World Village Jewelry Marketing Plan

By the University of New Mexico Small Business Institute Team:

Ryan Outka

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Lila Troyer

Ben Clinger

Patrick Nechvatal

Patrick Sanchez

Table of ContentsExecutive Summary

Industry Profile

Industry Size

Growth Potential

Industry Trends

Opportunities and Growth in Online Sales

Switching to a mobile platform

Using Social Media for Online Sales

Jewelry Trends

Seasonality Factors

Customer Profile

Primary Demographic Research

Survey Results

Analysis of Survey Results

Secondary Demographic Research

Geographic Segmentation

Psychographics

Competitive Analysis

Porters 5 forces

Current Rivalry: Existing Competitors

Potential Entrants: Possible Competitors

Bargaining Power of Buyers: Consumers

Bargaining Power of Suppliers: Resource Providers

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Substitute Products: Alternative Industry Providers

Price Analysis

Marginal Revenue

Price elasticity of Demand

Profit Maximization

Pricing Structure Recommendations

Wholesale price

Internet Sales

Non Profit

Break Even Analysis

Market Penetration

Distribution Channels and Market Penetration

Promotional Product Retailers Recommendation

World Village Jewelry Website

Partnering With Non-Profits

College Licensing Programs

How to obtain College Licensing

Associated costs with running a website:

Client’s costs and Recommendations.

Using Social Media Marketing.

Accepting Credit Cards on Website

Reviving World Village Jewelry online store.

Online Advertising

Recommendations Summary

Short-term Recommendations

Long-term Recommendations

Appendix

World Village Jewelry SWOT Analysis

Analysis of Competitors in the Fashion Jewelry Industry

Bibliography

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Executive SummaryThe following marketing plan is designed to provide World Village Jewelry with a road

map for improvement of operations. The main goals for improvement are marketing, profit

control, and strategic planning. Recommendations for improvement are based on market research

and theory.

In order to determine the target market1 (customers) for World Village Jewelry, research

was conducted within the industry to identify traits in the jewelry and watch retail and

wholesaling sector, promotional products sector, online jewelry sector, non-profit sector,

collegiate licensing sector, boutique store sector, and gift shop sector. Many of these industries

consist of competitors who are very large and have an economies of scale2 advantage or large

product differentiation3. A survey of 123 consumers in the Albuquerque area provided data on

the price consumers are willing to pay and why they would purchase the product. The SBI

research team determined that the following segments would be ideal for World Village Jewelry

based on the combination of data collected through both secondary and primary industry

research. Research reveals that consumers preferences are as follows:

● Consumers that are interested in supporting a social cause

● Consumers that are between the ages of 25 and 34

● Consumer that have graduated from high school

● Consumers that are making above $70,000 a year

1 The group of people that a company wants to sell its products or services to.2 The reduction of production costs that is a result of making and selling goods in large quantities, for example, the ability to buy large amounts of materials at reduced prices.

3 Emphasis on the difference between a particular product and those that are similar.

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This data portrays a two part unique recommendation for World Village Jewelry that will

both help increase sales and meet the organization’s mission and values.

World Village Jewelry’s mission is twofold, to both give back to the community and

promote world peace.  Many non-profit organizations have very similar values and achieve these

goals through fundraising. Therefore it may be in the best interests of World Village Jewelry to

partner with these non-profits with similar missions in order to sell its products in an effort to

raise money for the non-profit, increase sales, and build brand recognition4 for World Village

Jewelry.  Partnerships will allow World Village Jewelry access to the non-profits’ customer base,

and leverage an effective philanthropic marketing technique. The SBI research team survey

supports this strategy revealing 54% of buyers would purchase a World Village Jewelry Product

to support a social cause.  Various non-profits have been contacted with this proposed idea and

they expressed interest in developing a mutually beneficial strategic partnership with entities that

share similar missions.

The second part to this unique selling recommendation is to build and develop online

jewelry sales.  Through both secondary and primary research, data shows that many consumers

buy fashion jewelry online. In addition to this, the research shows that e-commerce sales are on

the rise, with an 18.4% increase in sales in 2013. Online sales will also help World Village

Jewelry improve its revenue stream through marketing to consumers outside of New Mexico,

while staying more in touch with the ever-changing demands of consumers.

Another concern of World Village Jewelry was cost control.  In order to address this

issue World Village Jewelry’s price point was assessed for the both products (bracelets and dog

tags). In assessing this price point, the SBI team assessed competitor pricing, the price

4 Is the extent to which a consumer can correctly identify a particular product or service just by viewing the product or service’s logo, tag line, packaging or advertising campaign.

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consumers are willing to pay, and a break even analysis of different price points.  Research

shows that World Village Jewelry’s products are not competitively priced because they are sold

at a much higher price than most fashion jewelry. The survey, which was conducted in New

Mexico, also indicated that most customers would be willing to pay about $15 for one of these

products.  This research assisted in devising a pricing structure that accommodated different

distribution channels.  These structures are as follows:

● Wholesale price: $7.00

● Internet Sales Price: $15.00

● Consumer sales price (brick and mortar): $14.00

● Affiliate sales price: $15.00

With a properly tiered pricing structure World Village Jewelry will be able to capture the

wholesale sales without cannibalizing Internet sales.  The $15.00 price also allows a margin

dedicated to percentage donations to the non-profit, while still providing a substantial profit for

World Village Jewelry. The percentage of donations given to non-profits will be up to the

owners. In our teams break even analysis, general donations are around 30% of the purchase

price.

In conclusion, World Village Jewelry will be able to utilize both the research along with

the recommendations in order to increase sales. Partnering with nonprofits and creating a much

stronger e-commerce presence will allow World Village Jewelry’s mission to be defined and

supported. By lowering the selling price the demand for World Village Jewelry’s products

should increase and in turn sales volume should rise drastically.

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Industry Profile

Industry SizeWorld Village Jewelry’s products have the potential to be sold in a variety of industries

ranging from: the jewelry and watch wholesaling sector, promotional products industry, college

merchandise industry, sport products, event merchandise, and gift shops and card stores industry.

These various market segments make for a large industry size, and encourage growth for World

Village Jewelry.

World Village Jewelry products most closely match the products in the jewelry and

watch wholesaling industry. This industry consists of sales from jewelry made from precious

metals and stones, watches, and fashion jewelry (costume jewelry). Currently, the size of the

industry exceeds $48.4 billion in revenue with an estimated projected annual growth to be 1.6%

through 2019. However, World Village Jewelry’s product features differ slightly from the

majority of the products that define this segment. World Village Jewelry’s products are produced

using aluminum and not of precious metals and stones; World Village Jewelry also does not

include watches.

Research shows that World Village Jewelry’s products fit more closely with the fashion

jewelry segment within the jewelry industry. The fashion jewelry segment accounts for 22% of

sales revenue for the jewelry and watch wholesaling industry, which represents approximately

$10.6 billion in annual revenue. The fashion jewelry segment is defined by its products, which

are made of non-precious or semi-precious metals and stones. Many of these sales originate

from retail sales in both men’s and women’s clothing stores5.

The promotional products segment is another sector within the industry that World

Village Jewelry’s products could be categorized. This industry is comprised of companies that

5 Jewelry and Watch Wholesale IBIS World

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produce promotional products through business-to-business (B2B)6 marketing sales; the

promotional products industry had $13.7 billion in revenue for 2013. A list of a few of the

products offered by this industry are as follows: key chains, magnets, shirts, and pens. World

Village Jewelry could easily customize existing products to cater to the needs of consumers in

this category. Many of World Village Jewelry products fall within the “wearable” segment of

this industry. The wearable segment accounts for the largest portion of revenue in comparison to

the other segments within the industry. The wearable segment has an estimated size of 29% of

the total industry, or $3.97 billion, with projected annual growth rates through 2018 to exceed

2.3%7.

College merchandise is another industry World Village Jewelry could sell its products.

