Blue Sky's Expansion Strategy

Blue Sky, a three-year-old company, seeks to expand its distribution to retail specialty shops throughout the nation, focusing on the Southwest and Mid-Atlantic regions. The company plans to offer customized products via the internet only, distinguishing it from offline offerings. Blue Sky will also establish relationships with retailers through personal contact, in-store training, and increased sales staff. Additionally, the company will engage in non-traditional marketing methods such as distributing free water and discount coupons at outdoor events, hosting design contests, and organizing hikes departing from participating retailers. The pricing strategy is based on value pricing, making Blue Sky products good gifts and comfortable for customers to purchase new clothing. The overall budget, schedule, and monitoring plan are outlined in the appendix.

SAMPLE MARKETING PLAN
The following pages contain an annotated sample marketing plan for Blue Sky Clothing. At some
point in your career, you will likely be involved in writing—or at least contributing to –a marketing
plan. And you’ll certainly read many marketing plans throughout your business career. Keep in
mind that the plan for Blue Sky is a single example; no one format is used by all companies.
Also, the Blue Sky plan has been somewhat condensed to make it easier to annotate and
illustrate the most vital features. The important point to remember is that the marketing plan is a
document designed to present concise, cohesive information about a company’s marketing
objectives to managers, lending institutions, and others who are involved in creating and carrying
out the firm’s overall business strategy.
Five-Year Marketing Plan Blue Sky Clothing, Inc.
TABLE OF CONTENTS
EXECUTIVE SUMMARY
This five-year marketing plan for Blue Sky Clothing has been created by its two founders to secure
additional funding for growth and to inform employees of the company’s current status and direction.
Although Blue Sky was launched only three years ago, the firm has experienced greater-than-anticipated
demand for its products, and research as shown that the target market of sport-minded consumers and
sports retailers would like to buy more casual clothing than Blue Sky currently offers. They are also
interested in extending their product line as well as adding new product lines. In addition, Blue Sky plans
to explore opportunities for online sales. The marketing environment has been very receptive to the firm’s
high-quality goods—casual clothing in trendy colors with logos and slogans that reflect the interests of
outdoor enthusiasts around the country. Over the next five year, Blue Sky can increase its distribution,
offer new products, and win new customers.
COMPANY DESCRIPTION
Blue Sky Clothing was founded three years ago by entrepreneurs Lucy Neuman and Nick Russell, Neuman
has an undergraduate degree in marketing and worked for several years in the retail clothing industry.
Russell operated an adventure business called Go West!, which arranges group trips to locations in
Wyoming, Montana, and Idaho, before selling the enterprise to a partner. Neuman and Russell, who have
been friends since college, decided to develop and market a line of clothing with a unique—yet universal—
appeal to outdoor enthusiasts.
Blue Sky Clothing reflects Neuman’s and Russell’s passion for the outdoors. The company’s original
cotton T-shirts, baseball caps, and fleece jackets and vests bear logos of different sports—such as kayaking,
mountain climbing, bicycling, skating, surfing, and horseback riding. But every item shows off the
company’s slogan: “Go Play Outside.” Blue Sky sells clothing for both men and women, in the hottest
colors with the coolest names—such as sunrise pink, sunset red, twilight purple, desert rose, cactus green,
ocean blue, mountaintop white, and river rock gray.
Blue Sky attire is currently carried by small retail stores that specialize in outdoor clothing and gear. Most
of these stores are concentrated in northern New England, California, the Northwest, and a few states in the
South. The high quality, trendy colors, and unique message of the clothing have gained Blue Sky a
following among consumers between the ages of 25 and 45. Sales have tripled in the last year alone, and
Blue Sky is currently working to expand its manufacturing capabilities.
The executive summary
outlines the who, what ,
where, when , how, and
why of the marketing
plan. Blue Sky is only
three years old and is
successful enough that it
now needs a formal
marketing plan to obtain
additional financing from
a bank or private
investors for expansion
and the launch of new
products.
The company description
summarizes the history of
Blue Sky—how it was
founded and by whom,
what its products are, and
why they are unique. It
begins to “sell” the reader
on the growth
possibilities for Blue Sky.

