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Case Study Of HOOP

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HOOP
HOOP is a sustainable brand that fulfills consumers’ everyday clothing and accessory needs. Its products are designed to maximize their physical and emotional value.
Revenue Mode: HOOP uses a point based incentive mode. It utilizes the buffers built for the discount in the business as usual (BAU) scenario to incentivize consumers for returning the product after use. HOOP offers five pathways under two payment plans—Ownership plan and Investment plan—to incentivize and encourage customers for returning the product after use (figure 3). We explain them in detail with an example and use three scenarios to demonstrate the broad range of possible gross margins that can be generated from this business model considering current consumption practices.
Ownership Plan: This is a plan for the consumers who prefer ownership.
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The success of VintageHOOP brand depends on its ability to make used clothes fashionable with a promise for quality. It is recommended to use celebrity endorsement, positive press, and marketing as tools to help create a positive image of the brand.
Revenue Mode: VintageHOOP product is sold at 30% value of its HOOP retail price. VintageHOOP provides only one choice—ownership plan—and gives the incentive to encourage consumers to return the product after use (figure 4). At the point of purchase, a consumer pays 100% of the product value. We use same jeans (as HOOP) to maintain the continuity and explain the revenue mode for VintageHOOP. The cost of cleaning, repairing, reselling and transportation (from the point of collection to warehouse and store) is estimated to be around $5 per piece. Its retail price was set at $17 (30% of HOOP retail price). Here, two incentive modes are explored to understand the possible range of profit (Table
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