House of Jewellery

PROBLEM

Rishabh Khamesra, CEO of House of Jewellery (HOJ), is faced with the task of developing a marketing plan for 2011 and beyond and specifically achieving a 10% annual growth in net income. Although HOJ is one of Canada’s leading jewellery wholesalers, the company has an inconsistent positioning in the market that has led to a lack of a competitive advantage, which is troublesome as increased competition is one of the industry trends and customer loyalty has been declining.

RECOMMENDATION

The proposed recommendation for House of Jewellery is to firstly, continue to sell generic items. Secondly, expand the product line to compete with the company’s indirect competition since they have become an increasing threat as the price of gold and silver has skyrocketed and consumers are moving towards more reasonably priced costume jewellery. Lastly, penetrate into Vancouver by opening tradeshows as there is limited competition in the Vancouver market.

EXPECTED RESULTS

With the aid of a recovering economy House of Jewellery achieved the highest annual growth in net income for 2010 in the past 4 years. Through their increased promotion and advertising, House of Jewellery will continue to grow specifically achieving the targeted 10% increase in annual net income for 2011, which results in $120 967 before income taxes (refer to exhibit A). The increase in net income will also be attributed to the growing economy; HOJ will see an increase in sales as economic conditions is one of the primary macro factors affecting the company.

However, HOJ will see a rise in expenditures related to setting up the trade show in Vancouver and launching the unique jewellery line. Once established, HOJ will observe steady expenses that can be predicted and budgeted for.