Exo Fit: Entrepreneurial Development Project Report - CMO Perspective

This project report focuses on Exo Fit, a lean startup business plan centered around an augmented reality device designed to revolutionize online shopping. The report, written from the perspective of a Chief Marketing Officer (CMO), details the device's functionality, which includes 3-D body scanning to improve the consumer's purchasing decisions. It presents a customer value proposition canvas, highlighting the gains, pains, and jobs-to-be-done from the customer's perspective, as well as a lean business model canvas. This canvas outlines key partnerships, activities, resources, value propositions, customer relationships, channels, and customer segments. The report includes financial projections, targeting revenues of £704,850 in the first year, and strategies for marketing and customer engagement, emphasizing social media and partnerships with online retailers. The target market is individuals aged 25-35, with a focus on females who frequently shop for clothing online. The report also includes appendices with market research data.

Entrepreneurial Development

Contents
Introduction......................................................................................................................................1
Customer Value Proposition Canvas...............................................................................................2
Lean Business Model Canvas..........................................................................................................3
CMO Level Specialist Contribution................................................................................................7
Finance and Financial Planning.......................................................................................................8
Summary..........................................................................................................................................9
References......................................................................................................................................10
Appendices....................................................................................................................................11
Appendix I.................................................................................................................................11
Appendix II................................................................................................................................13

Introduction
Entrepreneurship refers to taking up execution of business activities related to production,
manufacturing or procuring a service or a product which is being offered to a range of people
with an objective of taking risks to earn profits and high revenues (Drucker, 2014). Over the last
few years, technology and innovation has shaped every industry. It can be argued that this
decade has witnessed one of the biggest waves of technological changes in the history of
humanity with disruptions being made in every industry and firms. Technology is advancing to a
much higher level where augmented reality is becoming a major thing or trend. Augmented
reality is a concept which involves the interaction between a human and a stimulated real-world
like experience which is enhanced using computers and informational generated in the form of
visuals and sensory information using application based software (Bonetti, Warnaby and Quinn,
2018). The idea which is being presented for lean start-up is Exo Fit which is a device based on
augmented reality which has the primary objective of improving the online shopping experience
of a consumer and changing the dynamics of online shopping. The device is based on a
technology which analyses the person using it within seconds and undertakes a 3-D body
scanning to influence the buying or the purchase decision of the consumer (Hasan, 2016).
According to a market research, the number of online purchases and buying has improved
significantly over the years with more than 54% of consumers preferring to buy from online
stores and shopping platforms (Appendix I). Exo Fit is the device which helps the consumer to
better evaluate the products and make better decisions related to shopping using augmented
reality and technology. The target market for the product will be people aged between 25-35
years and preferably females who are more likely to purchase clothing apparels and other related
items while online shopping.
The following project report has been written with the perspective of the Chief Marketing Office
(CMO) of the new start-up. It is the responsibility of a CMO to create demand for the product or
service which is being offered using the various tools and techniques for sales promotion and
advertising. It is the main responsibility of a CMO to develop a suitable atmosphere for the
product which is to be launched in the market by creating awareness. It is expected that the
business would earn a revenue of £704,850 in the first year of its launch with a net profit of
£100,000 from the sales of 4699 units, the revenue and profit for second year are targeted and
expected to be £802,500 and £111,800 respectively from 5000 units being sold, the third year
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targets for revenue and profit of the start-up are £750,000 and £125,520 respectively as a result
of 5350 units being sold. The expected profit margin for the first three years is around 15%
(Appendix II). Since there is negligible or very little competition in the industry which is being
targeted, the business or the start-up has the objective of capturing a high share of market within
the first three years of its operations and obtain the position of industry leader.
Customer Value Proposition Canvas
Customer Value Proposition Canvas is a tool which is used to analyse the effectiveness of a
business model in meeting the needs and requirements of the customers. The model is divided
into two sections which shows the current existing scenario of the customer needs and the
proposed value or benefits of the business model (Sheehan and Bruni-Bossio, 2015).
