Agenda

1. Agenda • Background Information • Product Design and Innovation • Selection of Materials • Manufacturing • Sales and Marketing • Customer Service • Question and Answers

2. Design Presentation By Mery Montgomery aka: Lady of Leisure

3. Hi, I’m Julia Hi, I’m Sophia

4. Who is Mery Montgomery? • Mother of Julia and Sophia – ages 6 & 4 • PTSA President (for the past two years) • Business Owner and designer for Juley Jules – A COMPANY that manufacturers and sells high end gift items • Ex-pat for the past 10 years (Philippines and China) • Last “Corporate” Job – Corporate Event Planner for Abbott Laboratories, Chicago • Where was I born/raised: Los Angeles, California

5. History of Juley Jules • Started Juley Jules 7 years ago while living in the Philippines • My 25 person factory is located in Makati, which is in Metro Manila, Philippines • I sell monthly at a “bazaar” and export to select clients around the world. I also provide custom orders for weddings, parties, etc. • I sell through my home in China and during the Holidays, I sell at school bazaars. • I have a partner who is based in the Philippines who oversees the factory workers for me and makes payments

6. JULEY JULES PRODUCT LINE • “Core” Products are variety of boxes • Jewelry Box • Tea Box • Watch Box • Mahjong Sets

7. JULEY JULES PRODUCT LINE • Other Products: • Notebooks • Guest Books • Photo Frames • Photo Albums • Expanded to Include: • Purses • Balikbayan Box Covers • Custom Tea Trays

8. Product Design and Innovation

9. Generating Ideals/Design Influences • Personal Influences • Observation/Research • Store Visits • Internet • Trends (Color, Style) • Customer Feedback/Requirements • Current Product Line • “Fit” with existing products

10. Generating Ideals/Design Influences • Competitive Products • Required Quality Level • Pricing • Physical Attributes of Product • Size, shape, dimensions • Ease/Complexity of Manufacturing • Time to Market/Complexity or Simplicity of Design

11. Product Innovation Are there really any original ideals out there?

12. Product Innovation • Taking an existing idea and expanding on it • Personalize/Customize • Utilize different hardware/accents • Fabric selection • Color choice • Identify a way to “finish” design = Juley Jules original • Not interested in direct copying/plagerism • Does not require talent

13. Product Innovation • Necessary for continued success of business • Competitors will copy your design → Must stay ahead • Customers want something new → “Buzz” • Innovation does not always mean a complete redesign/new product • Product line extension • Minor modifications in color, materials, etc. • “Innovate or Die” • But know your core competencies (i.e.: Juley Jules won’t be coming out with food products!)

14. Selection of Materials

15. Selection of Materials • For Juley Jules, the quality of the materials is a critical success factor • Materials have unique characteristics/properties – must understand when making design decisions • Materials that are outwardly visible to customers • Materials that are “Hidden” but can cause problems • Let’s look at one example of a Juley Jules Product: • Jewelry Box

16. Selection of MaterialsExample: Jewelry Box • Visible Materials/Considerations • Fabric: Quality of Silk (Lower grades damage easier); Color, Pattern • Jade Stone: Color, Shape, Size → Compliment Fabric • “Hidden” Materials/Considerations • Manufacture of the box → Easily shaped, but does not easily break • Glue → Odor, Adhesiveness, Visible Stains • Padding → Thickness

17. Manufacturing The Product

18. Manufacturing the product • Choice of Factory • Volume Requirements • Quality Requirements • Cost Targets • Ethical Considerations • Volume Requirements • Mass Market vs. Niche Product • Custom Orders

19. Manufacturing the product • Quality Requirements • Luxury vs. Non-Luxury • Don’t want to combine high quality materials with low grade production • Cost Targets • Design complexity • Automation vs. manual labor (craftman) • Ethical Considerations • Fair Trade Factory → Why this is important to me and Juley Jules • Employee welfare/working considerations → happy employees working in good conditions for a decent wage produce great products

22. SALES AND MARKETING Who are my customers → Luxury vs. Mass Market

23. Sales and Marketing • Luxury is not only about materials, brand, or exclusivity; luxury is also about how much time it took to make the product • Quality speaks for itself • Satisfied customers tell other potential customers • Marketing Considerations • Differentiate your products from competition • Customer utility/benefit/need filled • Customer must perceive value from your product • Display/sales presentation → needs to be consistent with design of product (luxury products need high end presentation)

24. Sales and Marketing • Product Pricing – Why this is important • Knowing your price point, cost point, and profit margin can and will influence design → you may have greatest design, but might not be manufacturable or marketable • Customers perceived value → luxury goods can command premium prices only if customers see fair “value for money”

25. Sales and Marketing • What is competitive price position → can you afford to be “out of sync” without clear product advantage? • Do you discount for large quantities? Does this potentially reduce customer perception of “Value of Design” • Balance price vs. volume → sell one or one million?

