natura - marketing project

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Table of Contents

TABLE OF CONTENTS ............................................... 1INTRODUCTION ....................................................... 2STRATEGY ............................................................ 2MISSIONSTATEMENT............................................................. 2AIMS AND OBJECTIVES ........................................................... 2STRATEGIC VISION............................................................... 2

PEST ANALYSIS ....................................................... 3POLITICAL........................................................................ 3ECONOMIC ....................................................................... 3SOCIAL ........................................................................... 3TECHNOLOGICAL ................................................................. 4

COMPETITION AUDIT ................................................ 5CUSTOMER PROFILE ................................................. 7POSITIONING .......................................................... 8PRODUCT .............................................................. 9PRODUCT RANGE ................................................... 10PRICE ................................................................. 11PLACE ................................................................ 12PROMOTION ......................................................... 13CONCLUSION ........................................................ 14

APPENDIX ............................................................ 15GROUP MEMBERS................................................................ 15

BIBLIOGRAPHY ...................................................... 16


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Introduction

In todays dynamic and fast moving business world, the market for fashion and

beauty is continuously developing. Therefore, it was crucial to develop a market

plan for a product that would fit into a gap in the market and also establish itself

within that market.

In order to provide this market plan we begun by undertaking a thorough PEST

analysis of the industry that we wanted to enter, to ensure we knew of any

barriers that may prevent the product from developing, and also factors that

would prevent consumers from purchasing it.

As part of the prior analysis, a competition audit was completed to find out who

the main competition would be for our product and be able to illustrate our

position within the market. This report highlights the main competitors to the

brand, as well as the products and prices that they offer.

Our customer profile was produced in an attempt to define our target customer,

the person who this range of products would be aimed at in our promotions. After

deliberation and consultation between group members, we were able to identify

Outlined in this report furthermore is our business strategy including mission

statement, objectives and a strategic vision. A detailed marketing mix is included

providing insight to the range of products, as well as their pricing, promotion and

placement.


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Strategy

Mission StatementOur Mission statement provides a brief overview of our overall intentions now andalso in the future. It reflects our values and shows the direction and strategy wewant to follow.

Aspire to produce a unique range of skincare oils

Always committed to customers

Kind to the environment

Aims and Objectives

Our first aim is to respect the environment by using natural oils from sustainablesources, yet maintaining a high quality product for our customers to use. We mustuse the highest quality oils available within our budget to ensure the productquality is sustained, by utilising AAKs expertise and available resources. All peopleconnected to the brand will be treated equally, including stakeholders andconsumers themselves. A feedback system will be setup for consumers to voice

their opinions, raise any queries or make suggestions with regards to the range ofproducts on offer.

Strategic Vision

The strategic vision refers to the direction and activities that the business wants togo towards in the future. Our strategic vision outlines how we will develop ourproducts and achieve our objectives.

1.Develop a high quality luxury beauty product2.Provide customers with products that fulfil their needs

allowing for feedback and consultation

3.Use of current expertise and resources in production4.To be profitable and sustainable in a challenging

economic climate

5.Effective and complete communication in after salesservice


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PEST Analysis

PoliticalNumerous laws and regulations must be followed upon the production of beautyproducts, including the Cosmetic Products Regulations 2010 bill. The use of oilsand minerals in beauty products is strictly regulated and all precautions must betaken to ensure all laws are adhered to. Laws governing labelling and packagingare also enforced.

Economic

In order to market our product efficiently it was crucial to access the economicfactors which may lead to a lower number of our products being sold. Beauty andcosmetics items accounted for 5.5% of all UK retail sales in 2007, this is positivenews for us as this means that there is a great potential for our product to besuccessful.

The recession will have an impact on consumers in reducing consumer confidenceto spend. With consumers being careful with their money due to the rising cost ofliving, a lower disposable income on luxury products is available. It is well knownhowever that during economic hardship, sales of larger luxuries such as cars andtelevision often decline, being replaced by smaller luxuries such as chocolates andflowers, so a product such as a small luxury item is likely to appeal to a wideaudience.

