Sample Maketing Plan

SAMPLE MARKETING PLAN | NAURALLY BEAUTIFUL

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Marketing Plan for Naturally Beautiful

Sneha Lundia


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Table of Contents

I. Executive Summary ............................................................................................................ 3

II. Situation Analysis................................................................................................................ 3 Market Description........................................................................................................................................................... 3 Distribution Network ...................................................................................................................................................... 4 Product Analysis ................................................................................................................................................................ 5 Competitor Analysis......................................................................................................................................................... 6 Macro Environmental Analysis ................................................................................................................................. 7 Financial Analysis.............................................................................................................................................................. 8 Strengths, Weaknesses, Opportunities and Threat Analysis ................................................................... 8

III. Goals....................................................................................................................................... 9 Increase Sales Revenue .................................................................................................................................................. 9 Brand Management .......................................................................................................................................................... 9

IV. Marketing Strategy ........................................................................................................... 10 Product Strategy.............................................................................................................................................................. 10 Promotional Strategy ................................................................................................................................................... 10 Pricing ................................................................................................................................................................................... 10 Positioning.......................................................................................................................................................................... 10 Marketing Research ...................................................................................................................................................... 11

V. Tactical Programs ............................................................................................................. 11 Engage Target Audience at key touch points ................................................................................................. 11 Encourage Repeat Purchases from Existing Customers .......................................................................... 11 Increase Average Order Value from within the cart .................................................................................. 11

VI. Implementation ................................................................................................................. 11 First Year (2016)............................................................................................................................................................. 12 Second Year (2017) ....................................................................................................................................................... 12 Third year (2018)........................................................................................................................................................... 12 Forth Year (2019)........................................................................................................................................................... 12 Fifth Year (2020)............................................................................................................................................................. 12

VII. Budget.................................................................................................................................. 12

VIII.Controls ............................................................................................................................... 13

References .................................................................................................................................. 14


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I. Executive Summary

Naturally Beautiful is a cosmetic company, specializing in creating organic skin care

cosmetic products. It was founded in 2010 by an entrepreneur who has 35+ years of experience

working in the cosmetics industry. The company initially started with developing products like

Face Wash, Toner, Face Moisturizer, Facial Pack, Body Wash, and Body Oil. After being accepted

in the market, just one year back in 2015, Naturally Beautiful launched skincare make-up

products too.

With increase in buying capability, rising concerns for health safety, growing consumer

awareness about the hazards caused by synthetic chemicals, and increasing green

consciousness the demand for organic cosmetics is on a rise. Widened distribution channels

and new product developments also contribute to the growth in the market. Naturally Beautiful

will be positioned as an “Organic Beauty Product” indicating that the brand offers enriching

beauty products at a competitive cost. As the company name suggests, it manufactures

cosmetic products, which keep the skin healthy. All the ingredients used to make the product

are organic.

Naturally Beautiful is taking advantage of its existing experience and brand equity

among its loyal current customer base of women who use its products. The company will target

similar women who are conscious about their skin health and believe in looking good naturally.

The primary marketing objective is to capture approximately 9% of organic cosmetics market in

US within the next five years, increasing the company’s annual sale to nearly $110 million.

II. Situation Analysis

Market Description

The skin care cosmetics market consists of many different types of products. Varieties of

cosmetics include chemical based, mineral based, nature based – contains 95% of natural

ingredients and organic – 100% natural.

Most consumers have different perceptions about different brands. They are drawn to

specific product features and benefits provided by different brands. For example, consumers

perceive that organic products are beneficial for the skin. Some may look for cosmetics as a

utility product while others may find it a luxury. Product selection could be based on brand,

ingredients, fragrance, or utility. The cosmetics industry as a whole has positioned products into

various categories like skincare, hair care, make-up, perfumes, oral care, and hygiene products.

