistical tables, which are sent to you (the client) either over the Internet or in printed report form.

This chapter includes a marketing plan that identifies an opportunity by demonstrating that textile table mats and napkins are a neglected area in the nation s supermarkets. The plan outlines the best way to develop a profitable business through the supermarket trade. It provides a detailed marketing program, as well as giving volume and profit objectives that would more than double the company s sales and profits in this category.

The market review for the Tiffany Table Mat and Napkin venture was put together with data obtained from secondary sources, company sales information, and information from an online survey. Once the overall market was known, projections were made based on a consumer survey taken over the Internet that enabled the company to forecast sales by geographic region, manufacturer, and trade class. Estimates of spending per household and pricing in the various trade classes were also made.

One of the other interesting aspects of this marketing plan is its use of trade research to help develop the program. The company had had almost no experience with the supermarket trade prior to this venture. In-depth interviews were conducted with supermarket executives in a variety of chains in different geographic locations across the United States. During these interviews, supermarket merchandising managers were asked for their evaluation of the current status of the textile table mat and napkin market. They were then asked for their reactions to a variety of concepts regarding the marketing of this category to consumers as well as to the supermarket itself. Their answers to these questions became an integral part of the marketing plan for the venture.

Marketing Plan for: Tiffany Table Mats and Napkins Coil Industries ^[1] April 7, 2000

INTRODUCTION

The purpose of this report is to analyze the U.S. market for textile table mats and napkins and to make recommendations concerning what Coil Industries might do to substantially increase its sales of table mats and napkins through supermarkets. This report is divided into the following eight sections:

BACKGROUND. This section describes the current Coil organization and reviews Coil s current objectives in building expanded sales of table mats and napkins through the supermarket trade.
MARKET REVIEW. This section reviews the growth and nature of the U.S. market for table mats and napkins.
CONSUMER USAGE AND ATTITUDES. This section outlines present consumer practices, desires, and expectations regarding the table mat and napkin category in general, and specifically regarding the purchasing of table mats and napkins in supermarkets.
SUPERMARKET PRACTICES AND ATTITUDES. This section reviews the supermarket trade s current involvement with table mats and napkins and its reactions to alternative marketing approaches.
CONCLUSIONS. This section presents key thoughts based on the facts presented in the previous sections.
RECOMMENDATION. This section makes a recommendation concerning the advisability of Coil Industries attempting to build a profitable consumer franchise in textile table mats and napkins sold through supermarkets.
MARKETING PLAN ELEMENTS. These are very specific plans concerning what Coil should and should not do within the framework of the information obtained during the course of preparations for this marketing plan. Additionally, this section provides a fully developed national marketing plan.
FINANCIAL PROJECTIONS. This section provides a forecasted profit-and-loss statement for the venture.

This document is primarily directed at identifying what Coil should do, in addition to its present marketing activities, to increase its sales of table mats and napkins through the supermarket channel of distribution. The research and plans in this document deal strictly with textile table mats and napkins, not with paper products. The recommendations presented in this marketing plan have been designed as an incremental marketing effort and are intended to be compatible with Coil s present activities through other channels of distribution and in other product categories.

The information required to write this report was gathered in six stages. The stages were designed to provide a systematic understanding of the overall table mat and napkin market from both the consumer and the trade standpoint, as well as to develop specific marketing plans and strategies. The following steps were taken:

INFORMATION GATHERING. A careful review of marketing plans, cost details, and other information currently available at Coil was conducted. In addition, a careful screening of virtually every available secondary source related to the table mat and napkin market was done. This included information from the Census of Manufacturers, the U.S. Department of Commerce, and dozens of trade publications . Finally, the market review was rounded out with information from a consumer survey taken over the Internet.
INDUSTRY CONTACTS. Extensive interviews were conducted with manufacturers of table mats and napkins, with the research departments of related trade associations, and with the editors and market research directors of a number of business and consumer publications.
CONCEPT GENERATION. Based on the information gathered from screening the available market data and interviewing key industry contacts, a series of concepts for alternative marketing approaches was generated. This was accomplished during a series of brainstorming sessions.
MARKET RESEARCH. Focus group interviews were conducted with consumers to learn more about their willingness to purchase table mats and napkins in food stores and their reactions to the concepts developed. In addition, a special run of a textile panel was purchased to provide statistical breakdowns on a number of important aspects of the overall market. All of this market research information, together with the secondary source information, was used to develop statistical tabulations and estimates of the size of the table mat and napkin market and trends in that market.
FIELD TRIPS. Fieldwork was conducted in a number of geographic locations throughout the United States. This involved carrying out store checks to personally determine the current status of table mat and napkin product lines in food stores. In addition, interviews were conducted with key executives in leading supermarket chains in the western, midwestern, and southern regions of the United States to obtain their evaluations of the current status of the table mat and napkin market and to determine their reactions to alternative concepts from both the consumer and the trade perspective.
MARKETING PLAN DEVELOPMENT. Based on the information gathered in the previous five steps, a detailed plan of action was developed, including a step-by-step action plan that should enable Coil to profitably penetrate this incremental segment of the table mat and napkin market.

BACKGROUND

Coil Industries is an aggressive manufacturer of a number of textile lines, including both consumer products, such as infants knitwear, and institutional products, such as textiles sold to the food service industry. The company believes that despite the difficult economy, it will still be able to increase profits through aggressive market planning, expanded advertising/promotional programs, and a tightening of the overall organizational structure.

One area that Coil plans to emphasize during the 2000/2001 season is table mat and napkin products. The company believes that these products will show considerable growth and high profitability for Coil as a result of a number of recent changes in the marketplace . Primarily, the withdrawal of a major competitor from this market will allow Coil to gain a greater percentage of the total market. In addition, Coil is looking for stronger new product development and special programs to deepen its penetration of the table mat and napkin market.

Coil is currently focusing its efforts on upgrading its line by improving the quality of the product and the packaging. Additionally, plans are now underway at Coil to develop a product catalogue and illustrated promotional sheets as required. As production becomes available, Coil plans to add a new program focused on the department store market, to be sold either direct or through distributors .

