IBS MUMBAI

ADVANCED MARKETING MANAGEMENT

NAME- SANDESH K S

SECTION-O

ENROLLMENT NO.-18BSP4037

TOPIC: MARKETIING PLAN “NATURE’S

CANDY”

SUBMISION DATE – 11-01-2019

SUBMITTED TO – PROF. ARIJIT

BHATTACHARYA
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 in
Mumbai. 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 10 Crore in revenue.

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.

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.
 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 India. 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 Flipkart as industry benchmarks.

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 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.

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%.

SWOT Analysis
The following SWOT analysis captures the key strengths and weaknesses within the company and
describes the opportunities and threats facing NC.

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.

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.

Opportunities

 An efficient business model within a growing industry.

 The ability to service the entire country.

 Provide differentiation through enhanced convenience and service attributes.

Threats

 General trepidation of Internet-based business.

 Increased government regulation for supplements.

Competition
According to a report by global market research firm Euromonitor International, the Indian
vitamins and dietary supplements market, which was valued just over Rs2,556 crore last year, is
increasingly witnessing tough competition between direct sales player Amway and FMCG player
Dabur. “Growth will be driven mainly by urban consumers, who are becoming increasingly aware
 of health needs. More stressful lifestyle, pollution and digestive complains will further contribute
to growth,” the report said. As per the latest data by the market research firm, in value terms
Amway has 16.9% market share, while Dabur has 11.8%, followed in the third spot by Heinz
India. Ranbaxy Laboratories and Pfizer were in fourth position with 4.6% each. Among the
supplement brands, the study rated Amway’s protein powder Nutrilite, which had a sales of Rs330
crore last year, as the most popular brand followed by Dabur Chyawanprash from Dabur India
valued at Rs230 crore. In combination dietary supplements, Himalaya Drug’s Liv 52 has been
rated as a top brand with sales of Rs64.9 crore.

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.

Distribution

The primary channels of distribution in this market are:

 Mass market retailers (Apollo pharmacy and medplus India).

 Direct sales organizations.
 Health food stores .
 Mail order catalogs and the Internet.

Keys to Success
The keys to success are simple to articulate but challenging to achieve:

 Outstanding customer service.

 Consistently highest quality products.

 Efficient operations.

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.
 Marketing Strategy
Nature's Candy is focused on the merging/redefined Internet marketplace. The users will be Baby
Boomers. 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.

Marketing Objectives
 Increase repeat customers by 7% per quarter.

 Decrease customer acquisition costs by 8% per year.

 Maintain positive, steady growth each month.

Financial Objectives
 Pro-forma profitability by year three.

 Decrease variable costs by 2% a year.

Target Markets
A significant trend in India and abroad is that people are taking a more proactive interest in their
health. This is exemplified by the increase of health clubs and health club memberships. People
are looking to avoid invasive surgery and powerful pharmaceuticals; instead people are taking an
active role in the maintenance of their health and practicing preventive medicine. Naturopathic
medicine promotes the diagnosis, treatment, and prevention of human disorders through the use of
non-invasive, non-pharmaceutical products and practices.
 Besides the general development of naturopathic medicine, the aging of the Indian population is a
significant trend driving the use of naturopathic and homeopathic health supplements. The Baby
Boomers are now reaching middle age and their mortality is becoming a focus.

Another global trend is the emergence and popularity of e-commerce. Brand-focused Web retailers
that can provide good products, customer service, information, and the intangible, emotional buy-
in by the customer are becoming hugely successful. E-commerce retailers have an advantage in
that "Unlike traditional retailers, Web-based sellers are not slowed by the friction of store growth
and local marketing". In addition, e-commerce companies do not have the excessive overhead of
a traditional brick and mortar retailer. As seen by the recent success of Amazon.com and
Flipkart.com, consumers are comfortable buying online and will pay for convenience.

