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In order to develop a marketing strategy it is important to understand the market in which the company competes. NatureCare Products produces high quality skin care products and hence would belong to the cosmetic industry which is highly competitive. Understanding the various factors that influence this industry would provide a clear picture of how to approach the target market (Wilson, 2012).
Marketing Environment
Cosmetic and health care industry are one of the most competitive markets. With the advancement in technology, researching for new products and combinations has become much easier and hence skin care products are being developed at a much quicker pace (Mullins, 2012). The below is the five force analysis of the industry.
1. Rivalry among existing firms: The skin care industry has several established brands that take up major market share. In case of NatureCare Jurilique and Botani are the significant competitors.
2. Threats of new entrants: Skin care industry is an extremely profitable market when the right product is introduced and the right time. This makes the industry a lucrative market for any business that is planning to diversify its products. However, brand value plays a key role in growing in this market, especially since the products directly influence the health of the consumer. Also, the technology used for manufacturing skin products are patented by the major cosmetic companies and coming up with a new technology is challenging for new entrants (Solomon, 2014). NatureCare is a well-established brand in its vicinity and produces products that are specific to skin types. Hence the threat of new entrants is relatively low.
3. Threats of substitutes: Skin care products have a large number of substitutes and they are usually replaced due to the chemicals used in the manufacturing these products. The world today is moving on to organic and nature based products and hence NatureCare is at advantage, since all the products of NatureCare are eco-friendly and made with natural ingredients. Also, replacing a product that has a high brand value is difficult even for low price substitutes (Green, 2012).
4. Determinants of Buyer Power: NatureCare products are priced high and caters to customers who are less price-sensitive and prioritize quality of the product. However, the customers who are used to such products do not easily shift to low quality products (Chung, 2015). As long as the quality of the skin care products at NatureCare are maintained the bargaining power of buyers is significantly low. The only threat is in the case of a new product from a well branded company at a lower price is introduced in the market, which is highly unlikely given that NatureCare has different products for different skin types.
5. Determinants of Supplier Power: Since NatureCare manufactures its own products and the raw materials used for production are ecofriendly and natural, the influence of a supplier is less.
Economic Forces
There are several skin care companies that are introducing products that are pocket friendly. The inflation in the cost of raw materials is a great influencer on the price determination of the skin care products. However, the quality of the product cannot be undermined due to economic influence, as skin care products directly influence the health and personal image of the consumer (Alon, 2013). NatureCare believes in high quality products and hence sources only the best materials which leads to high priced products. Also, to come up with new products, a good finance support would be required (Fahy, 2012). Since NatureCare cannot compromise on the quality of the product, the price of the product is high and hence marketing strategies that emphasizes on the beneficial output by using these premium products need to be developed.
The influence of regulatory and legal forces are almost negligible as the products used for manufacturing are natural and indigenous. However, NatureCare plans to enter the Japan market with its existing products and hence a keen study of the legal and regulatory forces of Japan is required to penetrate through the market (Felzensztein, 2014).
Sociocultural Forces
The work life of the present world has led to a situation where customers have little time to take care of themselves and would prefer investing in products that took up their skin care duties. Hence, with working professionals particularly high quality products are appealing (Mooradian, 2013). The world has also moved on to a place where importance is given to products that are made of natural and organic ingredients which is also an advantage for NatureCare.
Target Market
Once the market is understood and analyzed the next key step is to identify whom we intend to sell the products to. The target market for NatureCare products is currently professional women in Australia who buy products at the online stores and the retail stores. The second target is overseas, especially Japan where the company intends to sell the same products to the same consumer sector.