The defining feature of this industry is the licensing of intellectual property, specifically

trademarked and copyrighted material, by companies, to reproduce on products. The majority of

the merchandise sold is categorized by University branded clothing, it can include anything from

beer cozies to wearable jewelry. In 2012 alone, sales reached nearly $5 billion.8

Gift shops and card stores are yet another venue that targets sales of specific comparable

products in which World Village Jewelry may be able to sell its products. These shops sell a

wide variety of items, souvenirs being a large part. A major characteristic of this industry is the

highly specific geographic location generally required. Souvenirs account for approximately

31.5% of the Gift shop industry’s revenue. This totals $6.05 billion of annual sales in 2013.9

The overall size of the jewelry and watch wholesaling industry adds up to $25.4 billion in

annual sales revenue based on 2013 industrial sales figures. This industry is projected to grow

6 Abbreviation for business-to-business: relating to business arrangements or trade between different businesses, rather than between businesses and the public, especially when this takes place over the internet.7 Promotional Products IBIS World8 Collegiate Licensing Company9 Gift Shops and Card Stores IBIS World

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because a driving factor of industry sales is directly correlated to the availability of consumer’s

discretionary income. During a recession, sales in these industries will decrease because

consumers do not spend money on luxury items when their discretionary income level is low.

However, the economy is currently recovering from a recession, so consumer discretionary

income is likely to increase.

Growth PotentialThe industries stated above have a high potential for growth due to the current state of

the recovering economy, subsequently allowing consumer discretionary income to increase. The

majority of these markets are dependent on their customers’ discretionary income level. As the

economy continues to recover, sales in this industry will continue to increase.

Fashion jewelry has seen growing demand due to the number of consumers experiencing

“downward mobility” or slipping down the socioeconomic ladder. Middle class consumers were

accustomed to this specific standard of living; therefore, when they experienced downward

mobility, they were forced to scale back their living10. Fashion jewelry can be targeted towards

these consumers due to its higher class look at an affordable price. This economic trend will add

to the growth of the fashion jewelry industry in the coming years. The fashion jewelry industry is

expected to grow at an annual rate of approximately 1.6% through 201911.

Promotional products sales decreased during the 2009 recession because companies

began cutting marketing budgets in an effort to reduce costs. Now that the economy is

recovering these companies’ marketing budgets are being restored. Recent marketing trends put

an emphasis on promotional products alongside traditional marketing. Promotional products are

a cost-effective marketing strategy because they expose consumers to the brand over the entire

10 Mintel Oxygen11 Fashion Jewelry IBIS World

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product’s life, while traditional marketing techniques may only expose the brand to the consumer

once. IBIS World predicts the promotional products segment to grow 2.4% annually through

2018.12

According to IMG College, college licensed merchandise sales have been increasing in

the women’s apparel retail category by 53% in the last three years. 89 million females identify

themselves as college sports fans, higher than any sport, including the NFL. College sports also

have the most fans earning over $100,000 annually. Collegiate Licensing Company estimates

that women’s apparel sales for the schools it partners with exceed $350 million during the 2012-

13 fiscal year13.

The souvenir industry grew only 0.5% between 2008 and 2013. The majority of sales in

the souvenir industry are highly correlated to the domestic and international seasonality levels of

tourism in the United States. Growth was slow due to the state of the economy over the past five

years; IBIS World estimates the growth rate to be 1.7% from 2013 to 201814.

Industry Trends

Opportunities and Growth in Online SalesAccording to the US Census Bureau, online retail sales in the US increased from $142.6

billion in 2009 to $224.4 billion in 2012, representing a compound annual growth rate of 16%.

Total e-commerce sales accounted for 5.2% of total sales in 2012 compared to 4% in 2009; e-

commerce sales increased 18.4% in the second quarter of 2013 compared to the second quarter

of 2012. Revenues in the fine jewelry industry rose 6% between 2011 and 2012 and are

anticipated to grow in 2013. Sales from retail stores decreased in May 2013, indicating a possible

12 Promotional Products IBIS World13 Forbes14 Souvenirs IBIS World

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shift from brick and mortar retail locations to online retail sites15.

Switching to a mobile platform

The number of consumers who access the internet via a mobile device, i.e. cell phones

and tablets, has increased over the past few years. According to MarketLine industry estimates,

shipments of tablets in 2013 are anticipated to grow by 68% and mobile phones by 4%. In 2012,

purchases through a mobile device totaled $25 billion, an 80% increase compared to sales in

2011. E-commerce via mobile devices is anticipated to grow 15% in 2013, indicating an

opportunity for businesses attempting to increase their online presence in the retail industry16.

Using Social Media for Online Sales

Social media has significantly impacted how companies interact with their customers in

recent years. Several companies use social media sites as a way to expose merchandise to more

consumers and as a marketing tool to lead customers to their website. Social media websites like

Pinterest and Tumblr allow companies to post high definition pictures of their products for

consumers to see; allowing the consumer to then click on a link that would take them to the

company’s website to purchase.

Jewelry TrendsGrowth in disposable income has remained weak since the 2008 recession, however, it is

anticipated to grow by 2.6% in 2014, averaging $37,709 annually. Disposable income levels are

anticipated to rise at a steady rate in the foreseeable future.17

Men have begun to wear more jewelry. Men’s jewelry is difficult to create because men

like a very specific type of jewelry; market research shows it should be manly but not too

15 US Census Bureau16 MarketLine17 Jewelry and Watch Wholesale IBIS World

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rugged, stylish but not girly, and durable but not rough. According to Men’s Fashion Magazine

men prefer jewelry that looks manly, meaning it is thicker and more rugged than the thin delicate

pieces women are attracted to. Simplicity is key when creating pieces for men.18

Seasonality Factors

According to IBIS World sales in the jewelry and watch wholesale industry are generally

effected during gift-giving holidays because products in this industry are often purchased as a

gift17. For periods surrounding popular holidays such as Christmas, product sales tend to be

higher during weeks or days before the actual holiday. The jewelry and watch wholesale industry

experiences an increase in sales during periods leading up to major holidays when customers are

purchasing products as gifts.

Customer Profile

Primary Demographic Research

Survey Results

The research team conducted a simple random sample survey of 123 individuals19.

Participants were surveyed in the Albuquerque area most of whom were students. Individuals

were asked various questions to help determine World Village Jewelry’s target market, pricing

point, as well as what industry to enter.

Demographics were gathered about the survey participants by asking them their age, sex,

sexual orientation, ethnicity, and student status (if they were a University of New Mexico student

or not). According to survey results, the average age of participants was between 20 and 30 years

18 Men’s Fashion Magazine19 Appendix A: Survey page 42

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old20 with 57% of these participants being female21. Ethnicity results showed that 54% of

participants were Caucasian and 24% were Hispanic. Other ethnicities represented were Asian,

African American, and Native American. Each of these ethnicities represents around 6% of our

results22.  Sexual orientation results showed that 82% of participants were straight, with 7%

being gay and 11% preferring not to answer23. Because the research team conducted the majority

of the surveys in the University area, results showed 79% of participants were students24.

To obtain information about participants’ spending habits on fashion accessories, several

questions asked how often the participants shop for fashion accessories and how much is usually

spent on one purchase. The survey also asked if the participants shop for fashion accessories

online and which websites they primarily use. According to survey results, the majority of

participants shop annually and spend between $20 and $5025 with 50% of participants shopping

online26.

The products were presented to the participants and asked how much they would pay for

the bracelet and what color they preferred. Three survey questions asked if the participant would

wear the bracelet if given as a promotional item, if they would buy it to support a social cause,

and if they would buy it to support their university. In response to the question regarding how

much they would pay for the bracelet, 55% said they would not pay more than $10.00, and 71%

said they would not pay more than $15.0027. When participants were asked if they would wear

this if given at a promotional event 69% said “yes” or “definitely yes”28, 55% of participants said

20 Appendix C: Survey Results; Age page 4521 Appendix B: Survey Results; Gender page 45 22 Appendix D: Survey Results; Ethnicity page 4623 Appendix F; Survey Results; Sexual Orientation page 4724 Appendix E: Survey Results; Student Status page 4625 Appendix H: Survey Results; How much is Spent page 4826 Appendix I: Survey Results; E-commerce page 4827 Appendix J: Survey Results; Consumer willingness to Spend page 4828 Appendix K: Survey Results; Promotional Products page 49

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“yes” or “definitely yes” to purchasing the bracelet for a social cause29, and 45% said “yes” or

definitely yes to purchasing a bracelet to support a local university30.

