BASIC MARKETING 18th Edition by Jerome McCarthy William Perreault, Joseph Cannon

Exercise 29

SplendidWedding.com
Cathey Newsome is happy with her life but disappointed that the idea she had for starting her own business hasn't taken off as expected. Within a few weeks she either has to renew the contract for her Internet Web site or decide not to put any more time and money into her idea. She knows that it doesn't make sense to renew the contract if she can't come up with a plan to make her Web site-based business profitable-and she doesn't like to plan. She's a "doer," not a planner.
Cathey's business, SplendidWedding.com, started as an idea 18 months ago as she was planning her own wedding. She attended a bridal fair at the convention center in Raleigh, North Carolina, to get ideas for a wedding dress, check out catering companies and florists, and in general learn more about the various services available to newlyweds. While there, she and her fiancé went from one retailer's booth to another to sign up for their wedding gift registries. Almost every major retailer in the city-ranging from the Home Depot warehouse to the Belk's department store to the specialty shops that handle imported crystal glassware-offered a gift registry. Some had computers set up to provide access to their online registries. Being listed in all of the registries improved the odds that her wedding gifts would be items she wanted and could use-and it saved time and hassle for gift-givers. On the way back from the fair, Cathey and her fiancé discussed the idea that it would be a lot easier to register gift preferences once on a central Internet site than to provide lots of different stores with bits and pieces of information. A list at a Web site would also make it easier for gift-givers, at least those who were computer users.
When Cathey got home, she did an Internet search and found several sites that focused on weddings. The biggest seemed to be www.weddingchannel.com. It had features for couples who were getting married, including a national gift registry. The site featured products from a number of companies, especially large national retail chains; however, there was a search feature to locate people who provide wedding-related services in a local ZIP code area. Cathey thought that the sites she found looked quite good, but that they were not as helpful as a site could be with a more local focus.
The more Cathey and her fiancé discussed the idea of a Web site offering local wedding-related services, the more it looked like an interesting opportunity. Except for the annual bridal fair, there was no other obvious local place for consumers to get information about planning a wedding and buying weddingrelated services. And for local retailers, florists, catering companies, insurance agents, home builders, and many other types of firms, there was no other central place to target promotion to newlyweds. Further, the amount of money spent on weddings and wedding gifts is very substantial, and right before and after getting married many young couples make many important purchase decisions for everything from life insurance to pots and pans. Spending on the wedding itself can easily exceed the cost of a year of college.
Cathey was no stranger to the Internet. She worked as a Web site designer for a small firm whose one and only client was IBM. That IBM was the only client was intentional rather than accidental. A year earlier IBM had decided that it wanted to outsource certain aspects of its Web site development work and have it handled by an outside contractor. After negotiating a three-year contract to do IBM's work, several IBM employees quit their jobs and started the business. IBM was a good client, and all indications were that IBM could give the firm as much work as it could handle as it hired new people and prospected for additional accounts over the next few years. Cathey especially liked the creative aspects of designing the "look" of a Web site, and technical specialists handled a lot of the subtle details.
Before joining this new company, Cathey had several marketing-related jobs-but none had been the glamorous ad agency job she dreamed of in college as an advertising major. Her first job as a college graduate was with an ad agency, but she was in a backroom operation handling a lot of the arrangements for printing and mailing large-scale direct-mail promotions. In spite of promises that it was a path to other jobs at the agency, the pay was bad, the work was always pressured, and every aspect of what she had to do was boring. After six punishing months, she quit and went looking for something else.
When a number of job applications didn't turn up something quickly, she took a part-time job doing telemarketing calls for a mortgage refinance company. Cathey's boss told her that she was doing a great job reeling in prospects-but she hated disturbing people at night and just didn't like making sales pitches. Fortunately for her, that pain didn't last long. A neighbor in Cathey's apartment complex got Cathey an interview for a receptionist position at an ad agency. That, at least, got her foot in the door. Her job description wasn't very interesting, but in a small agency she had the opportunity to learn a lot about all aspects of the business-ranging from working on client proposals and media plans to creative sessions for new campaigns. In fact, it was from a technician at that agency that she learned to work with the graphics software used to create ad layouts and Web site pages. When the Web site design job came open at the new firm, her boss gave her a glowing recommendation, and in two days she was off on her new career.
