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TRANSCRIPT
Applied Marketing Project (Capstone) – 24100
Bachelor of International Marketing
University of Technology, Sydney
Due:15.06.2018
Mario Simonsen
This paper is done as a part of the undergraduate program at BI Norwegian Business School.
This does not entail that BI Norwegian Business School has cleared the methods applied, the
results presented, or the conclusions drawn
TableofContents
Executivesummary...................................................................................................................................................................................3
1 Internalanalysis.............................................................................................................................................................................41.1 Introduction........................................................................................................................................................................41.2 Productline........................................................................................................................................................................41.3 Businessmodelcanvas........................................................................................................................................................5
1.3.1 CustomerSegments...............................................................................................................................................................51.3.2 ValueProposition...................................................................................................................................................................61.3.3 Channels.................................................................................................................................................................................61.3.4 KeyResources.........................................................................................................................................................................71.3.5 Keypartnerships.....................................................................................................................................................................7
1.4 Resourceaudit....................................................................................................................................................................8
2 Externalanalysis............................................................................................................................................................................92.1 Marketanalysis..................................................................................................................................................................9
2.1.1 Marketsize.............................................................................................................................................................................92.1.2 Markettrends.........................................................................................................................................................................92.1.3 Marketgrowthandprofitability.............................................................................................................................................92.1.4 Industrycoststructure.........................................................................................................................................................10
2.2 Customeranalysis.............................................................................................................................................................102.2.1 Customersegments..............................................................................................................................................................102.2.2 Theconsciousconsumer......................................................................................................................................................102.2.3 Thepricesensitiveandconvenientconsumer.....................................................................................................................112.2.4 Thequalityfocusedconsumer.............................................................................................................................................12
2.3 Competitoranalysis..........................................................................................................................................................132.3.1 Sukin.....................................................................................................................................................................................132.3.2 Pantene................................................................................................................................................................................15
2.4 PESTELanalysis.................................................................................................................................................................172.4.1 Political&Legal....................................................................................................................................................................172.4.2 Economic..............................................................................................................................................................................172.4.3 Social....................................................................................................................................................................................182.4.4 Technological........................................................................................................................................................................192.4.5 Environmental......................................................................................................................................................................19
3 SWOT...........................................................................................................................................................................................20
4 Threekeyissues...........................................................................................................................................................................214.1 Intercompanycannibalism................................................................................................................................................214.2 Marketingpersonnelandmarketingchannels..................................................................................................................214.3 Sellingpoints....................................................................................................................................................................21
5 Marketingobjectives...................................................................................................................................................................225.1 Salesobjectives................................................................................................................................................................225.2 Marketingobjective1.......................................................................................................................................................225.3 Marketingobjective2.......................................................................................................................................................235.4 Marketingobjective3.......................................................................................................................................................24
6 Targetmarketandpositioning.....................................................................................................................................................256.1 B2CMarket.......................................................................................................................................................................25
6.1.1 Segments/targetmarket......................................................................................................................................................256.1.2 Positioning............................................................................................................................................................................25
7 Keystrategies..............................................................................................................................................................................277.1 Productstrategies.............................................................................................................................................................27
7.1.1 Productdesign/designchange.............................................................................................................................................277.1.2 Pricing...................................................................................................................................................................................28
7.2 PromotionalStrategies.....................................................................................................................................................287.2.1 Digitalmarketing..................................................................................................................................................................287.2.2 Influencermarketing............................................................................................................................................................29
7.3 Marketexpansionstrategies.............................................................................................................................................297.3.1 Distributionstrategies..........................................................................................................................................................297.3.2 Retailerselection..................................................................................................................................................................307.3.3 Expansionstrategy...............................................................................................................................................................31
8 Bibliography.................................................................................................................................................................................33
9 Appendix.....................................................................................................................................................................................39
Executivesummary
Thisreportconsistsofanexternalandinternalanalysiswhichisbasedonbothprimaryand
secondaryresearch,theanalysisconcludedthatDailyNaturalsisgreatproductwhichcatersto
anincreasingsocialmovementtowardsveganandsustainableproducts.However,theinternal
andexternalanalysisalso revealed threestrategic issues thatDailyNaturalsare facing.The
issueshavebeenrenamedtobetterdescribetheproblemsDailyNaturalsisfacing:
1. Lowproductdifferentiation–ThesimilaritiesbetweenDailyNaturalsandDavroemakes
thetwobrandshardtodifferentiatecausingpotential intercompanycannibalisation,
this limits the possible customer segments that Daily Naturals can reach without
competingwithitssisterbrandDavroe.
2. Low brand awareness around Daily Naturals products outside Southern Australia –
Consumers outside Southern Australia possessed no knowledge of Daily Naturals
existence.
3. Competinginasaturatedmarket–Thehair-caremarketiscurrentlyhighlysaturated.
Consumerhaveseveraloptionstochoosefromintheall-naturalsegmentmaking.The
saturatedmarketalsomakesithardtocaptureanymarketshareandgainacompetitive
advantage.
Basedontheseidentifiedissues,overallsalesobjectivesandmarketingobjectiveshasbeenset
tohelptackletheidentifiedissues.
Salesobjective:Achieve25%marketpenetrationinAustraliaforDailyNaturalsproductsbyJuly
2019.
Marketingobjectives:
1.IncreasedclarificationaroundDailyNaturalsby50%inthenext12months.
2.IncreaseConsumersbrandawarenessofDailyNaturalsby50%withinthenext12months
3.Increasemarketshareintargetmarketsto0.4%within3months,andanannualgrowthof
20%everythreemonths
Product strategies, promotional strategies and market expansion strategies has been
suggestedin-ordertoreachsetobjectives.Thevariousstrategiesaresupportedbyresearch
andbackedupbytheories.
1 Internalanalysis1.1 Introduction
DailyNaturalsisownedbytheAustraliancompanyDresslierwhichwasestablishedin1930and
operatesoutof SouthAustralia. ThemajorityofDresslier’s success comes from their salon
brand Davroe. The Davroe brand experienced a demand from large pharmacy chains that
wantedtostocktheproducts,butduetotheimportantexclusivitypositionofDavroe,Dresslier
createdDailyNaturalstofillthegapinthemarketfortheconsumerdemandwithinpharmacies
andmoreprominentretailers.However,themarketpositionsofDavroeandDailyNaturalsare
overlapping resulting in intercompany cannibalism which is hugely detrimental to any
organisationsresults.Inthisreportwearegoingtopresentaninternalandexternalanalysisof
theAustralianhair-carebrandDailyNaturals.Asconsultants,wehavebeenbroughtintoclearly
definethepositioningoftheDailyNaturalsbrandandtodeveloprecommendationsonhowto
expandthedistributionandsalesacrossAustralia.
1.2 Productline
TheDailyNaturalsproductlineconsistsofvarioustypesofshampoosandconditionersthatare
suitablefordifferenttypesofhairanddesiredresults.Theproductlinealsoincludesarangeof
differenthairtreatmentsandstylingproductswhich,accordingtotheclient,willbeexpanded
inthenearfuture.MainattributesoftheseproductsarethattheyareallAustralian,all-natural
andvegan.TheDailyNaturalsproductsarealsosulphateandparabenfree.(Dresslier,2018)
WhentheDailyNaturalsproduct linewascreated,Dresslierwantedaproduct linethatwas
similartotheoneofDavroeduetothedemandoftheseparticularproductsinthepharmacy
market.Therefore,thecurrentDailyNaturalsproductsarequitesimilartoDavroeproductsin
termsofdesign,coloursandrange. InNationalPharmacies, theproductsarealsocurrently
labelled“DavroeDailyNaturals”.However,Dresslieraddressesthatthetimehascomeforthe
twobrandstoseparateandliveontheirown.
(ThepricesdisplayedaregatheredfromNationalpharmacies.com.au,butmayvaryatdifferentretailoutlets)
1.3 Businessmodelcanvas
Inourbusinessmodelcanvas,wehavedecidedtofocusandelaborateoncustomersegments,
value propositions, channels, key resources and key partnerships. These are the most
importantfactorsforthebusinesstosucceed.
