BP310 BACHELOR OF FASHION (MERCHANDISE MANAGEMENT)

BUSM3150 APPLIED MANAGEMENT

ASSESMENT 2, SEMESTER 1 2017

DEVELOPING A BUSINESS IDEA

JEAN YEO (S3547282)

Applied Management - Assessment 2
ORIGINALITY REPORT

2 %
SIMILARIT Y INDEX
1%
INT ERNET SOURCES
0%
PUBLICAT IONS
1%
ST UDENT PAPERS

PRIMARY SOURCES

1
Submitted to RMIT University
St udent Paper 1%
2
www.zenpromotional.com.au
Int ernet Source 1%
3
Submitted to Deakin University
St udent Paper <1%
4
www.paykarbonyan.com
Int ernet Source <1%
5
www.docstoc.com
Int ernet Source <1%
6
journalrecord.com
Int ernet Source <1%

EXCLUDE QUOT ES OFF EXCLUDE MAT CHES OFF

EXCLUDE ON
BIBLIOGRAPHY
 EXECUITIVE SUMMARY

This business proposal details the conception and development of Sage & Wilder, a Melbourne-

based brand that will design, manufacture and sell embroidered iron on patches as well as enamel

metal pins. The purpose of this proposal is to provide a detailed analysis into the products the

company will offer; a marketing plan covering products, customers and competitors; an operational

plan covering the production process, location of the business, staffing and suppliers to be used;

and lastly the management and organisation of the business, including any professional and

advisory support that may be used.

The main method used to conduct the research for this report was primary research, making use of

online sources such as competitors websites, industry reports, as well as manufacturers websites.

This startup business is entering the TCF industry, one that is currently saturated with other

companies offering similar products. Sage & Wilder aims to set itself apart from these other brands

by providing customers with a product offering consisting of unique designs that are of excellent

quality and affordable price. This new brand must ensure that it is aware of its direct and indirect

competitors and continually improve its operations in order to survive in this industry. The company

will also need to have a set management and organisational structure with well-trained employees,

in order to operate smoothly and successfully.

The findings of this proposal have found that Sage & Wilder will need to ensure that the products

they offer are of the highest quality and unique designs as it has promised customers and potential

investors, as well as following a carefully constructed marketing and operational plan in order to

establish itself as a reputable business within the TCF industry.

2
 TABLE OF CONTENTS

BUSINESS NAME 4

1. GENERAL COMPANY DESCRIPTION 5

2. PRODUCTS & SERVICES 7

2.1. EMBROIDERED IRON ON PATCHES

2.2. ENAMEL METAL PINS 8

3. MARKETING PLAN 9

3.1. PRODUCT

3.2. CUSTOMERS

3.3. COMPETITION 10

4. OPERATIONAL PLAN 11

4.1. PRODUCTION

4.1.1 PATCHES

4.1.2. PINS 12

4.2. LOCATION

4.3. STAFF 13

4.4. SUPPLIERS

5. MANAGEMENT & ORGANISATOIN 14

5.1. PROFESSIONAL AND ADVISORY SUPPORT 15

REFERENCES 16

APPENDICES 18

3
SAGE & WILDER
PATCHES AND PINS

4
1. GENERAL COMPANY DESCRIPTION

Customisation and personalisation within the fashion industry is a trend that has developed

immensely over the past couple of years. Brands and designers all over the world have been seen

incorporating this trend into their designs - be it ironing on patches onto the back of a jacket, the

leg of a pair of jeans or onto the side of a bag (see Appendix A). Consumers want to be able to

personalise products not only for themselves, but as gifts or presents as well, in the most

convenient way possible. Our new brand, Sage & Wilder aims to be a facilitator of this trend. Sage

& Wilder is a Melbourne-based company that designs, produces and sells, unique embroidered

iron on patches and enamel metal pins through its online store: www.sageandwilder.com.au, as

well as distributing them to other stockists.

We sell original, creative and fun designs that are ethically manufactured and we hope will inspire

our customers to develop their own style and personality. - Sage & Wilder

The companys goals and objectives are to earning a reasonable profit, as well as to expand the

business in two years time, thereby expanding its production operations. Long term objectives are

also to increase brand awareness within the market (i.e. becoming an established brand) and to

develop a strong social media following. The Sage & Wilder philosophy is to create high quality,

bespoke designs, not copied or appropriate from other artists within the industry, and also to

ensure that all products are produced under ethical conditions. The brands target market consists

of girls/women between 13 and 25 years of age, who have some disposable income, and are trend

driven when it comes to fashion, but still want to create a style/identity that is unique to themselves.

