2e NATURES 4r CANDY January 2003 This sample marketing plan has been made available to users of Marketing Plan Pro marketing planning software published by Palo Alto Software. Names, locations and numbers may have been changed, and substantial portions of text may have been omitted from the original plan to preserve confidentiality and proprietary information You are welcome to use this plan as a starting point to create your own but you do not have permission to reproduce publish distribute or even copy this plan as it exists here Requests for reprints academic use, and other dissemination of this sample plan should be emailedtothemarketingdepartmentofPaloAltoSoftwareatmarketing@paloalto.com.For productinformationvisitourweBsite:www.paloalto.comorcall1-800-229-7526 Copyright Palo Alto Software, Inc. 1998-2002
January 2003 This sample marketing plan has been made available to users of Marketing Plan Pro™, marketing planning software published by Palo Alto Software. Names, locations and numbers may have been changed, and substantial portions of text may have been omitted from the original plan to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to reproduce, publish, distribute or even copy this plan as it exists here. Requests for reprints, academic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at marketing@paloalto.com. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526. Copyright Palo Alto Software, Inc., 1998-2002
Confidentiality Agreement The undersigned reader acknowledges that the information provided by in this marketing plan is confidential; therefore, reader agrees not to disclose it without the express written permission of It is acknowledged by reader that information to be furnished in this marketing plan is in all espects confidential in nature other than information which is in the public domain through ot means and that any disclosure or use of same by reader, may cause serious harm or damage Upon request, this document is to be immediately returned to Signature Name(typed or printed) Date This is a marketing plan. It does not imply an offering of securities
Confidentiality Agreement The undersigned reader acknowledges that the information provided by _________________________ in this marketing plan is confidential; therefore, reader agrees not to disclose it without the express written permission of _________________________. It is acknowledged by reader that information to be furnished in this marketing plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to ________________________. Upon request, this document is to be immediately returned to _________________________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a marketing plan. It does not imply an offering of securities
Table of contents 1.0 Executive Summary 2.0 Situation Analysis 2.1 Market Summary 2.1.1 Market Demographics 2.1.2 Market Needs 2.1.3 Market Trends 2.1. 4 Market Growth 2. 2 SWOT Analysis 2.2.1 Strengths 2.2.2 Weaknesses 2.2.3 Opportunities 2.2.4 Threats 2.3 Competition 333455566677 2. 4 Product Offering 2.5 Keys to Success 2.6 Critical issues 3.0 Marketing Strategy 3.1 Mission 3.2 Marketing Objectives 3.3 Financial Objectives 3.4 Target Markets 3.5 Positioning 78888999 3.7 Marketing mix 3.8 Marketing Research 4. 0 Financials 4.1 Break-even Analysis 4.2 Sales forecast 4.3 Expense Forecast 5.0 Controls 5.1 Implementation 5.2 Marketing Organization 14 5.3 Contingency Planning
Table Of Contents 1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.0 Situation Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.1 Market Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.1.1 Market Demographics . . . . . . . . . . . . . . . . . . . . . 3 2.1.2 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.1.3 Market Trends . . . . . . . . . . . . . . . . . . . . . . . . 3 2.1.4 Market Growth . . . . . . . . . . . . . . . . . . . . . . . . 4 2.2 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.3 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.4 Product Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.5 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.6 Critical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.2 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.4 Target Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.5 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.6 Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.7 Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.8 Marketing Research . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.0 Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.2 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4.3 Expense Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 5.0 Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 5.1 Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 5.2 Marketing Organization . . . . . . . . . . . . . . . . . . . . . . . . . 14 5.3 Contingency Planning . . . . . . . . . . . . . . . . . . . . . . . . . 14
