I need help creating an executive summary for Dunlops Livery Antiques and writing a conclusion

DE BUSI 2208 Library Information Se X an docs_15460967.pdf x and New tab * a docs_15460967.pdf chegg - Bing * + X File | C:/Users/Tanveer/Desktop/Intro%20to%20Marketing/docs_15460967.pdf ... IVEy Publishing 9B20A015 DUNLOP LIVERY ANTIQUES: MODERNIZING THE VINTAGE INDUSTRY Robert Colquhoun wrote this case under the supervision of Julie Gosse solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, NG ON1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Our goal is to publish materials of the highest quality; submit any errata to publishcases@ivey.ca. Copyright @ 2020, Ivey Business School F Version: 2020-02-28 Bob Colquhoun, president and owner of Dunlop Livery Antiques (DLA) knew that he needed to make some important decisions regarding the future of his business. Colquhoun had owned the antique store in Dunlop, Ontario, since September 2001. During that time, he witnessed the antique industry change around him, wavering in popularity and shifting in channels of distribution. DLA's sales were falling, and Colquhoun these parameters is a copyright violation. knew that he had to consider catching up with the competition in terms of promotion and distribution. He was tentative toward new mediums, but he was considering promoting and selling his products online. Authorized for use only in the course Introduction to Marketing (B) at Carleton University taught by Lu, Irene from Sep 01, 2020 to Dec 31, 2020 The heavy wooden antiques were becoming more difficult for Colquhoun to carry, so he also had retirement on his mind, aiming to pass on or sell the business in several years. To do so, his goal was to increase the revenue, profitability, and brand awareness of DLA to bolster its potential selling price. Colquhoun required a comprehensive marketing plan to grow his business in the shrinking industry. LOCATION DLA was located in a 460 square-metre (4,950 square-foot) barn built in the 1890s. The barn was located on a busy intersection in Southwestern Ontario near Kincardine, Goderich, and the small village of Blyth. These small rural communities had low population levels, with 7,536 in Goderich and 8,315 in Kincardine.' With a large salt mine in Goderich and a nuclear power plant in Kincardine, many of these residents had a wage that was above the provincial average. These industries were leading to positive economic trends and a consistently expanding population. "Census Profile, 2016 Census: Goderich, Ontario," Statistics Canada, updated August 9, 2019, accessed June 1, 2019, www12.statcan.gc.ca/census-recensement/2016/dp-pd/prof/details/page.cfm?Lang=E&Geo1=POPC&Code1=0324&Geo2= PR&Code2=35&SearchText=Goderich&SearchType=Begins&SearchPR=01&B1=All&GeoLevel=PR&GeoCode=0324&TABI D=1&type=0; "Census Profile, 2016 Census: Kincardine, Ontario," Statistics Canada, updated August 9, 2019, accessed June 1, 2019, www12.statcan.gc.ca/census-recensement/2016/dp-pd/prof/details/page.cfm?Lang=E&Geo1=POPC&Code1=0412 & Geo2=PR&Code2=48&Data=Count&SearchText=Kincardine&SearchType=Begins&SearchPR=01&B1=All.DE BUSI 2208 Library Information Se X an docs_15460967.pdf x and New tab * Bar docs_15460967.pdf chegg - Bing * + X File | C:/Users/Tanveer/Desktop/Intro%20to%20Marketing/docs_15460967.pdf ... COMPANY HISTORY Colquhoun had been passionate about antique and vintage items since his childhood. He spent many years as an auctioneer, learning the value of different items and gaining an understanding of the customer base. Over the years he gained an extensive knowledge of Canadian furniture and collectables and was quick to jump at the opportunity to purchase DLA from its previous owner in 2001. To replenish and purchase new inventory, Colquhoun often visited old barns, checked out houses bound to be demolished, or was called to purchase items from an estate collection. He established a team of "pickers" rom around the province; these pickers would gather a load of antiques and deliver them to DLA in batches. Often, vintage pieces remained in their original dirty or rusty state because customers valued the "farm- fresh" feel. Each summer, Colquhoun brought in many customers because of the variety of his products and his knowledge of the story surrounding each piece. The barn was divided into two floors. The bottom floor held a wide assortment of items including keys, doorknobs, picture frames, and pottery (see Exhibit 1). The top floor was referred to as the showroom, which housed higher-priced items such as cupboards or tables (see Exhibit 2). Colquhoun