Tehzeeb Ornaments

8/6/2019 Tehzeeb Ornaments

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The Industry

These gems have life in them: their colors speak, Say what words fail of.

-- George Eliot, The Spanish Gypsy (bk. I)

Charm jewelry has been around since early civilization. The Egyptians wore it both to ward off

evil and to identify themselves to the gods so they would collect the right person at death. The

specific designs of jewelry varied based on the culture, but the general intent was the same: to

protect the wearer or provide them with extraordinary, often magical, powers. This religious

function of jewelry was present in most cultures, even including medieval knights who would

wear protective symbols for battle.

The art & craft of fine quality jewelry manufacturing are deeply rooted in the traditional heritage

and history of Pakistan. It was however in the Mughal period that the artisan class of goldsmiths

arose to attain a distinct status in the subcontinent. The most famous among the various jewelry

types that emerged during the times of the Mughals include, Minakari, Kundan, Polki, and

Nauratan, etc. Presently, metropolitan cities of Lahore and Karachi are the major hubs of jewelry

manufacturing. There are more than thirty major cities and nearly three hundred smaller

cities/mandi towns where jewelry manufacturing and trading clusters cater to domestic demand.

In addition, there are at least 45,000 villages where jewelers operate as single-shop,

manufacturing and selling units to meet the demand of rural population.

Pakistan is a country with a population of more than 150 million people and a rich tradition of

craftsmanship in jewelry manufacturing. Skilled/semi-skilled labor force is available at relatively

lower rates, which offers a comparative advantage to the country. Their skill enhancement

through training would lead to greater competitiveness.

The global demand of gold is more than 2500 tones and Pakistans consumption is more than

100 tones which makes Pakistan worlds 10th largest market .Gold is usually imported from Gulf

states and western countries. In the Gem sector Pakistan is full of natural resources. Unmatched

quality of Ruby, Emerald, topaz, aqua marine, fluorite , lais-lazuli which are mined from the

valleys of Gilgit, Hunza, Swat, Azad Kashmir and Chitral.Due to unavailability of gem cutting

and polishing facilities Gems are exported in a raw form which brings nothing as compared to its

real worth.


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Gems and Jewelry industry may be attributed as small family oriented industry with skill and

traditional mindset. Overall all marketing linkages are missing and interpersonal cut throat

competition and a narrow vision present the scenario of under developing industry in Pakistan.

In other way women of Pakistan are great admirers of jewelry because jewelry is taken as a

status of a person in the society and is counted as the wealth of women. The upper rich class

wears gold jewelry with diamonds, rubies, emeralds and pearls. Less wealthy wear gold with less

precious stones, whereas poor class wear jewelry made of silver and base metal. Since jewelry

shows the status and wealth of women, hence gold has an esteemed place as an investment.

Therefore in Pakistan you will find even an impoverished individual wearing at least ear studs

that are or look like gold. Expensive jewels are not ceremonial symbols in Pakistan, even though

they are used in abundance in big ceremonies such as weddings when bride is loaded with heavy

jewelry, but women and some men too, wear it simply to show their wealth, and to impress their

friends. Women wear jewelry with pride and look after them so that it can be handed down

generation in the family. In this tradition, jewelry is usually worn by married women whereas

widow hardly displays any form of jewelry.

Introduction of business

The business we aimed to initiate in Islamabad is to open a retail outlet of traditional jewelry.

Where we will provide variety of traditional ornaments under one roof. We can say that it will be

a house of ornaments.

The Tahzeeb Ornaments is a newly established retail store offering stylish, unique, luxuries and

personal style traditional ornaments with affordable price to consumers wanting to create a

personalized edgy fashion appearance.

Located in the Jinah Super area of Islamabad, Pakistan, the Tahzeeb Ornaments will cater to

lower, middle and upper-class consumers who look beyond the national chain stores for edgy

fashion and traditional jewelry.

After having established a successful and growth-oriented business, we look to expand our

business to e-commerce during our fourth year of operation. This additional business channel

will allow us to reach a broader customer base as well as expand the level of customer service

and personalized services we are able to offer the consumer.


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Name of Business:

The name of our business is Tahzeeb Ornaments which will represent that we are going to

provide our customers with such products which will be according to our traditional culture.