It will also be harder to get any necessary finance in order to raise capital for ourproducts; this is due to banks being wary of lending money to new ventures. If aloan is available, it is likely to have a high interest rate due to the banks

Due to the recession our research showed that there has been a significant changein consumer behaviour consumers are being more thrifty, being greener andspending more time at home and online. This poses a threat when we are sellingour skincare oils. Consumers no longerlive to shop, they shop to live. (ImogenMatthews, 2010) This means that consumers are more likely to question whetherthey really need to buy our product or not, this is worrying because skincare oilsare classed as an unnecessary item and this may negatively impact on our sales.

Social

Over the past five years there has been a dramatic increase in the sales of organicand fair-trade products, this started with products such as fair-trade fruit and

coffee and have filtered through into the cosmetics sector. One of the reasons forthis is that consumers have become more concerned about green issues such as the


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origin of the ingredients of their products. Companies such as Liz Earle naturallyorganic skincare and The Body Shop have always had a strong ethical ethos andthus their products have sold well. This is good news for us as it means that we aremore likely to have a large target audience who are concerned with the greennature of their products.

However research showed us that consumers ethical and green concerns aredirectly related to their income stream, this means that we need to ensure thatwe market our product to customers of a higher socioeconomic status who arelikely to have a higher income and can therefore afford to purchase our product.

Secondly consumers have become much more aware of the health and safetystandards of the products that they buy, and this extends to skincare. The mediahas reported that certain cosmetics ingredients such as parabens are harmful toskin, especially children and babies skin. This means that our product will have to

be rigorously tested in order to make sure that it does not cause any harmfulresults such as rashes to consumers. This will therefore increase costs.

Technological

AAK already has vast facilities and resources dedicated to the manufacturing of oilsfor various purposes. Integration of the Natura range to AAKs production line willbe as seamless as possible as methods of production of the Natura products do notdiffer greatly from what is currently produced. Automated processes includingmixing, packaging and delivery are already available and in use across the globe aswell as at AAK.

An exponential boom in social networking and use of the internet will provide afantastic opportunity for promotion and communication to potential and existingcustomers.


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Competition Audit

Having researched the cosmetics market for potential competitors, we discovereda vast range of companies selling similar products at various prices. It wasimportant that we found a gap in the market to explore and not delve into analready saturated industry where several companies have large market share.Going toe-to-toe with well established brands such as The Body Shop and Cowshedis unlikely to bring success.

This highly diversified market ranged from own brand or value products, includingbath and shower oils from the chain retailers of Tesco, Boots and Superdrugoffering products for as little as 0.90 to 1.10 per 100ml. These products offerlittle in luxury and are an everyday solution to people who do not often spendlarge amounts of money on showering and bathing products.

A crowded middle sector comprising of The Body Shop, Origins and Sanctuary alloccupy a large portion of the UK market for cosmetic products. Their productsoffer value for money for everyday use and are easily accessible to purchase,mainly via the internet, or in the Body Shops case, their own shops across thecountry. Products from these three range from 2 to 7 per 100ml.

[From L to R]: Boots Extracts Fairtrade Cocoa Butter bathcream, 4.19 for 300ml; Boots Extracts Fairtrade Mango

body wash, 4.19 for 200ml; Superdrug Naturals Coconut &Shea butter bathing milk 2.54 for 250ml


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The luxury market has a much smaller number of brands, however there is a steepjump in price from the middle market as companies such as Decleor and Liz Earleoffer similar products at over 10 per 100ml. These however incorporate luxurypackaging, and a high-quality feel to accompany their natural products. Liz Earleparticularly excels at marketing its Naturally Active Ingredients ethos.

[From L to R]: The Body Shop Deep Sleep Comforting Milk

Bath Float, 14 for 400ml; Origins Gloomaway GrapefruitBody wash and bubble bath, 18.00 for 250ml; SanctuaryFoaming Bath Soak, 5.10 for 250ml

[From L to R]: Decleor Relax Intense Shower Oil, 21 for250ml, Liz Earle Energising Body Wash, 8.25 for 100ml,

Espa Body Smoothing Shower Gel, 22.50 for 200ml


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Customer Profile

When trying to design and produce the perfect product, it was important for us towork out the ideal customer that would be buying our product. From thisinformation we would be able to work out how our product would be able to fitinto this made-up characters lifestyle.

