BUS 681 Professional Development Class
Marketing strategy and Product Mix Evaluation for
Global Village, Peoria Heights
Spring 2007
Authors:
Marketa Veberova, Ivona Taborska
Table of Contents:
1 INTRODUCTION 4
2 FAIR TRADE 5
2.1 HOW DOES THE GOODS BECOME FAIR? 6
2.2 LABELS 7
2.3 FAIR TRADE SIGNIFICANCE 8
2.4 CRITICISM OF FAIR TRADE 9
3 WHAT IS GLOBAL VILLAGE? 11
3.1 BRIEF HISTORY 11
3.2 WHAT PRODUCTS IS GLOBAL VILLAGE SELLING? 12
3.3 VOLUNTEERS AND THEIR ACTIVITIES 13
3.3.1 BOARD OF DIRECTORS 14
3.3.2 SHOP 14
3.3.3 EDUCATION AND COMMUNITY OUTREACH 15
3.3.4 NEWSLETTER 18
3.3.5 WEBSITE 18
4 GLOBAL VILLAGE MARKETING ACTIVITIES 19
4.1 THEORETICAL FRAMEWORK 19
4.2 LOCATION 20
4.3 PROMOTION AND ADVERTISING 20
4.3.1 CREATING A NEW BROCHURE FOR GLOBAL VILLAGE 22
4.3.2 RECOMMENDATIONS FOR GLOBAL VILLAGE WEBSITE 23
4.3.3 CUSTOMER SURVEY 26
4.4 FAIR TRADE SHOPS COMPARISON, PRICE 30
4.4.1 THREATS AND WEAKNESSES 32
4.4.2 RECOMMENDATIONS 34
4.4.3 STRENGHTS, OPPORTUNITIES 35
4.5 PRODUCT MIX ASSESSMENT 37
4.5.1 METHOLOGY USED 37
4.5.2 Food group 41
4.5.3 Women Accessory group – bags, purses, scarves 43
4.5.4 Home-Deco group 43
4.5.5 Informational group 44
4.5.6 Musical Instruments 44
4.5.7 Jewelry group 44
4.5.8 Clothes & Shoes, Woven products 46
4.6 VOLUNTEERS 46
5 FINAL RECOMMENDATIONS 49
5.1 PROMOTION………………………………. 49
5.2 PRODUCT MIX 50
5.3 PRICE 50
5.4 PLACE 50
5.5 VOLUNTEERS 51
6 CONCLUSION 52
PREFACE
The Introduction to this paper is informing the reader about how we learned about Global Village and how the cooperation was started. Then, we are focusing on Fair Trade, describing its concept, rules, significance and touching on the criticism of Fair Trade. In section Three, we are covering Global Village as an organization, describing its history, structure, products and volunteer activities. The following part, section Four, is characterizing current Global Village marketing activities, introducing customer survey, industry comparison and product mix analysis which are all bases for recommended marketing strategy plan in part six. Conclusions are following in the last section of this paper.
1 INTRODUCTION
We first visited Global Village shop in Peoria Heights in November 2006 when searching for “special” gifts we can get for our friend’s birthday and also idea of Fair Trade was something we wanted to know more about. (Marketa was looking after a flier she received from Global Village volunteers about a year ago on a multicultural festival on Bradley campus. In that time, we could not come since we did not own a car.)
During our first visit, we both knew right away, that we like Global Village very much and we want to get involved in its activities. We became volunteers and after the Christmas, started coming to the shop once a week or once in two weeks to help with selling products, unpacking or displaying goods received from suppliers. Of course, a general rule we laugh about is, that all volunteers in Global Village become in the same time customers and buy products or food here as well.
After some time, we realized that around Global Village, there are gathering really interesting and diverse people from the local Peoria area: peace activists, nurses, teachers, professors, other MBAs, artists, environmentalists, yoga instructors or just open minded individuals, many of whom traveled around the world. We felt that this is a kind of environment we want to be at.
Later on, when we were deciding about a topic for BUS 681 Professional Development class (a non for profit project in cooperation with a local organization for our MBA program), we chose to work with/for Global Village again. The president of the organization Nancy Long and the whole board agreed. We worked out the project topic: Global Village needed assistance in (1) evaluating their product mix and (2) developing a marketing strategy. The organization experienced slow growth in past years but would like to increase its overall sales.
2 FAIR TRADE
“Fair Trade is a trading partnership, based on dialogue, transparency and respect that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing their rights of, disadvantaged producers and workers – especially in the South. Fair Trade organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade” .
Essential parts of the whole process are: Fair Trade organizations, shops, retailers, which offer Fair Trade handcraft and food. These organizations and individuals are raising awareness of Fair Trade principles. From the consumers’ side is coming the support in the form of Fair Trade goods purchases. Moreover, consumers have also the power to influence stores and supermarkets by demanding Fair Trade products.
Picture: 1 Fair Trade system
Fair Trade is aiming to attain following main goals:
1. Improve livelihood of impoverished producers, improve their access to market, strengthen producers’ organizations, and provide long term relations and this way also stable prices.
2. Develop opportunities for disadvantaged producers, above all of women and aboriginal inhabitants, protect children from abuse in production process
3. Enhance consumer’s knowledge about negative effects of international trade and this way enable them to use its buyers’ force in positive way
4. Show example of trade partnership through dialog, respect and transparency
5. Contribute to campaigns, that aim to change rules of conventional international trade
6. Protect peoples right, social justice, support environmentally friendly behavior
2.1 HOW DOES THE GOODS BECOME FAIR?
To ensure, that the trade is fair, there are several standards (rules) set on producers’ side as well as on traders’ side and each product has to comply with certain criteria. Although there are several organizations that certify Fair Trade products, processes and organizations and the customer can came across different Fair Trade labels, the organizations are internationally cooperating and they revere the same Fair Trade principles.
Generally the producer considering Fair Trade certification can contact either FLO – Fair labeling organization or its affiliate FTC- Fair Trade Certified. Both organizations facilitate the process of complying with set standards.
All producer organizations have to be led democratically, transparently and will let all members to participate on profit. The farmers are required to follow principles of sustainable development and restricted from using chemicals and growing GMO plants or animals. No adult or child is being forced to work. Producers have right to use consulting in management, marketing, accounting areas.
Consequently for traders, the standards require long term relationship, the producer can rely on. The trade is done directly with producers and the trader is trying to avoid middlemen. The producers receive fair wages for their country, which is allowing them to live in decent conditions. Further, if producers ask for it, the trader will provide pre-financing. Producers are paid premiums above the basic prices, which are meant to help them develop their businesses and community.
The implemented practices are checked by certifying organizations, to ensure compliance with them and FLO is having a register of all certified organization available on its web-sites.
2.2 LABELS
There are several labels which indicate, that the products or an organization complies with Fair Trade standards. The label can be attached either to the product or to the organization that participates in the Fair Trade process (shop, store….).
While shopping we can come across several labels.
Both of these labels are attached to the products. First one is more common in Europe. The second one is more used in United States and Canada.
These two labels are used to mark organizations, which are selling Fair Trade products. The certificate should be placed on a visible place in the shop. But it happens that they appear only on the web-page or in brochures or informational materials of the organization. Both labels are common in United States.
2.3 FAIR TRADE SIGNIFICANCE
Fair Trade is still relatively small, but it is dynamically growing market segment. It is also difficult to track all products sold under different labels. Most easily traceable are the products sold under the label FAIRTRADE (label n. 1). It was about 1,55 billion USD in the year 2005, which represented 37% increase in comparison with previous year . This is only 0,001% of the total world trade, but it is significant for the farmers and artisans, who are included.
On the US market Fair Trade Certified coffee is the fastest-growing segment of the $11 billion U.S. specialty coffee market, growing an average of nearly 80% every year since 1999. Other Fair Trade product categories are also booming - in 2005, tea increased 187% and rice almost tenfold, and the first half of 2006 saw cocoa grow 110% and sugar 241% .
COFFEE CASE: HOW IS THE PRICE COMPOSED? STORY OF A COFFEE PRODUCER
The price paid to the farmers and artisans reflects the costs of production and costs of living of producer’s family, costs associated with run of the cooperative or costs of harmonization with Fair Trade.