Analysis of Survey Results

Data from this survey shows that the initial pricing point needs to be $10-$15 to attract

interest from consumers. As stated previously, 79% of the individuals surveyed were students,

which led the research team to believe that the majority would want to support their university

over a social cause, however, survey results indicated that consumers are more likely to support a

social cause.

Secondary Demographic Research

Demographics describe the characteristics of individuals when identifying a target

market. The Government’s Consumer Expenditure Survey31 helped create a profile of the ideal

target market so that marketing efforts can be made in locations where the target market segment

makes up the majority.

According to an article on the International Diamond Exchange32 website, which analyzes

the Government’s Consumer Expenditure Survey, the two most reliable ways to segment jewelry

consumers are based on:

● Amount of annual expenditures for jewelry per household

● Aggregate size of a demographic segment of the jewelry market.

The International Diamond Exchange results33 segment consumers based on income and

those consumers who spend more than the national average on jewelry as the ideal target market.

29 Appendix M: Survey Results; Social Cause page 5030 Appendix L: Survey Results; University Support p 5031 US Bureau of Labor Statistics 32 Demographic Data Helps Target Jewelry Shoppers, IDEX Magazine33 Appendix N: International Diamond Exchange results p 51

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According to these results, Asian consumers are considered the “best” ethnicity to target even

though they comprise only 4% of households in the United States. This data can be misleading

which is why the aggregate size of a demographic segment of the jewelry market is the second

way to segment jewelry buyers.

When analyzing the International Diamond Exchange results34 based on the size of the

jewelry market segment, Caucasian consumers become the ideal target ethnicity. One of the

other major differences in the two sets of data is the target age. The results based on amount

spent per household list the millennial’s, ages 25-34, as the target market age while the results

based on the size of jewelry market list individuals ages 45-54 as the target market.

Because it’s more lucrative for World Village Jewelry to focus on multiple segments of

the jewelry market, the SBI team analyzed and consolidated data gleaned from the International

Diamond Exchange to determine the target market. According to the International Diamond

Exchange article35, the criteria for the ideal customer to target include the following:

● Caucasian or Asian

● Live in Suburbs

● Professional

● College Graduate

● Homeowner with Mortgage

● No more than 4 people in household

● Age 25-54

● Income $70,000 or higher.

34 Appendix O: International Diamond Exchange results p 5135 Demographic Data Helps Target Jewelry Shoppers, IDEX Magazine

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Geographic Segmentation

After analyzing several possible industries World Village Jewelry can enter to gain

market share, our research found the fashion jewelry segment of the jewelry and watch

wholesale industry is the most feasible. Partnering with non-profits who share the vision of

giving back to the community is recommended as well.

Analyzing New Mexico as the initial location for market penetration36 shows that the

market is saturated with Native American inspired jewelry and jewelers. These jewelers range

from multi-millionaires who create and market rare expensive pieces in upscale stores to those

who set up shop on the side of the street near the University of New Mexico. This indicates that

direct sales to consumers is a saturated market in the Albuquerque and Santa Fe areas.

Finding a niche in this market will allow World Village Jewelry to gain market share and

successfully make sales in this industry. Instead of directing its attention on direct sales to

consumers, with the exception of online sales, World Village Jewelry can focus on selling pieces

wholesale to boutiques and gift shops and using them to give back to the community through

local non-profits.

Albuquerque is the largest city in New Mexico with a 2012 population estimate of

555,41737. According to the center for non-profit excellence, Albuquerque contains an estimated

5500 non-profit organizations38. By determining which of these non-profits attract the target

market discussed previously, World Village Jewelry can greatly increase sales.

Psychographics

36 *A process in which a product or brand becomes bought, used, or known by more and more people.37 Albuquerque (city) QuickFacts from the US Census Bureau38 “New Mexico Nonprofit Directory” Center for Nonprofit excellence in Central New Mexico

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Psychographics are the reasons people buy jewelry. Jewelry enthusiasts like to express

individuality and style. The reason a consumer buys a piece of jewelry is not because they need

it, but because they want it. Aside from wearing jewelry to look appealing, there are numerous

reasons why people wear jewelry. Some wear a piece of jewelry in remembrance of family or

faith to reflect their spiritually. According to the Spiritual Research Foundation, individuals wear

jewelry to ward off negative energy and promote spiritual healing39. Another reason individual’s

wear jewelry is to be associated with high social status. This is why wealthy individuals wear

diamond rings and gold necklaces. Wearing jewelry gives consumers a sense of self-worth.

One of the main reasons individuals wear jewelry is because it reminds them of

something they are passionate about. Whether it is a family heirloom or an item that supports a

cause, some individuals will wear the jewelry as long as it supports what they believe. According

to a TED talks with Simon Sinek, “people don’t buy what you do, they buy why you do it40.”

World Village Jewelry will find this philosophy useful because of the story behind the products.

When marketing the bracelets, it is important to keep in mind that you are not selling the

physical item but a symbol of the cause being supported. Therefore, the research team

recommends that when marketing; explain the cause being supported and the story behind the

product. By expressing this story, the product will attract people who have the same values.

Using this sales technique will build a brand and customer base that supports your beliefs. This is

also why partnering with non-profits would increase sales.

Competitive AnalysisWorld Village Jewelry is in an industry with many competitors that have different

39 Why to Wear Jewelry40 TED talks with Simon Sinek

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strengths and weaknesses. Using Michael E. Porter’s 5 Forces41* of external analysis, strengths

and weaknesses of World Village Jewelry will be analyzed to identify ways to stay competitive

in the market.

Porters 5 forces

Current Rivalry: Existing Competitors

The jewelry and watch wholesaling industry is saturated with many existing small

competitors. Price cutting is a major competitive factor in this industry. Another major

competitive factor is product development, or making new products in the present market to

attract customers. Some current advantages for World Village Jewelry are as follows:

● Few large competitors

● Lower Inventory Costs

● Lower Fixed Costs

● Many similar competitors, and

● Strong industry sales growth.

Fashion jewelry is a very fragmented industry due to the lack of large competitors.  No

single business in the fashion jewelry and promotional products segments account for more than

5% of market share42.  Due to the large number of small competitors saturating the industry, it is

easy for a single firm to take competitive action without being noticed by other firms, keeping

fashion jewelry and promotional products segments in a constant competitive battle43.

41 A business strategy theory that was first posted in the Harvard Business Review in 1979 by Michael E. Porter. This theory looks at the complete competitive landscape a company is in, and provides strategies to effectively navigate through the competitive environment. The 5 forces it examines is current rivalry, potential competitors, bargaining power of buyers, bargaining power of suppliers, and alternate industry providers.42 Fashion Jewelry, Promotional Products IBIS World 43 Coulter page 61-2

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Because of the larger number of competitors who have similar products in the fashion

jewelry industry, price cutting is the main competitive factor. World Village Jewelry can take

advantage of low inventory costs and low fixed costs for increased profits while reducing prices.

Price cutting is effective because there are so many similar products in the industry, and

switching costs*44 are low to consumers, meaning consumers will easily buy a competitor’s

product if the price is lower.

World Village Jewelry can take advantage of the growth in the fashion jewelry industry

that has resulted from the 2009 recession recovery. The average consumer has more

discretionary income; therefore, s/he can afford to purchase fashion accessories like World

Village Jewelry’s45.

Many existing competitors pose threats to World Village Jewelry as well which need to

be accounted for. Threats which existing competitors may pose are as follows:

● Equally Balanced Competitors

● Low differentiation

● Low switching costs

The threats of equally balanced competitors, low differentiation, and low switching costs

are interrelated.  According to IBIS World and our research, there are many equally balanced

competitors due to the large number of small competitors46.  For example, here in Albuquerque

Charming Charlie’s, Claire’s and Gordon’s represent World Village Jewelry’s small competitors.

