Fenty Beauty Cosmetic Industry Summary of Strategy Paper Our Industry is cosmetics and my company is Fenty Beauty( Found by Rihanna)There are some details

Fenty Beauty Cosmetic Industry Summary of Strategy Paper Our Industry is cosmetics and my company is Fenty Beauty( Found by Rihanna)There are some details which we have to write in the strategy paper. And I also put our studied content in this term for helping and the sample paper.( Hint: The sample paper focus on their industry but I just need focus on my company which is Fenty Beauty. This whole paper is about my company Fenty Beauty.)Background and High level Overview (2-3 pages) —a: Company Chosen(Fenty Beauty); Industry that company is part of… —b: Size, Growth Rate, Trends, Key Recent Events —c: Key differentiation – what makes your company different – today? —d: Key Opportunities & challenges in today’s marketplace —e: Your “Vision” for your company’s success in the future…how will it succeed? —- Competitive advantageMarket Industry Analysis (3-4 pages)—a: SWOT analysis —- Strengths, Weaknesses, Opportunities & Threats—b: Competitive analysis (Porter): 1. Who are your current biggest competitor? 2. 5-factor review (or 4 E’s)Customer Analysis: (2-3 pages) a: Segmentation, Target Audience, and Positioning: 1. Who are your customers today? 2. How will they change in the next 5 years? 3.How or will your positioning change in the future? b: Pricing & Distribution 1. How are you priced vs. your competition? 2. How will your distribution change? (Brick & Mortar? Online?) c: New products or areas of concentration? 1. Based on your industry(cosmetics) review… Measurement of your strategy’s future success:(1- page) a: Factors of measurement (don’t need financials, just catagories) Examples: Sales, New products, Margins, New markets (geographic?), New customer segments b: Summary: (1-2 pages) 1. How will your company (Fenty beauty) be different in 5 years? (Competitive advantage…in the future) The Journey of Competitive Strategy This Term
? Peter Drucker: “A company has only two basic functions: innovation and marketing.” Internal Only – Its all about the Company
? The 4 P’s:
? Product, Price, Promotion, Place – Internal Only – what we (the company) do…
? Porter’s 5 Forces – Adds customers and other outside views…
? Competitors
? Customers
? Suppliers
? Substitutes
? New Entrants
? 4 E’s – Complete integration of internal and external factors
? Experience
? Exchange
? Evangelism
? Everywhere
1
Competitive Strategy
? Strategic Planning: Identifies unfulfilled needs and desires. It defines, measures and
quantifies the size of the identified market and the profit and potential for growth.
? Developing a Competitive Advantage: Creates differentiation that is competitively
advantageous versus other entries in the space.
? Delivering Innovation: Creates and manages business processes that enable
constant change in a global environment.
Do it different…do it better
Summary of Strategy Paper
? Background and High level Overview (2-3 pages)
?
?
?
?
?
Company Chosen; Industry that company is part of…
Size, Growth Rate, Trends, Key Recent Events
Key differentiation – what makes your company different – today?
Key Opportunities & challenges in today’s marketplace
Your “Vision” for your company’s success in the future…how will it
succeed?
? Competitive advantage
? Market Industry Analysis (3-4 pages)
?
?
SWOT analysis
? Strengths, Weaknesses, Opportunities & Threats
Competitive analysis (Porter)
? Who are your current biggest competitors
? 5-factor review (or 4 E’s)
3
Summary of Strategy Paper
? Customer Analysis: (2-3 pages)
? Segmentation, Target Audience, and Positioning
?
?
?
Who are your customers today?
How will they change in the next 5 years?
How or will your positioning change in the future?
? Pricing & Distribution
? How are you priced vs. your competition?
? How will your distribution change?
? Brick & Mortar?
? Online?
? New products or areas of concentration?
? Based on your industry review…
4
Summary of Strategy Paper
? Measurement of your strategy’s future success: (1- page)
? Factors of measurement (don’t need financials, just
catagories)
?
Examples:
? Sales
? New products
? Margins
? New markets (geographic?)
? New customer segments
? Summary: (1-2 pages)
? How will your company be different in 5 years?
?
Competitive advantage…in the future
5
Paddywax
Yanting Xu
Ruoyu Wang
Xi Xiong
Yitian Zhan
Summation:
Paddywax is an unique brand of organic wax candle target to people who is organic
lover, strong personality and wants a better life-quality. Because our brand have
creative designs, unique scents and various collections which can deliver a message of
fulfilling the higher life-style.