Strengths:
Weakness:
Threats:
Opportunities:
NatureCare Products has identified the below as their marketing objective. To achieve the same, appropriate marketing strategies need to be developed within the budget of $150000
1. Increase the number of people who make a purchase while visiting the online store by 20%.
2. Increase the number of retail outlets selling NatureCare Products by 150.
3. To increase product awareness amongst the target market by 20%.
4. To increase market share to 15%.
5. To expand into at least one international market.
6. To identify new products and new markets.
7. To attain annual growth of at least 10% over the next three years.
The company NatureCare currently has a wide customer base in Australia that comprises majorly middle age and older women. The company has a brand value in Australia and hence to meet the marketing objectives the company would have to introduce a new product that appeals the younger generation, especially the age group of 21 to 25 while sustaining the existing customer base. The company can come up with a face wash that has a tan removal technology and provides a refreshing look. NatureCare already produces cleansing creams and scrubs and hence a face wash would act as a complete set. The face wash can be purchased as a sole piece or can be bought in a package that comprises of the scrub, cleansing cream and face wash. Customers who use the first two products would automatically prefer buying a compact kit of all the three products thereby increasing the sales of the new product along with the scrub and cleansing cream.
The risk here is that the face wash may not penetrate the market efficiently as there are several other well named brands producing face washes. However, the existing customers would encourage the sale of the product given that they have already experienced the quality of several other products introduced by the company. Aggressive marketing would be required to attract new customers. If the product succeeds the product would generate revenue equal to that of the scrub product
Overseas Business
NatureCare has been confined to Australia and has gained tremendous reputation by producing high quality skin care products. The best way to do the same is to test the market by forming a joint venture with a popular skin care retail shop overseas for six months and understanding if the products suit the marketing needs of Japan. Depending on the sales, the company can then enter into the market overseas (Samiee, 2013). Joint Ventures can be risky and hence a detailed understanding of the other company has to be undertaken (Killing, 2012). Also, the venture has to be short termed, so that the company may establish retail outlets overseas once the testing period is completed. Marketing overseas would be extremely profitable if the testing succeeds and marketing is done based on the preferences of the foreign clientele (Ferrell, 2012).
Marketing Strategies and tactics
Understanding the product mix would be beneficial when developing a marketing strategy and relevant tactics for a product (Pels, 2013)
Addressing the 4 P’sProduct: All the products of NatureCare are tangible and how they work can be clearly observed. The premium quality of the product is an advantage and since its address to specific need of the customer, the customer would find it difficult to replace the same (Johnson, 2013). The product is eco-friendly and natural making the product more suitable for regular usage
Price: Due to the premium quality of the products the price is on the higher end. The value of the product is reflected in the price and hence caters to high end customers.
Place: The products of NatureCare are currently available in Australia through their online stores and retail stores and a plan to introduce the product to foreign market is in progress.
Promotion: The quality of the product helps in easy promotion of the product. However, the price of the product restricts the same. Aggressive marketing would be required especially for a new product developed to ensure that the customer base increases (Fitzgerald, 2014).
Introduction of new productA new face wash that comes in two variants for dry to normal skin and normal to oily skin has to be designed with a tan removal feature suitable for all age groups. Formula for this product will be close to the formula used in the cleansing cream and the scrub developed by NatureCare. The product would be initially sold as a trial piece for free when any two products of NatureCare are purchased. The trail tubes will be small samples that can be used for five washes. The trial period will run for a month post which the product would be available as a self-product in varied weights and also with the new skin care kit comprising of the face wash, cleansing cream and scrub (Gorton, 2013).
Advertising on social mediaAdvertising on YouTube is one of the most efficient ways to reach a large clientele (Chaffey, 2015). Commonly watched videos such as prominent trailers or entertainment clippings should be chosen and a simple 15 second ad of one or all the products have to be run on the video. The number of viewers would substantially increase.
The best way to increase the number of visits to the site and substantially increase the number of online purchases in search engine optimization which increases the visibility of a webpage in an internet search. This would put the online site of NatureCare in the first page of internet search when keywords such as scrubs and creams or any other skin care products are searched for. Another way of marketing is by google ads, where the products pop up just below the search bar in google.
Joint Venture for International MarketThe company can form a short term joint venture with a local brand that does not sell the same products but has reputation in related products such as body lotions and foot creams (Motohashi, 2015). A joint venture will help NatureCare understand how well its product would be sold and if the market is ready to accept a new brand (Christopher, 2013). If the test is successful, at the end of the joint venture NatureCare can legally proceed to set up retail stores in the foreign country. If it is found that the joint venture is giving a profitable income, the same can be extended, else NatureCare can lookout for other potential markets.