Cosmetic brands also distinguish themselves by size and type of product. Naturally

Beautiful’s market consists of consumers looking for travel size and regular size natural

products. “Natural” in this context means no artificial fragrance or color. This market includes

traditional cosmetic users who are conscious about product composition. Specific segments


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that Naturally Beautiful will target include, the skin heath conscious, the socially responsible,

teen girls, and adult women. Naturally Beautiful has established a strong base of customers,

primarily among skin health conscious individuals. Below is how Naturally Beautiful addresses

the need of targeted consumer segments.

Targeted Segment Customer Need Corresponding

Features/Benefits

Skin Heath Conscious Avoid harmful chemicals and

additives

Desire to have a healthier

skin

All natural ingredients

Lead, Parabens and Mineral

oil free

Socially Conscious Support causes that help

solve world’s social

problems

20-cent donation from each

purchase to The Skin Cancer

Foundation

Teens Prevent skin problems like

acne during puberty

Try variety of cosmetics

Different products for

different skin types

Variety in terms for flavors,

fragrances and colors

Adult Women Natural look

Daily use

Fight skin problems like

aging

Maximum variety of nude

shades

Can be used daily without

harming skin

Prevents aging of skin

naturally

Distribution Network

Naturally Beautiful will be distributed through an independent distributor to a network of

retailers in the United States. This strategy will avoid some of the head-on competition with a

few brands in the luxury naturals market that rely heavily on distribution through specialty

retail stores, boutiques, and spas. The focus will be placing products in retail stores known for

selling organic products. These retailers include:

Health and natural food stores: Retail Stores like Whole Foods, Safeway etc.

Mass Outlets: Mass outlets offer ample shelf space to private label products

Beauty Salons: Various local beauty salons

Pharmacies and Drug Stores: Chains such as Walgreens, CVS etc.

As the brand gains acceptance, channel will expand into direct marketing via e-commerce

platforms, specialty stores, and unique locations relevant to the target customer segment (Ewa

Grigar, 2013).


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Product Analysis

Product features are:

All Natural – no artificial color, or fragrance

Lead, Parabens and Mineral oil free

No Animal Testing

Formulated to enhance skin health

Twenty cents from each purchase will be donated to The Skin Cancer Foundation, a non-

profit organization with the mission to educate, prevent and treat the world’s most

common cancer.

The various product categories offered by Naturally Beautiful are:

Skin Care Products

Face Wash

o Four skin types – very dry, dry, combination and oily

o Sizes: Travel size (2 oz.) and Regular size (8.4 oz.)

Face Pack

o Categorized based on utility – Anti-ageing and Skin Lightning

o Size: 3.85 oz.

Face Moisturizer:

o Categorized based on time of use – Daytime with SPF and night lotion

o Size: 1.5 oz.

Toner

o Common for all skin types

o Size: 8.4 oz.

Body Wash

o Available in various flavors based on content – Olive Oil, Argon Oil, Strawberry

and Honey

o Size: Travel size (2 oz.) and Regular size (8.4 oz.)

Body Oil

o Categorized based on type of oil – Coconut and Olive

o Size: 3.3 oz.

Color Cosmetic Products

BB Cream

o Three shades (light, medium and dark) to moisturize skin while acting as a base

for makeup

o Size: 1.5 oz.


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Lip Balm

o Tinted shades – Nude, Rose, Cherry, Grapefruit, Sweet Violet

o Size: 0.15 oz.

Lipstick

o Shades – Nude, Plum, Brown, Red, Pink, Blush

o Size: 0.15 oz.

Eye and Cheek Pallet

o One pallet containing nude shades for eye and cheek makeup to give a natural

look

Eye Pencil

o Shades – Black, Blue, Green, Brown

o Size: 0.01 oz.

Competitor Analysis

The beauty industry is highly competitive and, at times, subject to rapidly changing

consumer preferences and industry trends. A wide range of skincare cosmetics products are

offered by various brands like Avon, Bobbi Brown, Chanel, Clarins, Clinique, Estée Lauder,

L’Oréal, Lancôme, M.A.C., Maybelline, Neutrogena, Shiseido and Smashbox.