This brand will essentially operate within the Textiles, Clothing and Footwear (TCF) Retailing

industry as the patches and pins are designed to be worn on clothing, but can also be attached to

accessories or shoes. However, the main sector of the TCF industry that Sage & Wilder will be

operating in is the Clothing Retailing industry, and according to the IBISWorld Industry Report

G4251 - Clothing Retailing in Australia, this industry is still in the maturity stage of the industry life

cycle, with an annual growth rate between the years of 2012 and 2017 estimated at 4%. This

industry is seeing growth in online retailing as brands with traditional bricks and mortar stores are
5
expanding their operations through online sales channels. This move from physical stores to online

stores suits Sage & Wilders business strategy as it intends to operate through an online

distribution channel, and therefore has the potential to develop a strong online presence as well as

customer following due to this change within the industry.

Lastly, Sage & Wilder will be set up as a partnership between two co-owners, XXX and YYY, who

will run the business side of the company and the creative/design side respectively. This method of

ownership has been selected as the two founders developed the idea for the company together,

and this style of ownership allows them to maximise their skills and potential as they both possess

complementary skill sets that the other may not have or may not be as strong in.

6
2. PRODUCTS & SERVICES

Sage & Wilder aims to provide the highest quality patches and pins in creative, original designs.

The designs will be inspired and influenced by trends both from within and outside the TCF

industry. For example, drawing inspiration from pop culture, celebrities and trends on social media

platforms such as Instagram, Pinterest and Tumblr. We believe that the Sage & Wilder iron on

patches and pins are of better quality and value than the majority of similar products that exist in

the market, and they are also all original designs, not appropriated from other artists. This places

Sage & Wilder at a competitive advantage over other brands offering similar products because

many companies, especially larger corporations, tend to copy the designs of smaller, independent

designers. Therefore Sage & Wilder aim to provide a unique product offering of iron on patches

and pins that are of the highest possible quality. Details of designs and product specifications are

provided below.

2.1. EMBROIDERED IRON ON PATCHES

Sage & Wilder iron on patches will be made using the best quality polyester threads, twills and iron

on heats seals. The polyester threads being used are strong and will hold their colour for the life of

the garment they are applied to. This material is used as it will withstand tougher treatment than

other threads such as Rayon. Therefore our patches are designed to weather commercial washing

should it be necessary and also have good UV resistance if they are applied to a fabric that is

exposed to a lot of sunlight. These patches are designed mainly to be adhered to articles of

clothing, but can also be applied to other products such as bags, shoes and hats. This gives

customers to option to customise any of their personal belongings should they choose to do so.

A table for the suggested pricing of the patches is provided below, making use of economies of

scale, where customers will receive a discount when they purchase more patches in one order.

Customers are also able to choose what size they would like to order their patches in. Orders $30

and over will receive free shipping, and all orders under $30 will be charged a flat shipping rate of

$5 per order. Examples of patch designs will be attached in this document (see Appendix B).

7
 SIZE QUANTITY (UNITS)
(INCHES)

1 3 5 10 15 20+

2 x 2 $10 $9 $8 $7 $6 $5

3 x 3 $11 $10 $9 $8 $7 $6

4 x 4 $12 $11 $10 $9 $8 $7

5 x 5 $13 $12 $11 $10 $9 $8

TABLE 1: PATCH PRICE PER UNIT

2.2. ENAMEL METAL PINS

Sage & Wilder metal pins are crafted using the best quality materials at our manufacturing outlet

right here in Victoria. These badges are extremely durable and versatile, and similarly to our iron

on patches, are designed mainly to be attached to articles of clothing but can be pinned onto other

personal belongings such as shoes, hats and bags if desired. The designs of the pins are created

through having raised metal lettering and outlines, with recessed areas filled in with coloured

enamel. Each pin is then fitted with a butterfly clutch backing for easy attachment.

A table for the suggested pricing of the pins is provided below, where similarly to our patch pricing

structure customers will receive a larger discount when they purchase in larger quantities.

