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Marketing Plan, J. Long, J. Lennon, D. Kumar, P. Laurent

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BAGINS Inc.MARKETING PLAN

By

John LongJennifer Lennon

Devi KumarPatrick Laurent

National University MBA

MARKETING MANAGEMENT - MKT602 May 2007


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TABLE OF CONTENT

Executive Summary 3

Company Description 3

Mission and Vision Statement 4

Core Competencies 5

Situation Analysis 6

SWOT Analysis 7

BAGINS Competitors 7

Target Market 9

Marketing Mix 10

- Product Strategy 10

- Distribution Strategy 11

- Promotion Strategy 12

- Pricing Strategy 12

Budget, Schedule and Monitoring 12

References 16


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Executive Summary

Bag-ins Luggage remains dedicated to the BAGINS Luggage mission of meeting the

ever-changing needs of the traveling consumer. BAGINS Luggage continues to strive at being

the best in the industry. Its highly skilled marketing department has developed an unsurpassed

marketing plan for its 3-piece luggage set. BAGINS Luggage sees a real need in developing

lightweight, durable, and price competitive luggage geared for the Baby Boom generation.

Currently there are more then 70 million Baby Boomers heading towards retirement. As a re-

sult, BAGINS Luggage is developing new lines of its popular 3-piece travel luggage tailored

specifically for an older generation. In addition, their new style of luggage will display new

safety features, compartments, and mobility, to make travel safer and more practical for those

nearing retirement. Over the next three years, BAGINS Luggage will increase its distribution

by offering competitive pricing via its website. Those at BAGINS Luggage demand products

with unsurpassed quality that can meet the demands of the avid traveler.

Company Description

Dr. Chris Chavez founded BAGINS Luggage nearly 5 years ago. Since its foundation,

Dr. Chavez has had great success in the development and sales of the 3 –piece luggage set.

Recently, Dr. Chavez hired on a new marketing team consisting of Devi Kumar, Patrick Lau-

rent, Jennifer Lennon, and John Long. This newly emerging marketing team met in graduate

school, while studying contemporary marketing. Located in San Diego California, this team

of energetic graduates has brought a new design and flavor to the once traditional form of lug-

gage.

This team has been compiled because of their uncompromising drive of providing

superior luggage products with the quality and strength that characterizes every aspect of BA-

GINS Luggage. Besides, for BAGINS Luggage providing traditional 3-piece matching set of

luggage, they are in the developing stages of a new lightweight (33% lighter then traditional

luggage), highly durable, expandable luggage sets for retires.


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While the traditional luggage company targets business travelers as well as the oc-

casional traveler. BAGINS Luggage offers today’s travelers a unique selection of highly

specialized merchandise. With their new line of luggage, BAGINS goal is to target the aging

Baby Boomer generation, by marketing their new line directly to the needs of its customers.

In short, we have reinvented the traditional 3-piece luggage using our new eye catching and

fashionable designs.

Since is founding 5 years ago, BAGINS luggage has grown rapidly. They have out-

grown their once occupied 2,000 square foot office, to the newly renovated 40,000 square feet

warehouse. With a work force of 70, Bag-ins is able to market their products on cruise ships

as well as through their website. Today, BAGINS Luggage ships their goods internationally.

Mission and Vision Statement

BAGINS mission is to be the leading producer and marketer for the ever-changing

needs of the traveling consumer. We believe that traveling can be stylish, trouble-free and

pleasurable. BAGINS began with the original 3-piece set and continues inventing new and

innovative designs that mark BAGINS luggage as the best in the industry. The BAGINS

Luggage founder was tired of struggling with his luggage and decided to invent the “Connect-

able –Trio.” BAGINS Luggage continues to boast the most significant success in the luggage

industry. The Luggage 3-pieces has become standard equipment for over 200,000 airline flight

crewmembers worldwide.

During the next 3 years, BAGINS Luggage seeks to achieve the following financial

and non-financial goals.