Blue Sky is also committed to giving back to the community by contributing to local conservation
programs. Ultimately, the company would like to develop and fund its own environmental programs. This
plan will outline how Blue Sky intends to introduce new products, expand its distribution, enter new
markets, and give back to the community.
BLUE SKY’S MISSION AND GOALS
Blue Sky’s mission is to be the leading producer and marketer of personalized, casual clothing for
consumers who love the outdoors. Blue Sky wants to inspire people to get outdoors more often and enjoy
family and friends while doing so. In addition, Blue Sky strives to design programs for preserving the
natural environment.
During the next five years, Blue Sky seeks to achieve the following financial and nonfinancial goals:
 Financial Goals
1. Obtain financing to expand manufacturing capabilities, increase distribution, and introduce two
new product lines.
2. Increase revenues by at least 50 percent each year.
3. Donate at least $25,000 a year to conservation organizations.
 Nonfinancial goals
4. Introduce two new product lines—customized logo clothing and lightweight luggage.
5. Enter new geographic markets, including southwestern and Mid-Atlantic States.
6. Develop a successful Internet site, while maintaining strong relationships with retailers.
7. Develop its own conservation program aimed at helping communities raise money to purchase
open space.
CORE COMPETENCIES
Blue Sky seeks to use its core competencies to achieve a sustainable competitive advantage, in which
competitors cannot provide the same value to consumers that Blue Sky does. Already, Blue Sky has
developed core competencies in (1) offering a high-quality, branded product whose image is recognizable
among consumers; (2) creating a sense of community among consumers who purchase the products; and
(3) developing a reputation among retailers as a reliable manufacturer, delivering the requested number of
products on schedule. The firm intends to build on these competencies through marketing efforts that
increase the number of products offered as well as distribution outlets.
By forming strong relationships with consumers, retailers, and suppliers of fabric and other goods and
services, Blue Sky believes it can create a sustainable competitive advantage over its rivals. No other
clothing company can say to its customers with as much conviction “Go Play Outside”!
SITUATION ANALYSIS
The marketing environment for Blue Sky represents overwhelming opportunities. It also contains some
challenges that the firm believes it can meet successfully. Table A illustrates a SWOT analysis of the
company conducted by marketers to highlight Blue Sky’s strengths, weaknesses, opportunities, and threats.
The SWOT analysis presents a thumbnail sketch of the company’s position in the marketplace. In just
three years, Blue Sky has built some impressive strengths while looking forward to new opportunities. Its
dedicated founders, the growing number of brand-loyal customers, and sound financial management place
the company in a good position to grow. However, as Blue Sky considers expansion of its product line and
entrance into new markets, the firm will have to guard against marketing myopia (the failure to recognize
the scope of its business) and quality slippages. As the company finalizes plans for new products and
expanded Internet sales, its management will also have to guard against competitors who attempt to
It is important to state a
firm’s mission and goals,
including financial and
nonfinancial goals. Blue
Sky’s goals include
growth and profits for the
company as well as the
ability to contribute to
society through
conservation programs.
This section reminds
employees as well as
those outside the
company (such as
potential lenders) exactly
what Blue Sky does so
well and how it plans to
achieve a sustainable
competitive advantage
over rivals. Note that
here and throughout the
plan, Blue Sky focuses on
relationships.
The situation analysis
provides an outline of the
marketing environment.
A SWOT analysis helps
marketers and others
identify clearly a firm’s
strengths, weaknesses,
opportunities, and threats.
Again relationships are a
focus. Blue Sky has also
conducted research on the
outdoor clothing market,
competitors, and
consumers to determine
how best to attract and
keep customers.

duplicate to products. However, building strong relationships with consumers, retailers, and suppliers
should help thwart competitors.
COMPETITORS IN THE OUTDOOR CLOTHING MARKET
The outdoor retail sales industry sells about $5 billion worth of goods annually, ranging from clothing to
equipment. The outdoor apparel market has many entries. L.L. Bean, REI, Timberland, Bass Pro Shops,
Cabello’s, and Patagonia are among the most recognizable companies that offer these products. Smaller
competitors such as Title IX, which offers athletic clothing for women, and Ragged Mountain, which sells
fleece clothing for skiers and hikers, also grab some of the market. The outlook for the industry in general
—and Blue Sky in particular—is positive for several reasons. First, consumers are participating in and
i8nvesting in recreational activities that are near their homes. Second, consumers are looking for ways to
enjoy their leisure time with friends and family without overspending. Third, consumers are gaining more
confidence in the economy and are willing and able to spend more.
While all of the companies listed earlier can be considered competitors, none offers the kind of trendy, yet
practical products provided by Blue Sky—and none carries the customized logos and slogans that Blue Sky
pans to offer in the near future. In addition, most of these competitors sell performance apparel in high-
tech manufactured fabrics. With the exception of the fleece vests and jackets, Blue Sky’s clothing is made
Table A
SWOT Analysis for Blue
Sky Clothing, Inc.