Customers can also choose what size the would like to order their pins in and make use of the

same shipping pricing as the patches - where orders $30 and over will receive free shipping, and

all orders under $30 will be charged a flat shipping rate of $5 per order. Examples of pin designs

will be attached in this document (see Appendix C)

SIZE QUANTITY (UNITS)

(INCHES)

1 3 5 10 15 20+

1 x 1 $10 $9 $8 $7 $6 $5

2 x 2 $11 $10 $9 $8 $7 $6

3 x 3 $12 $11 $10 $9 $8 $7

4 x 4 $13 $12 $11 $10 $9 $8

TABLE 2: PIN PRICE PER UNIT

8
3. MARKETING PLAN

3.1. PRODUCT

The most important features of the Sage & Wilder iron on patches and pins are their quality and

design. The brand aims to provide an extensive product offering for customers to personalise their

belongings with at affordable prices. The physical features of the products include the composition

of both the iron on patches and metal pins as stated previously in the document. These qualities

ensure that the products are of upmost quality and durability and will last without their colours

fading or parts of them deteriorating. Consumers will not only be able to customise their clothing

and belongings but also the actual patches and pins themselves as they can select what size they

would like to order their products in. The benefits of these features are that customers receive the

satisfaction of being able to express themselves creatively as well as developing their own

personal style through the application of these patches and pins. Some after-sales benefits that

Sage & Wilder will also provide customers are a warranty policy - where customers can request a

replacement or refund for faulty products (i.e. should the backing of a pin break), as well as online

communication and assistance through a message chat feature on our website.

3.2. CUSTOMERS

Demographic Profile Geographic Profile Psychographic Profile

Gender: female Location: Australia-wide, Lifestyle: enjoys shopping,

Age: 13-25 years mainly Melbourne-based keeps up with latest trends in

Income: lowest tax bracket - fashion and pop culture,

< $18 200 feminine, creative

Education: high school -

university

Sage & Wilder will also sell to other retailers who wish to stock our patches and pins, these are

likely to be other small fashion apparel retailers or possibly clothing designers who would like to

attach our patches to their own products. These retailers may request for our products to be

shipped to them through an online order or they can collect their order from our warehouse if that is

more convenient for them. These customers will receive a larger discount for ordering in bulk.
9
3.3. COMPETITION

Sage & Wilder will be competing mainly with other small patch and pin designers online, such as

those found on Etsy. However, as many large international retailers have also incorporated patches

and pins in their product offering such as Topshop and Factorie, Sage & Wilder is now also up

against these other brands. Whilst Sage & Wilder may not be able to compete on price with these

large corporations who are able to achieve economise of scale in their manufacturing, our brand

will be able to compete on design, by creating innovative and unique designs for our patches and

pins. As iron on patches and enamel pins are not the main products that these apparel retailers

offer, they will also have a smaller range of designs available to consumers, thereby allowing Sage

& Wilder to develop a competitive advantage in this area over these larger brands.

Some indirect competitors that Sage & Wilder may face are companies that offer other methods of

personalisation and customisation of products such as The Daily Edited - offering personalised

embossing of their leather bags and accessories. Sage & Wilder must take this into consideration

as customers may opt for a different type of personalisation that Sage & Wilder is not offering,

therefore the brand might need to find a way of converting some of these customers to shop with

us instead of competitors.

10
4. OPERATIONAL PLAN

4.1. PRODUCTION

The Sage & Wilder iron on patches and enamel pins will be produced at a manufacturing factory in

Victoria, and from there the finished products will be shipped and stored at our warehouse and

distribution centre in Port Melbourne. At Sage & Wilder, we pride ourselves on quality. To maintain

this level of quality, all our products go though rigorous quality checks and any items that have

imperfections/faults are immediately removed from the rest of the patches/pins so that they are not

accidentally distributed and sold to customers.

We will make use of the just-in-time method of production, producing patches and pins as we

receive the orders from them in order to maintain accurate levels of stock, so that we will not have

access stock sitting in our warehouse, using up resources to store them when these funds could

be further invested into the creation of new designs that will actually sell. Whilst this means not

necessarily being able to make use of economies of scale in our production process at all times,

we believe that the money we will save from always having the right amount of stock on hand at

any one time will compensate for this, as money will not be wasted on producing and storing items

that will not sell.

Sage & Wilder will have an online chat feature for customers to communicate with our team during

business hours as well as a customer service mobile number should they have any queries, and

an email address will be provided if they wish to contact us outside of business hours. Our staff will

be trained in how to communicate with customers effectively as well as resolve any issues that

they may have with the products they have ordered of delivery processes. We aim to provide

excellent customer service and satisfaction.