Logo:

Slogan:

Revival of Heritage

Vision Statement:

To give the variety of traditional ornaments for the women of modern era, that is affordable,

accessible and reliable.

Mission Statement:

To access, advocate and act for the improvement in handicrafts that promote a strong cultural

system and work for the preservation of culture heritage and provide the convenient and

delightful experience for women.

A celebration of personal style, The Tahzeeb Ornaments is a store for the quality- and style-

conscious consumer. Providing unique, luxuries and personal style traditional ornaments with

affordable price, we intend to generate a fair return to finance continued growth and expanded

community involvement.


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Products:

The Tahzeeb Ornaments focuses on selling quality- and value-oriented Traditional Jewelry.We will provide following types of jewelries.

Antique Jewelry

The jewelry which is not in mainstream production and of which the mode of production is no

longer popular is known by the name of 'Antique Jewelry.' This kind of jewelry has dull and

rough look, combined with an old world-world charm, and this serves as the major USP of suchjewelry.

Bead Jewelry

Bead art in India is five thousand year old and dates back to the time of Indus ValleyCivilization. People of that civilization used to make beads out of gold, silver, copper, clay, ivory

and even wood. The excavated carried out there came out with finished and unfinished beads

from the site.

Bridal Jewelry

India has great tradition of wedding jewelry. Made of superior metals and excellent quality,jewelry accentuates the beauty of bride in multiples. Though these days silver and platinum

jewelry is gaining popularity, gold jewelry still holds the most popularity among Indians.

Custom Jewelry

Custom jewelry is personalized jewelry, which a customer gets her made on her interest and

fancy. This happens particularly in cases where readymade jewelry does not match the taste of

person. Custom jewelry gives total freedom to customer about the specifics.

Fashion Jewelry

Fashion jewelry is also called costume jewelry, mainly for the reason that it is not made ofprecious metals and stones, rather lighter and cheaper material are used. Fashion jewelry is trend-

conscious and keeps on changing as per changing needs.
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Filigree Jewelry

Filigree work is done on silver and involves lots of precision and technicality, added with great

amount of patience and an eye for minute details. Historically, filigree work was quite popular incountries like Egypt, Italy, and Spain. India's history of filigree work goes back to early

centuries.

Gold Jewelry

Gold is a metal that lures many. It gives the security against any financial crisis, because of its

easy liquidity, and is also used by women for adorning themselves. Traditionally, gold has beenconsidered auspicious among Hindus and is regarded to be symbolic of Lakshmi, the Goddess of

Wealth.

Handmade jewelry

Talking about jewelry manufacturing in India is as good as talking about handmade jewelry in

India. A major chunk of jewelry in the country is made by independent craftsmen. Traditionallyalso, a significant part of jewelry manufacturing has been handmade jewelry.

Ivory Jewelry

Jewelry that is made from the tusk of an elephant is called ivory jewelry. Importance of ivory

jewelry can be guessed from the fact that in Gujarat, the bride receives an ivory bangle from her

family just before marriage as jewelry. During marriage ceremony wearing of ivory bangles ismust for bride.

Jadau Jewelry

Jadau Jewelry forms one of the major examples of high skilled craftsmanship that was brought

into India by Mughals. Historically speaking, the tradition of Jadau work has been in practice in

the states of Rajasthan and Gujarat since the Mughal era. Jadau jewellery is also called engraved

jewelry.

Kundan Jewelry

During Mughal period, the art of kundan work reached Rajasthan from Delhi. Later on,craftsmen from the different part of the country migrated to the place and made Rajasthan a hub

of Kundankari. Rulers and feudal lords gave patronage to the art and it developed into perfection.

Lac Jewelry

Lac jewelry, also known as lacquer jewelry, originated in Rajasthan and has gained considerable

popularity in India today. Lac jewelry is available in versatile designs, which add to its beauty.

Among the various items in lac jewelry, the bangles need a special mention.
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Meenakari Jewelry

In Meenakari jewelry, precious stones are set and then enameled with gold. Historicallyspeaking, the art was introduced to Rajasthan artisans by Raja Mansingh of Amer. He invited

Lahore-based skilled artisans to his kingdom, and their intermingling with the locals craftsmen

resulted in an amalgam.

