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Unformatted text preview: II. The Challenge This company will buy and sell used furniture from the residents of Isla Vista and the surrounding Santa Barbara Area. Our target market will be College Students who are looking to dispose of their old furniture upon switching houses or graduating, as well as offering newly refurbished furniture for very affordable prices. The company will be based from a store near Isla Vista and the University of California, Santa Barbara campus. We will also offer a service to have the furniture we acquire to be custom painted with artwork to take advantage of the local cultural vibe of Isla Vista. What differentiates our service is that we will offer free removal of old furniture along with a small compensation to the customers, as well as free delivery to our customers who purchase our product. We will also offer a discount to customers who have donated or sold furniture in the past. UCSB has about 18,000 students enrolled, with about three- quarters of those living in Isla Vista or the surrounding areas, and the last quarter being freshmen in the dorms. This amounts to about 4500 graduating seniors each year looking to dispose of some or all of their used furniture. The remaining students will be looking to buy or sell furniture of some sort while moving around during their college enrollment. Our company hopes to tap into this market offering a free service of removal of old furniture, as well as free delivery of furniture purchased from our store. With regards to sales figures, our company hopes to sell furniture realistically in the first year to 10% of the enrolled students at UCSB, or 1800 people. In addition we hope to sell furniture to the students of the city college as well. This comes to around 2800 customers per year. While furniture prices are relative to the pieces we acquire, our goal is to provide inexpensive furniture for the college student market. If we use $40 as an average price of a piece of furniture being purchased, this leaves us with sales of $112,000 annually for the first year. We hope to increase the number of students who use our furniture pick up and delivery service by 2% per year for the next 5 years. Year # Customers Avg. Sale Price Annual Rev. Year 1: 2800 $40 $112,000 Year 2: 3360 $40 $134,400 Year 3: 3920 $40 $156,800 Year 4: 4480 $40 $179,200 Year 5: 5040 $40 $201,600 III Situation Analysis G IV E hopes to market to the IV community with an innovative strategy that combines the important values of low price point and community value. Our main goal is to communicate to the community that we offer a unique service, focusing mainly on low price point and free delivery and pick up. In addition gIVe also recognizes that the community value for our target audience is important therefore, we plan to engage the community with innovative strategies to make our service known, and also interactive....
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This note was uploaded on 12/05/2011 for the course ECON 118 taught by Professor Loster during the Fall '07 term at UCSB.
- Fall '07