1.3.1 CustomerSegments
Dresslierhaveasegmentedmarketsegmentationapproach,whichmeansthattheydistinguish
betweenmarket segmentswith slightlydifferentneedsandproblems.Dresslier is currently
selling their products to two specific segments through a B2B model: Hair Salons and
pharmacies.Davroeisaimedexclusivelytowardshairsalons,in-storeandonline,whileDaily
Naturalsaimsatphysicalandonlinepharmacies.
Dresslierasafirmwantstoreachthegrowingmarketofnaturalconsciousconsumers,dueto
their products being all-natural and vegan. Daily Naturals as a brand is described as a
completely unisex brand and their current customer range is in the age 16-50 located in
SouthernAustraliaonly.(Dresslier,2018)
1.3.2 ValueProposition
The value propositions Daily Naturals delivers to their customers are price, newness and
quality.
1. The first value proposition of DailyNaturals is price. TheDailyNaturals brand offer
productswithpremiumsalonqualitytouseathomeatanaffordableandreasonable
price.FromDresslier’sperspective,thiscreatesvalueforthecustomer.
2. Dresslieralsodeliversthevaluepropositionsofnewness,offeringinnovativeproducts
withauniqueformulaasaresultofyearsofresearch.AfocusandinvestmentinR&D
enablesthecompanytobeinnovative,stayaheadoftheircompetitors,andkeepup
withnewproducttrendsandconsumerpreferences.
3. Thirdly,Dresslierofferstheircustomersthevaluepropositionofquality.Dresslierhave
workedondeveloping their in-house formula forover80years,offeringapremium
range of products. The quality of the products can be considered a competitive
advantage as they nowown a patent on their unique formula. Decades of product
developmenthas resulted in trustworthyproducts.Dresslier removedsulphatesand
parabensfromtheirproductstocreateamorenaturalproduct,whilestillofferingsalon
qualityandperformance.Thiscanbeconsideredauniquevaluepropositionasother
competitorshavenotmanagedtomaketheirproductsperformaswellwhenremoving
chemicalcomponents.
1.3.3 Channels
1.3.3.1 Distributionchannels
Dresslierreachestheircustomersthroughbothdirectandindirectchannels.TheDavroebrand
ispromotedandsolddirectlytocustomersthroughthecompany'sownwebsite.Inadditionto
sellingproductsthroughtheprivately-ownedwebsite,Davroeusespartnerchannels.Theysell
their products in professional hair salons, both in-store and online. These stores include
retailersHairhouseWarehouseandPriceAttack.
Daily Naturals utilises indirect distribution through their partner National Pharmacies. The
productsarecurrentlysoldintheirphysicalandonlinestores,butaresofaronlyavailablein
SouthernAustralia.TheDailyNaturalsbrandisalsoavailableonthewebsiteFlora&Fauna,but
thewebsiteisnotoperatedbyDresslier.
1.3.3.2 Marketingchannels
Dressliercommunicateswithcustomersthroughprintmediachannels,includingmediaarticles
distributedtotheirconsumers.Theyhaveestablishedasizablesocialmediapresenceforthe
Davroebrandthatisrelativelyinactiveuse.However,theDailyNaturalsbrandisnon-existent
onallsocialmediaplatforms.
1.3.4 KeyResources
Dresslier currently possesses several important key resources, both physical, intellectual,
humanandfinancialresources.
1.3.4.1 Physicalresources
ManufacturingfacilitiesanddistributionnetworksareDresslier'smainphysicalresources.The
manufacturingofDresslier’sproductshappensattheirownfacilities.This inturnmakesthe
productionequipmentavaluablephysicalresource.DistributionnetworksreferstoDresslier's
outsourcedtransportationsystems.
1.3.4.2 Humanresources
Themainresourcefactoristheskillsoftheemployeeswithinthefirm.Thestaffisessentialfor
thebusinesstosucceed.Theyarecontributingwithskillsandhighproductknowledge,which
makesupforthefirm’shighlevelofR&Dandinnovativeness.Theyarealsocontributingwith
givingcustomerservice,whichisanimportantattributeforthefirm.
1.3.4.3 Financialresources
Thefirmhaslimitedfinancialresourcesduetothesizeofthecompany.Accordingtoyearly
financialsales,Dresslierhashadadecreaseinsalesfrom2014tomarch2018.Dresslierhasa
budgetof$500,000formarketingpurposes.(Dresslier,2018)(Appendix3)
1.3.4.4 Intellectualresources
Their main intellectual key resource is their in-house developed product formula for their
shampoos and conditioners. Another key intellectual resource is their level of brand value,
whichishighlyemphasizedwithinthecompany.DresslierhavemanagedtogetaPatenton
theirinvention,thein-houseformula.Suchexclusiverightsresultinuniqueproducts.
1.3.5 Keypartnerships
Dresslierhasabuyer-supplierrelationshipwithdifferentretailerstoassurereliablesupplies.
Themotivationfordevelopingkeypartnershipsistheacquisitionofparticularresourcesand
activities.Thismeansthattheycooperatewithdifferentcompaniesandsupplierstoextend
theirowncapabilitiesas theyarenotcapableofhavingacompletely independentbusiness
model.
AsDresslierdoesnothaveprivateownedstoresorwebsitesfortheirDailyNaturalsproducts,
theyhaveestablishedkeydistributionpartnershipswiththewebsiteFloraandFauna,andthe
retailer National Pharmacies. It is through these partners Dresslier is able to sell the Daily
Naturalsproductstotheendcustomer.Thedistributionpartnershipsareessentialinorderfor
themtogettheirproducttotheircustomer.
DresslierhavesteadyandstrongrelationshipswithmajoringredientsuppliersinEuropeand
America.Thesesuppliersarecrucialfortheingredientsusedintheiruniqueproductformula.
ThisenablesDressliertostayaheadoftheircompetitioninthecompetitivehair-caremarket,
resultinginastrongersupplychain.(Dresslier,2018)
Anotherimportantpartnershipistheirequipmentsuppliers.Theyprovideoriginalequipment
thatallowsDressliertoproducetheirDavroeandDailyNaturalsrangein-house,matchingthe
growingdemandofbothbrandswithincreasedsupply.Thisisimportantinthedevelopment
of Dresslier’s all Australian products, as ‘Australian Made’ is one of their most important
characteristicsandsourcesofcompetitiveadvantage.(Dresslier,2018)
1.4 Resourceaudit
Theresourceauditisanevaluationofthecompany’sresourcebase,andshowstowhat
extenttheseresourcescanbeutilisedforstrategyimplementation.Pointsaregiventomap
thestrategiccapabilitiesofthefirm.
Pointsrangefrom-3asamajorweaknessto+3asamajorstrength.
