Sweet Leaf Bath Co. Marketing Management Report
Sweet Leaf Bath Co. is a bath and body products company operated by Rose Creamer and her daughter Stacey Guymer. It is one of the rare baths, and body product manufactures in Canada whose products were certified through Fairtrade Canada. But the company has experienced minimal sales growth in last years. The marketing challenge is to reach a $150,000 to $200,000 target sales with creating a new marketing strategy. Achieving this goal, the plan is required to manage the solution effectively.
The recommendation includes selecting young customers as the target market. They need to hire another employee or recalling Guymer back to do the full-time job to increase the production efficiency. Improving the visibility of the company website, advertising on social media and websites to attract potential customers. Promoting the quality and kinds of the bath product and choosing the suitable placement to generalize their products.
The target market for the company is young customers who always go to the organic and health food stores. They prefer using the product with “green” or “organic” to keep their health. With a high percentage of use of social media, they do not receive information from the traditional media. It is an excellent opportunity to extend the range of advertisement on social media such as Facebook or YouTube. They can also make efforts on improving the online website to attract more young customers.
Most of the product of Sweet Leaf are certificated by the Fairtrade which is a well-known broader concept of fairness and decency in the marketplace. Compared with other competitors, Sweet Leaf has the high quality and environmentally friendly product with an adaptive price which is easy to accept. The customers can be offered by an inexpensive but created by the good ingredients product.
To attract more young customers to increase sales, the partner needs to spend more money on the exposure of the company and product in the online market. Compared with other high-cost promotion, Facebook Ad Campaign and Google AdWords Campaign are good choices because of the low cost and fixed conversion of the customers. Some of the high-cost promotion even cannot ensure the function for attracting the customers. It is not good behavior to increase the sale by losing money.
The online marketplace is the first choice to Sweet Leaf because of the high views by the visitors. At this point, Etsy is better than Pristine Planet even it is a shopping engine for best green merchants. Etsy has a great possibility to increase the customers and sales. Other two placement is not good choices to Sweet Leaf which are high cost and high risk. The marketing budget of the company is only 5,000 dollars. The partner cannot sustain the high upfront cost and travelling cost.
The Sweet Leaf Bath Co. had experienced minimal sales growth over the past years in 2011. They decided to create a new marketing plan to grow the business which has a $150,000 to $200,000 target sales. They also hope Guymer can return to the company to do the full-time job.
Finance – Sweet Leaf Bath Co. is a small company with $25,654 in annual sale. Although the expense of business may include personal expenses, they can only obtain profitability in 2011. With 5,000 dollars marketing budget, the company enables to offer high-cost advertisement campaigns and compete with established companies. Therefore, it can run interesting advertisements on social media to attract more customers.
Marketing – The Company gives free products to “mom bloggers” for coverage. They can make efforts on this marketing method because of the low cost and the vast range of dissemination. Most of their products are certified through Fairtrade Canada. As right marketing tools, the company can push hard on these products which are rare in Canada.
Operations – The Company creates high-quality products in Rose Creamer’s basement since 2007 with a constraint which is only maximum $150,000 worth of production can be made even if both partners work full time. They can only hire employees to reach the $200,000 target sales. In the online and direct sale, the company maintained a low traffic and high margin website that has information and can purchase through PayPal. It is a proper marketing operation because of the low cost of traffic. The company had no display materials on wholesale with high sales but low margin. Vendor shows give a large number of shows in various venues, locations with the participation fee. It is a potential chance to engage local retailer with plenty of time. The important shows can be chosen to do and leave more time for other things.
Human Resources – Only Rose Creamer and Stacey Guymer are working for the business. Guymer needs to come back to do the full-time job or hire an employee to reach the target sales. Rose is a retired business manager; she might have good business skills to help to increase the sales. Stacey Guymer studied aromatherapy, reflexology, and herbology. She knows their business which can create the product.
External Analysis (PEST)
Economical – Although the 2008 financial crisis impacted the entire market for soap, bath, and shower product. A lot of users started to choose cheaper alternatives to save money. But the industry has rebounded and is going to grow, nature and organic product market increased by 10% from 2007 to 2009. It is a good situation and tendency to the company. More purchaser will back and choose high-quality products. There are more than 40% of consumers want to buy green products, but they cannot afford it because of the financial reason. The price of the product is too high to be a problem for the consumers. Strongest chances are coming in textiles, cosmetics, and seafood. The products in the company also included in the cosmetics.