One area of special concern to Coil is the concept of expanding table mat and napkin sales through food retailers. Coil believes that this is a neglected area in food stores and that there could be a substantial opportunity for a hard- hitting marketing program. The objective of this plan is to determine the best way for Coil to develop profitable table mat and napkin volume through supermarkets and to establish specific volume and profit objectives for this business. This is to be done through the development of a detailed marketing program that will ensure that Coil meets its agreed-upon objectives.

MARKET REVIEW

The total market for table mats and napkins in 1999 amounted to $113 million in retail sales. Prior to 1999, the market had been growing at the rate of 6 percent per year, and it is expected to continue growing at the rate of 5 percent per year over the next few years . In 1995, the average household spent $1.64 on table mats and napkins. This is expected to increase by 4 percent in 2000 and by 3 percent in 2001.
Table mat and napkin sales tend to be strongest in the Northeast and North Central geographic regions. The Northeast and North Central markets account for 58 percent of total table mat and napkin sales. The Southern and Pacific regions account for roughly 16 percent of total retail sales each, while the Mountain and Southwest regions account for only 10 percent.

The Southern region is extremely underdeveloped. Although 16 percent of total dollar sales are in the South, a comparison of the number of households in the South reveals an index of only 76 percent, showing that fewer dollars per household are spent on table mats and napkins in the South than in any other geographic region. In addition, the South has a smaller percentage of dollar sales than it does of unit sales, indicating a generally lower price level. To a lesser degree, the same trend is apparent in the Mountain and Southwest regions.

The Pacific region of the United States is in many ways opposite to the Southern, Mountain, and Southwest regions. The Pacific region has 12 percent of total unit sales (slightly less than its percentage of households) and 16 percent of total retail dollar sales (somewhat greater than its percentage of households). This indicates that while the Pacific region is slightly underdeveloped in terms of penetration of units, the general price level in the Pacific region is considerably higher than that in the balance of the United States.
The major metropolitan areas tend to generate roughly the same percentage of retail dollar sales as their percentage of total households. For example, in total, New York, Chicago, and Philadelphia generate $17 million in retail sales, or 15 percent of the total market (which is roughly the same as the percentage of households in these areas). Los Angeles is a unique exception, generating a substantially smaller percentage of unit sales and retail dollar sales than the total number of households.

In both New York and Los Angeles, these products tend to be selling at a higher than average general price level, making the percentage of dollar sales greater than the percentage of units. For example, New York generates 6 percent of total unit sales and 8 percent of total dollar sales, while Los Angeles generates 2 percent of total unit sales and 3 percent of total dollar sales.
As might be anticipated, table mat and napkin sales tend to be concentrated in urban and suburban areas rather than rural areas. The central cities generate $36 million, or 31 percent of total retail dollar sales; this tends to be slightly higher than the total percentage of households in the central cities. The larger suburban areas generate $48 million in total retail dollar sales, or 43 percent of total table mat and napkin sales, and this also tends to be greater than the percentage of households in these geographic areas. The smaller suburban areas generate only 26 percent of total table mat and napkin sales and tend to be relatively underdeveloped.
The table mat and napkin market is clearly dominated by three major manufacturers. These three manufacturers generate total retail dollar sales equal to 58 percent of the total market. The remainder of the market is divided among a number of smaller manufacturers.
Discount stores are the leading outlets for table mats and napkins (27 percent of dollar sales), while supermarkets are a minor factor (only 11 percent of total retail dollar sales). Outlets such as mail order, specialty stores, and other nonconventional retail outlets are not really in the business. A total of $31 million in retail sales is generated through discount stores, $22 million through department stores, $16 million through national chains, and $19 million through variety stores. Supermarkets account for only $12 million. Specialty stores and mail order vehicles represent only 3 percent of total sales.

It should also be noted that a comparison of unit sales and dollar sales indicates that the price level in department stores and regional chains is slightly higher than that in discount stores and supermarkets. For example, supermarkets generate 13 percent of total unit sales, yet only 11 percent of total retail dollar sales.

