Precious Wedding創業企劃書 - 政大學術集成

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(1)國立政治大學商學院國際經營管理英語碩士學位學程 International MBA Program College of Commerce National Chengchi University. 碩士論文政治. 大. 立Master’s Thesis. ‧. ‧ 國. 學 sit. y. Nat. Precious Wedding創業企劃書 n. al. er. io. Precious Wedding Business Plan. Ch. engchi. i n U. v. Student: Yiyi Lee Advisor: Professor Chenghsien Tsai. 中華民國一○三年一月 January 2014.

(2) Precious Wedding創業企劃書 Precious Wedding Business Plan. 研究生：李依依. Student: Yiyi Lee. 指導教授：蔡政憲. Advisor: Chenghsien Tsai. 國立政治大學. 學. ‧ 國. 立. 政治大. ‧. 商學院國際經營管理英語碩士學位學程碩士論文. er. io. sit. y. Nat. A Thesis. n. a to International MBA Program Submitted iv l C n U NationalhChengchi University engchi. in partial fulfillment of the Requirements for the degree of Master in Business Administration. 中華民國一○三年一月 January 2014.

(3) Acknowledgements First of all, I would like to express sincere appreciation to Professor Chenghsien Tsai. For the past 8 months Professor Chenghsien Tsai has continuously offered constructive comments and guidance on my business plan. Without his patience and wise teachings, this business plan would not have been completed.. Second, I am deeply grateful for the love, support, and encouragement from my mother May. 政治大. and my brother Allen. We went through a lot of difficulties together for the past two years,. 立. and I sincerely appreciate that you two always try your best to protect me.. ‧ 國. 學. Lastly, I want to show my profoundest gratitude to my beloved Father Andy Lee who passed. ‧. away in February 2012. He worked extremely hard and devoted all his life to our family. He showed me the true spirit of an entrepreneur as he always held an optimistic attitude when. y. Nat. io. sit. confronting with adversity. If I have any accomplishments in the future, it should all be. n. al. er. attributed to my Dad’s credits. Because of the infinite love he gave me, I have the courage to keep moving on my life bravely.. Ch. engchi. Thank you all sincerely!. Yiyi Lee December 2013. i. i n U. v.

(4) Abstract Precious Wedding Business Plan By Yiyi Lee Precious Wedding is a professional wedding favors company in Taiwan which aims at helping every groom and bride create an unforgettable wedding experience through ideal wedding. 政治大. favors. As wedding favors is neither a brand-new nor prevalent product concept for most. 立. Taiwanese, coupled with the fact that there are fewer than 20 competitors selling on a large. ‧ 國. 學. scale, we assume that the wedding favors industry in Taiwan is currently at the late introduction stage of a product life cycle.. ‧. To test whether the wedding favors market in Taiwan will be profitable or not, we performed. y. Nat. er. io. sit. an online survey with 111 valid responses collected. The survey result turned out to be extremely positive as 88% of respondents claimed they will or they are likely to purchase. n. al. Ch. i n U. v. wedding favors ( or recommend others to do so), implying that huge sales and growth potentials are awaiting us to explore.. engchi. In terms of finance, we acquired NT$5,250,934 in our NPV calculation from year 1 to year 5, while the sensitivity analysis also generated positive outcomes even in the most pessimistic scenario, ranging from the lowest of NT$3,411,729 to the highest of NT$6,734,601.These figures all can be served as strong evidences that Precious Wedding is a great company to be invested on.. Keywords: Wedding, Wedding favors, Gifts, Precious Wedding. ii.

(5) TABLE OF CONTENTS 1. Introduction .......................................................................................................................... 1 2. Mission, Vision, and Values.................................................................................................. 3 2.1. Mission ............................................................................................................................ 3 2.2. Vision ............................................................................................................................... 3 2.3. Values............................................................................................................................... 3. 政治大. 3. Market Overview .................................................................................................................. 5. 立. 3.1. Industry Description ........................................................................................................ 5. ‧ 國. 學. 3.2. Competitive Analysis....................................................................................................... 6 3.3. SWOT Analysis ............................................................................................................... 7. ‧. 4. Market Research................................................................................................................... 9. y. Nat. io. sit. 4.1. Survey Design ................................................................................................................. 9. n. al. er. 4.2. Profile of Survey Respondents ...................................................................................... 10. Ch. i n U. v. 4.3. Survey Results and Implication ..................................................................................... 13. engchi. 5. Marketing ............................................................................................................................ 22 5.1. STP (Segmenting, Targeting, Positioning) .................................................................... 22 5.1.1. Segmenting ............................................................................................................. 22 5.1.2. Targeting ................................................................................................................. 23 5.1.3. Positioning .............................................................................................................. 23 5.2. 4P (Product, Price, Place, Promotion) ........................................................................... 24 5.2.1. Product .................................................................................................................... 24 5.2.2. Price ........................................................................................................................ 29 5.2.3. Place ....................................................................................................................... 30 5.2.4. Promotion ............................................................................................................... 31. iii.

(6) 6. Business Structure .............................................................................................................. 34 6.1. Business Activities of the Four Main Departments ....................................................... 34 6.1.1. Sales & Marketing .................................................................................................. 34 6.1.2. Research & Development ....................................................................................... 35 6.1.3. Human Resources ................................................................................................... 35 6.1.4. Finance & Accounting ............................................................................................ 35 6.2. Operations ...................................................................................................................... 35 6.2.1. Customer Service.................................................................................................... 35. 政治大. 6.2.2. Logistics ................................................................................................................. 35 6.2.3. Quality Control ....................................................................................................... 36. 立. 6.2.4. Purchasing .............................................................................................................. 37. ‧ 國. 學. 6.2.5. Inventory................................................................................................................. 37 6.2.6. Legal & Compliance ............................................................................................... 37. ‧. 6.2.7. Information Technology ......................................................................................... 38. sit. y. Nat. 7. Financial Analyses .............................................................................................................. 39. io. er. 7.1. Startup Costs .................................................................................................................. 39 7.2. Sales Forecast ................................................................................................................ 40. al. n. v i n 7.3. Operating Expenses, CostC of Goods Sold, and Working h e n g c h i U Capital .................................. 43 7.3.1. Operating Expenses ................................................................................................ 43 7.3.2. Cost of Goods Sold ................................................................................................. 44 7.3.3. Working Capital ...................................................................................................... 45 7.4. Net Present Value........................................................................................................... 46 7.5. Sensitivity Analysis ....................................................................................................... 47 8. Conclusions ......................................................................................................................... 49 Appendix ................................................................................................................................. 53. iv.

(7) List of Figures Figure 1: Product Life Cycle ...................................................................................................... 5 Figure 2: Online Survey ........................................................................................................... 10 Figure 3: Gender Distribution .................................................................................................. 11 Figure 4: Age Distribution ........................................................................................................ 12 Figure 5: Marital Status Distribution ........................................................................................ 12 Figure 6: Monthly Income Distribution ................................................................................... 13. 治政 Figure 7: Willingness to Purchase Wedding Favors (or Recommend Others to Purchase) ...... 14 大立 Figure 8: The Importance of Price during the Purchase Decision Process .............................. 15 ‧ 國. 學. Figure 9: The Importance of Product Quality during the Purchase Decision Process ............. 15. ‧. Figure 10: The Importance of Customer Service during the Purchase Decision Process ........ 15 Figure 11: The Importance of Product Uniqueness during the Purchase Decision Process ..... 16. y. Nat. er. io. sit. Figure 12: The Importance of Brand/Vendor Reputation during the Purchase Decision Process .......................................................................................................................................... 16. n. al. Ch. i n U. v. Figure 13: Preferences for Types of Wedding Favors .............................................................. 17. engchi. Figure 14: Budget for Edible Wedding Favors per Guest ........................................................ 18 Figure 15: Budget for Non-edible Wedding Favors per Guest ................................................. 18 Figure 16: Preferences for Shopping Platform ......................................................................... 19 Figure 17: Sources of Information............................................................................................ 20 Figure 18: Business Structure ................................................................................................... 34 Figure 19: Sales Forecast Year 1 – Year 5 (Unit: NT$) ............................................................ 43. v.