It was important for us to segment our market in order to find the perfect mould inwhich our customer profile would fit. We started off by trying to work out why ourcustomer would buy the product, whether they would be buying the product foreveryday use or for a luxury item. We also wanted our product to have the allureof a luxury product, and wanted the consumer to look forward to using our productinstead of just having it as part of their daily routine. We aimed to create aproduct that had a treat yourself feel to it.

In addition, we wanted to work out where it would be best to sell our product inorder to make it easily accessible, but to still make it seem like its exclusive tothe person that is purchasing it. This is why we were planning to sell the producton the companys own unique website, but we also plan to try and sell it in Boots.We chose Boots instead of Superdrug as we think Boots is seen as being morehigher end than Superdrug but yet still accessible to the average person. We wouldalso like our product to be seen at higher end supermarkets such as Waitrose.

We think that our target audience would likely to be purchasing the product every

2 to 3 months, this would mean the customer would be using the oil a few times aweek. We decided that our perfect customer would be a 25+ city professionalthat commutes to work for her 9-5 job and spends the nights and weekendsrelaxing at home. This professional would lack time during the weekday but wouldwant to treat herself whenever she gets the chance. This is ideally when ourproduct comes into place. However, we dont just want to limit our product to justthis one person, we want to appeal to others such as mums, pregnant women andwomen who want to be treated.


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Positioning

With the large gap between the middle and luxury sectors, this is a market thatshould be explored. Consumers can be offered a quality product with asophisticated feel to it at a price towards the top end of the middle sector andlower end of the luxury sector at 8-10 for 100ml. This will allow a large return forNaturas products. Hiam (2006) states that a ...high-class image can boost priceby 20 to 100%. Therefore the prices can be justified by a luxurious image.

Luxury

Middle

Value or Own Brand

A diagram illustrating the intended positioning of the

Natura brand in relation to competitors.


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Product

Our objective of marketing a masstige product can be achieved with strongbranding and creation of a luxurious, individual and sophisticated identity thatdeliver the functional and psychological benefits (Brassington & Pettit, 2006p.305) sought by consumers. We wanted a simple, easily recognisable brand namewith strong connotations of sophistication and luxury.

Having focused our attentions back to our initial discussions with regards to thecustomers wants and needs and working on several identities we decided upon thebrand name of Natura.

Natura, simply is the Latin translation for nature, which in ancient times literallymeant birth. The use of Latin and connotations of the Latin language are of high

class as the language itself is taught in the most prestigious of schools, it isdistinctive yet also acceptable due to its memorable quality. This branding willreassure customers of the products quality and prestige.

It also allows for AAK to branch out into other markets with varying productssimilar to the way Proctor & Gamble have achieved with Fairy, Camay, Olay andZest brands. (Brassington & Pettit, 2006, Table 7.2)

The relation to the word natural can also be beneficial as has been found thatcustomers brand preference is often based on the health and safety of the

product. For example Pot Noodle, Sunny D and McDonalds were found to beamongst the top four least preferable brands in a survey conducted by JoshuaAgency (2004, cited by Brassington & Pettit 2006). This is due to the high amountof negative media attention regarding their health impact.

Our philosophy of using natural ingredients can be also highlighted due to thisbranding.

The three natural-oil based products at launch offer the consumer differentoptions to satisfy their needs. We highlighted three uses for bath and shower oils

from the general public and existing products and developed products for each. Wetermed these as Moisturise, Relaxation and Energise. A coconut and vanillascented oil is the main product line and uses the same colour scheme as the branditself, it offers an intense moisturising experience using the clinically-provenbenefits of natural oils including shea butter and vegetable oil as a skinmoisturiser.

Grapefruit and orange provides consumers with a fruity, energising and revitalisingproduct perfect for stimulating the senses and giving the day a boost, whilstlavender and peppermint presents the consumer with a chance to unwind with a

beautiful blend of relaxing aromas.


