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Copy of Vitamin Marketing Plan

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David Putt

on 27 August 2013

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Transcript of Copy of Vitamin Marketing Plan

Vitamin Marketing Plan

Presented By:
Neno Nenov
Chuqian Yuan
Marissa Hornbrook

Marketing Plan

A. Situation Analysis
 
Market Description
-Size of the market, segments, and growth rates
-Competitive analysis: major players in the market, market shares, strengths and weaknesses.
 
Analysis of Environment
-Socio-cultural trends
-Political-legal trends
-Economic trends
-Technological trends
 
Buyer Behavior
-Profile of buyers
-What do buyers look for in a product or service?
 

B. Marketing Objectives
 
C. Marketing Mix Strategies
-Product strategy
-Pricing strategy
-Distribution strategy
-Promotion strategy
 
D. Business Analysis
-A three year forecast


Market Description

Market size (Sales)

Whereas the world’s economic problems have hit many industries hard, the nutritional supplement business has proved resilient on the strength of spending by the aging Baby Boomers and other health conscious consumers

The market growth as a whole appears to be steady, as the analysis below will demonstrate

Market growth (Annual % incr.)

For US, vitamin market, sales increased dramatically in 2007-2009, but began tapering off in 2011. This decline has been attributed to the slow economic growth during this period, but is expected to recover as the forecasting shows.

Growth rates by segmentation were higher for multivitamins during the 2009-11 period

Market segments

Multivitamins comprise over 45% of the vitamins market. Nearly a quarter go to single vitamins and mineral supplements take 31% of the market.

Competitive analysis (sales 2010, $ mln)

4 major players in the vitamin market. Together they account for 43.3% of sales

Competitive analysis cont’d…

Strengths and weaknesses

Meet the leading products…

Analysis of Environment

Women and older Americans more likely to take vitamin/mineral supplements
Number of women aged 18+ in the U.S. grew by 4.9% from 2006-2011, adding 7.4 million to population. Projected to grow another 7.7 million from 2011-2016

Social-Cultural Trends

Number of Americans aged 65+ increased some 3.9 million from 2006-2011 and projected to grow another 7.1 million from 2011-2016
Increase in population share from 12.4% in 2006 to 14.7% in 2016


Social-Cultural Trends

Political-Legal Trends

No provisions in the current act of the Food and Drug Administration (FDA) to approve dietary supplements for safety or effectiveness before they are sold (Dietary Supplements Health and Education Act (DSHEA) of 1994)
Manufacturers responsible for investigating any consumer complaints or adverse reactions and reporting to the FDA
New legislation of 2010, the Dietary Supplement Full Implementation and Enforcement Act (DSFIE), would accelerate the responsiveness of the FDA to adverse complaints and enable more studies about supplement related risks and side effects
New legislation would reduce the number of supplements on the market because of shorter time that illegitimate product could avoid regulatory backlash for its claims

Economic Trends

Growing costs for health insurance and healthcare driving many Americans to increase their use of vitamins and minerals in order to prevent and treat health conditions
Following data came from the Centers for Medicare & Medicaid and the Kaiser/HRET Survey of Employer-Sponsored Health Benefits 2001-2011:

Unemployment and cuts in employer-provided health insurance have driven growth in the number of uninsured from 13.1% in 2000 to 16.3% in 2010
Data came from the Centers for Medicare & Medicaid


Technological Trends

Advances in vitamin supplement formulation and preparation allow for the development of new and more potent products:
Gummy/Chewable – Easy Intake Products
All-Natural Products
Targeted Care Products
Gender-Specific Products

Approx. 2 in 10 have taken single or multivitamins in gummy/chewable form in the last 12 months
7% have taken mineral supplements in gummy/chewable form during the same period
Gummies have become growth driver for adult vitamins even as sales of teen and infant vitamins—which often come in gummy form—are declining
Primary reasons for the rise of gummy use among adults:
(1) easier to be taken than pills
(2) better taste


Profile of Buyers

All-Natural Products

1/3 of respondents who use vitamins and minerals report worrying about the negative side effects of taking too many vitamin/mineral supplements – Mintel exclusive survey

Consumer emphasis on products that do not pose any danger from chemicals, additives and preservatives

Examples: Nature’s Way Alive! Chocolate Ultra-Shake Whole Food Energizer and Natural Factors BioQ10 All-Natural Active CoQ10 Softgels

Targeted Care Products

Products designed to provide care for specific parts of the anatomy or to help treat specific conditions appear to be surging in the market

Example: Country Life Flex-Able Advanced Joint Support Supplement

Gender-Specific Formulations

Most vitamin and mineral users likely take gender-neutral products, however a range of gender-specific products have become part of the marketplace.

Example: Applied Nutrition Longer Stronger Hair & Nails Liquid Soft Gels for women

Buyer Behavior

Vitamin Usage (by gender)

Have you taken vitamins in any form during the past 12 months?