� Financial Goals

o Increase marketing and distribution of sales on Disney, Princess, and Travel

Royal Caribbean Cruise Ships.


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o Augment revenue by at least 50 percent annually.

o Bestow each of our new products with a lifetime warranty.

o Donate 1 percent of all sales to help stop elderly abuse.

� Non-financial Goals

o Introduce two new lines of luggage annually

• Luggage for the outdoors

• Luggage for the middle aged business traveler

o Add appealing features geared towards the Baby Boom generation

• 33 percent lighter luggage

• Fire and stain retardant material

• Illumination technology for nighttime traveling

• Safety compartment for securing valuable

• Compact luggage that offers expandable features

• Offer meticulous craftsmanship

o Develop a successful internet site geared towards the Baby Boom generations

• Offer free shipping

o Enter new distribution markets, including Kohl’s Department stores and REI.

BAGINS Core Competencies

BAGINS Incorporated strives to innovate and create luggage which meet or exceed

its customers expectations. The company relies on its Research and Development team and

computer assisted software to design rugged and quality products. These creations include a

number of revolutionary items to help customers during their travels. It also incorporates top

of the technology for Tracing and digital data.

The beautiful designs and materials used to create our products are then marketed

locally and abroad by our new Marketing and Development Team. A Marketing mix involves


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multiple aspects of the business and involves all of the employees to generate the existing

strong motivation and satisfaction.

The Production team, specialized in the field of baggage and tissues, as well as elec-

tronic components, is strongly involved in the supply chain and quality control according to

ISO 9002 and environmental ISO 14500. Our exclusive supplier works according to specific

charts and signed a contract for 10 years. Costs of production are kept low thanks to lower

labor costs in South America.

BAGINS Inc. Organized a pool of experienced employees in the distribution to man-

age the logistics, warehouse and shipping. Products are shipped within 12 hours after recep-

tion of payment and delivered worldwide within 48 hours.

The combination of expertise, Research and development, Marketing and logistics has

proven so far to be a good combination and solid competencies for future success. BAGINS

new sets of products will surely confirm the strength of the company and employees. It is

important for BAGINS to be different than its competitors. D. L. Kurtz (2007, p. 64) confirms

that “ Core competencies make a firm stand out from everyone else in the marketplace”.

Situation Analysis

It is a fact that Baby boomers generation have time and money to spend for traveling

and therefore buy luggage. M. Grecco (2007) states that “ Lucky baby boomers! They have

more leisure time and more money now for travel. And there are so many great places on this

Earth to see!”.

Airlines and security allows a maximum weight limit and size to travelers’ luggage.

However there is no obligation yet for digital tagging and tracing of the baggage. The technol-

ogy is, however, readily available on the market and could be included in the product.


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It is always difficult, while packing, to know how much weight is in the suitcase and surplus

baggage costs a fortune per extra pound! M. Greco (2007) explains that “ there are size and

weight restrictions by many airlines. To avoid costly surcharges, be sure to purchase luggage

that is within 62” when you add the length, height and weight”.

There is always a scary thought that terrorists may include bombs in the luggage, but

new resistant materials can sustain tremendous explosions without rupture. Such resistant

material is critical where rough handling occurs and make it a better quality. However the

product does not exist on the market yet and BAGINS could have first mover advantage.

BAGINS also lobbies at high levels to get new regulations and laws in place which in-

clude the security and digital system incorporated in our baggage. Laws and regulation are in

constant evolution due to the past events. The Travel airlines, cruises, trains also put in place

their own regulations and the company keeps close contact with them to adapt to the new

rules.

Finally the stock market is very important to allow BAGINS to sustain its growth

without building debts. However any political or economical turmoil has critical effects on the

stock prices and the company has to keep close to the financial analysts and communicate to

investors in a positive manner.

