New Product or Service in an Existing Product and Service Category - Business Plan Example

A Marketing Plan BY YOU YOUR SCHOOL INFO HERE HERE Grandma’s Boy – A Marketing Plan Executive Summary Grandma’s Boy fragrances are a new product conception in a very saturated, highly competitive market consisting of many upscale and mid-priced competitors. To achieve market successes, the business must position according to corporate values related to family and family-oriented values, which are prominent, pre-existing characteristics in the two most desired target markets: The Baby Boomer and the 18-34 year old markets. Research uncovered opportunities for Grandma’s Boy to utilise quality positioning to gain market prominence, with considerable emphasis on values and lifestyles to gain market attention. Grandma’s Boy will find market success through aesthetic packaging, effective integrated promotions and advertisement, and by establishing a competitive pricing structure. 2. Current Marketing Situation The target market for Grandma’s Boy fragrances is the Baby Boomer market and the 18-35 year old male buyer who maintains similar values and ethics of the Grandma’s Boy brand. 2.1 Market description Grandma’s Boy Fragrances is a values-based brand promoting corporate principles such as family and social connectedness. The most viable markets are the Baby Boomer market, a market of buyers born between 1946 and 1964. Expenditures on children and family represent the majority of volume consumption for this market (Baby-boomers-life.com 2010). Furthermore, a 2005 telephone survey utilising a sample group of approximately 1,200 Baby Boomers indicated that 91 percent believed family stories and family values are the most important lifestyle need (Coombes 2005). This strong drive toward sustaining and improving family dynamics in the Baby Boomer market represents significant opportunities for capitalisation by expressing family, tradition and nostalgia (as appropriate) to gain market interest. Baby Boomers are also likely to make consumption decisions that are aligned with their own personal values and ethics (Myron 2012). The secondary target market, the 18 to 34 year old markets, maintain favourable lifestyle-based characteristics for achieving profit success and market share in the fragrance industry. A recent study found that those in the Generation Y market are confident and secure and tend to gravitate toward premium and luxury products to justify their identity (Executive Digest 2008). Another study utilising a large sample of 24-35 year-old markets indicated a propensity to switch brands when a second competitive brand has their values linked to good causes (Myron 2012). This represents an ethical buying behaviour in an ideological market, an advantage for this socially responsible brand conception. 2.2 Product Review Grandma’s Boy Fragrances are designed to capture the essence of family togetherness and translate this set of corporate values into a total integrated marketing campaign. Grandma’s Boy will establish a cooperative supply chain structure that allows for premium ingredient procurement and rapid research and development to maintain innovative focus. The Grandma’s Boy product line consists of the following product conceptions: Humdrum – A premium, musk-scented product with overt masculine characteristics. Mother May I – A whimsical product, founded on a variety of blended fruit and natural essences ingredients. Bring it Home – A flowery, yet rugged scent with essences of apricot and lavender. Yenzig – A sweet, aromatic fragrance akin to major competitors such as CK1. During launch, these four product conceptions will be the focus of initial product offerings until Grandma’s Boy is able to determine which fragrances are meeting with market success and interest. Each packaging concept will bear the Grandma’s Boy logo, along with a colour coordinated scheme of baby blue, orange, copper tone, and ultra-modern graphics. Major companies in different industries such as The Home Depot and Sainsbury’s have found considerable psychological benefits of utilising orange to spark consumer brand recognition. 2.3 Competitive review The fragrance market in the UK is highly saturated by competition, both low-end and premium. Major competitors include L’Oreal, Georgio Armani, Donna Karan, and Christian Dior. It is a mature market with slow growth opportunities amid a competitive mix with many competitors maintaining very long-standing brand loyalty by key target markets. By 2015, it is estimated that the global fragrance market will be valued at 33 billion USD (Global Industry Analysts 2011). Seizing market share from major competitors will be difficult for Grandma’s Boy until the business has established brand recognition and recall in desired target markets due to the longevity of brand equity with major competitors in this industry. To outperform these competing brands, the business must position according to ethical premise, a unique positioning conception in this industry. 