While technology related to online shopping has changes the preference of consumers to
shop online and using multi-channels, it can be said on the basis of other researches and market
surveys that indicate that more than 70% of people aged between 35-44 years have returned a
product which they bought using online platforms (Appendix I). This presents a need to improve
and innovate technology which can help the consumer to make better choices while making
online purchases. On the right hand side of the Value proposition canvas, the gains which are
being provided or expected by the consumers in the proposed business model are easy access to
wide range of retailers and effective time management while online shopping and the easy access
to navigation and precise decision-making. Jobs which are to be done by the customers include
body analysis, selection of the garment or the cloth which they want to buy, making payment and
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purchasing the garments with the help of device based on augmented reality. On the basis of
market surveys are research, it has been observed that the more than 46% of people are shopping
online just to browse while the percentage of people shopping just to browse reduces to 27% in
case of store-purchases (Appendix I). It demonstrates the pains which are being experienced by
the customers in online shopping related to making the right choice in terms of size and colour,
difficulty in getting honest feedbacks and increased time which is being consumed for shopping
and time for travel. The need to have a technology or a device which helps the customer in
making better purchase decisions to avoid the hassle of returns and increased transportation
which also causes a bad impact on the environment is quite tangible. On the left side of the
Value Proposition Canvas, it can be analysed that the proposed business models has gain creators
for the customers such as a user-friendly platform for shopping which can be used to shop more
conveniently (Kyhnau and Nielsen, 2015). It also provides precise measurements with the help
of 3-D body scanning and has a range of products which are being offered from various retailers.
Products and services which are being offered in the lean start-up model are the technology of
body scanning, a safe and secure payment gateway, a better review and feedback system, ability
to communicate with different retailers to clear any doubts about the purchases which are being
made by a consumer and an option of easy portability. Pain relievers for the consumers in this
business model are reducing the time required for making the purchase decisions, avoiding the
hassle of returning items which are purchased online, avoids buying the wrong or incorrect size
with the help of body scanning and 3D mapping and also provides a much more realistic view
and picture of the product which can help in making a better informed purchase decision by the
customer. On the basis of market research and study, Exo Fit has a great value proposition for
the customers in meeting the needs and requirements of technology which can be helpful in
improving online shopping experience and changes the dynamic of current online shopping
scenario. With the help of using correct marketing channels and aligning the online marketing
campaigns with a need identification process in the consumers, Exo Fit can be turned into a
successful business venture with value proposition for customers.
Lean Business Model Canvas
Lean Business Model Canvas is a tool of strategic management which can be used to
communicate a business and its concepts in an effective and easy manner. It is a tool which helps
in getting a clear idea of the business model and idea and determine the likelihood of future
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business activities. It consists of nine important elements of a business (Pekuri, Pekuri and
Haapasalo, 2014). Lean Business Model Canvas for Exo Fit is as follows:
Key Partners:
The key partners for our business model Exo Fit have been identified as the multiple
online retailers and sellers. It is important for us to partner and collaborate with many online
retailers and sellers so that we can offer and sell a wide range of products to our consumers. Our
key marketing strategy would be to offer a wide range of products hence it is significant for us to
get many retailers on board. Among the other key partners, direct and intermediate suppliers of
the technology and the device components and various potential investors in the business model
are expected to play a major role in Exo Fit.
Key Activities:
The key activities which needs to be conducted by us for smooth operation of our
business includes adoption of marketing stratgies for reaching out to various customers and
creating brand awareness. We need to provide a rich online shopping experience to the
customers with the help of various B2B and B2C services which implies that individual
consumers as well as business organisation can be our potential customers for Exo Fit Device.
We also need to develop a customer helpline service for providing guidance and assisstance to
customers as a key business activity.
Key Resources:
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We would require a lot of resources for establishing the business enterprise. Most
important resources would be the financial resources and capital for acquiring various other
resources and importing technology required for the device. Financial resource will also be
required for various marketing campaigns and the sales and distribution expenditures which will
be incurred for building a customer base. A team of competent individual and employees with
technical skill would also be required to execute the various tasks related to the business project.
An inventory of technical resources and materials and components required to build the device
would also be needed among the key resources and a building or a premise where the company
office and other activities could take place is also a resource which is required (Eisenmann, Ries
and Dillard, 2012). Among other key resources, we need laptops, computers and a range of other
testing devices to ensure the proper functioning and working of the Exo Fit device.
