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Strategic Marketing Plan for Zona Verde

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Edward Appleyard

on 3 June 2010

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Transcript of Strategic Marketing Plan for Zona Verde

Double click anywhere & add an idea A Strategic Marketing Plan
for Zona Verde Cosmetics By
Edward Appleyard and Elise Milam Introductions The Readers Dr. Amy Ostrom
Dr. John Schlacter
Dr. Michael Wiles Zona Verde CEO Earl Miller Zona Verde Cosmetics Greenestar Technologies LLC Vía Verde Inc. Zona Verde Cosmetics Product Line 1. after sun aloe
2. bath & massage oil
3. hand & body lotion
4. body butter
5. night cream (repair and restore)
6. eye-cream (anti-wrinkle)
7. décolleté cream (neck and cleavage)
8. day cream (age defying)
9. shampoo
10. conditioner Hempseed Oil Essential Fatty Acids omega 3, 6, and 9
Natural SPF of 15
Source of gammalinolenic acid (GLA)

Vitamin A: rejuvenates
Vitamin B5: hydrates
Vitamin C: antioxidant, boosts collagen/sun protection
Vitamin E: antioxidant
Collagen: Firms
Haylauronic acid: hydrates
Aloe: repairs Other Natural Ingredients include: Product Life Cycle Zona Verde Internal Environment History/Mission Management/Organization Structure Finances Suppliers Technology Marketing and Sales SWOT Analysis External Environment Political/Legal Economic Trends Sociocultural Trends Green Consumerism Online Consumer Databases Industry/Competition Cosmeceuticals Other Competitors Hempz Pangea Organics Market Opportunity Analysis Current Customers Potential Customers Target Market: College Students 1. Beauticians (18-60 years old) 3. College Students (18-25 years old) 2. Parents (30+ years old) New Mission Statement and Objectives Mission Statement Positioning Statement New Company Objectives Financial Management, Organization, People Strategies and Tactics Product Placement Price Promotion Founded in 2008 by co-owners Earl Miller and Earl Shibou
The current mission statement reads: “Our success is derived from the production of an all natural, toxic free, totally green line of health and beauty products. Our research and development teams are constantly working towards formulating and improving products from nature’s best flora. We strive to produce products that are anti-aging, contain anti-oxidants, and in a variety of ways generally improve one’s well being.” Company is structured with zero debt.
Money is currently tied up in inventory or is in accounts receivable. Warehouses in Winnepeg, Canada and Los Angeles, CA
Products are shipped via FedEx, UPS, and Postal Services Hempseed oil is supplied from a company in Canada due to legal restrictions in US.
Other product ingredients are also supplied from Canada. www.zonaverdecosmetics.com
Customers have the ability to purchase items online and have them shipped to their homes.
Plans to do search engine optimization in order to ensure the maximum amount of potential customers visit the website. Currently being sold in Canada to dermatologists’ offices, drug stores, spas, beauty boutiques and gift stores.
All are reordering, but sales are still minimal (around $10,000).
Marketing is done mostly through three sales representatives and involve giving out free samples.

Industrial Hemp Production Cosmetics Regulations Labeling Certification Options Outlawed in the United States since 1937.
Confused with marijuana, but has less than 0.3% of the pyschoactive ingredient tetrahydrocannabinol (THC).
7 states have legalized production but the DEA is still turning down applications to produce.
Canadian products need only be tested for levels of THC - Zona Verde's supply contains 0.00% THC. The Food, Drug, and Cosmetic Act (FDCA) of 1938 regulates testing, manufacturing, distribution, and sale of cosmetics.
Cosmetics must have warnings of any side effects as well as warnings regarding carcinogenic ingredients, and cannot make unsubstantiated claims.
The Consumer Product Safety Act (CPSA) sets standards for potentially dangerous products, issue warnings, and require product recalls on harmful products. 1. USDA Organic Certified
2. IOS Natural & Organic Cosmetic Standard
3. BDIH Certified Natural Cosmetics
4. Whole Foods Premium Body Care Seal Currently in a recession caused by the 2007 housing market collapse and subsequent financial crisis.
Unemployment rates hovering around 10%.
Beauty and cosmetics markets forecasted to shrink by 1% annually.
However, naturals markets are expected to grow 12% annually until 2014.
Mostly in Canada
2 dermatologists' offices
2 massage parlors
1 hair salon
1 specialty boutique
1 spa Cosmetics Pharmaceuticals Rename Increase SPF of daily lotions
Change current fragrances
Eventually offer fragrance variety