Marketing PlanThe company would have to design 15 second ads for YouTube in the first 10 days with the help of the marketing assistant. The operations manager would have to complete the legal proceedings for publishing the ads. The CEO and Operations Manager would then get the new face wash developed within the first 6 months of the annual year while they also find a firm and develop a joint venture to sell their products overseas. Once the product is developed the sales manager along with his team would be responsible to encourage customers in trying out the new face wash and the complete kit and the marketing assistant would come up with new ads for the face wash.
The breakdown of the budget is as follows:
60% is allocated to development of new product and joint venture activities
20% for internet marketing and regular marketing by sales staff
20% to analyze the international market post sales with joint venture
NatureCare is an established brand in Australia. However, the company hasn’t done business in overseas and also the price of the products in a hindrance to growth of customer base. Hence, it is essential to develop a new product that would attract new customers as well as increase the product range of NatureCare. The marketing plan for the new product has been designed after understanding the various aspects of NatureCare and analyzing the market it operates in.
Alon, I., Jaffe, E. and Vianelli, D., 2013. Global marketing: contemporary theory, practice, and cases. New York: McGraw-Hill/Irwin, c2013. xxi, 602 pages: illustrations, maps; 26 cm...
Chaffey, D. and Ellis-Chadwick, F., 2012. Digital marketing: strategy, implementation and practice. Pearson.
Christopher, M., Payne, A. and Ballantyne, D., 2013. Relationship marketing. Taylor & Francis.
Chung, T.L., 2015. Research on the brand marketing strategies of convenience stores: a consumer’s view in Taipei and Shanghai.
Fahy, J. and Jobber, D., 2012. Foundations of marketing. McGraw-Hill Education.
Felzensztein, C., Stringer, C., Benson-Rea, M. and Freeman, S., 2014. International marketing strategies in industrial clusters: Insights from the Southern Hemisphere. Journal of Business Research, 67(5), pp.837-846.
Ferrell, O.C. and Hartline, M., 2012. Marketing strategy, text and cases. Nelson Education.
Fitzgerald, J., Neal Cavanaugh, R.B. and Borden, N., 2014. CPR for the 4Ps Breathing New Life into the Marketing Mix. In International Academy of Business and Economics Conference.
Gorton, G.B. and Ordonez, G., 2013. The supply and demand for safe assets (No. w18732). National Bureau of Economic Research.
Green, K.W., Whitten, D. and Inman, R.A., 2012. Aligning marketing strategies throughout the supply chain to enhance performance. Industrial Marketing Management, 41(6), pp.1008-1018.
Johnson, J.S. and Sohi, R.S., 2013, March. the implementation of new marketing strategies by business-to-business salespeople: the constraining factor model. in robert mittelstaedt doctoral symposium proceedings (p. 1).
Killing, P., 2012. Strategies for Joint Venture Success (RLE International Business) (Vol. 22). Routledge.
Mooradian, T., Matzler, K. and Ring, L., 2013. Strategic Marketing: Pearson New International Edition. Pearson Higher Ed.
Motohashi, K., 2015. Marketing Theory in Global Business Context. In Global Business Strategy (pp. 137-154). Springer Japan.
Mullins, J., Walker, O.C. and Boyd Jr, H.W., 2012. Marketing management: A strategic decision-making approach. McGraw-Hill Higher Education.
Pels, J. and Saren, M., 2013. The 4Ps of Relational Marketing, Perspectives, Perceptions. The Future of Relationship Marketing, p.59.
Ritter, J., 2016. Marketing strategy in the 21st century, a review and assessment of strategies and procedures for success and implementation. The Business & Management Review, 7(3), p.68.
Samiee, S., 2013. International market-entry mode decisions: Cultural distance's role in classifying partnerships versus sole ownership. Journal of Business Research, 66(5), pp.659-661.
Solomon, M.R., 2014. Consumer behavior: buying, having, and being. Engelwood Cliffs, NJ: Prentice Hall.
Wilson, R.M. and Gilligan, C., 2012. Strategic marketing management. Routledge.