You can find a summary of these competitors in Appendix R47.  Charming Charlie’s and Claire’s

are very similar in terms of products they sell. Charming Charlie’s and Claire’s have very cheap

44 The cost of moving your bank account to another bank, changing to a different phone service, etc.45 Fashion Jewelry IBIS World 46 Fashion Jewelry IBIS World 47 Appendix R: Analysis of Competitors page 54-55

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prices, and target young women between the ages of 14 and 25. Gordon’s carries many of the

same products as the other two, but it offers more high end products as well, such as jewelry with

fine metals and gems.

Research shows that in order to be profitable, World Village Jewelry will need to use a

competitive pricing strategy. Inventory costs are lower than the competition because of the

excess inventory currently being stored. Fixed costs are relatively low in comparison to other

companies in this industry. These lower costs will allow World Village Jewelry to price products

effectively and still maintain a competitive profit margin. Price competition is effective, but

World Village Jewelry must be careful not to cut prices to low so that it still turns a profit. Price

cuts will also increase product views to the public, which is necessary for building a brand. Sales

will increase as prices are decreased, and this increased exposure to your product will influence

more consumers through word of mouth advertising. Ultimately, World Village Jewelry will

have to closely monitor competitors’ changes in price in order to remain competitive.   

Potential Entrants: Possible Competitors

A major factor in determining potential new competitors are barriers to entry48. World

Village Jewelry will need to closely monitor new competitors who may try to copy the business

model. The following are advantages that World Village Jewelry currently possesses in

combating new competitors:

● Having a patent on the bracelets design,

● Having a unique product that is tied to philanthropic ideas, and

● Access to distribution channels like their website.

48 Coulter page 6450 The existence of high start-up costs or other obstacles that prevent new competitors from easily entering an industry or area of business.

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In order to grow and maintain sales, World Village Jewelry will need access to distribution

channels and utilize its advantage over some competitors because of its fully functioning

website. Many customers like to look at jewelry online before they go try it in the store, which

will give World Village Jewelry an advantage in reaching more consumers.

The semi-unique product that World Village Jewelry offers can be used as an advantage over

new entrants using the current patent. This patent will keep competitors from copying World

Village Jewelry’s product exactly. This patent and semi-unique design can also enable World

Village Jewelry to charge a slight premium for its products49.  

There are some advantages that World Village Jewelry has yet to attain in order to prevent

new entrants from gaining market share.  Some of these future advantages are as follows:

● Gain economies of scale and

● Achieve strong product differentiation

Some competitors such as Claire’s, Charming Charlie’s, and Gordon’s have already secured

a large economies of scale advantage. These companies have the capital to purchase in large

quantities as well as store inventory in large retail stores.  This means they can drive down prices

and stay very competitive.

Using larger economies of scale would help World Village Jewelry compete with companies

like Gordon’s, Claire’s, and Charming Charlie’s.  This will also provide larger profit margins

and keep potential entrants from gaining market share.

Stronger product differentiation will help World Village Jewelry compete with new entrants

and existing entrants as well.  Differentiation is when a product is more unique than others,

thereby making it hard for consumers to switch to competitors and harder for new entrants to

copy your product.

49 Coulter page 65

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Based on these advantages, World Village Jewelry will benefit from retaining this patent and

protecting new products with patents. Developing new products is a long-term recommendation

and should only occur after all current inventory has been sold, in about two years.  Adding new

products is a key part in expanding World Village Jewelry’s business for the long term and using

patents will strengthen this.  

Because of the advantages of e-commerce, World Village Jewelry will benefit from updating

its existing website to keep new entrants from acquiring its existing or new customer base.  This

recommendation is more fully explained in the website section of this report.

Economies of scale are a competitive factor in the fashion jewelry industry. World Village

Jewelry must continue to improve its economies of scale in order to be competitive.

Improvement can be done by securing better terms with suppliers, thereby lowering costs.

Securing better terms with suppliers can be attained by buying in a higher volume, establishing a

good relationship through loyalty, or using good negotiating tactics to secure a low price. After

all existing inventory has been sold, World Village Jewelry will benefit from lower

manufacturing costs.   

Product differentiation is a long-term recommendation which should only be attempted after

all existing products have been sold. Product differentiation can be achieved through attractive

product presentation and unique marketing styles50. One way to attract customers using

differentiation is to continue to utilize and clearly voice World Village Jewelry’s support of

social causes and potential partnerships with non-profits.

50 IBIS World

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Bargaining Power of Buyers: Consumers

World Village Jewelry’s customers have a large amount of bargaining power51 in the fashion

jewelry industry because of the risk of acting as a wholesale and losing sales by losing one

customer and low switching costs for consumers. World Village Jewelry will need to develop

strategies to combat these issues and remain competitive in the industry.

If World Village Jewelry acts as a fashion jewelry wholesaler it will be making a large sale to

one customer. The downside is that if one of these large customers is lost it could hurt severely

World Village Jewelry’s revenues and possibly put it out of business52.

In order to effectively address the bargaining power of buyers World Village Jewelry must

monitor customers switching costs, whether individual buyers or wholesale buyers. Many

wholesale buyers in the promotional products industry prefer to purchase multiple products from

the same supplier because this provides the buyer with bargaining power53. Dealing with a

minimum number of suppliers means a minimum amount of coordination and logistical

planning, minimizing costs. Therefore, buyers may demand lower prices due to the increased

cost of multiple supplier because of World Village Jewelry’s limited product line.

Switching costs can affect World Village Jewelry’s individual buyers as well54.  Since

there are many different types of jewelry, and jewelry that is similar to World Village Jewelry’s,

customers can easily switch to another product if World Village Jewelry’s prices are too high.

World Village Jewelry’s products do have an aspect of uniqueness to them, so this will provide a

small buffer to counteract customers’ potential product switching tendencies.

51 The ability of a person or group to get what they want

52 Coulter page 6553 Promotional Products IBIS World54 Coulter page 65

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An advantage World Village Jewelry has when counteracting the bargaining power of

buyers is the cost of its product.  Since the bracelets and necklaces cost so little to make, World

Village Jewelry can charge a small amount while still maintain a large profit margin.  This

means that low-income consumers can still afford to buy World Village Jewelry’s products.

One way to ensure that World Village Jewelry is not dependent on one or two large

customers is to start selling to smaller businesses.  That way, if one of these larger customers is

lost, operations can continue.  Some examples of smaller companies to sell to include local

Albuquerque businesses and organizations that host local annual events, like Animal Humane.

In conducting our surveys we talked to the marketing manager of Heads Up Landscaping.  He

expressed an interest in buying a product like this for his promotions.  Selling small amounts to a

business like his can increase sales, get attention to the product, and keep sales local.  Another

potential lead can be selling World Village Jewelry products at fundraising events like fun walks

for a cause.  These are usually held on a yearly basis, so it would be easy to predict selling

volume, and World Village Jewelry can change the design (engraving) each year, keeping the

product differentiated.

One way World Village Jewelry can limit buyers switching costs is to offer lower prices

and expand product line.  Since these two strategies can be costly, World Village Jewelry can

also target smaller businesses at first to gain popularity, which was mentioned above.  Once

World Village Jewelry has established increased credibility with smaller businesses, it can start

approaching larger organizations.  After seeing what the smaller customers are buying, World

Village Jewelry can use this data to make good decisions on what product lines to expand into.  

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Bargaining Power of Suppliers: Resource Providers        

   In this section of the bargaining power of suppliers in Porter’s 5 Forces competitive

analysis, World Village Jewelry has a strong advantage.  Products are made of aluminum which

is abundant and inexpensive so suppliers do not have very much bargaining power to raise

prices; therefore, World Village Jewelry can be sure that prices will stay constant.  An advantage

to the fashion jewelry industry it that most products are made of non-precious metals and gems.

A related advantage is that if World Village Jewelry wanted to increase production, it would

lower prices with the purchase of a larger amount.  Whereas other materials like gold and silver

stay at a constant price no matter how much is bought.  

Another advantage World Village Jewelry has is the low switching costs to a larger

number of alloys which could be used as substitute materials. One substitute would be stainless

steel.  It is more expensive than aluminum, but it is an ideal material for producing jewelry.

Many other fashion jewelry producers use stainless steel as a mid-priced material for

manufacturing jewelry.