26. The need for luxury goods or material possessions – what drives us?

27. Patek Philippe Watch At Patek Philippe, the oldest family-owned watchmaker in Geneva—and one of few that still makes its own movements—each 5004J takes four-and-a-half years to produce, partially because it's so, well, complicated, and partially because only Patek's top-tier watchmakers are allowed to work on a Grand Complication. Once each watch is complete, it's then subjected to 50 days of observation and testing—the self-winding mechanism alone comprises 407 pieces, so there's certainly plenty to check. Time to make: 4.5 yearsPrice: $166,600 (that's right, $166,600, not $166,000) • At Patek Philippe, the oldest family-owned watchmaker in Geneva—and one of few that still makes its own movements—each 5004J takes four-and-a-half years to produce, partially because it's so, well, complicated, and partially because only Patek's top-tier watchmakers are allowed to work on a Grand Complication. Once each watch is complete, it's then subjected to 50 days of observation and testing—the self-winding mechanism alone comprises 407 pieces, so there's certainly plenty to check. • Time to make: 4.5 yearsPrice: $166,600 (that's right, $166,600, not $166,000)

28. Van Gorkom Hiking Boots • Boots come in three heights, and each pair is made from one piece of oil-tanned leather (available in two weights), with brass rivets and a steel shank. A perfect fit is guaranteed, regardless of how oddly shaped your feet may be, and the process of breaking them in is made easier by their custom-made orthopedic insoles. Van Gorkom devotes an entire week to each pair, which translates to a current wait list of around two years (and which, when you think about it, lets you plan to go hiking while sparing you the bother of the arduous hiking itself). • Time to make: 40 hoursPrice: $1,500

29. Oliver Goldsmith Sunglasses • Each pair is cut by hand from a sheet of plastic and made using nothing more than handsaws, files, and a little hot air to keep the acetate malleable. The process takes about four hours, which may not seem like a lot, but it's an eternity compared with the amount of time it took to produce that five-dollar pair you bought on the sidewalk. Then there's the waiting time—not many people have the skills to make a pair of Goldsmiths, so orders generally take about six weeks to fulfill. • Time to make: 4 hoursPrice: From $500

30. Vanilla Bicycles • Clearly, a woman who waits nine months for a handbag is insane, and yet, after perusing the Vanilla Bicycles catalog, you come to believe that a man who'll wait four years for a custom bike is just being patient. The Portland, Oregon company's beautiful, handcrafted two-wheelers are designed and built from scratch for each customer. Founder Sacha White obviously believes that speed is more appropriate when riding a bike than making one: just painting the frame takes six weeks (that's six times longer than it takes to hand-paint an Aston Martin), and White can wax lyrical about spending ten hours polishing lugs, which are bound to his steel frames with silver. From the brand's super-strong mountain bikes to its elegant tourers, there's nothing plain about Vanilla. • Time to make: 60 hoursPrice: Frames (without forks) from $2,150

31. Confederate Hellcat • Confederate believes that bigger is better when it comes to just about everything—the backbone of their Hellcat frame is three inches thick, rather than the standard one-and-a-half to two inches. The exception to their more-is-more rule: output. The Alabama-based enterprise makes only about 120 bikes per year—less than Harley cranks out in a day—and each one is hand-built to order by a single operator from parts that are also designed in-house.. This places the output sprocket on the right side of the bike, counterbalancing the heavy moving parts of the engine, which would otherwise drag it to the left. Good thing it's stable—if you're able to get your hands on one of these, you'll end up spending a lot of time on it. • Time to make: 70 man hoursPrice: $70,000

32. Customer Service – how this affects your success • 1 time customer vs. a customer for life • Providing one-on-one customer service • Providing the correct price and not selectively discounting • Follow-up if there is an issue • Special Orders • Product replacement • You can differentiate your product design by how you address customer service issues

33. Juley Jules – Putting It All Together • What choices have I made that have influenced the design process? • This will be highly visible/displayed item by the customer or will be given as gifts • Luxury items using highest quality materials • Fair Trade Factory: Limits volume and type of production but meets quality requirements and ethical considerations • Short lead time from design concept to finished product

34. Juley Jules – Putting It All Together • Regular “turnover” of product line • Pricing consistent with quality and customer perception • Don’t stray too far from core competency • Customer service includes custom design capability

35. Questions/Answers