EXIMUSE GLOBAL GROUP , LLC.
612 Village Lane Winter Park, FL 32792 Phone: +1 407-278-5888 Fax: +1 813-283-2461 E-mail: marketing@eximuse.com Website: www.eximuse.com
Letter of Proposal (LOP) Mr. Giovanni Pena Ms. Ruby Pena Mr. Ruben Pacheco
As we agreed during the first meeting that took place on September 22, 2006 between Giovanni Pena with Romina Kunstadter and Eximuse Global Group (hereafter Eximuse) represented by Marc Fetscherin, Greg Turkanik and Wenni Xiong, we are sending this Letter of Proposal outlining our understanding of the current situation, the problem and our solution approach. Current Situation Giovanni Pena is currently involved in running a painting business, Magic Painting of Central Florida, Inc where he is managing this company for about 3 years. The company is a small-mid sized company having about 40 FTE and total sales of about USD 1.4mio, in the B2B market, mainly located in Central Florida with a significant part in Tampa and Sarasota. Giovanni Pena, with his partners Ruby Pena and Ruben Pacheco (hereafter the client) are currently exploring an idea for a new venture that would focus on sourcing and selling exotic flooring wood, specifically Kempas, in Florida. According to the client, there is a demand for such product and according to client’s own research there is only one provider of this product in Florida. Currently they are not in the flooring business, where Ruby Pena is an owner of two sunglass wholesale stores in Miami and Ruben Pacheco would be more an investor in the venture.
The Problem In order to minimize the risks and costs of pursuing a new venture and maximize the likelihood of success, there are several issues that need to be addressed and resolved before engage any further financial and time resources to this venture which can costs the client instead ten thousands of dollars. There is a need for a thorough analysis of current external environment and internal situation of the firm or the client. This should include such elements like company, customers, competitors, collaborators, and climate. Here are just some of the issues to be addressed: Company Experience in wood flooring? Experience in importing from Asia? Chinese Language? Customers Is there really a market? Market size, growth, trends? Who is the customer: constructor or home owner? Competitors Direct and indirect? If only few competitors – why? Where? Collaborators Suppliers: where and how to source the product? Channels of distribution? Legal, warranty? Climate/Context Import tariffs, quotas? Customs? Risks? Exchange Rate? Business Culture?
EXIMUSE GLOBAL GROUP , LLC.
Solution Approach The main objective of this project is to reduce the client’s exposure to risk, reduce the costs, save client’s time and increase potential for success. We propose four phases of the project which have the objective to look at the above mentioned issues. Phase 1: Detailed market analysis to determine the attractiveness of a market of wood flooring (Kempas in particular) in US and Florida and to understand evolving opportunities and threats as they relate to the strengths and weaknesses of the client. Some of the issues analyzed will be: market, market potential, substitute products, competitors. Additional option in phase 1: Due to Wenni’s planned business trip to China in connection with projects for other clients, Wenni could conduct some initial meetings with producers of exotic flooring wood Kempas if requested. While this is a preparation for phase 3, it will certainly be very cost efficient as it would not include the high fix costs related to airfare and hotel. It might also save time for phase 3. Phase 2: Market research about product sourcing. Comparison of sourcing from US based manufacturer/importer of exotic wood vs. sourcing directly from China (make or buy). Some of the issues analyzed will include: costs, time, tariffs, quality issues, storing/inventory (condition for storing wood, costs and risks of high inventory etc.). Phase 3: Searching for potential manufacturers and facilitating the process of negotiations, translation, assessment and comparison, telephone conferencing, writing letters (in Chinese), developing the relationship. Phase 4: Developing marketing strategy and marketing mix for the new venture. This phase will include topics like segmentation, targeting, positioning, developing value proposition, pricing, promotion, channel strategy. While we suggest all four phases, the decision about every next phase (2 through 4) can be reached after completion and presentation of findings of the previous phase in order to minimize your costs and maximize your potential for success. Each phase is needed for us in order to provide you with the best service we can offer. Team The team consists of senior people from Eximuse and the involvement of an Advisory Board Member. The first phase should take about 3 weeks and the price is USD 4,000. If additional option is accepted, fee for meetings with Chinese producers is based on $100 per hour fee + costs of travel to producers within China. Phase 2 should take about 2 weeks to accomplish and the price is USD 3,000. Phase 3 depends on the scope of the project (if international travel, time required) the costs of this phase will be discussed and agreed in a later stage. Phase 4 should take approximately 3 weeks and the price is USD 4,000. The prices above include all administration and office work. A 50% deposit for each phase is required to start work, with the balance due within seven (7) working days upon completion of each phase and receipt of deliverables.
EXIMUSE GLOBAL GROUP , LLC.
Due to Wenni’s trip to China, if the client decides to pursue the additional option, the decision should be made before October 2, 2006. The starting date for the project is five working days from receipt of 50% deposit.
The client accountabilities include: Provision of all information having a bearing on the project Providing timely answers for questions or issues regarding the project Payment in conformance with the terms above Expense reimbursement terms: All travel expenses (including, but not limited to, business-class airfare, 4-star hotel, food and transportation) will be reimbursed at cost by the client within seven (7) working days upon delivery of the receipts by Eximuse. The signatures below indicate acceptance of the details, terms, and conditions in this proposal, and provide approval to begin work as specified upon receipt of the 50% deposit.
For EXIMUSE Global Group: _______________________ Greg Turkanik General Manager
For the client: _______________________ Signature _______________________ Name/Last name Date: __________________
Date: __________________