All of the elements surrounding BAGINS business must be regularly and closely mon-

itored as to have a clear picture of the situation. D. L. Kurtz (2007, p. 64) states that “Every

successful marketing plan considers the marketing environment – the competitive, economic,

political-legal, technological and social-cultural factors that affect the way a firm formulates

and implements its marketing strategy.”


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SWOT Analysis

Competitors in the BAGINS Luggage Inc

US luggage market has grown since 1990s due to sharper gain in personal income and

favorable demographics. Supply and demand increased for lightweight, durable, expandable,

wheeled and easy carry luggage. Increased sales of these products increased the profitabil-

ity of the competitors and more competitors entered the market. Highly rated brands such as

Travelpro, Samsonite, Victorinox, TUMI and Delsey are competing with each other due to the

increasing demand of luggage. After using our qualitative and quantitative forecasting tech-

niques, we have decided to introduce our BAGINS Luggage Inc which will be selling 3-piece


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travel luggage. Statistics showed that market growth is forecasted to strengthen further next

five years since the baby boomers market moves through its prime luggage buying years.

To gain attention and be successful, we will differentiate our product from the compet-

itors by using features and ideas that is convenient and valuable for our baby boomers popula-

tion. For example our main focus will be on luggage pieces for outdoor activities. Majority of

baby boomers like diving and they need a water resistant and lightweight material that they

can carry for outside activities. Adjustable sizes, safety, reliable, high quality and perfect for

outdoor will be our main focus during production process.

Even though we have so many competitors for 3-piece travel luggage, we have not

seen any nice sets that cater towards fitting and protecting diver’s gears and divers comput-

ers. Bag-Ins will produce bags that will have a piece for storing diving materials, a piece for

clothes and a piece that has adjustable size and fits perfect on overhead compartment of ships

and airplanes.

To sell our 3-piece luggage more quickly then competitors, we will us Time-based

competition. This will enable us to improve product quality, diminish costs and increase of-

fering to satisfy our baby boomers. Before we implement our plans in action and manufacture

our new product we will conduct competitive intelligence findings about more competitors

using published sources, verbal interviews with baby boomers and observations of sales peo-

ple.

The Target Market

The target market for BAGINS Luggage Inc. is the active baby boomers who like

diving, hiking, swimming and topped sports. For Baby boomers who are seeking a different

retirement lifestyle compared to staying home and working. Baby boomers are mostly identi-

fied as persons 55 or older and earning average of $71,000 per year. Many baby boomers love

diving and own a second vacation home for leisure activities. Since baby boomers are coming


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in their chronological age, they want to be more active with out door activities so that they

can be physically fit and healthy. According to Loyola University Health System heart expert,

for the next 20 yrs, the U.S healthcare system could experience a tsunami of heart care de-

mand as millions of boomers turn 60, and their risk of heart attack increases (Senior Journal,

1).

In new survey of lifestyle, baby boomers show increase in active recreation, especially

adventurous pursuits, such as diving, hiking and river rafting. Our 3 -piece travel luggage will

be designed to support the needs and wants for all baby boomers with maximum strength.

The Marketing Mix

To be profitable and successful in the business, we need to consider four major strate-

gies (4P’s): Product, Distribution, Promotion and Pricing.

Product Strategy

When was the last time you purchased a travel bag? Recently! Did you like it? Or it

was frayed due to rough handling in the airplane or cruise ship. BAGINS Luggage Inc. will

be offering 3-piece travel luggage of high quality, lightweight and durable for all weather

climate. The 3-piece contains a spacious main rolling upright for clothes, 1 special rolling

upright for diving and a backpack perfect for vacation getaways. We will have different sizes,

colors and more stylish then what was offered in years past. It will also symbolize a style

statement selected for self-esteem, self expression and reflection of personality.

BAGINS will also offer life-time warranty on all the bags. Our bags will have lights

in front of the rollers in case of dark parking and back flashing red lights for safety purposes.

