Team 4 - Group Assignment - New Product Launch Plan
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Transcript of Team 4 - Group Assignment - New Product Launch Plan
OVERVIEW
Answer crucial questions:
What is our strategy?
What do we want to achieve?
What kind of demand do we want?
How do we deal with competitors?
How do customers react to our new product?
Introduction of the new nozzle with customized spraying option
Tactical/Strategic Decisions regarding the Marketing & Launch of our new product
STRATEGIC GIVENSDesired Level of New Product Innovativeness
Pioneering – Leveraged Creativity
New nozzle, scents from lotions already in existence to develop a healthy, natural product line
Desired Financial Results Achieve a 1st year gross sales of 35,000 units (105,000 units)
Achieve a 1st year gross sales of $1.2mil ($3.6mil by 3rd year)
Achieve a 1st year gross margin of $1.05mil ($3.15mil by the 3rd year)
Market Share:
67% in current mineral foundation market
looking to gain at least a 15% fragrance market share from main competitors the first couple years
Desired Market Entry Timing
First-to-Market – new product with the customizable spray nozzle
Key Drivers of New Product Development
Markets to serve: End-users, especially Women “on-the-go”, re-seller (Ulta & Sephora)
Technology: Leverage new technology for nozzle while minimizing platform cost
Competitive Stance of Positioning
Direct Pursuit – Grow market share by taking away from competitors, attack weakness of market share leader through customizable nozzle & lower retail price
STRATEGIC PLATFORM DECISIONS
Type of Demand Sought: Product Improvement to existing market
Launch plan must drive and achieve “customer migration”, encourage existing customers to migrate, and the competitors’
customers to switch to the new product
Launch plan must also stimulate pro-active “replacement” demand
Permanence in the market: We are here to stay…if we meet our goals!
Goal, metric, and time sensitive – goals?
Highly influenced by firm’s competitive capability
Aggressiveness of the new product launch: Aggressive Entry
Lots of attention through promotion & free testers early in the launch
Competitive Advantage: Product will offer lower price AND differentiation
Product Line Replacement: Don’t have an existing product line BUT it will be something similar to a high-season switch
Competitive Relationship: Making no reference to competitors
Scope of Market Entry: Roll Out Very Rapidly, abbreviated Market Acceptance Testing
Image: Modified Image including a new brand & a more customized experience for the end-user
MARKET ACCEPTANCE TESTING Sensorial analysis in order to identify the key drivers for our product’s acceptance includes use of the senses of smell, taste, sound, and touch
trial of the product with focus groups
observation of usage patterns & detection of individual differences
reassurance of meeting customer expectations while also providing a customized experience
Helps us understand the magnitude of changes that will get a particular consumer reaction
Helps determine which popular lotion scents make the most promising fragrances
Focus primarily on Beta Testing
TARGET MARKET DECISIONS(1ST STRATEGIC ACTION DECISION)Market Segmentation
End use: Perfume for customer to smell better and seem more attractive to others
Geographic & Demographic preferences
Preferred by women Nationwide in the US. Demographically from 20-40 years old
Upper level income
Already a Bare Essentials customer
Behavioral & Psychographic preferences
The customer would already use makeup, more than likely use Bare Escentuals, and maintain her appearance with beauty products. She is concerned with how she is seen by others and their opinions of her. She always likes to smell nice.
Benefit Segmentation (other market targets)
Original Concept Generation
The competitor gap of perfumes with makeup and beauty lines
Method of Operation
Once developed, this perfume will exceed original assumptions of the products’ use with its unique and functional spray design
Concept Testing or Product Use Testing
We found that changing the spray engineering would help differentiate our product more.
Micro Market & Mass Customization
Adaptive customizers: We developed the product to be customized by the customer. A customer can change the setting of their spray nozzle to suit their specific needs.
Diffusion of Innovativeness
Early Majority30% of the population roughlyInterested in keeping up with trends- Will adopt a new product after seeing it used successfully by either "innovators" and "early adopters" that they know personally. - Not big risk takers, only will after others do- Less affluent and less educated than innovators and early adopters
PRODUCT POSITIONING(2ND STRATEGIC ACTION DECISION)
Product Positioning Statement
Buyers in the target market should by Go Bare rather than others being offered because this perfume allows customers to customize it for themselves.
Positioning to an Attribute (Feature/Attribute)
Features a customizable spray adjustment. Customers can choose how much of the product they want to use.
Position by Surrogate (Nonpareil)
No other perfume asks the customer how much they want to spray, customers assume more than one spray is needed. Now, they get to choose.
Campaign to Position Attribute
Show a number of different women in different situations. Each woman saying a certain number. With the heading in the beginning that asks,
“What’s your number?”