Value Propositions:
On the basis of the market research and gap analysis, Exo Fit proposes a great value for
the customers as it helps the customer in making a better purchase decision while shopping
online. It help in removal of hassle associated with online returns and refunds. It help to avoid
purchasing wrong or incorrect size which is a pain for the customers. A range of products are
being offered to the customers from various retailers and suppliers. With the help of body
scanning technology in seconds, precise data can be obtained for size and measurements which
can be saved for future references as well which also saves the time for the customers. User
interface is easy to navigate and a secure and safe payment gateway is also provided to the
customers as value propositon.
Customer Relationships:
Through various strategies and tools of marketing, customer relationship will be build for
long-term growth and success of the business model. We will use various online channels and
social media platforms for marketing the product and attracting customers in the initial phase. It
will aslo be done with the help of influencer programs on apps and platforms like Instagram and
YouTube. For building the long-term relationship, online and offline surveys, feedback platforms
on webiste etcetera will be used to meet the expectations of the customer and constantly develop
and innovate the product with the help of customer feedbacks (Wang and Feng, 2012).
Channels:
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According to the perspective of CMO, various channels that will be used for advertising
and marketing the product include a extensive use of social media apps and platforms such as
Facebook, Instagram, Twitter, YouTube etcetera. Online marketing will be the main focus to
attract leads. Offline marketing includes posters and banners and partnering with various retailers
to showcase technology in stores also which can help us in finding a way into the routine of the
customer. Other than that, advertisements and commercials in print media which includes some
newspapers and mostly magazines would be given to create a brand awareness.
Customer Segments:
Target customer or customer segment based on the market research and product
description includes people in London region aged between 25-35 years of age and primarily
females who spend a lot of time in online cloth shopping and belong to the upper middle class
section of the society with income more than £40,000 per annum.
Cost Structure:
Cost structure includes the fixed costs as well the variable costs which are projected to be
incurred during the business operations (Aboody, Levi and Weiss, 2018). Cost for overall project
is estimated to be £1 Million with a provision of future business growth and expansion
throughout the markets of United Kingdom. Various fixed costs include wages, salaries, rent of
the building, office equipment and cost of advertising on various online and offline platforms.
From the perspective of CMO, advertising is important part of the cost structure which will help
in attraction of customers. Variable cost include expenditure on importing the technology and
components for building the device (Appendix II). Maintaining device and software will be the
most important variable cost which will be incurred in the business.
Revenue Streams:
Revenue streams include selling devices to individual consumers and business
organisations (Zhuang and Li, 2012). Devices will also be used for generating revenue based out
of single transactions or purchases as well the complete purchase and installation of the device.
The cost of the device is estimated to be about £130 per unit and adding a profit margin of about
15% brings the final selling price to be approximately £150 per unit. Both B2C and B2B models
will be used for generating revenues. Expected monthly revenue with a sales of 391 units is
58,650£ and the annual revenue with the sales of 4699 units will be 704,850£ which will
generate a profit of 100,000£.
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CMO Level Specialist Contribution
Chief Marketing Officer of any organisation is the person who is responsible for the
interaction between the potential customers and the company. Role of a CMO includes building
and developing a brand image and reputation of the company which can help in improving the
sales and revenues for the company and creates a demand for the products and services which are
being offered by the company. As the CMO of Exo Fit, the major roles and responsibilities
include conducting market research and surveys to identify the data related to customer needs
and requirements, existing gaps between customer expectations and what if being offered to
them, preparing and developing a customer engagement plan and marketing strategy for the
company, maintaining long-term relationships with the customers, public relations of the
company etcetera (Germann, Ebbes and Grewal, 2015). As per the research conducted, while a
large number of people are now using multi channels for shopping such as online platforms, it
was also identified that there exists some problems or hindrances which restricts the ability of a
customer to make better purchase decisions while shopping online and as a result, the return rate
and percentage of products bough online is also very high. Customer engagement plan and
marketing strategy prepared by the CMO of Exo Fit is as follows:
 The product or the device will be launched in a suitable atmosphere which will be created
with the help of various tools and techniques of sales promotion and marketing.
 As a part of key marketing strategy for the company Exo Fit, online promotions and
marketing will be stressed. A plan is prepared for extensive usage of online platforms and
social media platforms such as Twitter, Facebook, Instagram, YouTube etcetera for
marketing the device of the company and the services which it offers to the customers.