(8) List of Tables Table 1: Competitive Analysis .................................................................................................... 7 Table 2: SWOT Analysis ............................................................................................................ 8 Table 3: Product Information No.1 - 6 ..................................................................................... 26 Table 4: Product Information No.7 - 13 ................................................................................... 27 Table 5: Product Information No.14 - 20 ................................................................................. 28 Table 6: Postage Rate of Chunghwa Post ................................................................................. 36. 治政 Table 7: Postage Rate of SF Express ........................................................................................ 36 大立 Table 8: Startup Costs ............................................................................................................... 39 ‧ 國. 學. Table 9: Statistics of Married Couples (2001 To 2012) ............................................................ 41. ‧. Table 10: Calculation Process for Annual Revenue in Year 1 .................................................. 42 Table 11: Sales and Growth Rate (Year 1- Year 5) ................................................................... 42. y. Nat. er. io. sit. Table 12: Operating Expenses – Year 1 .................................................................................... 44 Table 13: Ratio of Cost of Goods Sold/Sales and Operating Expenses/Sales .......................... 44. n. al. Ch. i n U. v. Table 14: Sales Forecast, Cost of Goods Sold, Operating Expenses, and Working Capital. engchi. Year1-5 ............................................................................................................................. 45 Table 15: Net Present Value (NPV) Based on a Five Year Period ............................................ 46 Table 16: Sensitivity Analysis .................................................................................................. 48. vi.

(9) 1. Introduction This business plan provides an overview of the startup business Precious Wedding which is expected to be established in Taiwan in mid 2014. To evaluate the operational and financial feasibility of Precious Wedding, an online survey and a series of analyses were conducted, including a competitive analysis, a NPV (Net Present Value) analysis, and a sensitivity analysis. Given the positive outcomes from the survey and analyses, which will be detailed in the main body of this business plan, we can confirm that the profitability and sustainability. 治政 are very likely to be achieved by Precious Wedding. 大立 ‧ 國. 學. Implied by its name, Precious Wedding is a professional wedding favors company providing three main types of wedding favors, which are branded, personalized, and customized.. ‧. Furthermore, as both of the co-founders have over 5 years experiences in the gift and. Nat. sit. y. international trade industry, we also offer consulting and outsourcing services to search the. n. al. er. io. most suitable wedding favors for customers.. Ch. i n U. v. Based on our research, the current wedding favors market in Taiwan is at the late introduction. engchi. stage of the product life cycle with the feature of low competition. Consequently, we view now as a good entry point to get our business off the ground. Also, to get a deeper understanding of the Taiwanese customers, we performed an online survey with 111 valid responses collected. Referring to the survey outcome, 66% of respondents claimed their willingness to purchase wedding favors. In fact, the number is as high as 88% if we also consider those who are likely to purchase wedding favors, reflecting that the sales potential of wedding favors in Taiwan do exist and worth to be explored.. Through the NPV analysis, we acquired a net present value of NT$5,250,934 over the next 1.

(10) five years with a discount rate of 11.01%. As for the sensitivity analysis, even in the most pessimistic scenario, we still obtained a net present value of NT$3,411,729.. To sum up, in terms of financial perspective, both of our NPV and sensitivity analyses indicated that Precious Wedding will be able to generate profits continuously over the next five years, which therefore is a great business target to be invested on.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 2. i n U. v.

(11) 2. Mission, Vision, and Values Precious Wedding is a professional wedding favors company in Taiwan selling a wide range of wedding favors of fine qualities. Holding great passion towards wedding favors, we are dedicated to bringing the best wedding favors for every bride and groom. To provide a guideline for business operation, the two co-founders have set our mission, vision, and values as below.. 2.1. Mission. 立. 政治大. Our mission is to help the bride and groom create an unforgettable wedding experience. ‧ 國. 學. through providing ideal wedding favors. We want our customers to know that we are passionate, creative, devoted, and will take whatever it takes to present the best wedding. ‧. favors for their weddings. As we understand how precious a wedding must be for every. Nat. sit. y. couple, we named our brand Precious Wedding, which is the same with our company name, to. n. al. er. io. reflect our dedication to bringing the best wedding favors.. 2.2. Vision. Ch. engchi. i n U. v. Our vision is to become the No.1 wedding favors brand in Taiwan in terms of brand awareness, sales, and customer satisfaction. When it comes to wedding favors, we want Taiwanese customers to view us as a professional, passionate, creative, and customer-oriented company.. 2.3. Values We would like to shape our organizational culture with values listed as follows, for we believe these values as a whole play an indispensable role in our success. A. Passion 3.

(12) We only want to hire employees who hold passion towards wedding favors, as we believe people who love their jobs will devote themselves to work, which ultimately result in higher performance and lower turnover rate.. B. Productivity Working effectively and efficiently is highly valued in our company. We don’t need employees to work overtime to prove they are working hard. Instead, we view employees. 政治大. who have a balanced relationship between work and private life as those with high. 立. capabilities.. ‧ 國. 學. C. Creativity. Thinking outside of the box is encouraged within our company to improve products,. ‧. services, and processes. In the business world where products can be copied and strategies. y. Nat. n. al. D. Adaptability to change. Ch. engchi. er. io. an irreplaceable competitive edge for our company.. sit. can be learned anytime, creativity can be generated limitlessly. Therefore, it can serve as. i n U. v. Given the nature of fast-changing and competitive business world, we expect our employees to be adaptable and cope with change fast and effectively. We firmly believe that “only the most adaptable will survive”, and that’s where our emphases on strong adaptability stems from. Everyone within our company is encouraged to step out of their comfort zones and adjust whenever necessary to stay competitive.. E. Execution power Talking is cheap. Action always speaks louder than words, so we believe execution power will play a critical role in maintaining our competitive advantage. 4.

(13) 3. Market Overview 3.1. Industry Description. 政治大. 立 Figure 1: Product Life Cycle. ‧ 國. 學. In terms of product life cycle1, we believe the wedding favors market in Taiwan is currently at the late introduction stage due to the following three arguments.. ‧ sit. y. Nat. A. Neither new nor well-known. io. er. The product concept of wedding favors has been introduced into Taiwan for a few years. However, it hasn’t become a well-known nor a prevailing fashion, implying that the market. al. n. v i n C hstill belongs to the U hasn’t entered the growth stage and e n g c h i late introduction stage at this moment. B. Unrecognized demand and unexplored sales potential. As the Chinese translation of “wedding favors” is equivalent to “wedding small gifts”, many Taiwanese mistakenly consider that only gifts can be counted as wedding favors. However, what they don’t realize is that Taiwanese do have the long-lasting tradition of giving wedding favors, as the candies dispatched to guests can already be regarded as a form of wedding favors. In other words, not only the primary demand for wedding favors hasn’t been recognized yet, but also the huge sales potential hasn’t been generated either. Taking into 1. Product Life Cycle Stages. <http://productlifecyclestages.com/> (Accessed May 2nd, 2013). 5.

