Marketing Plan
Submitted
By Steven R. Van Hook
J7132 Marketing Plan Steven R. Van Hook Page
i
NONDISCLOSURE AGREEMENT
Suckers!
Marketing Plan
I agree that any
information disclosed by Suckers!
(hereinafter “Company”) in connection with my review of the Company will be
considered proprietary and confidential, including all such information relating
to the Company’s past, present or future business activities, research, product
design or development, personnel and business opportunities.
Confidential
information shall not include information previously known to me, the general
public, or previously recognized as standard practice in the field.
I agree
that for a period of five years, I will hold all confidentiality and
proprietary information in confidence and will not use such information except
as may be authorized by the Company and will prevent its unauthorized
dissemination. I acknowledge that unauthorized disclosure could cause
irreparable harm and significant injury to the Company. I agree that upon
request, I will return all written or descriptive matter, including the
Marketing Plan and supporting documents to the Company.
Accepted
and Agreed to:
J7132 Marketing Plan Steven R. Van Hook Page
ii
Suckers!
Table of Contents
Industry Analysis
2
Competitive Analysis
3
Target Market
4
Promotion Plan
5
Distribution Plan
6
Measurements 7
Financials 8
J7132 Marketing Plan Steven R. Van Hook Page
1
EXECUTIVE SUMMARY
OLD-FASHIONED PRODUCT FITS A NEW AGE
Suckers! is
a one-of-a-kind online company offering the finest large gourmet lollipops in
custom playful gift boxes. Suckers! lollipops come in
exotic tempting flavors, for starters: hot fudge sundae, cherry pie a la mode,
root beer float, berries and cream, banana split -- and holiday specials like
egg nog and pumpkin spice.
The company has a cooperative arrangement with the
"Candy Kitchen" in
Large lollipop suckers were especially popular with
children in the 1950s and 1960s, and the popularity is re-emerging in the 21st
century. Suckers! lollipops are targeted toward a consumer audience of mothers and
grandparents shopping for children’s gifts and party supplies online.
E-commerce saw a 72 percent increase in revenue in 1999: to $171.4 billion from $99.8 billion a year earlier. Forrester Research has projected that e-commerce could generate $6.9 trillion in revenues by 2003.
Suckers! has a competitive advantage in operating with low
overhead costs, a specialized niche-market product, and the ability to rapidly
respond to shifting market trends, consumer tastes, and customer service
premiums.
Suckers! is prepared to step into the online niche void for
gourmet lollipops, execute a marketing strategy targeted at the large and
affluent consumer groups of women and grandparents, and provide the online
service and support that will attract first-time and repeat business in an
environment free of restrictive market competition.
Suckers! has
the shop space, the tried-and-true vendors, the expert and dedicated staff. We
have a prototype web pages, a solid marketing plan, and an eager customer base. Suckers! has $145,000
in investments from its principals. We are seeking $395,000 in first-year
short- and long-term loans for start-up costs including equipment and
marketing.
This
Marketing Plan will demonstrate why Suckers!
is a prudent investment, promising a solid return and even a little fun in the
process.
J7132 Marketing Plan Steven R. Van Hook Page
2
Suckers!
Food
Industry Cuts Back on New Products
The
An Old
Favorite is New Again
Large lollipop suckers were
especially popular with children in the 1950s and 1960s, and the popularity is
re-emerging in the 21st century.
Teenage “ravers” are often found sucking
throughout an evening on their lollipops (US News & World Report,
6/26/00). Trends popular with older brothers and sisters are quick to catch on
with younger siblings. Lollipops are “cool” again. Suckers! is ready to step in and serve the demand.
Target-Audience
Shoppers (Mothers and Grandparents) Are Now Online
Suckers! lollipops are targeted toward a consumer audience of
mothers and grandparents shopping for children’s gifts and party supplies online.
Women have traditionally been responsible for 80 percent of household
purchases. That power-base of consumer decision-making is moving to the
Internet: currently 63 percent of those who shop online are women, and the
percentage of women surfing the Web has grown from 15 percent in 1995 to 50
percent this year. (CNET, 5/26/00)
Grandparents are becoming
ever more comfortable with computers and Internet shopping. Census bureau surveys have found that
about 40 percent of Americans aged 45 and older, or 35.6 million, have a
computer in their household. An AARP poll found that among computer users aged
45 and older, 81 percent have access to the Internet. (AP 3/30/00)
E-Commerce Niche
Shows Strong Profit Potential
Shoppers across all demographics are moving online to make their
purchases. E-commerce saw a 72 percent
increase in revenue in 1999: to $171.4 billion from $99.8 billion a year
earlier. Forrester Research projected in
April this year that e-commerce could generate $6.9 trillion in revenues by
2003. (Associated
Press, 6/6/00)
These numbers especially
favor companies such as Suckers! specializing in gifts
for children. A study of holiday gift
spending demonstrated that 70 percent of shoppers said their holiday online
purchases of toys or children's products were for gifts. (CNET, 10/26/99)
J7132 Marketing Plan Steven R. Van Hook Page
3
Suckers!