In order to develop a marketing strategy it is important to understand the market in which the company competes. NatureCare Products produces high quality skin care products and hence would belong to the cosmetic industry which is highly competitive. Understanding the various factors that influence this industry would provide a clear picture of how to approach the target market (Wilson, 2012).
Marketing Environment
Cosmetic and health care industry are one of the most competitive markets. With the advancement in technology, researching for new products and combinations has become much easier and hence skin care products are being developed at a much quicker pace (Mullins, 2012). The below is the five force analysis of the industry.
1. Rivalry among existing firms: The skin care industry has several established brands that take up major market share. In case of NatureCare Jurilique and Botani are the significant competitors.
2. Threats of new entrants: Skin care industry is an extremely profitable market when the right product is introduced and the right time. This makes the industry a lucrative market for any business that is planning to diversify its products. However, brand value plays a key role in growing in this market, especially since the products directly influence the health of the consumer. Also, the technology used for manufacturing skin products are patented by the major cosmetic companies and coming up with a new technology is challenging for new entrants (Solomon, 2014). NatureCare is a well-established brand in its vicinity and produces products that are specific to skin types. Hence the threat of new entrants is relatively low.
3. Threats of substitutes: Skin care products have a large number of substitutes and they are usually replaced due to the chemicals used in the manufacturing these products. The world today is moving on to organic and nature based products and hence NatureCare is at advantage, since all the products of NatureCare are eco-friendly and made with natural ingredients. Also, replacing a product that has a high brand value is difficult even for low price substitutes (Green, 2012).
4. Determinants of Buyer Power: NatureCare products are priced high and caters to customers who are less price-sensitive and prioritize quality of the product. However, the customers who are used to such products do not easily shift to low quality products (Chung, 2015). As long as the quality of the skin care products at NatureCare are maintained the bargaining power of buyers is significantly low. The only threat is in the case of a new product from a well branded company at a lower price is introduced in the market, which is highly unlikely given that NatureCare has different products for different skin types.
5. Determinants of Supplier Power: Since NatureCare manufactures its own products and the raw materials used for production are ecofriendly and natural, the influence of a supplier is less.
Economic Forces
There are several skin care companies that are introducing products that are pocket friendly. The inflation in the cost of raw materials is a great influencer on the price determination of the skin care products. However, the quality of the product cannot be undermined due to economic influence, as skin care products directly influence the health and personal image of the consumer (Alon, 2013). NatureCare believes in high quality products and hence sources only the best materials which leads to high priced products. Also, to come up with new products, a good finance support would be required (Fahy, 2012). Since NatureCare cannot compromise on the quality of the product, the price of the product is high and hence marketing strategies that emphasizes on the beneficial output by using these premium products need to be developed.
The influence of regulatory and legal forces are almost negligible as the products used for manufacturing are natural and indigenous. However, NatureCare plans to enter the Japan market with its existing products and hence a keen study of the legal and regulatory forces of Japan is required to penetrate through the market (Felzensztein, 2014).
Sociocultural Forces
The work life of the present world has led to a situation where customers have little time to take care of themselves and would prefer investing in products that took up their skin care duties. Hence, with working professionals particularly high quality products are appealing (Mooradian, 2013). The world has also moved on to a place where importance is given to products that are made of natural and organic ingredients which is also an advantage for NatureCare.
Target Market
Once the market is understood and analyzed the next key step is to identify whom we intend to sell the products to. The target market for NatureCare products is currently professional women in Australia who buy products at the online stores and the retail stores. The second target is overseas, especially Japan where the company intends to sell the same products to the same consumer sector.