(14) account of these characteristics, we define that the wedding favors market in Taiwan hasn’t entered the growth stage and is still at the late introduction stage.. C. Low competition In view of the current market, there are fewer than 20 vendors selling wedding favors on a larger scale. On top of that, none of these vendors has apparently achieved the first mover advantage or obtained a dominant market share. If the wedding favors market were already at. 政治大 while customers could have a much wider variety of wedding favors to choose from. 立. the growth stage, there should be more vendors competing against each other in the market. ‧ 國. 學. Nevertheless, this is not the case at this moment. As a result, we believe the wedding favors market in Taiwan is still at the introduction stage. With proper strategies, we will be able to. ‧. excel in terms of sales, market shares, brand recognition, and words of mouth.. y. Nat. sit. 3.2. Competitive Analysis. n. al. er. io. As mentioned in section 3.1., the wedding favors market in Taiwan is still at the late. i n U. v. introduction stage of a product life cycle with low competition. Based on our observation,. Ch. engchi. three main competitors can be identified after considering the company size as well as the scope of operation. 1). Happy 2U2. 2). Wen-Wen3. 3). Kute4. 2. Happy 2U. <http://www.happy2u.com.tw/> (Accessed May 5th, 2013). 3. Wen-Wen. <http://www.d0919786896.com/> (Accessed May 5th, 2013). 4. Kute. <http://www.kute.com.tw/> (Accessed May 5th, 2013). 6.

(15) Table 1: Competitive Analysis. 立. 政治大. ‧. ‧ 國. 學. n. al. er. io. sit. y. Nat 3.3. SWOT Analysis. Ch. engchi. i n U. v. To enact an effective business strategy, it is essential to conduct a SWOT analysis which compares Precious Wedding with competitors externally and internally. Through the SWOT framework, we can gain a deeper understanding of our strengths, improve our weakness, capitalize on opportunities, and minimize threats.. Table 2 provides the summary of the SWOT analysis. While some of them are self-explanatory, the others are not. Therefore, we will elaborate on some points further to avoid ambiguity.. 7.

(16) Table 2: SWOT Analysis Strength. Weakness. . Brand There is no professional wedding favors brand in the market at this moment. Strict quality control Management skills. . Both of our co-founders have over 5 year experiences in the gift and international trade industry. Moreover, our working experiences in local Chinese factories also will contribute to our future communication and negotiation with Chinese suppliers. Creativity Design ability Outsourcing service for customization products. . Threats. . Potential sales growth Given that the wedding favors market in Taiwan is at the late introduction stage of a product life cycle, there is a lot of uptrend opportunity for the sales growth afterwards. Benefit from the economic boom. . Words of mouth. n. al.  . Ch. engchi . . . 8. Failure to spur sales growth Low repurchasing rate Given that wedding is a one-time only experience for most people, the repurchase rate is really low. Potential competition from big brands. er. io. sit. y. Nat. Consulting service to assist customers find the most suitable wedding favors. Opportunities .  政治  大. ‧. . No physical store Two out of our three main competitors have at least one physical store. No economies of scale No retail experiences in Taiwan. 學.   . 立. . ‧ 國.  . Price As we target at the middle to high end market, our price will be set relatively higher than competitors’. Limited financial and human resources. i n U. v. With abundant resources, some big lifestyle brands such as Muji and Working House might step into this market and compete against us. Risk of TWD depreciation against CNY As most of our suppliers will be located in mainland China, we might incur currency loss due to CNY appreciation. Impact of economic downturn.

(17) 4. Market Research 4.1. Survey Design To determine whether the wedding favors market in Taiwan will be profitable, an online survey was conducted to local Taiwanese with 111 valid responses collected. Based on analyses of these responses, we obtained a lot of valuable insights into Taiwanese consumers’ attitude and preferences towards wedding favors.. 政治大. Regarding the design of survey, two points need to be addressed.. 立. A. To enhance accuracy of survey results, the term “wedding favors” is defined specifically. ‧ 國. 學. on top of the survey. As mentioned earlier, the Chinese translation of “wedding favors” makes it quite easy for. ‧. Taiwanese to misunderstand that only gifts can be regarded as wedding favors. For. Nat. sit. y. instance, respondents may claim they have no interest in buying wedding favors at all,. n. al. er. io. while in fact the Taiwanese tradition of distributing candies to guests on wedding banquets. i n U. v. can already be viewed as a means of giving wedding favors.. Ch. engchi. Consequently, to improve survey accuracy and to prevent misunderstanding of the term “wedding favors”, we particularly educated respondents the definition of “wedding favors” before they began the survey.. B. Three versions of questionnaires are conducted in order to know whether Taiwanese are inclined to buy edible wedding favors or not Taiwanese have a long-standing tradition of distributing candies to wedding guests. Since candies are edible, we would like to know whether Taiwanese tend to buy edible wedding favors or not. Therefore, three varying versions of survey were designed. 9.

(18) From question No.1 to 7, the three versions are exactly the same. Respondents are then asked in question No.7 which type of wedding favors they are interested in purchasing. Depending on their answers to question No.7 which could be edible only, non-edible only, or both edible and non-edible, respondents were guided to the three different versions for the rest of the questionnaire.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Figure 2: Online Survey. 4.2. Profile of Survey Respondents In terms of the demographics of the survey respondents, 62% of survey participants are female while 38% are male. In our view, opinions of these survey respondents are very indicative based on the following three reasons.. 10.

(19) First of all, 82% of respondents are between 26 and 35 years old, which is considered to be the appropriate age range for marriage in Taiwan. Second, 62% of survey participants are single. In terms of marketing jargons, these single people are the actual purchasers when it comes to wedding favors. Therefore, their opinions are more significant than others such as influencers or gate keepers. Lastly, as high as 58% of respondents earn a monthly income higher than NT$35,000, pointing out that these people do have the purchasing power for non-necessity products such as wedding favors.. 政治大 Exact numbers for the profile of survey respondents are detailed in figure 3 to 6 as below. 立 ‧. ‧ 國. 學. Female 62%. n. al. Ch. y er. io. sit. Nat. Male 38%. engchi. i n U. v. Figure 3: Gender Distribution. 11.

(20) Over 41 years old 1%. 19 - 25 years old 9%. 36 - 40 years old 8%. 31 - 35 years old 51%. 26 - 30 years old 31%. 政治大. 學. ‧ 國. 立 Figure 4: Age Distribution Others 3%. Single 62%. n. er. io. al. sit. y. ‧. Nat. Married 35%. Ch. engchi. i n U. v. Figure 5: Marital Status Distribution. 12.

(21) Below NT$25,000 9%,. Over NT$50,001 30% NT$25,001 - 35,000 33% NT$35,001 - 50,000 28%. 立. 政治大. Figure 6: Monthly Income Distribution. ‧ 國. 學. 4.3. Survey Results and Implication. Our survey has revealed several noteworthy findings. Through the interpretation of these. ‧. results, we are able to formulate a comprehensive business strategy to tackle market. er. io. sit. y. Nat. efficiently.. al. v i n Ch According to our survey, 66% of respondents e n g claim c h ithatUthey will purchase wedding favors or n. A. The wedding favors market in Taiwan is full of sales potential. recommend relatives and friends to do so. If considering those who are likely to do so, the combining number is as high as 88%. In contrast, only 4% of respondents expressed unwillingness to purchase wedding favors.. 13.

(22) Haven't decided 8%. No 4%. Possible 22%. 立. Yes 66%,. 政治大. Figure 7: Willingness to Purchase Wedding Favors (or Recommend Others to Purchase). ‧ 國. 學. Based on the survey results, we can conclude that the wedding favors market in Taiwan is full of opportunities for a start-up company like us to explore. Hence, to capitalize on the high. ‧. willingness of purchasing wedding favors, we should get our business operations off the. y. Nat. io. sit. ground as soon as possible. Furthermore, we believe that adopting a branding strategy will be. n. al. er. a wise start, given the less competition at this stage. Through the brand, we expect to enhance. Ch. i n U. v. recognition, charge higher margin, and have words of mouth spread promptly.. engchi. B. Product uniqueness and quality outweigh the price During the purchase decision process, 94% of respondents view product uniqueness as extremely important or important, followed by product quality with a score of 91%. To our surprise, price is ranked No. 4 out of the five factors with 65% of people consider extremely important or important. As for the brand/vendor reputation and customer service, they are ranked the third and the last one respectively.. 14.