Internalarea Resource/competence Evaluation
Physicalresources OwnthemanufacturefacilitiesProductionequipment
Mediumstrength(+2)Mediumstrength(+2)
Humanresources HighproductknowledgeGoodcustomerserviceHighR&DlevelLackmarketingpersonnel
Majorstrength(+3)Mediumstrength(+2)Majorstrength(+3)MajorWeakness(-3)
Financialresources Limitedfinancialresources Minorweakness(-1)
Intangibleresources Self-madeandownedproductformulaReputationPatentBrandvalue
Majorstrength(+3)Minorstrength(+1)Mediumstrength(+2)Minorstrength(+1)
2 Externalanalysis2.1 Marketanalysis
2.1.1 Marketsize
TheAustralianhair-caremarketishuge,presentingahugeopportunityforbusinesseslooking
toenter.However, it isextremelysaturated.Theindustryconcentrationlevelsarelow,with
morethan500businessescompetinginthesamemarket(Richardson,2017)Thetotalmarket
availableistheentireAustralianpopulation,whichiscurrently24.7millionpeople.(Statista,
2018)AsofJune2016,73.9%ofthepopulationofAustraliapurchasedshampooatleastonce
(onaverage)withinaperiodofsixmonths.Thisgivesusamorerealisticviewoftheactualsize
oftheavailablemarket.ThebiggestbrandsonthemarketareUnilever'sAlberto,Procter&
Gamble´sHead&ShouldersandPantene,followedbyseveralotherwell-knownbrands.(Inside
FMCG,2016)
2.1.2 Markettrends
Thehair-caremarketisverysaturated,yetproductinnovationremainsanimportantareaand
sourceofcompetitiveadvantageforcompanieslookingtocompete.Therearemanydifferent
kindsofhair-careproductsavailabletotheendconsumer.Asoftoday,themostprominent
trendswithinhair-careproductsistomakeuseoffruits,keratinandMoroccanoils.Thereisan
increasedfocusonlivingagreenlifestyleandusingorganicproduce.Sulphate-freeandparaben
freeproductsarealsoinincreasingdemand.(Richardson,2017)Thesetrendsareverymuchin
accordancewiththegrowingnaturalandorganictrendsworldwide,whichareforecastedto
haveadoublinginsizefromUS$11Billionin2016toUS$22Billionin2024.(Statista,2018)
2.1.3 Marketgrowthandprofitability
Themarketiscurrentlyinamaturestage.Thehair-caremarketexperienceddoubledigitannual
growthfrom2013to2018.Thisannualgrowthisexpectedtoslowdownconsiderablyandthe
marketisexpectedtogrowannuallyby2.8%from2018until2023.Thegrowthinthemarket
is dependent on external drivers such as crude oil price, demand fromdepartment stores,
household incomeanddemandfromsupermarkets.Theextrememarketcompetition,price
discountinginthemassmarketandthefluctuatingcostofrawmaterialsresultsinprofitability
beingrelativelylowandisonly11%outofaAU$1.5billionindustry.(Richardson,2017)
2.1.4 Industrycoststructure
Theindustrycoststructurelooksattheaveragecostsbasedontheactorsinthemarketand
costswillvarydependingonsizeofthefirm.Currentlythecoststructurerevolvesaroundthe
purchases,wages,marketingandadvertising.Rawmaterialsaccountforover50%ofthecosts
intheindustry.Packagingalsoaccountsforalargesectionwithinpurchasecosts.Wageisthe
secondlargestfactorintheindustryinregardtocosts.Wagesareexpectedtoincreaseinthe
future and consumeabigger portionof the industry revenue. Lastly, costs associatedwith
marketingandadvertisingismainlydependentonthesizeofthecompany.Nicheproducers
tendtouselessonmarketingwhilebiggerfirmssuchasUnileverandProcter&Gamblecan
useasignificantamountofmoneyonmarketing.(Richardson,2017)
2.2 Customeranalysis
Dresslierhasaperceivedtargetmarketofunisexconsumersaged18-50acrossAustralia.The
aimistosellDailyNaturalproductsatdifferentpharmacies,yetthroughourprimaryresearch
wefoundthatmostlyfemalesshopatthesestores,whilemostofourmalerespondentsusually
shopped at supermarkets. Females tend to put greater emphasis on personal selling and
experiencedpersonnelcontrarytomenwhomakemorerationaldecisions,whichmayexplain
thedifferencesinshoppingbehaviours.(Shemwell,etal.,2008)
2.2.1 Customersegments
Because of this observation, we want to focus on potential segments that Dresslier could
potentially reach out to by dividing them based on behavioural and demographic factors.
Withsuchasaturatedmarketwhereconsumersarebombardedwithalternatives,astrategic
positioning plan is a necessity to capture a significant market share. The following three
segmentsaretheprimaryoneswethinkDressliershouldfocusonwhenexpandingtheDaily
NaturalsproductsacrossAustralia.
2.2.2 Theconsciousconsumer
This segment is mainly consistent of millennials (aged 18-35 approximately) who follow
differentmarkettrendssuchasusingnaturalproducts,beingmoreenvironmentallyfriendlyas
wellasveganism.Thisgenerationalsoshowsatendencytocaremoreabouttheirhealthand
theimpactoftheproductstheyuseandconsume.(Detre,etal.,2019)Thissegmentconsists
ofmorefemalesthanmales,aswesawthatfemalesarewillingtospendmoreonhair-care
productsthanmales(seeappendix5),butisnotlimitedtoonegender.Theseconsumersalso
considerallnaturalandvegantobeimportantfactorswhenbuyinghair-careproducts,which
isimportantforDressliergiventhesearethemainattributesofDailyNaturalproducts.Brand
loyaltyisgenerallyequalacrossgender,yetmalesaremoreimpactedbybadexperiencesthan
females,meaning females aremore likely to try new products or the same brand despite
previousbadexperiences.(VerdeGroup,2007)Womenalsotendtospendmoremoneyon
fashion related products more often than men, leaning they are more willing to follow a
particulartrendandbuyproductsthatareconsidered‘hip’.(Kuruvilla,etal.,2009)
2.2.3 Thepricesensitiveandconvenientconsumer
Thissegmentconsistsofconsumerwhomainlybuyhair-careproductsatsupermarkets,and
are mostly male. They value the option of buying their shampoo while they are buying
groceries,thusplacinghighimportanceonconvenience.Thepriceisanimportantfactorwhen
decidingwhatproductstheypurchase,butstillputemphasisonquality.Theywantasmuch
valueaspossibleforthe lowestavailableprice.Theyalsotendtoprefer largecontainersso
theydon’thave to shop toooften. Theyarenotparticularlybrand loyal, butwill stick to a
productiftheyfindsomethingthatissuitedtotheirneedsandeasilyaccessible.Accordingto
IBIS “Supermarkets in particular are benefiting from changing consumer purchase patterns,
whichhaveseenthemswitchprices,brandsandevendistributionoutletsoverthepastfiveyears
infavourofproductsdeemedtoofferbettervalueformoneyandfunctionality.”(Richardson,
2017)Moreover,mentendtouselessproductsthanfemales,andarethereforemorelikelyto
choseaproductthatwilladressseveralissuesinone,eg.shampooandshowergelinonebottle.
(Biesterbos,etal.,2013)
2.2.4 Thequalityfocusedconsumer
Thisgroupofconsumers’primaryfocusisonthequalityoftheproductstheybuy.Theyprefer
shoppingathair salons,doesnotconsiderpricean important factorwhenbuyinghair-care
productsandarewillingtospendthemostforagoodproduct.Consumerswithinthissegment
tendtobeofhigheragethanintheothertwo,andhavealargerdisposableincome.“The40-
plusgrouphasemergedoneofthefastest-growingconsumersegments,atleastinthebeauty
business”(Bennett,Coleman&CompanyLimited,2012)ItisthereforeimportantforDresslier
toconsiderthisaseparatesegment.Womenaged40-54arealsotheonesvisitinghairdressers
mostoften,normallyeverytwotothreemonths.Theyaveragelyspendbetween£200-£39per
visit(Batham,2008),thereforemorelikelytobuytheirhair-careproductsathairsalonsthanin
pharmaciesorsupermarkets.
The“stateofthestate”reportfromCommSeclooksathowAustralia’sstatesandterritories
areperformingbasedoneightkey indicators:economicgrowth,retailspending,equipment
investment,unemployment,constructionworkdone,populationgrowth,housingfinanceand
dwellingcommencement.
Lookingattheirdata(seeappendix5)wecanseethatNSWleadsthewayonretailspending,
butotherstatesarenotfarbehind.Inregardstoannualgrowthintrends,VictoriaandSAare
actuallyperformingstrongerthanNSWinretailtrade.Thisdataindicatesandclearlyproves
thatourprimaryresearchconductedinNSWcanbeadoptedacrossAustralia.DailyNaturals
therebyhavethesupporttoexpandtheirbusiness.(CommSec,2018)
2.3 Competitoranalysis
Whengoingintoapharmacymarketthatishighlycompetitiveandsaturated,everyhair-care
brand in thatmarket canbe considered competitors ofDailyNaturals. Therefore,wehave
chosentoconsiderbothgeneralshampoobrandsaswellasbrandsfromthenaturalcategory
inourexternal competitoranalysis. Theanalysiswill bebasedonboth secondarydataand
primarydatafromourresearch.
