KirkEL Company’s Marketing Plan

Introduction

Since it’s established in mid 2005, KirkEL Company popularity has become immense especially in health and cosmetic products. Its full potential was realized when it shifted its focus from marketing and promotion of health products to development of innovative natural, gentle and effective skin care products. It provides customers with new products and solutions that are easy to use and seamless integration. The relevant competitive models chosen for this assessment includes the Porte’s five forces such as entry of competition, threats to substitutes, bargaining power, power of suppliers and rivalry and SWOT analysis as well as monitoring procedure in order to assess KirkEL Company strategic capabilities and suggest future directions for the business. KirkEL Company assessment also analyses the results of a study presented to examine how it utilizes customer satisfaction data obtained from formal feedback mechanism.

Mission Statement

KirkEL Company provides natural, gentle and effective health and cosmetics products offering no- nonsense approach to its unique formulation.

Market Objectives

With mainstream health and beauty care products, KirkEL Company target market would be health seekers pursuing natural organic products. Since consumers are continuing to opt for health and cosmetic products made from natural products, KirkEL Company will create ingredients that are safe and healthy to target organic markets. Statistics from 2004 indicated that 57.6% of California residents aged between 23 and 45 spent their income on beauty and health products. We may use this information to attract the same population on organic mineral-based cosmetics with the slogan name “The Organic Youth”.

The product objective will be based on the four marketing strategies of price, product, place and promotion. With regards to promotion strategy, KirkEL Company will have a health section in large retail markets to display organic health and cosmetic products in their shelves. The promotion objective would be based upon rich aroma oils and foundations that will suit both men and women of different facial colors. The product objective will consist of both health and cosmetic products bearing the name “The Organic Youth” with a clear guidance.

Since organic products are relatively expensive, KirkEL Company will set prices that maximize the volumes sold by setting prices very low in order to attract a large portion of the market and increase when the product becomes established in the markets.

Place objective will target a new market segments that promotes the organic youth. Hollywood popularly known to influence body images, California would be the perfect place to set the company. Promoting organic youth alongside the current trend of toned, healthy-looking and perfect skin would be the best way to go.

Competitive Situation Analysis

KirkEL’s Company will group products to enable consumers search, view and validate their products lines by using the three-way consumer products classification system. This includes convenience, shopping and specialty of the products provided.

With regards to pricing objective, the prices will be set relatively low for convenience purposes and also since KirkEL’s product are organic mineral based with non-chemical properties; consumers will be directed to buy products frequently. Shopping classification will prioritize natural and organic personal care products as essential to well being of the body and the skin. This way consumer will consider KirkEL’s Company products as high priority needs. Specialty classification on the other hand will keep in mind the unique organic anti-oxidant formulation including special extracts of sea buckthorn designed to heal skin imperfections. Consumer products classification system enables a company pre-select group expected to buy the products which helps in speeding the ability to react to consumer needs.

Five Porter’s Forces

Porter’s five forces focuses on the threat of new entrants, bargaining power of suppliers and buyers, power of substitutes and rivals on profitability in a company.

The following table presents Porter’s five forces analysis of the KirkEL Company

Factor Implications
Rivalry
  • When organic based mineral products were first introduced in the markets, they quickly became people’s favorite.
  • KirkEL’s company organic mineral based cosmetics were not provided in different color ranges pushing customers to other makeup line providers
Bargaining power of buyer
  • KirkEL’s company is a balanced organization. Its operations are equally customer & product oriented and produces excellent health and cosmetic products.
  • KirkEL’s company will be able to gain best margins due to its ability to invent natural and cheaper product lines.
Threat of new substitute products
  • For KirkEL’s company, threat of new substitutes factor is rather important since natural and organic products develop rather quickly & the market is constantly updated by the new solutions presented by new makeup lines
  • KirkEL’s has strategically paid attention to research and development increasing its health and cosmetic products investment year after year. In 2008 for example, KirkEL’s company provided for a budget of $1.1 million in research and 42 percent increase from previous year’s spending.
Bargaining power of suppliers
  • KirkEL’s company cooperates with a number of suppliers but the power of final decisions as for production capacities & volumes is taken by the company’s governance based on the fact that KirkEL’s develops the final products using its own intellectual & human resources.
Industry Competition
  • As far as competition is concerned, KirkEL’s competition with Tianshi & Dynapharm is rather strong. Industry competition influences the position of the company in the market & determines its strategic objectives in development.
  • KirkEL’s engaged in a head to head competition with Dynapharm in the mineral makeup line. Dynapharm was able to dominate the markets due to its efficient supply chain management, although KirkEL outperformed it in organic and hair care products.

SWOT Analysis

SWOT analysis determines company’s competitors and develops sales & marketing strategies to allow it to achieve its marketing & strategic objectives.

Understanding KirkEL’s position in the market is necessary for the development of the marketing plan.