CONSUMER USAGE AND ATTITUDES

Table mats and napkins are purchased almost exclusively by women. In some cases, the husband may accompany the wife while she is purchasing table mats and napkins. It was clearly indicated by the people interviewed, however, that this is a female purchase decision. It was indicated that the female generally made all decisions regarding the type of table mats and napkins purchased. Even in the case of gift purchases, the woman was the actual purchaser.
The quantity of table mats and napkins purchased will vary depending on the number of people in the family, and the amount of entertaining done. There was a clear difference between heavy and light users of table mats and napkins. Heavy users tended to have large families and generally used a lot of dishes during each meal. These women indicated that because of the sheer volume of usage, their table mats and napkins tended to wear out or become badly stained more quickly.
For table mats and napkins, brand names were found to be not very important. A number of the respondents interviewed recognized the major brand names. These respondents indicated, however, that they did not make their purchase decision on the basis of the brand name of the item. They did not even attempt to repurchase the same brand that they had bought in the past ”even if this brand ideally suited their desires. Most of the people interviewed felt that they would evaluate a table mat or napkin at the time they were making the purchase and would base this purchase decision on a number of factors, with brand being one of the least important.
The people interviewed indicated that they generally purchased their table mats and napkins in department stores or in discount stores, with only a small percentage making their purchases in supermarkets. The main reason given for purchasing in discount and department stores was the large selection available in these outlets. Although most of the respondents interviewed realized that table mats and napkins were sold in supermarkets, they generally felt that the selection there was too small to warrant much of their shopping time. Supermarkets would be an acceptable outlet for table mats and napkins purchased for selfuse, provided there was a reasonable selection of items and the quality of the products was comparable to that found in discount and department stores.
Approximately 28 percent of total table mat and napkin sales are for gift purposes. Of total table mat and napkin sales ($113 million), $32 million are for gift purposes and $81 million are for self-use.
Department stores and national chains are the most acceptable outlets for gift purchases of table mats and napkins, while supermarkets are the least acceptable. Approximately 50 percent of total gift sales are made in department stores and national chains. Discount stores account for 19 percent of gift sales, variety stores for 16 percent, and supermarkets for only 3 percent. Nongift purchases are the most important segment of the market, and discount stores dominate this segment, with 31 percent of nongift sales. Supermarkets also play a significant role in the nongift market, with 14 percent of the retail dollar sales for the segment.
Consumers normally do not plan to give gifts of table mats and napkins unless the recipient has a specific need for them. Most table mats and napkins that are purchased as gifts are purchased on impulse. The exception to this is where there is a specific need (e.g., weddings or knowledge of the recipient s need for table mats and napkins).
Consumers do not expect table mats and napkins to be on sale and do not wait for sales to make their purchases. The people interviewed during this research indicated that they almost never see special sales or promotions on table mats and napkins. Because of this, most consumers expect to pay full retail price for table mats and napkins and do not spend a lot of time seeking out bargains.
Ensembles make up a relatively small segment of the total market, accounting for only 12 percent of dollar sales and 10 percent of total unit sales. Ensembles of table mats and napkins are frequently desired for gifts, but they usually are not wanted for self-use. The consumers interviewed indicated that they would prefer to buy their table mats and napkins individually. When they need a table mat for their own use, they do not want to be forced to buy a napkin as well. On the other hand, if the consumer is purchasing table mats and napkins to give to someone else, a matching ensemble is appealing.
The color of table mats and napkins is clearly more important to consumers than the pattern or design. Conservative or traditional designs are preferred over unique or fashionable designs. Consumers are primarily interested in coordinating their table mats and napkins with the color theme in their dining room or kitchen. Because of this, it is very important that the overall color of the table mat and napkin does not conflict with the overall color scheme in the dining room or kitchen (wallpaper, appliance colors, and so on).
White, avocado, gold, and brown are expected to be the largest-selling colors for table mats and napkins in 2000. The research in this study indicates that yellow and gold are increasing in importance, while avocado is decreasing . White as the basic color for table mats and napkins is expected to remain constant at 34 percent of total sales through 2000.

The respondents interviewed in this research indicated that in their opinion, table mats and napkins should not be designed for ˜ ˜high fashion. The table mats and napkins they preferred most were basic plaids, stripes , and checks; solid colors; or very simple designs, including fruit, flowers, spices, and so on. These consumers were presented with fifteen possible design concepts, ranging from very traditional to wild and modern. Table 9-1 illustrates that those designs that received the highest preference (highest score) were clearly the most basic.

Table 9-1. Consumers Preferred Design Concepts for Table Mats and Napkins
Design Concept	Preference Score
Basic plaids, stripes, and checks	64
Solid colors	62
Flowers	58
Fruit	52
Spices	52
Food recipes	50
Scenes of four seasons	46
Designs by famous artists	46
Old print ads	42
Peanuts characters	42
Pictures of songbirds	40
Authentic reproductions of paintings	36
Children s art	34
Magazine covers	12
Packaged goods pictures	6
Note: Scores based on a 5-point scale ranging from excellent through poor. Highest score indicates most positive reaction.

Consumers generally prefer that table mats and napkins be put on display at retailers without being packaged. When shopping for table mats and napkins, consumers prefer to be able to feel the cloth so that they can judge its thickness , absorbency, and so on. They believe that if table mats and napkins were to be packaged, they would not be able to make intelligent purchase decisions.
Table mat and napkin sales are concentrated in the smaller families. Although very large families (six members and over) tend to be the heaviest users of table mats and napkins, the bulk of total purchases are made by one- to three-member families. Table mat and napkin sales are further concentrated in the middle to upper middle income ranges. In addition, these income groups purchase a greater percentage of table mats and napkins than would be normally representative of their share of U.S. households.
Most consumers are not aware of the price of table mats, and will base their price comparisons strictly on the prices of the table mats available in the retail outlet at the time they are purchasing a new one. While most of the people interviewed indicated that they do want to obtain the best bargain possible, they really have no benchmark on which to base this, primarily because the purchase is so infrequent.
There were several factors regarding the purchase of table mats that were common among respondents. Table mat sales tend to be concentrated in the lower price ranges. Over half of consumers purchase two or three table mats at a time. The majority of table mats are purchased as nongift items.
As with table mats, there were also several consistent factors identified in the purchasing of textile napkins. Most consumers purchase four or less textile napkins during a single transaction. The most frequent transaction size was two, representing 28 percent of all transactions. Nongift sales make up 88 percent of all textile napkin sales and 87 percent of all textile napkin retail dollar sales.
A good textile table mat or napkin is considered to be one that is attractive, is long- lasting , and won t fall apart after a few washings. The primary problem with table mats and napkins is that they wear out. They also become permanently stained, or they fall apart after a number of washings. Table mats and napkins that would last longer would be considered to be preferable.
People would be willing to pay more for good table mats and napkins. A table mat or napkin that lasts longer is considered to be worth more than an inferior table mat or napkin. Because of this, most of the consumers interviewed would be willing to pay more for a good table mat or napkin.
Most consumers use textile table mats and napkins only occasionally, although a small group never uses these items, and another small group uses them every day. Typically, the average consumer uses textile table mats and napkins approximately once a week or less. For many, the main reason for using textile table mats and napkins is that the family is giving a dinner party, which is not typically an everyday occasion.

Consumer Concepts

Three different consumer concepts were developed and presented to consumers for their reactions. The following summarizes the consumers overall and specific reactions to each of these concepts.