of strictly the highest quality cotton, so it may be worn both on the hiking trail and around town. Finally,
Blue Sky products are offered at moderate prices, making them affordable in multiple quantities. For
instance, a Blue Sky T-shirt sells for $15.99, compared with a competing high-performance T-shirt that
sells for $29.99. Consumers can easily replace a set of shirts from one season to the next, picking up the
newest colors, without having to think about the purchase.
A survey conducted by Blue Sky revealed that 67 percent of responding consumers prefer to replace their
casual and active war more often that other clothing, so they are attracted by the moderate pricing of Blue
Sky products. In addition, as the trend toward health-conscious activities and concerns about the natural
environment continue, consumers increasingly relate to the Blue Sky philosophy as well as the firm’s
contributions to socially responsible programs.
THE TARGET MARKET
The target market for Blue Sky products is active consumers between the ages of 25 and 45—people who
like to hike, rock climb, bicycle, surf, figure skate, in-line skate, ride horses, snowboard or ski, kayak, and
other such activities. In short, they like to “Go Play Outside.” They might not be experts at the sports they
engage in, but they enjoy themselves outdoors.
These active consumers represent a demographic group of well-educated and successful individuals; they
are single or married and raising families. Household incomes generally range between $60.000 and
$120,000 annually. Despite their comfortable incomes, these consumers are price conscious and
consistently seek value in their purchases. Regardless of their age (whether they fall at the upper or lower
end of the target range), they lead active lifestyles. They are somewhat status oriented but not overly so.
They like to be associated with high-quality products but are not willing to pay a premium price for a
certain brand. Current Blue Sky customers tend to live in northern New England, the South, California,
and the Northwest. However, one future goal is to target consumers in the Mid-Atlantic states and
Southwest as well.
THE MARKETING MIX
The following discussion outlines some of the details of the proposed marketing mix for Blue Sky products.
PRODUCT STRATEGY. Blue Sky currently offers a line of high-quality outdoor apparel items
including cotton T-shirts, baseball caps, and fleece vests and jackets. All bear the company log and slogan,
“Go Play Outside.” The firm has researched the most popular colors for its items and given them names
that consumers enjoy—sunset red, sunrise pink, cactus green, desert rise, and river rock gray, among
others. Over the next five years, Blue Sky plans to expand the product line to include customized clothing
items. Customers may select a logo that represents their sport—say rock climbing. Then they can add a
slogan to match the logo, such as “Get over It.” A baseball cap with a bicyclist might bear the slogan,
“Take a Spin.” At the beginning, there would be ten new logos and five new slogans; more would be
added later. Eventually, some slogans and logos would be retired, and new ones introduced. This strategy
will keep the concept fresh and prevent it from becoming diluted with too many variations.
The second way in which Blue Sky plans to expand its product line is to offer items of lightweight luggage
—two sizes of duffel bags, two sizes of tote bags, and a daypack. These items would also come in trendy
an basic colors, with a choice of logos and slogans. In addition, every product would bear the Blue Sky
logo.
DISTRIBUTION STRATEGY. Currently, Blue Sky is marketed through regional and local specialty
shops scattered along the California coast, into the Northwest, across the South, and in northern New
England. So far, Blue Sky has not been distributed through national sporting goods and apparel chains.
Climate and season tend to dictate the sales at specialty shops, which sell more T-shirts and baseball caps
Blue Sky has identified
its customers as active
people between the ages
of 25 and 45. However,
that doesn’t mean
someone who is 62 and
prefers to read about the
outdoors isn’t a potential
customer as wll. By
pinpointing where
existing customers live,
Blue Sky can make plans
for growth into new
outlets.
The strongest part of the
marketing mix for Blue
Sky involves sales
promotions, public
relations, and
nontraditional marketing
strategies such as
attending outdoor events
and organizing activities
like day hikes and bike
rides.