Social – Consumers are often distrust of “greenwashing” strategies because some organizations existed for issuing certification, but 71% of them still believe that third-party certification is the best way of claiming it. The products of the company are creating with ingredients that were ethically and environmentally sustainable. That is the reason why the company can be certificated by the Fairtrade which gives them large advantages. The notion of “green” products was firmly ingrained in CPG’s offers and consumer mindset, such as “Organic,” “Environmentally friendly product,” and “Carbon neutral” It is good for the company which are made with ingredients and certificated
Sweet Leaf has many other competitors who are also in Ontario or a different location in Canada. Tashodi is a large and famous company offering bath and hair product, but none of their products are certified when it marks itself as Canada’s leading fair-trade bath. It increases people’s suspicion of the real Fairtrade certified products. Sweet Leaf has a big advantage in the quality of the product, but it is not well known by Canadians. They also have local competition in Ontario. Delapointe is focusing on the morality and influence of the nation. Shea butter is a big advantage for Delapointe as the supplier of Sweet Leaf. Two companies are not on the same level to compare, but Sweet Leaf can extend the online sales to compete with it because Delapointe has stores in Quebec and New Brunswick. L’Herbier is another company located in Quebec which uses natural and organic Fairtrade ingredients with no certification. With offering the bulk product for the business, their products are available in over 100 spa and retailers. It is good for Sweet Leaf to increase the cooperation with other industry or stores to help them grow. Kynk Naturals and Earth to Body does not have high-quality ingredients but has a strong base of an online sale and excellent marketing mode. It is possible to compete with them if Sweet Leaf can expand publicity and network marketing. (Exhibit 1)
The first customer group for the Sweet Leaf is the mature customer which are all married with 1 or 2 children. Most of them are high education and high-income people and like buying in the organic/health food store and convenience store. They like sharing shopping products with others; it is a good mode of transmission to help the company sell their products. This customer group is a good target due to the shared shopping. Good shopping experience to them will offer more customers who are recommended by the existing mature customers. The next consumer group is the young customer. Most of them are not married, no child and living alone. They also like buying in the health food store. And they have high usage of social media. It is necessary to make the advertisement and promotion on social media and online marketing. The predisposed customer is not a good group to focus on because they have a high percentage of primary shoppers and purchase in the supermarkets. The last group which is disengaged customer also not good to be the target customers. Most of them are males with no child; they do not need to make a green selection for children’s health. They also have a high percentage of primary shoppers, which may not go to purchase for the product again. 44%of them never use the social media with 34%living in Quebec. That is difficult for them to obtain for the product without the network and high cost of the traffic.
It is recommended that the young customer is chosen as the target market. Because of the low marketing budget, it is necessary to do a low-cost advertisement to expand the groups. The age of young customers is 18 to 24 year-olds with high usage of social media. The company can also give free samples to young “youtuber” for coverage. It is a low cost but useful method to attract young customers to purchase the product. The young people prefer using organic products to keep their health. Although the majority of Sweet Leaf’s customers are women in 25-50, most of them like share shopping. But the main marketing method of the Sweet Leaf is online and from retailers. It may increase the margin of the company, but doing the advertisement with low cost is difficult.
Sweet Leaf produces 22 different products. Not all the ingredients of products are certificated by the Fairtrade. Therefore those ingredients have a lower price which is 50% of the retail selling price. If the company has a substantial difficulty on the fund, the packaging of the lip balms can be changed back to the plastic tube. It can decrease the cost of the materials effectively. But the tendency of the margin is increasing every year, the “eco tube” can still be used to be a new point to advertise.
Etsy is one of the E-commerce websites including multiple categories of products. It can support a lot more visitors because of the high view of the site. Customers can use the Etsy platform to purchase to ensure the safety of the purchasing. All the cost of the website is reasonable and acceptable. But there are too many products on the website; it is impossible to make certain that their products will be interested. And the website cannot highlight the advantage of the Sweet Leaf’s products which are certificated by the Fairtrade.
Pristine Planet is a green item comparison shopping website. It has a target market which are people who want to buy green products. There is no transaction fee because the customers will be directly linked to their company websites. And Pristine Planet also offers individual product page and free exposure on social media. As the weak point of this website, they only have about one million unique visitors each year which is a tiny market compared with Etsy.
Purity Life is a distributor contract which distributes health product and natural health food to the retail stores across the countries. If one of the big retailers decided to sell the products from Sweet Leaf, it will not only increase the sale of the products but also gives the company great potential customers. For the demonstration day, the company also have large opportunities to increase their sales and executives at these big retail stores. But there is a high risk of working with this distributor because of the high upfront cost which also reduces a large amount of the margin. Moreover, there is a big negative margin if no retailers buy from the Sweet Leaf.