Another advantage related to the low switching costs is the opportunity World Village

Jewelry has to switch to other manufacturers.  If World Village Jewelry feels like it can get a

cheaper price going through another manufacturer, or there are other problems with the current

manufacturer, it would be easy to switch to another.  If World Village Jewelry wanted to expand

their production sites to better serve different geographic segments, this could be done as well.

This means that World Village Jewelry has low switching costs giving it bargaining power with

resource providers.

The reduced need for quality control is another advantage for World Village Jewelry.

Because fine jewelry is not being produced and consumers do not take the time to notice small

quality errors, World Village Jewelry can negotiate with suppliers to get a lower price on goods.

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This does not mean that the suppliers can do a poor job on World Village Jewelry’s products, but

it does mean they will not have to deeply evaluate each finished product, cutting down on cost of

goods and; therefore, raise World Village Jewelry’s margin.

Due to the low switching costs of changing materials, World Village Jewelry may benefit

from using different material when expanding its product offerings.  Many competitors expand

product lines using different materials in order to differentiate products and have more selection

in suppliers. Product line expansion and differentiation is a long-term recommendation and

should around the 3 year mark and after current inventory is sold.

Once all existing inventory has been sold, World Village Jewelry will benefit from

reevaluating manufactures and switching to options closer to New Mexico, cutting down on

shipping costs but possibly limiting the manufacturing and engraving to one site.  Lower costs

may be secured by using a producer who both manufacturers and engraves. Since the

manufacturing and engraving are taking place at the same time, World Village Jewelry may be

able to negotiate a lower price. Texas would be an optimal location for manufacturing, having

many plants, and is close enough to New Mexico to make the production more cost effective.

Substitute Products: Alternative Industry Providers

This section of Porters 5 forces competitive analysis will show the possible substitutes for

World Village Jewelry’s products. For example, there are many different industries that can

provide promotional products.  This could include drinking glass makers, clothing

manufacturers, or stationary manufacturers.

To combat alternate companies providing a substitute product to World Village Jewelry’s

customers, products must be unique. Partnering with non-profit organizations will provide a

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marketing leverage point and help to form a unique image for the product. This will be

discussed in detail in a later section.

Another way World Village Jewelry can combat alternative products in different

industries is by strengthening the World Village Jewelry brand. Establishing consumer brand

awareness and loyalty offsets the risk of losing customers to alternative products.  

Price Analysis

Marginal RevenueTotal revenue is the total amount of money the firm collects in sales

and is calculated as: (TR) = price (p) x quantity (q). When price (p) is

decreased, total revenue also decreases marginally. The amount which

revenue changes per one unit sold is known as Marginal Revenue. Marginal

Revenue (MR) is the change in Total revenue (TR) from increasing quantity

(q) by one unit: MR = ∆TR/∆q.

World Village Jewelry’s products have a downward sloping demand curve, explained in

Price elasticity of Demand section, meaning that setting a price (p) correlates directly with the

quantity (q) which will be sold; therefore if World Village Jewelry wants to increase sales price

must be decreased. Marginal revenue (MR) is not the same as price (p) even though it is the

amount received for selling one more unit. This is because price must lowered to sell one

additional unit; therefore, marginal revenue is not equal to price and is below the demand curve.

Calculating marginal revenue is important because often times when company’s lower

their prices two effects happen, people buy more because the price is lower or people pay less

per unit. Depending on which effect is bigger will determine whether marginal revenue is

positive or negative. Determining this effect is closely related to the price elasticity of demand.

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Price elasticity of DemandElasticity refers to the level of change when one variable is altered in accordance to the

other variable. An example is the law of demand which states that when prices rise demand will

decrease. When a product is referred to as elastic it means that any change in price will have a

high effect on quantity demanded. Costume jewelry is elastic. An inelastic product would be one

where demand does not shift with price. Luxury items are inelastic. In order to determine the

price elasticity of demand World Village Jewelry will need to analyze total revenue as the price

changes.

Figure 1

Figure 1 above is an example of what elastic and inelastic demand curves look like.  The

slope of an elastic product is horizontal because a small change in price will greatly shift the

demand whereas inelastic goods have a more vertical demand slope. Total revenue (TR) is

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calculated as price (p) x quantity (q): TR=p*q. P1, P2, P3 = any set price. Q1, Q2, Q3 = the

quantity demanded at that set price.

A company’s demand curve is relative to the amount of competition in that market.

Meaning the more competition the more elastic that company’s demand curve will be. Costume

jewelry has an elastic demand curve because there are many substitutes and competition is high

meaning that consumers can respond to price increases by going to other vendors. The elastic

demand for World Village Jewelry’s product means that an increase in price will decrease total

revenue as shown by the downward sloping demand curve in Figure 1. Knowing the company’s

demand curve is important because it tells that company the price consumers are willing to pay

for that specific product. As opposed to the market demand curve which puts the whole market

together on the demand curve.

The formula for calculating price elasticity of demand is:

Price elasticity of demand = | _% change in quantity demanded_|                                                           % change in price

Once a company calculates price elasticity of demand setting the price is much easier. As

shown in our survey results55, 71% would not willing to pay above $15. Because World Village

Jewelry is in the beginning stages of company startup there is no consistent past data to develop

an initial graph.

In order to maximize profits, World Village Jewelry will need to test different price

points and the demand correlated with these prices, starting with a higher initial price of $15 and

dropping incrementally as needed. It is better to start high and lower the price because consumers

do not respond well to price increases. Decreasing the price and analyzing the impact on demand

will give World Village Jewelry the information it needs to determine the price elasticity of

55 Appendix J: Survey Result: Consumer prices page 47

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demand. Once World Village Jewelry calculates the price elasticity of demand it can see how

this impacts marginal revenue.

Profit MaximizationAs with marginal revenue, marginal costs (MC) are the amount of costs incurred per one

additional unit sold. When companies are making decisions on the amount to produce marginal

cost is taken into account. For example, when deciding on whether or not to produce one more

unit if MR > MC then it is profitable to produce that unit because the added benefit outweighs

the costs. However, if MR < MC then the company should cut back down on production because

the costs outweigh the benefits meaning that the only point where the company is satisfied is

where MR=MC. This is generally true for all firms and is the rule for profit maximization. To

find this point on the graph, begin by finding the point where the MR and MC curves cross to

find quantity (q), to find price (p) that correlates with this quantity extend the line up to the

demand curve. This is the point of profit maximization, a higher price will reduce sales below (q)

and a lower price will increase sales above (q). At this point on the graph profit is maximized.

Figure 2 below provides an example:

Figure 2

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Pricing Structure Recommendations

Wholesale price

Data shows that the majority of the market is not willing to pay above $15 for the current

product offered by World Village Jewelry. To sell costume jewelry at the wholesale level prices

usually range from $5-$12 depending on the perceived value as well as brand name. Based on

research and data, in order to maximize profits the initial wholesale price point should be at $7

because this will allow retailers to mark-up the price 30-40% and still keep the product within

the range of $12-$15. At a cost of around $3.30 to produce one bracelet World Village Jewelry

would still have a 47% profit margin.

Internet Sales

Selling products directly from the World Village Jewelry website we recommend a

starting price at $15 based on our survey results. The majority of the surveyed market was not

willing to pay above $15 so this would allow World Village Jewelry to incrementally drop the

price and not upset as many customers if the quantity sold is not satisfactory. An internet price of

$15 would also minimize price conflict between the retail and wholesale markets because

retailers typically mark-up prices 30-40%.

Non Profit

When partnering with nonprofits, selling World Village Jewelry’s products at retail price

would be optimal because surveys showed that customers are willing to pay $15. The nonprofits

already have an established relationship with the customer and the added value of donating a

percentage to charity would increase the perceived value of the product.

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Break Even AnalysisA break even analysis will show World Village Jewelry how many units it will have to

sell to cover the fixed costs for the business.

Breakeven point = Fixed Costs_ ___ Gross Profit per unit

Using World Village Jewelry’s income statement, the breakeven points for the bracelets

and dog tags at each pricing structure56 have been calculated to be an average of 147.79 units per

month.  This data shows that in order for World Village Jewelry to be profitable it will have to

sell at the minimum 148 products per month or 1,764 products per year.