Strengths Weaknesses
Products offered by KirkEL are unique:
  1. based on the natural organic extracts, KirkEL formulations are unknown to its competitors;
  2. the products are of the highest quality according to customer satisfaction surveys;
Lack of competition that would facilitate the development of company’s goods & services to higher levels of quality
KirkEL was known to guard secrets behind its formulation making it unable for customers to fully trust its products.
  • Strong current market position
  • Excellent organic formulations
  • Managed its business on geographical basis
  • KirkEL has always refused to compete on prices and relied entirely on its organic youth products that promise to provide natural, gentle and effective products that are ease-of-use and safe for consumer’s health to win its customers.
  • KirkEL formulation are kept a secret, a strategy that would have boosted its sales revenues
  • Loyal customer base
  • Insufficient price flexibility & adjustment to socio-economic changes
Opportunities Threats
Uniqueness of goods & services offered might facilitate the further strengthening of market position Lack of competition to weaken the company
Further international expansion is beneficial for the customer base development & market segmentation with the products that include anti-oxidant formula, extracts from neem leaves among others Inability to adjust to socio-economic & demographic changes to undermine its market position
  • Further innovations in health and organic cosmetic line and partnership with leading organic mineral based companies such as Tianshi and Dynapharm to promote the company internationally
  • KirkEL stores were opened to all users and were able to purchase products sold by third parties.
International economic situation to damage the company’s market position, demand & sales rates

Marketing Strategies

Promotion strategies

Building brand awareness; this will be done by engaging in sales promotion as a strategy to increase sales and increase the likelihood of customers to recognize , attach value to the product and be informed of the availability of the products.

Differentiate the product; this will be achieved engaging in advertising activities for product awareness (brand building) and market dominance.

Building corporate image; also known as corporate advertising should include “The Organic Youth” slogan that customers can identify with in years to come.

Therefore, by building brand awareness and corporate image as well as differentiating the product from other organic health and cosmetic lines, KirkEL’s would promotion objective based upon rich aroma oils and foundations would attract a wide customer base.

Product strategy

Line extension; the existing health and cosmetic products should extend to new flavors and shades to include people of dark skinned complexion and those of Asian origin.

Multibrands; this requires the company to introduce a new brand name in the same product category. For example neem facial oil could also have neem foundations.

Brand extension; the existing brand name ‘The Organic Youth’ should be extended to new product categories. For example, use of ‘new and improved’ selling preposition will generate new life and renewed interest in the product.

Since products attribute customer’s decision, product objective that consist of both health and cosmetic products bearing the name “The Organic Youth” with variety shades to choose from and of the required multi-brands will enable the product to compete with each other fairly.

Pricing Strategy

Penetrating pricing; KirkEL will set prices relatively low as a strategy to increase sales and market share. And once customers familiarize with the products, prices are expected to go higher.

Psychological pricing; here, KirkEL will position prices a unit lower than the market place price. For example, neem oil will be priced at $9.99 instead of $10.00

Bundle pricing; KirkEL will be required to sell its ‘Organic Youth’ products alongside other products. For example, customers who buy bundles of products will enjoy reduced prices. The idea of buy one get one free and membership subscription should also be encouraged. The pricing objective of setting prices very low in order to attract a large portion of the market and increase when the product becomes established in the markets should be given the highest priority.

Place Strategy

Distribution centers; The Organic Youth products will be distributed in all retail stores within California and neighboring states.

Warehouse; designing regional distribution centers to handle shortages.

Transportation; for membership subscription, customer who purchase products online should be provided free delivery.

Place objective of targeting new market segments should consider having distribution centers in case of stock-outs.

Tactics and Action Plan

Product Action Plan

Tactic Due Date Responsible Party
Introduce different shades to match dark skinned complexion 6/30/2011 Quality control department
Introduce new brand name in the same product category. Neem oil, neem pesticide, neem medicinal herb 4/30/2011 Dermatologist
Introducing new and improved selling preposition to generate renewed interest in the product. 7/30/2011 Human Resource

Price Action Plan

Tactic Due Date Responsible Party
set prices relatively low from $9.99 then increase to $15.99 when the products gains market share 4/30/2011 Sales Representative
Set prices a unit lower than the expected price to attract clients 9/31/2011 Sales Representative
Introducing buy one get one free and membership subscription 11/1/2011 Marketing Department

Place Action Plan

Tactic Due Date Responsible Party
Distributing company products to all retail stores within California and neighboring states 4/24/2011 Sales and Purchases department
Developing regional distribution centers to handle shortages 4/24/2011 Sales and Purchases department
Door to door delivery for online purchases 4/24/2011 Sales and Purchases department

Promotion Action Plan

Tactic Due Date Responsible Party
sales promotion 4/24/2011 Sales Representative
advertising activities 4/24/2011 Sales Representative
Building corporate image 4/24/2011 Human Resource Department

Monitoring Procedures

Monitoring Activity Due Date/Frequency Responsible Party
Identification of mismatch between target markets and available products including competitors 4/30/2011 Sales Department
Identify key strength of the product that will allow the company to attract large market shares and satisfy target markets by identifying which products sell the most 5/31/2011 Human Resource
Identify which location have poor sales by checking sales and purchases entries 4/30/2011 Sales and Purchases Department
Identify new innovation likely to face out the product via the internet and by visiting competitors stores and websites 9/31/2011 Quality Assurance Department