Marketing Plan Team Project
Team D
Joseph Mumma, Chelsea Pacheco, Roy Purnell, Emvirgil Roces, Carlos Socarras, and Samantha Morris
DeVry University, BUSN 319 February 22, 2008
Foot Locker, Inc. This is a proposal written to discuss the target market of retailer Foot Locker, the largest seller of athletic shoes in the United States. Team D has further researched this company and their tightly defined target market. During the past weeks, we discussed our hypothesis of what we expect to find during our research and conclusions, as well as our analysis of our environment. We then further defined our target market, as well as research similar companies. We also incorporate our marketing strategy, media plans and budgeting plans. Our final draft is a complete marketing plan with a detailed media and budget plan. We included a comprehensive analysis of the environment and the opportunities that it offers and a marketing strategy to maximize income by taking advantage of those opportunities. History Foot Locker was introduced to the retail market place in 1974. First and foremost it is the world's leading athletic retailer and has acquired more than 3,900 stores in 20 countries in North America, Europe and Australia. They also own Footaction, Lady Foot Locker, Kids Foot Locker and Champs Sports retail stores. You can also purchase merchandise through their website at footlocker.com/Eastbay. They were known as the F.W. Woolworth Company, founded by Frank and Charles Woolworth in 1911 as five-and-dime discount stores in New York City. With time they went ahead and opened the first Foot Locker in 1974 and grew to thousands of stores worldwide. The company changed its name to Foot Locker Inc. in 2001. It would acquire the Footaction chain in 2004. Making its mark in this world, it is the destination for their core customers between the ages of 12-20. Foot Locker is the leading retailer for athletic footwear, apparel and equipment. There are approximately 3800 athletic stores in 21 countries. Their total sales in dollars for 2006 were $5750 million and total profit was $381 million. Foot Locker’s main product is footwear, but offer apparel and equipment. There are plenty of brands and products to choose from and are all sold at the following retail stores.
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|Jeans |Nike Shox |Adidas Soccer |Track Shoes |Converse Wade 1.3 Mid |Puma Track |

Footlockers Positioning Global diversification is a vital component of Footlockers strategic positioning. Foot Locker, Inc. is the world's leading retailer of athletic footwear and apparel. Foot Locker has a strong foundation built for their company. They meet the needs of consumers on a daily basis. They also meet the city’s needs that they are based in because they are making them money and paying their taxes. They are making money for those cities. They are competing everyday with other retailer who is trying to offer the same products. Foot Locker has built such a good report with their customers they don’t want to go to other places. This is how they keep on top. This company has a lot of strength and is on the right track. They offer a wide selection of brands to the consumer, they are international and they also provide online access to their merchandise.
Footlockers Purpose Our team’s objectives would include increasing market growth, while trying to acquire a higher market penetration. Our strategy would also include revamping our products and presentations to help increase sales to the same market and get current customers to buy more or buy more frequently, and then try to focus our attention to market segments not previously targeted. We also wish to develop new products for both existing customers, and new customers while helping to increase any potential opportunities by further expansion, growth in sales and share of the market.
Key internal Factors affecting Footlocker Foot Locker has a lot going for them. If it wasn’t for their strong internal strengths the company would not be where they are at today. In looking at all their reports they really don’t have a lot of weaknesses going on except for their high cost of franchise expansion. If there was a way for them to lower that price they might be able to open even more stores.
Recommendations
When looking at Foot Locker and trying to see what potential opportunities they might have, the only things are further expansion, growth in sales and share of the market. Foot locker has a strong foundation built for their company. They meet the needs of consumers on a daily basis. They also meet the city’s needs that they are based in because they are making them money and paying their taxes. They are making money for those cities. They are competing everyday with other retailer who is trying to offer the same products. Foot Locker has built such a good rapport with their customers they don’t want to go to other places. This is how they keep on top. When looking at foot Lockers reports they are increasing in the market. They are opening more stores every year and hardly closing any. This is a good sign for this company. The reason the market has maintained where it is because they have met the needs of all ages. Not only do they meet the age of 18 to 35 they also meet the ages that are younger and older. Anyone can find the things they need here when it comes to athletic footwear and apparel. I look at Foot Locker and see only good things for this company in the future if they keep on the path they are going. We feel that our objectives meet and exceed those of Footlocker, which are to increase revenues, expanding the business unit and continue to be the worlds leading footwear and apparel retailer. The team also feels that we can accomplish these goals due to the wide variety of age groups and income brackets that Footlocker caters to. The fact that they are so wide spread with locations throughout the United States and other parts of the world allows us the opportunity for improving this market and makes it highly achievable.