Eventhougheveryhair-carebrandcanbeconsideredascompetitors,wehaveidentifiedSukin
andPanteneastwomajorcompetitorsofDailyNaturalsandwearegoingtodescribethemin
termsofsize,goals,marketshare,productqualityandmarketingstrategies.
2.3.1 Sukin
2.3.1.1 SizeSukin was launched in 2007 by the company BWX Ltd, which is the owner, producer and
distributorofthebrand.ThecompanyisbasedinMelbourne,Australia,andaccordingtotheir
mostrecentannualreporthave200employeesandasalesrevenueof$72.7millionin2017.
Their FY17 revenue was mainly driven by strong domestic sales particularly across the
Pharmacychannel. (BWXLimited,2017) Inaddition toa strongdomesticmarket, theSukin
brand has also increased its international presence by entering and developing new and
existingexportmarketsandisnowpresentin11countriesworldwide.
In Australia, Sukin can currently be found across retailers such as ChemistWarehouse and
Priceline,andonlinestoressuchasfloraandfauna.com.au,ry.com.auandadorebeauty.com.au.
(Sukin,2018)
2.3.1.2 Goals
- Makeconsumersswitchtonaturalhair-careproducts.
- Increasemarketshare.
- Continuedrivingdomesticgrowth.
- Penetrateandbepresentinhighgrowthexportmarkets.
2.3.1.3 Marketshare
- SincethelaunchofSukinin2007,thebrandhasgrowntobecomeAustralia’sNumber
OneNaturalSkincareBrand.(Sukin,2018)
- InFY17,Sukinhasincreaseditsmarketshareby0.5%andnowcommandsover7.1%
marketshareofcosmeticskincareinthepharmacychannel.(BWXLimited,2017)
2.3.1.4 Productquality
Sukinofferssomeofthemostaffordableproducts
in thenatural hair-care category, yet can still be
considered a high quality product. The products
aresoldin250ml,500mland1Lbottlesfor$8.95,
$14.95and$24.95perbottle1. Sukinhas awide
productrangeconsistingofproductsfordifferent
hairtypesanddesiredresults.
2.3.1.5 Marketingstrategies
Sukiniscurrentlytargetingthe“natural”segmentofthebeautyandpersonalcaremarketwith
theirmarketingefforts,asconsumersaremakingcleanerandgreenerlifestylechoices.Rising
concerns for health and theenvironment is also fuelling ademand fornatural andorganic
personalcareproducts.(BWXLimited,2016)
Thebrand’smainmarketingstrategiesconsistof:
- Pointofsalepromotionsacrossthedifferentretailersandonlinestores.
- Digitalmedia(press,magazines,onlinewebsite)todeliverkeybrandmessage.
- Socialmediaforsharingcreativecontentandcommunicatebrandpersonality.Present
onseveralplatformssuchasInstagram,FacebookandYouTube.
- Social influencers and ambassadors who have access to specific target markets to
communicatebrandpersonalityandgenerateawareness.
1PricesfoundonPriceline’sonlinewebsite.Pricesmayvaryatdifferentretailoutlets.
2.3.2 Pantene
2.3.2.1 Size
PanteneisanAmericanbrandownedbythemultinationalmanufacturerProcter&Gamble.
P&Goperatesinmarketsworldwideandthehair-careproductcategorymadeup18%oftheir
netsalesin2017.(Procter&Gamble,2017)Pantenebecameabillion-dollarbrandin1995and
hascontinuedtorunasapremiumhair-carebrand.P&Galsoownalotofotherlargebrands
withinthegeneralhair-caremarketsuchasHead&ShouldersandHerbalEssences.
InAustralia,Pantene isavailabletoconsumersalmosteverywhereandcanbe foundacross
pharmacy retailers such as Priceline and Chemist Warehouse, supermarkets such as
Woolworths and Coles, and on several online sites such as pantene.com.au and
epharmacy.com.au.
2.3.2.2 Goals
- Besuperioronproductrange,packagingandexecution
- Createcustomervalueandmeaningfuladvantagesthatearntrialandrepurchase
- Growmarketsandbuildmarketshare
- Beavailablefortheconsumeratthemaximumnumberofretailoutlets,supermarkets
andonlineretail
2.3.2.3 Marketshare
P&Gisconsideredaglobalmarketleaderintheretailhair-caremarketwithover20%global
marketshareprimarilybehindtheirPanteneandHead&Shouldersbrands.Thecompanyis
wellpositionedintheindustrysegmentsandmarketsinwhichtheyoperate,oftenholdinga
leadershipor significantmarket shareposition. (Procter&Gamble,2017)According toRoy
Morgan,PantenewasthethirdmostboughtshampooinAustraliain2016.
2.3.2.4 Productquality
Panteneoffersbudgetfriendlyproductsofgoodquality
for daily use. They have a wide product range and
consumerscanshopbybothproducttypeandproduct
collection. Pantene follows a competitive pricing
strategy,andtheirproductsarecurrentlysoldin350ml
and900mlcontainersfor$6.99and$15.69perbottle2.
Pantene is also continuously working on product
innovationanddevelopment.
2.3.2.5 Marketingstrategies
Beingastrongandrecognizablebrand,Panteneproductsarepromotedthroughallmarketing
platforms.However,theirmainmarketingstrategiesare:
- Digitalmediasuchasmediapress,onlinemagazinesandonlineads.
- Socialmedia platforms such as Facebook, Instagram and YouTube. Sharing creative
content with a growing number of followers, increasing brand intimacy and
communicatingbrandpersonality.
- Television advertisements. Focused on the advantages with using the products,
showingthefinalresult,oftenstarringawell-knownperson.
- Celebrity endorsements and brand ambassadors. Added brand value, positive
associationandincreasedinperceivedlegitimacy.
- Printmediasuchaspostersandnewspapers.Targetingtheofflinesegment,increasing
impulsivebuyingandbrandvisibility.
Whenweconductedourprimaryresearchandaskedwhathair-carebrand(s)ourrespondents
currently use, almost noneof the respondents answered the samebrand. This showshow
highly competitive and saturated the hair-caremarket is. However,more than 35% of our
onlinesurveyrespondentsrecognizedtheSukinbrand.Sukinwasalsomentionedseveraltimes
duringbothfocusgroups.ThisindicatesthatSukiniswellknownbyconsumerscomparedto
otherhair-carebrandsintheall-naturalcategory.
2PricesfoundonPriceline’sonlinewebsite.Pricesmayvaryatdifferentretailoutlets.
2.4 PESTELanalysis
2.4.1 Political&Legal
2.4.1.1 Veganlabelresponsibility
Tomaintaintheirveganpromise,Dresslierisrequiredtocontinuallyreviewthestrictguidelines
setoutbytheAustralianGovernmentastoavoidlegalissuesthatotherlargebrandssuchas
L’Orealhadfacedwhentheirproductwasadvertisedasvegan,butthesameproducthadbeen
testedonanimals.(Chiorando,2017)
2.4.1.2 Importingenvironment
Ninety-fivepercentoftheingredientsinDailyNaturalsaresourcedfromoverseas.Theever-
changingpoliticalclimatesandtheeffect itcanhaveontradeagreementsmeans ithasthe
propensity to interruptDresslier’s supply chain. Australia ranked14th in the EaseofDoing
Business index, receiving a score of 80.14 which is a positive position for companies like
DresslierwithinAustralia,dealingwithinternationalsuppliers.(TheWorldBank,2017)
2.4.2 Economic
2.4.2.1 Australia’seconomicoutlook
Alan Oster, the National Australia Bank Chief Economist, predicts that the strength in the
current business environment and the latest indicators suggest economic growth will
strengthen and over-time we will see a solid growth in jobs and a reduction in the
unemploymentratewithinAustralia.(Tradingeconomics,2018)ThisisimportantforDresslier
becauseDailyNaturalsisapremiumproductandduringtimesofdepressionorlowconsumer
confidence premiumproducts are often the first category of product to be removed from
household budgets. More disposable income for Australians means a higher chance for
consumerstoconsiderapremiumproductsuchasDailyNaturals.