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Product range

[From L to R]: Natura Coconut & Vanilla, Grapefruit &Orange and Lavender & Peppermint in the three availablesizes of 50ml, 100ml and 200ml, showing off our luxurious

design


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Price

In such a highly diversified market, it is crucial to ensure that pricing is effectiveand suitable for the product being sold. For instance, attempting to sell a smallKorean hatchback at luxury Italian supercar prices is extremely unlikely to besuccessful. Even in the beauty and cosmetics industry, where admittedly the pricegaps are nowhere near that of six-figure sums produced by some carmanufacturers, a small variation in price from a competitor can be the differencebetween success and failure.

As found in our Competition Audit, we discovered a large variety of products withvarious prices targeted at various markets, and as a direct result of ourinvestigations we found a small gap in the to position the brand between theluxury and middle sector.

Brands such as Liz Earle and Decleor offer luxury bath and shower products at highprices upwards of 11-12 per 100ml, for example Liz Earles Vital Oils for the Bathrange, whilst highly concentrated formulas are priced at 8.95 for a small 10mlbottle. Both Liz Earle and Decleor amongst others utilise stylish and luxuriouspackaging to complement their products. It is known that a high-class image canboost price by 20 to 100% (Hiam, 2006). We feel that effective use of a luxuryimage is a powerfool tool to use in launching the Natura range.

Additionally, the crowded middle market of bath and shower products should be

avoided, with well established businesses such as The Body Shop, Cowshed andOrigins all operating with products between 3 and 8 per 100ml, it will bedifficult for new brands to enter this highly competitive area.

The three launch products will each be available in three sizes, totalling nine newNatura products on the market, with each combination priced the same at itsrespective size. Offering three sizes provides the consumer with a choice, a 50mlbottle retailing at 5.95 will be beneficial to a traveller due to its reduced size, oras a consumers first trial of a Natura product. The standard 100ml size will beavailable to all, retailing at 8.95, slightly below that of the aforementioned

luxury brands, followed by a larger 200ml bottle priced at 15.95. The latter willprovide a greater value for money offering compared to the smaller two sizes, witha value of 8.48 (rounded) per 100ml.

Furthermore, introductory offers will be available to distributors and consumers asincentive for purchase. This will include a 5% introductory discount for distributorsupon purchase of their first batch, with additional discount for cash payment.Consumers will be offered free samples and gifts of other Natura products upondirect purchase from the company, as well as introductory price promotionsincluding buy-one-get-one-half-price. This competitive pricing strategy will aidNaturas initial venture into the market and ensure the brand has a foothold to

progress from, with a view to raising prices once a good brand equity has beencreated and move to a prestige pricing tactic.


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Place

Using an intermediary for the distribution of products can be useful to increaseefficiency and minimise costs created by dealing directly with consumers. Forexample if AAK wanted to sell to 100 customers, it would require 100 transactions.Each transaction would involve delivery, administration, packing and marketingcosts. Alternatively, using an intermediary would cut this number down to just oneor however many intermediaries they choose to provide their products to.

The simplest intermediary to use to deliver the products to the consumer is to usera Producer-Retailer-Consumer path. This is ideal for large retailers andmanufacturers (Brassington & Pettit, 2006). This is especially applicable to AAKdue to their existing relationship with the large chain supermarkets includingSainsburys, Tesco and Morrisons.

By utilising AAKs connections with the big four, this will ensure that there is nointerference with current clients such as Avon and The Body Shop as they usealternative methods of distribution. The advantage of using large retailsupermarkets is that their labour costs are 10-20% lower than independent storesand their buying advantage is 15% higher (Brassington & Pettit, 2006). This willassist us in ensuring our products achieve a masstige level and it will help minimisecosts.

By selling our products in supermarkets, it will allow our target consumers to be

reached. Implementation of Natura products into inner-city and largersupermarkets such as Tesco Metro and Sainsburys Local stores will mean that ourproducts are easily accessible to the hard-working professionals targeted. Theseeasily accessible stores have large footfall so the product will also be available tomembers of the public on their general shop so opens up opportunities for newconsumers.

There is a possibility to set up a Producer-Consumer path. This would be achievedthrough the use of telephone and internet sales. Online shopping has grownsignificantly in recent years, with a 39% rise between December 2008 and

December 2009 in Health and Beauty sales online. (IMRG.org) However, it mayprove to be uneconomical to set up a company-owned sales and distribution forceto deal with the resulting sales.