The material will be water and explosive resistant and wrinkle free. We will also include safe

compartment with digital lock for value papers and jewelry. Since we have so many traveling

rules after September 11th, we will offer bags that can fit perfectly in overhead compartments.


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In all the bags we will have waterproof medication compartment which will enable our target

market to carry their medications safely.

Distribution strategy

To begin with, BAGINS will distribute majority of the bags to cruise ship stores cater-

ing towards divers. Since our bags will have a special piece for divers, baby boomers will get

reason to buy whole set for storing diving gears and clothing or personal belongings. Also we

will provide samples to travel agencies so that our target market can see the offer and contact

for us purchase. Our bags will be convenient and useful for all the seasons and will be availa-

ble year around for our customers. We will also use marketing intermediaries such as retailers

and wholesales to make our products easily available for other customers. Since technology

is opening new channels of distribution we will have online purchase with easy delivery at no

cost.

3-piece travel luggage will also be available in specialty shops. When climate and sea-

son permits, people go shopping in these stores for their traveling needs. We will have prod-

ucts ready in these stores using all available channels of distributions. Once we begin making

profit with our local business, we will expand internationally. We will distribute our bags to

international market using proper channels.

Promotion Strategy

Since we have so many competitors selling 3-piece travel luggage, our promotional

strategies has to be very effective and measurable for the company. Even though messages

will come from different sources such as word of mouth, TV, radio newspapers, billboards,

direct mail, we will be using integrated marketing communications to coordinate all promo-

tional activities for our consumers. IMC will also help us broaden our promotion to include all

the ways a customer has contact with our organization.

We will also use direct marketing to promote our product. “Direct marketing advertis-

ing expenditure in the Unites states topped $161 billion in one recent year” (Kurtz 505). It also


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pursues goals beyond creating product awareness.

To achieve our goals, we will use cash incentives for retailers to stock and promote our

product to the consumers. To test our promotional strategy, we will use direct sales results test

and indirect evaluation to measure the effectiveness of our promotion strategy. This will help

us to improve our weakness and be more productive for our customers.

Pricing Strategy

BAGINS luggage Inc. will offer very reasonable and affordable price for the 3-piece

travel luggage. We will have a comparison of pricing with other competitors so that we don’t

offer too high or too low and go out of business. The price will also depend on the supply and

demand of the products. Our objectives are to make profit, increase volume, and meet compe-

tition and prestige from our customers. This can be achieved by proper implementation of the

marketing mix for our goods and services.

In order to attract customers and introduce our product, we will start with low pricing

and special offers. We will be giving incentives and a free cosmetic case which will include

mirror, spill-resistant interior and compartment to hold cosmetics for all the first 100 pur-

chases. “A good pricing strategy should create value for customers, building and strengthening

their relationship with a firm and its products”(Boone, et all 49).

BUDGET, SCHEDULE, and MONITORING

Although BAGINS Luggage Inc. is only five years old, it has held its own as a new

market emergent in the travel luggage industry. The company has been able to eliminate

external debts and reinvest its profits to expand its business during the prime market window

of the baby boom retirement era. BAGINS has shown increasing profits annually since it was

founded and desires to increase its revenue yearly by 50%. The table below shows BAGINS

sales during the first 5 years, plus projected sales for 2007 and 2008.


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Year Sales (*or projected sales)2002 $63,0002003 $98,0002004 $165,0002005 $274,0002006 $725,0002007 *$1,050,0002008 *$2,500,000

BAGINS plans to continue its partnership with our South American manufacturer in

order to take advantage of the low cost of production materials and labor in the region.

BAGINS also plans to partner with various travel agencies and cruise ship retailers to pro-

mote and sell its unique lines of luggage. In the coming years, this company will expand its

work force, increase its advertising, and strive to maintain its revenue goals while keeping

costs down. Budgets are to be completed a year in advance and adjusted, as needed, based

upon quarterly analysis of performance. The company plans to continue past successful low

budget endeavors such as: online auction purchasing and internal computer refurbishment

by established computer technician J. Lennon; continued website design by P. Laurent; and

continued use of email as a primary source of communication. Below is the proposed 2008

marketing budget plan. A more detailed version with additional operational costs is included

in the BAGINS Luggage, Inc. business plan.