Navratna Jewelry

In Navratna jewelry, nine auspicious stones are used in a single ornament. The belief behind thisis that the nine stones together ensure well being of the person who wears it. In India, Navratna

jewelry has been given major importance, because of its astrological significance as well as its

innate charm.

Pachchikam Jewelry

In the world of fashion and design, old trends tend to come over again and again, though with

slight changes. Pachchikam jewelry making craft is one of the examples of jewelry that has come

back once again. Originated in Gujarat and Kutch, centuries ago, Pachchikam jewelry has againbecome popular.

Silver Jewelry

Silver Jewelry, along with gold jewelry, is quite popular amongst Indian women. Ornaments

made of silver, such as rings, bracelets, chains, necklaces, nose rings, earrings, toe rings, heavykadas, and armlets, form integral part of Indian jewelry.

Stone Jewelry

Jewelry studded with different gems is quite popular among Indians. For reasons ranging from

spiritual to aesthetic to health, gemstone jewelry has become the part of life of Indian women

and men both. These stone jewelries are worn according to the individual's astrological chart and

ruling of planet.
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Tribal Jewelry

Tribal jewelry in India is quite rich. Each tribe has kept its unique style of jewelry intact even

now. The original format of jewelry design has been preserved by ethnic tribal. Jewelry that ismade of bone, wood, clay, shells and crude metal, by tribals, is not only attractive, but also holds

a distinct rustic charm.

1. Anklets 2. Armlet Jewelry

3. Bangles 4. Bracelets

5. Waistband Jewelry 6. Toe Rings

7. Pendants 8. Nose Rings

9. Necklace 10. Finger Rings

11. Earrings 12.

STORE OPERATIONS

The Tahzeeb Ornaments will be open for operation Saturday-Friday.

Closed major holidays

Hours of operation will be 10:00 a.m.-10:00 p.m. Saturday-Thursday.

From 5:00 p.m.-10:00 p.m. on Friday.

Hours will be extended to 3:00 a.m. during the Eid Days.

STORE POLICIES

To most effectively service the customer.

The Tahzeeb Ornaments will accept the following forms of payment:

o Cash

o Credit Card: Visa & MasterCard.

Merchandise returns will be granted a full refund within 14 days of purchase.

A store credit will be granted within 30 days of purchase with or without a sales receipt.

Gift recipients can return items for exchange or store credit.

Damaged and defective items can be returned for exchange or refund via original form ofpayment.

Competitive Strategy:

Companies can compete generally on three bases which can be there competitive edge also.

Some companies compete on cost bases and become the cost leader in the market.

Differentiation is another strategy for competition. Differentiation can be made on the bases of
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products features, or value to the customers. Focus strategy is the third way through which

businesses can compete in which firm focus on a selected group or a number of groups having

common characteristics.

We are going to use differentiation strategy. The image of Tahzeeb will be our main

differentiation.

Positioning Statement:

To females, who want novelty in traditional jewelry. Tahzeeb is going to provide expedient

shopping experiences by giving an assortment in traditional ornaments with a blend of currenttrends those are reliable, accessible and affordable than competitors.

SMEs, MAIN ACTORS AND THEIR INTERLINKAGES

Following are Public and Private Institutions and organizations which can play their part for thedevelopment of SMEs in Pakistan especially in the GEM AND Jewelry sector.

A) Actors on a National Level

All Pakistan Gem Merchants & Jewelry Association.

All Pakistan Commercial Exporters of Precious & Semi-precious Stones of Pakistan.

Pakistan Gem Manufacturers & Exporters Association.

Members of APGMJA (All Pakistan Gem Merchants & Jewelry Association)

Raw material Supplier. Federation of Pakistan Chamber of Commerce & Industries.

Small & Medium Entrepreneur Development Authority.

Small Business Finance Corporation.

Commercial Banks.

Export Promotion Bureau.

B) INTERNATIONAL ACTORS

World Gold Council

United Nation Industrial Development Organization

UNIDO is an specialized agency of United Nations. This organization provides technical andfinancial assistance from developed countries. Till this time Pakistan was not on those countries

where they supported Developmental Projects. Some projects are being run by UNIDO in India.

Recently Pakistan has been selected for such type of projects.


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SWOT Analysis

Strengths

Availability of raw materials specially gems and semi precious stones.

