Marketing Plan: BB cream

Marketing Plan: BB cream

Situation Analysis

Most of the BB cream will be for Canadian men aged between 15 and 65 years. This group of men is in a position to purchase more of the BB creams at the stipulated market prices that will be predominant among market players. Many of these purchases are anticipated to be impulsive, given the relatively higher quality BB cream products the company plans to introduce in the market (West, & John, 2015). Notably, the Canadian market is highly concentrated with active competitions from other men’s beauty product companies that have been in operation for the past years.

Description of company product

BB cream product is very effective and has the ability to even out skin tone, protection of the facial scars and dark under-eye circles. Correspondingly, BB cream is waterproof containing SPF, affordable, lightweight and can be used as a dyed moisturizer. The BB cream products are produced based on four diverse formulas for different skin types that includes; dry, normal, sensitive and oily skins. The stipulated formulas are in various shades matching any skin tone making the product to be specifically suited for men given the natural looks it is associated with. BB cream is also enriched with certain nutrients that adequately prevent acne.

Mission statement

Our presence in the beauty products market is based on attracting and maintaining a loyal customer base with such commodities that exceeds the expectations of the clients. The Company’s mission is to provide a range of aesthetic beauty products that are of high quality, affordable and can be accessed by a large number of customers.

 

Review of the marketing strategy and performance

The company is will be mostly dependent on online advertisements and the distribution posters and leaflets on its BB cream products (West, & John, 2015). Per se, the promotion of the BB cream in the Canadian market is an inherent element of the company’s marketing strategy that cannot be gainsaid. The company’s marketing strategies aims for the BB cream product in the Canadian market entails aggregating its overall marketing share, attracting more clients annually, improving the rate of retention of clients and reaching a relatively high breakeven sale within a short time frame (West, & John, 2015). In its effort aimed at achieving these objectives, the company will undertake aggressive advertisement campaigns that will be in various forms with a specific objective of reaching a large number of clients.

For instance, the company considers using its online campaign platforms, print media and employing sales personnel to facilitate further the marketing of BB cream in the Canadian market. The Company is also planning to segment its target Canadian markets into various assortments depending on the income levels, residences, and availability. These marketing strategies are viable and consistent with the stated company’s mission. This is because the company aims at enhancing the quality of services of BB cream as a way of attracting and retaining a loyal customer base in the Canadian market. The Company has several marketing promotional strategies that were tested in other markets and are viewed as effective. The primary objective for these promotional strategies is to attract potential consumers to the company and to retain them (Yamada, Ling & Shota, 2014). For instance, the company plans to offer BB cream products at discounted prices to their new Canadian clients.

Pricing Strategy

The sales of BB cream will be solely dependent on the inherent needs of the targeted types of customers, which may also be seasonal or based on preferences. The prices of various products are also largely dependent on the income of the targeted brand of clients and the company will take into consideration such inherent facts (Daniels, 2010). Most of these BB cream products will be priced based on the rate of penetration of the Canadian market. As such, the company will offer very high quality products that will be necessary in attracting and retaining a large customer base that mostly go for quality. On the same note, the firm will be charging low prices for its products compared to other market players specializing in related commodity to attract those customers that are sensitive to prices.

Distribution strategy

The company will use various retail chain stores that will be operational in the Canadian market to help in the distribution of the BB cream products to its targeted market niche. The Company’s employees will also be involved in the distribution of the BB cream products. In implementing the distribution strategies, the Company will first keep sight of its unique selling arrangements that will ultimately make it have a competitive edge in the market niche (Daniels, 2010).

The Company’s SWOT analysis

Strengths

Meeting Customers’ Needs

Primarily, the Company aims at providing the best beauty products with a staff that is highly motivated towards enhancing relationship with the targeted customer base leading to excellent quality products and services deliveries. Lately, aesthetic beauty products among men has been on an increasing demand in Canada, hence, the establishment’s entry into the market is well timed. Correspondingly, the firm’s various locations in the Canadian market will be strategic making it convenient to meet the indispensable supply needs of the clients.

