Carpet Business Plan Project

Preface

We have prepared this final project Carpet Business Plan Project for the course of Marketing Management and after giving different information on different phases of marketing plan as instructed by our teacher. This project contains all the data of marketing and finance for the development of business plan for our unique and innovative product “ORNATE CARPETS” which we have choose and then we have identified the target customers. This project contains the company profile and customer profile in which the segmentation is described and the entire business plan is being described and analyzed.

Acknowledgement

First of all we are thankful to ALLAH Almighty for giving us power to complete our final project of business plan based on a different and unique topic. After that we are most thankful to our respected and honorable teacher. He has taught us Marketing Management in an excellent manner. The important points like idea generation, business development and marketing strategies and information given to us through various Lectures were highly effective; the most important thing is the knowledge which we have studied in our course was all the same which we have applied practically. All the qualities in a good project and knowledge about interpersonal skills will prove to be very essential in our practical life as well as in future. We are also thankful to our parents that due to their prayers we have succeeded in completing our final term project. We are personally thankful to the friends that had helped us in fact co-operated with us also our respected teachers who gave us guidelines for making the business plan and allowed us to work in a different environment. Another thing here is worth mentioning that we are also thankful to our each group member personally as each one of us has helped each member of the group.

Executive Summary

This project is based on the idea of a unique and innovative product. This project is prepared for the course of Marketing Management. The main theme of the project was to develop a business plan of a unique product that is an innovative and not existing in the market at the same time. The idea generation was the most important and base of the project. The idea and its whole generation process are being explained in detail in the project. The product on which we have developed our business plan is the idea of reloaded carpets and carpet patch. The name of our product is “Ornate Carpets” and the unique and innovative thing is that we are making new carpets and rugs by using old and used carpets.

The whole process of making reloaded carpets and why we have chosen this idea of recycling carpets is also being explained in detail. After that the introduction to our company is being given including vision, mission and values. In marketing all the important things like the marketing activities and its budget for all the 1 month are being explained.

After reading these whole details the reader could analyze the whole carpet industry and would come to know all the important aspects in developing a business plan and after that making financial projections and the marketing activities needed for success of the business.

Table of Contents

• Preface
• Acknowledgement
• Executive Summary
• Idea Generation
• History
• Political Trends
• Economic Trends
• Social Trends
• Forecast
• Some of the important problems
• PROCESS OF MAKING CARPETS
• INTRODUCTION TO OUR COMPANY
  • Name of our company
  • Vision
  • Mission
  • Strategy
  • Values
  • Objectives
• SWOT Analysis
• Strengths
  • Use of Waste Products
• Opportunities
  • Profitable Organization
  • Introduction to New Product Line
• Marketing Mix
  • PRODUCT
  • PRICE
  • PLACE
  • PROMOTION
  • PEOPLE
  • Packaging
  • Process
• PESTEL Analysis
  • Political factors
  • Economical Factors
  • Social Factors
  • Technological Factors
  • Environmental Factors
  • Legal factors
• Marketing Phase
• Segmentation
• Distribution Channels
• Coverage Planning
• Particulars
• Abbas carpets
• Khyber weavers
• Ornate carpets
• SWOT Analysis
• Competitors’ Analysis
• Positioning
  • Total Budget 10 million
  • TV Ad Budget
  • Radio
  • News Paper
  • Billboard
• References

Idea Generation

The idea is the most important phase. Once the idea is researched and selected then the planning for that and the action to implement the planning are being taken. Idea generation is the most important and most difficult phase as well. As many ideas came in mind but after that the main thing was to select an idea and then refine it so that it becomes accurate and an effective one. A person who has a lot of potential in himself to work and bring a change but fails to do so, if he doesn’t have a good idea. The generation of idea and then also having a good idea is very important.

Our project is related with the entrepreneurial thinking. So in that context we should have an entrepreneurial product and the idea/product should be marketable. The idea on which we are working is the idea of reloaded carpets. Now, this is very important to tell that how we got the idea of this. We are going to make new carpets by using old carpets. Our teacher said us to think something innovative spontaneously one of our group members thought about the idea of these carpets.

At the same time we told that to Sir and finally he agreed and it seemed like finally we have entered into the ground for the race to begin. The brand name was suggested by the group leader and then all the group members started working on the idea. This is how the idea was generated and first barrier of a good final project was passed.