Nature's Candy 1.0 Executive Summary Nature's Candy (nc) is an e-commerce company designed to become the market leader in Web- based sales of naturopathic and homeopathic nutritional supplements. the company is located Chicago, IL. Although many Internet companies have recently failed the internet is still poised to support e-commerce retailers. Most of the dotcoms failed because of access to capital with an unproven business model and no true revenue streams. Nature's candy will overcome these problems with an easy to use website and an efficient distribution system Nature's Candy' s mission is to provide the finest in natural supplements using the Internet to lower everything else will fall into place. Our services will exceed the expectations of our custome/ m the consumer's cost We exist to attract and maintain customers when we adhere to this ma The majority of the start-ups which were Internet-based started their business model on the assumption that the first to market had the best chances of survival. this reasoning was based on the belief that gaining customers and market share were the most important things a business could do and the first to market had the best chance of achieving this. while these are indeed important activities, they are by no means the absolute priority. the whole technology fallout indicates that a proven revenue-generating business model is more important than sheer customers and market share In the next three years Nature's Candy intends to create an icon e-commerce brand and will grow to $319,000 in revenue Annual sales Forecast 500000 s450000 400,000 5350,000 250,000 150,000 s50,000 2003
1.0 Executive Summary Nature's Candy (NC) is an e-commerce company designed to become the market leader in Webbased sales of naturopathic and homeopathic nutritional supplements. The company is located in Chicago, IL. Although many Internet companies have recently failed, the Internet is still poised to support e-commerce retailers. Most of the dotcoms failed because of access to capital with an unproven business model and no true revenue streams. Nature's Candy will overcome these problems with an easy to use website and an efficient distribution system. Nature's Candy's mission is to provide the finest in natural supplements using the Internet to lower the consumer's cost. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers. The majority of the start-ups which were Internet-based started their business model on the assumption that the first to market had the best chances of survival. This reasoning was based on the belief that gaining customers and market share were the most important things a business could do and the first to market had the best chance of achieving this. While these are indeed important activities, they are by no means the absolute priority. The whole technology fallout indicates that a proven revenue-generating business model is more important than sheer customers and market share. In the next three years Nature's Candy intends to create an icon e-commerce brand and will grow to $319,000 in revenue. $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 2003 2004 2005 Baby boomers Other Annual Sales Forecast Nature's Candy Page 1
Nature's Candy 2.0 Situation Analysis Nature's Candy is beginning its first year of operation Nc recognizes that marketing activities are critical to the success and profitability of the business NC offers a wide selection of private label naturopathic and homeopathic nutritional supplements The basic market need is for a wide selection of reasonably priced, consistent-quality supplements 2.1 Market Summary Nature's Candy has collected information regarding the common attributes of the prized customers. This information will be used to determine the specific needs of the customers and the best method for communication with the targeted segments Target Markets Baby boomers Other Table 2.1: Target Market Forecast Target Market Forecast Potential Customers Growth CAGR Baby boomers 9144 900% 44I 8.00% 8.62% 器滋 145,868 8.62%
2.0 Situation Analysis Nature's Candy is beginning its first year of operation. NC recognizes that marketing activities are critical to the success and profitability of the business. NC offers a wide selection of private label naturopathic and homeopathic nutritional supplements. The basic market need is for a wide selection of reasonably priced, consistent-quality supplements. 2.1 Market Summary Nature's Candy has collected information regarding the common attributes of the prized customers. This information will be used to determine the specific needs of the customers and the best method for communication with the targeted segments. Baby boomers Other Target Markets Table 2.1: Target Market Forecast Target Market Forecast Potential Customers Growth 2003 2004 2005 2006 2007 CAGR Baby boomers 9% 64,785 70,616 76,971 83,898 91,449 9.00% Other 8% 40,000 43,200 46,656 50,388 54,419 8.00% Total 8.62% 104,785 113,816 123,627 134,286 145,868 8.62% Nature's Candy Page 2
