Marketing Plan

AMB240 Marketing Planning and Management

Semester 1, 2016

Marketing Manager: Freya Croninn8582670

Product Manager: Jade Bullockn9161147

Pricing Manager: Alli Duckworth n7095082

Promotion Manager: Tayla Hardingn8866767

Distribution Manager: Siobhan McCann n8910022

Table of Contents

1EXECUTIVE SUMMARY

2SITUATION ANALYSIS

2.1THE MARKET

2.1.1Market Need

2.1.2Macro-environment – PEST analysis

2.2THE COMPANY

2.2.1Mission statement

2.2.2Marketing Team

2.3COMPETITION

2.4SWOT ANALYSIS

2.5SUMMARY

3MARKET SEGMENTATION AND TARGETING

3.1Segmentation

3.2Target market

3.3Market size, demand and potential

4MARKETING OBJECTIVES AND METRICS

5MARKETING MIX

5.1Product strategies

5.1.1Positioning

5.1.2Pricing Strategies

6BUDGET

7IMPLEMENTATION PLAN

8REFERENCES

9APPENDIX A: Product and Stall Checklist

10APPENDIX B: Map of Competitors

11APPENDIX C: Market Visit

12APPENDIX D: Market Research Survey

1EXECUTIVE SUMMARY

The Full Sun Company (‘TFSC’) is a new business that will make its QUTopian debut in Semester 1, 2016. TFSC aims to become the premiere QUTopian home wares retailer by offering beautiful, bespoke and environmentally friendly products for the discerning consumer.

TFSC offers a unique range of homewares and potted succulents. These products are handmade and homegrown, and will delight consumers hoping to add new beauty to their home environment. Focusing on environmental sustainability and the importance of inimitability, TFSC has nurtured wonderful products from seedling to kiln.

TFSC aims to target key QUTopian markets including ‘Broad City’, ‘Gift Givers’ and ‘Flower Power’. TFSC will predominantly aim to target members of Broad City, a young female demographic whose psychographic and behavioural interest in lifestyle and high quality products will undoubtedly attract them to the beautiful offerings of TFSC.

Due to the popularity of home wares and succulents in the wider market, TFSC faces strong competition in the QUTopian marketplace. The strengths, weaknesses and threats posed by each of these competitors will be detailed herein.By differentiating their brand positioning and focusing heavily on integrated efforts across all elements of the marketing mix, TFSC aims to become the category leader.

The pricing, promotional and placement strategies implemented by TFSC are grounded in primary and secondary research. Key among these is the use of social media to create excitement and promote TFSC’s products. Social media has also allowed for more detailed market research, which has furtheredthe company’s insight into the QUTopian consumer.

By providing unique, handcrafted products and excellent customer service, TFSC aims to spark joy in the lives of busy consumers, and bring environmentally friendly beauty to their homes.

2SITUATION ANALYSIS

2.1THE MARKET

The Full Sun Company is operating in QUTopia, competing against a market where 66 other businesses and where according to the QUTopia census data, there will be a minimum of 274 potential consumers in the market.

2.1.1Market Need

As the demand for this product has grown greatly over the past few years, so has the supply of it within QUTopia.

2013, Sem 1 / 2014, Sem 1 / 2014, Sem 2 / 2015, Sem 1 / 2015, Sem 2 / GRAND TOTAL
$7,750.00 / $3,334.00 / $4,025.00 / $3,151.67 / $3,800.00 / $3,831.94

Table 1: Average Expenditure AcrossSimilar Product Categories 2013‐2015

Past consumption patterns in QUTopia within the broader category of Other Store Based Retailing have been motivated by different factors; 21% cheap products, 58% good products and 21% other (QUTopia Bureau of Statistics 2014). The Full Sun Company’s products will tap into the QUTopian consumer’s desire for quality bespoke products, whilst being fairly priced. The homemade, original nature of the product will appeal to consumers wanting an environmentally friendly product that makes them feel socially aware. The PEST analysis (Table 2) below has identified the trends driving environmentally aware consumers, as well as the latest trends in the fashion industry with gardening home wares. This highlights that there is a rising need for these products on a grander scale.