Vendor Shows is a CHFA show holding over four days at the end of September with two days conference and two days trade show. It offers an opportunity to get more retail customers for the company, and it can also increase brand awareness. During the conference, they can make a connection with other companies in the same industry. It can also help the company grow if they can learn more knowledge from other companies, such as marketing skills. But they need to pay $3,200 for preparing the materials, products and traveling. The cost of Vendor Shows is too high, at the same time, all the results are indetermination. Time management is also a problem to participate in the show because Guymer has another full-time job. She needs to request two days leaving for the show; it will influence her income of the full-time job.
Overall, the online market is the place recommended to the Sweet Leaf because of the low cost and certain target market due to the low marketing budget. And it shows their advantages of green and organic products. Increasing the sales, distributor contract also can be tried based on the acceptable to the high risk. Compared with the Vendor Shows, it is more reliable with the higher percentage to be chosen by the retailers.
Based on the price of other competitors, there is no need to change the product price. If the partner wants to daily deal website as the promotion, they can increase the small scale of the price to prevent losing money. (Exhibit 2&3)
Public Relations Consultant help them develop a print and online media presence to drive traffic and sales to the company website. It approximately costs $1,660 for total requesting two jobs, $800 for writing and distribution of one targeted press release and $30 addition in one sample mailing cost. (Exhibit 5)
Website Redesign can make the website more professional with more information and incorporate promo code. It can also provide better visibility in search engines and improve the checkout procedure with approximately $3,500 for work. It takes a large percent of the company advertising budget.
Facebook Ad Campaign has two different costing model which are cost-per-click (CPC) and cost-per-thousand-impressions (CPM). CPC purchase for clicking by the potential consumers, CPM purchase for viewing by the viewers on the Facebook. The partners need to set a maximum daily budget and bid target to estimate how many people will go to the company website to purchase. And they need to decide what kind of promotion should be posted in the advertisement. CPC cost about $0.65 to $1.24 with 1% conversion, CPM is about half of the CPC’s price which is $0.325 to $0.62 with 0.003% conversion. Sweet Leaf may obtain one real customer with $124 using CPC or $20.67 using CPM. But there is a precondition of the number of people. (Exhibit 6)
The system of Google AdWords Campaign is similar to the Facebook Ad Campaign which needs to decide what content to promote, what keywords shown on the advertisement and what maximum budget to set for both per click and daily. But they only have one model which has 1,500 to 1,900 views and 160 to 200 clickers with $150. Sweet Leaf may obtain one real customer with $91.19. With the similar method, Google has a low cost for per real customer. (Exhibit 7)
Daily Deal site promotions are websites feature numerous products and services for consumers to purchase at really deep discounts. If Sweet Leaf wants to post the products on these websites, it needs to offer 50-70% off, and the website will take half of the discounted price as commission. If the company only give the 50% discount, they can still earn a little bit of money from three product which are soaks, scrubs, and butter. Otherwise, they will lose money on all of the products. (Exhibit 8)
Point-of-sale displays can provide an aesthetically appealing display for retailers in order to draw the attention. It costs $44 per retailer with order of 25 which is about $1,100. (Exhibit 4)
The suggestions previously outlined will help Sweet Leaf Co. reach their $150,000 to $200,000 target sales. Because of the production efficiency of a person, Guymer needs to do the full-time job. Otherwise, the company needs to hire other employees to reach the production standard. By targeting the young customers in British Columbia, advertisement and promotion on social media are necessary to attract them. Both of the partner, Rose Creamer and Stacy Guymer know about marketing and creating products which can help the company grow. For choosing the online marketplaces and promotion, Etsy and Google Adwords Campaign are good opportunities to increase the sales and margin with low cost. Instead of giving a free sample to the “mom blogger,” the partner can also collaborate with young “YouTubers.” Therefore, by the possible marketing strategy provided, Sweet Leaf Bath Co. will reach $150,000 to $200,000 target sales in 2012.
Weighted average price = ∑ VC × proportion of sales
Weighted average price Retail Selling Prices = 11.56
Weighted average price of Variable Cost per Unit = 3.04
|Public Relations Consultant|
|Target Press Release||$ 800|
|Sample Mailing||$ 30|
|Total cost||$ 830|
|Total cost for two jobs||$ 1,660|