Innovation

Skilled labor

Comparative advantage because of variety of products.

States liberalized policies i.e. Zero percent Import of Gold and export facilitation.

Availability of Finance, which can be utilized.

Availability of Technical Skill through training Institutes.

Wide local market for consumption.

Weaknesses

Illiteracy

No use of new technology.

Labor is costly.

High rate of utility charges and tax regulations.

Not easy entry in the business

Not utilization of International Markets.

Smuggling

Law & Order situation

Opportunities

Globalization and free trade.

Access to new marketing information and skill.

New and unexplored markets.

Easy process of affiliation with International organizations.

Free and transparent trade.

Quality Standards.

Threats

Law & Order situation

Unmatched customer Demand/ satisfaction.

Competition in near future.

Political Instability


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Customer Benefits:

Customers will have a lot of benefits while shopping from Tahzeeb. They will find a vast range

of traditional and studded jewelry. The facility of customization will also be available like we

will provide custom jewelry on the choice of customers. They can find all kinds of jewelry under

one roof.

Uniqueness:

Tahzeeb have some unique features on its end. The products of Tahzeeb are the blend of our

traditional and current fashion. Convenient shopping experience is also the important feature.

The special designs of four provinces will be offered.

Future Products:

Tahzeeb has certain opportunities and can increase its product range. So future products can be:

Marketing strategy:

Target Market:

Target Market (Customers Identified)

To target any market segment, three points will keep in consideration:

Each segment size and growth

Segment structural attractiveness

Company objectives and resources

These above three mentioned features are inter-related. Like each business will target a segment

to which the business will be able serve properly. The largest, fastest growing segments are not

always the most attractive ones for every company. Some small businesses may lack the skills

and resources needed to serve the larger segments. Or may these segments be too competitive for

such business. This type of business may select segments that are smaller and less attractive, in

an absolute sense, but they are potentially more profitable for them. The business should enter


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only segments in which it can offer superior value and gain advantages over competitors.

Tahzeeb is going to target the segment which is not much growing because our selected target

customers are only those who like jewelry. According to our resources, that segment is suitable

for our business.

Demographic Features:

We did segmentation on gender basis. And we are going to target only female irrespective of

their age, income level, area of their belonging, profession and anything else. We target the

whole female market. Market size is also favorable for our business. As they are fond of

shopping and spending money, so the frequency of their visits will also be high.

Promotion Mix:

A companys total marketing communication mix also called its promotion mix consists of the

explicit combination of advertising, sales promotion. Public relations, personal selling, direct

marketing tools that the company uses to chase its advertising and marketing objectives.

Following are the five promotion tools:

Advertising

Sales Promotion

Public Relations

Personal Selling

Direct Marketing

Advertisement:

Any paid form of non personal and promotion of ideas, goods, or services by an identified

sponsor. We will use three ways of advertisement i.e.:

Advertising on Radio FM99 & FM100 on peak timings.

Two newspapers will be used for advertising i.e. Express and Jang. Ad will be published

on top of the last page.


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The medium of cable will also be used for advertisement of Tahzeeb. Star Plus is very

famous channel among females thats why we will prefer this and our ad will be played

on Prime time.

We will also promote Tahzeeb Ornaments through out door media. We will display bill

boards on Islamabad Highway, Ninth Avenue and in Blue area.

Sales Promotion:

Short term incentives to encourage the purchase or sale of a product or service.

In the beginning, we will offer a short percentage of discounts. If a customer does

shopping of more then Rs. 7000, she will get 5% discount.

We will also offer some gifts to our first 100 customers.

Exchange facility will also be offer.

Direct Marketing:

Direct communications with carefully targeted individual consumers, the use of telephone, mail,

email, and other tools to communicate directly with specific consumers. We will collect the

specific customers data like their telephone numbers and their addresses who will visit our store.

We will send them Eid cards. Or we will wish them on special occasions like their birthdays and

invite them to visit our shop.

Pricing:

A retailers price policy must in shape with its target market and positioning. During the past

decade, marketers have noted a basic move in consumer attitudes towards price and quality.