Market Penetration

Distribution Channels and Market PenetrationThere are several possible distribution channels that World Village Jewelry could utilize.

Many of these channels have been outlined in above sections.  These channels include jewelry

shops and boutique stores, promotional product retailers, partnerships with non-profits, fashion

jewelry retailers, the World Village Jewelry website, and college licensing programs.  This

section will outline the recommendations for the most feasible and profitable distribution

channels for World Village Jewelry.

Promotional Product Retailers RecommendationFor World Village Jewelry to be successful in the long-term it must build a brand for

itself, it is not recommended to use promotional products as a distribution channel. Selling to

promotional product companies will increase sales but will not build World Village Jewelry’s

brand. Consumers would associate the products with the labeled brand not with World Village

56 Appendix Q: SWOT Analysis page 53

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Jewelry’s products. Selling World Village Jewelry as promotional products would also not fulfill

the mission of the owner to provide to charitable organizations.  

Another deterring factor from entering the promotional product industry is the intense

price competition. This price competition is detailed in the competitive market profile.  World

Village Jewelry would have to engage in intense price cutting to compete decreasing profits.

World Village Jewelry would have a hard time competing in this industry due to the

nature of its products.  Many promotional products need to be a “one size fits all” variety. This

would be hard to accomplish with World Village Jewelry’s wrist bands because of the need for

adjustments to the individual consumer. The dog tags could be used, however, research shows

that necklaces are not very common in the promotional products industry.  

World Village Jewelry WebsiteThe World Village Jewelry website is an excellent distribution channel.  The previous

sections describe the improvements needed to make this website a viable distribution channel.  If

the measures that were previously mentioned are taken, it can provide World Village Jewelry a

cheap and effective medium to sell its products.  Website sales are great because most

transactions provide the business with instant cash, opposed to selling products on credit.  This

means World Village Jewelry can get the cash instantly, and use that cash to pay other expenses

of the business.  

The World Village Jewelry website can can reach people all over the world and is not

limited to the demographics of a certain area, opposed to a typical brick and mortar shop. This

greatly increases the customer base and exposure of the business.  With Volusion, the

recommended service, consumers can purchase products on any type of device and pay using a

credit card easily.  This makes the transaction convenient and easy for the buyer, therefore,

increasing their chances of buying and recommending a friend to visit the website.  

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Partnering With Non-ProfitsPartnering with non-profits is an effective way of selling World Village Jewelry’s

existing inventory while accomplishing its missions of supporting the community. Supporting

this recommendation survey results showed that 54% of participants would purchase a World

Village Jewelry bracelet to support a social cause. Several non-profits have small side stores

where items are sold to support the non-profit.  The SBI research team contacted two of these

non-profits, Project PeacePal and Wings for Life, and proposed this idea to them.  Project

PeacePal expressed interest in selling World Village Jewelry items on their online store.

Following up on this opportunity is recommended. To attract non-profits to want to partner with

World Village Jewelry it needs to be made clear how World Village Jewelry’s products will

benefit the non-profit without much work on the nonprofits part. World Village Jewelry needs to

establish an accountability system with the non-profit to make sure the donations can be tracked

to the non-profit.  These transactions need to be transparent to the customers in order to leverage

the benefit of buying a World Village Jewelry product; the benefit being that buying a World

Village Jewelry product means supporting a local non-profit.

Wings for Life also expressed interest in potentially partnering with World Village

Jewelry.  Potential customers can be reached by passing out flyers for Wings for Life monthly

meeting attendees, directing attendees to World Village Jewelry’s website. World Village

Jewelry can then donate a portion of the proceeds back to Wings for Life. Following up on this

opportunity and pursuing similar partnerships is recommended. This is similar to other local non-

profits advertising local businesses and those local business’s donating some profits back to the

non-profit in return.  Project PeacePal does something similar through their website.

Animal Humane has programs that allow businesses to purchase space at its events and

sell items to the attendee’s.  The money from the purchase of the space at the events goes to

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Animal Humane, and the business receives exposure from thousands of guests in return.  Doggie

dash and dawdle is one of these events which may be beneficial for World Village Jewelry. This

event attracts over 4,500 guests57.  A “barketplace booth” costs $300 dollars and comes with a

10’ x 10’ canopy, one 6’ table, two chairs and two parking passes.  World Village Jewelry may

not sell enough products at the event to break even on the $300 cost but could benefit from future

customers who learned about World Village Jewelry at the event. The initial price point

recommended for sales at these events is $20 per bracelet.  Going to this event will also support

World Village Jewelry’s mission to give back to the community and help support animals in

need.  

College Licensing ProgramsCollege licensing is a potential market for World Village Jewelry to look into for the

future.  As our “How to obtain a college licensing” section talks about, obtaining the license to

sell a university’s product can be difficult and costly.  World Village Jewelry needs to prove its

supply chain and demand for the product before applying for a license.  However, if World

Village Jewelry follows our original recommendations and boosts its sales and demand, college

licensing has potential in the future.

45% of our survey participants said that they would buy a World Village Jewelry bracelet

in support of their University.  This tells us that there is a large market for students buying a

World Village Jewelry product. Once World Village Jewelry sells more of its products in other

markets to build its demand record it would be a good idea to pursue a college license agreement.

World Village Jewelry can also market their bracelets to college students and other university

supporters with the promise to donate to local scholarship funds, like the New Mexico Lottery

57 Animal Humane NM

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Scholarship.  This way it can achieve its goal of giving back to the community while still

generating sales.

This recommendation should be utilized after more sales data has been established.  Since

the licensing contract requires a good sales history and supply chain history, World Village

Jewelry will need to get established in other markets before applying for this license.  This will

ensure the costs of the license application will be offset, since there will be a higher chance of

being approved for the license.  

How to obtain College LicensingSeveral colleges license producers through a company called Collegiate Licensing

Company58 (CLC), a trademark licensing Affiliate Company of IMG College. This company

represents nearly 200 of the nation’s top colleges, universities, bowl games, athletic conferences,

the Heisman Trophy, and the NCAA. CLC represents nearly 80% of the retail market for

collegiate licensed merchandise. Each collegiate partner (University) makes its own licensing

decisions, the CLC serves as a resource for applicants every step of the way. CLC serves as a

conduit in managing the application process and makes recommendations to each institution

about the potential of each applicant.

There are different types of licenses obtained by distributors entering the collegiate

merchandise industry. These are Internal Campus Suppliers, Local Licenses, and Standard

Licenses.

Internal Campus Supplier allows a company to produce merchandise bearing the

trademarks of collegiate institutions for university departments and related entities for internal

consumption only. With this license sales must be categorized as royalty exempt by the

individual institution. Sales to University book stores, alumni associations, student groups, and

58 College Licensing Company

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other university entities not included on the approved distribution list are not permitted. This

license type is the most expeditious and least costly to pursue but there are strict limitations on

distribution.

A Local License is for companies that desire to obtain a license with an institution

located in their immediate in-state marketplace. This license may better suit companies that do

not believe they can qualify for a Standard License but believe they can demonstrate sales

success for in-state institutions. Local licensees may only apply for three institutions or less with

the initial application but can ultimately become licensed for up to five institutions within the

same state as their business location. Local Licensees are permitted to sell products to

institutions and their departments, retailers, and directly to consumers.  This license is the next

easiest to pursue, but the costs are higher and geographic restrictions exist. The Local License

offers new/unproven companies the opportunity to establish distribution and sales without

incurring the added costs, requirements, and elevated scrutiny of the Standard License. It is very

rare for local licensees to elevate to standard licensees without outstanding success in sales and

distribution.  Each year less than 2% of all local licensees are accepted by institutions to become

standard licensees.

Standard Licenses are intended for companies that are capable of extensive production

and retail distribution of their products and/or introducing a unique and commercially viable

product to the collegiate market. This is usually not for first-time applicants or companies

without well-established marketing plans, existing product distribution, and/or solid financial

history of selling licensed products. This is the most challenging and expensive license to pursue.