4.1.1. PATCHES

The production process of the iron on patches is as follows:

1. The patch design is sketched by hand then digitalised through the use of Adobe Illustrator.

2. The final design is sent to production, where large sheets of polyester twill are placed within

embroidery machines, so that multiples of the patches are created simultaneously.

11
 3. A heat seal and press machine applied the iron on backing to the sheets of patches.

4. The patches are then checked for loose threads or imperfections/faults - any patches found

with faults will be removed from the final stage of the production process.

5. The individual patches are cut out from their sheets and a edge is applied using a

merrowing sewing machine.

4.1.2. PINS

The production process of the enamel pins is as follows:

1. The pins design is sketched by hand then digitalised through the use of Adobe Illustrator.

2. The final design is sent to production, where metal die lines of the design are created, in

order to stop the different colours of enamel mixing.

3. The enamel is then laid in the recessed areas and baked in an oven to harden,.

4. The enamel is left to dry so that it clings to the edges of the die lines and becomes

recessed in the pin.

5. An epoxy resin coating is then added to protect the enamel and create a smooth finish,

giving the flat appearance of hard enamel.

6. Lastly, a butterfly pin attachment is then glued onto the back of the pin.

7. All finished pins are then checked for any imperfections/faults before being sent to the

warehouse to be stored and distributed.

4.2. LOCATION

Sage & Wilder will require a small head office where designing, customer service operations, as

well as any other business administration can take place. Ideally, this location should be

somewhere close to the CBD and public transport for staff to be able to commute easily. The

building should have basic utilities such as bathrooms and a kitchen. A warehouse for storage and

distribution of products will also be required, a space in Port Melbourne has been selected. This

location could also possibly house the head office in order to have all operations in one location.

Port Melbourne has been selected as it has an industrial hub where many companies within the

TCF industry also have offices and warehouses in this area. This location is also easily accessible

for trucks transporting the finished good from the manufacturing factory to the warehouse. Sage &

Wilders business hours will be a regular 9 a.m. to 5 p.m. on weekdays and closed on weekends.
12
4.3. STAFF

The Sage & Wilder head office staff will consist of two co-owners who will be in charge of all

design, strategic and tactical operations, marketing and brand management. The brand will also

employ a design intern as well as a marketing intern to assist with these operations as well as to

contribute fresh ideas that may help improve the brand and the business. A customer service staff

member will be employed to communicate with customers and answer any queries they may have.

In the warehouse and distribution centre, two staff members will carry out quality checks and

manage inventory levels, as well as packing and sending out customers orders. These staff

members will be recruited through online employment websites such as seek.com.au, through

social media posts about the positions available, as well as through word of mouth

recommendations from people within the industry who may be able to suggest someone who

would suit the roles being advertised.

4.4. SUPPLIERS

Sage & Wilder intends to use local Australian suppliers, however the manufacturing factory to be

used to produce the patches and pins will have existing machinery to create the product with

because they will be a factory that specialises in the manufacturing of these products for other

patch and pin retailers. The thread to be used for the embroidered patches will be sourced from

Australian wholesaler such as Ebony Craft, selling 2000 metre spools of polyester thread for $2.50

each. These suppliers should be able to deliver the thread directly to the manufacturing factory to

be used for production and possibly offer a discount for ordering in larger quantities. We also

intend to research any potential suppliers that the manufacturing factory may have dealt with in the

past and might recommend for other supplied required to create the patches and pins, such as the

iron on backing for the patches or the butterfly backing attachments for the pins. It is vital that Sage

& Wilder have backup suppliers should the main supplier run into complications with fulfilling the

order or should there be issues with shipping and delivery of the supplies to the manufacturer. This

is extremely important as a late delivery or shortage of supplies will set back the manufacturing

process and deplete stock levels, meaning that Sage & Wilder may not be able to fulfil customers

orders in time.

13
5. MANAGEMENT & ORGANISATION

Sage & Wilder will be run by two co-owners. One owner will be in charge of the management of the

business at a corporate level, making decisions with regards to marketing strategies, production

and distributions strategies as well as the financial aspect of the business. The second owner will

be in charge of the designs of the products, involved in the production and manufacturing process

to ensure that products are made to their specifications, and will make organisational decisions

alongside the first owner. The co-owners may also require a team assistant to help with

administrative paperwork and organising meetings with potential stockists or investors.