Strengths:
Weakness:
Threats:
Opportunities:
NatureCare Products has identified the below as their marketing objective. To achieve the same, appropriate marketing strategies need to be developed within the budget of $150000
1. Increase the number of people who make a purchase while visiting the online store by 20%.
2. Increase the number of retail outlets selling NatureCare Products by 150.
3. To increase product awareness amongst the target market by 20%.
4. To increase market share to 15%.
5. To expand into at least one international market.
6. To identify new products and new markets.
7. To attain annual growth of at least 10% over the next three years.
The company NatureCare currently has a wide customer base in Australia that comprises majorly middle age and older women. The company has a brand value in Australia and hence to meet the marketing objectives the company would have to introduce a new product that appeals the younger generation, especially the age group of 21 to 25 while sustaining the existing customer base. The company can come up with a face wash that has a tan removal technology and provides a refreshing look. NatureCare already produces cleansing creams and scrubs and hence a face wash would act as a complete set. The face wash can be purchased as a sole piece or can be bought in a package that comprises of the scrub, cleansing cream and face wash. Customers who use the first two products would automatically prefer buying a compact kit of all the three products thereby increasing the sales of the new product along with the scrub and cleansing cream.
The risk here is that the face wash may not penetrate the market efficiently as there are several other well named brands producing face washes. However, the existing customers would encourage the sale of the product given that they have already experienced the quality of several other products introduced by the company. Aggressive marketing would be required to attract new customers. If the product succeeds the product would generate revenue equal to that of the scrub product
Overseas Business
NatureCare has been confined to Australia and has gained tremendous reputation by producing high quality skin care products. The best way to do the same is to test the market by forming a joint venture with a popular skin care retail shop overseas for six months and understanding if the products suit the marketing needs of Japan. Depending on the sales, the company can then enter into the market overseas (Samiee, 2013). Joint Ventures can be risky and hence a detailed understanding of the other company has to be undertaken (Killing, 2012). Also, the venture has to be short termed, so that the company may establish retail outlets overseas once the testing period is completed. Marketing overseas would be extremely profitable if the testing succeeds and marketing is done based on the preferences of the foreign clientele (Ferrell, 2012).
Marketing Strategies and tactics
Understanding the product mix would be beneficial when developing a marketing strategy and relevant tactics for a product (Pels, 2013)
Addressing the 4 P’sProduct: All the products of NatureCare are tangible and how they work can be clearly observed. The premium quality of the product is an advantage and since its address to specific need of the customer, the customer would find it difficult to replace the same (Johnson, 2013). The product is eco-friendly and natural making the product more suitable for regular usage
Price: Due to the premium quality of the products the price is on the higher end. The value of the product is reflected in the price and hence caters to high end customers.
Place: The products of NatureCare are currently available in Australia through their online stores and retail stores and a plan to introduce the product to foreign market is in progress.
Promotion: The quality of the product helps in easy promotion of the product. However, the price of the product restricts the same. Aggressive marketing would be required especially for a new product developed to ensure that the customer base increases (Fitzgerald, 2014).
Introduction of new productA new face wash that comes in two variants for dry to normal skin and normal to oily skin has to be designed with a tan removal feature suitable for all age groups. Formula for this product will be close to the formula used in the cleansing cream and the scrub developed by NatureCare. The product would be initially sold as a trial piece for free when any two products of NatureCare are purchased. The trail tubes will be small samples that can be used for five washes. The trial period will run for a month post which the product would be available as a self-product in varied weights and also with the new skin care kit comprising of the face wash, cleansing cream and scrub (Gorton, 2013).
Advertising on social mediaAdvertising on YouTube is one of the most efficient ways to reach a large clientele (Chaffey, 2015). Commonly watched videos such as prominent trailers or entertainment clippings should be chosen and a simple 15 second ad of one or all the products have to be run on the video. The number of viewers would substantially increase.
The best way to increase the number of visits to the site and substantially increase the number of online purchases in search engine optimization which increases the visibility of a webpage in an internet search. This would put the online site of NatureCare in the first page of internet search when keywords such as scrubs and creams or any other skin care products are searched for. Another way of marketing is by google ads, where the products pop up just below the search bar in google.
Joint Venture for International MarketThe company can form a short term joint venture with a local brand that does not sell the same products but has reputation in related products such as body lotions and foot creams (Motohashi, 2015). A joint venture will help NatureCare understand how well its product would be sold and if the market is ready to accept a new brand (Christopher, 2013). If the test is successful, at the end of the joint venture NatureCare can legally proceed to set up retail stores in the foreign country. If it is found that the joint venture is giving a profitable income, the same can be extended, else NatureCare can lookout for other potential markets.