Although Cathey's jobs had not been high-profile positions, they did give her some experience in sales promotion, personal selling, and advertising. Those skills were complemented by the technical computer skills of her fiancé (now husband), who made a living as a database programmer for a large software consulting firm. Taking everything as a whole, they thought that they could get a wedding-related Web site up and running and make it profitable.
There were several different facets to the original plan for SplendidWedding.com. One facet focused on recruiting local advertisers and "sponsors" who would pay to be listed at the Web site and be allocated a Web page (which Cathey would design) describing their services, giving contact information, and links to their own Web sites. Another facet focused on services for people who were planning to be married. In addition to an online wedding gift registry, sections of the Web site provided information about typical wedding costs, planning checklists, details about how to get a required marriage license, and other helpful information (including a discussion forum with comments about the strengths and weaknesses of various local suppliers). Cathey also started a blog that helped foster more feedback from customers. A man and woman could sign up for the service online and could pay the modest $20 "membership" fee for a year by credit card. Friends, family, and invited guests could visit the Web site at no charge and get information about wedding preferences, local hotels, discounts on local car rentals, and even printable maps to all of the churches and synagogues in the area.
When Cathey told friends about her plan, they all thought it sounded like a great idea. In fact, each time she discussed it someone came up with another idea for a locally oriented feature to add to the Web site. Several friends said that they had tried national Web sites but that the information was often too general. But generating more new ideas was not the problem. The problem was generating revenue. Cathey had already contracted for space from an Internet service provider and created some of the initial content for the Web site, but she only had four paying sponsors, two of whom happened to be family friends.
Cathey started by creating a colorful flyer describing the Web site and sent it to most of the firms that had participated in the bridal fair. When no one sent back the reply coupon for more information, Cathey started to make calls (mainly during her lunch hour at her full-time job). Some stores seemed intrigued by the concept, but no one seemed ready to sign up. One reason was that they all seemed surprised at the cost to participate and get ad space at the Web site-$2,400 a year (about the same as a 1/16-page display ad in the Raleigh Yellow Pages). Another problem was that no one wanted to be the first to sign up. As one florist shop owner put it, "If you pull this off and other florists sign up, then come back and I will too."
Getting couples to sign up went slowly too. Cathey paid for four display ads in local Sunday newspapers in the society section, sent information sheets about the Web site to clergy in the area, listed the Web site with about 25 Internet search engines, and sent carefully crafted press releases announcing the service to almost every publication in the area. One article that resulted from a press release got some attention, and for a few weeks there was a flurry of e-mail inquiries about her Web page. But after that it slowed to a trickle again. More recently she tried to use Google AdWords which placed ads next to Google search results when someone from the greater Raleigh area searched on the keyword wedding. She got a few more hits from this and wondered if she should increase the number of keywords-and wondered what the best keywords could be. She thought about creating a Facebook page but wondered how it would help.
Cathey's diagnosis of the problem was simple. Most people thought it was a great idea, but few couples knew where to look on the Internet for such a service. Similarly, potential advertisers-many of them small local businesses-were not accustomed to the idea of paying for Internet advertising. They didn't know if the cost was reasonable or if her site would be effective in generating business.
Cathey's life as a married person was going great and her job as a Web page designer kept her very busy. Her free time outside of work was always in short supply because the young crowd at her office always had some scheme for how to keep entertained. So she wasn't about to quit her job to devote full time to her business idea. Further, she thought that once it got rolling she would only have to devote 10 hours a week to it to earn an extra $30,000 a year. She didn't have delusions of becoming a "dot-com millionaire." She just wanted a good locally oriented business.
However, it still wasn't clear how to get it rolling. After a year of trying on and off, she only had four paying ad sponsors, and one of them had already notified her that he didn't plan to sign up again because it wasn't clear that the Web site had generated any direct leads or sales. Further, it looked like anything she could do to attract more "members" would end up being expensive and inefficient.
Cathey thinks the idea has real potential, and she's willing to do the work. But she's not certain if she can make it pay off. She has to decide soon, however, because the bill for the Internet service provider is sitting on her desk.
What is Cathey's strategy? What should she do? If she were to move forward, what strategy would you recommend? Does her financial goal seem realistic? Why?