Weird Products Slimming Pills - Term Paper Example

Executive Summary Weird Products Slimming Pills is a well developed UK company, which intends to move into the Australian markets. The report provides a clear marketing plan and also provides the estimated profit and loss statements for the company for the next five years. Also a clear section that deals with the various controls for the evaluation of the marketing plan has also been included. Also clear analyses of the competitors and the factors that affect the introduction of the company have also been included. The internal factors like the strengths, weaknesses of the company have also been included within this report. Table of Contents Product Description 2 Current Marketing Situation 2 SWOT and Issue analysis 3 SWOT Analysis: 3 Issue Analysis: 6 Objectives 7 Marketing Objectives: 7 Financial Objectives: 9 Competition edge: 9 Marketing Strategy 9 Target Market 9 Positioning Strategy 10 Action Programs 11 Controls 11 Recommendations: 12 Projected profit-and-loss-statement 13 Bibliography 14 Product Description Weird Products is a slimming pills company, which provides an opportunity where people can positively improve their lives. The company will deal in producing healthy food supplements, which help provide people loose weight the healthy way. The tablets have been tested and are safe with a number of through studies to back up the effectiveness and the benefits of the food supplements. Weird Product slimming pills use simple and natural products to develop the slimming and beauty pills and these ingredients are mainly from unroasted coffee, which have been studied to be very effective for slimming. The ingredients of the products have been carefully thought out and the potential harms of coffee due to high consumption have bee reduced. The amounts of caffeine that are contained within the pills are less than a quarter cup of coffee, hence ensuring that the product is free of harmful ingredients like cafestol and kahweol (which could in a number of ways be dangerous for the human body). Current Marketing Situation Weird Products at present is available only in the UK. The company has just been developed and the launched in the United Kingdoms and has developed an e- Commerce website. This website caters to mostly Europe. The company at present has a number of different strategies that are being used in terms of marketing. However, the main source of marketing for the company is online and via the web. Since Weird Products has most of its business online mostly, hence this is the best mode of marketing for the company at present. However the business does also sell the products to pharmacies across Europe. The various sources that are currently being used for the company is mainly, e Mail marketing, pay per clicks, banner ads and link building, all these along with a strong emphasis on search engine optimization as well (Jobber, 2004). These are the main marketing media that are being used by the company. The current marketing of the company is mainly focused on providing an easier lifestyle and healthier eating style for people, especially in the current day and age, where the lifestyle is becoming hectic with lesser possible time to pay attention to health and exercise regularly. The company currently positions itself in the market as a healthy food supplement, which helps for not only slimming but also for beauty. This is the current marketing strategy used by the company and is aimed mainly at helping people reduce weight and healthy. SWOT and Issue analysis SWOT Analysis: The major strengths of the company are as discussed here. Weird Products – Slimming pills has currently got an excellent technical team with good knowledge of the various marketing techniques. Also, the team is well aware of the various methods of marketing which benefits the company and those which do not work well for the company. It is essential in a company like this to have a strong and well developed team to ensure that the marketing that is done is well tracked and the responses of the marketing is well tracked. Also, Weird products have a well developed data warehousing methods which are put to practise currently. This helps the company focus on the high value customers. Also the company currently has a team which provides a chance for them to retain the customers and also generate higher revenues from these customers. Another major strength of the company is that it is customer centric. This is mainly because the product that they sell is focused mainly on customers and also the marketing techniques used by them are also focused on the customers. This allows the company to build long term relationships with the customers and allows the company to earn continuous revenues from the customers. Lastly the company deals with a product which is very attractive and is one with high marketing scope. In simpler terms the product is one which has a lot of options for marketing as it is one which will appeal to almost every age group as well as any gender of people. This makes the target market for the company wide and hence easier marketing strategies can be developed. However like every company, this also has a few weaknesses. Firstly, the cost of research and development for the product is extremely high. This is mainly due to the fact that the product falls into the medicated category and hence, a number of different proofs and tests need to be done to provide to the customers. All these incur high investments for the company. However, while selling to the pharmacies, the rates are based on whole sale prices. Also one of the major disadvantages that are faced is that the marketing is majorly online and this might in a number of cases miss out on focusing on the other customers, hence leaving out a potential market for coverage. Weird Products has a number of opportunities that are available for the company to grow and develop. These include chances like forming partnership with other beauty related service providers. Weird products can contact the various spas, beauty parlours, and even recreation centres to market their product. Also it can open up its own beauty service centres where there can be various centres that are