For example, coffee Arabica from Latin America has a minimal purchasing price of 1.21USD for 1 pound. Additionally to each pound 0.05 USD is paid. This money (social premium) goes to the cooperative’s fund and the premium is further used for development purposes. All members of the cooperatives benefits from this funds.
In case, that set Fair Trade price falls to the level of common free market price, producers always get additional 0.05 USD per pound.
SEGUNDO’S STORY
Segundo Garcia is a farmer in La Corona Nicaragua. He is growing organic and non-organic Fair Trade coffee and sells it at the price of $1.26 for a non-organic pound and $1.41 for a pound of organic coffee. These stable prices enabled him to survive a tough period for coffee growers in the time span between 2000 and 2004 when the free trade prices dropped to 60 - 80 cents per pound. “Fair Trade isn’t perfect, Segundo is still poor, but Fair Trade provides a living wage and ensures that farmers can keep their land when the market takes a dive. ” Segundo is supporting his family - wife and son (currently ill, left without proper treatment, because the family can’t afford it). He is hoping to sell 100% of his coffee at the Fair Trade prices, but the demand isn’t great enough.
2.4 CRITICISM OF FAIR TRADE
Similarly to other free trade adjustment initiatives also Fair Trade idea and current Fair Trade system has its critics that either disagree with going too far or grumble about not helping enough.
The most powerful argument is supported by Adam Smith Institute, which blames Fair Trade from overproduction and shielding market inefficiencies. The fixed Fair Trade prices might cause excess of supply, which can consequently decrease prices on non Fair Trade market. As a result producers which are not included in Fair Trade systems sell for lower prices and suffer more then they would, if there was no Fair Trade system at all.
Other objections are raised against Fair Trade practices that use current setting of trading system and do not build completely independent structure of fairer, fully independent trading system.
Thirdly, the prices of Fair Trade goods are determined by Fair Trade organizations and recent critique is pointing at rigid systems, which does not allow as frequent price adjustments, as the system would deserve.
Finally, Institute for Economy and Democracy condemned Fair Trade for having wrong direction. It suggests that all goods produced in the country should also stay there, this way the country is able to take full advantage of the product on many levels. If a society spends one hundred dollars to manufacture a product within its borders, the money that is used to pay for materials, labor and, other costs moves through the economy as each recipient spends it . Due to this multiplier effect, a hundred dollars worth of primary production can add several hundred dollars to the Gross National Product (GNP) of that country .
3 WHAT IS GLOBAL VILLAGE?
We would like to provide to a reader a brief description of Global Village, its mission, history and current activities. Global Village is all volunteer, non for profit organization, which is operating a small shop located in Peoria Heights. It offers large variety of Fair Trade gifts produced by farmers and artisans from around the world and thereby provides the Peoria area market for their food, artistic and craft products. These people are often coming from underprivileged or poverty stricken communities outside or inside of the USA.
By taking part on Fair Trade, artisans and farmers are able to work in safer and healthier conditions for fair prices, which are reflecting the true costs of production. They are operating and controlling their businesses themselves, usually through self-help cooperatives. Long-term relationship with buyers and consistent orders help them to sustain their livelihood. In some cases, the producers gain an opportunity to take part on various educational or environmental programs, which help their personal and social development. All products sold in Global Village shop are satisfying requirements for Fair Trade given by Fair Trade Federation (as discussed earlier).
Global Village also serves as a source for spreading awareness in Peoria area about Fair Trade principles and promoting global economic and social justice. GV facilitates Peoria residents to further expand their cultural understanding and comprehension of global economy. Global Village volunteers are periodically organizing various seminars, sponsoring educational forums and lectures at local colleges, scheduling in store presentations and administering fundraising for development projects. Its mission is to stimulate more equitable and sustainable system of production and trade that promotes self sufficiency without exploitation and benefits people and their families.
Global Village is affiliated with other Fair Trade organizations - Friends of the Third World and Fair Trade Federation that is setting standards and principles for its members, both for producers and buyers.
3.1 BRIEF HISTORY
Global Village was formed in 1999 as an ecumenical group and was incorporated in 2000. Ms Nancy Long became president and she is residing in this position until now. First, Global Village was being hosted and promoted by other shops: Crafts to You and That Cool Shop. Then, Nancy Long and enthusiastic group of people supporting a common vision opened own shop in Peoria Heights (1308 E. Sieberling, IL 61614) in July 2002. “Global Village has a vision of a world where everyone has enough to eat, a safe place to live, and the dignity of knowing that their work is appreciated,” said GB in newsletter in summer 2002, including special thanks to people who enabled to the shop to be opened. The opening hours were originally from Wednesday to Saturday from 10 AM to 4 PM. This shop was run entirely by volunteers who were taking two shifts, from 10 AM to 1PM and from 1PM to 4PM. Global Village started selling Fair Trade arts and foods from all around the world, for example from India, Nepal, Bangladesh, Philippines, Malaysia, Ghana, Burundi, Guatemala, Mexico, and many other. It is slowly building awareness among local community and also its customer base. Currently, it is open from Tuesday to Saturday, 11 AM to 5 PM.
3.2 WHAT PRODUCTS IS GLOBAL VILLAGE SELLING?
Global Village is offering several groups of products:
• Food
The customers can choose from large variety of Fair Trade coffee and tea. They can also buy chocolate, nuts, olive oil, dried fruits, honey or cocoa.
• Books, note cards, postcards, posters and stickers
The shop offers several publications focusing on social and economic justice issues (for example How the Wall-Mart is destroying America). Additionally, Global Village has a good selection of hand made or printed greeting cards, postcards and it also sells variety of stickers, posters, buttons and calendars.
• Other Gifts
Customers can purchase here many unique ethnic gifts – baskets, trays, kitchen and table ware, soaps, candles, wall hangings, carvings, picture frames.
• Jewelry
Large variety of jewelry consists of bracelets, ear rings, necklaces or rings of many styles and colors can be found here as well.
• Clothes and accessories
Global Village also sells t-shirts, shirts, dresses, pants, skirts, shoes, jackets, purses, wallets and portfolios.
• Instruments
The shop supplies its customers with many traditional musical instruments from all around the world such as drums, flutes, singing bowls, tambourines, gongs, thumb pianos and many more. These instruments can be also used as decorative items.
• Toys
Children can find here an interesting variety of toys with educational and entertainment purpose, such as kites, puzzles, puppets, stuffed animals or books.
3.3 VOLUNTEERS AND THEIR ACTIVITIES
Global Village in Peoria is entirely run by volunteers. They are coming from different backgrounds and it is a very diverse group including people of all ages. Volunteers are devoting part of their free time to Global Village which is fully depending on availability and dedication of each of them.
Volunteers are taking part on following activities within the organization:
3.3.1 BOARD OF DIRECTORS
Currently comprises of twelve members and two advisory members. All are serving two year period and next elections will take place in May 2007. Working members and their area of responsibility is listed bellow: Nancy Long - President; Doug Thompson - Vice President, Ruth Sharp - Treasurer, Joanne Fought - Secretary, Tonya Sneed - Purchasing, Luan Railsback - Website, Dorothy Murray & Norma Bader - Volunteers Management, Clare Tschirn - Inventory, Sharon Williams - Newsletter, Kate Koehler - Community Outreach, Melanie Butts - Education. There will be new position added of Publicity Chair from this year.
The Board meets once a month to discuss various issues regarding sales in last month, website updates, volunteers/special events, purchasing, inventory, education, current development projects, themes for the shop, sponsoring and upcoming events.
3.3.2 SHOP
There are various activities connected to the shop operations which need to be covered by volunteers: shop design, product display, inventory, purchasing, book keeping, daily operations stuffing.
The main core of activities is performed by board members, where each person has an additional responsibility. Daily operation staffing is covered by board members and additional volunteers, who are interested to get involved in GV activities. They can come to the shop once a week, once a month or less and help with selling the products, unpacking and displaying of new goods, writing receipts and mainly each volunteer introduces the concept of Fair Trade to newcomers to the shop. The education is considered to be essential part of Global Village Activities.