Decisions
The team will first try to focus its efforts on a certain age group within the states and try to develop a product working within a price bracket that would benefit many different types of customers. Once that has been established then we would be able to expand the idea to the other stores around the world. The team feels very confident being that this is a market that has the potential to expand and is also a market that is needed. People need athletic wear and sneakers, so the ability to allow the imagination to take over is great.
Position Reasoning The competitors are companies Like “Just for Feet”, “Dicks sporting Goods”, “Nike Outlet”, “Payless” and other similar small businesses. Payless and small businesses are no real threats because their target market groups are so small, Payless being much cheaper, but lack in quality and small businesses because they may be a little more convenient, but not posing any serious threats. The first is because Foot Locker has many obvious advantages. Being that they are the largest of their chain in the world, they bring in more revenue and are able to research, market and pitch customer’s world wide. This opens a much larger market for them to grow with. Second, the are able to have warehouses world wide which makes it easier and faster to ship products, but mostly cheaper to make ship and have a quicker turn-around time for these products. Their competitors do not have this option, therefore are limited as to what they will be able to market over Foot Locker. The strengths that their competitors would have over them would be that they do not rely on other countries to update, change product lines a laws that Govern those changes because most of them are they are domestic retailers.
Strategic Implementations Contrary to beliefs there are product modifications expected as the product moves through the product life cycle. There are going to be modifications to their website and products and always will be. It is up to the customer to view any changes that may occur frequently because they are subject to change at any time. At Foot Locker there are not any warranties because their products are what you call “as is”. This means you inspect just as you should any other products that you may buy before purchasing. They disclaim all warranties. There are test openings, but for the most part Foot Locker has an area and demand analysis in their standard operating procedures completed prior to opening a new store. Most test marketing that is conducted is done by franchises. Nike required retailers to purchase a certain number of less-popular lines. If those lines didn't sell well, the retailer lost money. In order to improve its sales performance, Foot Locker announced that it would not carry Nike products unless it received better pricing and product from the vendor. Both businesses suffered as a result of the decision, but by the end of 2003 they had negotiated an agreement and were looking forward to placing Nike products in Foot Locker stores once again. Foot Locker Inc. has always been able to provide a good concept to their existence in order to win their clienteles loyalty. This is achieved by providing athletic footwear and apparel to meet all demands not matter the style, sport, or age bracket. They are also able to provide good features and benefits because they have several systems set up to please both the customer and themselves. If a customer wants a product there are several ways to purchase them whether it be at many different local locations or online. This is convenient. Foot Locket also has it set up to where if you have a gift card then you receive an extra 10% off, great for the customer and even better for Foot Locker because the average amount of gift cards that actually get spent are by far less than those that are. It is not only the temptations that bring in the customers, but the products that they market. Customers don’t only purchase these products for what they were intended for, as far as equipment and uniforms, but for clothing. Customers sport Footlockers products on a daily basis. These are trends that Footlocker follows to maintain their status and supply all demands. Footlocker strategically places their warehouses in areas near their retailer location to minimize the shipping costs, thus, maintaining lower costs for high demand products. This keeps their revenue up and overhead low. Foot Lockers products differ from that of the competition because they tend to bring in more revenue than their competition so they are able to market their products a little more and Foot Locker, for the most part are a little cheaper than others with comparable products and use this to drive out their leading competitors. This is what leads to their dominating expansion. Footlocker is much larger than most would think. They are not only Foot Locker Inc., but Foot Locker, Lady Foot Locker, Kids Foot Locker, Eastbay, Foot Locker International, Foot Action and Champs and They Market their name and Logos with Red, White, and Blue. This not only being the colors that stand out the most for marketing, but are of course our Nations colors.
Primary
Footlocker should focus on their most promising customers and introduce more products or improve current ones to satisfy potential increase in demand. Continue to expand into current and future foreign markets by being aggressive and the worldwide leader of the footwear industry.