sold a variety of these products to different customers and his prices varied widely (see Exhibit 3). Colquhoun was the sole proprietor of DLA, and since he was the only employee, business hours were largely dependent on his availability. Due to the lack of heat or running water in the historic building, DLA was open only from May 1 to Labour Day each year. Colquhoun wondered if expanding his hours would be worthwhile, but he knew that traffic dramatically decreased during the stormy Bruce County winters these parameters is a copyright violation. Colquhoun's retirement from his career as an auctioneer allowed him more time to spend at DLA. Before Authorized for use only in the course Introduction to Marketing (B) at Carleton University taught by Lu, Irene from Sep 01, 2020 to Dec 31, 2020. his retirement, sales had dropped from CA$63,094 in 2016 to $52,133 in 2017 (Exhibit 4). The changing and unpredictable industry was cause for concern. THE ANTIQUE INDUSTRY se outsi Colquhoun was aware that the antique industry was struggling. Antique sales usually followed trends that stemmed from designers and decorators each season. In 2018, the well-known online antique marketplace, Istdibs, released a trend study of its customers revealing that 64 per cent of professional interior designers indicated a preference for contemporary and modern projects.' The same online marketplace began a contemporary category in 2016. After one year, this new category represented 15 per cent of furniture sales." Another reason for the decline was that changing home layouts toward open concept living spaces meant that large harvest dining tables and bulky cabinets were no longer desirable. Overall, trends toward minimalism and a lack of interest in the history of antique pieces meant a continuously shrinking consumer base. Nevertheless, exceptions did still exist. Many designers and homeowners continued to enjoy combining antiques with contemporary furniture as accent pieces. Popular television shows such as American Pickers and Mad Men also brought a surge of popularity to the industry. The antique market was also known to be as cyclical as fashion. Although certain styles of antiques were in a declining phase currently, they could rebound in the future. 2 All currency amounts are in CA$ unless otherwise specified. Hadley Keller, "1stdibs Releases 2018 Trends Report," ADPRO, January 16, 2018, accessed April 30, 2019, www.architecturaldigest.com/story/1stdibs-2018-trends-report-designers. * Tim Mckeough, "How Low Will Market for Antiques Actually Go?" New York Times, March 3, 2018, accessed April 30, 2019, www.nytimes.com/2018/03/03/style/how-low-will-market-for-antiques-actually-go.html.DE BUSI 2208 Library Information Se X an docs_15460967.pdf x and New tab * Bar docs_15460967.pdf * chegg - Bing * + X File | C:/Users/Tanveer/Desktop/Intro%20to%20Marketing/docs_15460967.pdf ... Page 3 9B20A015 CONSUMERS Casual Buyers DLA divided its consumer base into three main groups. The first group was the casual buyers. These consumers mostly fell into the 40 to 65 age range and already had a certain amount of antiques in their home. They purchased antiques for the feeling of nostalgia, the durability, and the uniqueness of the items. This group tended to be more affluent and could distinguish the value between a genuine antique and a comparable product from a modern retail store. "Antiquing" became a popular hobby for this group, driving around looking for new spots or exploring stores recommended by friends. Many casual buyers were also tourists visiting from the United States. The relatively low Canadian dollar meant that they could purchase antiques in Canada for a sizable discount. This consumer group became much more popular during summer vacations or long weekends; DLA would sometimes see up to 200 customers on a nice summer day. Dealers The second consumer group contained dedicated collectors and other antique dealers. This group comprised the majority of DLA's current sales. Dealers purchased antiques from other dealers to bring fresh inventory to their region, which was crucial for sales to casual buyers. Dealers sold through different geographies and through different channels, including online, brick and mortar, and business-to-business. They shared the same passion for history as Colquhoun and looked at the shift toward contemporary styles with disappointment. They often bought in high volumes and were given deals on their purchases. The lower price allowed them to add their own markup before selling to consumers. At a recent antique show, Colquhoun noticed