Consumers had a lukewarm reaction to the concept of purchasing both textile table mats and napkins and paper napkins with coordinated patterns and prints. The consumers primary objection to this concept was that they felt that it was impractical to coordinate paper napkins with cloth table mats and napkins because (1) they like to buy whatever brand of paper napkins is on sale and don t want to be locked into a single brand, and (2) they feel that the cloth patterns will eventually fade and will not match the paper once this happens.
Consumers generally reacted favorably to the concept of purchasing table mats and napkins with the latest designs (modern recipes, great paintings, attractive reproductions of fruit or flowers, and so on). The people interviewed indicated that they liked the idea of being able to select a design that matched their kitchen and/or their individual taste. It was clearly indicated, however, that there would have to be a fairly wide selection of designs to accommodate each consumer s individual desires. Although designer table mats and napkins generally had a wide acceptance, each specific design individually appealed to only a very small group of consumers. Finally, it was indicated that the primary appeal of this concept would be in purchasing for the gift market. Consumers would be much more prone to buy table mats and napkins with modern designs to give away to someone else than they would be to buy them for self-use.
Consumers responded very enthusiastically to the concept of being able to purchase highquality, basic textile table mats and napkins (i.e., department store quality) at their local supermarket. It was indicated that this concept filled a primary need in that they would be able to purchase their table mats and napkins conveniently while they were in the food store instead of making a special trip to a department store or discount store. Also, they felt that a supermarket was a logical place to buy table mats and napkins in that consumers are thinking of their kitchen and dining room while they are shopping in the food store.

Although it was clearly indicated that consumers would purchase textile table mats and napkins for their own use in supermarkets, they would hesitate to purchase gift items in these outlets. Generally speaking, most of the people interviewed did not feel it would be acceptable to purchase a gift for someone in a supermarket, as this is generally considered to be a low-status outlet.

There were two problems associated with the supermarket program. First, it was felt that there would be a very limited variety of designs in supermarkets. Consumers felt that they must have at least enough colors to match with their kitchen and dining room. Second, women like to touch and feel table mats and napkins before purchasing them. Consumers felt that in a supermarket program, the table mats and napkins were likely to be all packaged up, and that this would be a negative.

The supermarket concept received by far the most positive reactions from consumers. Participants in the focus group interviews were asked to rank each concept as their first through third choices. A score was then assigned to each concept based on how many consumers gave it first, second, and third place. The supermarket program received a substantially higher score than any of the other concepts, as indicated in Table 9-2.

Table 9-2. Consumers Ratings of Alternative Marketing Concepts for Table Mats and Napkins
Marketing Concept	Preference Score
Supermarket program	62
Designer prints	36
Coordinated kitchen	32
Note: Scores based on consumers rating in order of preference. Highest score indicates most

SUPERMARKET PRACTICES AND ATTITUDES

Most supermarkets carry at least some textile table mats and napkins; however, the amount of space allocated to this category is generally minimal. Almost all of the supermarkets visited in preparation for this marketing plan carried at least some table mats and napkins. However, they were usually located on the bottom shelf of one section of a gondola in the housewares section.

Most of the supermarket executives interviewed indicated that they believed table mats and napkins to be a ˜ ˜good, stable business ; however, most of them did very little merchandising of this category. There were a few exceptions to this. A few chains engaged in a major program, displaying table mats and napkins on the equivalent of half of a four-foot gondola section. Generally speaking, however, table mats and napkins were relegated to an unimportant position on a lower shelf, with no more than one four- foot shelf of space.
The table mats and napkins currently carried by supermarkets are at the low end of the quality scale. Supermarkets are not involved in selling high-quality , high-fashion table mats and napkins. The type of merchandise currently sold is chosen primarily on the basis of price so that the supermarket can offer a line in the lower price ranges.
Price points on table mats and napkins sold through supermarkets are generally in the low to mid range. The supermarket executives interviewed were very concerned that their retail prices on these products be competitive. They believed that consumers expect supermarkets to carry this type of merchandise at fairly economical prices.
The retail margins (percentage off retail) on table mats and napkins are currently in the area of 40 percent. These margins assume no outside servicing. In this case, the supermarket handles the merchandise through its nonfoods warehouse, and all in-store servicing is performed by store personnel. Where a rack jobber is involved (this is seldom), the store will generally net a 25 percent profit.
There are no real standards for performance or profitability of table mats and napkins sold through the supermarket trade. Most supermarket people do not really know the amount of profit that a given program is generating. They generally use trade margins and inventory turns as their primary indices.
Supermarkets generally do not expect a line of table mats and napkins to be nationally advertised. None of the supermarket executives interviewed were aware of any nationally advertised brands of table mats and napkins, and they did not feel that national advertising would be necessary on a new brand that they might take on. Most of the advertising for this category is done by the retailer. Almost all of the supermarkets visited were doing at least some advertising of their own on table mats and napkins. This was primarily related to special sales on specific items.

A supermarket would, however, generally expect the manufacturer of table mats and napkins to provide it with allowance money so that it could advertise sales on these products in its regular food ads. There was a mixed reaction to the idea of the manufacturer s providing co-op money to pay for this advertising. The majority of people felt that co-op money would not be necessary. Virtually all the people, however, felt that it would definitely be necessary for the manufacturer to provide allowance money to support price discounts .
As with most nonfood items, the housekeeping on table mats and napkins in supermarkets varies considerably from chain to chain and from one region of the country to another.

During store checks of table mats and napkins in supermarkets throughout the country, it was found that the housekeeping ranged from excellent to poor. Most of the people interviewed felt that their housekeeping efforts in the nonfood areas were improving substantially; however, they could not maintain a consistently high level of housekeeping. It was indicated, however, that where the racks are very clearly marked and the items are packaged conveniently, with the proper in- packs and so on, their own people can do a reasonably good job of housekeeping. Some chains are especially well equipped to handle housekeeping on nonfood items and do an excellent job in this area.
Most supermarket chains are properly equipped to handle soft goods such as table mats and napkins through their nonfoods warehouse. All of the supermarket executives interviewed indicated that they were very well equipped to handle the special ˜ ˜pick packing and other requirements necessary for nonfood items. Most of the table mats and napkins that they currently sell are handled through the warehouse without any problems.
A major new program on table mats and napkins would initially be sold to the appropriate merchandising manager, and then all follow-up transactions would be handled by the appropriate buyer. During trade meetings, it was indicated that the decision to take on a new and major table mat and napkin program would be made, in most cases, by the merchandising manager. In some cases the manager would discuss the decision with the appropriate buyer to arrive at a joint decision. It was clearly indicated, however, that this decision would be made above the normal buying level. Once the program has been accepted, most follow-up transactions would be made with the buyer.