Alternatives
• Accelerate funding for numerous marketing campaigns in order to get to specific markets or customer groups. • Focus on improving working conditions and human rights at international manufacturer centers and at the same time increasing their productivity. • Implement product diversification with company’s newest technologies so resulting increased earnings could be reinvested into R&D plans.
Current update[pic]Top of Form
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Industry: Apparel Retailers

Cash Flow Statement
Bottom of Form
| |2006 |2005 |2004 |2003 |-- |
| |2/3/07 |1/28/06 |1/29/05 |1/31/04 |-- |
|Net Income / Starting Line |247,000 |263,000 |255,000 |209,000 |-- |
|Depreciation, Depletion & Amortization |175,000 |171,000 |154,000 |147,000 |-- |
|Depreciation & Depletion |156,000 |153,000 |137,000 |147,000 |-- |
|Deferred Income Taxes |21,000 |24,000 |50,000 |(5,000) |-- |
|Funds From Operations |470,000 |467,000 |422,000 |393,000 |-- |
|Extraordinary Items |-- |$0 |$0 |$0 |-- |
|Funds From/For Other Operating Activities |(281,000) |(113,000) |(133,000) |(122,000) |-- |
|Dec(Inc) In Receivables |-- |-- |-- |-- |-- |
|Capital Expenditures (Additions To Fixed Assets) |165,000 |155,000 |156,000 |144,000 |-- |
|Additions To Other Assets |$0 |$0 |$0 |$0 |-- |
|Net Assets From Acquisitions |$0 |$0 |242,000 |$0 |-- |
|Increase In Investments |1,992,000 |2,798,000 |2,884,000 |$0 |-- |
|Decrease In Investments |2,041,000 |2,767,000 |2,875,000 |$0 |-- |
|Disposal Of Fixed Assets |$0 |1,000 |$0 |$0 |-- |
|Other Uses - Investing |8,000 |11,000 |17,000 |15,000 |-- |
|Other Sources - Investing |8,000 |9,000 |1,000 |$0 |-- |
|Net Cash Flow - Investing |$116,000 |$187,000 |$423,000 |$159,000 |-- |
|Proceeds From Stock Options |3,000 |2,000 |$0 |27,000 |-- |
|Long Term Borrowings |$0 |$0 |175,000 |$0 |-- |
|Inc(Dec) In Short Term Borrowings |$0 |$0 |$0 |$0 |-- |
|Reduction In Long Term Debt |87,000 |35,000 |$0 |19,000 |-- |
|Cash Dividends Paid - Total |61,000 |49,000 |39,000 |21,000 |-- |
|Common Dividends (Cash) |61,000 |49,000 |39,000 |21,000 |-- |
|Preferred Dividends (Cash) |$0 |$0 |$0 |$0 |-- |
|Other Sources - Financing |2,000 |$0 |$0 |$0 |-- |
|Other Uses - Financing |$0 |$0 |$0 |$0 |-- |
|Net Cash Flow - Financing |($142,000) |($105,000) |$167,000 |($13,000) |-- |
|Effect of Exchange Rate On Cash |1,000 |2,000 |2,000 |(8,000) |-- |
|Changes In Cash And/or Liquid Items |(68,000) |64,000 |35,000 |91,000 |-- |
| |2007 Q3 |2007 Q2 |2007 Q1 |2006 Q4 |
| |11/3/07 |8/4/07 |5/5/07 |2/3/07 |
|Net Income (Loss) |-- |-- |17 |-- |
|Depreciation, Depletion & Amortization |-- |-- |-- |-- |
|Depreciation & Depletion |-- |-- |38 |-- |
|Amortization of Intangibles |-- |-- |-- |-- |
|Extraordinary Items & Discontinued Oper |-- |-- |-- |-- |
|Deferred Taxes |-- |-- |-- |-- |
|Other Funds from Operations |-- |-- |3 |-- |
|Funds from Operations |-- |-- |63 |-- |
|Accounts Receivable - (Incr) Decr |-- |-- |-- |-- |
|Inventory - (Incr) Decr |-- |-- |(174) |-- |
|Accounts Payable & Accrued Liab - Incr (Decr) |-- |-- |125 |-- |
|Income Taxes Payable - Incr (Decr) |-- |-- |5 |-- |
|Incr/Decr Other Accruals |-- |-- |-- |-- |
|Other Assets & Liabilities - Net Change |-- |-- |8 |-- |
|Funds From/For Other Operating Activities |-- |-- |(36) |-- |
|Net Cash Flow Operating Activities |-- |-- |$27 |-- |
|Capital Expenditures (Additions To Fixed Assets) |-- |-- |43 |-- |
|Disposal of Fixed Assets |-- |-- |$0 |-- |
|Acquisitions |-- |-- |$0 |-- |
|Increase in Investments |-- |-- |423 |-- |
|Decrease (Sale) in Investments |-- |-- |451 |-- |
|Other Uses - Investing |-- |-- |$0 |-- |
|Other Sources - Investing |-- |-- |$0 |-- |
|Net Cash Flow - Investing |-- |-- |$15 |-- |
|Net Proceeds from Sale/Issue of Common & Preferred |-- |-- |5 |-- |
|Proceeds from Stock Options |-- |-- |-- |-- |
|Other Proceeds from Sales/Issuance of Stock |-- |-- |5 |-- |
|Purchase of Common & Preferred Stock |-- |-- |26 |-- |
|Cash Dividends |-- |-- |19 |-- |
|Long Term Borrowings |-- |-- |$0 |-- |
|Reduction in Long Term Debt |-- |-- |$0 |-- |
|Increase/Decrease in Short Term Borrowings |-- |-- |$0 |-- |
|Other Uses - Financing |-- |-- |$0 |-- |
|Other Sources - Financing |-- |-- |1 |-- |
|Net Cash Flow - Financing |-- |-- |($39) |-- |
|Effect Of Exchange Rate On Cash |-- |-- |3 |-- |
|Increase/Decrease In Cash And Short Term Investments |-- |-- |(24) |-- |