Larger and more visible hemp leaf
Recyclable packaging
Sun-proof containers
Change colors - green!
Flip top/push-down caps
Earl's "Pearls of Wisdom" “Ecocentric bodycare that’s always beneficial and never artificial”
Hand crafted bodycare products made with pure & natural ingredients
Ingredients sourced from organic farmers through fair trade practices.
No petroleum-based ingredients, sulfates, detergents, synthetic preservatives, GMOs, artificial colors or fragrances
Strategy = narrow product differentiation:
- Fancy & exotic fragrances
- High quality ingredients
- Revolutionary biodegradable packaging
- Expensive prices
- Humanitarian philosophies Sold through distributors of natural & organic products.
Presence in 7 countries.
Sephora, Macy's, Whole Foods, specialty boutiques, and website.
Price Point Comparison
Social media outlets: Twitter, Facebook, Myspace
Women's magazines: Allure, Vanity Fair
Website discounts
Program partnerships
Home Shopping Network infomercials
“A Higher State of Bodycare"
Sun, Body, and Hair care lines
Name highlights key ingredient
Strategy: product differentiation
- Hempseed oil
- Naturally advanced
professional products
- Stylish look

No shopping cart feature
Sold only via authorized beauty distributors
- Beauty Express
- Trade Secret
- Ulta
- Specialty spas
- Tanning salons Placement Products Placement Product Promotion Ties to youth culture
- Recycling, waste management, eco-friendliness
- Demand less preservatives, toxins, and unnatural chemicals.

"Citizen-consumer hybrid" theory

Environmental Working Group
Contain biologically active ingredients with "medicinal" properties.
No FDA regulations
Vitamins, herbs, botanical oils and extracts Green & black tea
Rosemary extract Grape seed
Hempseed oil! Promotion In-store promotions
Varied discounts
Social media: Facebook Philosophy
Earthly Body
Jason's Natural
Alba Technology Biodegradable packaging: hemp fiber, flax seed, and newspaper pulp
Recycled post-consumer materials
Amber glass sun-proof bottles
#2 high-density polyethylene plastic bottles
Silk-screen printed labels Quality, function, style
Experimental users
Well-informed, up-to-date, professional
Occupation, geographic location, company of employment
* Zona Verde currently not up to their
standards of clinically proven results Emotional benefits, function, quality, healthy
Heavy, consistent users
More selective, brand loyal group, willing to pay premium prices
Age, disposable income, geographic location
* Zona Verde not established or well recognized to
compete with top brands Function, healthy, style, eco-friendly
High customer lifetime value, easy to reach, more green consumers
Price sensitive, experimental, enjoy variety
Age, disposable income, geographic location
* Zona Verde not youth oriented in function or
eco-friendliness Geographically concentrated + dependent on social media = cost efficient
Narrow focus on Arizona & Southern California regions
- Health & beauty conscious students
- ASU = ideal test market (60,000+)
Guides company's purpose and actions
1. "To serve as a guiding light for green consumerism and healthy living."
2. "To continually improve one's beauty and health."
3. "The secret to health and beauty." Conveys company's culture, values, and role with the consumer in mind
Drives company initiatives and programs

"For youthful women, Zona Verde is a skincare line that promotes health and
beauty in an all-natural and eco-friendly way with unique blends of hemp oil
and vitamins that will moisturize, nourish, and protect skin all year round."