The new volunteers, who show interest to help in the shop, are usually being trained by experienced volunteers during regular opening hours, for at least two shifts – 6 hours altogether. Then, they can work in the shop on their own.
3.3.3 EDUCATION AND COMMUNITY OUTREACH
Every year, Global Village takes part on various educational or environmental activities – Earth Day in Nature Centre (Peoria). Clean Water Celebration in Riverfront Park (Peoria), Moss Avenue Sale (Peoria), Cultural Festival on Bradley University, where it is attempting not only sell its products but also educate people about Fair Trade and conditions of poor farmers and artisans from impoverished countries.
Additionally, Global Village members organize presentations and lectures on Corporate Ethics, Fair Trade or Haiti Development project on various places – Bradley University, Nature centre; and workshops for example on nonviolent communication. It is also possible to borrow for free several educational documentaries or movies from Global Village about toxic waste, Wall-Mart, Haiti reforestation project, Iraq war and many more. People can also donate used glasses which are than shipped to Haiti.
HAITI PROJECT
Along with its main goal “supporting developing countries by selling products of local farmers and artisans”, Global Village supports poor people in third world countries by participation on development projects as Guatemala women support and Haiti reforestation.
From November 2006 Global Village started fund raising for “Trees for Haiti” project. The project is expected to be carried till the end of this year.
Trees disappearing with deepening poverty
Haiti is the poorest country in western hemisphere, where 54% of population lives on less than $1 a day , 80% of the population is unemployed and the rest is largely underemployed . Not only extreme poverty but also an over-population of the country led Haitians, skilled farmers, to plant and farm on the very steep hillsides. For that purpose, large part of country, that is mountainous, was cleared of trees. Treeless soil exposed to extensive farming quickly lost its fertility and is very vulnerable to erosion. Because peasants are not able to secure their living by agriculture production, they started to look for different source of income. They began to cut down trees to make a charcoal, which they use as a fuel for cooking. Current estimates say, that 90% of Haiti country is due to these two factors deforested . The country has not only problems with soil erosion aggravated by flooding but the ecological imbalance cause a lower retention ability of the soil as well. This fact raises the potential and graveness of the floods. Moreover, lower level of retained water makes people suffer from water shortages.
The current situation in Haiti is very severe and needs immediate action from both the Haiti people and international donors. Even dough local people know the basic principles of sustainable development they don’t have any more the means to afford the comfort of following them.
"My grandmother used to tell me stories about the mapou trees and how they should always be respected for the power that they had with the spirits, but that was a different time. People are poorer now and a lot of us don't have choices." - Dereston Jean-Louise, 45-
Ecologists fear, that in some Haiti regions, the situation is or may soon become irreversible. In May 2004, 1 700 people were killed by floods in Mapou region. With soil in some areas eroded beyond help, the government is looking into relocating communities, particularly from flood-prone zones .
GLOBAL VILLAGE SUPPORT
Global Village is aiming to raise and contribute $ 50 000 to reforestation efforts in Haiti. Up to $25 000 of each donation will be matched with the same sum of money from the matching fund provided by anonymous donor . The amount will be split among three nonprofit organizations: Konpay, the Quixote Center and the Lambi Fund.
Global Village customers have also an opportunity to contribute to Haiti reforestation efforts by purchasing original Haiti products. The entire profit from these sales will be added to the Haiti fund.
The first $5 500 raised, will be granted to the partner organization of Konpay, “The Children’s Movement for the Protection of the environment”- MEPE, in Cyvadier, southern Haiti. With the matching fund included, MEPE should receive $11 000. The cost of one tree is about $1 and the seeding success rate is slightly above 50%, thus as a result at least 5 500 trees can be planted . The MEPE project also aims to educate children about the environment and its protection. Till April 2007, Global Village succeeded to raise $ 14 000, thus covered fully the intended amount of donation for MEPE.
To bring closer Haiti environmental crisis, Global Village volunteer Tonya Sneed writes articles to Global Village newsletter and up-dates the progress of the money risen. She also arranges presentations in Forest Park Nature Center approximately once a month. Possible donors are informed about the project by flyers placed in Global Village store and by big poster behind the counter, nicely visible right from the entrance. Global Village, in pursuance of its “gifts for better world” mission, offers “tree gift certificates”. That way a person can be given a tree or a group of trees to his/her birthday, special occasion or holidays . The gift certificates have a variety of designs, usually seasonally changing (Christmas, Valentine, Easter design). People can donate through buying and presenting somebody a tree gift certificate, by placing money to a small box in the shop or by writing check or money order.
3.3.4 NEWSLETTER
The Global Village Newsletter is an important mean of communication with customers, volunteers and friends of Fair Trade. It brings them newest information about GB activities, development project, and various articles on social responsibility, volunteer corner and calendar of upcoming events. Through the newsletter, GB maintains important connection with people who are supporting the shop, reforestation in Haiti or who are interested in reading articles about social and environmental responsibility or anti-sweatshop legislation and news. Global Village is also trying to stimulate Fair Trade in local area, by nominating groups and businesses that decided to serve and stock Fair Trade coffee (Churches, Coffee shops) for Fair Cup Award.
Global Village decided to start sending out the Newsletter electronically as well, to save the paper & trees.
3.3.5 WEBSITE
Global Village’s website www.globalvillagepeoria.org provides its visitors with a basic idea on what Fair Trade concept means, how the shop in Peoria Heights is run, what kind of products are being offered to customers, including photographs, and it also brings news about upcoming events, contact information and links to other Fair Trade organizations. Currently, it is not possible to shop products online from the website.
4 GLOBAL VILLAGE MARKETING ACTIVITIES
4.1 THEORETICAL FRAMEWORK
The major marketing management decisions can be classified in one of the following four categories: product, price, place and promotion. We have decided to add one more categhory, people, since it is one of the most significant factors for Global Village success.
Each firm or organization attempts to generate a positive response in the target market by blending these five marketing mix variables in an optimal manner.
Product - is the physical product or service offered to the consumer. In the case of physical products, it also refers to any services or conveniences that are part of the offering. Product decisions include aspects such as function, appearance, packaging, service, warranty.
Price - Pricing decisions should take into account profit margins and the probable pricing response of competitors. Pricing includes not only the list price, but also discounts, financing, and other options such as leasing.
Place (distribution) - Place (or placement) decisions are those associated with channels of distribution that serve as the means for getting the product to the target customers.
Promotion – is related to communicating and selling to potential consumers. Promotion decisions involve advertising, public relations or different media types.
People decisions are those related to customer service. How does the organization want the workers to appear to the customers? What is the appearance or attitude of the customers?
4.2 LOCATION
Global Village is located in Peoria Heights on 1308 E Sieberling Street. In our opinion, the location close to Prospect Rd. is very convenient for customers since it is one of the main shopping streets in Peoria. On the other hand, Global Village is relatively hidden from customer’s eyes, in the side street. It would be helpful, if on Prospect Rd. could be a permanent board displayed which would draw attention and would be pointing out to the shop. Also, in this area, there are several shops selling ethnic products and clothes and they are representing relatively strong competitors such as Apache Junction od Harp & Thistle Imports on Prospect Road.
4.3 PROMOTION AND ADVERTISING
Global Village promotion activities were relatively scattered and are concentrating mainly on giving out brochures, visiting cards, newsletters, educational presentations provided outside of the shop and lectures on Haiti reforestation project. Global Village is a member of Peoria Heights Business Association, which supports local businesses and civic organizations in their marketing efforts, lists its members on their websites, posts news, organizes various events and attempts to increase visibility of its members. Also, Global Village is a member of Fair Trade Federation, which lists its members on website, unfortunately Global Village is not included on the members list for unknown reason.
In December 2006 and February 2007 GV put coupons for Fair Trade Divine chocolate (95c) to Peoria local newspapers trying to attract new customers. For February promotional period 35 coupons have been collected back from customers. After a new customer came to the shop, bringing a coupon, the volunteer working that day explained her/him the purpose of Global Village and origins of product sold here.
Our estimate is that about half of people were interested more in getting free chocolate - “coupon hunters” and will most probably never come back. The other half of people showed interest in the organization. However, it is hard to evaluate the entire impact of this promotional action on publicity.