Nature's Candy 2.1.1 Market demographics The profile for Ncs customer consists of the following geographic, demographic, and behavior factors Geographics There is no immediate geographic target for NC. the only constraint of the Internet is that the majority of sales will be from within the U.s. due to importing/exporting tariffs that do not make it cost effective for an international order to be placed The total targeted population is 336, 428 Demographics Both male and female Ages range from 25-65, with 73% of the people coming from the subgroup of 26-37. Young professionals who work 40-60 hours a week and appreciate the convenience of purchasing over the Internet. 64% of the customers have attended colle Behavior Factors Are very cognizant of the their health 39% of the customers practice some form of yog 31% of the targeted customers are vegetarians. 9% of the target market are vegans(vegetarian that abstains from all dairy products any animal by-product) 2.1.2 Market Needs Nature's Candy is providing its customers with a wide selection of private label supplements. Nc seeks to fulfill the following benefits that are important to their prized customers. Selection: Customers demand a wide selection so all of their supplementary needs can be met by one store Quality: There are hundreds of different brands selling supplements within the U. s. Having consistently high-quality products is important because supplements are not government regulated and vary widely in quality and strength Customer Service: Consumers want to patronize companies that have customer service as a priority. Nc will be using Amazon. com and L L. Bean as industry benchmarks 1.3 Market Trends The market trend for supplements has seen a recent increase in sales as well as an expansion of product offerings. This trend is fueled by several factors An increase in holistic medicine relative to the traditional western view of medicine An increase in people's desire to monitor/manage their health this can be seen by the ncrease in fitness club memberships over the last five years
2.1.1 Market Demographics The profile for NC's customer consists of the following geographic, demographic, and behavior factors: Geographics • There is no immediate geographic target for NC. The only constraint of the Internet is that the majority of sales will be from within the U.S. due to importing/exporting tariffs that do not make it cost effective for an international order to be placed. • The total targeted population is 336,428. Demographics • Both male and female. • Ages range from 25-65, with 73% of the people coming from the subgroup of 26-37. • Young professionals who work 40-60 hours a week and appreciate the convenience of purchasing over the Internet. • 64% of the customers have attended college. Behavior Factors • Are very cognizant of the their health. • 39% of the customers practice some form of yoga. • 31% of the targeted customers are vegetarians. • 9% of the target market are vegans (vegetarian that abstains from all dairy products or any animal by-product). 2.1.2 Market Needs Nature's Candy is providing its customers with a wide selection of private label supplements. NC seeks to fulfill the following benefits that are important to their prized customers. • Selection: Customers demand a wide selection so all of their supplementary needs can be met by one store. • Quality: There are hundreds of different brands selling supplements within the U.S. Having consistently high-quality products is important because supplements are not government regulated and vary widely in quality and strength. • Customer Service: Consumers want to patronize companies that have customer service as a priority. NC will be using Amazon.com and L.L. Bean as industry benchmarks. 2.1.3 Market Trends The market trend for supplements has seen a recent increase in sales as well as an expansion of product offerings. This trend is fueled by several factors: • An increase in holistic medicine relative to the traditional western view of medicine. • An increase in people's desire to monitor/manage their health. This can be seen by the increase in fitness club memberships over the last five years. Nature's Candy Page 3
Nature's Candy Market Forecast 160,000 140.000 100000 Baby boomers Other 40,000 20,000 2003 2004 2005 2006 2007 2.1.4 Market Growth The market for vitamins and nutritional supplements has grown to over $6.5 billion annually Herbal sales alone are growing by 20% per year. This market is lead by the aging Baby Boomers who are concerned with their mortality. Also, there has been a paradigm shift of perception of nutritional supplements. Homeopathic and naturopathic products are seen as normal, they are no longer outliers in society. Additionally, positive medical results from major studies have further egitimized these products The nutritional supplement market is a semi-mature market characterized by high-growth rates medium barriers to entry and a few large competitors. Despite the competition in the market many companies have reported annual growth levels of 30%. the market leaders are as follows GeneralNutritionalCompaniesInc.(gnc)(website:www.gnc,com):This company is a nationwide specialty retailer of vitamins, minerals, and sports nutrition supplements. With over 3, 000 stores, GNC generated $1.19 billion in 2000 NaturesSunshineProducts,Inc(website:www.naturessunshine,com):Nature's manufactures and markets a variety of health supplements. This multi-level marketing company had 2000 revenues of approximately $370 million Rexall Sundown, Inc( website: www-rexallsundown, com): Rexall develops, manufactures, markets and sells vitamins, nutritional supplements, and consumer health products through retailers, independent distributors, and mail order Rexall had 2000 venues of approximately $370 million. International Vitamin Company, Inc: IVC manufactures, packages, sells, and distributes private label vitamins and nutritional supplements to drug stores, supermarkets and health food stores. IVc had revenues of $107 million in 2000 The primary channels of distribution in this market are Mass market retailers(Fred Meyer, Rite Aide) Direct sales organizations. Health food stores(GNc) Mail order catalogs and the Internet