Whilst products in the food and drinks category have achieved high profit margins in almost every semester; comparatively, consumers may not wish to solely purchase food and drink items and therefore have a need to purchase something useful they can take home. TFSC fills the consumers’ need for an experiential, emotional purchase by selling products that are for long term use.

1

The Full Sun Company| Semester 1 2016

2.1.2Macro-environment – PEST analysis

Environment / Trends/issues / Implications for our product
Political/Legal / The Australian political environment is relatively stable – it is expected that re-election of the LNP government will occur in 2016 (The Economist Intelligence Unit 2016)
Pressure from retailers to reduce the tax-free threshold on imported goods purchased online has resulted in GST being applied to purchases beginning July, 2017 / Expectation that legal/political policies affecting small business will remain stable across 2016, and that there will be few disruptions to trading conditions
Importing goods will soon be more expensive - this will affect supplies purchased overseas for our business, but will also likely decrease demand for imported products in future. While this is not currently applicable, it affects future trading conditions in the retail industry.
Economic / Expenditure on private dwellings has increased, leading to increased demand for household items (Kelly 2015)
An increase in Australian household discretionary income over 2015-2016 increases demand for non-essential goods (Kelly 2015)
Consumer confidence is expected to grow over 2015-2016, making consumers more willing to spend on discretionary items (Kelly 2015)
The Australian dollar is low against other currencies, which results in higher cost of imports for production and consumption. However, this increases demand for Australian goods
Consumers in the retail industry tend to be price sensitive and seek the best value for their money (Kelly 2015)
Mean profitability across similar businesses in QUTopia from 2013-2015 was 31.34%, indicating that similar businesses have been relatively profitable. Semester 2 2015 saw an average of 59.2% profitability across 5 competing businesses
Mean salary of $286.46 in QUTopia, with a range of - this income is more or less entirely disposable but must be spread across both market days. / Increases in private dwelling expenditure, household discretionary income and consumer confidence indicate that spending on retail products may increase, which indicates a positive likelihood of successful retail trading.
The Full Sun Co. should aim to source materials locally to save on costs of currency exchange.
The price sensitivity of retail consumers increases importance of ensuring that our product is priced in a manner that accurately reflects its value to our target market. It may be prudent to consider a target-costing method of pricing.
Previous businesses in our industry have achieved success, even when competition is strong. These data indicate good prior success for our industry, and show that consumers are willing to purchase items from our product category.
Pricing should attend closely to this mean income, as it reflects the majority of the disposable income in QUTopia, not including income provided by market day tourists.
Social/culture/
demographic / 72% of Millennials are willing to pay more for products that have a positive social and environmental impact (Nielsen 2015)
Purchase decisions heavily influenced by values regarding health, environmental sustainability and social justice (Euromonitor 2015)
Gardening has become a retail fashion industry and consumers are seeking on-trend offerings (Lo 2015)
The majority of consumers in QUTopia are female (60.2%), and consumers have a mean age of 21.15 years
Top Roy Morgan Value Segments as derived from QUTopian census data are Young Optimism (57.7%) and Socially Aware (12.8%) / The Full Sun Co. could benefit from this trend by marketing the environmental sustainability aspect of our goods, to capitalise on these social trends
In light of the emergence of gardening as a fashion industry, it would be prudent to ensure that designs/colour choices are in demand through market research efforts, in order to meet market demand
The higher percentage of female consumers and the relative youth of the market at large should guide our target market choice.
Marketing efforts should aim to identify and meet the needs of these segments. ‘Young Optimism’ consumers are interested in image, style, and reflecting themselves positively, while ‘Socially Aware’consumers are keen to learn and are conscious of social and environmental issues. Our products should be positioned in a way that reflects these values.
Technology / Large percentage of young consumers are heavy users of social media platforms
Growth of online shopping and the trend of ‘showrooming’ – browsing online and purchasing in store -and ‘webrooming’ – researching online and buying in stores (Nielsen 2016)
Multi-device use is becoming more common amongst young consumers (Nielsen 2016) / These trends indicate that the Full Sun Co. could benefit by using social media as an advertising platform, and by providing customers the ability to view the product line and order products online prior to as well as during Market Day.
The trend of multi-device use indicates that our company should ensure that online advertising is compatible across multiple devices

Table 2. PEST Analysis

1

The Full Sun Company| Semester 1 2016

Analysis indicates that the majority of consumers in the QUTopian marketplace are young and female, providing insight into a potential target market opportunity. The strong popularity of social media among Australian youth provides an excellent and freely available advertising and market research platform for our business. Furthermore, social trends that highlight the importance of environmental sustainability indicate that products meeting this description will be attractive to consumers. However, our marketing strategy should attend closely to the threat posed by the price sensitivity of consumers in the retail industry.