2.4.2.2 Hair-careindustry:Domestic&Global
Revenueinthehair-careindustrywithinAustraliahasamountedtoover$1.2Billionsofarin
2018.Thehair-caremarketispredictedtogrowannuallyby2.8%.Asawhole,thehair-care
marketisverysaturated,andfocusmustcontinuetobeplacedonDailyNaturals’sourcesof
competitive advantage, being Australian, natural & vegan. On the global market themost
revenuegeneratedisintheUSAwithatotalvaluein2018ofUS$15.2billion.(Statista,2018)
ThisrepresentsfurtherfutureprospectsforDailyNaturalstoenterintotheUSmarketonce
theirhair-careproductsarestronglycementedintotheAustralianmarket.
2.4.2.3 GrowingAustralianveganpackagingmarket
DatafrommarketresearcherEuromonitorInternationalhasshownAustralia'spackagedvegan
foodmarketiscurrentlyworthalmost$136millionandpredictsitwillbeworth$214million
by2020.(EuromonitorInternational,2017)AlthoughDresslierisstrictlyhair-carebased,this
prediction reflects the growing number of vegan or vegan conscious people growing in
Australia.AgrowingveganmarketwithinAustraliameansagreatermarketpotentialforDaily
Naturals.
2.4.3 Social
2.4.3.1 Customersincreasingawareness
Hair-care is an industrywhichwill post amodest growth over the next year, however this
categoryisexpectedtodeclinebecauseofgrowingconcernsregardinghealthofhair,andsocial
media-fuelledawarenessaboutharmfulchemicalsaddedtotheseproducts.Thereisincreased
awarenessandatendencyofdiscardingproductswhichcontainharmfulingredientssuchas
siliconesandparabens.(MordorIntelligence,2017)Ascustomersbecomeincreasinglymindful
oftheharmfulingredientsinchemicallybasedshampoos,alternativessuchasDailyNaturals
willbecomemorepopularanddesirable.Theriseof'ethicalconsumerism'isalsoinfluencing
demand, as a growing number of consumers take into account the ethical, social and
environmental consequences of their purchases. (Australian Trade and Investment
Commission,2018)
2.4.3.2 BabyBoomerspotentialmarket
AsignificantsectionoftheAustralianpopulation,alsoknownasthe‘BabyBoomers’isaged,
withover51%ofthepopulationsittingbetweentheagesof29and64.Anagingpopulation
willdrivethehaircolourantgrowthinthecountry.TheaverageAustralianwomanspendsover
$3,600onbeautyproductseachyear.(Cook,2017)DailyNaturalsColourLockinCompound
will provide a substantial competitive advantage in successfully breaking into this ageing
market.Astheageingpopulationlearnsmoreaboutthedamagechemicalproductsdoesto
hair, natural hair products such as Daily Naturals will becomemore popular. Additionally,
market researcherRoyMorganstates that theolderacustomer is, themore theywill care
aboutproductsbeingmadeinAustraliathantheyoungergenerations.(Morgan,2013)
2.4.4 Technological
2.4.4.1 ContinuedResearch&Development.
Hair-caremanufacturersareexpectedtocontinuetoinnovatewithnewformats,ingredients
andtechnologies,andwhilethesewilldeliversomegrowth,thehair-caremarketwillremain
highly saturated. (Euromonitor International, 2017) Dresslier will have to maintain their
researchanddevelopmentexpenditureinordertoremaincompetitiveandconstantlyimprove
theirproductoffering.
2.4.5 Environmental
2.4.5.1 Freight&packagingintheAustralianclimate.
Australia’s harsh environment means hair products have to contend with varying climatic
conditions, such as intense sun exposure and extreme humidity. (Australian Trade and
InvestmentCommission,2018)Dresslierneedstoconsidertheseconditionswhentheybegin
transporting theirproductsaroundAustralia.Naturalproducts require specific temperature
regulationandanoverallgreatercarethanchemicallybasedproducts.
3 SWOT
Strengths Weaknesses
- Strongrelationshipwiththeirsuppliers.Allowingforastrongsupplychain
- MostofcurrentadvertisementisthroughWordofMouth,whichindicatespositivecustomerexperiencesandcustomerreferral
- In-housemanufacturingofproducts,whichallowsforshorterleadtimes,completecontrolandconsistentquality
- Greatinvestmentsinproductdevelopment
- Numberoneplanogramspositioninginatleast80%oftheNationalPharmacystores
- Annualincreaseinsalesandtrackingat26%for2018
- Theirproductsmatchamovementinthesocietytowardsveganandsustainableproducts
- Havebeenworkingonascaleupfor4yearsandhavesufficientresourcesforgrowth
- Dresslierhasover80yearsofexperiencewithnaturalhair-careproducts
- Limitedproductrange.Theirproductsarecurrentlyonlyfocusedtowardhairwellnesssuchasshampoos,conditioner,leaveinmasque,etc.
- Noonline/socialmediapresenceforDailyNaturalstomeettheonlinesegment.
- Weakmarketdistribution.DailyNaturalsarecurrentlyonlyavailableeitherthroughphysicalstoresinSouthAustraliaorNationalPharmaciesonlinestore.
- Financiallimitations.TheirmarketingbudgetisquitelowforexpandingacrossAustralia.
- Nomarketingunitwithintheorganisationtoimplementmarketingstrategies.
- BrandmostlyunknownacrossAustralia- Thesimilarityindesignandselection
betweenDailyNaturalsandDavroeproducts- Thecompanyhasareactiveratherthan
proactiveapproachtomarketdemands
Opportunities Threats
- GrowingnumberofconsciousconsumerswithinAustralia
- Enteredthepharmaceuticalmarketwherethereishugerevenuepotential,Davroecouldneverdothis
- UtiliseDavroe’sestablishedrelationshipswithsupply,freightanddistributionnetworks
- Largepartofmalesinthemarketcurrentlynotbeingreached
- ExpansionintoothermarketsoutsideofSouthAustralia
- DailyNaturalsproductscurrentlyverysimilartoDavroeproductsintermsofdesignandproductname
- Economicgrowthwillstrengthen,whichmeansmoredisposableincomeforAustralians
- Thehair-caremarketisextremelysaturated- Althoughagrowingtrend,‘Vegan’alsohasa
negativestigmaforsomepeople- Lossofrelationshipswithboutiquesuppliers
andsalonsifDailyNaturalsisperceivedtobetoomuchaliketoDavroe
- Sukin'smarketpositionandpricingstrategyundercutsDailyNaturals
- Thehair-careindustryispredictedtoexperiencenegativegrowthinupcomingyears
- Increasedcompetitionwithinnaturalandveganhair-careproducts
- Fluctuationinpriceofrawmaterials
4 Threekeyissues4.1 Intercompanycannibalism
WeconsiderthepotentialintercompanycannibalismoftheDavroeandDailyNaturalsbrands
tobethebiggestissue.OpportunitiesforDailyNaturalsarethreatstoDavroe,whichlimitsthe
numberofsegmentsDailyNaturalscouldpotentiallyreach.DailyNaturalshaveahugepotential
toacquirenewcustomers inallcustomersegments,however iftheyweretoreache.g.the
qualityfocusedconsumerstheywouldbeinterferingwithDavroe’scustomerbase.
Thesimilarityindesign,ingredientsandselectionbetweenDailyNaturalsandDavroeproducts
makesthetwobrandshardtoseparateandcreatesconfusion.
4.2 Marketingpersonnelandmarketingchannels
Dresslierisasmallcompanywithlimitedhumanresources.Thelackofmarketingpersonnelis
anissueastheydonothaveenoughstrategicknowledgeonhowtopositionthetwobrandsin
themarket.Theyalsolackastrategicuseofmarketingchannelsintheirmarketingapproach.
Anonlinepresencewouldbeasignificantstartingpointinincreasingthebrand’sawareness
acrossthemarket.Utilisingsocialmediatosharecreativecontentandbrandvalueisalsoaless
costly marketing approach, as the company currently has financial limitations and a low
marketingbudget.