Positioning
Nature's Candy will position themselves as a one-stop Internet purveyor of high-quality,
reasonably-priced supplements. NC will leverage its competitive edges to achieve the desired
positioning:

 Nature's Candy's competitive edge will be its easy to use website and superior customer service.
The website design will be a competitive advantage because research indicates that an easy-to-use
website significantly increases sales. Too often sales are lost because of complex websites that are
far from intuitive.
 Nature's Candy's other competitive edge is superior customer service. The mantra of the customer
service department is to serve the customer in any way required. Customers that call in with
problem/issues will be amazed at the amount of personal attention they receive, and how quickly
issues are not only resolved but significantly improved. Superior customer service will be a
powerful asset.

Strategies
The single objective is to position NC as the premier retailer of naturopathic and homeopathic
nutritional supplements. The marketing strategy will first seek to create customer awareness
regarding the products offered, grow the customer base, and work toward building customer
loyalty and referrals. The long-range goal is to not only dominate the homeopathic supplement
market, but to 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.
 Utilize outdoor advertising, providing general awareness to the public at large and direct
individuals to the company's website.

Marketing Mix
Nature's Candy's marketing mix is comprised of the following approaches to pricing, distribution,
advertising and promotion, and customer service.

 Pricing: The pricing structure will slightly undercut the national brands. NC is able to do this by
leveraging its efficient business model as well as using private label manufacturing.
 Product: 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.
 Distribution: All products will be distributed through its warehouse, accessed via the website,
and delivered throughout this country as well as internationally.
 Advertising and Promotion: Internet-based marketing as well as outdoor ads will be used.

Marketing Research
NC conducted several different focus groups to collect valuable market research prior to
undertaking this large project. The focus group participants were comprised of dissimilar
individuals. Some of the participants were the ideal targeted customer, while others were
individuals who might have an inclination to purchasing supplements and might have an
inclination to purchasing from an Internet vendor.

The information gathered from the focus groups, both from the natural customers as well as the
tentative ones was invaluable. When working so hard on a single project for a long period of time
it is often difficult to see things from multi-perspectives. The collected research had a positive,
profound effect on the entire project and it is believed that NC will be far more successful as a
result of this market research.

Financials
This section will offer a financial overview of NC as it relates to the marketing activities. NC will address

break-even analysis, sales forecasts, expense forecasts, and how these link to the marketing activities.

Break-even Analysis
The break-even analysis indicates that 18,00,000 is needed in monthly sales to reach the break-
even point.

Break Even Anaysis

(amount in lakhs)
20

15

10

0
0 6 12 18 24 30
-5

-10

-15

-20

-25

Series 1

Sales Forecast

Nature's Candy will process 90% of its sales online through a secure socket layer (SSL). All orders
will be charged to Visa, MasterCard, or American Express.

Research indicates that too many sites are not easy or intuitive to navigate and lose customers who
migrate through the site; often putting products in their basket, yet leave without purchasing
anything. By ensuring that the website is easy to navigate as well as simple to order from, Nature's
Candy will be ensuring that people who make it to the website will end up completing their order.
This last point is key.
 The first month and a half will be used to develop and ready the site. There will be no sales. From
month two on, Nature's Candy expects a gradual rise in sales.

SALES FORECAST (AMOUNT IN LAKHS)

50
45
40
35
30
25
20
15
10
5
0
JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC

Baby Boomers Other

Controls
The purpose of Nature's Candy's marketing plan is to serve as a guide for the organization. The
following areas will be tracked to gauge ongoing performance.

 Customer acquisition costs.

 Repeat customers.
 Customer satisfaction.
Difficulties and Risks
 Problems generating visibility.

 Software/hardware issues that hamper order placement and fulfillment.

 An immature market that is not yet ready to adopt the efficiencies and convenience that Internet-based

retailers offer.
Worst Case Risks May Include
 Problems securing additional capital.

 Having to liquidate equipment to cover liabilities.