The pricing structure is relatively the same as usual, but has a different approach as to how they might keep the effecting changes in “everyday procedures” from keeping them off line. These changes are to include more severe weather patterns, terrorist actions in and out of the United States, fusion trends, political instability and disruption to transportation services. The pricing structure for the product or service compared with that of the competition by having a large clientele with that comes venders wanting Foot Locker to market their products because the demands will not only be met but, would soar past its competitors. Even when Foot Locker strong-arms vendors into their whole sale purchasing range, it is beneficial for the vendors to comply because of the quantity of sales that they acquire. Consumers do not seem to be effected by movements of pricing, it does not seem to matter as much because of the way Foot Locker presents them and the way they Market their products. The demand has moved in a way, toward the name “Foot Locker” opposed to their products names, although this is still a leading contributing factor. The demand does not seem to be as effected as it used to be because people are used to seeing the wide variety and their previous prices has won their loyalty and now people stay loyal because they know what they are to expect and know what they will get when purchasing Foot Lockers products. Currently, the distribution strategies that are available to customers include being able to shop online at the official site or in store at almost 4,000 locations world wide. These distribution channels are very effective. It has something to offer for everyone. Statistics show that “87% of online shoppers are now comparing the offerings of online retailers against catalog merchants and retail stores to find the best deals and items that are in stock. 71% of online shoppers report they were able to find better sales and discount offers online than offline via a retail or catalog merchant.” (1) However, for those who choose not to shop online (“Thirty-five percent of consumers surveyed said added costs, such as shipping and handling, or lengthy delivery times resulted in their abandoning an online purchase. Sites requesting too much information is another annoyance that drives away 35 percent of buyers surveyed.”) Have the convenience of going to an actual store to make their purchase instead. (2) There are no other methods of distribution that should be added to accommodate new products, nor are there any other means of distribution available at this time. The only future developments that could possibly affect how, what, or when the consumers will be able to purchase shoes, is if both the online and in store shopping experience can be improved. For example, if online shopping can deliver cheaper shipping costs and faster shipping time, as well as a guarantee of the security measures that are taken when making an online purchase, customers may continue to shop online. For those customers that prefer to shop in the store, their experience can be improved by providing them with a larger in-stock selection to choose from, greater sales, friendlier staff and a shorter wait at the check out. Our communication objectives to promote our shoes include the basic ‘who, what, when, where, and why’s’ of what our customer’s needs are. We need to decide, who our customers are, what they want, when will we be able to deliver the product to them, where is the best place to promote our product, and why is this the product you should buy over someone else’s? Our overall promotional strategy includes researching exactly what the consumers want, and making sure we get it to them. Foot locker has a great media strategy to get their products out there for the public to see and want. Foot locker teamed up with Sports Celebrity Network Teams to Create Online, Athlete-Specific Merchandise Store. “The content-driven storefront displays player-specific merchandise, exposing potential customers to items related to their favorite stars (i.e., John Elway fans will be able to purchase John Elway merchandise, Ken Griffey Jr. fans will be able to order Ken Griffey merchandise, etc.).” (3) Sales promotions that are used online include signing up for a free Foot Locker membership that allows you as the customer to receive discounts on Foot Locker merchandise, as well as emails that inform you of new, upcoming items that you may otherwise not be aware of. The objective of this ‘club membership’ is to encourage the consumer to feel as if they are part of a VIP group, and that if they are among the first to purchase the latest styles of shoes, they will be trendsetters ahead of the rest. This both increases customer loyalty and sales. The ratio of advertising and promotion to actual sales is recorded as having “raised its operating profit forecast to at least $418.9 million at then-current exchange rates, from an earlier projection of $359.1 million to $395 million. The company said sales were expected to increase 30 percent or $2.75 billion, due to an expected boost owing to strong orders from the U.S., Europe, the Middle East and Africa.” (4) The following milestones identify the key marketing programs. It is important to accomplish each one on time and on budget.