However, we must ensure that a balance between exclusivity and accessibility ismaintained in keeping with the brand strategy. Selling Natura products in everyshop possible will devalue the brands luxury appeal. Restricting the number ofstockists is a technique used to great effect in the luxury industry, particularly inthe jewellery market.


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Promotion

As the products in question are considered to be standardised products, low value,low risk, frequent purchases the market is considered to be a consumer market.This indicates that the products should be marketed using less emphasis onpersonal selling with more emphasis placed on advertising, sales promotion anddirect marketing (Brassington and Pettit, 2006).

Borden (1975) stated that cosmetic companies with large resources utilise a pullmarketing strategy for the introduction of new products. A carefully selectedrange of mediums will be used over a long period, focusing initially, primarily onprint and web-based advertising. Television airtime is extremely expensive and itis unlikely that radio advertising will convey an effective message.

As AAK rarely have had to deal with advertising directly, it may be more effectiveto work in conjunction with a full service advertising agency. It is important to usean agency which is experienced yet innovative. Companies should seek the bestservice possible to maximise returns via a reputable company.

We discovered that our target audience are most likely to be subjected toadvertising through glossy magazines and general internet browsing as some oftheir spare time is used by these mediums. Effectively utilising these sources withhalf and full page spreads in selected national glossy magazines such as Elle,Grazia and Cosmopolitan are likely to have a beneficial effect on raising initial

brand awareness to our target consumers. Additionally, the boom in socialnetworking provides ample opportunity for promotion, a promotional Facebookpage with information, news and exclusive offers can be setup free of charge andused effectively to promote the brand. Additionally, there is a growing number ofDIY Reviewers on video websites such as YouTube and Daily Motion. Providingfree samples to popular beauty and cosmetics reviewers on their channels canreach a potentially worldwide audience.

Targeted advertising, particularly through Google Ads, will target people with arelevant search history; there will be little to no waste on advertising to

uninterested and unresponsive people. A free iPhone and iPad app offeringinformation and other interactive features on the iTunes store could promoteinterest to people on the move.

It is important to advertise business-to-business in our launch stage as this willpromote initial awareness and ensure orders are placed to get products on shelves.


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Conclusion

We feel that the marketing plan and outline launch strategy we have provided

should present a prime opportunity for AAK to recieve maximum return on a niche,exciting product range, with little initial outlay due to its existing resources andproduction methods. Integration will be relatively straight forward due to theexpertise already posessed by the company. Our initial research, and developmenthas given us confidence that, providing that the brand is effectively introducedand developed to the general public, could be a great success. The gap in themarket needs to be exploited quickly and efficiently before other companies seekit out.

Offering a luxurious, high-quality product can justify a relatively high price as a

brand premium, however, an initial competitive pricing policy will be beneficial inthe brands initial introduction. By offering products at an RRP of 10.95 for 100ml,this prices undercuts the luxury brands of Liz Earle, Decelor and Neals Yard andmay be seen as a better value-for-money investment by consumers.

Placement of the product in inner-city and larger value chain stores will allow goodaccess for the targeted market, yet still remain a relatively exclusive brands bylimiting distribution to selected stores. Ideally, the product should remainaccessible yet exclusive to allow the consumers to sense the luxury of the brand.

Placement of half and full page spreads in glossy magazines such as Elle,

Cosmopolitan and Grazia will provide a traditional source of advertisement, butthe boom in social network and internet advertising must be utilised as much aspossible as it as available to a worldwide audience. Other uses of technology suchas an iPhone and iPad app, along with review samples to bloggers must beembraced to ensure maximum possible coverage.

A quality, sophisticated and luxurious bath and shower oil at competitive pricing isthe right product, at the right time.


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Appendix

Group membersNathan Morris

Rebecca Stephens

Max Roberts

Laura Jibson


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Bibliography

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Borden, N. H. (1975): The Concept of the Marketing Mix; from Readings in BasicMarketing. Irwin, Homewood, IL.

Brassington, F. and Pettit, S. (2006): Principles of Marketing. 4th ed. PearsonEducation, Harlow, UK.

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