(23) Very important. 15%. Important. 50%. Normal Not important Least important. 28% 5% 2%. Figure 8: The Importance of Price during the Purchase Decision Process. 政治大. 立. 32%. 學. ‧ 國. Very important. Important Normal. y. 3%. sit. io. al. 1%. er. Nat. Least important. 5%. ‧. Not important. 59%. v. n. Figure 9: The Importance of Product Quality during the Purchase Decision Process. Ch. Very important. engchi 9%. Important. 42%. Normal. 41%. Not important Least important. i n U. 6% 2%. Figure 10: The Importance of Customer Service during the Purchase Decision Process. 15.

(24) Very important. 45%. Important Normal. 49% 4%. Not important. 1%. Least important. 1%. Figure 11: The Importance of Product Uniqueness during the Purchase Decision Process. 立. Very important. 政治大 14%. 57%. 學. ‧ 國. Important. 23%. Normal 3%. Least important. 3%. ‧. Not important. y. Nat. sit. n. al. er. io. Figure 12: The Importance of Brand/Vendor Reputation during the Purchase Decision Process. Ch. i n U. v. This survey results has shown that when it comes to wedding favors, Taiwanese emphasize on. engchi. the product itself much more than the price. We assume this can be attributed to the “once in a lifetime” nature of weddings. After all, everyone wants his/her wedding to be special and unforgettable. Since most people only have one chance to do it right, they are willing to pay higher prices in exchange for special wedding favors of high qualities.. While formulating our marketing strategy, extensive efforts should be allocated to each aspect of the product. Moreover, to appeal to customers, we should offer superior products in terms of design, uniqueness, variety, and quality. A more detailed product strategy will be described later in the marketing section. 16.

(25) C. Most respondents are interested in both edible and non-edible wedding favors From the survey results, 62% of respondents show their willingness to purchase both edible and non-edible wedding favors. On the other hand, 10% of respondents prefer to buy edible wedding favors only, while the number is 28% for non-edible ones.. Edible 10%. 立. 政治大. Non-eible 28%. Both 62%. ‧. ‧ 國. 學 y. Nat. al. er. io. sit. Figure 13: Preferences for Types of Wedding Favors. v i n C people are interested mosth e n g c h i U in. n. Despite Taiwanese only have the tradition of distributing wedding candies, which can be grouped into edible favors,. non-edible ones as well.. Consequently, we will promote ourselves as a professional wedding favors company, offering “one-stop shopping” for both of the edible and non-edible wedding favors. Furthermore, when it comes to merchandise purchase, the ratio of non-edible to edible favors should be approximately 3 to 1, reflecting the ratio of 28% to 10% in our survey findings.. D. Average budget for wedding favors is higher than NT$20 per guest For edible wedding favors, 41% of survey participants are willing to spend over NT$30 per guest, while 25% are willing to spend between NT$20 - 29 per guest. As for the non-edible. 17.

(26) wedding favors, as high as 48% respondents expressed willingness to spend over NT$50 per guest, while 34% of participants are willing to spend between NT$20 - 49 per guest.. Below NT$5 2% NT$5 - 9 11% Above NT$30 41%. NT$10 - 19 21%. 政治大. 立. NT$20 - 29 25%. ‧ 國. 學 ‧. Figure 14: Budget for Edible Wedding Favors per Guest. y. Nat. n. NT$5 - 19 18%. Ch. engchi. NT$50 - 99 36%. er. io. al. sit. Above NT$100 12%. i n U. v. NT$20 - 49 34%. Figure 15: Budget for Non-edible Wedding Favors per Guest Shown by the two figures above, for both edible and non-edible favors, the majority of survey respondents are willing to spend more than NT$20 per guest. On top of that, it seems customers’ budgets for non-edible wedding favors are higher than those of edible ones. As a 18.

(27) result, when enacting the pricing strategy, we will take the information above into consideration to maximize profits.. E. Customers prefer suppliers with both virtual and physical presences While only 10% and 7% of respondents prefer physical stores and online stores respectively, a total of 83% prefer to shop from suppliers with both the virtual and physical presences.. 政治大. Online store 7% Physical store 10%. 學. ‧ 國. 立. Both 83%. ‧. n. er. io. sit. y. Nat. al. i n U. v. Figure 16: Preferences for Shopping Platform. Ch. engchi. In our perspective, unlike online stores that remove time and geographical constraints, physical stores provide customers an easy access to check product design and quality in person. Moreover, through visiting the physical store, a customer can obtain a general understanding of a company’s atmosphere and customer service. This explains why the majority of survey respondents still prefer to purchase from those with both a physical and online presence.. While an online store will be launched as soon as we start our business, a physical store in capital Taipei city is scheduled to be opened two years later. To compensate our lack of. 19.

(28) physical presence in the first two years, we will constantly update our website with new products and promotions. A strict quality control as well as a friendly return policy will also be implemented to assure customers’ satisfaction.. F. Internet is the main source of information 70% of respondents claim that they search information of wedding favors through the internet, while 16% seek advices from wedding consultants or related professionals. Relatives and. 政治大. friends account for 8% in terms of information source, followed by the wedding magazines. 立. with a number of merely 6%.. ‧ 國. 學 ‧. Wedding related prfessionals 16%. n. al. er. io. Internet 70%. sit. y. Nat. Friends & relatives 8%. Ch. Wedding magazines 6%. engchi. i n U. v. Figure 17: Sources of Information Undoubtedly, internet marketing is vital to our success as it’s our biggest venue to attract interests from potential buyers. Moreover, cooperation with wedding related professionals might also be a good idea for sales enhancement, given that they are ranked No.2 in terms of information source.. On the contrary, the efficiency and effectiveness of advertising on wedding magazines need to. 20.

(29) be assessed carefully, especially while many vendors are doing so in Taiwan currently.. During the formulation of promotion and channel strategy, we should place extra emphasis on the internet to achieve a high utilization of internet marketing tools. Moreover, as most people search wedding favors information through the internet, enough resources must be allocated to online forums to maintain our reputation and customers’ satisfaction. As for the cooperation with wedding related professionals, a more detailed plan will be included in the marketing part.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 21. i n U. v.

(30) 5. Marketing In order to generate a comprehensive marketing strategy, we must segment the market through an effective attribute, target the most prospective segment, and then position ourselves specifically to suit target customers’ preferences. In section 5.1., we will explain the STP (Segmenting, Targeting, Positioning) process first, while in section 5.2., our 4P (Product, Price, Place, Promotion) will be detailed further.. 政治大. 5.1. STP (Segmenting, Targeting, Positioning). 立. 5.1.1. Segmenting. ‧ 國. 學. There are several variables that consumers will put into consideration during the purchase decision process of wedding favors. In our survey, five key factors are listed including price,. ‧. product quality, customer service, product uniqueness, and brand/vendor reputation. Despite. Nat. sit. y. that product uniqueness and product quality are ranked as the most and second important by. n. al. er. io. Taiwanese customers, these two traits are subjective and relatively difficult to be measured.. i n U. v. Hence, we will use price which is a more explicit measure to segment the wedding favors market in Taiwan.. Ch. engchi. According to our survey results, the wedding favors market in Taiwan can be segmented into three major parts with varying price range, which are low end, middle end, and high end.. A. For edible wedding favors -. Low end (NT$5 - 19). -. Middle end (NT$20 - 29). -. High end (over NT$30). 22.