Multivitamins are the most used combination because they include many ingredients and address various aspects of health.

No mater what type of vitamins, women are more likely to use vitamins then men.

Usage (by age)

Mineral Supplements are the least used compared to Single Vitamins and Multivitamins, but they also double in usage as respondents age from 3 in 10 to 6 in 10.

Have you taken vitamins in any form during the past 12 months?

No mater what type of vitamins, as age increases people are more likely to take vitamins

Usage (frequency)

How often do you take Multivitamins? (by age)

As age increases, it is more likely to take vitamins daily.

No matter the age,
most people take vitamins daily

Pill vs. Gummy form (by gender)

Which of the following Multivitamins have you taken in the past 12 months?

Compared to Single Vitamins, Multivitamins users go for gummies 50% more often.

More respondents report using multivitamins then single vitamins, likely because multivitamins offer a wider range of vitamins.

Pill vs. Gummy form (by age)

Which of the following Multivitamins have you taken in the past 12 months?

Respondents aged 55+ are the most likely to use multivitamins in pill form, as vitamin usage in general is higher among older respondents.

Senior respondents are more likely than younger respondents to report using pill form. Seniors however would likely benefit from gummies because they can be easier to swallow than pills, a factor that should be emphasized to best market gummies to seniors.

Pill vs. Gummy form (by frequency)

How often do you take Multivitamins? (base: users who use Multivitamins)

Product Selection (by gender)

Who do you ask for advice when it comes to vitamins and mineral supplements?

More than 6 in 10 respondents who use vitamins or minerals report turning to their doctors for guidance, and 4 in 10 turn to pharmacists.
Professionals will be most trusted for advice about supplements, which is best since professionals can best distinguish between a beneficial and safe supplement and a less trustworthy product.

Women are significantly more likely than men to report turning to their doctor for supplement guidance, suggesting that women are most persuaded by an authority on the issue. Therefore, brands that employ a doctor as a spokesperson to help market their products may best appeal to women.

Reason to buy

Which of the following are reasons why you take vitamins/mineral supplements?

Reason to buy, cont’d

Most use vitamins/minerals to boost health in general - Although the optimal way to get all the nutrients the body requires is through a healthy diet, this is not always possible for many consumers, especially busy users who may not always have the time (or, in the current economy, the money) to eat right. For these reasons, supplements offer a way for users to feel that they are filling dietary gaps.
Half of respondents report taking vitamin/mineral supplements to help ward off illness, although there is little proof that doing so will actually help stave off illness. Still, using vitamins and minerals may give them peace of mind.
Other reasons for using vitamins and minerals appear to be more specialized, such as the close to half of those surveyed who report using these products for energy. These respondents are likely using supplements that include B vitamins, which are said to help energy performance.

Reason to buy, cont’d

Respondents aged 55+ are the most likely to report using vitamins and minerals to boost health in general, likely because these respondents are experiencing health issues for which supplements can be of some benefit. These respondents are also the most likely to use vitamins/minerals for heart health, which is a common concern among older consumers.
Meanwhile, respondents aged 18-24 are the most likely to use vitamins/minerals for weight loss, although many weight loss supplements have been marketed under a cloud of suspicion that they do not provide the claimed results.
Respondents aged 35-44 are the most likely to use vitamins/minerals to look younger, which makes sense as at this age consumers are likely beginning to experience the visible effects of aging.
Also, respondents aged 25-34 (obviously women) report the highest likelihood to use supplements to prepare for pregnancy.

Reasons NOT to buy

Reasons NOT to buy cont’d

4 in 10 say they prefer to get nutrients from diet over supplements - Significant numbers also say they do not use vitamins and minerals for related reasons. A proper diet is likely one of the biggest negative drivers supplement manufacturers face, and one that requires a somewhat delicate style of marketing to best reach consumers who feel their diets are adequate for getting nutrients.
Respondents aged 18-24 and senior respondents are more likely than other age groups to report preferring to get their nutrients from a proper diet, and to report that as long as they maintain a healthy diet, they do not worry about a daily supplement regimen, suggesting that these groups will best respond to ads that do not seek to replace aspects of diet with supplements but simply add to it.

Reasons NOT to buy cont’d

More than a quarter of respondents agree that they do not use vitamins/minerals because they are too expensive (seniors are least likely to report this, likely because supplement usage is too vital for them to forgo it). This will be a somewhat common charge against supplements during the current economic crisis, as many consumers will feel that the price is not worth it, especially if like many respondents they feel that diet is enough.
It also appears that some respondents do not take vitamins and minerals because they either have not thought of it or often forget to take them, again suggesting a need for manufacturers to supply users with helpful reminders about daily doses, such as folded-up calendars in bottles that users can pin up, smartphone apps, or other means. Moreover, while ads can be informative for those who report not using vitamins and minerals because they do not know enough about them, it may be more productive to guide potential users to brand websites or health websites that explain how supplements can be beneficial, as well as which are best for different people and lifestyles.