2.4 Channels and logistics review There is a well-developed distribution infrastructure in the UK for fragrance delivery to a variety of major retailers (such as Marks and Spencer), with adequate hub systems for coordinated deliveries. The business will work with major retailers to accept Grandma’s Boy products, on contract, with supplementary in-store merchandising support provided. High-street retail vendors and mass market retailers will be the most critical bricks-and-mortar networks to promote Grandma’s Boy fragrances. However, one of the most fundamental success factors for Grandma’s Boy fragrances will be e-business models, allowing for at-home delivery of Grandma’s Boy products. In 2004, 22 percent of Baby Boomers already maintained electronic payment accounts, with this volume growing year-on-year. Major grocery retailers such as Tesco and Morrison’s, as two examples, have found considerable sales growth via the Internet as a sales platform. Grandma’s Boy will adopt many characteristics of these successful e-business models to ensure adequate market interest. Thus, 60 percent of focus for Grandma’s Boy will be for online consumption with 40 percent for bricks-and-mortar retailers. It is vital for successful launch of Grandma’s Boy to provide convenience to consumers in the Baby Boomer and 18-34 year-old markets, taking the physical product from bricks and mortar retailers into the virtual environment. A dedicated sales and catalogue website will be developed, allowing for instant payment and delivery of product without having to patronise many UK retailers. 2.5 SWOT Analysis Strengths Innovation in positioning strategy Alliance development in supply chain for cost reduction and rapid response to innovative product launch needs Strong understanding of market characteristics and lifestyles to enhance brand-building function. Weaknesses No brand personality established in key markets Lack of internal training focus for cultural development associated with business mission and corporate values – A human capital disadvantage Opportunities Co-branding for more market visibility with respected beauty industry leaders Use of guerrilla marketing for more direct sales prowess Expansion into international markets Threats Economic recession impact leading to price sensitivity Cost increases in the supply chain for premium ingredient procurement 3. Objectives and Issues This marketing plan maintains three distinct objectives: Achieve the foundation of brand recall by August 2013 in key markets. Boost profitability by 20 percent post-launch by December 2013. Development of three new fragrances by June 2013 to diversify product line. To achieve these goals, the business must conduct routine market research on consumer attitudes, values and lifestyles and how these translate to brand attachments and Grandma’s Boy fragrances. Quantitative data achieved through surveys will assist in correlating consumption behaviours with brand preferences. Questionnaires will provide valuable qualitative data on lifestyle needs and attitudes that can translate into more effective promotional materials. This data will assist in determining product formulations and variety and also how to effectively utilise integrated marketing messages on family and ethics to gain market attention and long-term loyalty. 4. Marketing Strategy 4.1 Positioning Grandma’s Boy will be positioned as a socially responsible brand where quality of relationships in the family structure act as the foundation for all integrated communications. The goal is to establish the foundations of brand loyalty in key markets, which will ultimately provide opportunities to utilise premium pricing models (Chaudhuri and Holbrook 2001). Where other competitors position based on product features and benefits or pricing, Grandma’s Boy will be positioned uniquely in this market structure under ethical consumption theory. 4.2 Product Strategy Packaging aesthetics will be the main selling feature of Grandma’s Boy products. The business will establish supply partnerships with art glass manufacturers to supply innovative, retro, and ultra-modern conceptions for each product variety. Figure 1 illustrates a packaging prototype for the Bring it Home product. Figure 1: Art glass conception for packaging aesthetics Press (2008) iterates the powerful selling features and characteristics that packaging maintains. Though positioned as an ethical and family-oriented brand, packaging that maintains classical and modernised features will provide perceptions of a premium product designed to foster sensations of quality to gain more market prominence. 4.3 Pricing Strategy Grandma’s Boy, until it has established the foundations of brand recall, will be hard-pressed to establish a premium pricing structure. To offset the costs of procurement for high-end ingredients, however, the pricing structure must be aligned to meet profit expectations and also appear competitive to major fragrance manufacturers. The pricing structure is as follows: Humdrum - £25 and £48 Bring it Home - £28 and £48 Mother May I - £22 and £45 Yenzig - £31 and £52 This pricing structure makes Grandma’s Boy products comparable, in price, to major competitors such as Donna Karan and Christian Dior, without exceeding its current market position with no brand loyalty and little market recognition of logo and corporate values. It will not benefit the business to utilise dynamic pricing to penetrate the market, as this would ultimately cheapen the quality-minded focus of Grandma’s Boy and would send consumers the impression that this brand is not comparable to major upscale fragrance producers. 4.4 Distribution Strategy The business will establish a hub of inventory storage operations, a single warehousing facility to reduce the costs of multiple inventory storages. All online orders and deliveries to major retailers will be coordinated at the hub warehouse. Three-day freight to consolidate land deliveries in the UK will be selected for cost controls coordinated using electronic ordering data from consumers and retailers. Customers will be offered discounted or free shipping (during recurring and limited-time promotions) that will be coordinated with Royal Mail. This will provide a perception of convenience to buyer markets and also reduce the costs of using high cost expedited or same day freight options. 