Many businesses have changed their pricing approaches to bring them into line with changing

economic environment and consumer price acuity. More and more marketers have adopted value

pricing strategies which are offering just the right mixture of quality and good service at

reasonable price. (Kotler, 2005)


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General Pricing Approaches:

The price the company charges will be somewhere between one that is too stumpy to produce a

profit and one that is too high to produce any demand. Product costs set a floor to the price;

consumer perceptions of the products value set the ceiling. Between these two limits, the

company must consider competitors prices and other external and internal factors to find the

best price. General approaches include the following:

Cost-Based Pricing

Value Based Pricing

Competition-Based Pricing

Cost-Based Pricing:

Cost plus pricing is adding up a regular markup to the cost of the product.

To demonstrate markup pricing, we have to consider following:

Variable cost

Fixed Cost

Expected unit Sales

To calculate unit cost, following formula is used:

Variable cost + Fixed cost / unit sales

Markup Price is calculated in the following way:

Unit cost / 1 desired return on sales

Value- Based Pricing:

A growing number of companies are basing their prices on the products perceived value. Value

based price uses buyers perceptions of value rather than on the seller are cost, as the key to

pricing. Value based pricing is the undo process of cost based pricing. The company set its target

price based on customers perception of the product value. The targeted value and price then


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derive decisions about product design and what cost can be incurred. As a consequence, price

begins with analyzing consumer needs and value perceptions, and price is set to match

consumers perceived value.

Competition Based Pricing:

Consumers will base their decision of a products value on the prices that rivals charge for

parallel products. One form of the competition based pricing is going rate pricing in which a firm

bases its price largely on competitors prices with less concentration paid to its own cost or a

demand. The firm might charge the same as, more than, or less than its key competitors.

Cost-Based Pricing (Strategy of Tahzeeb):

We will set our prices according to cost based pricing strategy. This will suit to our business. The

reason not to choose value based pricing is that consumers perception about our products is not

very strong means most of them think that these are very inexpensive and the reason not to

choose competitors based pricing is that our competitors are very fragmented and most of them

also using cost based pricing which is more beneficial. It is also suitable because it is fair to both

buyers and sellers, buyers and sellers will be having equal benefits in this method. We will use

30% markup from above the cost.

Sales and Distribution:

We are opening a retail outlet. Sale will be made through that store. No other distribution

channel will be available. Customers will have to visit our store in order to make purchases.

Place Decision:

Retailers often point to three critical factors in retailing success: location, location, and

location (Philip Kotler). It is very necessary that retailers desire the location which is

approachable by the target market in region that are consistent with the retailers positioning.

Small retailers may have to mend for whatever locations they can get or pay for. Keeping these

things in consideration, we have selected a location or a store Jinah Super, which is accessible


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for a large number of customers from different related areas of Islamabad. We select it also

because Jinah Super market is now a shopping hub and we can target our customers more easily.

Design of our outlet:

We will design and set our outlet in an artistic way that will definitely depict the theme of our

business. Walls would be designed by ordinary clay, Wood will be the most integral component

of the design to give more of a natural and raw look- a nice mixture of contemporary and

traditional architecture - orange and yellow colors would be brought into the design in relevance

with the rich heritage and culture and also it presents the color combination of Tahzeebs logo.And this scrupulous effort would be done by the designers them selves to gild the outlet with

these time-honored embellishments.

Layout of Tahzeeb:

This is the outlet of Tahzeeb. The location of our outlet is in Jinah Super, Islamabad. We select

this location because the most famous brands are located there and this is the busiest market of

Islamabad. We design our outlet to keep in mind the convenience of our costumers. The entire

items are easily visible. On the very left corner there is our counter from where we take delivery

of our items and collect our payments from our customers. On the left corner there are shelves on

which we shall display our handmade and traditional jewelry. And on the front side and right

corner we will display our different types of ornaments. We will design it in such a way that our

layout will help our customer in making choices.


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Evaluation of Industry and business Environment:

Porters Five Forces Model:

Porter suggested that while evaluating industry and business environment, firstly you have to

know the name of the industry in which you compete. If you are competing in more than one

industry, you have to list each industry separately. Tahzeeb is dealing in clothes, shoes, bags andjewelry, which mean we can say these are four separate industries. But in todays modern era, we

relate all these items to fashion and fashion industry has become very broad. Keeping in mind

this thing, we as Tahzeeb are competing in Fashion Industry. Porters five forces model helps toanalyze the industry environment and also directs about competition prevailing in that particular

industry.