provided, including marketing of the pills. This will help the company build better relations with the partners as well as use the opportunity to market their own brand. Also various other services like one to one consultation can be provided to the customers. This can include providing the customers with personalised body check ups and having doctors and dieticians to build a personalised plan for each customer. This however would be way in the future, once the customer database has been built. The final step for the company would be inclusion of other weight loss centres within the business, which would mean selling the products of other weight loss companies and also cross and up selling to the customers. The possible threats however are many to the company. Though the numbers of threats look less, the actual impact of each of the threats is quite vast and can affect the company quite drastically (Kotler, et.al, 2007). Firstly, one of the biggest threats that the company faces is if the product does not suit any person or causes any kind of allergic reaction to any person. In case of this issue, the customer 2 customer (C2C) feedback and the word of mouth marketing will be affected negatively, causing the company to be faced with loss in terms of their revenues earned. Also another very big threat for the company is the new entrants in the markets. Since the market that the company operates in does not have too many barriers to entry for new companies (Sloman and Sutcliffe, 2004). This opens up a number of possibilities for the company to be faced with a lot of competition and thereby be affected in terms of revenues. Lastly, one very important aspect of the business is the FDI regulations. This keeps changing from time to time and thus the company needs to ensure up to date research is conducted which will eliminate any possible chance for not meeting up with the regulations. Strengths Technical teams Data warehousing methods Customer centric Builds long term relationships with customers Target segments very high marketing scope high Patented researches and ingredients Weaknesses Cost of research and development Proofs provided for customers Whole sale rate to stores Online marketing complete focus, not much in direct marketing Opportunities Form partnership with other beauty Own beauty service centres One to one consultations Other weight loss centres Threats C2C, if not suitable to all, negative New entrants FDI regulations Figure: SWOT analysis for Weird Products Issue Analysis: Based on the above mentioned SWOT, the following issues need to be addressed by Weirdest Slimming Pills. Firstly, the company requires concentrating on the customer to customer issues. This would include the negative feedback that the customers might provide. The major reason for the negative feedback would be majorly in the case of customers who have issues with the ingredients of the pills. Also, it is possible that the ingredients that are included in the pills might cause a number of allergies this could lead to the customers providing negative feedback for the product as well. Also, since weirdest pills will be introduced into Australia, it is essential to analyse whether the pills should be focusing mainly online or even at physical stores. This is an essential decision that the company requires to make to ensure and understand which would prove to be more beneficial for the company. Another very essential element which requires being included is whether the company requires using direct marketing as well. It is important that the right mix for the marketing is used to ensure that the company uses all off its funds on marketing well and in a more focused manner. It is also important to decide, whether the company needs to plan to start the shops and stores immediately or would require some time to wait to see the response got for the pills online in Australia and also if the company have enough demand to start a store. Weirdo pills will also face a number of different issues based on the legal aspects. This is majorly because it is important to check if the ingredients that have been used in the pills are legal in Australia. It is common that the FDA regulations are different in different countries and it is important that the company checks for complete details of the country before moving into the markets. Objectives The major objectives for the company are as discussed below: Marketing Objectives: The main aim is to introduce Weirdo pills to Australia and build a strong brand image and awareness for the company. Also along with the high and strong brand awareness, it is essential that the company also gains a strong market share. Last but not the least, it id also important to position the market and reach out to the customers via the e Commerce website. These form the marketing objectives for the company to introduce Weirdo Pills into the Australian markets. Financial Objectives: The financial objective of Weirdo pills is to earn annual revenue of one million USD. Also it is aimed at becoming the market leaders within five years. The company requires acquiring the entire market within the five year span. An aim for the company is also to earn a profit margin of a minimum of 30%. Competition edge: Weirdo pills will face a lot of competition in the Australian markets. The demand for the slimming pills is noted to be quite high. The competitive edge however for Weirdo pills are that the company has the pills which are made out of natural ingredients. This provides the company with an upper hand when compared to competition from companies like, Curves 3x, Orovo, Leptovox, Xenical and many more. These pills that have been included do provide the customers with slimming however it also causes a number of side effects and also causes for loss of health and continuously deteriorating health of the customers. Marketing Strategy Target Market Australian has been noted to have as much as almost 21.7% of obese people (Nation Master, 2009). This makes the market a target market and the age groups that will be covered here is a variety from children up to the older generations. This is majorly because it has been noted that almost 1 in 5 children are obese or on the verge of becoming