Promotion and Place Marketing Area of the New Wave Shampoo - Case Study Example

Marketing Introduction Marketing entails focusing on four major areas. The paper delves on the product and price marketing area of the New Wave Shampoo. The paper focuses on the promotion and place marketing area of the New Wave Shampoo. The marketing mix coupled with feasibility study ensures the company will be able to generate continually increase revenues, gross profit, and net profit amounts during the future months of business operations. Product The company will introduce a New Wave Shampoo product in the market. The product is a shampoo. The shampoo will be launched to fill a very recurring need among the people in the community. The product will be launched on a test pilot basis for one month. The New Wave Shampoo product will be test launched for one month, June. The results of the 30 day product launch will serve as basis for expanding into new market segments. The test launch will determine whether the company should continue to sell the new product in July and other future months. If the product is profitable for the month of June, the product will be continually sold during July and the future months. If the June trial period will generate a net loss figure, the product will no longer be sold in July and other future months. Further the New Wave Shampoo product is classified as a quality one. The New Wave Shampoo product makes the hair generate a glossy or shiny hair image. With the shiny hair image, the people will admire the hair of the product. When the other people will see many admirers of the hair of the users of the New Wave Shampoo, they will become jealous. Consequently, the jealous people will line up and buy the New Wave Shampoo for themselves. Clearly, the sales of the New Wave Shampoo will skyrocket as more and more people will go the_extra mile to acquire the new shampoo in order to be the attraction of the group, community, or one’s love target. Price. The p rice of the New Wave Shampoo product will be $6 each. The price is reasonable. The other prices of shampoos include $15.35 for S_Factor Diamond_Dreams shampoo. Another shampoo, Mango & Amp sells at $10. A third shampoo, Puritan’s_ Pride , sells at $ 7(Shop411 1). Our selling price is reasonable because people are free to choose the optimum price. The price is not too high because people who poverty-stricken may choose the lower priced shampoo brand. The price is not too low. A low priced shampoo may give an impression on the customers that the shampoo is cheap. The word cheap creates an impression that the ingredients are of poor or low quality. With low quality shampoo ingredients, the people expect low quality shampoo output. Place. The New Wave Shampoo product will be launched in Los Angeles, California. With the huge population there, the projected June 2015 sales target can easily be achieve. The sales target is pegged at a conservative level. Surely, with more prospective shampoo customers, there is a very high probability that the targeted June sales and net profit forecasts can be realized. Promotion. Samples of the New Wave Shampoo product, with the attached marketing leaflets advertising the benefits of the new shampoo alternative, will be distributed in front of populated areas in Los Angeles California. The populated areas include entrance and exit points of malls and grocery stores. The populated areas will include busy street corners. The promo personnel of the company will personally sell the products in order to persuade the doubting current and future business customers to buy the product. The products will be sold on a door to door basis during the June test period. The door to door test marketing strategy includes giving the target customers a 10 percent discount if they purchase 10 shampoo pieces. The discount will persuade the current and future business customers to purchase 10 or more shampoo pieces. The promotional sales person will continue to sell the shampoo products on a door to door basis. The door to door marketing strategy is a better strategy than just setting up a store on the street corner. Since the product is still new in the market, few people know about the product. Thus, there are fewer people interested to buy the new shampoo product than buying the well known Puritan’s Pride shampoo. Table 1 Income Statement The above table 1 shows the forecast income statement for the New Wave Shampoo during the month of June, 2015. The projected June 2015 sales will reach $2,110.50. Applying the conservative accounting method of recording business transactions, the small sales figure is expected. Since there are only a few people roaming the streets to sell the products, the sales people can only so much target customers in one day. Since the people do not know the new product, many will prefer the currently popular shampoo alternatives. The above conservative figure is realistic. There will always be a group of individuals, current and future business customers, who are eager to try to experiment with new things. The new things include experimenting on the benefits of new shampoo products. The cost of the shampoo is estimated to be $873. The cost portion is based on the financial statement of a popular shampoo manufacturing and marketing company, Palmolive_-Palmolive Company (Colgate-Palmolive Company 1). Further, the projected June Income statement will show that the company will generate a gross profit figure amount to $1,237.50 or the New Wave Shampoo product. The projected $740 June operating expenses will be deducted from the gross profit. The result of the mathematical computation is a favorable projected $497.50 net profit for the month of June alone. Table 1a Income Statement (one year) The above table 1a shows the income statement for one year. The income statement shows the sales is $25,326 for one year, June 2015 to May 2016. The same table shows the cost amount is $10,476 for the one year period. Likewise, the operating expenses amount for the same 12 month period is $8,880. The net profit amount for the 12 month period is $5,970. The one year financial report indicates the company will be generating increasing sales, gross profit, and net profit amounts for the June 2015 to May 2016 marketing period. Table 2 Balance Sheet The above Table 2 shows the balance sheet computation for the New Wave Shampoo product. The cash is $ 400. The receivables amount is $97.50. The amount represents the figure that customers promise to pay at a later date for previously bought New Wave Shampoo products. The total assets amount of the company for the month of June, 2015 is $100,000. The same balance sheet shows the company generated a total debt amount amounting to $60,000. The remaining $40,000 represents my own investment in the company, a sole proprietorship. A sole proprietorship is company owned and managed by only one person. On the other hand, the partnership and corporation type of business venture is characterized by the presence of more than one person owning the business or entity. Marketing_Decision The projected income statement shows the company is projected to generate a profit for the pilot or test month, June (2015). Consequently, the marketing decision is to sell the New Wave Shampoo product during July and other future months. Next, the company will continue to sell the shampoo on a door to door basis. The door to door basis marketing will continue for the next six months. After the next six months, the company will rent a small store outlet in a busy street corner. The Marketing strategy for the month of July and other future months will include producing other sizes of the shampoo product. Other sizes will include a size smaller than the size sold in the June test marketing strategy. The other sizes will include sizes that are bigger than the size sold in the same June test marketing period. Table 3 Cash Flow Statement Table 4 Cash Flow Statement 2 The above table 3 shows the cash flow statement of the company during the month of June, 2015. The cash flow statement is correct if the cash flow result is equal to the cash amount shown in the balance sheet. The cash amount shown in the balance sheet is $400. The cash flow amount balance shown in the Cash flow statement is $400. Consequently, the prepared cash flow statement correctly presents the net cash amount flowing into the company’s cash box. The $400 cash inflow indicates that the company has $400 cash allocated for the payment of currently maturing short term debts. The above table 4 shows the increasing project cash inflows from June 2015 to May 2016. With the company’s shampoo brand gaining popularity, more and more current and future business customers will eagerly buy the company’s products. With more customers buying the company’s products, the company’s monthly cash inflows will continue to increase. The cash inflow increase is the result of the continuing rise in the sales of the new popular shampoo product. Conclusion Summarizing, the marketing process includes focusing on four major areas. The product and price marketing strategies ensure rising revenues and profits during the next 12 months. The promotion and place marketing strategies will generate increasing revenues and profits during the next 12 months. Evidently, the marketing mix plus the favorable feasibility study results ensures the company will generate continually rise in the revenues, gross profit, and net profit amounts during the future business operating months. Works Cited Company, Colgate-Palmolive. Colgage-Palmolive Company. 31 December 2014. 30 April 2015 . Shop411. 10 April 2015. 29 April 2015 . Read More