during warm weather and more fleece vests and jackets during colder months. Blue Sky obtains much of
its information about overall industry trends in different geographic areas and at different types of retail
outlets from its trade organization, Outdoor Industry Association.
Over the next three years, Blue Sky seeks to expand distribution to retail specialty shops throughout the
nation, focusing next on the Southwest and Mid-Atlantic regions. The firm has not yet determined whether
it would be beneficial to sell through a major national chain such as REI or Bass Pro Shops, as these outlets
could be considered competitors.
In addition, Blue Sky plans to expand online sales by offering the customized product line via Internet only,
thus distinguishing between Internet offerings and specialty ship offerings. Eventually we may be able to
place internet kiosks at some of the more profitable store outlets so consumers could order customized
products form the stores. Regardless of its expansion plans, Blue Sky fully intends to monitor and maintain
strong relationships with distribution channel members.
PROMOTIONAL STRATEGY. Blue Sky communicates with consumers and retailers about its products
in a variety of ways. Information about Blue Sky—the company as well as its products—is available via
the Internet, direct mailings, and in person. The firms’ promotional efforts also seek to differentiate its
products from those of its competitors.
The company relies on personal contact with retailers to establish the products in their stores. This contact,
whether in-person or by phone, helps convey the Blue Sky message, demonstrate the products’ unique
qualities, and build relationships. Blue Sky sales representatives visit each store two or three times a year
and offer in-store training on the features of the products for new retailers or for those who want a
refresher. As distribution expands, Blue Sky will adjust o meet greater demand by increasing sales staff to
make sure it stores are visited more frequently.
Sales promotions and public relations currently make up the bulk of Blue Sky’s promotional strategy. Blue
Sky staff works with retailers to offer short-term sales promotions tied to event and contests. In addition,
Nick Russell is currently working with several trip outfitters to offer Blue Sky items on a promotional
basis. Because Blue Sky also engages in cause marketing through its contribution to environmental
programs, good public relations have followed.
Nontraditional marketing methods that require little cash and a lot of creativity also lend themselves
perfectly to Blue Sky. Because Blue Sky is a small, flexible organization, the firm can easily implement
ideas such as distributing free water, skiers, and discount coupons at outdoor sporting events. During the
next year, the company plans to engage in the following marketing efforts:
 Create a Blue Sky Tour, in which several employees take turns driving around the country to
campgrounds to distribute promotional items such as Blue Sky stickers and discount coupons
 Attend canoe and kayak races, bicycling events, and rock climbing competitions with our Blue
Sky truck to distribute free water, stickers, and discount coupons for Blue Sky shirts or hats.
 Organize Blue Sky hikes departing from participating retailers.
 Hold a Blue Sky design contest, selecting a winning slogan and logo to be added to the
customized line.

PRICING STRATEGY. As discussed earlier in this plan, Blue Sky products are priced with the
competition in mind. The firm is not concerned with setting high prices to signal luxury or prestige, nor is
ti attempting to achieve the goals of offsetting low prices by selling high quantities of products. Instead
value pricing is practiced so that customers feel comfortable purchasing new clothing to replace the old,
even if it is just because they like the new colors. The pricing strategy also makes Blue Sky products good
gifts—for birthdays, graduations, or “just because.” The customized clothing will sell for $2 to $4 more
than the regular Blue Sky logo clothing. The luggage ill be priced competitively, offering a good value
against it competition.
BUDGET, SCHEDULE, AND MONITORING
Though its history is short, Blue Sky has enjoyed a steady increase in sales since its introduction three years
ago. Figure A shows these three years, plus projected sales for the nest three years, including the
introduction of the two new product lines. Additional financial data are included in the overall business
plan for the company.
An actual plan will
include more specific
financial details, which
will be folded in to the
overall business plan.
For more information, see
the “Financial Analysis in
Marketing” appendix on
page A-1 of this book. In
addition, Blue Sky states
that at this stage, it does
no have plans to exit the
market by merging with
another firm or making a
public stock offering.
Figure A
Annaul Sales for Blue
Sky Clothing: 2

The timeline for expansion of outlets and introduction of the two new product lines is shown in Figure B.
The implementation of each of these tasks will be monitored closely and evaluated for its performance.
Blue Sky anticipates continuing operations into the foreseeable future, with no plans to exit this market.
Instead, as discussed throughout this plan, the firm plans to increase its presence in the market. At present,
there are no plans to merge with another company or to make a public stock offering.
Figure B
Timeline for First Three
Years of Marketing Plan