- Communicates key benefits
- Long-lasting
- Differentiated
- Believable Sell via web to cover payments upfront and alleviate cash flow problems. Short-term goal: annual sales volume of $1 million, net profit of $100,000 or 10% of sales after taxes

Medium-term goal: annual sales volume of $10 million, net profit of $1 million or 10%

Long-term goal: to be a $100 million+ company

Exit strategy:
1. Sell to a large, publicly traded company
2. Take the existing company public Sources of Funding 1. Increase personal financial investment
2. Borrow money for payment of interest
- Friends and family
3. Small Business Administration
4. Banks: will generally lend 75% against accounts
receivable and 50% against inventory
5. Raise equity financing
- Private and public
6. Enter into a joint venture
7. Merge with a bigger company Hire new talent
- Full-time commission-based sales rep ($40,000 annually)
- Report directly to CEO Earl Miller
Sell through focused distributors, local retailers, and strategic web promotions Drop "cosmetics"
Alternative: "Pure Hemptation" Redefine Continually research target market's criteria
Assumption: functional, healthy, eco-friendly
- "Anti-inflammatory" instead of "anti-wrinkle"
- "Firming" instead of "décolleté" Create Comprehensive Skincare Line Eliminate shampoo & conditioner
Incorporate facial cleanser & scrub Redesign Packaging Packaging Contacts 1. World Wide Packaging LLC (WWP) in California
Offers “unmatched” services in the cosmetics and personal care industry Specializes in product formulation, packaging design, and the manufacturing of cosmetic components and tubes to contract services for decorating and finishing touches

2. SKS Bottle & Packaging Inc. in New York
Offers custom and private stock molding, decoration & labeling
Worldwide supplier of packaging plastic, glass and metal bottles, jars, containers, for various industries: cosmetics, herbal, industrial, chemical, pharmaceutical industries.
Near or on college campuses: local bookstores & retailers
Differentiate from Hempz
- Medical marijuana dispensaries
- CVS Pharmacies, Target, Whole Foods (difficult to enter)
- Health, beauty, fashion retailers
- 8 potential retailers around ASU
1. ASU Bookstore
2. Student Book Center
3. The College Store
4. Here the Corner: A Fabulous and Fun Boutique
5. Sasi Salon Boutique
6. Lotions & Potions
7. Happy High Herbs
8. Hippy Gypsy
Maintain current MSRP
Look to cut costs wherever possible Booth on-campus ($100 per event)
Focus groups on-campus ($148 per event)
YouTube commercial contest
Social media outlets: Facebook, Twitter
- “Purely irresistible, purely tempting, purely hemp”
- “Awaken the hemptress within”
- “So good, it should be illegal”
- "Blazing a trail for hemp-based skincare”
- “Totally green, all-natural, toxin-free, paraben-free,

Paraben free
Toxin free
All natural
Not tested on animals All products are: Strengths
Financial stability: no debt
Unique product features (hemp oil, all-natural)
Customer support & website
Weaknesses New startup company = lack of brand awareness
Not generating enough sales to break even
Products need to be reformulated
Product packaging needs to be redesigned
Skincare line not comprehensive Opportunities Green consumer trends in society
More advanced social technology:
social networking media = cost
efficient promotional methods
Females = a large and potentially profitable market
Threats Multiple competitors (both local and national) vying for the same female market segments
Changing laws and regulations for cosmetics & labeling
Current recession in the United States
Note - Female consumer focus
Based on "Making Segmentation Work" by Barron & Hollingstead Reformulate Focus Group Costs Elements Costs Room
Student incentives
Focus group leader (sales rep)
Materials (paper and pencils)
Refreshments (coffee and bagels) Free
$12 per bottle x 10 students = $120
$25 (optional)
Total = $148 Promotional Booth Costs Elements Cost Per Event Booth $3,000* (depending on type) Once
Sales Rep $40,000 (salary) Once
Product $100 Each event
Total $3,100 $100 *Source: camelbackdisplays.com 1. Reformulate products to include characteristics females desire and
seek in skincare products, particularly college women
2. Redesign packaging to reflect these changes and emphasize unique
selling points
3. Update website to reflect these changes
4. Hire a full-time marketing sales rep to conduct research
and help promote the products
5. Invest in promotional efforts and R & D on ASU’s Tempe campus:
On-campus booth
On-campus focus groups
YouTube.com commercial contest
Record consumers' feedback
6. Adjust products as needed and contact local retailers interested in
selling the products
7. Continue to develop new products and promote them on campus Implementation Chart Thank You!

Any Questions?
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