Service Differentiation from Competitors

In essence, the motivation among the personnel at the Company is to promote good customer relations, and in the process enhance customer satisfactions that would ultimately help in attracting and retaining the customers. The relatively low market prices that will be charged by Company for their BB cream products will enable them gain a competitive advantage over other firms producing related merchandises due to the affordability of the BB creams. The production of BB cream that is based on four diverse formulas for different skin types that includes; dry, normal, sensitive and oily skins is a major differentiation strategy from other brand competitors in the Canadian market.

Weaknesses

No reputation because the BB cream is new in the Canadian market

The product being relatively new in the Canadian market has no reputation on the proven quality and will solely depend on its robust marketing strategies to convince the targeted customers that the quality is not compromised. Since the products are to be introduced into the market for the first time, the attention of the many customers is not fully captured, particularly those that are frequent customers to other beauty products stores in Canada. Moreover, the company is yet to create awareness about the BB cream products they will be introducing into the Canadian market which is of importance as feasible marketing strategy.

Loyalty packages

Further, the company’s loyalty packages is not very flexible or clearly stipulated compared to that offered by its competitors which places the competitors at an advantage as the preferred beauty products providers given their relatively elastic costs. As such, since the company aims at attracting many clients from the Canadian market, especially men aged between 15 and 65 years old, the company must thoroughly invest in creating positive awareness about its BB cream products and its various locations if it is to break even and ultimately be profitable. Also, the company will introduce a ‘reward-for-purchase’ scheme with an intention of increasing more traffic and purchase of the new brand. This will encompass incentivizing the clients to repeat retail visits and in the process increase the growth and value of the BB cream product. The company will also enroll its new clients in a ‘point-based rewards’ program that will be aimed at retaining customers and creating real value for the product.

Opportunities

Growth in the Industry

The success of the BB cream beauty products in other markets provides an encouragement of the feasible opportunities in introducing it into the Canadian market. In addition, the growth of preferences and demand for fashion and beauty products among men in globally is a good sign of the ultimate eradication of the associated cultural complexities and barriers.  The growth opportunities existing in the beauty products industry would enable Company to decide on the amount of BB cream investments that they will require to reach its targeted number of customers. The potential growth men beauty products industry implies that the number of customers will also likely to increase requiring the company to increase and improve its productions to cater for the potentially increased number of clienteles.

More disposable income because of economic conditions

The targeted customers in the Canadian market are more economically empowered making them be in a position to purchase the new Company’s products. This is a sustainable opportunity to introduce the BB cream products into the Canadian market given its economic potentials.

Growth in health conscious populace

The Canadian market is more conscious and sensitive to quality products, and the BB cream offers this much desired quality. The company will bank on this and market its BB cream as quality products compared to those being produced by competing firms.

Threats

Cultural barriers

The promotion of masculinity within most societal systems prevents males from spending on cosmetic products such as the BB cream. To most men, make ups are a preserve for women using such products are largely viewed as ‘anti-social’. This is a real threat to the market survival and ultimate profitability of the BB cream product in the Canadian marketplace. This threat implies that the Company has to enact such approaches that will enable it gain and retain customers to attain profitability in the sales of BB cream products.

Market Competition

Given Company’s low awareness of its BB cream products, the market competitors have an upper hand in the market, and to attain a competitive market advantage and to maintain its clients, the Company must change tact. Primarily, an unsatisfied and unaware customer base will tend to most likely stick with their present suppliers of beauty products given that they have no feasible alternatives. Likewise, a client who is ignorant of the reality of BB cream products would continue seeking beauty products from other companies even if they are not satisfied with the quality. Further, if the company does not offer lucrative customer packages, their BB cream products be unaffordable to many targeted customers, and in the process crippling the operations, hence, plummeting their potential revenues.