History

The carpet is the one of finest and most exquisite form of expression and has more than 2,500 years old history. The Iranians were amongst the first carpet weaver of the ancient civilizations and, through centuries of creativity and ingenuity building upon the talents of the past, achieved a unique degree of excellence. The carpet industry plays a vital role in the economy of Pakistan. It is not only a major earner of foreign exchange for the economy as a whole but it also contributes to the relief of poverty in rural areas. It is basically a cottage industry spread all over Pakistan, especially in remote rural areas. It is a major source of income for families who have few other sources of livelihood, apart from marginal agriculture. Families can easily enter carpet-making as an occupation as it requires few infrastructural facilities. Unlike other industries it does not require electricity, water, etc. Historians believe that carpet making was introduced to the region now constituting Pakistan as far back as the 11th century with the coming of the first Muslim conquerors the Ghaznavids and the Ghauris. During the Mughal period the carpets made in the Indo-Pak Sub-Continent became so famous that there was mounting demand for them abroad. These carpets have distinctive designs and boasted a rich knotting density. The tradition has remained strong over the last 400 years, although it has had ups and down during this period. After the partition of the Sub-Continent in 1947 to establish the new Muslim State of Pakistan, most of the Muslims migrated to Pakistan, settled down either in Lahore or in Karachi. It is these people who formed the backbone of the carpet industry in Pakistan. The rugs are individually made from a process of knotting with a unique pattern rather than mass-produced. In the world market such rugs are best known as ‘Persian’ rugs and Turkish rugs although Iran and Turkey are not the sole supplier. According to the Pakistan Carpet Manufacturers and Exporters Association (PCMEA, 2003) there are 150000-200000 looms in the country. The number of weavers is estimated around 200000-250000. Carpet making takes place in all the four provinces of Pakistan.

Political Trends:

• Political instability is effecting badly to the carpet industry.
• Energy problem (high cost and power failure) is the main issue in these days, because it leads to increase in production cost.
• From the previous some years Government of the Pakistan are encouraging import and export policies. And also encouraging the foreign investors to invest in Pakistan.
• Government should take measures to check the inflow of carpet into Pakistani market through the tactics of under-invoicing and miss-declaration.

Economic Trends:

• Economic crisis hit badly on carpet industry especially raw material to manufacture of carpets.
• One of the most important problems in the growth of carpet industry is higher energy prices.

Social Trends:

In Pakistan the life style of people is changing with a fast pace. Their life has become more money and time oriented. There is a major shift in the values of the people of Pakistan. People now prefer western life style rather than the traditional one. Everyone wants that he or she wears new shoes at every occasion. Pakistan is amongst the top ten most populous countries of the world, increase in population and also increase in demand for the products and it also increases demand for carpet industry.

Forecast:

In the nutshell we can say that there is potential for higher growth of the industry and it can become a source of export earnings. The rapidly changing global economic environment and in the face of increasing cost of doing business in Pakistan, there is a need to strengthen the competitiveness of the carpet industry in Pakistan

Some of the Important Problems:

• One of the most important problems hindering the growth of carpet industry is higher energy prices. Increasing energy and inputs prices leads to an increase in the cost of production that influences the expected production of the industries and thereby exports.
• Improper availability of raw material
• Transport and utility infrastructure facilities are not adequate.
• Heavy taxes in the form of sales tax and income tax on retail businesses.

PROCESS OF MAKING CARPETS

Carpets once bought are categorized into 3 categories.
o A category
o B category
o C Category
Carpets are categorized according to their conditions. The best pieces of carpets are transferred in category A, better into category B and the bad conditions into 3rd category that are used for carpet patches.

• After categorization of carpets they will now transfer to the cutting department for cutting/removing the wool. In which by using cutter the wool is removed Only the 50% of the total wool is remaining which will be removed in washing phase.
• Once the wool is removed from the carpets it is now proceeds towards washing department, where by using different types of chemical the old color of the carpets is removed. It will take at least one day to eliminate the color completely In the next and last step carpets are moved towards the coloring department where by using different chemicals mixed with hot boiled water, colors are applied and send for dryness. It might take two days to get completely dried.
• The finishing department then gives the final touches and by bringing it into different shapes/styles and then darning department makes the new carpets by patching the different pieces and make one carpet

Note:
Carpet Reload Time from Raw Material to Finished Goods is 3 days
Carpet Patch Time from Raw Material to Finished Goods is 5 days

INTRODUCTION TO COMPANY

Name of our Company

The name of our company is “ORNATE CARPET”. We make the products that are attractive in appearance, durable and most important are competitively price. We are manufacturing carpets and selling out at our company outlets.