Global Village does not have any advertising budget. In April 2007 there was nominated first Publicity Chairman in history of Global Village.
We would recommend creating advertising budget. We are convinced that it is very important to promote Global Village and Fair Trade and that the marketing budget would enable future publicity chair to work independently and more operatively within certain limits. Additionally, the board could better keep track of all marketing expenses. The details would be discussed and decided by the Global Village board of directors.
Additionally advertising through local radio would help Global Village gain publicity.
We would also suggest other ways of promoting Global Village such as T-Shirts, stickers, bags for customers with Global Village logo.
T-shirt
Sticker
4.3.1 CREATING A NEW BROCHURE FOR GLOBAL VILLAGE
We were suggested by various board members to design a new brochure for Global Village customers. The old brochure was still good and relatively informative, but it was created several years ago and some information were outdated, couple things were missing (a map of location of GB, explanation of Fair Trade concept, changed opening hours, website) and also we agreed that the new designed handout would help promotion of Global Village.
The old brochure was given to those customers, who were coming to the Global Village shop for the first time, so that they received basic information about what Global Village and its mission, who the GV volunteers are, and what products are offered to the customer. There was one paragraph about educational events of GV and contact information on the back page. The first page contained Global Village logo and its motto “Gifts for a Better World”. The brochure included a reproduced painting by African artist Tonny Mbawa and a photograph of ethnic carving of a standing figure (both sold in the shop). It was printed in black and white color on a yellow paper.
On the board meeting on April10, 2007 we have presented first draft of a new brochure and it was very positively accepted by all members. We asked everybody for suggestions in changing either content or design and we received feedback from several people, and incorporated it in our final version. The technical part of designing the brochure was carried out by Ruby Thompson, pro bono. She mainly used Photoshop program and the brochure was submitted to Global Village in PDF file.
When creating the new brochure , we made use of the same size (A4 folded into thee parts) because it worked well for its purpose. On the front page, we put Global Village’s name and its logo on the top. Bellow, there are two African women carrying a load on their head and back, originally a picture made from butterfly wings in Africa. Phrase “gifts for better world” is leaning above their heads as if it is saying a secret how to make their burden lighter. A sign under their feet says “a Fair Trade organization”.
Inside of the brochure, we decided to create a visual diagram helping people to understand, how Fair Trade is working and also describing the way, how each customer can help by purchasing Fair Trade products. We put a cartoon of Earth with a village (Global Village) right in the middle, and drew clear connections to all participants, who are taking part on Fair Trade: The customers from the Peoria area, poor artisans and farmers, Global Village shop, volunteers and a Fair Trade partnership between producers and consumers. We are attempting to evoke in the customer, that she/he is a part of global community and as such, she/he also has the ability to improve the community by supporting poor farmers and artisans by giving them chance to work in dignified conditions for fair wages. We used the brochure as a mean of educating of the customer.
Further, when the right side of the inside gets folded, it offers to the customer list of product she can purchase in the Global Village. Additionally, it gives information about product backgrounds and GV memberships in other organizations. On the back side, we placed a map of GB location, its address, phone number, website, email and opening hours.
We decided to design the new brochure to be printed in black and white colors, since it is more convenient for the GB (mainly cost-wise). It will be printed in few hundred copies on colored recycled paper.
4.3.2 RECOMMENDATIONS FOR GLOBAL VILLAGE WEBSITE
Creating a good website is one of very important promotion tools of each organization or business. In case of Global Village, the website has more informative role, bringing explanation about what Fair Trade is, describing purpose of Global Village, telling the news to customers and listing several products and their pictures. Currently, there are no online sales of Global Village products due to lack of manpower.
Global Village’s website is very simple, well organized and easy to understand. Also, its separate sites are logically linked to each other. It is divided into following parts: Home page, News, Current project, Resources, Contact us and Products. Its design is relatively plain. The website clearly states that Global Village is a member of Fair Trade Federation and Co-op America. The logo of GB is visible in the background as a semitransparent picture.
Website link has not been published on current brochure of Global Village, also the results of our customer survey showed, that only about one percent of the customers got to know about Global Village through its website.
However, there are many customers, who took a look at the website first after they learn about Global Village for example from their friends or family, to learn a)what products are being offered by GB b)what is the location of the shop or c)what Fair Trade means. They can also find out more about Haiti reforestation project online, after attending an educational presentation conducted by Global Village.
Link to Global Village website will be posted on the new brochure. We are recommending slightly restructuring and updating the website, since it is an important mean of communication with customers.
RECCOMMENDATIONS
• The Home page should additionally display a picture either from the shop or one of artisans to evoke more personal feeling and to get the customer interested in the website & Global Village
• The organizational description on the Home page is brief and apposite- we like that.
• News and Events should be more updated and it would be better if it provided more topics. For example, the main articles from each Newsletter.
• The Newsletters are great source of information and they are well placed on the News and Events Website.
• We would recommend putting Upcoming events to the upper part of the website, since they are hidden after clicking on News and Events link. Also more detailed description of the events and whether Global Village is going to be present would be more feasible.
• Current Project – Trees for Haiti is simple and well arranged website. We would just recommend updating of the picture in the upper part (above Trees for Haiti) since it does not display properly. Also, it would be better to use higher quality pictures for this project. (The black frame around pictures from last projects helps to highlight them.)
• Resources – no comments
• We would recommend switching Products and Contact Us labels, or put the Products even more towards the beginning, since selling the products from impoverished countries is one of the main reasons of GV existence.
• The Products are well organized and simple. However, we would again suggest updating the quality of some used picture materials (which look like scanned copies). Also, after we clicked on a particular product, for example Purses, this sentence crosses the picture of Purse: Available at 1308 E Sebierling, Peoria Heights, IL(no online sales at this time). Global Village is open Tuesday - Saturday from 10:00 AM to 4:00 PM It is very confusing.
• Other suggestions: Would it be helpful to the customers’ understanding if GB included Stories about particular farmers/artisans/cooperatives?
• Online donations and online gift certificates could be an option. Also “join our mailing list” table.
• What about using some dynamic graphic design?
• Global Village could get in touch with students on either Bradley or ICC, who could help to improve the design of the website
• It would be helpful to have Global Village website posted on other websites (Crossroads- Bloomington, Nature Forrest Centre- Peoria and such)
We liked following website http://www.fairworldgallery.com/catalog/index.php and suggest that Global Village can draw some inspirational inputs from this site.
4.3.3 CUSTOMER SURVEY
We have designed a customer survey to get feedback from customers about how people typically learn about Global Village, how frequently they shop here, what attract them to come and what additional product they would like to see here. In the optional part, the customers could fill their name, address, email and phone number if they wanted to receive the Global Village Newsletter or become volunteers . Also, the questionnaire was included in the newsletter for March 2007 and we received several of them back via post.
We asked GV volunteers for cooperation. Usually, it takes about 3-5 minutes to fill out receipt on each purchase. Meantime, the customer would answer our survey if she/he agreed to. After 5 weeks, we collected in total 57 surveys and closed the survey.
We received following answers from the customers and used them for our futher analysis:
A) 54% people come to the shop for the first time because of a friend or family member recommendation. 24% customers stop by because they are shopping in Peoria Heights and they see Global Village from the street. 7% learn about GV from their church community. The rest of customers attend Global Village presentation, a fair or other event, learn about the shop from newspapers, and knew the president Nancy Long or other reason suggested them to come.
Our findings: Global Village has a good reputation which is an excellent sign. Customer satisfaction is one of the main marketing strategy goals of most of profit or non-profit oriented businesses and organizations. Word of mouth can have a powerful impact, both positive and negative.
We would additionally recommend strengthening customers’ awareness about Global Village through other marketing tools such as advertising and promotional sales (included later in the report).
Church communities
Church communities are relatively significant consumers of Fair Trade coffee. People from this circle are willing to help the poor artisans and farmers by making their choices more responsible towards global community. According to Nancy Long, people from church communities are aware that they cannot buy all products from Global Village, but even purchases of one item are making a difference.