Trade Presentation of the Coil Venture

During the preparation for the writing of this marketing plan, interviews were conducted with leading executives of seven major supermarket chains located throughout the United States. During each of these interviews, a ˜ ˜straw man concept on selling table mats and napkins through supermarkets was outlined. This concept had the following key elements:

THE SCOPE OF THE PROGRAM. The overall concept is to put together a major totally integrated marketing program for textile table mats and napkins, to be launched solely through supermarkets. This will be the largest national program on table mats and napkins ever launched by any manufacturer.
PROGRAM OBJECTIVES. Supermarkets currently have only a minor share of the total textile table mat and napkin business. The objective of this program is to shift a major portion of the table mat and napkin business to supermarkets. In sum, this program is intended to restructure the table mat and napkin industry so that supermarkets will become the leading retail channel of distribution.
DISTINCTIVE NAME/PACKAGE/DISPLAY. A traditional supermarket program has very little display impact on the consumer. Table mats and napkins are usually given very little space and are displayed in an area of the store that has very little visibility. This concept will dramatically change the in-store impact by providing a dramatic and distinctive display unit that will fit into the current gondolas. The name and packaging will be tied into the display with a central theme so that the consumer will receive a dramatic, well-coordinated image. In sum, this concept will have a highly visible billboard effect as the consumer is walking through the supermarket, attracting a great deal of interest and resulting in impulse purchasing.
PRODUCT LINE. The consumer research indicated that although consumers would prefer to buy table mats and napkins in supermarkets, they frequently shop at alternative outlets, primarily because there is very little selection in supermarkets and the product quality is at the low end of the spectrum. This concept will provide the consumer with high-quality merchandise at competitive prices. In addition, this concept will provide an excellent selection of table mats and napkins. Consumers will now be able to find the same quality and selection of basic table mats and napkins in supermarkets that they used to have to go to other, less convenient outlets to find.
DISTRIBUTION. The product will be distributed through the supermarkets nonfoods warehouse and sold through a network of food brokers . There will be no servicing in the store by either rack jobbers or manufacturer personnel. The display will be constructed in such a way that the regular in-store personnel can easily maintain the stocking and housekeeping of the rack.
ADVERTISING AND PROMOTION. In order to allow the supermarket to put merchandise on sale and promote it in its regular newspaper ads, trade allowances will be provided at various times throughout the year. Additionally, there will be a limited amount of national advertising and a manufacturer-sponsored sales promotion program.
MARGINS/VOLUME. The manufacturer will provide the supermarket with a 40 percent margin (percentage off retail). While the volume per store is not yet known, it is anticipated that this program will generate five to six inventory turns per year.

Trade Reactions

Each supermarket executive interviewed was told that this was a hypothetical program that was still early in the planning stages. They were told that the decision as to whether or not the program would move forward would depend on the results of discussions with them and other people in the industry, as well as a detailed financial analysis. After the overall concept was described, the trade was asked for overall and specific reactions. The following outlines the trade s reaction to the Coil supermarket venture:

The overall trade reaction to the Coil supermarket venture was positive. Almost all of the supermarket executives interviewed were receptive to the overall concept and felt that this was an area that definitely needed a strong program now. The people interviewed generally felt that it would be possible to shift a substantial percentage of the total business to supermarkets, and they indicated that they would like to participate in such a program. In addition, they felt that the venture was likely to be successful, as there appeared to be no competition at this point in time.
The trade strongly indicated that it would prefer that the items carried in the Coil line be standard rather than premium products. The executives interviewed felt very strongly that the price points in this category should be competitive with those of other channels of distribution (notably discount stores). Ideally, the prices of these goods in a supermarket would be lower than the discount stores prices. Because of this, the executives felt that it would not be appropriate to design a program selling premium-priced, high-quality table mats and napkins through supermarket chains.
The supermarket executives interviewed generally felt that a manufacturer-provided display to be inserted in the gondola would be a valuable asset to the entire program. They felt that a properly designed display would get consumers attention, would facilitate housekeeping and loading by in-store personnel, and would provide additional motivation for them to take on the new program. In addition to the trade s receptivity, the concept of a display provided by the manufacturer elicited the following suggestions:
1. It was generally felt that the size of the display should be flexible and that it should fit into the regular gondola section. Some stores wanted an entire four-foot section, while others wanted only two shelves of the four-foot section. Because of this, it was felt that what was needed was a modular unit with a variable number of shelves that could be adapted to the size of the individual store.
2. It was unanimously felt that the configuration of the display should be such that it would be very easy for in-store personnel to stock. The stores ability to handle the instore merchandising varied considerably from one chain to another. For example, one chain felt that it would have absolutely no problem maintaining impeccable housekeeping. On the other hand, another chain indicated that housekeeping would vary considerably from one store to another, primarily because some stores in the chain have trouble with housekeeping in the nonfoods areas. The concept of a visual schematic to facilitate easy identification of which products go where was extremely well received, and it was generally felt that this would minimize the problem.
It was generally felt that space would be made available for a new venture like the Coil supermarket program. Nearly all of the supermarket executives interviewed agreed that they would be able to find space for this program, either by reducing their involvement in another category (e.g., putting it in the soap section and reducing a few sizes of soap) or by shifting items around in the housewares section. In sum, space would be made available for initial distribution, and it would remain available as long as movement appeared to warrant carrying the line.
The trade was generally unable to indicate its requirements for acceptable movement of a textile program. Generally speaking, the stores interviewed were not aware of their current performance in this category and did not have any rule of thumb by which to measure the performance of a new program. A number of possible guidelines were provided, but even these were very subjective .
A 40 percent margin (percentage off retail) appeared to be a generally satisfactory trade margin on a new table mat and napkin program. This varied somewhat from chain to chain. For example, one merchandising manager indicated that he would have to have at least a 50 percent margin. Generally speaking, however, a 40 percent margin appeared to be attractive enough to warrant distribution.
The trade indicated a clear preference for a trade allowance program of some type that would permit them to discount in-line merchandise so that it could be put on sale and advertised as such as part of the regular advertising program. It was clearly indicated by most of the trade people interviewed that they would prefer that sales be provided on regular merchandise carried in the regular line. They felt that this would enable them to continually generate excitement within a normal line. Special merchandise put on sale through dump bins was not nearly as interesting to them as in-line sales. Additionally, they felt that these sales should be provided to them several times during the year (the most preferred number was four).
Most of the supermarket executives interviewed apparently promote table mats and napkins three to four times a year and feel that they get good results from this. Because they are accustomed to promoting table mats and napkins now, they would feel perfectly comfortable continuing to do this with a new program. Although there were a few exceptions, most people indicated that it would not be necessary for the manufacturer to provide co-op money to pay for the stores advertising programs. It was generally felt that if a reasonably effective allowance program were offered , the stores would pay for their own advertising, as they do now. The main reason for this negative response to co-op money was that it was frequently found to be a ˜ ˜pain in the neck to keep track of co-op money and to provide proof of advertisement.
The supermarket trade preferred that the table mats and napkins be packaged in such a way that the in-store personnel would not be required to fold the products. It was generally felt that if some form of packaging that kept the products in a constantly folded state were offered, this would greatly simplify the in-store housekeeping problem for store personnel. Additionally, it was felt that if the table mats and napkins were packaged in such a way that the consumer could feel the actual merchandise without destroying the package, this would be a significant consumer benefit. Finally, the trade really did not have any preference on a two-pack versus a single pack. It was suggested that a test be conducted on both to determine the advantages of each.
It was suggested that the inventory on the rack consist of eighteen units and the replenishment in-packs consist of six units each. It was suggested that the case size be six dozen per case, or twelve in-packs. It was generally felt that this combination would be easily manageable, both in the store and in the warehouse.
The supermarket trade strongly recommended that the merchandise be changed, at least in part, approximately four times per year. The trade felt that it was important to keep the rack ˜ ˜ alive by providing some changes periodically throughout the year. It was indicated that if the merchandise were never changed, it would quickly become invisible to the consumer.
The supermarket trade saw no reason why this could not become a permanent program within the supermarket. It was indicated that as long as the movement appeared to be satisfactory, the supermarket executives would not consider this to be a temporary program. They were eagerly looking for ways to improve their soft goods merchandising, and this appeared to be an attractive way to permanently put them in the textile table mat and napkin business.
Coil Industries was generally considered to be a major company in this industry, and this added credibility to the entire program. Most of the people interviewed were familiar with Coil and had a highly favorable impression of the company. It was felt that if Coil Industries were to engage in such a program, it would have a reasonably good chance of achieving success.