(31) B. For non-edible wedding favors -. Low end (NT$5 - 19 ). -. Middle end (NT$20 - 49). -. High end (over NT$50). 5.1.2. Targeting We will target both middle and high-end segments on the back of two reasons.. 政治大. First of all, 66% of our survey respondents claimed their willingness to pay more than NT$20. 立. for edible wedding favors per guest. Also, 82% of respondents are willing to spend over. ‧ 國. 學. NT$20 on non-edible ones per guest. Both of these figures serve as strong evidences why we should aim for the high-end and middle-end markets.. ‧ sit. y. Nat. In addition, to thrive in the low-end market, a company must have cheaper purchasing costs as. io. er. a competitive edge over its rivals. Nevertheless, for a start-up company like us, economies of scale is difficult to be achieved when purchasing merchandise, not to mention that it’s. al. n. v i n financially risky to buy in large C quantities. focusing on the low-end market won’t h e n gTherefore, chi U be a wise option at the current stage.. 5.1.3. Positioning To excel in the middle and high-end segments, we want to position ourselves as a professional wedding favors company. Therefore, we named our brand Precious Wedding as literally it’s not only catchy but also is easy to be associated with wedding professionals. In addition, Precious Wedding clearly conveys our dedication to create precious wedding experiences for our customers.. 23.

(32) When compared to competitors, we want to be associated with the brand image as follows. -. Superior product design. -. High quality. -. Outstanding customer service. 5.2. 4P (Product, Price, Place, Promotion) 5.2.1. Product. 政治大 wedding favors of good qualities, including candies, cupcakes, chocolates, key chains, photo 立. Positioning ourselves as a professional wedding favors brand, we strive to provide unique. ‧ 國. 學. frames, bottle toppers, notepads, place-card holders, coasters, and so forth.. Furthermore, given limited resources, we will only purchase finished products during the. ‧. startup stage. Once we successfully get our business on track and generate a steady flow of. y. Nat. al. n. Overall, our products can be grouped into three categories. A. Branded wedding favors. Ch. engchi. er. io. sit. revenue, we will launch our own designs through co-developing with gift manufacturers.. i n U. v. To enhance brand recognition, unless customers disapprove, we will have our brand name Precious Wedding on each wedding favor we sell. Our brand name can appear in various forms such as on the gift tag, ribbon, sticker, gift bags or on the favor itself. In the meantime, we will educate customers the benefits of branded gifts such as correlation of higher price and product value.. B. Personalized wedding favors As long as it’s technically workable, we can personalize wedding favors for customers through multiple methods such as engraving and printing. Most importantly, we will advise all 24.

(33) kinds of feasible personalized options so customers can choose the one which suits them most economically.. C. Customized wedding favors Customized wedding favors are provided as well for customers requesting very unique wedding favors. Depending on customers’ needs, we can develop special wedding favors from scratch.. 政治大. Regarding the merchandise we will be selling in the beginning of operation, table 3 to 5 offers. 立. various information including item photo, description, MOQ (minimum order quantity), and. ‧. ‧ 國. 學. io. sit. y. Nat. n. al. er. unit price.. Ch. engchi. 25. i n U. v.

(34) Table 3: Product Information No.1 - 6. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 26. i n U. v.



(37) 5.2.2. Price From the survey we obtain that: A. For edible wedding favors -. 41% of respondents are willing to spend over NT$30 for each guest.. -. 25% of respondents are willing to spend NT$20 - 29 for each guest.. B. For non-edible wedding favors -. 學. ‧ 國. -. 政治大 34% of respondents are willing to spend NT$20 - 49 for each guest. 立. 48% of respondents are willing to spend over NT$50 for each guest.. Targeting at the middle and high-end customers, we will only focus on providing wedding favors priced over NT$20. On top of that, for edible wedding favors, a higher percentage of. ‧. products will be priced over NT$30, while a higher percentage of products will be priced over. y. Nat. er. io. sit. NT$50 for non-edible ones.. al. In addition, varying prices for an item will be offered in sets of quantities as an incentive for. n. v i n customers to buy fewer items inC larger This will also be beneficial for us to attain h equantities. ngchi U economies of scale in terms of merchandise purchase.. For example, the price of a card holder will be set as below: 1-11 sets of 4. NT$180/set. 12-23 sets of 4. NT$144/set. 24-47 sets of 4. NT$132/set. 48 or more sets of 4. NT$120/set. Regarding the exact prices of the first 20 items we provide, please refer to table 3 to 5 in. 29.

(38) section 5.2.1.. 5.2.3. Place Based on our survey findings, as high as 83% of respondents prefer to shop wedding favors from a vendor with both physical and virtual presences. Nevertheless, due to financial concerns, we won’t open a physical store at the early stage of our business. Instead, we will concentrate our selling through the online channels first.. 政治大. The channels we plan to sell our products through are listed as below.. 立. A. Online store. ‧ 國. 學. Our official website www.preciouswedding.com.tw, designed by Design Ori. Studio with a design fee of NT$40,000, will be the main channel selling our wedding favors.. ‧ sit. y. Nat. B. Yahoo bidding. io. al. er. Yahoo bidding is an important channel for online shopping in Taiwan. Thus we will open a. n. shop on yahoo bidding as well.. C. VeryWed. 5. Ch. engchi. i n U. v. As abundant wedding information could be drawn from this website, it is regarded as the most popular and must-visit website for Taiwanese brides and grooms. As a result, we will utilize this channel to sell our products in their wedding favors section.. D. Wedding dress shops, wedding banquet restaurants, and wedding consulting companies Based on our findings, wedding related professionals are regarded as the second most important source of information when it comes to wedding favors, implying that customers 5. VeryWed. <http://www.verywed.com/> (Accessed June 8th, 2013). 30.

(39) are more willing to take their business referrals seriously. Consequently, the places where these professionals work at should be treated as significant channels as well.. Instead of asking these wedding related businesses to purchase our products, we will provide them free samples and catalogues for sales demonstration. Moreover, our commission-based selling can act as a venue for them to generate extra income within limited risk, offering incentives for these business to cooperate with us.. E. Physical store in Taipei city. 立. 政治大. When financially feasible, we will rent an office in downtown Taipei with a sample room. ‧ 國. 學. displaying our full range of wedding favors. This sample room will serve as a physical store for customers to shop and check on product qualities in person.. ‧ sit. y. Nat. 5.2.4. Promotion. io. al. er. Promotional strategy will be evaluated and adjusted constantly to remain competitive. The. n. notion here is that not all of the promotional activities described below will be applied in a. Ch. specific period of time. Instead, budget will be. engchi. iv n reallocated U. to maximize promotional. efficiency and effectiveness.. A. Advertising Since the beginning of our operation, we will advertise on Verywed.com as it’s the most popular website in Taiwan when it comes to wedding. In the future when we generate a steady flow of sales, we will consider to advertise on high traffic MRT stations as well as on popular media.. 31.

(40) B. Keywords search engine optimization According to our survey, 70% of respondents claimed that internet is their main source of information. Therefore, optimizing our online visibility naturally plays an indispensable role to achieve sales goals. Furthermore, considering our lack of experience as well as limited human resources, we will purchase the keywords service from Domain technology, Inc.6 With the assistance of their experienced employees, we can attain higher search engine rankings.. 立. C. Free samples. 政治大. ‧ 國. 學. Free samples will be dispatched to wedding magazines, restaurants, or wedding gown shops. These samples could be used as gifts for lucky draw or simply serve as decorations for stores. ‧. and photography purposes. We believe the free samples will not only raise our brand. y. sit. n. al. er. io. D. Discount. Nat. recognition but also enhance sales opportunities.. i n U. v. Discounts will be offered either through order amount, order volume, or through special. Ch. engchi. promotional event. For instance, for orders exceeding NT$10,000, a discount of 5% will be applied automatically. Another example is the “buy one get the second 50% off “ discount policy which is widely used as an incentive to raise customers’ expenditure.. E. Free shipping Under normal circumstances, we will have free shipping to addresses in Taiwan on orders over NT$3,000. However, this minimum order amount for free shipping is subject to change depending on our promotional strategy at a given time. 6. Domain Technology, Inc. <http://www.promote168.com.tw> (Accessed June 10th, 2013). 32.

