The Magic Behind

The uniqueness of our product is the location of where we sell our ballerinas, we offer our product when our clients NEED THEM MOST. But we need more, we have to differentiate our product from the rest of the competitors!

- The design of the ballerinas -

We have to find something that makes our product stand out. Our plan is to create a platform online and get designers to design for our company! For example associate our business with Barcelona Design Schools. ;) Create platform for artists to submit their designs, create buzz, votes, and all at a low cost.

Updated Business Model Canvas

Regarding what Julius commented on our project, now we need to focus on our revenue streams.

Our main revenue streams from our old business model canvas were the followings:

Option A

Selling Vending Machine at high price to club owners and individual pairs of shoes

Option B

Provide machine at low / no cost, profit from selling

shoes.

According to our research on vending machines and the interview we have done with the club owner, we figured out that there is another option for revenue stream.

We may use the vending machine the club provides for us, paying certain amount of cost to the club, and we get all the profits from selling shoes.

We came with this idea because, first, manufacturing our own vending machine is too much cost and since it is our first trial, we are not sure if this business is

going to be successful enough to pay all the cost for the vending machine, so we decide to take less risk as possible.

We may use the vending machine the club provides to us, and then if the business seems successful, then we may expand our revenue on vending machine.

New leaps of faith

1. If we put the price of the ballerinas down (5-7 euros) will people choose NOT to buy them because they are worried about the quality of the shoes?
   
2. If we put the price higher and produce good quality ballerinas (10-13 euros), will these girls buy the ballerinas? If they do, will they buy them again? 

Dilemma - cheap ballerinas with low margin higher sales volume or expensive ballerinas with bigger margin and less sales?

After conducting the questionnaire in clubs, we see two very clear demand on pricing on the ballerinas. We can make higher quality ballerinas at higher prices so they can wear them again in the future, but this would mean less demand and selling less as they will not buy as frequently. We can also produce cheaper shoes at a lower quality, demand will be high, girls can buy them every time they go clubbing and dispose them soon after; leaving them no regret on 'throwing one away and buying a new pair'. But if the quality is too low this might stop people from trusting the ballerinas or not buying them again.

Below is a definition of  Margin Turnover Model of Retail (by Ronald R. Gist)

We will color parts that is related to our business: 

Blue represents points that fits our ballerinas and orange represents points that do not match.

1. Low Margin High Turnover Stores

Such an operation assumes that low price is the most significant determinant of customer patronage. The stores in this category price their products below the market level. Marketing communication focuses mainly on price. They provide very few services; if any, and they normally entail an extra charge whenever they do. The merchandise in these stores is generally pre-sold or self sold. This means that the customers buy the product, rather than the store selling them. These stores are typically located in isolated locations and usually stock a wide range of fast moving goods in several merchandise lines. The inventory consists of well-known brands for which the manufacturer through national advertising creates a consumer pull. Local promotion focuses on low price. Wal-mart in the United States is an example and Pantaloon Chain or Subhiksha are Indian examples of such stores.

2. High Margin Low Turnover Stores

This operation is based on the premise that distinctive merchandise, service and sales approach are the most important factors for attracting customers. Stores in this category price their products higher than those in the market, but not necessarily higher than those in similar outlets. The focus in marketing communication is on product quality and uniqueness. Merchandise is primarily sold in store and not pre-sold. These stores provide a large number of services

3. High Margin High Turnover Stores

These stores generally stock a narrow line of products with turnover of Reasonably high frequency. They could be situated in a non-commercial area but not too far from a major thoroughfare. Their location advantage allows them to charge a higher price. High overhead costs and, low volumes also necessitate a higher price.

4. Low Margin-Low Turnover Stores

Retail enterprises in this category are pushed to maintain low margins because of price wars. Compounding this problem is the low volume of sales, which is probably a result of poor management, unsuitable location etc. such businesses, normally get wiped out over a period of time.

CONCLUSION
We cannot find a clear position on where our ballerinas stand in the high/low margin high/low turnover chart. We find ourselves in both scenarios. It is really difficult to try to position a new product and a new location...

Information from http://www.mbaknol.com/retail-management/margin-turnover-model-of-retail/

Interview with Marc Arribas – Director of Club Opera

Interview with Marc Arribas – Director of Club Opera

We conducted an interview with the director of a new club in Barcelona called Opera to ask him about his thoughts on our business idea was and if he would agree on adding a vending machine in his club if our business idea was to be created.

Just like most males, when we presented the idea of providing a solution to girls who are tired form wearing high heels while dancing in clubs, he was surprised about the idea and quickly became quite supportive about implementing the business into his club because ‘it made sense’. He understood and agreed to the idea immediately because he himself was thinking about creating something for the girls to ‘rest their feet’ in his club, his idea was to separate out a section of the club’s floor and add a big sponge and people can dance without shoes on it. (I commented on his idea that the sponge floor might become dirty if drinks spill and also you would not want all the girls to leave the dance floor and go there.)

·      His club has a large restroom (plus area for makeup) and he said it would be possible to add the machine outside or inside the restroom.

·      He suggested to add chairs for girls to sit down when changing their shoes

Sales Prediction

We asked him to give an estimate of the number of girls who will buy from the vending machine and he suggested that the best way to answer this is if you put an actual machine into the club, offered the ballerinas at cost price, and measure the result because this is a new product so we don’t any historical statistics to compare with.