Financial assessment

The Company’s ultimate financial objective is to achieve a double digit rate of growth in the subsequent fiscal years in its Canadian market operations. Similarly, the company aims being profitable in its first year of operation and introduction of BB cream among Canadian men consumers. The Company will earn its revenue from the sale of various forms of BB cream products to its Canadian market. The firm’s current income statement from other markets explicates a comprehensively big profit margin with a big net income per fiscal year and the company aims at maintaining this range. The firm has established its own break-even point that will be analogous to the monthly and annual sales of BB cream products.

With robust marketing and promotional strategies, the company is predicting its annual profits from the sales of BB cream products in Canada to double the current figure in other markets in line with the expansion programs. The company doesn’t expect an increase in price competitions from companies producing related products to BB creams. Increased and expanded marketing of product, however, might accelerate the industry’s advertising activities. In essence, increased promotional campaigns from other industry players might affect the entry of BB cream products in the Canadian market in terms of prices and preferences. In such events, the Company has viable plans to expand its marketing activities to increase customer awareness and amass more revenue from the sales of BB cream.

The funding of the production of BB cream in its first year of operation will be derived from the company’s savings and loans from financial institutions. The proposed financing and startup capital bases coupled with a break-even analysis is summarized in the subsequent discussions.

Source of Funds Amount
Company’s savings $ 8, 000, 000
Bank Loan $ 15, 000, 000
Other sources (contributions from shareholders) $ 5, 000, 000
Total $ 28, 000, 000

 

Fixes costs

Categories January February March April May June Monthly Average
Wages $ 1, 500, 000 $ 1, 500, 000 $ 1, 700, 000 $ 1, 400, 000 $ 1, 400, 000 $ 1, 400, 000 $ 1, 483, 333
Accounting fees 540, 000

 

0 0 180,000 0 0 120, 000
Maintenance 300, 000 280, 000 380, 000 320, 000 300, 000 300, 000 313, 333
Rent 35, 500 35, 500 35, 500 35, 500 35, 500 35, 500 35, 500
Utilities 2, 030, 000 2, 360, 000 2, 283, 000 2, 224, 000 2, 360, 000 2, 360, 000 2, 269, 500
Advertisement 530, 000 460, 000 494, 000 495, 000 460, 000 460, 000 483, 166
Insurance 180, 000 0 0 0 0 0 30, 000 (per fiscal year)
Total $ 4, 645, 500 $ 4, 699, 500 $ 4, 592, 500 $ 4, 792, 500 $ 4, 482, 500 $ 4, 612, 500 $ 4, 666, 879

From above calculations, the monthly average fixed costs is $ 4, 666, 879 and will be used in the calculation of BEP (Break Even Price). The projected average revenue for the sales of BB cream products is approximately $ 9, 000, 000 per month while the total average costs is roughly $ 4, 666, 879.

The contribution margin = 1- (average costs/average revenue)

= 1- ($ 4, 666, 879/ $ 9, 000, 000)

= 0.5185(or approximately 52 %)

BEP = FIXED COSTS/ CONTRIBUTION MARGIN RATIO

=         $ 4, 666, 879/ 0.5182

=$ 9, 005, 941

Thus, the company will record profits from the sales of the BB cream in any month within the fiscal year (from January to June) that has sales receipts exceeding = $ 9, 005, 941

 

 

 

References

Daniels, D. (2010). Product Launch Readiness: Planning for Sales Velocity. Pragmatic Marketing

Kim, B (2013). “Competitive priorities and supply chain strategy in the fashion industry.” Qualitative Market Research: An International Journal.

West, D, & John F. (2015). Strategic marketing: creating competitive advantage. Oxford: Oxford University Press.

Yamada, S, Ling F, &, Shota, N (2014). “A Components Analysis of Competitive Advantage in Brand Strategy Management-A case study of Fast Retailing.” Innovation and Supply Chain Management.

Politsch, B. (2015, June 5).  News Brief: Everyone Loves Men’s Skincare, Including Women.