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 2003 2004 2005 2006 2007 Baby boomers Other Market Forecast 2.1.4 Market Growth The market for vitamins and nutritional supplements has grown to over $6.5 billion annually. Herbal sales alone are growing by 20% per year. This market is lead by the aging Baby Boomers who are concerned with their mortality. Also, there has been a paradigm shift of perception of nutritional supplements. Homeopathic and naturopathic products are seen as normal, they are no longer outliers in society. Additionally, positive medical results from major studies have further legitimized these products. The nutritional supplement market is a semi-mature market characterized by high-growth rates, medium barriers to entry, and a few large competitors. Despite the competition in the market, many companies have reported annual growth levels of 30%. The market leaders are as follows: • General Nutritional Companies, Inc. (GNC) (website: www.gnc.com): This company is a nationwide specialty retailer of vitamins, minerals, and sports nutrition supplements. With over 3,000 stores, GNC generated $1.19 billion in 2000. • Nature's Sunshine Products, Inc. (website: www.naturessunshine.com) : Nature's manufactures and markets a variety of health supplements. This multi-level marketing company had 2000 revenues of approximately $370 million. • Rexall Sundown, Inc. (website: www.rexallsundown.com): Rexall develops, manufactures, markets and sells vitamins, nutritional supplements, and consumer health products through retailers, independent distributors, and mail order. Rexall had 2000 revenues of approximately $370 million. • International Vitamin Company, Inc.: IVC manufactures, packages, sells, and distributes private label vitamins and nutritional supplements to drug stores, supermarkets and health food stores. IVC had revenues of $107 million in 2000. The primary channels of distribution in this market are: • Mass market retailers (Fred Meyer, Rite Aide). • Direct sales organizations. • Health food stores (GNC). • Mail order catalogs and the Internet. Nature's Candy Page 4
Nature's Candy Target Market growth 7.00 6.00% 543 %%%% 2.00 100% 2.2 SWOT Analysis The following SWoT analysis captures the key strengths and weaknesses within the company and describes the opportunities and threats facing Nc. 2.2.1 Strengths Strong relationships with private label manufacturers that provide high-quality supplements and on-time deliveries Efficient operations providing Nc with above-average margins The ability to scale rapidly as sales increase 2.2.2 Weaknesses The lack of brand awareness due to the fact that Nc is a start-up company with only an Internet presence al store front The proven strategies for developing online visibility are still being tested it is currently trial and error
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% Baby boomers Other Target Market Growth 2.2 SWOT Analysis The following SWOT analysis captures the key strengths and weaknesses within the company and describes the opportunities and threats facing NC. 2.2.1 Strengths • Strong relationships with private label manufacturers that provide high-quality supplements and on-time deliveries. • Efficient operations providing NC with above-average margins. • The ability to scale rapidly as sales increase. 2.2.2 Weaknesses • The lack of brand awareness due to the fact that NC is a start-up company with only an Internet presence, no real store front. • The proven strategies for developing online visibility are still being tested, it is currently trial and error. Nature's Candy Page 5
Nature's Candy 2.2.3 Opportunities An efficient business model within a growing industry The ability to service the entire country Provide differentiation through enhanced convenience and service attributes 2.2.4 Threats General trepidation of Internet-based business Increased government regulation for supplements Aggressive competition from U. S, Canadian, and other markets. 2.3 Competition Within the mass-market retailer channel, the three primary vitamin and supplement product ine grands consist of 60 of the domestic market while the rivate label brand s account for the remaining 40% of the m National brands Examples: Centrum, One-A-Day Generally do not provide a full line of vitamins or other supplements The product formulas are conservative and generic in nature Broad-line brands Examples: Rexall Sundown GNCs Nature's Fingerprint Country Life. Full lines of products under one brand This is the market segment where most of the product development and innovation occurs Stronger potencies and cutting-edge ingredients Highest price Private label products Examples: NatureMed Under retailer's name Smaller line of products than broad-line brands Manufactured by a third party More conservative potencies than broad-line Tend to be the cheap