4.3 Sellingpoints
Althoughagrowingnumberofconsciousconsumers,ourresearchshowsthatcurrentselling
pointsarenotvaluedbytheconsumer.Forbothouronlinesurveyresponsesandfocusgroup
discussions,noneofourrespondentsfound“vegan”and“allAustralian”tobesignificant.(See
appendix2and5)Themajorityalsoansweredthatproductingredientsarenotthatimportant,
and does not really knowwhat “sulphate and paraben free”means. So even though their
productsmatchamovementinthesocietytowardsveganandsustainableproducts,andtheir
sellingpointsaretooobscurefortheconsumer.(Seeappendix1)
5 Marketingobjectives
ToaddressDresslier’sthreekeyissues,increaseprofitandincreasebrandawarenessinthe
market,onesalesobjectivehasbeenset,aswellasthreemarketingobjectivesforthecoming
12monthsstartingfromJuly2018.
5.1 Salesobjectives
Dresslieroverallsalesobjectiveshouldbetoachievea25%marketpenetrationinAustraliafor
theirDailyNaturalsproductsbyJuly2019.AlthoughtheAustralianhaircaremarkethasseen
double-digitgrowthoverthelastcoupleofyears,themarkethasbecomeverysaturatedand
growth is expected to slow down considerably the coming years. Growth should still be
expectedbutnotatthesamerateasbefore.(Richardson,2017)Byachievingtheoverallsales
objectiveDressliercanexpecta15%increaseinrevenueontheirDailyNaturalsproductsby
July 2019. This will help increase Dresslier’s overall profit. In addition to the overall sales
objective,threemarketingobjectiveshavebeenset,these(marketing)objectiveswillassistin
achievingtheoverallgoal.
5.2 Marketingobjective1
Issue:Lowproductdifferentiation
Objective:IncreasedclarificationaroundDailyNaturalsby50%inthenext12months.
Asitcurrentlystandstherehasbeennoproductcannibalisation,thisismainlybecauseDaily
Naturalshasonlybeenavailable inSouthernAustralia.ButbecauseDailyNaturals isnearly
identical toDavroewhen it comes to design, colour and range, it has a limited number of
optionswhenitcomestothetargetmarketitcanenterwithoutbecomingadirectcompetitor
toDavroe.
Duringourresearch,itbecameclearthatcustomersandevenpartnersofDresslier,struggleto
differentiate betweenDailyNaturals andDavroe.National Pharmacies is currently the only
retailerthatsellsDailyNaturals,theyhavehoweverbrandeditas“DavroeDailyNaturals”which
canconfuse thecustomersbygiving the impressionthatDavroeandDailyNaturalsare the
samebrand.Additionally,participantsofthefocusgroupwhohadbeentestingDailyNaturals
productsforamonth,reportedthatthedesignoftheproductswasboring,cheap,anddidnot
communicategoodingredientsandbrandvalues.(Appendix1)Giventheinformation
5.3 Marketingobjective2
Issue:LowbrandawarenessaroundDailyNaturalsproductsoutsideSouthernAustralia
Objective:IncreaseconsumersbrandawarenessofDailyNaturalsby50%withinthenext12
monthsstartingJuly2018
DailyNaturalsasabrandisrelativelynew.Thereiscurrentlyonlytwowaysforcustomertoget
theirhandsonDailyNaturals,throughNationalspharmacystoresacrossSouthernAustraliaas
wellassomeonlinewebsites.Throughourresearch,itbecameevidentthatDailyNaturalsdid
nothaveanybrandpresenceoutsideofSouthernAustralia.Whenparticipantsofthesurvey
wereaskedwhethertheyusedaspecifichair-carebrand67%saidno.Theremaining33%who
diduseaparticularhair-carebrand,didnotmentionDailyNaturalsasoneoftheirpreferred
brands. (Appendix 7; Appendix 8) Survey participant all lived outside state of Southern
Australia,whichfurtherprovesthelackcustomerawarenessaboutDailynaturals.(Appendix
12).
Uponexpansion intonew targetmarkets and consideringDailyNaturals is a relatively new
brand,increasingcustomerbrandawarenesswillbecrucial.Increasingcustomer’sawareness
willincreasethechancesforthebrand(DailyNaturals)tosucceedinthemarket.Becauseof
increasedcustomerawareness,wecanexpectanincreaseinbothrevenueandprofit.
In-ordertomeasureifmarketingobjectiveisreachedwith-inthistwelvemonthperiod,regular
marketresearchneedstobeconducted.Themarketingresearchshouldbedoneeverythree
monthsstartingJuly.Thisistoensurethatbrandawarenessisincreasingatadesiredrateat
whichtheendgoalisreachedandtoallowformarketingadjustmentshouldthegrowthnot
satisfactory.Marketingstrategieswillbediscussedinstrategies4.2whichwillfurtherelaborate
onhowtoincreasebrandawareness.
5.4 Marketingobjective3
Issue:Competinginasaturatedmarket.
Objective: Increasemarketshare intargetmarketsto0.4%within3months,andanannual
growthof20%everythreemonths
UponexpansionintootherpartsoftheAustralianhaircaremarket,Dressliershouldnotdirect
alltheirfocustowardachievingcertainsalesnumbersforDailyNaturalsonly.Thereshouldbe
anequal focusor evengreater focuson increasingDailyNaturalsmarket share.By gaining
marketsharefromcompetitors,DailyNaturalswillbeabletoestablishcontinuedlong-term
growthinbothrevenueandprofits.
The hair-caremarket is currently highly saturated and is only expected to growwith 2.8%
annually.(Richardson,2017)BasedontheDailyNaturalsexpectedsalesof$AU270000asof
June2018,theircurrentmarketshareisroughly0.21%.(Appendix3)MeaningDailyNaturals
currentlysells12shampoo’saweekacrossthe31Nationalpharmacystorestheyare in.By
increasingthenumberofhaircareproductssoldweeklyandbydistributingDailyNaturalsinto
newstoresacrossthecountry,DailyNaturalsshouldbeabletocaptureabiggerpartofthe
targetmarket,makingthesetobjective0.4%marketsharewithinthefirst3monthsattainable.
Thisinformationisbasedona$1.2BillionrevenueintheAustralianHair-caremarket.(Statista
2018)Thereafter,a20%increaseinhair-careproductssoldeverythreemonthsshouldbethe
setgoal.
In-ordertomeasurewhetherdesiredmarketsharegoalsarereachedduringthetwelve-month
period.Salesrevenuereportsneedstobecomparedagainsttheoverallmarketrevenueevery
3monthstodetermineifDailyNaturalsmarketshareisgrowingasplanned.Strategieswhich
willhelpinreachingtheobjectivewillbediscussedinStrategies4.
6 Targetmarketandpositioning
During the customer analysis three different customer segmentswere detected. Targeting
thesesegmentsandpositioningDailyNaturalssothatitbetteralignswiththem,canpotentially
helpthemattractnewcustomersandprovideDailyNaturalswithacompetitiveadvantage.The
targetmarket/segmentwhichwillbe focusedon is“Theconsciousconsumer”, thesegment
coversabout20%oftheAustralianpopulationandconsistsofconsumerswhohaverelatively
thesameneedsandtraits.(Indexmundi,2018)BypositioningDailyNaturalsintherightway,
wecanbettercatertothistargetmarket/segment,increasingthenumberofcustomerswho
arelikelytopurchasetheproducts.
6.1 B2CMarket
6.1.1 Segments/targetmarket
Theconsciousconsumer
Theconsciousconsumerconsistsofmillennialsbetweentheageof18to35,majorityofthe
segmentiswomen,whoareeitherstudentsorworkingfull-timeandarewillingtospendmore
moneyonhaircareproducts.Thesegment ishighly impactedbynewsocial trendssuchas
naturalproducts,environmentallyfriendlyandveganism.Oursurveyresearchintothistarget
marketrevealedthat75%oftheparticipantsiswillingtopaybetween$5to$20forabottleof
shampoo. (Appendix 9) The participants also placed high importance on attributes such as
quality, natural ingredients, smell and store location. (Appendix 2) The segment is most
influencedbyfriends,familyandsocialmediaandusuallybuystheirproductsinpharmacies
stores.(Appendix10)
6.1.2 Positioning
In-order to capture as many customers as possible in the “Conscious consumer” segment
positioningbecomesvital.PositioningDailyNaturalssothatitalignswiththesegmentneeds,
increasethechancesofsuccess.