Women saying or holding up fingers: “Three” “Two” or “One”
Then shows our product, featuring the three different spray options and says
You choose.
Go Bare.
CREATING UNIQUE VALUE(3RD STRATEGIC ACTION DECISION)
Branding Decisions
“You choose. Go Bare.“
Brand asks women to believe they can have a choice with their beauty products. Brand it as so and feature how they can customize their perfume usage with Go Bare.
Packaging Decisions
Keep the perfume in a clear glass bottle (primary package), then have the perfumer bottle in a clear plastic box (secondary package). We want to make it look bare as the name suggests. Nothing hidden, nothing but Bare.
Pre and Post Sales Service
Pre sales service includes informing retail and wholesale employees on the brand and product features, including how to demonstrate the three levels of spray function.Post sales would include an email asking the customer “What’s your number?” and if she liked the product. If any problems arise, they will be forwarded to customer service.
Intangibles
The feeling of being able to choose. That is a big benefit for the customer and is not seen in other perfumes. Makes the customer feel confident in her decisions
A-T-A-R ASSUMPTIONS
Profits=Units Sold x Profit per Unit
Units Sold = Number of buying Units = 5,000,000
X “A” % of buying units who opt to try the product if they obtain it (15%)
X “T” % of buying units who obtain Go Bare (if it is available) (5%)
X “A” % of intended triers who can obtain Go Bare (30%)
X “R” Measure of repeat: 1+ (the 25% of triers who like the product enough to repeat their purchase times 1 additional units bought by repeaters in a year)
Units Sold = (5,000,000) x (.15) x (.05) x (.3) x (.25x1) = 2,813 units sold
Profit per Unit = $39.95 - $4.15 = $30.05
Therefore - Year 1 Profits = 2,815 x $30.05 = $84,530.65
What we will communicate to
our re-seller
What we will communicate to our end-
user
What the re-seller will
communicate to the end-
user
COPY STRATEGY STATEMENTS
COPY STRATEGY STATEMENTSFor Ulta & Sephora
Aligns with the natural elements of the makeup line, Bare Minerals
Made with the same ingredients as our popular lotions
Affordable price that also reflects quality
Key Attributes
Two sizes: normal and travel size
Simple square bottle for easy storage and clean display
Pre-measured nozzle for appropriate spritz
COPY STRATEGY STATEMENTSFor Women “on-the-go”
Scent of favorite lotions can be applied with perfume without the hassle of lotions
Made with natural ingredients from our most popular lotions
Key Attributes
Pre-measured nozzle for appropriate spritz
Two sizes: normal and travel size
Low cost that also reflects quality
Easy pull to open top
Simple clear glass, square bottle
COPY STRATEGY STATEMENTSFor the woman shopping at Ulta or Sephora
Provides a new experience for the Bare Escentuals customer
Perfume aligns with the natural elements found in the makeup line, Bare Minerals
Emergence of Aromachology – the use of fragrances for reduction of stress and change of moods
Key Attributes
Fresh scents that won’t overwhelm
Pre-measured nozzle for appropriate spritz
Two sizes: normal and travel size
Low cost that also reflects quality
TACTICAL LAUNCH DECISIONSThe Marketing Mix Communication Vehicle/Content Target Audience
Pricing - Employ “skim” pricing- Initial buy incentives (price reduction)
- Wholesalers & retailers- Retailers Only
Distribution - Employ selective distribution - Wholesalers & retailers
Public Relations - ”First to Market” news release - Wholesalers & retailers
Advertising - Conduct awareness promos - Wholesalers & retailers
Product Shows - Natural Products Expo West- Go Bare Tour of America- Dallas/Fort Worth Ultimate Women’s Expo
- Specific wholesalers and retailers sales personnel
Literature & Merchandising - “How it works” feature sheet- 3 panel new product Brochure purchasestuffer sheet
- Wholesalers & retailers store display- Wholesale & retail customers
New Product Training N/A N/A
TACTICAL LAUNCH DECISIONSThe Marketing Mix Communication Vehicle/Content Target Audience
Sales Presentation (by brand) - Bare Escentuals: Go Bare - Wholesalers & retailers
Business-to-business Customer Visit (to Firm)
- Select wholesaler visits (@Bare Escentuals)
- Wholesalers
Signage/ Point-of-purchase - Wall banners, specific store set promotions
- Wholesalers & retailers sales counter and product displays
Direct Mail - Brochure, specs, tester - To sales personnel to take and use at key wholesaler locations
Web Content - Micro site within Bare Escentuals main site
- Wholesaler & retailer customers
Video - Spritz video demonstration - Bare Escentuals personnel & wholesaler sales
Internal (to the Firm) Communications
- Internal customer service team meetings- Automated specification service update
- Select Bare Escentuals personnel