Usually a volunteer from Global Village or a person who supports idea of Fair Trade and promotes it in her/his church. Sometimes, speakers (volunteers) from Global Village are invited to talk about Fair Trade versus working conditions or sweatshops. Being informed, this group can make a decision to serve and stock Fair Trade coffee. The commitment needs to be maintained and further supported within the church community and also contact with Global Village must be continuously refreshed.
We believe that communication with various church communities (or educational institutions) should be additionally encouraged by Global Village as its own initiative; they could send a representative who would talk about Fair Trade and actively maintained contact with the groups. In our view, the best would be self-initiating, fair-trade and in the same time business oriented person, who would be interested to perform this activity as a part of voluntary her/his service within the Global Village frame.
B) We found out, that 50% of the customers come occasionally (once in three months), 38% of the visitors came fist time and there are 12% of regular customers. Additionally, there are 25-30 active volunteers whom we can consider as occasional or even regular customers. Our observation and own experience shows that a lot of times the volunteers buy Global Village products during their shift.
We are aware, that with shop of type, selling unique gifts, coffee or sweets, it is difficult to develop regular customer base. It is not convenient for most people to drive to Peoria Heights just to visit the shop, unless they are close by or need a particular product, such as Fair Trade coffee.
C) Customers of Global Village responded that their reasons to come are following: 59% visit the shop because they support the idea of Fair Trade, 39% like to buy unique products Global Village offers them and 4% of visitors have interest in particular craft or country.
We can deduce from these answers, that Global Village efforts to educate the Peoria area community about principles of Fair Trade are successful. The customers, when shopping in Global Village, know what the origins of the products are and that they were fairly traded. Also, many of the church communities in local area agreed to buy fairly traded coffee from Global Village and serve it in their church. So the idea of fairly traded products is essential for their decision. Nevertheless uniqueness of the gifts is attractive to customers as well.
What do you purchase
in Global Vilage? Number of customers
Fair Trade Coffee and Chocolates 8
Home deco 6
Music instruments and CDs 3
Literature, posters, stickers 5
Jewelry 14
Toys 2
Greeting cards 6
Ethic Clothes 5
Soap, incense sticks , jam 1
Bags and baskets 1
All of above 1
Other 1
D) We asked the customers what they mostly purchase in Global Village. Table on the right side lists their answers. The most popular products among customers are jewelry, Fair Trade coffee and chocolates, home deco and greeting cards.
E) We further asked the customers what products they would like to additionally purchase in Global Village. 41% of visitors answered more women accessories and 27% would like to have greater variety in home deco. 22% answered that they would enjoy more ceramics and clay products.
F) The questionnaires revealed likely profile of a typical customer. Only part of the customers left their names (34) in total but in our opinion, it is still a sufficient amount to find out who visits Global Village more, men or women? What is the age group of customers?
Typically, most buyers are women. Positive finding was that all age groups like to come to Global Village, including young generation in range from 10 to 25 years, which furthermore represents 35% of all customers.
Age group
G) Direct impact of conducted customer survey was that 24 people (42%) signed up to receive the Global Village Newsletter, which we consider to be an important marketing and educational tool. Also, 5 customers (8.7%) are willing to become volunteers and get involved in Global Village activities.
4.4 FAIR TRADE SHOPS COMPARISON, PRICE
To analyze and assess the business practices of Global Village store, we decided to compare it with similar nonprofit the Fair Trade stores. Our aim is to do an assessment in a sense of benchmarking, to find out, what Global Village can learn from organizations with the common goal – “Fair Trade instead of free trade”. Benchmarking analysis is a continuous process, of products, services and processes comparison with competitors or those organizations, which are considered to be a top performers in given industry . We wouldn’t call other Fair Trade stores competitors of Global Village, firstly because all these organizations are pursuing same goal of Fair Trade goods promotion secondly because each shop serve different area and therefore they do not directly interfere one with another. However, there is a possible threat of Fair Trade market becoming more saturated. In such case competition will start to play more significant role in the daily life of Fair Trade stores. To make results of benchmarking analysis well-ordered, we would deploy SWOT analysis.
SWOT analysis is a tool for auditing an organization and its environment, which helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors .
To conduce benchmarking analysis, we’ve visited and examined one shop from a national Fair Trade chain Ten Thousand Villages in Grays Lake – Northern Chicago and an independent Fair Trade store Crossroads in Bloomington. We are bringing up brief descriptions of both organizations.
TEN THOUSAND VILLAGES CHAIN
Ten Thousand Villages (TTV) has been selling Fair Trade goods for more than 60 years and it runs 160 Fair Trade stores around the United States . It is the most professional Fair Trade store chain in the US. The proficiency of the company is clearly visible from the shops design and display of goods as well as from information brochures and web-site. Even though the shops are volunteer run, Ten Thousand Villages organization pays a manager and assistant manager for each store. TTV employs professional designers’ team, skilled marketing group and management team to handle operations the whole chain. The business model is in its essence similar to franchise, because the corporate politics is set from the top, shops have very similar interior arrangement and they carry very similar products. In contrast to traditional franchisees, shops are run by organized volunteer groups. Ten Thousand Villages organization is vertically integrated, because it operates also a TTV wholesale.
When new group of volunteers wants to join the chain, they raise initial capital of $65 000 and thereafter qualify to enter. New store is designed by professional designers and a manager with assistant manager are assigned to the initiated Fair Trade business.
CROSSROADS
Crossroads store in Bloomington is an independent Fair Trade store, run solely by volunteers. It has a 19 year history. The store has a very good location on Main Street, downtown Bloomington. Store room is approximately 4 times larger compared to Global Village. Crossroads shop is very closely cooperating with Ten Thousand Villages organization, as they largely rely on TTV wholesale. The board members are currently pondering an accession to the Ten Thousand Villages chain.
FAIR TRADE STORE COMPARISON
The table bellow compares all three Fair Trade stores in major customer sensitive categories. The scale used ranges from 1 to 5; 5 for the best performance, 1 for the worst performance.
Table 1 Store Comparison
Global Village
Peoria Crossroads
Bloomington Ten Thousand Villages
Grays lake Chicago
Display, shop appearance 2 4 5
Courtesy and professionalism of personnel 5 5 5
Promoting a Fair Trade idea, explanation to new customers YES NO when we were there, but they usually do it YES
Fair Trade logo visibly placed in the shop YES NO NO
Stories of artisans and farmers placed in the shop YES YES YES
professional posters, flyers
Discount practices Hardly ever YES YES
Price level comparison Generally lowest 15% to 20% higher than Global Village 15% to 20% higher
than Global Village
Web-site design 3 1 5
Offers on-line shopping NO NO YES
Information Material design and content, Brochures, leaflets,… 3 4 5
Location of the store 4 4 4
4.4.1 THREATS AND WEAKNESSES
It is obvious, from the comparison of all three Fair Trade shops, that there are certain areas, which the store should re-consider.
Display, Store Appearance
Firstly, the display and shop appearance lags behind its benchmarks. The biggest challenge for Global Village store lies in less spacious store compared to other two stores. GV carries a large variety of products taking into account its size, therefore they can’t effort to display items in a way the benchmarks do. Ten Thousand Villages and similarly Crossroads have deco sections arranged by colors, thus when customers come, they immediately see, what will nicely comply with the color decoration of their houses. Further, the shops are divided into clothes, books and music, jewelry and food sections, which make it easier for shopping. Global Village is pursuing these practices likewise, but it is more difficult to do clear divisions in the space available. The variety of items sold in Crossroads and Ten Thousand Villages is similar to GV product portfolio, although there are some differences. TTV and Crossroads both carry fewer books and more of ethnic music. Moreover, both stores are mainly focusing on home deco and crafts.
Looking into display development of the Global Village itself, we have observed many positive changes over the past 6 months. Some resourceful volunteers started to combine various products. This is not only enhancing attractiveness of the products but offers suggestions for product usage after purchase as well. Putting together nicely arranged logical product groupings creates cozy “feel like home” atmosphere. Thereafter customer is leaving with a better impression and is more likely to find a product he/she is looking for.