Whilethe“Consciousconsumer”isnotverysensitivetopriceandconsumerinthesegmentare
willingtospendupwardsof$20dollarforabottleofshampoo,positioningDailyNaturalsso
that it competes on price against its competitors in themarket is essential. This ismainly
becausethetargetedcustomersegmenthaslowbrandloyaltyandmorewillingtotryoutnew
products, should the consumer findaproductwhichoffers all the sameattributes asDaily
Naturalsbutatacheaperprice,thechancesofconsumersthenswitchingbrandsbecomeshigh.
Currently,DailyNaturalsselltheir250mlshampoofor$13.99whiletheirmaincompetitorSukin
selltheirequivalentforonly$8.95puttingDailyNaturalsatadirectdisadvantage.Positioning
DailyNaturalsinthe8-9dollarrangedwillallowittobettercompetewiththecompetitorssuch
asSukinandincreasethelikelihoodofsucceedinginthetargetmarket.(Appendix9)
In addition to a price positioning change,DailyNaturals shouldbepositioned as an ethical
quality hair-care product which is all natural and vegan. The “Conscious consumer” as a
segment is interested trends such as veganism, environmentally friendly and all naturals
products.Byemphasizingproductattributessuchasallnaturalandcrueltyfree,DailyNaturals
willbecomeamoreattractiveoptiontoasegmentwherethesekindsofattributesarevalued.
Datafromthefocusgroupswhichhadparticipantsfromthe“Consciousconsumer”segment,
saidthattheyappreciatedallnaturalsproductsbecauseitwasperceivedas“goodforyou”,
thisfurtheraddstothesegmentsfocusonagreenlifestyle.Theperceptualchartbelowvisually
displayshowDailyNaturalsshowbepositioned.
7 Keystrategies
ThefollowingstrategiesarealldesignedtohelpDailyNaturalsaddressthemarketingobjectives
thathavebeenset.Thekeystrategiesinvolveproductstrategies,PromotionalStrategiesand
DistributionStrategies
7.1 Productstrategies
TheproductsstrategieswilladdresstheissuesaroundthelowproductdifferentiationofDaily
Naturalsandhowtosolvethem.Thestrategieswillmakeiteasierforcustomerstodifferentiate
betweenDailyNaturalsandDavroe.
7.1.1 Productdesign/designchange
Currently Daily Naturals and Davroe suffers from having very similar product design, the
consequenceofthis,isthatitbecomeshardtodifferentiatebetweenthetwobrands.Primary
researchalsoshowsthatpeopleperceivethecurrentproductdesignofDailyNaturalstobe
boring,cheapandthatitdoesnotcommunicategoodnaturalingredients.(Appendix1)Inorder
todifferentiateDailyNaturals,fromitssisterbrandandcreateanimagethatcommunicatesa
highqualityall-naturalproductatanaffordableprice,aproductredesignisnecessary.
Onethirdofconsumerdecisionsisbasedondesignaloneanddesignelementssuchascolor,
highlyinfluenceconsumerpurchasingdecisions.(Jarski,2014)Thisshouldbekeptinmindwhen
developingDailyNaturalsbottledesign.Thefocusshouldbeonbrightcolorswithanelegant
designwhichcommunicateshighqualityall-naturalproductandmaintainsconsumerattention.
Additionally, thebottledesignshouldcommunicateDailyNaturalsethicalvaluesevenmore
thenitdoescurrently,emphasizingthefocusonallnatural,crueltyfree,andenvironmentally
friendly.Emphasizingthiswillcatertothe“Consciousconsumer”targetmarket.BygivingDaily
Naturals a completely different look then Davroe, consumers will be able to visually
differentiatebetweenthetwobrands.ThiswillclarifywhatDailyNaturalsstandsforandhow
itisdifferentfromDavroe,changingconsumersperceptionsofDailyNaturals.
7.1.2 Pricing
Pricingisanimportantdifferentiationfactorandsettingtherightpricepointforaproductwill
highlyimpactwhetheraproductsucceedsinthemarketornot.CurrentlyDailyNaturalssuffer
frombeingoutpricedbycompetitorssuchasSukinasindicatedintheSWOTanalysis.Primary
researchintothe“Consciousconsumer”segmentalsoindicatedthatDailyNaturalsispricedto
high,all3focusgroupparticipantssaidtheywouldnotbuyDailyNaturalsagainatitscurrent
pricepoint.(Appendix1)
InordertodifferentiateDailyNaturalinthemarket,apenetrationpricingstrategyshouldbe
implemented.Thisinvolvessettingthepricepointlowtobeginwithin-ordertogetpeopleto
buyDailyNaturalsandbecomefamiliarwiththebrand.(MarketingTeacher,2018)Additionally,
thelowpricepointwilldifferentiateitfromitscompetitorsandsisterbrandDavroe.Whenthe
desiredmarketpenetrationisachieved,DailyNaturalsshouldbepricedbasedonacompetition
pricing strategy, this entails setting a price based on the competition in the market.
(LearnMarketing,2018)
7.2 PromotionalStrategies
ThepromotionalstrategieswillfocusonhowDailyNaturalscansolveitslowbrandawareness
throughvariousmarketingandpromotionalstrategies.
7.2.1 Digitalmarketing
Daily Naturals being a relatively new brand in the hair-care market, has been limited to
southernAustralia,andthereforesuffersfromlowbrandawareness.Byimplementingdigital
marketingforDailyNaturalsweareabletoincreasethebrandawarenessatacheaperprice
compared to traditional marketing. Digital marketing also allows for audience interaction
throughvarious socialmediaplatforms suchas Facebook, Instagram,Twitter andYouTube.
Additionally,digitalmarketingallowsanorganizationtoreadrealtimeresultsthroughtools
suchasgoogleanalytics,whichallowsfor instantadjustmenttotrends inthemarket(Cave,
2016)
Dresslier should develop social media accounts for Daily Naturals on various social media
platforms.ThefocusshouldbeonFacebookandInstagramasthesearethemostinfluential
platforms.64%ofInstagramuserbetweentheageof18to24saidthattherewasanincreased
chance of them buying the product if it was recommended by someone they follow on
Instagram.(MediaMarketing,2016)Thisgoestoshowtheinfluentialpowerofsocialmedia.
Dresslier’s current socialmedia andmarketing teamwhohandles allDavroe’s socialmedia
shouldbetaskedwithcreatingandmaintainingDailyNaturalssocialmedia.Astheycurrently
havethecapacitytodoso.(Dresslierbrief,2018)
7.2.2 Influencermarketing
Inadditiontodigitalmarketing,Dressliershoulduseinfluencermarketingin-ordertoincrease
customers brand awareness of Daily Naturals. The effect of influencermarketing is that it
creates authentic content about a product, drive engagement and traffic to Daily Naturals
website.(Forer,2018)DressliershouldfindmicroinfluencerstopromoteDailyNaturals,these
influencers usually have a lower following, aremore cost effective thenmacro influencers,
deliverahigherlevelofengagementthenmacroinfluencersanddrivesocialbuzz.Duetothese
micro influencers being invested in what they do, they become a trusted source for their
followers.(Main,2016)WhenselectingmicroinfluencerstorepresentDailyNaturals,picking
an influencer which has similar traits to the “Conscious consumer” segment will have the
biggestimpactasconsumerswillseetheinfluencersasexpertsintheirfield.Anexampleofan
influencer who would fit Daily Naturals image is Chemical Detox who is a green life style
influencer.(LovingIsland,2016)
7.3 Marketexpansionstrategies
ThemarketexpansionstrategieswillhelpDailyNaturalexpandbeyondthebordersofSouthern
Australia.Thesestrategieswilladdresstheissuesofthecompetingsaturatedhair-caremarket
andtheobjectiveofcapturingabiggermarketshareforDailyNaturals.