2.2THE COMPANY

2.2.1Mission statement

To delight our customers with handmade vessels and planters that spark joy in busy lives.

2.2.2Marketing Team

Team Member / Position
Freya Cronin / Marketing Manager
Jade Bullock / Product Manager
Alli Duckworth / Pricing Manager
Tayla Harding / Promotions Manager
Siobhan McCann / Distributions Manager

Table 3: The Full Sun Company Team

2.3COMPETITION

The Full Sun Company falls within the Other Store Based Retailing industry sector. Prior to 2016, the market has never been as saturated with homewares and in particular, planting and garden related items. Previous data suggests that only 18 businesses in 2013-2015 have sold specialty planting items and homewares, compared to nine competitors in 2016 detailed below.

1

The Full Sun Company| Semester 1 2016

Company Name / Offering / Direct/Indirect / Why are they competitors?
1 / Moss Masters / Home decor using moss / Direct / Consumers may choose only one plant based item to purchase on market day.
2 / Coyote Plants / Unique succulents placed in decorative terracotta pots. / Direct / Consumers may choose only one plant based item to purchase on market day.
3 / Lifebulbs / Terrariums made from light bulbs and premium horticultural products. We offer a diverse assortment of free standing and hanging terrariums ranging from small medium or large in size. Lifebulbs also offer DIY kits for those aspiring to customize their own miniature worlds. / Direct / Consumers may choose only one plant based item to purchase on market day.
4 / Revived / Re-purposed materials into manually designed home decor / Indirect / Consumers may choose to purchase only one home decor item.
5 / Bed, Bath and Study / Terrariums, decorated jars & clips, nail polish marbling, fancy hair ties, fancy stationary, candle holders, fridge magnets, fragrance diffusers. / Direct / Targeting a similar market segment Broad City with the use of hair ties and candle holders. Also offering plant based products which consumers may choose to purchase instead of TFSC.
6 / Puny Pots / Fun, contemporary and unique pot plants with seeds packs. / Direct / Similar product offering unique hand decorated planters.
7 / The Gent's Shed / A collection of sustainable modern and minimalistic homeware items crafted by concrete, glass and wood / Direct / Unique, handcrafted homewares. Seen as a direct threat to the market share looking for unique home decor.
8 / Gro-A-Bro / The company uses recycled goods to create unique grass heads with a personality. / Direct / Unique homewares relating to plants.
9 / Easy care cacti / Cacti and succulents in jars / Direct / Offering succulents and cactuses also.
10 / ConCreations / Sophisticated modern homeware products crafted using concrete / Direct / Creating unique homewares made by hand.