Recently, we have observed more cart boards and short stories about artisans and farmers placed in the shop. Also some recipes appeared in the Global Village store. We are convinced that it is important to show origin of the products, people who made them and ways how to use them. We encourage Global Village to use more of these short stories. It is possible to add story about the country or about the material used to produce goods as seeds, wood or stone. Another creative idea is to place pictures of local people into blank frames GV sell.
Discount practices
Crossroads as well as Ten Thousand Villages stores put regularly seasonal products, above all clothes, on sale. This business practices help them to get rid off the goods that would sit on the shelves for long time, encroach space in store and bind the capital, which could be used in more useful way. Discount practices would be particularly useful for Global Village, because it would help with selling items, which are kept in the store longer than necessary and which encroach scarce space of the store. Plus these practices will release financial capital, which is otherwise stuck in the inventory.
Information materials
The information material design largely depends on the budget each store had set aside for promotional purposes. Global Village is currently using very low marketing budget and the business policy is not to spend too much on marketing. We will refer to this topic later in our study, because we are coming up with a suggestion of a new brochure.
4.4.2 RECOMMENDATIONS
Considering that display of products and neglected sales techniques are main challenges of Global Village store, we are suggesting to solve both issues at once. We recommend the organization to employ discount technique, whenever it is hard to sell some products.
Following practices are above all recommended for seasonal goods particularly clothes and holiday goods as Christmas Deco, Eastern and Valentine gifts and other occasional products. All these items should be considered for discount slightly before or right after the mean time is over. The discount percentage should reflect mark up and character of the product. Depending on the turnover and nature of other products sold in Global Village, we are recommending 6month to 1 year time span, after which these should be considered for discount as well. Increase of turnover by discount practices would enable the shop to offer large variety of goods in relatively small shop. Moreover, considering that GV still wants to explore, which products would be most appreciated by customers, discounts seem to be good complement to this core strategy. When it turns out, that customers are not interested in new varieties, lower prices will increase its attractiveness and facilitate purchase. Although general price level of the store is lower compared to other Fair Trade stores, some items might be overpriced anyway. Additionally, discounted goods have strong psychological impact on customers, especially when they are used to sales shopping. The “on sale” section should be visibly placed close to store entrance.
Addressing drawbacks of discount practices as looking “too profit oriented” or diminished perception of goods quality, we want to emphasize, that most of the US people are used to sales practices. Further, even regular customers, who are strongly supporting “Fair Trade idea” would chose products that are attractive to them, thus leaving unappealing products in the store.
4.4.3 STRENGHTS, OPPORTUNITIES
Our analysis has pointed out strengths of Global Village, which can be further developed and which represent an asset and advantage of the store.
Volunteers
Our comparison with Ten Thousand villages store and Crossroad store has revealed that all volunteers in Global Village are enthusiastic and very professional. From our experience Global Village volunteers are nice, courteous, responsible and helpful. Therefore they represent significant strength of the shop. We attribute this positive finding to quality training each volunteer receive (two shifts training with senior volunteer), useful information available in the text form (“black” book of volunteer practices placed in the shop) and via phone (“24/7” consulting with volunteer director). Finally, volunteers are not pressured or constrained by the board of Global Village, thus when they help in the shop they feel responsible and unconstrained to carry out their best intentions.
Low prices
Lower price level is another important strength of the company. Our findings show that prices in Global Village are generally 15% to 20% bellow both benchmarks. We have identified two possible reasons of this positive observation. Either GV is able to cooperate with cheaper producers and suppliers and thereafter offer better prices to customers, or the store is operating on lower margins compared to other Fair Trade shops. Both explanations result in conclusion, that GV has skilled business people among volunteers, who are able to ensure affordable price level for shoppers.
The conclusion of the benchmarking analysis and conclusions obtained so far are summed up in the following SWOT table.
Table 2 SWOT conclusion for Global Village
4.5 PRODUCT MIX ASSESSMENT
4.5.1 METHOLOGY USED
To assess product mix, Global Village board provided us access to the accounting program – QuickBooks - used by the organization. We could examine the Balance Sheets, Income Statements and some more detailed Reports used by the organization. Our task to recommend right mix of products was more complex than it would be if Global Village was a conventional commercial store. Profit generated by different product groups is not the only measurement of Global Village success. Some of these groups have for example the educational purpose, as discussed earlier.
However, we used profit generated as a primary measurement and number of products sold as a secondary measurement in our study to see the business site of this organization.
Reports used for product mix assessment
The key report used in our assessment was Sales by Item for the year 2006 (January through December). This Report described products by names, product numbers, quantity sold, profit generated, average cost of the goods sold and margin allocated to each item by the store. Because the store is carrying over 1300 items, we were not able to work with the entire report as it was, but we needed either to sort sold items by product groups or work only with certain portfolio of products from the whole product list. We chose to use a combination of both approaches.
Firstly we decided to extract group of Top Sellers and work primarily with them. The Top Sellers group was chosen according to the profit generated by each item throughout the year 2006. Our requirement was, that the profit would exceed or equal to $90 earned by item per year. This way we obtained 94 products, which were used for further analysis and recommendations.
We decided not to work with the entire list, which was very conveniently sorted to product groups in Income statement, because we realized, that these product groups are incomparable. Each group consisted of different number of products and therefore Income statement showed different profits partly because of different number of products included.
We used master group of 94 Best Selling Products as an indicator of desirable product portfolio. Further we divided this Best selling products into product groups to show, which product groups generated profit most efficiently.
We complemented our findings by Days in inventory formula , used to estimate how long it takes on average to sell item from a certain product group.
Days in inventory = Average Inventory
(Sales/360)
The attempt of organizations is to have the days in inventory as low as possible, therefore the turnover of goods as fast as possible. This formula also shows how much of financial capital is tightened in the particular inventory. To employ this formula, we made average from the two Balance sheet statements from beginning and end of the year 2006 to obtain Average inventory.
Sales were copied from the 2006 year Income statement. By calculating we received days in inventory for various product groups.
Days in inventory formula will complete our analysis and underline significance of our findings from 94 Top Sellers group.
Table 3 First 20 products from the 94 top sellers list, full version is enclosed in the Appendix
Number Product Group Product Name Quantity Profit $
1 Food-Chocolate Chocolate, Organic dark w/ Almonds 215,00 547,51
2 Food-Oil Olive oil 74,00 490,80
3 Info bumper sticker(s) 350,00 423,30
4 Food-Chocolate Chocolate, milk w/ hazelnuts 151,00 358,14
5 Food-Chocolate Chocolate, Organic very dark 139,00 350,21
6 Accessory Camera bag, large, blue 13,00 345,93
7 Food-Chocolate Chocolate bars, milk, small Divine 346,00 323,29
8 Food-Chocolate Chocolate, dark, small, Divine, 1.5 oz. 339,00 309,93
9 Food-Tea Tea, organic ginger in satin bag 44,00 309,86
10 Accessory Knit silk purse with flap and fringe, zipper 15,00 300,00
11 Info Button(s) 203,00 280,94
12 Food-Chocolate Chocolate, white, bar 113,00 259,06
13 Musical Ins. Singing bowl with baton 11,00 259,00
14 Food-Chocolate Chocolate, large, dark, Divine, each 110,00 253,45
15 Accessory Silk scarf, handknit 15,00 243,58
16 Accessory Purse, small, recycled, churro 15,00 240,48
17 Food-Coffee Coffee, French Roast, Organic, 1 of 6, 10 oz. 32,00 230,23
18 Food-Coffee Coffee, hazelnut creme, decaf, 12 oz, 1 of 6 26,00 222,72
19 Info Calendar, Peace, 2007 18,00 221,23
20 Food-Coffee Coffee, Hazelnut, 12 oz, 1 of 6 28,00 205,40
Following table is ranking Product groups according to their turnover starting from the best, going to the worst. Green color highlights products that are sold quickly, red color signals problem groups. Emphasized groups in the brighter color shows high amount of capital tightened in inventory.