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Last updated: 3/15/20072008

PersonnelSalaries, wages, and payroll taxes 375,000 Benefits 17,000 Commissions and bonuses 15,000

Personnel Total $407,000

Market ResearchPrimary research 50,000 Secondary research 12,000Library management 1,000

Market Research Total $63,000

Marketing CommunicationsBranding 25,000Advertising 400,000Web sites 22,000 Direct marketing 100,000 Internet marketing 225,000 Press, Public, Analyst relations 16,000Events and Charity 35,000

Marketing Communications Total $823,000

ChannelsChannel communications and training 21,000Channel promotions and incentives 42,000

Channels Total $63,000

Customer Acquisition & Retention (CAR)Acquisition 50,000 Customer loyalty 16,000

CAR Total $66,000

OtherPostage 2,000 Telephone 8,000 Travel 23,000 Computers and office equipment 8,000

Other Total $41,000

Total Marketing Budget $1,463,000


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BAGINS hopes to introduce a minimum of two lines of luggage per year. It also plans

to increase marketing and sales on several cruise ship lines and partner up with travel agencies

to promote brand and product awareness. The following is a timeline for implementation of

the company’s market schedule.

Year 1 (2007)

○ Introduce Dive Smart line of luggage in two color variations

○ Introduce line of safety inspired luggage in 3 styles

○ Increase advertising on chosen cruise lines by 30%

○ Increase product inventory in cruise line shops by 27%

○ Promote both lines of luggage through travel agencies

○ Donate at least .25% of sales to preventing abuse of the elderly

Year 2 (2008)

○ Introduce 2 new and unique lines of luggage (1 possibly for backpackers/campers)

○ Donate at least 1% of sales to preventing abuse of the elderly

○ Introduce style of Dive Smart specifically geared towards females

○ Introduce additional colors/styles of current popular luggage lines

○ Strengthen sales on cruise ships, and continue travel agency promotion

As stated above, the marketing plan will be evaluated and adjusted quarterly to include

any needed budget adjustments. BAGINS analysis team will maintain records on and report

analysis of: sales, market share, expenses, and finances. The following table breaks down the

analysts with their assigned sections for the 2007-2008 season.

Analyst Section 1 Section 2

J. Long Finances ExpensesD. Kumar Sales Market Share

BAGINS will adjust any performance tracking needs as necessary throughout the next

two years and plans to continue utilizing the above analysis team based on their past exem-

plary conduct in the analytical field.


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References

Kurtz, L., Boone., (2007) Contemporary Marketing: Thomson South Western.

(2007). Consumer Search. Retrieved May 23, 2007, from

http://www.consumersearch.com/www/house_and_home/luggage-reviews/review.html

(2007). Luggage Makes the Man. Retrieved May 25, 2007, from

http://www.fastcompany.com/articles/2001/08/luggage.html

Senior Journal (n.d) Retrieved (May 25, 2007) Active Recreation Tops Lifestyle Desires for

Older Baby Boomers, Senior Citizens, from:

http://www.seniorjournal.com/NEWS/features/2007/7-04-13-ActiveRecreation.htm

Senior Journal(n.d). Retrieved (May25,2007) Baby boomer Alert-the ‘60s Are Coming but

This Time, It’s Age, Warms Heart Expert. from:

http://www.senorjournal.com/NEWS/Boomers/6-11-15-BabyBoomerAlert.htm

Maxine Greco, Retrieved (May 27, 2007) Buying Bags for Baby Boomers, Ezyne Articles.com

http://ezinearticles.com/?Buying-Bags-for-Baby-Boomers&id=169493

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