Usage habits (by gender)

Do you agree with each of the following statements? (Yes!)

Usage habits (by gender) cont’d

Vast majority agree that supplements provide easy, needed nutrients – 8 out of 10 is a great result given that one of the primary marketing angles used by supplement manufacturers is that these products fill dietary gaps when needed, suggesting that much of the advertising for supplements is working.
More than 4 in 10 report being confused by all the different types of supplement product on the market, an understandable reaction given the wide array of products available and the results they promise.

Usage habits (by gender) cont’d

4 in 10 respondents report meaning to take supplements more frequently, but often forgetting to do so. Perhaps one way for manufacturers to help users solve this problem is to provide mini-calendars that serve as helpful reminders. These could be included within supplements product packaging.
More than a third of respondents report being concerned about the side effects of taking too many vitamin/mineral supplements, a valid concern given the reports that some supplements are not properly tested or can even be harmful.
More than 3 in 10 respondents agree that they are not convinced that vitamins and minerals are effective but take them anyway. This is a good result for manufacturers but nonetheless underscores the skepticism some consumers have about supplements.

Marketing Plan

A. Situation Analysis
 
Market Description
-Size of the market, segments, and growth rates
-Competitive analysis: major players in the market, market shares, strengths and weaknesses.
 
Analysis of Environment
-Socio-cultural trends
-Political-legal trends
-Economic trends
-Technological trends
 
Buyer Behavior
-Profile of buyers
-What do buyers look for in a product or service?
 

B. Marketing Objectives
 
C. Marketing Mix Strategies
-Product strategy
-Pricing strategy
-Distribution strategy
-Promotion strategy
 
D. Business Analysis
-A three year forecast


Objectives

1. Achieve sales of $7.2 mil in the first year:

From Wholesale Clubs:
195 WS Clubs x 365 days x 3 products sold a day =
213,525 items x $32.99 = $7,044,189.75

From Paid listings:
1 website x 90 days x 300 paid clicks = 27,000 page visits x 5% conversion rate = 1,350 items purchased x $9.99 = $13,486.5
(the paid listings only cost $27,000)

From Organic listings and direct traffic:
1 website x 365 days x 150 visits = 54,750 page visits x 2.5% conversion rate = 1,369 items purchased x $9.99 = $13,673.81

TOTAL: $7,071,350.06


Objectives, cont’d…

2. Product Development in the wholesale and internet markets.
Wholesale clubs -
bigger package
easy to forecast sales because of work with members
Direct Mail
in-store advertisements
less competitors than in the retail marketplace (pharmacies, Wal-Mart, drugstores, etc.)

Online - national coverage at small distribution expenditures

Segmentation & Targeting

Competitive Frame of Reference

POP:
Health
Ingredients
Gummy form

POD:
Taste
All-natural ingredients



Positioning: Company Attributes

Name -
Company Name: Vitamin City
Brand Names:
Bright Gummies
Stay Active Gummies

Logo -



Slogan– “Healthy and Tasty!”
Mission– “Our goal is to produce high quality vitamin supplements using premium ingredients and quality manufacturing practices, at affordable cost to promote health and well-being.”


Marketing Plan

A. Situation Analysis
 
Market Description
-Size of the market, segments, and growth rates
-Competitive analysis: major players in the market, market shares, strengths and weaknesses.
 
Analysis of Environment
-Socio-cultural trends
-Political-legal trends
-Economic trends
-Technological trends
 
Buyer Behavior
-Profile of buyers
-What do buyers look for in a product or service?
 

B. Marketing Objectives
 
C. Marketing Mix Strategies
-Product strategy
-Pricing strategy
-Distribution strategy
-Promotion strategy
 
D. Business Analysis
-A three year forecast


Product Strategy

The Products

Ingredients target concerns of each segment:
Bright gummies - Ages 18-44
Energy: (Thiamin, Riboflavin, D, Niacin )
Immunity: (C, Echinacea, Zinc, B6)
Healthy hair, skin, nails: (A, E, Selenium, Calcium, Biotin, Folic Acid)




The Products

Stay Active gummies - 55+
Heart Health: (D, Folic Acid, Phosphorous, Magnesium, K)
Strong Bones: (Calcium, D, Magnesium)
Energy: (B vitamins, Iron)



Brand attributes

Packaging
365 gummies (1 year supply – sold W/S only)
90 gummies (3 month supply – sold online only)
90 + 90 + gift (bundle pricing offer)


Pricing Strategy

Pricing

$9.99/3 month supply (90 vitamins)
Unit price: $ .11/pill
Bundle price: 90 + 90 = customer gift