that nearly 80 per cent of his in-person sales were attributed to this market. Use outside these parameters is a copyright violation. Authorized for use only in the course Introduction to Marketing (B) at Carleton University taught by Lu, Irene from Sep 01, 2020 to Dec 31, 2020. Hipsters Colquhoun discovered the third segment when he noticed an increase in the number of customers wearing scarves, berets, and glasses (with rims only) when they visited the store. The individuals in this subculture ranged in age from 22 to 35 and were often referred to as "hipsters." They were looking to move away from the cultural mainstream and often relied on previous trends in fashion, art, and decor to set themselves apart. This market segment tended to be Internet-savvy but was also aware of popular "ad-blocking" services, which could limit the effectiveness of certain promotional options. COMPETITION Local Competitors Most small towns throughout Southwestern Ontario contained at least one antique or used furniture store. These locations each had their own contingency of loyal customers who valued visiting these stores to inspect larger and more expensive items before purchasing them for their homes. Though prices across regions varied widely, the average retail prices for the competitors' antiques were similar to DLA's. However, in terms of inventory, DLA often housed more unique and exclusive products due to the network that Colquhoun had taken a long time to develop-the pickers. While some competitors used the same forms of advertising as DLA, others were more technologically savvy, using a variety of online mediums to showcase their products.DE BUSI 2208 Library Information Se X an docs_15460967.pdf x and New tab * Bar docs_15460967.pdf chegg - Bing * + X File | C:/Users/Tanveer/Desktop/Intro%20to%20Marketing/docs_15460967.pdf ... Page 4 B20A015 Online Competitors The ubiquity and increased trust associated with online shopping resulted in tremendous growth in online sales of antiques. The number of companies operating in the online antique industry was set to grow at a rate of 3.4 per cent over the next five years, with industry revenue increasing 3 per cent over the same period. This was a noteworthy change, especially compared to the physical antique store market in Canada, which was set to grow at a rate of 0.1 per cent annually between 2019 and 2024." Two of the largest online competitors were Heritage Auctions and eBay." Dealers from across the country posted their products here to connect with new buyers around the world. These sites normally ran on an auction-based pricing model, where the item was sold to the highest bidder. For retailers, this could result in bidding wars from two or more customers who were interested in the same products. Other items garnered little attention, selling for much less than they would in a retail store. If customers were persistent in checking these sites, they could often find what they were looking for at a lower cost than at a physical store. Modern Equivalents When choosing how to furnish their home, consumers could also visit modern equivalents, including HomeSense, Lowe's, Pier 1 Imports, or Ikea. These well-known retailers sold products and furniture items that were more affordable than comparable products in the average antique store. Also, they offered delivery ers is a copyright violation. and a high level of convenience, and featured or sold their products online. However, despite these benefits, the products lacked history, craftsmanship, and the durability of some vintage antiques. Authorized for use only in the course Introduction to Marketing (B) at Carleton University taught by Lu, Irene from Sep 01, 2020 to Dec 31, 2020 ALTERNATIVES The average used furniture store spent $8,200 on advertising in 2017. Currently, Colquhoun was spending se outside these parameter $0 on marketing. He was slow to embrace technology and was concerned that he might not be able to use these new tools. Instead, Colquhoun had been using traditional cost-free methods such as word-of-mouth and a Facebook page to advertise; he did not have a concrete figure in mind to budget for marketing in the coming year but wanted to keep costs down to mitigate risk. He knew that choosing too many options would hinder his ability to see them through. PRODUCT Colquhoun wondered if this industry was reaching the end of its cycle and began considering an "if you can't beat them, join them" strategy. He started thinking about transitioning at least some of his store to sell contemporary or reproduction pieces. These items would sell at a similar price to the existing antiques but would have 15 per cent lower margins due to the higher cost of goods sold (COGS). Colquhoun believed this could help increase visitors and volume, but wondered if sacrificing the authentic atmosphere of his store was worth it. He would also have to find new suppliers and a way to promote the change in offerings. 