(41) F. Referral gift We understand the power of words of mouth. Therefore, as long as a referee has been identified and verified to contribute to an order over NT$2,000, he or she will receive a special gift from us as a referral reward, which we believe will encourage words of mouth further.. G. Online coupon. 政治大 distributed periodically to appeal to customers. 立. Considering its characteristics of convenient and eco-friendly, online coupons will be. ‧ 國. 學. H. Flyers. Flyers will only be distributed in certain areas to attain efficiency and effectiveness, such as. ‧. Zhongshan N.Rd. and Aiguo E.Rd., where many wedding gown shops are concentrated at.. er. io. sit. y. Nat. I. Public relations. al. We will hold public relations events occasionally to enhance our brand awareness and image.. n. v i n Cused For instance, our products can be charity auctions, for fund raising, or be given as h e for ngchi U gifts on a visit to the children’s home.. J. Social media marketing To enhance our online exposure to potential customers, gaining high traffic at social media sites such as facebook, twitter, and Instagram is very critical. Therefore, we will constantly devote a substantial part of resources to these social media sites to increase exposure.. 33.

(42) 6. Business Structure As we only have two co-founders working during the start-up stage, these two people will be responsible for all business functions and assist with each other. After our business attains steady sales growth, we aim to have five departments functioning independently but still collaboratively.. 治政 Managing Director 大. Research & Development. 學. Human Resources. Finance & Accounting. Operations. ‧. Nat. io. sit. Figure 18: Business Structure. y. Sales & Marketing. ‧ 國. 立. n. al. er. Business functions of these five departments are outlined as below. While most of our. Ch. i n U. v. business activities may be similar to those of others, we developed some specific operational. engchi. strategies tackling the wedding favors market in Taiwan. Therefore, the operations part will be detailed in particular in section 6.2.. 6.1. Business Activities of the Four Main Departments 6.1.1. Sales & Marketing - Generating sales - Formulating and executing marketing strategy - Tracking and analyzing competitors’ movement. 34.

(43) 6.1.2. Research & Development - Designing and developing new items - Collecting updated information. 6.1.3. Human Resources - Recruiting - Employee performance evaluation - Employee education. 立. 政治大. - Managing financial flows to keep operations smoothly. 學. ‧ 國. 6.1.4. Finance & Accounting. - Payment tracking and refund. ‧ sit. y. Nat. 6.2. Operations. io. er. 6.2.1. Customer Service. al. Customers can contact us by phone, email, or fax. We can also be reached via our facebook. n. v i n C hAdditionally, an auto-reply fanpage or website message board. function will be added to our engchi U. company’s email account. Whenever a customer sends out an enquiry, a confirmation email will be sent back, informing them the enquiry will be processed within 24 hours excluding. weekends and holidays. In addition, a 7 day unconditional return and refund policy will be applied to the whole range of merchandise. As all of our three main competitors either have conditional or very unfriendly return policy, we believe our outstanding return and refund policy will differentiate ourselves and contribute to sales increase.. 6.2.2. Logistics Limited to addresses in Taiwan, free shipping will be applied for any orders over NT$3,000 35.

(44) on a regular basis. Depending on customers’ needs of delivery speed, we can ship products through two main couriers, which are Chunghwa Post and SF Express.. A. Chunghwa Post Table 6: Postage Rate of Chunghwa Post7. 立. io. sit. Table 7: Postage Rate of SF Express8. n. al. er. Nat. y. ‧. ‧ 國. 學. B. SF Express. 政治大. Ch. engchi. i n U. v. 6.2.3. Quality Control To ensure our product quality, an inspector will be assigned to each order on a random basis. After checking the quality thoroughly, he or she has to sign on an inspection sticker as an approval for shipment. We will take photos of every inspection sticker as a record for future 7. ChungHwa Post. <http://www.post.gov.tw/post/internet/u_english/postal_f_2.jsp> (Accessed July. 8. 15th, 2013) SF Express. <http://www.sf-express.com/tw/en/product_service/product_intro/taiwan_express.html> (Accessed July 15th, 2013). 36.

(45) use. If any quality complaint is raised, this record will give us access to track responsibility easily.. In addition to tracking, the measure of inspection stickers is also accompanied by two other benefits. First of all, it can help reduce the product return rate caused by inferior quality, as the need to sign on inspection stickers will naturally obligate employees to treat quality control seriously. Second, it can raise company reputation, given that customers are very. 政治大. likely to interpret the signed inspection sticker as a company’s extra effort devoted to the. 立. quality control.. ‧ 國. 學. 6.2.4. Purchasing. In terms of merchandise, we will focus our purchasing on suppliers in mainland China.. ‧. Through visiting major gift trade shows such as Canton Fair, Hong Kong Gifts & Premium. y. Nat. sit. Fair, Mega Show Part 1, and Global Sourcing Fair, we expect to find qualified suppliers and. n. al. er. io. build a long term relationship with them.. 6.2.5. Inventory. Ch. engchi. i n U. v. During the start-up stage, all products will be stocked in an apartment with a space of 100 square meters. As it’s sponsored by a relative of the cofounder’s, no rent will be charged. The only expense which will occur is the utilities. In the future whenever the need for larger storage space arises, we will seek for other solutions.. 6.2.6. Legal & Compliance Considering our small scale and the efficiency of resource utilization, we will outsource most of our legal & compliance tasks to professional agencies. Related legal issues include company license registration, trademark registration, regulatory compliance, and so forth. 37.

(46) 6.2.7. Information Technology We will have Design-Ori Studio to design our website. Upon its completion, this website will be hosted by url.com.tw with an annual fee9 of NT$4,700, including the hosting fee of NT$4,000 and domain registration fee of NT$700.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. 9. Ch. engchi. i n U. v. 智邦生活館. <http://hosting.url.com.tw/products.html> (Accessed July 20th, 2013). 38.

(47) 7. Financial Analyses 7.1. Startup Costs The table below summarized the estimated startup costs which equals NT$237,700 in total. Considering that both of the founders have a full time job currently, we will have professionals to assist with the application for company license and trademark patent, which will cost $9,000 and $6,000 respectively. As for the trademark NT$30,000 and website design NT$40,000, we will choose Design Ori. Studio which have been worked with one of the. 學. ‧ 國. 治政 partners many times before. Website hosting as well as domain 大 registration will be outsourced 立 to url.com.tw which costs NT$4,000 and NT$700 per year. Table 8: Startup Costs. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Regarding the NT$32,000 budget for pre-opening marketing, we will assign NT$25,600 on the keywords search engine optimization held by Domain Technology, Inc. Advertisement on VeryWed for a month will cost NT$5,000 as well, while the rest of NT$1,400 will be utilized on other marketing tools such as flyers and free premiums to potential customers.. The office supplies NT$6,000 include stationary, business cards, ink, printer, and a landline. 39.

(48) telephone. We will apply for a business landline number from Chunghwa telecom which cost NT$1,500 for the one time set up fee.. In terms of merchandise, we will spend an equivalent of NT$100,000 allocated on buying all items listed in table 3 to table 5. The exact quantities for each item will be based on the two partners’ past experiences in the gift industry, coupled with opinions from friends who are wedding photographers or wedding banquet hosts.. 政治大. As there exist great needs of freight shipping between China and Taiwan, the competition. 立. among forwarders is fierce. Thanks to this fierce competition, we can import goods from. ‧ 國. 學. China to Taiwan at a relatively cheaper price which will be NT$25/kg10 for sea freight including customs clearance fee. Given the nature of small size and light weight of wedding. ‧. favors, NT$5000 should be sufficient to cover the freight and customs clearance fee for our. y. Nat. n. al. 7.2. Sales Forecast. Ch. engchi. er. io. other expenses which might occur unexpectedly.. sit. goods per shipment. Lastly, a miscellaneous fee of NT$5,000 is listed in our estimate to pay. i n U. v. As wedding favors are mostly bought by couples who are about to get married, it’s most logical to calculate the sales forecast based on the actual number of couples getting married in Taiwan each year.. 10. GINIFAB Co., Ltd. <http://www.ginifab.com/forwarder/calculatefreight.php> (Accessed November th. 15 , 2013). 40.