Competitive Analysis
Competitors
Slow to Move Online
Mass producers of candy products have been slow to move online. A business.com
industry analysis asserts packaged-food companies (including candy makers) have
been reluctant to cater directly to consumers via the Internet – a move that
would anger existing distributors. For many food companies, the Internet is
more of a marketing outlet than a distribution channel. (www.business.com,
retrieved
In fact, with each passing
year the number of potential competitors in this market decreases. According to New Product News, the
introduction of new packaged-foods items decreased in 1999 to only 6,000 new
products, a decrease of 40% over a brief period of four years.
Suckers! has a competitive advantage in operating with low
overhead costs, a specialized niche-market product, and the ability to rapidly
respond to shifting market trends, consumer tastes, and customer service
premiums.
Low Niche
Competition On the Web
There are currently several sites that offer bulk and specialty candy products
to online shoppers, e.g.:
Candy Direct (www.candydirect.com)
Make Mine Sweet (www.makeminesweet.com)
Goodie Basket Shop (www.goodiebasket.com)
Jo’s Candies (www.joscandies.com)
Shoemaker’s Candies (www.shoemakers-candies.com)
These sites primarily offer mass-produced candies or custom chocolates, and
none offers specialty lollipops. Nor do any of these sites offer the sort of
customer support to be provided by Suckers!:
party-theme ideas, decorating suggestions, do-it-yourself candy recipes. Suckers! would be effectively marketed through existing
online malls, taking advantage of the large numbers of shoppers already
attracted to the sites. A search on ShopGuide.com (“the largest shopping guide
and search directory for over 20,000 online stores, malls and cyber shops”)
found zero outlets offering any product similar to Suckers! gourmet lollipops.
The
Suckers! is prepared to step into
the online niche void for gourmet lollipops, execute a marketing strategy
targeted at the large and affluent consumer groups of women and grandparents,
and provide the service and support that will attract first-time and repeat
business in an environment free of restrictive market competition.
J7132 Marketing Plan Steven R. Van Hook Page
4
Suckers!
Suckers! products and services target a consumer market,
specifically mothers and grandparents involved with gift purchases and party
planning for children. The Suckers! web site will also be attractive to children, who
may make referrals to the parents and grandparents. Initial marketing efforts will focus on a
domestic audience in the
The typical target mother
will be married or head of a single-parent household, educated, earning a
middle-to-upper income, with one or more pre-teen children in the home. While fathers may also be attracted to our
products, mothers are typically the ones responsible for planning and
purchasing the supplies for children’s parties.
Women make approximately 80 percent of household purchases. Nowadays 63 percent of online shoppers are
women, accounting for $180-billion in online purchases in 1999.
“I’m
the neighborhood mom that gives the ‘coolest parties.’ So say the kids, anyway.
I love your theme ideas – especially the pirate pajama loot ‘n lollipop
jamboree.” – Tony’s mother,
Grandparents:
Grandparents are becoming
ever more comfortable with computers and Internet shopping. Census bureau surveys have found that
about 40 percent of Americans aged 45 and older – or 35.6 million people – have
a computer in their homes; 81 percent of those have access to the Internet, for
a potential market of 28.8 million online customers in the grandparent age
group.
“We
have 11 grandchildren, ages 2-12. We’ll keep a box of suckers in the closet for
all those birthdays we forget.” –
Grams & Gramps Smythe,
Children:
Some 70 percent of holiday shoppers
make their online purchases of toys or children's products for gifts. The Suckers! web site will be especially attractive for children,
as well as provide suggestions for party themes that children may relay to
their parents and grandparents. Though
the actual sell of items will not be targeted at children, the children will be
encouraged to refer the site to appropriate adults.
“Cool!” – Sandra Stephens, age 8
General
Audience:
Beyond the shopping segments
of mothers, grandparents, and children, our product has a broad appeal that
will attract customers outside of the specific target audience. Though the web site content and marketing
materials will target a specific audience, it will be prepared in such a way as
to attract and certainly not alienate demographics beyond the target
groups.
J7132 Marketing Plan Steven R. Van Hook Page
5
Suckers!