Pricing for organic cosmetics is higher than traditional chemical based cosmetics.

Cosmetics sold in specialty locations cost more than those sold in retail stores. Key competitors

to Naturally Beautiful include the following:

The Body Shop: Founded in 1976, it is a British cosmetics and skincare company

owned by L’Oréal. It currently offers 1,200 products, which sells in 2,500 franchised

stores in 61 countries. It employees direct marking strategy through franchise retail

stores and online e-commerce stores. The Body Shop exceeds $950 million in

annual sales, with approximately 11.5 % coming from North America (L’Oréal, 2016).

Aveeno: Skin care and hair care manufacturer in United States and a subsidiary of

American consumer goods and pharmaceutical company Johnson & Johnson. They

have categorized their products as for body, face, hair, sun and baby. Currently they

produce only skincare products and have not entered the color cosmetics market.

They employee retail store distribution channel.

Origins: Founded in 1990 by Leonard Lauder, son of Estée Lauder, it is one of the

original brands of The Estée Lauder Companies. With 25 years the brand now has

approximately 2,000 stores. They harness the power of trees to create high

performance skincare. They have worked with organizations like Global ReLeaf to

plant trees around the world (Origins, n.d.).

Kiehl’s: Kiehl's is an American cosmetics brand retailer that specializes in premium

skin, hair, and body care products. Kiehl's was founded in 1851 and purchased by


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the L'Oréal Group in 2000. It has more than 250 retail stores worldwide, and over

1,000 points of sale supplemented by sales in high-end department stores, select

airport locations, as well as independent stockists.

bareMinerals: Subsidiary of Bare Escentuals, this brand includes its core mineral

based foundation products and a wide variety of eye, face and cheek products (Bare

Escentuals Inc. ,2009)

RareMinerals: Another subsidiary of Bare Escentuals, represents an innovative

extension of the brand’s mineral-based expertise into the skin care category and

offers women a natural, mineral-based alternative to traditional skin care products.

The RareMinerals line currently includes a facial cleanser, facial mist, moisturizer,

nighttime skin treatment and an acne treatment product (Bare Escentuals Inc.

,2009).

Despite the strong competition, Naturally Beautiful believes that it can create a relevant

brand image and gain recognition among the targeted segments. The company competes

on the basis of product differentiation, sales and marketing strategy and its distribution

model. In addition innovative product formulation and differentiated product concepts,

expertise within the organic cosmetics category, loyal consumer base, and focused

marketing and distribution expertise provides the company with competitive advantages in

the market for organic cosmetics.

Macro Environmental Analysis

Political

Industry-specific rules and regulations

The relationship between USA and the countries from which raw material is sourced

Economic

Buying power of consumer

Local economic environment within each market

Social

Changing family patterns in USA

Consumer preferences

Changes in lifestyle in population

Changing values among population

Technological

Emergence of innovative technology


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Biotechnological development

Environmental

Environmental rules and regulations

Environmental disasters in countries producing various raw materials

Global warming and other environmental issues at a global level

Legal

Introduction of policies by health authorities about animal testing

Introduction of tougher customs and trade regulations

Licensing regulations relating to industry

(Academia, n.d.)

Financial Analysis

The cosmetic market is estimated to reach $675 billion by 2020 growing at 6.4%, with

skin care products having the highest market share (Business Wire, 2015). The color cosmetics

market is estimated to be valued at $77.7 billion, by 2020 (Statista, n.d.). With increase in

awareness, rise in consumer income and lifestyle changes the organic cosmetics market is

growing steadily. It is predicted that the global demand for organic personal care products will

reach $13.2 billion by 2018. North America accounts for roughly 35% of the global demand for

organic cosmetics (Michelle Yeomans, 2013).

Strengths, Weaknesses, Opportunities and Threat Analysis

Naturally Beautiful has several powerful strengths on which to bui ld, but its major

weakness is limited budget for promotional activities . Major opportunities include a growing

market and consumer trends targeted by Naturally Beautiful’s product traits. Threats include

barrier to entry posed by limited retail space.