(49) Table 9: Statistics of Married Couples11 (2001 To 2012). Above is the statistics of couples who got married in Taiwan from 2001 to 2012. We will use 148,704, the average for the past 12 years to project sales.. 治政大 small sample bias, 22% will be However, to forecast in a more conservative way and avoid 立 taken in our calculation instead of 66%. We times the average number of couples getting According to our survey, 66% of respondents claimed that they will purchase wedding favors.. ‧ 國. 學. married per year with 22%, then we have the number of couples who will buy wedding favors. ‧. each year. This number will be 32,714, equaling 148,704 times 22%.. Nat. sit. y. The next step is to multiply 32,714 by our market share percentage. Despite we only observe. n. al. er. io. approximately 20 competitors operating on a larger scale currently, we will apply 2% market. i n U. v. share in year 1 for the purpose of conservative calculation. The result indicates that we will obtain 654 customers in year 1.. Ch. engchi. To project the annual sales, the final step is to figure out how much per customer will contribute to the revenue approximately. Assuming that each couple will spend NT$30 on each guest and there are 150 guests per wedding banquet, we estimate our annual revenues in Year 1 to be 2,943,000.. 11. Directorate-General of Budget Accounting and Statistics, Executive Yuan, R.O.C. (Taiwan). <http://www.dgbas.gov.tw/ct.asp?xItem=15409&CtNode=4595&mp=1> (Accessed November 15th, 2013). 41.

(50) Table 10: Calculation Process for Annual Revenue in Year 1. 政治大 each year. Here, the numbers of growth rate we apply from year 2 to 5 are 18%, 15%, 12%, 立. In order to forecast the sales from year 2 to year 5, we have to determine a growth rate for. ‧ 國. 學. and 10% respectively. While some might question the practicality of our sales growth rate, we want to emphasize again that the way we calculate our sales forecast in year 1 is extremely. ‧. conservative. Moreover, as explained in earlier section, the wedding favor industry in Taiwan. sit. y. Nat. is at the late introduction stage of the product life cycle, which makes us believe that growth. io. al. n. all.. er. rates over 10% for the next five years are actually very reasonable and not overestimated at. Ch. engchi. i n U. v. Based on the sales forecast in year 1, we times the growth rate from year 2 to year 5 by NT$2,943,000. The results for sales estimate from year 2 to 5 are shown in table 11. Table 11: Sales and Growth Rate (Year 1- Year 5). 42.

(51) 立. 政治大. Figure 19: Sales Forecast Year 1 – Year 5 (Unit: NT$). ‧ 國. 學. 7.3. Operating Expenses, Cost of Goods Sold, and Working Capital. ‧. 7.3.1. Operating Expenses. Nat. sit. y. While the normal procedure is to divide operating expenses into fixed and variable costs, we. n. al. er. io. grouped all of our expenses into the variable category. This is because we didn’t rent any. i n U. v. physical warehouse or office in the beginning years of operation. Furthermore, despite some. Ch. engchi. expenses such as website hosting and maintenance fee might be considered as fixed costs, we believe this expense will rise with the increasing traffic of our website as well as the increasing sales. Therefore, all of the listing expenses in table 12 are variable costs in our view and will be adjusted to the sales change.. To forecast the operating expenses in year 1, we sum up all the estimated expenses per month and multiply the figure by 12, which equals NT$700,800 in the end.. 43.

(52) Table 12: Operating Expenses – Year 1. 政治大. In year 1, the ratio of operating expenses to sales forecasts is approximately 24%. Benefiting. 立. from the experience curve effect, we assume the ratio between operating expenses to sales. ‧ 國. 學. will drop from the 24% in year 1, to 20% in year 2 and 18% in year 3 respectively. After year 3, the experience curve effect is very likely to come to a halt and thus stabilize the ratio at. ‧. 18% for the following years. As a result, the operating expenses from year 1 to year 5 will be. y. Nat. al. er. io. sit. NT$700,800, NT$694,548, NT$718,857, NT$805,120, and NT$885,632.. n. Table 13: Ratio of Cost of Goods Sold/Sales and Operating Expenses/Sales. Ch. engchi. i n U. v. 7.3.2. Cost of Goods Sold We assume the ratio between costs of goods sold and sales forecast remains the same throughout the five years. Here, a ratio of 33% is selected, as most gift importers or wholesalers mark up three times as much as the original price when selling to retailers or end customers. Therefore, the cost of goods sold generated from year 1 to year 5 are NT$971,190, NT$1,146,004, NT$1,317,905, NT$1,476,053, and NT$1,623,659 respectively.. 44.

(53) Table 14: Sales Forecast, Cost of Goods Sold, Operating Expenses, and Working Capital Year1-5. 7.3.3. Working Capital The logic for calculating working capital is detailed as follows:. 政治大 80% of the merchandise are sold every month and become the cost of goods sold. 立. 1) We assume that 20% of the merchandise remain as inventory per month. In other words,. ‧ 國. 學. 2) On a yearly basis, suppose the merchandise we buy is X, implying that 20% of X is the working capital, while 80% of X is the cost of goods sold.. sit. y. Nat. 0.8X = 971,190. ‧. 3) Take year 1 for example:. io. Working capital = 0.2X = 0.2 *1,213,988 = 242,798. n. al. Ch. engchi. er. X = 971,190/0.8 = 1,213,988. i n U. v. This calculation formula of working capital can be applied to year 2 till year 5 as well, leading to a working capital equaling NT$286,501, NT$329,476, NT$369,013, and NT$405,915 respectively.. 45.

(54) 7.4. Net Present Value Table 15: Net Present Value (NPV) Based on a Five Year Period. 立. 政治大. ‧ 國. 學. We have explained the logic for forecasting sales, working capital, cost of goods sold, and. ‧. operating expenses in previous sections. Thus we will focus on explaining the calculation of. y. Nat. al. v i n C h average yieldUto maturity Taiwan government bond, Risk Free rate - The 5 year weighted engchi n. WACC = Risk free rate+ ß ( Market Risk Premium) 1). er. io. sit. discount rate here. To estimate the discount rate, the WACC formula will be applied.. which is 1.072%12 based on the closing price as of December 11th, 2013, will be used as the risk free rate. 2) Beta (ß) - Considering the nature of our business, we will use the Beta of retail store to calculate the discount rate. Based on a survey conducted by Aswath Damodaran with a database of 6177 companies, the latest Beta for retail store is 1.2913 as of January 2013. 12. cnYes.com.<http://www.cnyes.com/futures/History.aspx?mydate=20131211&code=TWBOND5Y> (Accessed December 11th, 2013). 13. Aswath Damodaran 2013. Beta by Sector. Value Line database, of 6177 firms. <http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/Betas.html> (Accessed. 46.

(55) 3) Market Risk Premium – Referring to the survey conducted by Pablo Fernandez, Javier Aguirreamalloa, and Luis Corres Avendaño in 2012, a market risk premium of 7.7%14 for Taiwan will be used in our calculation formula. 4) Combining above, a number of 11.01% of discount rate is generated. 1.072% + 1.29 *7.7% = 11.01%. As shown on table 15, except for period 0, all the other present values from year 2 to year 5. 政治大 NT$5,250,934, indicating that our investment will be a wise and profitable choice. 立. are positive. After combining the present values throughout the five years, we obtain. ‧ 國. 學. 7.5. Sensitivity Analysis. Despite the attractive NPV value NT$5,250,934 calculated in section 7.4., chances are that. ‧. our estimates might not be realized because of the changing dynamics. Consequently, we will. y. Nat. sit. use sensitivity analysis in an attempt to reflect alternative outcomes if an important business. n. al. er. io. factor changes. Two variables, which are sales forecast and costs of goods sold, will be. i n U. v. adjusted for the sensitivity analysis in terms of pessimistic, expected, and optimistic scenarios.. Ch. engchi. According to section 7.2., various factors are considered and assumed in the calculation of sales forecast, such as 2% market share and $30 dollar spent on per guest. Despite that the sales forecast is affected by these multiple factors, to simplify the sensitivity analysis, we will only assign a number as a whole in each scenario to represent the combining influences of all. 14. December 12th, 2013) Fernandez, Pablo and Aguirreamalloa, Javier and Avendaño, Luis Corres. Market Risk Premium Used in 82 Countries in 2012: A Survey with 7,192 Answers (November 23, 2013) <http://ssrn.com/abstract=2084213> (Accessed December 12th, 2013). 47.

