Day 11

This morning, the marketing manager of Velasca presented information about the company and the Bottegas (stores) that sell their products. Velasca sells hand crafted men’s leather shoes that are 100% made in Italy. Their target market is businessmen older than 25 who want a reliable product, but do not want to pay the price of competitors. One of the biggest competitors of Velasca is Church’s. The average price of a Church’s shoe is 600 euros, and Velasca’s average price is 185 euros.

Velasca offers a lower price because of their direct to consumer business model. Essentially, they cut out the middle man and sell directly to the end user through the internet and storefronts currently in Milan and Rome. By doing this, they turn what would be additional production costs and retail markups into benefits for customers in the form of lower prices. However, Velasca is a new, small brand, so they cannot compete in terms of branding. If a customer wants Church shoe, they will pay extra for the name.

A unique opportunity that Velasca has with their online market is the ability to conduct all marketing on the internet. The direct to consumer model is a result of the internet as it is easier to reach new target markets, like the United States. 80% of Velasca’s marketing is on Facebook because it is more effective than search engine marketing on Google. Search engine marketing is when companies pay to be featured at the top of the search results. On Facebook, companies can filter through people’s profiles and posts to personalize their marketing strategy. For example, if someone clicks on a Velasca ad but does not buy anything, Velasca will continue to send them ads and maybe even discounts to get them to buy the product.

Another way that Velasca markets on the internet is through influencers on Instagram. Currently, they are working with a blogger to gain name recognition. Their gentleman’s collection was created with the help of this man, and in return for wearing their shoes, Velasca pays him. The final unique way that Velasca markets is through an online magazine. Accessible through their website, their magazine helps to establish the brand.

Marketing online is very important to Velasca because last year, their revenue was 1.2 million, and 70% of that was through the internet market. Each year, they expect to double their revenue. However, as the company grows, they will not expand their workforce equatable to that of a huge company. The only sector that may grow is customer relations. Right now, their organizational culture is young and informal to foster creativity. On their website, pictures of the employees are displayed and each image has its own quirky feature. For example, the Milan store manager has sunglasses drawn on. If Velasca were to hire more employees, the informal structure will need to be changed to a more hierarchical model to maintain stability, and this may hinder their ability to be innovative.

Another issue that Velasca faces with expanding is the capacity of suppliers. Currently, they commission teams of artisans to manufacture their shoes. However, due to the changing economic situations, artisanal labor is less valued, and as a result, less people are entering this field.

In the United States, there is a similar shoe company with an almost identical business model. For Velasca, they are a competitor because they want to sell in the same markets. However, in the United States, the political climate makes entrepreneurial business easier. Last year, the company got 50 million dollars from investors, but Velasca only received 120,000 euros. This is because the Italian government makes it extremely hard to open a new company. Because of this, Velasca has extra barriers that they must overcome.

Also, in the United States, there are a few similar models. One example is Blue Apron. Blue Apron is a food company that delivers premeasured ingredients for meals directly to customer’s doorsteps. They do not have storefronts, and sell exclusively online. Therefore, the majority of their advertising is on the internet too. For example, I constantly see their ads when I’m on Facebook.

After learning about the company and having a quick lunch (I tried a new pasta), we took a bus to Fiege’s second warehouse. Fiege is a logistics company that ships Velasca shoes. They receive the product from the supplier and then check for quality on Velasca’s behalf. For example, they make sure that each shoe is the same size in the box and that the product isn’t damaged. After doing quality control, the shoes go into the stock shelves and wait for an order to arrive. The average time to prepare an order for shipping after being received by Fiege is 24 hours.

Overall, today was very informative. The previous companies that we had visited were owned by older, more traditional people. In contrast, Velasca has young and innovative co-founders that have pioneered their own business model. During this week, I have broadened my knowledge of business and supply chains, and I can’t wait for the opportunity to learn more in the next couple days!




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