Strengths

1. Superior Quality: Naturally Beautiful boasts the best quality skin care products with

100% natural ingredients. It has no artificial fragrance or color to its products.

2. Industry Experience: The founder of the company has 35+ years of industry experience

making him an expert in understanding the needs of the consumer and building

products accordingly.

3. Expertise in alternative skincare product marketing: Naturally Beautiful went from

nothing to a rapidly growing successful skincare brand with fiercely loyal customers in a

matter of only five years. This success was achieved by staring small and focusing on the

gaps in the marketplace.


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4. Social Responsibility: Every customer will have the added benefit of helping skin cancer

affected patients throughout the world. Although the price of Naturally Beautiful

products are in line with its competitors, low promotional costs allow for substantial

charitable donation of 20 cents per purchase while maintaining profitability.

Weaknesses

1. Limited Budget: Being a small company Naturally Beautiful has much smaller funds

available for research and promotion.

2. Limited Partnership: Limited partnership and not a very strong relationship with all retail

stores.

Opportunities

1. Growing Market: The global organic cosmetics market is growing at CAGR of 9.6 per

cent (Michelle Yeomans, 2013).

2. Increased Awareness: With increasing buying capabilities and awareness consumers are

spending more on organic products as opposed to traditional chemical based cosmetics.

3. Loyal Customers: The consumers of cosmetic products tend to stay loyal to a brand that

enriches their skin.

Threats

1. Limited Shelf Space: Retail stores offer limited shelf space since the number of

competitor products in the same category is high.

2. Strong Competitors: Competitors like The Body Shop, Bare Escentuals etc. have a

stronger brand name

(Jim Makos, 2014)

III. Goals

Naturally Beautiful has well defined aggressive but achievable goals.

Increase Sales Revenue

One of the most important goals of marketing for-profit entities is driving business and

increasing sales of the organization. Naturally Beautiful aims to achieve a 9% market share of

the growing organic cosmetics market or approximately reach $110 million in annual sales

within 5 years.

Brand Management

Maintain a place in the minds of existing customers and create one in the minds of

prospective customers.


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(Mason Kaho, n.d.)

IV. Marketing Strategy

Naturally Beautiful’s marketing strategy will involve developing a “look beautiful

naturally” positioning based on extra benefits for the price. The brand will also establish

channel differentiation, as it will be available in locations where major competing brands are

not available. The primary target segment is Women in the age group of 15-60.

Product Strategy

Naturally Beautiful products will be sold will all features described in Product Analysis

section. As awareness takes hold and retail availability increases, more product lines will be

introduced. Hair care products will be added to the product line. All aspects of the marketing

mix will be consistent with the brand.

Promotional Strategy

Based on the information presented in the Distribution Network section, Naturally

Beautiful will employ a selective distribution strategy with well-known retail stores, health and

natural departmental stores and pharmaceutical stores. This distribution strategy will be

executed through a network of independent distributors, as there are no other major brands of

organic cosmetics manufacturers following this strategy. Naturally Beautiful will also partner

with local beauty salons to use, showcase and sell its products. Later the brand will employee

direct marketing through franchise retail stores and e-commerce outlets.

Naturally Beautiful will leverage various social media platforms to create awareness. It

will conduct free skincare consulting campaigns and distribute free samples to advertise and

build brand loyalty. It will promote its products through customer testimonials.

Pricing

There is a lot of price variation between products offered by luxury brands and other

brands. Naturally Beautiful will follow customer value-based pricing strategy. Given that

Naturally Beautiful claims superior quality, it must be careful not to position itself as a lower

cost alternative. The pricing of the products will vary depending on the place. The products may

be marked at a little lower price in discounted-retail stores while they will sold at a higher cost

in salons. They will be priced higher that traditional chemical based cosmetics but lower than

luxury brand cosmetics.

Positioning

Naturally Beautiful will be positioned on an “Organic Beauty Product” value proposition.