Associated costs with running a website:There are several costs associated with starting and maintaining a website for a small

business. The first and most important cost is establishing the site’s domain name. A domain

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name for a website is what visitors’ type into their URL box to access your website. For

example, in the URL http://www.worldvillagejewelry.com/custom-engraving.php, the domain

name would be worldvillagejewelry.com. The costs associated with registering a domain name is

relatively cheap, averaging around $8 - $10 for a basic .com name from registrars like

GoDaddy59. Registering the domain name is fairly easy when you do it through a web hosting

service. Hosting companies act much like storage units for web designers, they make it possible

for individuals and companies to put their website online by storing the information in a large

server. The costs associated with this type of service can vary depending on the services the

designer is interested in, how much space is needed to run the website, the reliability of the

hosting company, and how much traffic the website attracts. It is important for designers to know

the requirements of their website before they choose a hosting service to avoid any unnecessary

costs.  

Client’s costs and Recommendations. World Village Jewelry is currently spending $120 per year or $10 a month in hosting

costs.  With this expense the company receives enough space on the servers to support World

Village Jewelry’s web page, as well as access to its business website. Although this hosting

service offers the resources to operate online, research shows that there are alternative hosting

services that would offer more valuable benefits for our client. The company Volusion based out

of Austin, Texas is a web host that collaborates with companies wanting to sell products online.

They offer a number of plans that provide a web page with a built in online store that can be

accessed on any computer as well as mobile devices such as tablets and smart phones. Plans vary

depending on the quantity the client is wanting to sell using their service. Prices vary from $15 a

month for 100 products to $135 a month for an unlimited number of products. Volusion also

59 Zwilling

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offers a number of different services such as web design, market assistance, and other tools for

tracking sales for an additional charge.

Based on the benefits offered by Volusion, their services are recommended for World

Village Jewelry’s hosting service. Volusion will allow our client to re-establish the online store

as well as expand her internet presence through utilizing their social media tools. Volusion’s

services will provide World Village Jewelry with the opportunity of selling their products using

mobile devices, allowing the company to attract customers on multiple devices rather than just

an online store.

Using Social Media Marketing.Utilizing the communication streams on social media strengthens a company's brand and

expands its customer base. Social media is a high- involvement activity that can provide

marketing support with the addition of assistance in sales and customer service. There are limited

costs associated with becoming active on social media, however it requires an investment of time

similar to public relations. When done correctly using social media allows a business to convey

their personality, vision and values to their customers, allowing for their customers to build an

emotional relationship with the company.

Photo-sharing platforms such as Instagram and Pinterest operate as magnets for visually

oriented customers who are drawn to pictures of products in the retail market. Using this

platform will allow World Village Jewelry to post pictures of their products online and advertise

the products to a large audience at no cost.

Social community platforms such as Facebook, and Google+, allow the company to

interact with their customers on a daily basis by posting company updates and seasonal sales.

This interaction will aid World Village Jewelry with marketing their products to a wider

customer base as well as build brand recognition within their industry.

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Accepting Credit Cards on WebsiteE-commerce is an effective way for the company to reach their customers as well as gain

global market share. In order for a company to accept payment from credit cards they must do

one of two choices, either open its own merchant account at a local bank, or operate through a

third party merchant like PayPal. The most common of the two is operating through a third party

merchant, mainly because there are not any initial costs associated with signing up for services.

Payment occurs in a percentage of sale instead of a monthly fee. PayPal, a major third party

merchant charges its clients around 2-3% of the total sale amount60. Because World Village

Jewelry has used PayPal’s services in the past its services are recommended.

Setting up an account with PayPal is a quick and easy process and should take no longer

than a couple of days to establish. Another reason why World Village Jewelry should use their

services is there are no associated costs with starting your account. Instead, PayPal collects three

percent of the online transaction as a form of payment.  

Reviving World Village Jewelry online store. Taking into consideration that our client already has a registered domain name and

currently has a functional website on the internet, getting the online store back into operation will

not be difficult. Setting up an account with a third party merchant is simple, and free of charge.

Taking no longer than one week in time.

Online AdvertisingMaking money from advertisements on your own site is fairly simple and attainable by

anyone who wishes to put ads on your website.  The company or designer must first join an

Affiliate Network so that they can host ads on their page. Affiliate networks stand as an

intermediary between the people who want to advertise their site and people who wish to hold

60 Heng

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advertisements on their page. Once a business signs up with an affiliate network they are given

the option to choose affiliate programs that most interest them.  After that, the online merchants

running those programs will review the site. If the merchant approves the affiliate network will

guide the business with posting the appropriate links on their web page as well as help set up a

payment agreement with the online merchant. In all cases it is wise for the designer to choose an

affiliate network that will distribute ads that are similar to their target market. In World Village

Jewelry's case, if our client chooses to join an affiliate network and offer advertisements on the

website the affiliate network should be one that offers ads  promoting charitable events, non-

profits, and social activism.  

Listed below is a list of networks that provide outsourced affiliate program management

services to businesses focused on the green movement and social activism.  These networks also

serve as a directory for online affiliate programs that serve to connect affiliates with businesses

offering ecofriendly health and wellness products on the web.

● http://www.greenaffiliateprograms.net/

● http://www.performance-based.com/eco_affiliate.html

● http://eartheasy.com/affiliate-program

● http://www.eco-affiliate.com/

Although offering advertisements on your website is an easy alternative for making extra

revenue it is important to keep in mind that any company that intends to sell a product on their

site faces the risk of their online visitors being lead to other retail sites due to the advertisements

showcased on their webpage.

Paying for online advertisements to attract customers to your site is another popular way

to gain attention for online business. Pricing for this option can vary depending on the pricing

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agreement that the publisher chooses to practice. For our client, we recommend that World

Village Jewelry chooses to not participate in this service until their sales and online traffic

increases. Until then we recommend that World Village Jewelry utilizes the marketing

capabilities of social media sites listed above to advertise the company and gain customer

awareness of their products. We recommend this option does not include any associated

advertising costs and is simple enough to be managed by one person.

Recommendations SummaryData shows that the fashion jewelry segment of the jewelry and watch wholesale industry

is the most feasible for World Village Jewelry to gain market share61 by partnering with

nonprofits who support a social cause62 and implementing a competitive pricing structure. The

fashion jewelry industry shows potential for growth with the recovery of the economy63 from the

2009 recession and the increase in consumer discretionary income.

Short-term RecommendationsWorld Village Jewelry will benefit from redesigning the existing website in order to

prevent new entrants from gaining market share and generate a larger online presence. Data

shows that the benefits of utilizing Volusion’s services will outweigh the costs of the current

host.64. Switching to a different host will also increase visibility and potentially reduce costs65.

PayPal would be the optimal third party merchant for accepting credit card payments online 66.

61 Refer to Customer Profile, Geographic Segmentation page 1662 Refer to Customer Profile, Primary Demographic Research, Analysis of survey results page 1263 Refer to Competitive Analysis, Porters 5 Forces, Current Rivalry: Existing Competition page 1864 Refer to Market Penetration, Client Costs and Recommendations pages 3265 Refer to Market Penetration, Distribution Channels and Market Penetration, World Village Jewelry Website pages 3266 Refer to Market Penetration, Accepting Credit Cards on the Website page 36

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Research shows that utilizing social media sites will benefit World Village Jewelry

because this social media allows the company to communicate with its customers using photo-

sharing and social community platforms 67. World Village Jewelry would benefit from increasing

sales and online traffic through the use of social media before utilizing paid advertising 68.

Due to high price competition in the fashion jewelry segment of the jewelry and watch

wholesale industry, World Village Jewelry will need to use a competitive pricing strategy in

order to effectively compete in the industry69. In order to develop an effective pricing strategy

World Village Jewelry will need to drop prices incrementally to test consumer demand.

According to our surveys, the initial retail price point should be $10-$1570. Internet sales

price should start at $15, and be dropped incrementally in order to meet a specified number of

units sold71. Pricing for nonprofit retail outlets should be $15. A percentage of this will be

donated to the nonprofit, which will not only help World Village Jewelry build brand

recognition72 but also gain access to the nonprofits customer base73. Wholesale price should be

$7 to decrease channel conflict74 and allow retailers to mark-up the price 30%-40% and still have

a retail price of $12-$1575.