obese here in Australia (Better Health, 2007). Positioning Strategy The table below provides a clear view of the various elements that require to be considered while introducing the product into the Australian markets. A clear break up of the percentage expenses on the marketing and the research and development has also been included in the table. Particulars Strategy Product Positioning Healthy, simple ways to loose weight, and provide healthy food supplements Product Line Slimming Pills, Essential Diet nutrition pills and Diet and Do it Yourself Exercise Plans Price The cost of the product will be AUD 50, this will provide the customer with a supply for a month Communications Using the already existing website, use of direct mail, use of promotional campaigns in super markets and pharmacies Sales force Well trained people for the promotional campaigns, and for the one on one consultants well trained doctors and dieticians Service Personal, online, quick, good after sales, flexible, great offers Advertising & marketing The advertising and the marketing will be based on highlighting the benefits of the pills to the various groups of people. Also there will be an emphasis on the benefits that the service provides when compared to competitors. Also the main idea of focus will be on the rise of obesity and the health issues caused due to obesity. Sales Promotion A high percentage of almost between 25% - 30% of the revenues earned on marketing. This will also include the sales promotions for the company. The marketing and sales promotions will also include a number of different offers for the customers. This will be used as a mode to increase the sales and the revenues for the company Synchronous Development of an e Commerce website along with the marketing in terms of providing the products in the pharmacies. The websites need to be designed to provide the customers with a complete understanding of the product along with how the pills work and also most importantly, allowing the customers to place orders to buy the products online. Marketing Research: R&D Out of the 25-30% that has been set out for the company, 50% will be used for the research and development of the marketing. Also a total of almost 30% will be used for development of new products and improvements of current products. Action Programs Registration and other legal work May 2009 Development of Website May 2009 – July 2009 Production Site Setup May 2009 – July 2009 Partnerships with Pharmaceuticals July 2009 Production and Distribution July 2009 – August 2009 Email Marketing August 2009 – December 2009 Direct Marketing August 2009 – December 2009 Promotional Campaigns September 2009 – December 2009 Controls Weird Products Slimming Pills has already been tested and proved to be successful in the UK. As mentioned earlier the main focus for the marketing will be based on email marketing, video marketing, website marketing and also with the help of promotional activities. As for the new media marketing techniques used, evaluated by receiving the statistics of the various campaigns and the number of click throughs that have been got on the website through these (Johnson, et. al., 2006). As for the promotional activities the company can provide a chance for the customers to provide details of where they have seen the promotion that made them buy the products. This can help provide the company with clear statistics of the number of customers that have been got from the campaign. These can then be used to evaluate the most effective forms of marketing for the company and improve based on the stats received. Recommendations: The current market for diet pills is very large in Australia. Weirdo pills have a strong possibility of making a strong customer database in the Australian markets and also gaining a high percentage of the marketing mix. The one recommendation for the company is to ensure that each step of introduction into the market is taken one at a time rather than just flooding the markets with the pills directly. It is essential to understand and see which parts of the market will work better and correctly create a marketing mix for the company. This is one of the most important decisions that the company requires to be successful. Projected profit-and-loss-statement Profit and Loss Statement   Year 1 Year 2 Year 3 Year 4 Year 5 Revenue (Net Sales) $1,500,000 $2,000,000 $2,500,000 $3,000,000 $4,000,000 Cost of Goods (Ingredients) $300,000 $350,000 $450,000 $500,000 $550,000             Gross Profit $1,200,000 $1,650,000 $2,050,000 $2,500,000 $3,450,000             Administration and Salaries $300,000 $400,000 $500,000 $600,000 $700,000 Marketing Expenses $400,000 $500,000 $600,000 $750,000 $1,000,000 Profit before Interest and Tax $500,000 $750,000 $950,000 $1,150,000 $1,750,000             Tax $150,000 $225,000 $285,000 $345,000 $525,000             Net Income $350,000 $525,000 $665,000 $805,000 $1,225,000 The revenue for the first year is estimated as $ 1.5 million and is expected to increase to $ 4 million after 5 years of operation. Based on the increase in demand, the administration and salaries are also estimated proportionately. Marketing is the main expense for the company and the initial budget is set as $ 400,000. However, this budget is increased every year with the aim of acquiring more customers. The tax is assumed as 40% and is levied on the income earned. The net income is estimated to be around $ 1.225 million at the end of the fifth year of operations Bibliography Better Health, 2007, Obesity in children, Accessed on 9th M ay 2009, retrieved from http://www.betterhealth.vic.gov.au/bhcv2/bhcarticles.nsf/pages/obesity_in_children?open Jobber, D., 2004, Principles and Practice of Marketing, 4th Edition, McGraw – Hill, Berkshire Johnson, G., Scholes, K. and Whittington, R., 2006, ‘Exploring Corporate Strategy’, 7th edn, Prentice Hall, Essex Kotler, P, Brown, L, Adam, S, Burton, S, & Armstrong, G 2007, Marketing, 7th, Pearson Education, Frenchs Forest Nation Master, 2009, Health Statistics, Accessed on 8th May 2009, Retrieved from http://www.nationmaster.com/graph/hea_obe-health-obesity Sloman, J. and Sutcliffe, M., 2004, ‘Economics for Business’, 3rd edn, Prentice Hall, Essex Read More