(56) factors. Therefore, we will apply 75% to the pessimistic scenario and 125% to the optimistic one.. As for the costs of goods sold, 50% is assigned to the pessimistic scenario while 25% is assigned to the optimistic one. Table 16: Sensitivity Analysis. 立. 政治大. ‧ 國. 學. Table 16 above clearly indicates that the NPV remains positive even under pessimistic scenarios, reflecting that our business will still be operating in good health even if there is a. ‧. downturn in sales or a rise in the cost of goods sold.. n. er. io. sit. y. Nat. al. Ch. engchi. 48. i n U. v.

(57) 8. Conclusions Precious Wedding is a professional wedding favors company in Taiwan which is dedicated to bringing the best wedding favors for every bride and groom. As wedding favors originate from western countries and are still not prevalent in the Taiwan market, we embedded a survey as well as multiple analyses in this business plan to assess the practicability and profitability of our company.. 政治大. From observation, we believe that the wedding favors market in Taiwan is at the late. 立. introduction stage of a product life cycle based on three reasons. First of all, the product. ‧ 國. 學. concept of wedding favors is neither new nor well-known for Taiwanese customers. Second, given that most Taiwanese don’t realize the candies we dispatch on weddings can already be. ‧. counted as a form of wedding favors, there is unrecognized demand in this market, which. Nat. sit. y. therefore lead to unexplored sales potential. Third, the competition is low as there are only. n. al. er. io. fewer than 20 vendors running on a large scale.. Ch. i n U. v. In addition, we carried out a competitive analysis as well as a SWOT analysis. While the. engchi. competitive analysis allows us to get a deeper understanding of our competitors, the SWOT analysis not only helps us identify strengths and weaknesses, but also pinpoints several opportunities and threats that must be addressed when formulating business strategies. Most importantly, both of these analyses have shown that Precious Wedding do possess competitive advantages and are highly likely to excel in the wedding favors market in Taiwan.. Furthermore, to examine whether the sales potential of wedding favors market in Taiwan do exist or not, an online survey was performed to local Taiwanese with 111 valid responses collected. To enhance the accuracy of survey results, we on purpose explain the definition of 49.

(58) wedding favors in the beginning of the survey. Also, to test whether Taiwanese prefer edible or non-edible wedding favors, three types of questionnaires are dispatched.. Several noteworthy findings have been released from our survey and are listed as below. 1) As high as 88% of respondents claimed that they will or they are likely to purchase wedding favors (or recommend others to do so), while only 4% refuse to buy. 2) During the purchase decision process, Taiwanese consider product uniqueness and product. 政治大 reputation. Surprisingly, price ranked No.4 out of the five factors in our survey results. 立. quality as the two most important attributes, followed by the factor of brand/vendor. ‧ 國. 學. 3) 62% of survey participants are interested in both edible and non-edible wedding favors. 4) 41% of respondents are willing to spend over NT$30 per item for edible wedding favors,. ‧. while 48% of respondents are willing to spend over NT$50 per item for non-edible ones.. sit. y. Nat. 5) 83% of respondents prefer to shop from vendors with both physical and virtual stores.. io. al. er. 6) 70% of respondents claimed that internet is their main source of wedding favors. n. information, while 16% seek information from wedding consultants or related professionals.. Ch. engchi. i n U. v. Based on our analyses and survey results, we have formulated a comprehensive marketing strategy to tackle our market. First of all, instead of offering a wide price range of products like our competitors, we will only focus on selling middle to high end wedding favors over NT$20 per item. Second, considering the market is at late introduction stage, we view branding as a critical element of our marketing strategy, allowing us to charge higher margin and to build recognition promptly. Given that none of our competitors has achieved a competitive edge in terms of company or brand awareness, our catchy brand name Precious Wedding will enable us to stand out from the crowd as well as impress potential customers 50.

(59) Third, we offer superior products in terms of product uniqueness and quality. Unlike competitors who mostly sell similar products without any special features, we will be offering branded, personalized, and customized wedding favors to differentiate ourselves from others. Also, we have strict control policy to ensure high qualities and customers’ satisfaction. On top of that, the two co-founders’ working experiences also contribute to our competitive edge in terms of product. On one hand, we know a lot about gifts, as we used to attend major. 政治大 be grouped into the gift category, we also have a better sense for wedding favors with regards 立 international gift exhibitions promoting gifts to buyers worldwide. Since wedding favors can. ‧ 國. 學. to design, uniqueness, quality, and customers’ acceptance. On the other hand, as most of the. wedding suppliers are located in Mainland China, our working experiences in the Chinese. ‧. factories will be beneficial when it comes to merchandise purchase. For instance, we are very. sit. y. Nat. familiar with every process of a product development, which will facilitate our negotiation. io. n. al. er. when co-developing customized products with these Chinese suppliers.. i n U. v. In terms of financial perspective, despite of the underestimation of sales forecast, we still. Ch. engchi. obtain as high as NT$5,250,934 in our NPV calculation over the next five years with a discount rate of 11.01%. In the sensitivity analysis, our NPV remains positive in the five different scenarios, ranging from the lowest of NT$3,411,729 to the highest of NT$6,734,601. That is to say, even in an economic downturn, our business plan is still practical and financially feasible.. In summation, there is no better timing than now to dive into this market, as it is already at the late introduction stage of a product life cycle. With proper strategies, we can ride this trend and enjoy the exponential sales growth. In contrast, if missing this good entry point, fierce. 51.

(60) competition might surface during the growth stage of a product life cycle and make it difficult for a startup company like us to survive.. Given the survey results, analyses, and strategies described in the business plan, we are confident that Precious Wedding will meet financial forecast, expand company scale continuously, and ultimately fulfill our goal to be the No.1 wedding favors brand in Taiwan.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 52. i n U. v.

(61) Appendix As the purpose of our market research was to investigate Taiwanese attitude towards wedding favors, the original survey was conducted in Chinese. Also, to test whether Taiwanese are inclined to purchase edible wedding favors or not, depending on the answers on question No.7, respondents were led to 3 versions of questionnaires for the rest of the survey. 婚禮小物問卷調查. 政治大. 您好,我是政治大學 IMBA 碩士班的學生李依依,此問卷乃為碩士論文的一部份,目的為. 立. 調查台灣國民對於購買婚禮小物之動機及態度。此問卷大約將花費您 5 分鐘以內的時間. ‧ 國. 學. 完成,在此非常感激您寶貴的時間與協助。. ‧. (背景：婚禮小物之英文為 Wedding Favors,為歐美國家新人在婚禮時發送給賓客的小禮物,以表達對賓客的感激。婚禮小物型式不拘,可以是實用的家用品,也可以是糖果餅. y. Nat. n. al. er. io 1) 請問您的性別. sit. 乾...等等。台灣文化中婚禮發送喜糖的概念,就有點類似婚禮小物。). 男性. Ch. engchi. 女性 2) 請問您的年齡層屬於?  19 - 25 歲  26 - 30 歲  31 - 35 歲  36 - 40 歲  41 歲以上. 53. i n U. v.