4.5 Marketing Communications Strategy Grandma’s Boy will develop an integrated campaign consisting of billboard advertisements pre-launch to gain consumer attention and interest. A subsequent advertising campaign, post-launch, in relevant lifestyle-related magazines applicable to Baby Boomer and the 18-34 year old markets will be coordinated to build the foundations of brand recall. Images of actors in a variety of lifestyle-similar poses and activities will gain more market interest. In urban regions with a great deal of consumer traffic, such as high street, guerrilla marketing teams will be sent with promotional merchandise and product samples. For the first three months pre- and post-launch, heavy labour and capital investment in promotion will be required to establish a brand with positive word-of-mouth. 5. Marketing Research As previously highlighted, research into what is driving current market preferences and lifestyles will be critical to supplying a product that is deemed superior to competition. Psychographics are the key to success for a brand that desires market position based on ethics and family values. Prior to launch, the business will conduct a variety of surveys using a sample between 200 and 400, representing the socio-demographics of desired Baby Boomer and youth markets. This will allow Grandma’s Boy to determine whether pricing is aligned with consumer expectations, whether product formulations are sufficient for quality positioning, and how best to establish customer relationship management to gain market loyalty. 6. Implementation Grandma’s Boy will utilise internal marketing staff to develop the first series of billboard ads that will be distributed pre-launch. Figure 2: Billboard conception for pre-launch brand recognition establishment To successfully launch this campaign, internal inservice training imperatives must be established to develop a culture of ethics, family and moral consumption. Coordinated with information technology specialists to provide website development and guidance of IT, implementation will require a decentralised strategy with horizontal communications (internally) consisting of the marketing department, procurement, R&D and executive business development. 7. Budget Integrated promotions both post- and pre-launch represent significant capital expenditures, along with the capital resources required to establish a hub distribution system. Billboard advertisement £120,000 Magazine advertisement £700,000 Guerrilla marketing £25,000 Catalogue production £100,000 Hub warehousing £1,500,000 Total Expenditures £2,445,000 8. Control Controls to determine effectiveness and return on investment opportunity for this campaign will be coordinated using two strategies. The first involves executive-level analyses of current sales volumes in key markets to determine whether certain commercial regions are performing well or under-performing. Tangible financial metrics will provide knowledge of whether to change distribution and promotional strategies as well as determine which supplementary markets, other than the main target groups, are interested and consuming Grandma’s Boy fragrances. By maintaining awareness of quarterly cash flow figures and sales volumes, adjustments can be made in operations and advertisement to better meet market conditions. A secondary control system will involve assigning a change champion internally to facilitate cultural development to reflect corporate values and principles, thus removing risks to adaptability by internal staff members. This change champion will work with procurement, information technology, project management teams, marketing and sales divisions, and executive leadership to ensure that employees are not resisting internal changes and remain devoted to achieving the marketing objectives outlined in this report. Having a change champion authorised with transactional (reward versus punishment) management theory will ensure that employees and managers stay on target to their unique project team goals. The change champion will report weekly during the inservice training and pre-launch activities on findings related to psycho-social attitudes of internal employees and how these attitudes translate into achievement of strategic objectives. References Baby-boomers-life.com. (2010). Baby boomers and their families. [online] Available at: http://www.baby-boomers-life.com/baby-boomers-and-their-families.html (accessed 10 December 2012). Coombes, A. (2005). Baby boomers value family history over inheritance. [online] Available at: http://www.chron.com/business/article/Baby-boomers-value-family-history-over-inheritance-1929018.php (accessed 10 December 2012). Chaudhuri, A. and Holbrook, M. (2001). The chain of effects from brand trust and brand affect to brand performance: The role of brand loyalty, Journal of Marketing, 65(2), pp.81-93. [online] Available at: http://micco.se/wp-content/uploads/2012/02/Chaudhuri-Holbrook-Chain-of-effects-from-brand-trust-and-rand-affect-to-brand-performance-2001.pdf (accessed 11 December 2012). Executive Digest. (2008). How to market to the overlooked 25 to 34 year old age segments. [online] Available at: http://www.marketing-execs.com/news/11-08/2.asp (accessed 9 December 2012). Global Industry Analysts. (2011). Global fragrance and perfumes market to cross US $33 Billion by 2015, according to new report by Global Industry Analysts, Inc. [online] Available at: http://www.prweb.com/releases/2011/2/prweb8151118.htm (accessed 10 December 2012). Myron, G. (2012). Conscientious consumption. [online] Available at: http://www.demodirt.com/index.php/baby-boomer-trends/consumer-spending/527-conscientious-consumption (accessed 9 December 2012). Press, J. (2008). Eco-cleaners: Clorox and Windex to the rescue? [online] Available at: http://www.greendesignetc.net/GreenProducts_08_(pdf)/Press_Judah-cleaners(paper).pdf (accessed 11 December 2012). Read More