7.3.1 Distributionstrategies
DailyNaturalsiscurrentlyrunningonanindirectdistributionmodel.Theproductsarecurrently
soldthoughttheirpartnerNationalPharmaciesbutonlyinSouthernAustralia.Goingforward,
DailyNaturalsshouldimplementahybridizeddistributionmodelcombiningindirectanddirect
distribution.
Theindirectbusinessmodelshouldbekeptasis,itcanstillprovideDailyNaturalswithastrong
competitiveadvantagesuchasgainingaccess toabiggerconsumerbasewithouthaving to
worryaboutgettingcustomersinthedoor.(Youngupstarts,2017)Therefore,findingtheright
distribution partner who reaches the biggest number of customers with-in the “Conscious
Consumer”becomesimportant,moreonthisin4.3.2Retailerselection.
Dresslier should implementadirectdistributionstrategy forDailyNaturals in the formofa
websitewhere thedifferentproductscanbesold from.This tocater to thegrowingonline
shopping trend of health and beauty products in Australia, which grew by 15.5% in 2017.
(Auspost,2017)ByimplementingthesedistributionstrategiesDailyNaturalsshouldbeableto
captureabiggermarketshareinthecoming12months.
7.3.2 Retailerselection
When considering which retailer to partner up with, several things should be taken into
considerationsuchaswheredoesthetargetsegmentprefertoshop,thegeographicreachof
theretailer,retailersexperiencewiththetypesofproductthatyouwishtosell.
Based on the primary research conducted, Priceline pharmacies presents itself as the best
alternativeforanewretailpartnerwhenexpandingbeyondSouthernAustralia.Whensurvey
participants where asked which pharmacy their preferred to shop at, over 40% answered
Pricelinepharmacies,making it themostpopularpharmacychaintoshopat. (Appendix11)
Focus groupparticipant belonging to the “ConsciousConsumer” segment alsoput Priceline
pharmacies as their preferred pharmacy chain. The data highlights Priceline pharmacies
popularityinthe“ConsciousConsumer”segmentmakingthemtheidealoptionforapartner
whenexpandingacrossAustralia.
Withover400storenationwide,Priceline’sgeographicalreachisunrivaled.ThisallowsforDaily
Naturals to be distributed across Australia. (Priceline, 2018)Dresslier should push for a
partnershipwithPricelinepharmaciesasthisthiswillgiveDailyNaturalsaccesstothebiggest
possiblenumberofconsumersandhelpwithreachingthetargetedmarketshare.
7.3.3 Expansionstrategy
An expansion strategy is something an organization makes us of in-order to achieve high
growth.Thereareseveralreasonsbehindexpansionssuchashigherprofits,largermarketshare
andsurvival.(Jargons,2018)Dressliershouldimplementanexpansionthroughdiversification
strategy when expanding with Daily Naturals. (Businessjargons, 2018)When planning Daily
Naturalsexpansionstrategyconsideringthemarketpotentialinexpandingtodifferentstates
andmakingsuretomaximizemarketpotentialisthebestwaytoensuresteadymarketshare
growth.BylookingataveragespendingacrossthealltheAustralianstates,NewSouthWales
andVictoria lead theway. IntroducingDailyNaturals in these states firstwould be a good
startingpoint intheexpansionofDailyNaturals.(Appendix5)Expansionintothesemarkets
couldpotentiallykickstartsalesofDailyNaturalsandensurerapidmarketgrowthwiththefirst
monthsofintroduction.
8 Keyrecommendation
Its recommended thatDresslier implement the following strategies in a specific order. The
variousstepsinstrategy4.1shouldbeimplementedfirstandassoonaspossible.Redesigning
DailyNaturalsbottledesignisimperative.AsitcurrentlyisDailyNaturalsistoosimilartoDavroe
indesigntobeintroducedintothewholeAustralianmarket.Thedesignwasalsolabelledas
boringandcheapwhichisnotdesired.(Appendix1)Whendesigningthenewbottlethefocus
shouldbeonphysicallydifferentiatingDailyNaturalsfromDavroethroughchangeofcolour
and labelling. The goal is to make the new design appealing to the consumer while also
clarifyingthedifferencebetweentheDailyNaturalsandDavroe.Thenewbottledesignshould
be finished by the end of September 2018. Daily Naturals new price point should also be
decidedonduringtheredesignperiod,thenewpriceshouldbefocusedaroundenablingahigh
levelofmarketpenetrationwhilealsodifferentiatingitfromitscompetitorsintheintroduction
stage.
Promotionalstrategies4.2shouldbedevelopedstartingJuly2018andshouldbeimplemented
inthebeginningofOctober2018,afterthenewDailyNaturalsdesigniscomplete.Dresslier’s
socialmediaandmarketingteamshouldestablishasocialmediapresenceforDailyNaturals
duringthefirst3monthsstartingJuly2018andactivelyusethemtopromotethenewDaily
Naturalsafterredesigniscomplete.Thedelayinimplementationisavoidsuddenchangesin
marketingapproachasDailyNaturalsbrandimageisbeingchanged.Dressliershouldalsolook
toestablishpartnershipswithmicro-influencerstopromoteDailyNaturals.Whenpartnering
up with a micro-influencer Dressiler must make sure that they cater to the “Conscious
Consumer”segment.
Marketexpansionstrategies4.3shouldbedevelopedandimplementedsimultaneouslywith
promotionalstrategies4.2.DressliershouldlooktodevelopawebsiteforDailyNaturaltocater
totheincreasedonlineshoppingonhealthandbeautyproducts.(Auspost,2017)Additionally,
Dresslier should establish a partnership with Priceline pharmacies which is the preferred
pharmacychaininthe“Consciousconsumer”segment.
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10 Appendix
Appendix1
FocusGroupSummaryFortheinternalanalysisweconductedatotaloftwofocusgroupstoget insightsaboutthe
targetpopulation’scurrentshoppingandspendinghabits,brandawarenessandattitudeswhen
itcomestohair-careproducts.Theseinsightswerevaluableforuswhendevelopingouronline
surveyandtogetabetterunderstandingofconsumerbehaviourinthisparticularmarket.One
focusgroup(A)wasunawareofthebrandweareresearching,whiletheotherfocusgroup(B)
weregivenfreesampleshadbeenusingDailyNaturalsproductsforonemonth.
FocusgroupA:Generalinsightsabouthair-careproductsandusage
Participants
- Consistedof3maleand3femalestudentsaged18to29.
- Includedtwovegansandonevegetarian.
- DisposableIncome:rangingfrom$1000to$3000permonth
- Education:3masterstudentsand3bachelorstudents
Shoppingandspendinghabits
- Mostbuyproductsonceamonthorevery2-3months.
- Mostdonotuseaspecificbrand,onehasusedLushforafewyears.
- Mainlyuseshampooandconditioner,somealsousehairoilsandmasks.
- Usuallybuylargecontainers,rangingfrom500mlto1litre.
- Usuallybuyhair-careproductswhenbuyinggroceries(convenience).
- Buyhair-careproductsatsupermarkets,pharmaciesandLush.
- Wouldbewillingtotrynewproductsiftheyarecheap,insmallvolumeandiftheyare
nothappywithcurrentproducts.
Productsandattributes
- Foundprice,packagingandsmellmostimportantwhenbuyingnewhair-careproducts.
Onealsomentionedcrueltyfreeandveganasimportant.
Appendix2
Appendix3
Appendix4
Appendix5
Appendix6
Basedonthequestions:
- “Howmuchwouldyoubewillingtopayfora250mlbottleofshampoo?”(Maximum
price)
- “Howmuchdoyoucurrentlypayfora250mlbottleofshampoo?”(Currentlypay)
- “Howimportantdoyouconsiderprice?”(Priceimportance)
- “Whatdoyouidentifyas?”(Gender)
- “Whatagerangebestsuitsyou?”(Age)
Appendix7
Appendix8
Appendix9
Appendix10
Appendix11
Appendix12