Vision
“To become a leading manufacturer of the world”

Mission
“To be known as trend setters in the carpet industry catering to the customers demand by reading the wishes in their eyes and turning them into reality before they give their thoughts as expression”

Strategy

“Creating attractive and unique designs, adopting innovative techniques and endeavoring to produce for carpet loving people”

Slogan

Values

• Honesty and integrity
• Commitment and loyalty
• Teamwork
• Mutual respect
• Socially responsible

Objectives

• To bring together all the scattered carpet industries and promote organized efforts for the betterment of the carpet industry.
• To maintain and ensure a sustained supply of raw materials for the benefit of carpet industries.
• To promote the market potentialities of the carpet and safeguard it from market crisis.
• To stabilize the market price and quality of raw wool used in carpet.
• To check all the activities that hampers the quality of the company.
• To work as a negotiator in the dispute of the member industries.
• To provide advisory services to government and lobby as and when required in formulation and execution of carpet related policies and programs.
• To promote relationship and co-operation with other organizations having similar objective.
• To organize trade fairs, exhibitions, seminars, and related programs in order to develop the industry.
• To train manpower and bring new technologies for the improvement in the carpet field.
• To collect information related to carpet industry and disseminate them to the members.
• To carry out child rights research with the co-operation of related organizations and conduct child welfare activities.
• To carry out other functions for the fulfillment of objectives of the Central Carpet Industries Association

SWOT Analysis

Strengths

• An innovative and a unique product
• A Pakistani brand focusing on innovation and effective distribution system
• Quality products and services
• Price affordability
• Investment of the partners so more interest involved in the operations
• Low Cost Product
• Cheap Labor
• Cheap Raw Material
• Realization of Artistic skills
• Quality product
• Durability
• Use of Waste Products

Opportunities

• Providing a new dimension to the carpet industry
• Open invitation for the mergers and joint ventures
• Potential for the business to grow country wide
• Pakistani brand that could be exported
• Increase the reputation of the country
• Profitable Organization
• Introduction to New Product Line

Marketing Mix

Product
a. VARIETY: 35% wools
b. Quality: Irani
c. Design: Kirman ,Taveez And Tabreez etc.
d. Size: 6 *4 mtrs etc
Price:
e. LIST PRIZE: 1500 to 2500 PER SQR MTR
f. 1000-1200 EXP
g. 4500 SQR MTR
h. DISCOUNT : VARIES CUSTOMER TO CUSTOMER
i. PAYMENT PERIOD: Decided With Customers
Place:
j. Focusing in one area. Based in Lahore
k. CHANNEL: by Road
l. INVENTORY: Stock Of All Products Available In Store And Website

Promotion:
m. SALES PROMOTION: Offering Discount And Keeping Rates
n. ADVERTISEMENTS: Exhibitions
o. And Their Outlets
People:
p. Class: NECHE MARKETING
q. UPPER MIDDLE CLASS
Packaging:
N/A
Process:
Carpets once bought are categorized into 3 categories.
• A category
• B category
• C Category

Carpets are categorized according to their conditions. The best pieces of carpets are transferred in category A, better into category B and the bad conditions into 3rd category that are used for carpet patches.

• After categorization of carpets they will now transfer to the cutting department for cutting/removing the wool. In which by using cutter the wool is removed only the 50% of the total wool is remaining which will be removed in washing phase.
• Once the wool is removed from the carpets it is now proceeds towards washing department, where by using different types of chemical the old color of the carpets is removed. It will take at least one day to eliminate the color completely In the next and last step carpets are moved towards the coloring department where by using different chemicals mixed with hot boiled water, colors are applied and send for dryness. It might take two days to get completely dried.
• The finishing department then gives the final touches and by bringing it into different shapes/styles and then darning department makes the new carpets by patching the different pieces and make one carpet

Note:
Carpet Reload Time from Raw Material to Finished Goods is 3 days
Carpet Patch Time from Raw Material to Finished Goods is 5 days

PESTEL Analysis

Political Factors

• Political instability in country directly affects our company performance as there is political instability then its automatically decrease company production as there is fear of loss to business.
• Government increase tax rate which affects growth of the organization because when tax increases then the price of the product also increase which effects the selling of the product with reduction in selling of product which ultimately disturbs growth of the organization.
• Government introduces its own labor law which restricts us to obey that order and the company is bound under that law which affects performance of the company as to run the company and also production according to that law.
• There is also trade restrictions imposed by company that which country who should export or not from it we bound because we are restricted to the specified country which decrease our profit as there the price of the shoe is totally different in every country so we are restricted towards imports and exports.
• Government also imposed employment restrictions like how many hours the employee work and their health program so with these reasons organizations have to hire more staff which increased the overall cost of the production.
• There is also national pressure groups in the country which have relation with politicians and they also have industries so that they in order to find monopoly in business they affects and influence the other companies.

Economical Factors

• Inflation rate is important economical factor as inflation rate increase then it increases the cost of raw material of the product which ultimately increases the cost of the product because the employees demand high wages and salaries and at the end result increase the price of the product.
• Interest rates on the bank loan also effect company performance as the bank increase the interest rates as the inflation increase which effect the company performance as the company make the whole year budget so that when the interest increases then it affects the company budget which ultimately effect company performance.
• Exchange rates also affect the company performance as it increases the costs of exporting raw material which ultimately increase the price of the product.
• Lack of infrastructure development is also economic factor as there is not good roads in the country so that its effect the delivery of the product which result in loss of the profit of the company because the retailer and customer demanded fast and reliable delivery of the specified product.
• Availability of raw materials also effect company performance as there is shortage of raw material so that its effect the production of the product.