CONCLUSION

The textile table mat and napkin market is a small but stable market with little potential for expansion. The total market for table mats and napkins in 1999 amounted to $113 million in retail sales and is expected to grow at the rate of approximately 5 percent per year for the foreseeable future. Consumer research indicated that because of the nature of this product category, there is little potential to explode the market through innovative marketing programs. Consumers tend to require a given number of items in this product category per year and do not appear to be willing to expand this usage, except perhaps on a temporary basis. For example, severe price cutting may induce consumers to buy more table mats and napkins in a given period, but if they do so, they will simply reduce their consumption in the next period. The reason for this is that there is apparently no way to induce consumers to use up (wear out) more products than they are using up currently.
There is some geographic concentration in the table mat and napkin market. The textile table mat and napkin market provides greater opportunities in the suburban and central city areas than in rural areas, and greater opportunities in the Northeast and North Central geographic regions than in the South, Mountain, Southwest, and Pacific regions. The Northeast and North Central regions account for 58 percent of total table mat and napkin sales, and the market is clearly concentrated in the major cities (31 percent) and larger suburban areas (43 percent).
There are currently no retail price standards in the table mat and napkin market. Virtually the same products are sold in the same retail channels of distribution at a myriad of different retail price points. In addition, most consumers have no idea of what the price of a table mat or napkin should be. While they obviously want to obtain the best bargain possible, consumers have no benchmark on which to base textile table mat and napkin retail prices other than the range of merchandise available in any given outlet. The lack of price recognition appears to result from the infrequent purchase of these items.
There is a substantial potential for the sale of textile table mats and napkins through supermarkets. Although the table mat and napkin market currently is relatively underdeveloped in the supermarket trade (11 percent of retail dollar sales), the potential in supermarkets is substantially greater than this. The basis for this potential can be summarized as follows :
1. Major success in a limited number of chains. Almost all supermarkets carry at least some table mats and napkins. Usually they are located on the bottom shelf of one section of a gondola in the housewares section. A few supermarket chains, however, have been experimenting with large textile table mat and napkin programs with a great deal of success. These supermarkets are putting table mats and napkins on the equivalent of an entire four-foot gondola section, and are generating sufficient sales at retail to justify giving the program this amount of space. The executives of these chains who were spoken with indicated that they planned to accelerate their efforts in the table mat and napkin area.
2. Buyers acceptance. With one exception, all of the supermarket executives interviewed were receptive to the idea of taking on a major brand of table mats and napkins. They generally felt that they would be willing to devote a substantial amount of space (e.g., four gondola feet) to such a program, and that this amount of space would remain available as long as movement appeared to warrant carrying the line. These retail executives saw no reason why a large textile table mat and napkin program couldn t become a permanent part of their nonfoods section.
3. Extremely favorable consumer attitudes. Consumers generally feel that a supermarket is a logical place to buy table mats and napkins because they are thinking of their kitchen and dining room while they are shopping in the supermarket. The only reason given for not purchasing table mats and napkins in supermarkets now was that the selection in food stores was almost negligible, In sum, consumers would rather purchase textile table mats and napkins in food stores than in any other outlet, primarily because of the convenience factor.
4. Supermarkets are well equipped to handle a table mat and napkin program. Most supermarket chains are properly equipped to handle soft goods such as table mats and napkins through their nonfoods warehouses. Those that carry them now are not experiencing problems with the table mats and napkins that are presently moving through these warehouses. Additionally, the people interviewed indicated that clearly marked and properly constructed racks for nonfood products enabled their in-store personnel to adequately handle all housekeeping chores.
A carefully selected network of food brokers would be the ideal selling agent to handle a table mat and napkin program through supermarkets. The key retail executives interviewed generally believed that a rack jobber or manufacturer s detailing service would cost too much for a program in this category, given the small expected dollar volume. They felt that a network of food brokers who are especially well equipped to handle in-store detailing, coupled with the store s ability to assist in this effort, could effectively sell the products at the headquarters level and could also do a satisfactory job at the store level.
There is clearly an opportunity for a branded line of table mats and napkins. No such line currently exists. Although the table mat and napkin market is currently dominated by three major manufacturers, these three manufacturers have only modest brand recognition in the table mat and napkin categories. Consumers do not generally recognize any current brand of table mats and napkins. More important, consumers do not now make their purchase decision on the basis of the brand name of the item, and do not even attempt to repurchase the brand that they have bought in the past. Because of this, there is clearly an opportunity for a manufacturer to develop a brand franchise through heavy consumer promotion.
Color coordination is the only key consumer benefit that would be meaningful for an entire line of table mats and napkins. Although there are specific benefits that are important for either table mats or napkins, the research identified color coordination as the most important overall consumer benefit. Consumers have a strong interest in coordinating their table mats and napkins with the color theme in their kitchen or dining room.
There is a broad but fairly distinct target market toward which a brand of table mats and napkins could be directed. Table mats and napkins are primarily purchased by females over twenty-five years old, with two- or three-member families, in the middle income ranges, who have at least a high school education. Additionally, these women are primarily purchasing table mats and napkins for their own use rather than as gifts.
Coil Industries is ideally suited to launch a major program selling a brand of textile table mats and napkins through supermarkets. Coil has an excellent reputation in the supermarket industry. Nearly all of the people in the supermarket trade who were interviewed were familiar with Coil and had a highly favorable impression of the company. They felt that if Coil were to engage in such a program, it would have a reasonably good chance of achieving success. Additionally, based on its current product lines, Coil is well equipped to produce a line of quality table mats and napkins that would fit well into a supermarket branded program.