This will allow for differentiating the brand based on product features (all organic ingredients


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with no artificial color or fragrance), desirable benefits (expect healthier more beautiful skin),

and values (do more for a social cause). Marketing will focus on conveying that Naturally

Beautiful is more than just a cosmetic brand: It gives customers much more for their money in a

variety of ways.

Marketing Research

Naturally beautiful will monitor, online discussions to remain consistent with the online

promotional approach, and use insights to reach target customers. In this manner company will

gauge customer perceptions of the brand, the products, and general satisfaction. For future

development of the product and new distribution outlets, crowdsourcing methods will be

utilized.

(Kotler & Armstrong, 2014)

V. Tactical Programs

Engage Target Audience at key touch points

Run Facebook advertising during high traffic around consumers with similar interests

Acquire Coverage in National Fashion Magazines

Run Online Banner Advertising on Fashion, e-commerce sites targeted at Women

between 15-60 years of age

Create content around the shopping & lifestyle needs of targeted customers

Encourage Repeat Purchases from Existing Customers

Email existing customers with referral percentage discount deals for new customers

Add print vouchers to all orders sent during a specific timeframe

Increase Average Order Value from within the cart

Add attractive deals to the cart automatically (worth around 10% of transaction value)

Increase the Free Delivery Threshold from $35 to $45

Add gift wrapping options to the cart (with images of premium gift packaging)

Add a free gift for purchase of $200 or more

(Charlie, 2013)

VI. Implementation

Here is the year wise action plan for reaching an annual sale of $110 million in the next

five years.


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First Year (2016)

Increase Naturally Beautiful’s market presence by organizing campaigns with free skin

consultation and distribution of sample products. Promote the social and health benefits of

using the products.

Second Year (2017)

Sales team will partner with mass-distributors to gain shelf space in large retail stores.

They will encourage salons to use products of Naturally Beautiful for their clients.

Representatives will listen to suggestions from salon professionals to make improvements in

products.

Third year (2018)

Once Naturally Beautiful has a good brand presence and the loyal customer base has

increased, a new hair care product line will be introduced. This will include shampoos and

conditioners for variety of hair types like dry, frizzy, chemically treated, oily scalp, daily use,

dandruff, and hair fall. A variety of hair oil like argon oil, olive oil and coconut oil for hair will

also be added in the product portfolio.

Forth Year (2019)

Expand the distribution channel by setting up specialty stores. Skin and Hair care

consultation services will also be provided at these specialty retail stores. E-commerce platform

will be created for direct purchase from the manufacturer.

Fifth Year (2020)

New weather-based products will be added to the product catalog and the annual sales

of the company will reach $110 million. Expand globally and move to growing international

markets like Asia.

VII. Budget

The marketing expense budget is approximately $90,000 for 2016. This encompasses

external marketing efforts as well as internal activities such as marketing training. Marketing

expenses will increase with increase in promotional activities. It will also be affected by inflation

for the next five years. The budget is calculated by employing percentage-of-sales method and

Objective-and-Task method. Below is the estimated sale for the next five years and promotional

budget for each year.

2015 2016 2017 2018 2019 2020


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Annual Projected Sale

in million USD

25 30 38 50 70 110

Percentage increase in

sale

20.00% 26.67% 31.58% 40.00% 57.14%

Marketing Budget as %

of Sale

3.00% 3.25% 3.50% 3.50% 4.00%

Marketing Budget in

million USD

0.9 1.235 1.75 2.45 4.4

(Mplans, n.d.)

VIII. Controls

Naturally Beautiful is planning tight control measures to closely monitor product quality,

brand awareness, brand image, and customer satisfaction. This will enable the company to

react quickly in correcting any problems that may occur. Other early warning signals that will be

monitored for signs of deviation from the plan include monthly sales (by segment and channel)

and monthly expenses. Given the market’s volatility, contingency plans are also in place to

address fast-moving environmental changes such as shifting consumer preferences, new

products, and new competition (Kotler & Armstrong, 2014).


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