$32.99/1 year supply (365 vitamins)
Unit price: $ .09/pill


Distribution Strategy

Distribution – Online Store

URL
www.brightgummies.com
Free shipping
- on order of $30 or more
Pay-per-click:
- partnership with fatwallet.com, ebates.com, MrRebates.com


Distribution – BJ’s Wholesale Club

The third-largest warehouse club in the United States.
Less competition from brand-name and private label vitamins than in Costco and Sam’s Club
Total # of members: 200,000

Marketing Mix Budget (Cost)

Marketing Mix Timeline
Promotion Strategy

Promotions

Gift with 90 + 90 purchase – vitamin portable case
Free shipping with purchase of $30 or more online
BJ’s Coupon books

Creative – Bright gummies

Bright gummies:
A doctor with compassionate face expression talks to a young female:
“You still need to take vitamins to boost your health and to ward off illnesses!”
Woman: “Kids don’t like them!”
The doctor shrugs shoulders…
The woman gives liquid medicine to her child, which makes faces, then she tires it and makes the same face.
Male announcer, as woman looks at the ingredients of a pill box: “Are you looking for an all purpose multivitamin, but you are not ready to sacrifice taste?”
Woman puts down the pill box and takes Bright gummies.
Announcer: Bright gummies have all the power of top shelf multivitamins, and tastes like candy!
“Bright gummies – multivitamins that taste like candy!”


Creative – Bright gummies

Creative Stay Active Gummies

Stay active multivitamins
Doctor Bright explains as scenes move: “Diet alone is not enough to keep you healthy especially when it is time to enjoy retirement and play with grandchildren”
Elderly couple on a boat (man fishes)
Man in his 60s plays outdoors with a child
Woman in her 60s read a book to a child
Instead they are interrupted by pains and aches
The man on boat experiences chest pain
The man in the outdoors has back pain
The woman reading the book has trouble seeing the text
Doctor Bright show the Stay Active bottle : Vitamins are easy way to ensure the nutrients that your body needs such vitamin D and B complex, calcium, magnesium, iron…
Then as he talks seriously he eats a gummy and says: “… and it tastes good” (then eats another one)… “tastes like candy, but it’s a vitamin!”
“Stay Active Gummies – multivitamins that taste like candy!”

Creative Stay Active Gummies

Brand equity

Spokesman: Dr. Bright

Third-party endorsements:
Favorable ratings from:
- www.health.com,
- The Vitamin Magazine

Brand reinforcement:
Keep launching new products:
- with all-natural flavors, and
- in different forms: gummies, chewable, effervescent etc.


Programs

Programs (cont’d)

Customer Relationship Management
Register Online and Save! for free
- 5% discount for any purchase
Upgrade to Premium Vitamin Customer after purchase of $100
- 10% discount for any purchase
Customize Your Vitamin Portable Case:
- customize your name or personal logo on the cute vitamin case at our website
Direct E-mail:
- deliver tailored message to customers on new product and health tips
- send seasonal greeting cards and coupons to most valuable customers
In-package coupon for next purchase
How do you like your Bright Gummies?
- conduct customer satisfaction survey at Facebook – young people
How do you like your Stay Active Gummies?
- conduct mail-in survey – age 55+ people

Marketing Plan

A. Situation Analysis
 
Market Description
-Size of the market, segments, and growth rates
-Competitive analysis: major players in the market, market shares, strengths and weaknesses.
 
Analysis of Environment
-Socio-cultural trends
-Political-legal trends
-Economic trends
-Technological trends
 
Buyer Behavior
-Profile of buyers
-What do buyers look for in a product or service?
 
B. Marketing Objectives
 
C. Marketing Mix Strategies
-Product strategy
-Pricing strategy
-Distribution strategy
-Promotion strategy
 
D. Business Analysis
-A three year forecast


Plan for the next 3 years

Diversification of product portfolio
Prenatal vitamins
Sports vitamins
Digestive vitamins
Disintermediation – branch out distribution
Sales forecast
150% increase of online sales
20% increase of total sales



Where do you want to take this brand?

We want to improve health without sacrificing taste!
We want to be associated with an exceptionally healthy lifestyle and people:
Aged, sport achievers, beautiful, etc.
We want to have satisfied customers with repeat business

Questions and Comments

Disclaimer: The product that you had might have sugar, high-fructose corn syrup, aspartame, coloring, preservatives, etc. This product may not necessarily boost your health. In rare cases it may cause dental problems, including but not limited to dental cavities, gingivitis etc., heart problems, obesity, problems seeing, unusual urine color etc. If you have any of the abovementioned symptoms, stop stuffing your face with our delicious gummies and contact your doctor immediately.

More respondents report using multivitamin gummies regularly (three to six times per week) than pill forms of multivitamins, further illustrating that gummy usage is on the rise.
Full transcript