RECOMMENDATIONS

Coil Industries should move now to launch a branded line of textile table mats and napkins to be sold through supermarkets. The following paragraphs detail the rationale for this recommendation:

A branded supermarket program on table mats and napkins offers Coil the opportunity to more than double its current sales and profits in this category. On an ongoing basis, we believe that a branded textile table mat and napkin program through supermarkets would generate retail sales of approximately $20 million, net factory sales of approximately $12 million, and profit before tax of approximately $1.8 million annually. These forecasts are detailed in the Financial Projections section.
A branded supermarket program offers Coil the opportunity to increase its share of the table mat and napkin market by a substantial proportion. The objective of the program recommended would be to achieve a 17 percent dollar share of the total textile table mat and napkin market. While we believe this figure is reasonable, its achievement will more than double Coil s current share of market.
A branded business would be a relatively stable one. Because this would be a branded item with a sustained consumer franchise, Coil would not be subject to the normal distribution shifts, price cutting, and overall instability of operating in a market without such a brand.
Coil could launch a branded supermarket program without any disruption in its normal day-to-day operations. By gradually expanding the program to national levels, Coil would have ample time to expand its facilities and make the modest staff additions that would be required to manage a supermarket-distributed brand.

MARKETING PLAN ELEMENTS

PRODUCT LINE. Coil s product line should provide the consumer with a basic array of textile table mats and napkins for self-use on a day-to-day basis. It should include three types of table mats and three types of napkins (solid color, printed, and striped). Specifically, the products in Table 9-3 should be selected from the present Coil line.

Table 9-3. Product Line Summary
Product	Code Number
Table mat	12500
Table mat	12213
Table mat	12500 (solid)
Napkin	13306
Napkin	13214
Napkin	13300

These products should be produced in four basic colors (gold, yellow, brown, and green), and the same colors should be used for each of the table mats and napkins (striped, printed, and solid). In this way, Coil will provide consumers with all their product needs, in a variety of colors that will coordinate with almost any kitchen or dining room.

PRICING. All table mats should be priced at $2.99. Napkins should be priced at $1.99. These prices will allow Coil the necessary margins to pay for a national advertising and promotion program, yet will still be acceptable to supermarkets. The food trade believes that this pricing structure is suitable from a consumer standpoint.
PACKAGING. Coil should not package these products. The cost would be prohibitive, and consumers prefer buying textile products that they can touch. Instead, it is recommended that a special gummed label be developed giving the brand name, pertinent data, and, as necessary, any promotional announcements. The table mats and napkins will be presented to the consumer as they normally are, folded and placed on the rack with an identifying sticker.

Although a nonpackaged product may create housekeeping problems at the store level, it is believed that these problems can be overcome . Two factors account for this optimism . First, all of the supermarkets visited that were running major textile table mat and napkin programs were successfully doing so without packaging. Second, the display rack (described below) will be an enormous help in maintaining attractive displays.
DISPLAY STRATEGY. It is recommended that a modular display be developed in two sizes, to be inserted into supermarket gondolas. This display should be created in such a way that it can occupy the top half of a four-foot gondola section in small stores and the entire fourfoot gondola section in large stores.
PRODUCT NAME. It is recommended that Tiffany be used as the brand name for this product. The primary product advantage Coil will have in this program is that it will be providing the consumer with a coordinated line of table mats and napkins in a large variety of colors. The name Tiffany effectively communicates this product advantage.
MARKETING SPENDING. We recommend a first-year marketing expenditure of $3,957,000 (37 percent of factory sales). Advertising will consume $2,097,000 of this, or 53 percent of the total budget. By limiting commercial production expenditures, the plan is to apply over 90 percent of this amount to working media. Promotion expenditures will total $1,860,000. Almost half this amount will be spent on direct consumer offers (couponing and refunds ). Going-year marketing spending is planned at $1,758,000 (14 percent of sales), with $1 million of this amount being spent for consumer advertising.
COPY STRATEGY. The copy on the display, in the promotional material, and in advertisements should clearly communicate to the consumer that this product provides a coordinated line of table mats and napkins in a variety of colors. Media efforts should further emphasize that the product line is available in supermarkets.
MEDIA STRATEGY. Daytime television is recommended as the primary medium for the brand s consumer advertising. At this point, it is envisioned that most, if not all, of the brand s working dollars should be spent supporting thirty-second commercials. Longer spots would be unaffordable. Shorter ones might prove difficult to administer and would not provide the time required to adequately communicate all copy points. Further, it is recommended that the brand s working dollars be flighted. Flighting (the concept of advertising for several consecutive weeks, taking a hiatus, and then repeating the process) enables the efficient use of media funds. The budget established for this brand provides sufficient funds to support three or four flights of five-day weeks each. Naturally, the first of these flights will be the longest in duration and will include the greatest number of commercial announcements. Such front-end loading will help establish the brand quickly and convince the trade of its consumer potential.
PROMOTION STRATEGY. Promotion efforts will focus on generating consumer trial of the brand. Temporary price incentives ( coupons and refund offers) will be utilized to do this. Trade expenditures will be maintained at the minimum levels consistent with attaining the brand s distribution goals.