Social Factors

• Every product in the market can never become successful until company has sufficient information about the consumer lifestyle. Our company has to take social factors under consideration in order to achieve the strategic objectives.
• Increasing awareness of people towards our company product by creating brand image because people focus on brand rather than price so we have to develop brand image of our company if we want to become successful.
• Every demographic have different consumer lifestyle so we have to develop effective strategies in order to met different lifestyle. Company is totally dependent on the consumer lifestyle and their attitude of buying the shoe.
• We should increase our production as the population increases in order to sustain in the market because the consumers not only see brand image with it they also see availability of the product.
• Advertising and publicity is also important in society as it change the mind of the customer as customer attract towards the desired product so we focus on more advertising with different tools to gaining the attraction of customer towards our product.
• Ethics is also important in society and it is very important factor as we deal with our dealers in good and polite ethical manner that they will be more committed towards our brands and they try to sell our brands more and more which increase our profit.

Technological Factors

• Technology creates opportunities for new products and existing product improvements and of course new marketing techniques like Internet, E-Commerce to increase the sales of the specific product.
• Technology has great influence on business operations and overall decisions by developing mutual meetings with the help of online web and with the help of video link with channels members of the product.
• Company uses technology by taking orders via telephone and online by internet. This supports the selling promotion of the products.
• Technology use in various company activities such as record of customers and employees that which are our potential customer and maintain the record of knowledge skills and abilities of the employee with the help of different software.
• Technology allows the company for easy payments anywhere in the world so that why technology is very important factor in every business.
• If any company have unique technology then it have single monopoly in the industry which increase the sales of the product because of people trust on that specified product.
• Technology plays an important role in achieving economical growth with the better machinery which increases the production.
• Technology helps in research and development which helps the company to identify that which new and innovative products will be launched to sustain in the market.
• Technology is necessary for any company to develop the strong brand image in the mind of the customer with the help of SMS and through Internet so that everyone knows about the product and it brand.

Environmental Factors

• Weather also effect the company performance because for winter seasons it have will take more time to dry the carpets.
• Energy consumption parameter also effect the company performance as the company is totally dependent of energy for their production as it was in form of gas or electricity so that shortage of energy affects the company performance.

Legal factors

• Government teams check the quality of product any time and any company with the purpose of implementation of consumer law so that company should legally bound to product quality product which increases the cost of the product.
• Government also imposed employment restrictions like how many hours the employee work so with that reason organizations have to hire more staff which increased he overall cost of the company which increased the price of the product.
• Government also imposed health and safety programs for employees which is necessary for companies to implement which increase the company cost.
• The tax which is imposed by government then is legally duty of company to pay them which affect the employee performance because of increase in budget of company.

Marketing Phase

Segmentation

Segmentation is the first step of identifying our potential candidates and it’s done in different ways like geographic, demographic, psychographic and behavioral ways. It is the first step of categorizing our target market on the basis of common needs among different people. The segmentation table is made under to explain our product strategy for segmenting our target market.

Distribution Channels

Coverage Planning

SWOT Analysis

Competitors’ Analysis

Positioning

Budget

Total Budget 10 million

TV Ad Budget

Chanel Name: ARY, City42, A Plus
Cost:

• ARY (30 sec cost @ Rs 50,000) Timing: 7 to 11 pm (2 ads per day) total cost (per day cost2 ads 100,000, 1 month cost= 100,000*30=3,000,000)
• City42 (30 sec cost @ Rs5, 000) Timing: 7 to 11 pm (4 ads per day) total cost (per day cost 4 ads 20000, 1 month cost= 20,000*30=600,000
• A Plus (30 sec cost @ Rs10, 000) Timing: 7 to 11 pm (4 ads per day) total cost (per day cost 4 ads 40,000, 1 month cost= 40,000*30=1,200,000

Radio: 106.2 timing (8:45a.m, 1:15p.m, 6:00p.m) 30sec as cost 3,000, 3 ads per day, total cost per day 9,000, 1 month cost 9,000*30= 270,000

News Paper: Jung, 1,555,200 Dawn, 1,036,800

Billboard: One weak billboard rent 50,000 (Making cost 150,000), total cost 30 Days cost 1,600,000.

Also Study:

The Advantages and Disadvantages of Starting a New Business

Worldwide Demographic Trends and its Impacts on International Marketing

References:

1. www.dailytimes.com.pk
2. www.google.com
3. www.facebook.com
4. wikipedia.org
5. www.lcci.com.pk
6. www.ehow.com