Milestones
| |Start Date |End Date |Budget |Manager |
|Marketing Plan Completion |7-Jan-08 |24-Feb-08 | |Team Leader |
|Advertising - 1st Qtr |1-Jan-08 |31-Mar-08 | $ 106,500 |Purnell |
|Advertising - 2nd Qtr |1-Apr-08 |30-Jun-08 | $ 107,500 |Purnell |
|Advertising - 3rd Qtr |1-Jul-08 |30-Sep-08 | $ 149,000 |Purnell |
|Advertising - 4th Qtr |1-Oct-08 |31-Dec-08 | $ 171,000 |Purnell |
|Other | | | $ 70,000 |Purnell |
|Total Marketing Expenses | | | $ 604,000 | |

According to Foot Locker, Inc website http://www.footlocker-Inc.com/, sales increased by 2 percent in 2006 compared to 2005. Sales for 2007 has not been posted as of yet. Therefore, I projected a 4 percent increase is sales based on Foot Locker’s sales history. Results will be measured by the difference of Projected Sales Goals minus Actual Sales.
Sales Forecast
| |Millions |
|2008 |1st Qtr |2nd Qtr |3rd Qtr |4th Qtr |Total |
|Projected Sales Goals | $ 1,055 | $ 1,096 | $ 1,835 | $ 2,000 | $ 5,986 |
|Actual Sales | $ - | $ - | $ - | $ - | $ - |
|Difference | $ - | $ - | $ - | $ - | $ - |

The marketing expenses will increase each quarter as Foot Locker is trying to generate more shoe sales and other products in the stores. The expenses will also spike in the 3rd qtr. & 4th qtr. during the winter holiday season as Foot Locker will should strive to attract back-to-school shoppers, athletes, and holiday shoppers.
Marketing Expense Budget
|2008 |1st Qtr |2nd Qtr |3rd Qtr |4th Qtr |Total |
|Advertisements | $ 106,500 | $ 107,500 | $ 149,000 | $ 171,000 | $ 534,000 |
|Other | $ 10,000 | $ 15,000 | $ 20,000 | $ 25,000 | $ 70,000 |
|Total Marketing Expenses | $ 116,500 | $ 122,500 | $ 169,000 | $ 196,000 | $ 604,000 |

References
Shop org. 2007 http://www.shop.org/learn/stats_usshop_general.asp Shop org. 2007 http://www.shop.org/learn/stats_intshop_general.asp CNET Networks, Inc 2007 http://www.findarticles.com/p/articles/mi_m0EIN/is_1998_Oct_27/ai_53133926CNE Foot Locker Inc. 2007 http://www.fashionunited.co.uk/news/footlocker.htm Foot Locker, Inc 2007 http://www.footlocker.com/home/default/cfm?SID=8793&inceptor=1&cm_mmc=SEM-_Engine

Foot Locker, Inc 2008 http://wwwfootlocker-inc.com/Website2003/HomepageFLLink.htm Foot Locker, Inc 2008
http://www.footlockerinc.com/Website2003/Community/CommunityIntro.htm