Table 4 Days in inventory comparison
Rank Item group Sales Average Inventory in $ Days in inventory
1 Food 10119,20 1350,32 48,04
2 Buttons, Magnets, Stickers 842,33 124,42 53,18
3 Accessories - bags, purses 5106,90 850 59,92
4 Bed & Bath 1093,72 190 62,54
5 Collectibles 1193,56 275 82,95
6 Candles, Incense, etc 902,27 250 99,75
7 Books (children + adult) 1789,63 580 116,67
8 Musical Instruments 1731,40 570 118,52
9 Postcards, Note cards 1317,70 465 127,04
10 Jewelry 3544,66 1272,59 129,25
11 Toys, Games 1689,08 630,54 134,39
12 Baskets & Boxes 2050,66 780 136,93
13 Clothing 3838,44 1600 150,06
14 Kitchen & Garden 1736,43 728 150,93
15 Sculptures 142,00 73 185,07
16 Plaques, wall hangings 948,00 590 224,05
17 Woven Items 664,00 490 265,66
18 Paintings 147,00 515 1261,22
19 Shoes 748,00 2895 1393,32
4.5.2 Food group
Most significant group in top sellers list is the Food group. This consists of Coffee group, Chocolate group and group labeled as others, which includes Olive and Brazilian nut Oil, Nuts variety, dried soups, teas, hot chocolate and baking cocoa. Food group all together represents 43%, from the best selling products ($6 9040,43).
We discovered that this group has large potential to be further extended. Although coffee and chocolate are well know as best sellers, we were interested if customers have any particular interest in varieties, for example flavored, decaf. coffee, etc.
Our findings show, that customers are interested in flavored as well as unflavored coffees and they buy ground as well as bean coffee. Similar findings apply also for Chocolate where the Top Sellers Group was reached by milk as well as dark and white chocolate and other varieties. For these two groups (Coffee and Chocolate) we recommend keeping the variety and expanding further.
Surprising results might reveal “Other” products in Food category. Olive Oil is the second most frequently sold item in the store creating profit of $490 per year with 74 bottles sold per year. Brazil nut Oil is also quite popular with 23 bottles sold per year. Nuts either covered in chocolate or plain represent also great success with 76 bags sold altogether generating over $250 profit. Other food categories as teas, baking cocoa and hot chocolate or soups indicate great potential of the Food category. Our findings show that customers incline to prefer tea begs to leaf tea.
The days in inventory analysis highlights the success of this group by showing 48 days in inventory only, for the entire food group.
Therefore we recommend the shop to offer more food variety especially in cooking oils, nuts, teas, dried food and packed organic sugar. With Food group, there is no need to be afraid of trials and experiments.
Additionally food is a product category, which is purchased frequently on regular basis. When the shop expands this product group, it might help to expand regular shoppers group. As the Survey shows currently only 12% of all customers come regularly.
4.5.3 Women Accessory group – bags, purses, scarves
Second most popular group is women accessories representing 22% from top sellers group and generating over $3500 profit. Winning products in this category are “Camera” bags of all sizes. To bring up other successful products from these groups we can mention Coin purse with children (CPSGH3), Silk scarf (ACCKSS) and Knit silk purse (BGCSP). The days in inventory analysis confirms, that the turnover of the entire bags and purses group is also very favorable with 60 days in inventory only. Considering the Customer survey, where 41% of all customers marked they wish to see more women accessories variety in the store, we recommend to carry a good variety of fashionable products.
4.5.4 Home-Deco group
This group represents 12% in the top selling products. Leading product is a Cat puzzle, but favorable are also an oven mitts and some wind chimes. This group is interesting for the shop, because it decorates the shop and helps to create nice atmosphere. However, the days in inventory formula indicates, that some products of this group remain in the shop prohibitively long. For example paintings are staying on average 1261 days (over 3 years) in the inventory. Plaques and wall hangings as well as some Kitchen and garden products are also rising some questions with its 224 and 185 days in inventory.
Our recommendations for this product group would be to carefully choose highly likable or decorative goods for reasonable prices. Specially, when prices of the goods are higher, customers are starting to reconsider, weather there is a real utilization for the product and weather they really like it.
4.5.5 Informational group
We have included posters, calendars, bumper stickers, buttons, date books and various cards in this group. These products all together represent 10% from the top sellers list. Winning two products are bumper stickers bringing $423 and buttons with $280 profit in 2006. Surprising success brought Peace calendar (18 pieces sold) and women date books (14 pieces sold). Another successful products in this group are various greeting cards. Days in inventory analysis underline the positive results of this group showing 53 days turnover for buttons and stickers and generally good turnover also for greeting and note cards staying in inventory on average 124 days.
In our opinion, this group has also a potential to grow. Shop is frequently visited by young people, who are repeated purchasers of stickers and buttons. Calendars for the year 2007 and women date books opened another potentially very successful area. The only threat with these seasonal products is purchasing adequate quantity to be sold before the new year starts.
4.5.6 Musical Instruments
Favorites of this group are singing bowls, Nicaraguan whistles and Frog Instruments. Generally there is not prohibitively high capital tightened in these products. The days in inventory analysis shows fairly positive results for this group. We recommend regular reconsiderations of the product portfolio in this area.
4.5.7 Jewelry group
Jewelry product group represents 3% of the top sellers. This group is quite difficult to access, because the shop is usually carrying just few pieces of each type, therefore with our method of Top Sellers assessment we might encounter distortion of some degree. However, there are still some interesting outcomes of our observations. Firstly, the largest group of customers stated in the customer survey, that they like of all shopping jewelry the most. However, this does not necessarily mean that they spend most of their money on it. Thus, this information is telling us, that jewelry is the “attraction” of the store and that the store has interesting items to offer. Customers like to see jewelry in the store and when they really happen to purchase a piece of jewelry it brings them in general the most enjoyment. Therefore they are more likely to talk about this purchase with their friends and family compared to purchase of other product and they are more likely to mention also Global Village in their talks with others.
However, the jewelry stays in inventory on average 127 days and there is relatively high capital tightened in the goods exceeding $1200.
Taking all the factors mentioned above into consideration we recommend the store keeping this group of products. We are convinced, that the display of these products should be changed, to make all pieces more accessible and appealing. We would replace the table with glass top currently used for display (customers generaly dislike “barriers” like glass or plastic bags for jewelry) by a rotating jewelry display showed in picture 1 (bellow). Ideally it would go from the floor to the eye height. Other display options are showed in picture 2 and 3.
We are convinced, that when women declare, they like shopping for jewelry it is very probable, that they like the whole process of purchasing thus: touching the products, trying them on and finally buying and wearing them. Reconsidering prices of some items might be useful as well, because prices of some single items might be relatively high.
4.5.8 Clothes & Shoes, Woven products
Clothes and woven products seem be very difficult product groups to manage, because clothes sold in Global Village might be appreciated by namely young people as being unique, unfortunately for some customers it is too different from their daily outfits. Further, most of clothing products are subordinated to seasonal changes. Thus various clothes are more likely to be sold in different seasons of the year.
Days in inventory study show that it takes 150 days to turnover clothes group and there is considerably high capital, over $1500, tightened in this product group. Even worse case represents woven product group with on average 265 days in inventory. Therefore, we recommend regular winter and summer discount practices for the seasonal goods. Discount practices should be applied to some possibly overpriced items as well. Further, it is very important to purchase mostly women, fashionable clothes targeted to young people and than evenly to all age groups (children not excluded).
4.6 VOLUNTEERS
Global Village volunteers are an essential part of the whole organization. We have therefore decided to list them among important factors of the marketing strategy for Global Village.
Volunteers are taking care of wide range of activities in Global Village, as described earlier. Many of them come regularly to the shop to help, and a lot of times they become customers as well, when purchasing gifts or food for their friends and family. Currently, there are about 25 to 30 active volunteers and another 20 who are being “called” when needed (unfortunately a lot of times not successfully). Global Village is always in need to get more talented volunteers, who would be willing to spend time for example in the shop or by attending various events and presenting Global Village. According to Norma Bader, the manager of volunteers, only one out of ten people, who show interest in volunteering in Global Village and leave their contact information in the shop, actually start coming regularly. Others lose their interest or their job/life conditions change and they do not have enough free time for this additional activity.