Marketing PlanThe company would have to design 15 second ads for YouTube in the first 10 days with the help of the marketing assistant. The operations manager would have to complete the legal proceedings for publishing the ads. The CEO and Operations Manager would then get the new face wash developed within the first 6 months of the annual year while they also find a firm and develop a joint venture to sell their products overseas. Once the product is developed the sales manager along with his team would be responsible to encourage customers in trying out the new face wash and the complete kit and the marketing assistant would come up with new ads for the face wash.
The breakdown of the budget is as follows:
60% is allocated to development of new product and joint venture activities
20% for internet marketing and regular marketing by sales staff
20% to analyze the international market post sales with joint venture
NatureCare is an established brand in Australia. However, the company hasn’t done business in overseas and also the price of the products in a hindrance to growth of customer base. Hence, it is essential to develop a new product that would attract new customers as well as increase the product range of NatureCare. The marketing plan for the new product has been designed after understanding the various aspects of NatureCare and analyzing the market it operates in.
Alon, I., Jaffe, E. and Vianelli, D., 2013. Global marketing: contemporary theory, practice, and cases. New York: McGraw-Hill/Irwin, c2013. xxi, 602 pages: illustrations, maps; 26 cm...
Chaffey, D. and Ellis-Chadwick, F., 2012. Digital marketing: strategy, implementation and practice. Pearson.
Christopher, M., Payne, A. and Ballantyne, D., 2013. Relationship marketing. Taylor & Francis.
Chung, T.L., 2015. Research on the brand marketing strategies of convenience stores: a consumer’s view in Taipei and Shanghai.
Fahy, J. and Jobber, D., 2012. Foundations of marketing. McGraw-Hill Education.
Felzensztein, C., Stringer, C., Benson-Rea, M. and Freeman, S., 2014. International marketing strategies in industrial clusters: Insights from the Southern Hemisphere. Journal of Business Research, 67(5), pp.837-846.
Ferrell, O.C. and Hartline, M., 2012. Marketing strategy, text and cases. Nelson Education.
Fitzgerald, J., Neal Cavanaugh, R.B. and Borden, N., 2014. CPR for the 4Ps Breathing New Life into the Marketing Mix. In International Academy of Business and Economics Conference.
Gorton, G.B. and Ordonez, G., 2013. The supply and demand for safe assets (No. w18732). National Bureau of Economic Research.
Green, K.W., Whitten, D. and Inman, R.A., 2012. Aligning marketing strategies throughout the supply chain to enhance performance. Industrial Marketing Management, 41(6), pp.1008-1018.
Johnson, J.S. and Sohi, R.S., 2013, March. the implementation of new marketing strategies by business-to-business salespeople: the constraining factor model. in robert mittelstaedt doctoral symposium proceedings (p. 1).
Killing, P., 2012. Strategies for Joint Venture Success (RLE International Business) (Vol. 22). Routledge.
Mooradian, T., Matzler, K. and Ring, L., 2013. Strategic Marketing: Pearson New International Edition. Pearson Higher Ed.
Motohashi, K., 2015. Marketing Theory in Global Business Context. In Global Business Strategy (pp. 137-154). Springer Japan.
Mullins, J., Walker, O.C. and Boyd Jr, H.W., 2012. Marketing management: A strategic decision-making approach. McGraw-Hill Higher Education.
Pels, J. and Saren, M., 2013. The 4Ps of Relational Marketing, Perspectives, Perceptions. The Future of Relationship Marketing, p.59.
Ritter, J., 2016. Marketing strategy in the 21st century, a review and assessment of strategies and procedures for success and implementation. The Business & Management Review, 7(3), p.68.
Samiee, S., 2013. International market-entry mode decisions: Cultural distance's role in classifying partnerships versus sole ownership. Journal of Business Research, 66(5), pp.659-661.
Solomon, M.R., 2014. Consumer behavior: buying, having, and being. Engelwood Cliffs, NJ: Prentice Hall.
Wilson, R.M. and Gilligan, C., 2012. Strategic marketing management. Routledge.
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