 The marketing campaign and advertising strategy would be build along the lines of
problems and pains which are being faced by the customers in the process of online
shopping. Advantages of using the device and the services which it provides will be
heavily promoted such as enhancing the online shopping experience for the customers
with the help of 3-D body scanning which lets the customer choose the perfect size and
product from a range of products which are being offered by various retailers. User
interface is also easy and it also provides a safe and secure payment gateway.
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 Influencer campaigns will be organised for creating a better image of the product and
helping the customers in need identification and the value proposition of Exo Fit in
meeting their expectations.
 Offline marketing will be limited to various magazines and some of the newspapers
according to the target segment of customers and magazines will be selected on the basis
of their likelihood to be read by the target customers such as fashion magazines, tech
magazines etcetera. Posters and banners will be used at some offline stores and live
demonstrations of technology in the device will be done to communicate the idea of the
product in a better way.
 Customer relationship management and customer engagement will be done with the help
of constant surveys on various online platforms and feedback channels on company
website which allows the customer to give suggestions for improving the quality of
product and its usefulness.
 Sales promotional tools such as discounts and free sample purchases with the help of
using device will be used to initially create a demand and engage with the potential
customers of Exo Fit.
 Engagement with customers is also sought using interactive sessions with the potential as
well as current customers on the Instagram and Facebook webpages of the company.
Finance and Financial Planning
Financial planning of the business project consisted of determining the cost structure of the
company, estimating the profit and sales for initial three years, break-even point analysis, cash
flow analysis and various other aspects related to the costs. Sales expected for the first three
years are 704,850£, 750,000£ and 802,500£ with profits of 100,000£, 111,800£ and 125,520£
respectively. The gross profit margin is expected to be 15%. Break-even point on the basis of
contribution and fixed cost is calculated to be approximately a sale of 2148 units per year or 178
units per month or 6 units per day which is easily achievable where the company will be in a
situation of no profit and no loss. Major revenue streams for the company would be B2B and
B2C purchases of complete device installation along with single purchase transactions as well in
some cases. Cost-structure of the company denotes various variable and fixed costs such as rent,
salaries, wagers etcetera. Variable cost is estimated to be 110.8 £ per unit and the fixed costs
estimates are 84,200£. Fixed cost of the company also includes the cost incurred on online
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advertising and marketing equivalent to 3500£ per year which is required and essential for
attracting customers. Cost on advertising also includes an aspect of sales promotion tools and
incentives. Angel Investment is the major source of financing the company operations and
business establishment. 10,00,000£ equivalent of funds as initial investment will be used for
covering the major fixed costs of the project for the initial year which involves renting a
warehouse, wages and salaries, expenditure on advertising, research and development costs and
procurement of materials, component and technology required to develop the device (Appendix
II).
Summary
This report is prepared from the perspective of CMO of the company. During the report,
various findings and conclusions have been summarised based on the market research and
surveys which has been conducted. It has been observed on the basis of these researches that
there exists a need for a technology or device with the value propositions like those of Exo Fit
which can be helpful for the customers in making a better purchase decision. The report
highlights the customer value proposition of Exo Fit and also presents detailed information about
the business model canvas for the lean start-up opportunity. Evidence of the study shows that the
device based on augmented reality which can help the customer in making better online
purchases is of high value and is a profitable opportunity for investment. Exo Fit as a lean start-
up has high potential of meeting and safeguarding the interests of all the stakeholders including
great earning and wealth creation opportunities for the investors and shareholders as well.
Moreover, the forecasts and estimates of sales and profit of the lean start-up Exo Fit also
indicates a profit margin of 15% and the break-even point is also low up to sales of 6 units per
day or 178 units per year or 2148 units per year which we aspire to achieve in the first year.
Considering all these points, it can be concluded that Exo Fit provides a safe and profitable
investment opportunity for the potential investors with high rates of return on investment and
maximisation of shareholder’s value in the long term business environment.
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References
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virtual reality (pp. 119-132). Springer, Cham.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
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startup. Harvard Business School Entrepreneurial Management Case. (812-095).
Germann, F., Ebbes, P. and Grewal, R., 2015. The chief marketing officer matters!. Journal of
Marketing. 79(3). pp.1-22.
Hasan, B., 2016. Perceived irritation in online shopping: The impact of website design
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