Vending Machine

He also suggested that instead of buying a vending machine customized to your product, there are vending machines for rent that suits to a fixed product size. It is much cheaper than ordering 1 or 5 special ones just to test out your product. Examples can be found in metro stations in Barcelona, where they sell mobile phone covers and USB sticks.

Where and how to produce Ballerinas

A typical minimum order for shoes in China is 500 pairs+. This would be impossible for us to afford at the beginning of the business and especially when we have to repeat the same ballerinas in different sizes – 36,37,38,39,40 just for ONE DESIGN.

Marc suggested producing the first ‘show case’ ballerinas locally in Catalonia in Spain. This was you can produce in small quantities in shorter time and better communication between us and the suppliers.

Ballerinas to go Research

Customer Profile

• Female 20-23 years old
• Student or young professional
• On the weekend, partying/going out for dinner with friends
• Wear heels on special occasions such as for dinner/club
• Interested in fashion in general
• Enjoys to shop, specially shoes
• Purchase shoes once in a month at least, with no matter of the cost

Customer Profile

• Female 30-35 years old
• Professional
• On the weekend, sometimes partying, most of time going out for dinner with friends
• Wear heels most of times
• Interested in fashion, enjoys shopping, specially on luxury products
• Does not want to spend money on something unnecessary
• Prefers to try on the products before purchase them

Business Canvas Model - Version 1

Answers form survey

We went to two clubs in Barcelona - Thursday at Sutton and Friday in Opera and asked 100 girls wearing high heels our questionnaire, and here are the responses:

1.     73/100 preferred  option B – higher quality at approx.. 10 euros per pair

26/100 preferred option A – lower quality at approx.. 5 euros per pair

Sample reasons for choosing option B (Higher Quality, 10 euros per pair)

-        I will only buy it if the design is nice, and if the design is nice, 10 euros is cheap for ballerinas

-        Because is cheap, but can I return it if I don’t like it?

-        Yes, because I will need the ballerinas when I get tired

-        Because I have share it with my friend

-        Because 10 euros is cheap

-        Because the quality for 5 euros will be bad, I don’t want me feet the smell bad

-        Yes because I don’t wear cheap shoes, maybe I will not even buy these for only 10 euros. But why not.

Sample reasons for choosing option A (Cheaper quality, 5 euros per pair)

-        Do not wish to spend too much money

-        The quality does not matter, therefore the cheaper the better

-        Never heard of it, so I don’t trust it

-        If it’s cheap, I will buy it and doesn’t matter if the quality is not good

-        No one will see it, so the design or quality doesn’t matter, as long as it’s comfortable

-        Not interested in spending a lot of money

-        Not sure

2.     20 people will spend 6 euros
40 people will spend 10 euros
40 people will spend up to 13 euros

3.     95% of the interviewees said they will wear it again

4.     Does the design matter?

-        Most of the interviewees (75 people) said it does matter because they want the ballerinas to suit their current outfit.

-        A few (20 people) said it doesn’t matter too much because maybe they will wear it at home or some place where they do not need to dress up

-        5 people said it doesn’t matter

5.     All choose vending machine

6.     Up to 80 people said 80% / Most likely

7.     60% said they will continue dancing, 40% said if they bought the shoes, they would use it to wear it to go home

8.     90% said near or in the bathroom, others said – entrance, wardrobe, next to the tabacco machine

9.     70% said deposit it at discounted price at the wardrobe,
30% said put it in a bag

10.  a) 100% suggested posters in bathrooms
b) 55% suggested at the entrance
c) 80% suggested Facebook fan page
d) 7% suggested magazine, Metropolitan, tourist related magazines

Survey 2 - Detail Questionaire

First step: Introduce business idea

1. Which would you prefer?

a)     cheaper ballerinas for a lower quality (one time use) (approx. 5 euros) and why?

b)     standard priced ballerinas for a better quality (approx. 10 euros) and why?   

2. How much are you willing to spend? 5-6 euros / 7-10 euros / 11-13 euros

3. Would you wear the ballerinas again? For club or normal outing?

4. Does the design or material matter to you? (please expand) 

5. Do you prefer buying from a vending machine or from the wardrobe assistant (at a higher cost) and why?

6. Convert the chances of you buying the ballerinas in a club to a percentage? 

7. Would you stay (and dance) longer at the club?

8. Where do you expect the machine to be?

9. For your high heels, would you prefer to deposit it at the wardrobe at a 'discounted' offer or use a bag provided with the ballerinas?  

10. What is more effective of a promotion of ballerinas for you? (may select more than one)

a) Posters in the bathroom

b)At the entrance where you queue and pay

c) facebook advertisement/fan page

d) magazines and which ones

Start up dashboard

Leaps of faith

Leaps of faith

• The clubs may not want a vending machine at their clubs,
• Girls bringing their own ballerinas in their purses.
• Will they even notice the vending machine in the club-(advertising???)
• What are they going to do with their own shoes?
• Will the ballerinas make them actual stay longer at the club?

Antilog/analog

Our plan B, if the idea is not successful would be to sell ballerinas at a stand
inside the clubs, near the wardrobe. The problems we may arise with our initial
plan would be to get permission to place an actual vending machine at the
venues. If we decide to instead take in use a person who sells, this would require
more personnel and we would have to take into consideration other factors like
working hours, employment contracts etc. This solution would be collaborating
much more with the existing wardrobe system many clubs have, so we would
have a talk with them and se if they would provide personnel or if we would hire
our own people to stand at the ballerinas to go stand.