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Porter explains that in any industry there are five forces that influence what happens within the

industry:

Customers

Suppliers

Competitors

Potential New Entrants Substitute Products

Customers:

Customers are the buyers who purchase our products. If customers have various choices and

have more substitutes of our products, their bargaining power will be high. Tahzeeb is the only

shop in Islamabad which offers variety of products and dealing in large variety of ornaments so

our customers have less bargaining power.

Suppliers:

Suppliers are an important factor which can influence the business environment. Suppliers of raw

materials, components, labor, and services to the firm can be a source of power over the firm.

Suppliers bargaining power will be maximum, if they are few and concentrated. Tahzeeb will

basically have number of suppliers who will be providing all the accessories we need.

Bargaining power of those will be low because there are a large number of suppliers we will deal

with.

Competitive Rivalry:

Competition prevailing in the market is a very essential factor. If competitors are very aggressive

and very large in number, competitive rivalry will be intensive. In fashion industry, we can


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observe that competition is increasing rapidly but competitors do not compete on price basis.

They compete on non-price dimensions like innovation, marketing strategies. Tahzeeb is also

going to tackle this stiff competition by bringing something different in the market.

Threat of New Entrants:

If entry and exit barriers are less in an industry, threat of new entrants will be high. In fashion

industry, threats of new entrants are also high because new firms normally have not to face legal

or any other type of restrictions.

Threat of Substitutes:

If in the market, substitutes of your product are more, threat of substitutes will be high because

customers will have a lot of options and can easily switch to the competitors products. Incase of

Tahzeeb, threat of substitute is more because already there are a lot of existing indirect

competitors.


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Marketing strategy:

Target Market:

Target Market (Customers Identified)

To target any market segment, three points will keep in consideration:

Each segment size and growth Segment structural attractiveness

Company objectives and resources

These above three mentioned features are inter-related. Like each business will target a segment

to which the business will be able serve properly. The largest, fastest growing segments are not

always the most attractive ones for every company. Some small businesses may lack the skills

and resources needed to serve the larger segments. Or may these segments be too competitive for

such business. This type of business may select segments that are smaller and less attractive, in

an absolute sense, but they are potentially more profitable for them. The business should enter

only segments in which it can offer superior value and gain advantages over competitors.

Tahzeeb is going to target the segment which is not much growing because our selected target

customers are only those who like handicrafts. According to our resources, that segment is

suitable for our business.

Demographic Features:

We did segmentation on gender basis. And we are going to target only female irrespective of

their age, income level, area of their belonging, profession and anything else. We target the

whole female market. Market size is also favorable for our business. As they are fond of

shopping and spending money, so the frequency of their visits will also be high.


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Promotion Mix:

A companys total marketing communication mix also called its promotion mix consists of the

explicit combination of advertising, sales promotion. Public relations, personal selling, direct

marketing tools that the company uses to chase its advertising and marketing objectives.

Following are the five promotion tools:

Advertising Sales Promotion

Public Relations

Personal Selling

Direct Marketing

Advertisement:Any paid form of nonpersonal and promotion of ideas, goods, or services by an

identified sponsor. We will use three ways of advertisement i.e.:

Our Pamphlets and brochure will be placed on the big departmental stores of the

city, i.e. City center, Meer shopping centre, Shopping center & Shehbaz store.

Advertising on Radio FM106 on 8:00 Pm to 12:00 Am.

Two newspapers will be used for advertising i.e. Nawa-e-waqt and Jang. Ad will

be published on top of the last page.

The medium of cable will also be used for advertisement of Tahzeeb. Star Plus is very famous

channel among females thats why we will prefer this and our ad will be played on Prime time.

Sales Promotion:

Short term incentives to encourage the purchase or sale of a product or service.

In the beginning, we will offer a short percentage of discounts. If a customer does

shopping of Rs. 3000, she will get 5% discount.

If someone buys three pieces of attire, will get one mobile pouch free.

Exchange facility will also be offer.


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Direct Marketing:

Direct communications with carefully targeted individual consumers, the use of telephone, mail,

email, and other tools to communicate directly with specific consumers. We will collect the

specific customers data like their telephone numbers and their addresses who will visit our store.

