NEW PRODUCT LAUNCH PLAN

Team 4

Sarah Lewis

Kaylie Sautter

Eva Lutter

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

SPRAY NOZZLE

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

THANK YOU FOR YOUR ATTENTION!