67 Refer to Market Penetration, Using Social Media Marketing page 3568 Refer to Market Penetration, Online Advertising page 3869 Refer to Competitive Analysis, Porters 5 Forces, Current Rivalry: Existing Competition page 1470 Refer to Customer Profile, Primary Demographic Research, Analysis of Survey Results page 871 Refer to Price Analysis, Pricing Structure Recommendations, Internet Sales page 2772 Refer to Price Analysis, Pricing Structure Recommendations, Nonprofit page 2773 Refer to Market Penetration, Distribution Channels and Market Penetration, Partnering with nonprofits page 29-3074 Is a situation in which channel partners have to compete against one another or the vendor’s internal sales department. An example of this is if World Village Jewelry sold their products on their website at prices that competed with its wholesale customers prices.75 Refer to Price Analysis, Pricing Structure Recommendations, Wholesale Price pages 26-27

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In order to re-start sales, World Village Jewelry needs to engrave and print all current,

blank inventory being stored in New Mexico. In order to have it ready to sell, and allow quick

fulfillments of orders76.

Long-term RecommendationsDue to the advantages of holding a patent for products, it is recommended that World

Village Jewelry continues to patent existing products and patents all new products. World

Village Jewelry should continue to differentiate product lines by developing new products in

order to be more competitive in the industry. This will also help World Village Jewelry limit

consumer switching costs. This is a long-term recommendation that would not be implemented

for at least 3 years77.

Economies of scale should be improved by securing better terms with suppliers through

bigger purchases. Manufacturing costs can also be lowered by switching to a manufacturer closer

to New Mexico. Several manufacturers in Texas have expressed interest and may provide

optimal manufacturing facilities78. Lower manufacturing costs may also be obtained using the

lessened need for quality control79. World Village Jewelry will benefit from lowering

manufacturing costs after selling existing inventory80.

Data shows that the most strategic approach for World Village Jewelry is to sell to both

small and large customers. Starting with smaller business and integrating larger ones will help to

stabilize the business and profit and avoid a large loss of sales if it loses one major customer81.

76 Refer to Competitive Analysis, Porters 5 Forces, Bargaining Power of Suppliers: Resource Providers page 2177 Refer to Competitive Analysis, Porters 5 Forces, Bargaining Power of Suppliers: Resource Providers page 1978 Refer to Competitive Analysis, Porters 5 Forces, Substitute Products: Alternative Industry Products page 2179 Refer to Competitive Analysis, Porters 5 Forces, Bargaining Power of Suppliers: Resource Providers page 2180 Refer to Competitive Analysis, Porters 5 Forces, Possible Entrants: Possible Competitors page 16-1781 Refer to Competitive Analysis, Porters 5 Forces, Bargaining Power of Buyers: Consumers page 17

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Appendix World Village Jewelry

Survey Questions. (Appendix A)

Age:________ Ethnicity:__________   Sex:_______ Student:  Y/N 1. On average, how often do you purchase fashion accessories?A. Daily.         B. Weekly.          C.  Monthly.       D. Semiannually       E. Annually.

2. On average, how much do you spend on fashion accessories in one purchase? A. $10            B. $20                 C. $50               D. $100                    E. $200

3. Have you ever purchased fashion accessories online? If Yes please tell us where.

4. Looking at the bracelets we have provided how much would you be willing to spend on one? $________

5. Looking at the bracelets we have, which color would you most likely buy?

6. Would you wear one of our bracelets if it was given to you at a promotional event?A. Definitely Yes.     B. Yes.        C. Maybe.         D. Probably Not.      E. Definitely No.

7. Would you purchase one of our bracelets to support a social cause? For example, military awareness. A. Definitely Yes.     B. Yes.        C. Maybe.         D. Probably Not.      E. Definitely No.

8. Would you purchase one of our bracelets to support your local University?A. Definitely Yes.     B. Yes.        C. Maybe.         D. Probably Not.      E. Definitely No.

Appendix A: Survey

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Appendix B: Survey Results

Appendix C: Survey Results

Appendix D: Survey Results

47

Appendix E: Survey Results

Appendix F: Survey Results

48

Appendix G: Survey Results

Appendix H: Survey Results

49

Appendix I: Survey Results

Appendix J: Survey Results

50

Appendix K: Survey Results

Appendix L: Survey Results

51

Appendix M: Survey Results

Appendix N: International Diamond Exchange Results

52

Appendix O: International Diamond Exchange Results

Appendix P: Harvard Business School Publishing

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World Village Jewelry SWOT Analysis

Strengths Weaknesses Opportunities Threats● Low inventorycosts● Low fixed costs● Product design patent ● Semi-uniqueness of product● Access to e-commerce● Low materialsswitching costs● Good productpackaging

● Small product line● High ready to sell inventory levels ● Low customer brand awareness ● Incomplete webpage

● Low unequal competition ● Strong industry growth● Developed e-commerce distribution channel● Low manufacturing switching costs● Low exit barriers

● High equal competition● Low product differentiation ● Low switching cost● Low economies of scale● Low barriers to entry

Appendix Q: SWOT Analysis

Analysis of Competitors in the Fashion Jewelry Industry

Company Description Products Online Presence Price Points Main Advantages

Fossil Inc. ● Established in 1984● Global designer,

marketer and distributor of fashion accessories

● Men’s and women’s watches to retailers.

● Fashion jewelry,

● Extensive online catalog

● Many style offerings

● Detailed

● Fashion jewelry bracelets: $28 - $88

● Necklaces

● Excellent economies of scale

● Product diversification

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● Used vertical integration to combat the 2009 recession

sunglasses, handbags, and small leather goods

● Stainless steel used to make many products

pictures on website

● Offer men’s jewelry

similar to dog tags: $48

● Excellent website

● Large market share

Claire’s (local)

● Founded in 1961● Costume jewelry

and accessories retailer

● Target tweens and young adults ages 7-25

● 3 locations in Albuquerque (city’s malls)

● Brightly colored products

● Cheap products ● No materials

listed

● Extensive online catalog

● Many style offerings

● Detailed pictures on website

● Prices range: $2 - $20

● Geographic diversification

● Merchandising strategy

Gilt.com ● Online fashion store

● Appeals to the casual business consumer

● Discounted products

● Business model: Instant access at discount prices

● Men’s and women’s fashion jewelry

● No bright colors● Directed to the

18+ professional oriented customer

● Many dark leathers and dark straps for men’s jewelry

● Majority of sales through e-commerce

● Well-designed website

● Prices range: $22 - $1000

● Similar bracelet made of sterling silver: $249

● Competitive price for quality

● Designer products

● Well established brand

Blue Fly ● Designer fashion jewelry and clothing store online

● Belle & Clive, a members only shopping destination

● wide selection of products

● high end fashion and fine jewelry

● Targeted to adults over 20 years of age

● E-commerce only

● Well-designed website

● Prices range: $10 to $120+

● High product differentiation

● Strong brand● Independent

designer’s represented

● Sister company to differentiate sales

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Wet Seal Inc. (local)

● Fashion jewelry ● E-commerce and

532 retail stores in US

● 2 locations in Albuquerque (malls)

● Targets women

● Fashion jewelry ● Targets young

women● Diverse product

line● Markets

innovation

● Large e-commerce presence

● Majority of business from retail stores

● Extensive online inventory

● Well-designed website

● Most jewelry price range: $5 - $50

● Strong brick and mortar presence

● Strong e-commerce

● Product diversification

● Strong brand● Specific target

market

Charming Charlie’s (local)

● Targets women● 1 retail location in

Albuquerque

● Brightly colored products

● Target women over 20

● Variety of products including necklaces, bracelets, earrings, and rings

● Large e-commerce

● Detailed pictures and descriptions

● “sale” section on website

● Most jewelry price range: $10 - $30

● Strong brand recognition

● Product Differentiation

● Retail locations

● E-commerce

Appendix R: Analysis of Competitors

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Appendix S: Break Even Analysis

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