We are convinced that the Global Village volunteers have tremendous potential. We would suggest Global Village to design more activities for volunteers themselves, so that they can meet, get to know each other more (they already have at least one thing in common!), communicate, cooperate and it could possibly result in new, previously unexpected initiatives. The whole “team” of volunteers would integrate easier.
For example, right after we came to Global Village for the first time, we were both trained by Norma Bader and developed very nice relationship with her. Since that time, we were never afraid to call her and ask whenever we did not know how to perform a specific operation in the shop she was very helpful. Also, when thinking about this project for Bradley MBA program, we talked to her to get to know her opinion. We were not sure if Global Village would be interested to cooperate with us and she assured us that it is an excellent idea. Norma continuously helped us even with the project – for example we designed a new brochure and she was the first one who responded with new suggestions for this brochure. In our case, everything worked perfectly. But we would appreciate getting to know wider circle of Global Village volunteers.
We are convinced that if the volunteers would have more possibilities to meet each other, it would be very beneficial for the whole organization. Currently, there is only one annual meeting a year. We would suggest more additional activities, when
• On April 12/13th, Global Village volunteers would be specifically invited to the shop in Peoria Heights to celebrate International Fair Trade day. The Fair Trade coffee would be served.
• On July 13th is the shop Anniversary. Picnic in Forrest Centre or elsewhere could be organized. Volunteers would bring their own food, Global Village would provide small treats.
• Similar events could be organized at least once in three months specifically for volunteers &.their families or friends.
• Every year, there could be a Work Day in Global Village. The shop would be repainted, reorganized and any additional activities could be performed to help the shop keep going.
• Global Village should organize more educational presentations (updates) on Fair Trade for volunteers themselves, so that they are feeling more comfortable explaining this concept to the customers.
Additional activities in the shop
In out opinion, the volunteers’ activities in the shop should be more organized, so that full advantage of their time is taken. If there are no customers inside of Global Village shop, volunteers could remove dust from the products, reorganize, look for expired or damaged products, label products, reorganize the kitchen, change the displays, vacuum the carpet before they leave etc. List of additional activities that the volunteers could perform (if they want) can be created by people on the board. Also, recommendations of how to communicate with the customer should be put on a visible place for everybody to see that.
5 FINAL RECOMMENDATIONS
5.1 PROMOTION
1. First, we would recommend to Global Village board to set up a monthly marketing budget. We are convinced that it is very important to promote Global Village and Fair Trade and that the marketing budget would enable future publicity chair to work independently and more operatively within certain limits. Additionally, the board could better keep track of all marketing expenses. The details would be discussed and decided by the Global Village board of directors.
2. Second, we have designed, created and introduced to the board a new brochure for Global Village, which in our opinion reflects better general knowledge about Fair Trade and current situation of Global Village. Also, it is has more educational focus and provides better visual understanding of the Fair Trade concept. This brochure should be distributed to local residents in large amount by various means.
3. Our customer survey showed that one fourth of all first time visitors saw the Global Village shop from the Prospect Street while browsing through Peoria Heights, one of the main attractive shopping centers in Peoria. We are persuaded that this group has a big potential to grow. Therefore, we recommend placing large and visible informative board on Prospect Street, alerting people and inviting them to visit the shop.
4. We are assessing positively Global Village attempts to advertise the shop through giving out coupons in local newspapers. People received small Divine chocolate samples in exchange. We would suggest continue similar activities, for example providing Fair Trade treats during various educational presentations, when appropriate.
5. From the financial statements of Global Village we discovered, that informational products such as bumper stickers or buttons are very popular, therefore we suggest creating personalized items specifically designed for Global Village. Nicely fitting Fair Trade T-shirts with Global Village logo are another great opportunity to promote the organization.
6. Global Village board could explore advertising in local radio stations.
5.2 PRODUCT MIX
1. On the basis of product mix analysis we conducted (Top sellers group, Days in inventory) we have found out that food products are the most profitable group, therefore we recommend to expand it and offer more variety. Cooking oil, nuts, dried fruit, soup mixes, etc. are good options. Also women accessories product group is very successful. Moreover our Survey showed that customers would welcome more variety in accessories.
2. Although majority of women stated in the Survey, that they like Global Village jewelry, our product analysis showed that the purchase rate is not as high as we would expect. Therefore, we would recommend using large rotating jewelry display instead of existing jewelry glass table. This way, women would have the chance to touch the products and try them on.
3. The product mix analysis further shows, that alarmingly high capital is tightened in clothing with low turnover rate. Paintings, Plaques and wall hangings stay in inventory for a prohibitively long time. We recommend taking close look on all these groups.
4. Discounts practices would be particularly useful for Global Village, because it would help to sell in the store longer than necessary and which are encroaching the scarce space of the store. Seasonal and holiday items would be the first we would consider for sales. Compared to other Fair Trade stores, Global Village is displaying too many products considering the space available, thus we recommend decreasing amount of products displayed in the shop. As a long term goal, we suggest expanding the size of the store.
5.3 PRICE
1. Based on our Industry Analysis, we would state, that Global Village has most reasonable prices from all Fair Trade shops we visited in Bloomington and Chicago. The store should pay attention to single overprized items that might time to time appear in the store. Currently, customers might perceive as overpriced some items in paintings, clothing product groups. Discounts practices are recommended for seasonal products and products, which are for a long time in the inventory.
5.4 PLACE
1. The location of the Global Village store in Peoria Heights shopping area is very special, and we recommend take the full advantage of it by enhancing the visibility of the store. Various International Festivals and cultural events are excellent opportunities, how to approach potential customers. Additional distribution channels such as selling products on Farmers Market, Downtown Peoria or actively bringing Fair Trade coffee to church communities, educational organizations or companies is desirable, if the board of directors finds a talented business focused individual, who would entirely take care of it.
5.5 VOLUNTEERS
1. The entire volunteer group is an very important asset of the organization. Therefore we recommend designing more activities specifically for volunteers, so that they can meet, socialize, cooperate, share their ideas. This could possibly result in new previously unexpected initiatives. Presentations, picnics, workshops, celebrations or providing more training in Fair Trade would be useful.
6 CONCLUSION
Non for profit MBA consulting project BUS 681, was very contributing to us particularly because we had excellent opportunity to apply our theoretical knowledge learned at Bradley University in real life situation. We were lucky to have very good relations with Nancy Long, the president of Global Village, who couple times made herself available to our project discussions in her very busy schedule. Very outgoing were also other members of Board of directors in Global Village, who offered us any help we needed and invited us to all board meetings held since February 2007. Especial thanks belong to Norma Bader, volunteer director, who helped with the Customer Survey coordination and to Tonya Sneed, purchasing director, and her husband Jim Sneed, who lent us a hand with Financial Statements and Reports.
We enjoyed the procedure of assembling information, processing them and highlighting the most significant factors for the future business of the store. We hope that results of our marketing study would be useful and beneficial for the Board of Directors as well as for volunteers and customers of the store.
REFERENCES
1) Fair Trade labeling organizations international, www.fairtrade.net
2) Organization for Fair Trade and Development Education, www.fairtrade.cz
3) Food Navigator USA, www.foodnavigator-usa.com
4) Global Village News Letter, Tonya Sneed, Global Village volunteers visit a coffee farm in Nicaragua, December 2006
5) Fair Trade Certified, http://transfairusa.org/content/about/overview.php
6) Fair Trade Organization, http://www.fairtradefederation.org/
7) International Coffee Organization, http://www.fairtradefederation.org/
8) Global Issues http://www.globalissues.org
9) Wikipedia www.wikipedia.org
10) World bank – Millennium goal map, www.worldbank.com
11) Friends of the children of Haiti, www.fotcoh.org
12) Konbit Pou Aiti, http://www.konpay.org/wordpress/environment/
13) Philly Burbs News http://www.phillyburbs.com/pb-dyn/news/88-06022004-310352.html
14) Global Village brochure, “Support reforestation in Haiti”
15) Ten Thousand Villages web-site, http://www.tenthousandvillages.com/
16) Veber Jaromír, Management, Basis, Prosperity, Globalization, Management Press, Prague 2000,
17) EuroAnalysis, http://www.euroanalysis.cz
18) http://facweb.eths.k12.il.us