Pricing:

A retailers price policy must in shape with its target market and positioning. During the past

decade, marketers have noted a basic move in consumer attitudes towards price and quality.

Many businesses have changed their pricing approaches to bring them into line with changing

economic environment and consumer price acuity. More and more marketers have adopted value

pricing strategies which are offering just the right mixture of quality and good service at

reasonable price. (Kotler, 2005)

General Pricing Approaches:

The price the company charges will be somewhere between one that is too stumpy to produce a

profit and one that is too high to produce any demand. Product costs set a floor to the price;

consumer perceptions of the products value set the ceiling. Between these two limits, the

company must consider competitors prices and other external and internal factors to find the

best price. General approaches include the following:

o Cost-Based Pricing

o Value Based Pricing

o Competition-Based Pricing


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Cost-Based Pricing:Cost plus pricing is adding up a regular markup to the cost of the product.

To demonstrate markup pricing, we have to consider following:

Variable cost

Fixed Cost

Expected unit SalesTo calculate unit cost, following formula is used:

Variable cost + Fixed cost / unit sales

Markup Price is calculated in the following way:Unit cost / 1 desired return on sales

Value- Based Pricing:

A growing number of companies are basing their prices on the products perceived value.

Value based price uses buyers perceptions of value rather than on the seller are cost, as the

key to pricing. Value based pricing is the undo process of cost based pricing. The company

set its target price based on customers perception of the product value. The targeted value

and price then derive decisions about product design and what cost can be incurred. As a

consequence, price begins with analyzing consumer needs and value perceptions, and price is

set to match consumers perceived value.

Competition Based Pricing:

Consumers will base their decision of a products value on the prices that rivals charge for

parallel products. One form of the competition based pricing is going rate pricing in which a

firm bases its price largely on competitors prices with less concentration paid to its own cost

or a demand. The firm might charge the same as, more than, or less than its key competitors.

Cost-Based Pricing (Strategy of Tahzeeb):


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We will set our prices according to cost based pricing strategy. This will suit to our business. The

reason not to choose value based pricing is that consumers perception about handicrafts

products is not very strong means most of them think that these are very inexpensive and the

reason not to choose competitors based pricing is that our competitors are very fragmented and

most of them also using cost based pricing which is more beneficial. It is also suitable because it

is fair to both buyers and sellers, buyers and sellers will be having equal benefits in this method.

We will use 30% markup from above the cost.

Sales and Distribution:

We are opening a retail outlet. Sale will be made through that store. No other distribution

channel will be available. Customers will have to visit our store in order to make purchases.

Place Decision:Retailers often point to three critical factors in retailing success: location, location, andlocation (Philip Kotler). It is very necessary that retailers desire the location which is

approachable by the target market in region that are consistent with the retailers positioning.

Small retailers may have to mend for whatever locations they can get or pay for. Keeping these

things in consideration, we have selected a location or a store in Green Center, Satellite town,which is accessible for a large number of customers from different related areas of Satellite town

market. We select it also because of the demand of the customers which we became to know

from questionnaires result. Satellite town market is now a shopping hub.

Design of our outlet:

We will design and set our outlet in an artistic way that will definitely depict the theme of our

business. Walls would be designed by ordinary clay, Wood will be the most integral component

of the design to give more of a natural and raw look- a nice mixture of contemporary and

traditional architecture - orange and yellow colors would be brought into the design in relevance


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with the rich heritage and culture and also it presents the color combination of Tahzeebs logo.

And this scrupulous effort would be done by the designers them selves to gild the outlet with

these time-honored embellishments.

Layout of Tahzeeb:

This is the outlet of Tahzeeb. The location of our outlet is in green centre in satellite town

Gujranwala. We select this location because the most famous brands are located there and this is

the busiest market of Gujranwala. We design our outlet to keep in mind the convenience of our

costumers. The entire items are easily visible. On the very left corner there is our counter from

where we take delivery of our items and collect our payments from our customers. And beside

the counter we have our handmade bags revolving stand. We have different styles and sizes of

bags available there. On the left corner there are shelves on which we shall display our

handmade and traditional jewelry. And on the front side and right corner we will display our

embrioded clothes and khaddi wear on the rods. On the right side we will display our shoes on

the racks. Our layout will help our customer in making choices

Documents

Tehzeeb Ornaments