Current Market Analysis
Although candles have lost their value as a source of light, they have experienced
resurgence as a home decor and accessory product. However, as a home decor
product, candles have become highly discretionary purchases and the revenue is
fluctuating with disposable income and changing tastes. Improving economic conditions
and the introduction of a variety of scented and colored candles has helped industry
revenue grow at an annualized 3.1% over the five years to 2016. The total revenue is
$2.0 billion in 2016. Recently, the organic and sustainable trend made its way into the
candle industry and cater to the increasingly environmentally conscious American
consumer. This trend will continue to gain steam over the next five years, especially as
shoppers dedicate more money to green purchases.
According to the report of Mintel Group, both women and men report high incidence of
candle use. Candle users most commonly report that they purchase candles at specialty
retail stores, department stores and mass merchandisers. Specialty retail stores are
projected to account for 26.0% of industry revenue. These stores have higher priced
candles and can also offer a more sensory shopping experience.Online sales have also
risen steadily over the past five years, they are estimated account for 6.4% of industry
revenue in 2016 and will continue to grow steadily over the next five years.
Apart from daily usage, approximately 35% of candle sales occur during the Holiday
season. Also, ?Candles are viewed as an appropriate gift for the holidays, a house
warming gift, birthday gifts and so on. ?People are using candles for both functional and
emotional reasons and companies should make sure to feature both in marketing
campaigns and when developing scent collections.
SWOT Analysis
The Strength is that our products have nearly 30 collections, the candles have organic
wax and innovative scents at an affordable price. The creative design is also a selling
point.
The Weakness is lack of brand awareness, retail store channels and limited budget for
marketing. The poor service and bad shopping experience of the online websites will
also affect the development and sales of the brand. Brand image may be hurt by these
factors.
The Opportunities are the high industry growth and the rapid development of candle
market. Consumers have an increasing interest in high life quality, sentiment and style.
Also, our brand can develop partnership with more other businesses like decor stores.
Business to business opportunities also exists such as wholesale to spa stores.
The Threats come from the relatively low entrance barrier of the industry and fierce
competition among various brands. Many private label products may enter the market
with a relative low price. Competition also comes from flameless candles in terms of
safety issues.
Competitor Analysis
In this section, an analysis of two direct competitors and one indirect competitor in terms
of targeting, distribution, pricing and competitive advantage will be provided.
Our direct competitors are companies in the candle industry. The Candle industry
exhibits a moderate level of concentration. As the industry’s largest operator, the
Yankee Candle Company, is expected to generate an estimated 40.1% of total industry
revenue in 2016. Their target audience are female Ages from 25 to 54. Distribution
channels include wholesale network, company owned retail stores and online website.
The candles are pricing at $20-$30. The competitive advantage is their high brand
recognition, strong customer base and a wide range of fragrance choices.
Apart from some large companies, there is a large number of small manufacturers that
produce niche candles and cater to particular demographics and geographic markets.
NEST Fragrances is a lifestyle brand offering luxury home fragrance. They target luxury
lover. The company sells products through department store like Neiman Marcus,
selected specialty boutiques and online website. The price is relative high at $40. NEST
is well-known for its outstanding and complex fragrances, high-quality, luxurious
formulas and exceptionally beautiful packaging.
Our Indirect competitors are products that consumer purchased as a gift to others. The
bouqs is a flower delivery company. They sell products through official website and their
own app. Flowers are sold from $40 to $60. Their competitive advantage is the
subscription service to let customer enjoy and give the gift of flowers more often. Its
Happiness guarantee service and same day delivery service are also service strengths.
However the same day delivery will cost an additional $60.
Summation of the Opportunity
The Opportunities not only come from the external market trend but also come from
internal strength of our product.
The first opportunity is the high industry growth because of Increase number of
households and increase per capita disposable income. Also, consumers have an
increasing interest in high life quality, sentiment and unique lifestyle. Then, the organic
and sustainable trend cater to the increasingly environmentally conscious consumer will
encourage them to buy our product. Also, we can develop partnership with other
business and explore business to business opportunities.
Branding Positioning
Positioning: An artistically designed organic wax candle brand with innovative scents
and affordable price, lovely for every home and every gift-giving occasion.
Paddywax is not a luxury brand. However, it is also not a low-end brand despite its
relative affordable price. It is important to let customers know that although our candle is
not expensive, the using experience is not cheap.
The core idea of our brand positioning is to convince consumers that, unlike other
ordinary candle brands, Paddywax represents a healthy and artistic lifestyle. We want to
make those who use our products consider themselves to be elegant and rich in taste.