2.2.3 Opportunities • An efficient business model within a growing industry. • The ability to service the entire country. • Provide differentiation through enhanced convenience and service attributes. 2.2.4 Threats • General trepidation of Internet-based business. • Increased government regulation for supplements. • Aggressive competition from U.S., Canadian, and other markets. 2.3 Competition Within the mass-market retailer channel, the three primary vitamin and supplement product categories are national brands, broad-line brands, and private label brands. The national and broadline brands consist of 60% of the domestic market, while the private label brands account for the remaining 40% of the market. National Brands • Examples: Centrum, One-A-Day. • Generally do not provide a full line of vitamins or other supplements. • The product formulas are conservative and generic in nature. Broad-line Brands • Examples: Rexall Sundown, GNC's Nature's Fingerprint, Country Life. • Full lines of products under one brand. • This is the market segment where most of the product development and innovation occurs. • Stronger potencies and cutting-edge ingredients. • Highest price. Private Label Products • Examples: NatureMed. • Under retailer's name. • Smaller line of products than broad-line brands. • Manufactured by a third party. • More conservative potencies than broad-line. • Tend to be the cheapest. Nature's Candy Page 6
Nature's Candy 2. 4 Product Offering Nature's Candy will market and sell private label(manufactured by a company that places the retailer's name on the packaging) naturopathic homeopathic dietary supplements to individual consumers via the Internet. These products will include ginseng, ginkoba, and various antioxidants After year one, additional products will be offered 2.5 Keys to Success The keys to success are simple to articulate but challenging to achieve Outstanding customer service Consistently highest quality products Efficient operations 2.6 Critical Issues Nature's Candy is still in the speculative stages as an Internet-based retailer. Its critical issue is to continue to take a modest fiscal approach. while its business model allows for rapid scalability the business should be expanded only because it is necessary to serve the customers with a high level of attention and service that they are/ should be accustomed to 3.0 Marketing Strategy Nature's Candy is focused on the merging/redefined Internet marketplace. The users will be baby Boomers, which represent approximately 50% of the discretionary income currently in the United States. They are looking for proactive non-invasive, and non-pharmaceutical ways to stay healthy as they age. Nature's Candy can bring these people cutting-edge products coupled with convenience and service The long-range goal of Nature's Candy is to not only dominate the naturopathic and homeopathic supplement market, but to also create an icon brand. Initially, the company will Engage in Web-based marketing for the next year to generate awareness of the company and product information. Because Internet-based advertising has declined in recent quarters, the prices for advertising have consequently significantly dropped making the expenditure more cost effective Engage in outdoor advertising providing general awareness to the public at large and direct individuals to the company' s website. Page 7
2.4 Product Offering Nature's Candy will market and sell private label (manufactured by a company that places the retailer's name on the packaging) naturopathic homeopathic dietary supplements to individual consumers via the Internet. These products will include ginseng, ginkoba, and various antioxidants. After year one, additional products will be offered. 2.5 Keys to Success The keys to success are simple to articulate but challenging to achieve: • Outstanding customer service. • Consistently highest quality products. • Efficient operations. 2.6 Critical Issues Nature's Candy is still in the speculative stages as an Internet-based retailer. Its critical issue is to continue to take a modest fiscal approach. While its business model allows for rapid scalability, the business should be expanded only because it is necessary to serve the customers with a high level of attention and service that they are/should be accustomed to. 3.0 Marketing Strategy Nature's Candy is focused on the merging/redefined Internet marketplace. The users will be Baby Boomers, which represent approximately 50% of the discretionary income currently in the United States. They are looking for proactive, non-invasive, and non-pharmaceutical ways to stay healthy as they age. Nature's Candy can bring these people cutting-edge products coupled with convenience and service. The long-range goal of Nature's Candy is to not only dominate the naturopathic and homeopathic supplement market, but to also create an icon brand. Initially, the company will: • Engage in Web-based marketing for the next year to generate awareness of the company and product information. Because Internet-based advertising has declined in recent quarters, the prices for advertising have consequently significantly dropped making the expenditure more cost effective. • Engage in outdoor advertising providing general awareness to the public at large and direct individuals to the company's website. Nature's Candy Page 7