Table 4. Competitor Summary

1

The Full Sun Company| Semester 1 2016

1

The Full Sun Company| Semester 1 2016

ConCreations / The Gent’s Shed / Coyote Plants / Gro-A-Bro
Target market(s) / ConCreations will be targeting married/defacto and single women in the age range of 20-30. These women would enjoy keeping up with the latest homeware trends and align themselves with sophisticated product offerings. / The Gent’s Shed would likely target socially aware males. This is relevant with their branding along with their company mission to create sustainable homewares. / Coyote Plants would be targeting young optimists and socially aware Females between the ages of 18-25. This is apparent through their youthful and trendy branding along with their product offering. / Gro-A-Bro has a wide target market with their ‘goofy’ product offering and branding. They would likely be targeting young optimist females and males from the ages of 18-20, along with female and male Conventional Family Life who could be buying for a partner of family member.
Product / Sophisticated modern concrete homewares. / Sustainable homewares crafted using concrete, glass and wood. / Hand painted terracotta pots and plants. / Hand painted planters and plants.
Price / $70-$80 Premium pricing / $40-$80 Cost based pricing / $30-$50 Budget pricing/Competition pricing / $30-$50 Budget pricing/Competition pricing
Place / Market Day, Facebook / Market Day, Facebook / Market Day, Facebook / Market Day, Facebook, Instagram
Promotion / Projected: social media, pre order / Projected: social media, pre order / Current: social media, survey participation discount / Current: social media, preorder, survey participation partnership coupon offering
Potential competitive barriers / ConCreations would likely present competitive barriers in the form of high level of execution and trend based retailing. / The Gent’s shed will present with a High level of execution, Authentic Innovation and a sustainable mindset that will align similarly to TFSC. / Through social media Coyote plants will present a high level of Brand Equity (Aaker, 2011) which will create solid competition between similar companies. / Gro-A-Bro will build stable Brand Equity (Aaker, 2011) along with a high level of Customer Involvement (pre-order customisation).
Potential strengths and weaknesses of competitors / Strengths: Sophisticated homeware offering, unique product, ‘on trend’ product.
Weaknesses: High Price, Low Demand, Saturated Marketplace, Similar offering to The Gent’s Shed, no social media presence. / Strengths: Appealing sustainable homewares for Socially Aware consumers, unique offering, handmade appeal.
Weaknesses: Low Male Market Share, No social media presence / Strengths: Survey Feedback, Social media presence, Survey Offers
Weaknesses: Saturated marketplace. / Strengths: High social media presence, customer customisation, survey feedback
Weaknesses: saturated marketplace.
Our likely response(s) / Avoid: Stall placement means that this is a distant competitor. Focus on closer competitors. / Avoid: Stall placement means that this is a distant competitor, and target markets differ / Attack close competitor with competitive pricing strategies and increased promotional activity. / Attack close competitor with increased social media presence and introduction of customer customisation/preorder.

Table 5: Competitor Analysis

TFSC aims to stand out from our competitors through our unique product offering and unique selling proposition (‘USP’) (Kotler 2013, 265). By creating one-of-a-kind, homegrown and handmade planters, TFSC aims to create a clear differentiation in comparison to competitors. This strategy will be measurable through the company's objectives along with sales comparison post market days.

1

The Full Sun Company| Semester 1 2016

This analysis reveals that the competitors TFSC should aim to target are Coyote Plants and Gro-A-Bro, given their close stall positioning and strong social media presence.

2.4SWOT ANALYSIS

Strengths / Weaknesses
  • No Cost Of Goods Sold
  • No set up costs for Market Day
  • Easy to manufacture product and obtain raw materials
  • Product on current trend
  • Low cost of market stall ($300)
  • Minimised wages expenditure
  • Low media and promotion expenditure: using owned and earned media
  • Free market research
  • Strong demand for product from market research
  • USP compared to competitors: handmade quality
  • Diverse skills within team – creative
  • Multiple distribution channels (pre-order)
  • Potential for large profit margin on each item
  • Product is low maintenance
  • Product targeted at female demographic – over 50% of population
/
  • Low disposable income of consumers compared to unit price of product
  • Cannot consume product instantly
  • Transporting product and delicacy may off-put consumers
  • Product targeted at female demographic – may lose out with male consumers
  • Low awareness of brand
  • Short time frame to create demand
  • No level of customer loyalty at this point in time
  • Time constraints for team meetings
  • Only two Market Days to make a profit

Opportunities / Threats
  • No other team has advantage over another
  • Product can be customised to suit tastes of consumer
  • Pre-order to create demand
  • Market research to gauge demand and gain a picture of the target audience
  • Facebook and in-class advertising to promote brand
  • Promote product as perfect gift
  • Minimise costs by drawing on existing resources and skills accessible within team
  • Use connections to minimise expenditure on packaging and stall design
/
  • 64 competitors
  • High level of competition – 8 direct competitors
  • Popular industry – many indirect competitors
  • Inability to create awareness and demand prior to market day
  • Acts of God
  • Poor planning or time management
  • Pricing – too low or too high
  • Stall position – next to two competitors
  • Traffic on Market Day – may not flow through stall as desired
  • Customers may not be interested in our product

Table 6. SWOT analysis