5 "Industry Outlook," IBISWorld, accessed April 30, 2019 https://clients 1.ibisworld.com/reports/us/industry/industryoutlook.aspx?en tid=5071 Ibid. Ibid. "Summary-Canadian Industry Statistics: Used Merchandise Stores - 4533," Government of Canada, February 2, 2014,DE BUSI 2208 Library Information Se X an docs_15460967.pdf x and New tab X D docs_15460967.pdf chegg - Bing * + X File | C:/Users/Tanveer/Desktop/Intro%20to%20Marketing/docs_15460967.pdf ... Page 5 9B20A015 PROMOTION Instagram Colquhoun believed that Instagram would be the best social media for advertising because of its photo- based sharing. Instagram advertising cost more than Twitter and Facebook due to its high average click- through rate and average conversion rate of 1.08 per cent." Colquhoun was willing to set a weekly ad budget of $45 for Instagram which he would run all year. He would need to hire a student graphic designer to create a collection of advertisements, which he figured would cost $50 per month. The cost per click for the ads varied depending on the consumer's age. If the targeted consumer was between the ages of 25 and 35, the average click costed around $1.15." Consumers aged over 40 were targeted less and therefore were cheaper, costing on average $0.80 per click." Colquhoun wondered if he could make a profit from advertising through Instagram. If he were to advertise through this medium, he needed to decide whether to target the ads geographically around his shop location or branch out farther to attract new customers. eBay Colquhoun had found success selling several smaller items on eBay and began researching that site's "Promoted Listing" feature. This option seemed like an interesting tradeoff-by foregoing a percentage of the unit's selling cost, the item's exposure would grow by an average of 36 per cent." The "bid rate" for de these parameters is a copyright violation. antiques in Canada was sitting at 8.2 per cent of selling price, which would come directly out of Colquhoun's margins. He estimated that the additional shipping, packaging, and shrink-wrapping would Authorized for use only in the course Introduction to Marketing (B) at Carleton University taught by Lu, Irene from Sep 01, 2020 to Dec 31, 2020. cost him $15 per week, but his listings would now be more prominent in searches and could also be promoted to specific demographic groups. When DLA was previously selling on eBay, Colquhoun recalled that he could easily sell at least one product per week by himself. If Colquhoun pursued eBay sales, he planned to hire a part-time worker to manage the operation." In the past, shipping items such as pottery had gone poorly because the products sometimes arrived broken or smashed when received by the customer. Colquhoun wanted to make sure this option did not hurt his brand image. Canadian Antiques & Vintage Magazine Another alternative to advertise the vintage products was to use an older medium. Nearly a decade earlier, Colquhoun had advertised in the Canadian Antiques & Vintage magazine; he was considering returning to that medium. The magazine offered an advertising space of 7.5 x 12.5 centimetres (3 x 5 inches) that cost an $85 flat rate, included ad design, and would run for one month. This medium was consumed widely by an older Canadian demographic, including many dealers. Colquhoun wondered how many of these advertisements throughout the year would be worthwhile, and what message should be conveyed. "How Much Does It Cost to Advertise on Instagram," ThriveHive, February 24, 2017, accessed April 29, 2019, https://thrivehive.com/how-much-does-it-cost-to-advertise-on-instagram/. 