It is recommended that three consumer promotion events be run in the introductory year. The first should consist of a consumer refund offer. The offer should be announced on a sticker attached to initial distribution quantities . The consumer would mail this coupon to Coil, who, in turn , would mail back a coupon giving the refund amount on the next purchase of a Tiffany product. The second event should consist of a coupon, redeemable at the local supermarket, to be run by Coil in newspapers. The third event should consist of an in-ad coupon to be run in the regular newspaper advertisements of participating retailers.

To support the consumer promotion and to generate trade interest, the trade should receive a first-month introductory offer of one free item with a purchase of twelve. In addition, this event should include an advertising allowance of 10 percent. The second trade event, to take place in Month 4, should consist of a 15 percent advertising allowance on an eight weeks purchase.
TRADE MARGINS. Coil should offer the retail trade a margin (percentage off retail) of 38 percent. During the trade meetings, it was indicated that, generally speaking, the supermarket trade shoots for an objective of a 40 percent margin on products such as table mats and napkins. Based on Coil Industries current experience with what supermarkets are actually getting, it is felt that a 38 percent margin would be acceptable to the trade.
DISTRIBUTION SYSTEM. Coil should establish a national network of food brokers to handle the selling and maintaining of the table mat and napkin line. The brokers in the network should be paid a commission of 8 percent on gross sales of the product line in their respective areas. A number of food brokers have been interviewed that are well equipped to handle the heavy in-store detailing required for this product category, and they have indicated that an 8 percent commission would provide them with sufficient motivation to properly handle the selling and other related functions.
IN-STORE RACK LOADING. It is recommended that the Tiffany product be shelved in fourfoot racks, each containing the six different product types and the four basic colors indicated earlier. There will be a total of twenty-four stock-keeping units. Large racks, floor to top of gondola, would hold thirty-six units of each item. Smaller racks, using just the top half of the gondola, would hold only eighteen units of each item.
CASE PACKS. It is recommended that all products be packed six dozen per case, broken down into twelve individual in-packs. There should be six units in each in-pack. If possible, units should be packaged in a cartridge form so that they can be loaded easily onto the racks. With the in-packs packed in units of six, the supermarket warehouse will find it very easy to pick-pack for each individual store.

TENTATIVE TIMETABLE. Assuming that management approval to proceed with this program is received on April 21, 2000, the advertising should be able to begin on September 1, 2000. The exact timing of these steps will of course depend on a number of factors, including available funds, production capacity, and other management decisions. Table 9-4 gives the details of this recommended timetable.

Table 9-4. Tentative Timetable
Marketing plan presentation	4/7/00
Marketing plan approval	4/21/00
Start display design and production	5/1/00
Start advertising creation and production	5/1/00
Assign project manager	5/1/00
Creative ready	6/10/00
Product ready for shipment	7/22/00
Start retail placement	8/12/00
Start advertising	9/1/00

FINANCIAL PROJECTIONS

It is forecasted that $19.8 million in retail sales and $11.9 million in net factory sales will result in a profit before tax of $1.8 million. This is illustrated in the estimated income statement in Table 9-5 and is backed up in considerable detail in a separate financial plan.

Table 9-5. Estimated Income Statement for Going Year (000)
Retail sales	$19,812
Retail margin (38%)	-7,529
Gross sales at factory	$12,283
Cash discount (2% gross sales)	-246
Returns (0.05% gross sales)	-61
Seconds (0.85% gross sales)	-104
Net sales	$11,872
Less: Freight (5%)	-594
Cost of goods	-4,416
Package cost ($0.02/unit)	-569
Gross profit	$6,293
Operating expenses
Advertising	$-1,000
Promotion	-758
Display depreciation (3 years)	-177
Marketing and administration	-537
Sales and distribution	-2,040
Profit before tax	$1,781

Retail sales are based on the sales forecast of $19,812,000 at retail prices of $2.99 for table mats and $1.99 for napkins. The display depreciation expense is based on the distribution forecast and assumes placement of 3,291 large racks at $100 each (total of $329,000) and 4,056 small racks at $50 each (total of $203,000), for a total display expense of $532,000. This total cost was divided by a three-year expected life to arrive at an expense of $177,000 annually. Marketing and administration assumes a $300,000 annual expense to cover the regional sales managers plus their expenses and supervision and 2 percent of net sales for corporate overhead. Sales and distribution assumes 8 percent of gross sales for broker expense. Distribution is assumed to be 8.9 percent of net sales.

^[1] Disclaimer: The specific information in this sample marketing plan was compiled for intended use as an example only. Although this marketing plan is based on actual products from a real company, the specific information in the plan is hypothetical and is not intended to compete with or to divulge proprietary ideas, company structure, or the financial status of any company. The names, numbers , and some of the facts in this marketing plan have been changed because of the confidential nature of the information. The information is intended to be used as a guide only.