Also, we hope Paddywax could be considered as one of the top choices of gift option.
Brand Mantra: Unique Lifestyle and Better Life Quality
Key differentiation
Organic soy wax – cleaner and soot free
Artistic designs – wine bottles, woods, metals…
Innovative scents – olive tree, green tea, ocean tide…
20+ collections – Gilt, Library, Urban, Holiday Trimmings…
Creative packages – Uniquely designed packages for different collections
Affordable price – 25 dollars
Critical Issues
Currently, Paddywax is still under a stage of niche brand. It is not widely known and has
not created a consensus among consumers about what kind of candle brand it is.
Paddywax has very limited physical stores. Most consumers cannot get the best
shopping experience as a result. Though it is not uncommon to see our products in
retail stores ?such as Whole Foods, Crate & Barrel and Paper Source, consumers
cannot feel that elegant and artistic brand image and shopping experience that we truly
want to deliver.
There are countless candle brands on the market. Flowers, perfume and aromatherapy
can all be good indirect substitutes to our candle. It’s challenge to stand out in the gift
market.
How you solve problem
We need to clearly state our candle’s key differentiation to our current and potential
customers through advertisements. Our organic wax candles are healthy, combining
innovative scents and creative designs.
More advertisements on variety of platforms such as magazine, social medias, including
bid on keywords such as “healthy organic wax”, “artistic candle” and “pleasant candle”
on search engines to accurately suggests core characteristics of Paddywax.
Improve our gift customization. Such as engraving service and greeting card service.
Also, we should keep creating new and intriguing ways to package our products. We
have variety of uniquely designed packages for different collections in order to
complement the branding of our candles. Take our library collection as an example, we
stamp quotes from famous writers like Jane Austin on the containers and the package is
made like a book. With these details and designs, our candles become exquisite and
good for every gift occasion.
Increase our partnerships with more kinds of business such as hotels, restaurants, spa,
beauty shops, bookstores and coffee shops. Although this action won’t increase our
sales directly, we believe increasing Paddywax’s exposure in these locations will be
helpful to position our brand to be exquisite and elegant.
Keys to success
Successfully deliver our brand image as healthy, artistic, elegant and variety of choices,
representing a unique lifestyle.
More exposure of our candles, giving consumers enough opportunities to physically feel
the uniqueness of our products.
Successfully let customers know that why our products will be more welcomed as a gift
than other substitutes.
Segmentation Strategy, Target Markets and Positioning
Segmentation:
1st segment(40%): Online customers who enjoy the online shopping experiences and
would like to buy candles for home decorations. For this segment, we would like to
enhance the awareness of our brand so they would place our candle as their first choice
when they consider to purchase candles. Specific tactics: Sending mails with samples,
create valuable content about candles in Social Media, display in local market.
2nd segment(40%): Offline customers who go to national stores which we are partner
with. For this segment, our strategy is build a relationship with them, improve our
customer service by sending thank-you email, and do more surveys on customer
satisfaction. (Flyer, farmer market)
3rd segment(20%): Gift buyer who would like to buy candles as a gift for their friends or
families. For this segment, we will display our products to them when they are looking
for some gift choices. Specific tactics: Sending email coupons, pushing banner ads, etc.
Persena for each segment:
1. Online Customer: Paul is a full time technical support in NYC. He commutes from
office and home everyday. He has no time on shopping. However, he enjoys high
quality lifestyle and wish to make life more comfortable. So Paul prefers to shop
online.
2. Offline Customer:Lucy is a primary school teacher. She likes to shop on
difference local markets like whole foods.She is an organic lover and she knows
what is good for her and her family’s health. So she knows a lot about local
markets after comparing with them.
Lucy loves to buy candles to fulfill sense of smell and makes her home warm and
sweet.
3. Gift Buyer: Selina works in a advertising company in Lower East of Manhattan.
She is a social activity lover and is really busy with working and social
networking. So she Prefers to buy gifts online, because she has no time to pick
gifts and shop at local stores. She likes to give gifts to make others feel good and
show love and respect to others when visiting and some important dates.
Position for each segment:
1. Paddywax provides quick, convenient online shopping system; delivers our
unique scents and lifestyles to busy workers.
2. Paddywax provides numerous collections and gorgeous packaging organic wax
candle with affordable prices, offering an impressed shopping experience to
shoppers.
3. Paddywax offers multiple selections, affordable price and special gift wraps to
customer who want to show their loves and respects via their gifts.
Targeting?