10 Karola Karlson, "Instagram Ads Cost in 2019-Complete Up-to-Date Guide," Advertise.Grow., February 16, 2018, accessed April 29, 2019, https://karolakarison.com/instagram-ads-cost-and-bidding/. " Ibid. 12 "Promoted Listings," eBay, accessed April 29, 2019 https://pages.ebay.com/seller-center/listing-and-marketing/promoted- listings.html#what-is-pl. 3 The part-time employee would be paid $15 per hour and would work 12 hours per week in the summer (May, June, July, and August) and five hours per week throughout the rest of the year.DE BUSI 2208 Library Information Se X an docs_15460967.pdf x and New tab * Qui docs_15460967.pdf * chegg - Bing * + X File | C:/Users/Tanveer/Desktop/Intro%20to%20Marketing/docs_15460967.pdf ... Page 6 9B20A015 PLACEMENT Colquhoun also considered changing the way his products were sold, but he wanted to determine the profit potential of the placement options. Selling Online One of Colquhoun's unique ideas was to close the barn doors altogether and move his business entirely online. Since he spent most of his time interacting with customers, online sales would allow him to focus his efforts on distribution. Colquhoun believed that setting up an online Shopify store would be manageable and allow him to sell to customers across Canada and the United States. Shopify, a Canadian start-up founded in 2006, powered 600,000 stores." It became a popular tool through its use of search engine optimization, which helped boost lesser-known businesses closer to the top of online search results. Setting up a Shopify account cost $79 per month for the website subscription and hosting." Colquhoun believed that this online site would allow him to showcase his products to many new clients; however, it came with its own challenges. With this option he could move past the geographic barrier of his shop, but he worried that some consumers might be wary of purchasing antiques they had not seen. With DLA's location closed to the public, Colquhoun's utilities and automotive expense for the shop would be cut in half. If this site became popular, Colquhoun would need to organize shipping, packaging, and distribution plans for the antiques. He believed that absorbing the cost of packaging for the shipping would parameters is a copyrightv increase COGS to 50 per cent, and in conjunction with the right promotional plan, could boost last year's sales by 15 per cent. All other expenses from the previous year's income statement could be classified as Authorized for use only in the course Introduction to Marketing (B) at Carleton University taught by Lu, Irene from Sep 01, 2020 to Dec 31, 2020 fixed costs and were expected to remain the same dollar amount as the previous year. Antique Shows In the past, Colquhoun had participated in several antique shows throughout the province and wondered if committing more resources to these events would be worthwhile. Antique shows such as Cabin Fever, Christie Antique & Vintage show, and the Aberfoyle Antique Market gathered dozens of dealers together to offer consumers a wide variety of products. These events were often quite profitable but required a great deal of work and investment. To attend these shows, Colquhoun would have to rent a cube van to transport his antiques; with gas, the cost would be $750 per show. He would also have to rent a booth for an average of $430 each time. Colquhoun decided that he needed to keep the shop location open on show days, so he would have to hire two helpers to attend each show. These helpers would be paid $18 per hour-for around 26 hours for the weekend trip. Based on his previous success, Colquhoun believed he could make roughly $5,500 in revenue at each show, if he had the right inventory and the weather cooperated. The variable costs associated with these sales would total $2,640 per show. He could attend a maximum of four shows throughout the year. His main concern was that the two hired helpers would not know the "story" behind the items and would sell items for lower prices to tough, well-versed customers. Colquhoun was curious as to how much profit this would add to his sales at the shop. 14 "About Us," Shopify, accessed April 30, 2019, www.shopify.ca/about. 15 "Set up Your Store, Pick a Plan Later," Shopify, accessed April 30, 2019, www.shopify.ca/pricing.DE BUSI 2208 Library Information Se X an docs_15460967.pdf x and New tab * ( docs_15460967.pdf * I chegg - Bing * + X File | C:/Users/Tanveer/Desktop/Intro%20to%20Marketing/docs_15460967.pdf ... Page 7 B20A015 Status Quo If DLA did not alter its placement strategy, Colquhoun believed that sales would grow organically by 2.5 per cent. This option could be effective if DLA simultaneously chose to focus its efforts on new promotional or product changes CONCLUSION Colquhoun had many big decisions to make regarding the future of DLA. He knew that his choices needed to work together cohesively to create an effective strategy. He hoped these decisions would result in future success for his antique business. Authorized for use only in the course Introduction to Marketing (B) at Carleton University taught by Lu, Irene from Sep 01, 2020 to Dec 31, 2020. Use outside these parameters is a copyright violation