Next, a staff member who is in charge of customer service operations will be required in order to

communicate with customers, resolve any problems/issues they may have, as well as

communicating customer feedback to the owners of the business to develop improvements to be

made in this area. At least two staff members will be required to run the distribution centre and

warehouse, carrying out duties such as quality checks on stock, inventory management, packing

and sending out customer orders, as well as communicating with the owners what they feel the

most efficient method of running the warehouse might be. Lastly, a marketing intern as well as a

design intern may be hired in order to assist the co-owners with their day-to-day tasks, along with

gaining experience working in this industry and also possibly bringing fresh ideas to the table that

may be applied to improve the business.

As there are a few members who are part of the Sage & Wilder staff, should a team member

become sick or unable to work, there is likely to be someone else on the team who is able to cover

their tasks whilst they are unavailable for work. However, perhaps a backup casual staff member

should be hired or on standby just in case an unexpected emergency arises and a team member is

unable to come in to work.

14
5.1. PROFESSIONAL AND ADVISORY SUPPORT

As Sage & Wilder is a small enterprise, it would not be logical to hire full time professionals such as

a company attorney or accountant who may not be required to carry out day-to-day tasks.

However, Sage & Wilder will require professionals such as these to ensure the smooth running of

the business as the two co-owners do not specialise in these areas, and therefore may need

assistance.

A company attorney may be required in order to ensure that the business is operating in line with

legal requirements and constraints, and are not in breach of any ethical or human rights policies.

An accountant would be necessary to manage and analyse the business finances and taxes, as

well as making sure that all employees are paid the wages that they are entitled to. As Sage &

Wilder is a start up company, it would be beneficial for them to have a mentor or advisor who has

experience within the industry, as well as in setting up and running their own business. This mentor

will hopefully be able to provide the owners with any tips and tricks that may assist them in

establishing a successful business in the TCF industry.

15
REFERENCES

Cichowski, H, 2017, Put a Pin in It: The Cool-Girl Guide to DIY, The Fashion Spot, viewed 27 May

2017 <http://www.thefashionspot.com/style-trends/734263-pins-patches-customized-clothing/#/

slide/1>

Messinger, K, 2016, Enamel Pins Are Taking the Internet by Storm, Vice, viewed 24 May 2017

<https://creators.vice.com/en_au/article/pins-the-internets-new-collectible-obsession>

Magner, L, 2017, IBISWorld Industry Report G4251 - Clothing Retailing in Australia, IBISWorld,

viewed 29 May 2017 <http://clients1.ibisworld.com.au.ezproxy.lib.rmit.edu.au/reports/au/industry/

default.aspx?entid=407>

Suesz, E, 2016, MAKING LAPEL PINS USING SKETCHBOOK: STEP-BY-STEP WITH SIMONE

BROWN, Sketchbook, viewed 29 May 2017 <http://www.sketchbook.com/blog/how-to-make-

enamel-pins/>

Troy, M, 2016, Embroidered Patches Are Fashions Next Trend, Huffington Post, viewed 25 May

2017 <http://www.huffingtonpost.com/marcus-troy/embroidered-patches-are-f_b_11429024.html>

UNKNOWN, 2014, Embroidered Badges, Embroidered Patches, viewed 29 May 2017 <http://

www.embroidered-patches.com.au/embroidered-badges.html>

UNKNOWN, 2017, Tattoos, Iron-Ons & Magnets, Sticker You, viewed 28 May 2017 <http://

www.stickeryou.com/2/about-stickeryou/pricing-specialty>

UNKNOWN, 2017, Embroidered Cloth Badges, Action Badges, viewed 28 May 2017 <http://

www.actionbadges.com.au/products/embroided-badges/>

UNKNOWN, 2016, Individual income tax rates, Australian Taxation Office, viewed 24 May 2017

<https://www.ato.gov.au/rates/individual-income-tax-rates/>
16
UNKNOWN, 2016, How Embroidered Patches are Made, Patch Superstore, viewed 25 May 2017

<http://patchsuperstore.com/how-embroidered-patches-are-made/>

UNKNOWN, 2015, Soft Enamel vs Hard Enamel Pins, Made by Cooper, viewed 25 May 2017

<https://www.madebycooper.com/blog/soft-enamel-vs-hard-enamel-pins>

17
APPENDICES

APPENDIX A - BRANDS USING THE IRON ON PATCH TREND

18
APPENDIX B - EXAMPLES OF IRON ON PATCH DESIGNS

APPENDIX C - EXAMPLES OF ENAMEL PIN DESIGNS

19