In terms of geographic, we will focus on customers who live in USA, all regions.In terms
of demographic, our target audience are customers age from 20 to 60, both male and
female, middle to upper middle class with income from 40k-200k. As for psychographic
and behavioral features, our target audience are customers who are price sensitive,
organic-prefer and who want to show their personality and to have an high-end life
quality through their consumption pattern.
The reasons for targeting this segmentation are multiple. Firstly, these customers
pursue a high life quality and they want and willing to spend money to fulfill their high
standard and unique lifestyle. Secondly, consumers in this segmentation have more
disposable income and able to purchase the product on a regular basis. Thirdly, based
on the ingredients of Paddywax candle, we are an environment-friendly brand that
target to people who are also organic-prefer and environmental-friendly. Them, since
we are going to focus on online shopping experiences, basically all states in USA is
accessible for us. Our brand has numerous collections which can satisfy different kinds
of customer to show their personality and life quality.
Pricing
The current price range of Paddy is from $18 to $30. Our group decided to not adjust
the current pricing because this price is corresponding to our brand position. Our targets
are upper middle class with income from 40k-200k. For this group, our price is not too
high to be affordable, but also not as low as a cut-price candle brand. Since we are
selling a lifestyle, we need to differentiate our brand from low cost commodity in price.
The unit cost of candle is 5 dollars, including packaging and shipment fee, we have an
average 20 dollars profits per unit.
Distribution
Online: Official Website. We are going to optimize our official website to improve
experiences for online customers.
Offline:
1?st?. We are going to open a showroom in SOHO district. SOHO is a well-known
shopping district which have numerous brands of independent designers, opening a
showroom in there can present our unique lifestyle to publics and attracting more
potential audiences.
2?nd?. Also, there will be three retail stores opened in popular shopping malls located in
three main shopping centers – Columbus Circle, Midtown center, Union Square. The
flow of passengers in these shopping malls will increasing the awareness of our brand.
3?rd?. During the holiday, we would like to rent a vendor in farmer markets, this can help
us target to gift buyers who are looking for holiday gifts.
4?th?. Paddywax already partnered with many national stores, and we decided to keeping
working with them.
Strategy
Online: Our online strategy is focusing on improving the brand awareness, trying to
enhancing the relationship with customers and building the customer’s loyalty.
Offline: Offline strategy is more focusing on brand acquisition, we need to increasing the
sales by doing CTA.
Gift Buyer: For typical buyer, our strategy including both online and offline, through
managing our tactics, we will increasing orders during the holiday times.
Tactics
Online:
? Targeting to our online customers, first of all we
are going to create the customer subscription,
customers who subscribed our website will
received a coupon for their first order.
? Customer Reward: At last, we will reward those
loyal customers who reach a credits level,
sending them gifts in holidays or birthday, giving them extra discounts, etc.
? Email Newsletters: For customer who subscribed our website, we will send
weekly Newsletter with contents like “what’s new”, “Best sellers”, “Tips of
improving your lifestyles”, etc.
? Content marketing: All of those weekly newsletter content will also be showed in
our social media account(Instagram, Twitter, Facebook), and we would create
more activities online to engage our customers.
? Direct Mail: Moreover, we will retargeting to those people who subscribed but not
purchased, sending them direct mails with samples they might interested in.
Offline:
? Farmer Market: During the holiday weeks, we will rent a vendor in holiday
markets like union square winner market, to attract more people to do the
purchase and improving the brand awareness.
? Flyers: Also, we will send flyers in main
shopping centers with coupon codes to drive the
sales.
? Travel series: Since we are partner with national
stores, we will using slogan like “carry a
paddywax to light up your travel”, “10 items you must packaging” to increase our
sales in national stores.
Gift Buyers:
? Email: We will send email coupons to potential
customers who are looking the gifts for their friends or
families.
? PPC: Also, we will use the pay per click to advertise
our brand in social media, manage the search engine
marketing to exposure our products to more gift buyers. (Left image is PPC AD)
? SEM: During the holiday week, we are going to create keywords like “Best
Holiday gifts”, “Christmas gifts”, “Gift for friends”, etc. All customers who are
searching these keywords can see our products at the first rank.
? Subscription: Moreover, for customers who has subscribed our website, as long
as they input the informations in advance (birthday or celebrations of their
friends/families), we can offer the service of automatically sending gifts to their
friends and families at that time.
? Magazine: Also, we will put the ads on magazines and using the title like “
holiday gift guide” to attract more potential customers.
Tactical Execution Plan
? …
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