Promotion
Suckers! will execute a $50,000 annual cross-media marketing
strategy. With a target audience of party-planners,
gift-givers, mothers, grandparents and children, the marketing outlets will
include:
Virtual
Shopping Malls
Web site will be linked
through appropriate existing online shopping mall sites. The site ShopGuide.com
(“the largest shopping guide and search directory for over 20,000 online
stores, malls and cyber shops”) found zero outlets offering any product similar
to Suckers! gourmet lollipops.
Cost: annual mall rent of
$15,000. First mall placements by Month 3; full placements by Month 9.
Reciprocal
Marketing:
Links with appropriate
partner companies offering discounts to customers surfing between companies.
Cost: 15% of sale as
customer incentive. Initial partner agreements by Month 6.
Affiliate
Programs:
Provide opportunity for
affiliate sites to receive percentage of sale generated by a link from their
site.
Cost: 8% of sale to
affiliate. Initial affiliate agreements by Month 6.
Catalogues:
Placement of advertisements
in household and party catalogues with directions to web site.
Cost: annual budget of
$17,500. First placements by Month 3; review of effectiveness and additional
placements by Month 6.
Cost: annual budget of
$10,000. First placements by Month 3; review of effectiveness and
additional placements by Month 6.
Banner
Ads:
Placement of banner ads on
suitable web sites in conjunction with affiliate programs and reciprocal
marketing.
Public
Relations:
Editorial content provided
to newspapers, women’s and housekeeping magazines on party theme ideas,
providing link to web site for additional theme suggestions.
Cost: none, beyond
article development. First media releases by Month 6.
J7132 Marketing Plan Steven R. Van Hook Page
6
Suckers!
With
the pending purchase of the lollipop fabricating machines and the move into the
selected 300-square foot production facility, Suckers! will be able to begin producing within the timetable approximately
2,000 lollipops per day with rotating production shift crew of three workers
(200 lollipops per hour with 10 hour days and overlapping work shifts). The
lollipops have a per-unit material cost of $.25 and will retail for an average
of $1.50 each (including discounts for bulk orders). Monthly revenues after material costs should
approximate $65,000.
Several commercial vendors for sugar, flavorings, lollipop sticks, wrappings, and custom shipping boxes have been identified. These vendors have proven dependable delivery records with the Santa Barbara Candy Kitchen.
The Marketing Strategy section of this Marketing Plan describes the advertising and promotion campaign. Suckers! will reach a readily available market audience through “storefronts” with existing online malls. The planned online mall expenditures and timeline are detailed in the Marketing section.
Most of the lollipop orders will be placed with credit cards over the Internet. This will allow minimal labor to gather the order mix (selections of different flavors), shipping information, payment data, and an email address for follow-up communications. Two fulltime operators will be capable of processing 100 orders per day (average of 20 lollipops per order).
Suckers! will provide daily UPS
shipments for 3-day delivery throughout the
Follow-Up
The final stage of every Suckers! customer purchase will be a follow-up email message to ensure complete customer satisfaction with the product and delivery. This will also assist in developing an opt-in customer database for additional marketing strategies (e.g., announcements for new flavors, candy recipes, party-planning ideas).
J7132 Marketing Plan Steven R. Van Hook Page
7
Suckers!
Operations:
·
Rent
and equip production facility
·
Implement
initial production and operations staff (six full-time equivalents)
Marketing:
·
Place
Suckers! web
site on targeted online malls
·
Initiate
promotional campaign as outlined in Marketing section of Marketing Plan
Financials:
· Achieve year end sales averaging $65,000 per month
·
Aim
for year-end break-even point between production costs and sales
Operations:
·
Review
staffing needs based on year-two production goals
·
Maximize
production efficiency
Marketing:
·
Review
online mall placements for maximized effectiveness
·
Continue
advertising campaign as outlined in Marketing section of Marketing Plan
Financials:
· Achieve year end sales averaging $80,000 per month
·
Assess
bonus payments to production teams for meeting year-end goals
Operations:
·
Assess
suitability of production facility and equipment for year-three goals
·
Review
vendor prices and competitive options
Marketing:
·
Maximize
public familiarity with Suckers! brand
name
·
Place
editorial copy for magazine/online content promoting Suckers! party theme ideas
Financials:
· Achieve year-end sales averaging $100,000 per month
·
Solicit
bids for company buy-out
·
Assess
bonus payments to production teams for meeting year-end goals
J7132 Marketing Plan Steven R. Van Hook Page
8
Suckers!
Financials
Please see
the attached Excel file for documents including: