Quali-Teeze

When Cynthia and Akiel Charles got married they made a vow to each other to not only be partners in life but also one day be partners in a business as well. Two years later, they were putting the finishing touches on their marketing plan to launch their new business selling high-quality, custom-designed t-shirts. The innovative part of their business model was their desire to not only donate 10% of the profits from every item sold to local children's charities but also to donate one specially designed t-shirt for every five items sold, which the charity could then sell to raise funds on its own. They believed that this would provide customers with an opportunity to give back to a worthy cause and differentiate them from the competition. As Cynthia and Akiel were reviewing their marketing plan for the upcoming launch they wondered what strategies they should pursue to ensure the future success of the business.

The Co-Founders

Cynthia and Akiel met when they both attended a birthday party hosted by a mutual friend. At the time, Cynthia was one of the leading sales agents at a large furniture retailer and had also started a small business selling scented candles. She had started this business as a way to supplement her income and had seen sales grow slowly but steadily over the first year of operations. Akiel worked as a loans officer in a credit union and was responsible for evaluating the business proposals of entrepreneurs who visited the institution seeking funds to finance their business. This exposure had led him to open a small agricultural shop at the front of his home and he also offered consulting services to small business owners in the area where he lived. The pair had bonded after sharing their experiences as entrepreneurs and their passion to see those businesses give back to their respective communities

The Business Model

The idea of a socially responsible for-profit business is one that had long been popularized in North America but had gained limited support in the local market. Retailers who engaged in this business practice often spoke about joining a movement for social good and reported that consumers were willing to pay higher prices for their products if they knew the brand was associated with a worthy cause. Individuals from higher socio-economic groups were more likely to purchase an ethical product but many consumers were excited by opportunities to give back through their consumption. Critics of the model argued that such programs were designed to ease the guilt of privileged consumers rather than addressing the root causes of societal problems. They therefore questioned the sustainability of such business practices

Cynthia and Akiel wanted to adopt this model for their business but felt that rather than simply donating money to a charity they should encourage recipients to become entrepreneurs themselves. Providing the charity with products that they could sell would provide a more sustainable source of income and assist in making them more financially independent. Akiel was also willing to provide free financial advice to the charities to "teach them how to fish rather than simply giving them a fish".

The Marketing Plan

The co-founders had decided that Quali-Teeze would launch with a hand-crafted custom designed t-shirt featuring a bold print. They wanted a product that could be worn casually as well as under a jacket at businesscasual events. Focusing on a high-quality item would allow customers to show off their individuality and stand out from the crowd. Cynthia and Akiel were however unsure, which consumer groups would be attracted to such an item and who they should initially target with their launch. Should they focus on men or women? What age group would be the most appropriate target. They knew that they had to get answers to these questions in order to create an effective marketing campaign. Cynthia was strongly in favour in setting a high price point for their products in order to support the quality image that they wanted to portray. This would also allow them to cover the higher cost of producing their customized tshirts. While consumers could find lower-quality discounted t-shirts selling for as little as $60, she believed that Quali-Teeze t-shirts should be priced at $125 with limited edition prints costing at least $50 more. She also wanted the business to focus on selling the t-shirts online since this would reduce their expenses and make the items more widely available. Akiel had some concerns about each of these suggestions. He was worried that setting the price too high would force them to compete with imports which were priced around $150 and had strong brand recognition and customer loyalty. This price point could also limit the affordability of their products to the wider market and limit sales in the short-run. While he supported the idea of driving sales online, he also felt that retail stores offered the best fit for the company's products but was unsure whether retailers would be willing to gamble with stocking an unknown brand. It was also unclear what discounts they would have to offer retailers in order to get them to stock their products. Another option that was available would be to open their own retail outlet and attempt to create a unique brand identity. This would require a larger initial investment and be a riskier proposition but would allow greater control over the company's brand image. Cynthia and Akiel felt strongly that they should launch their business as quickly as possible in order to prevent competitors from stealing their ideas. From their past business experience however, they knew that in order to be successful in the long run they would have to make some key marketing decisions before going forward with the launch.

QUESTIONS

1. (a) What are the opportunities and threats confronting the business? (10 marks)

(b) Which customer group(s) should the business target? (10 marks)

2. What marketing strategies would you recommend for Quali-Teeze? (20 marks)