Figure 6 resoundingly illustrates how critical reassurance of cleanliness and quality are to anyone who purchases toothpaste. This is considered to be industry-average for distribution of retail products (Steenkamp, Gielens, 2003). This costing structure also assumes that the company continually seeks to create cost efficiencies in raw material sourcing and look to external packaging as part of its branding. The net contribution margin per unit of £.30 for the 100g tube, of £.71 of the 250g tube and £.78 of the 250g tube with pump which provides funding for future supply chain optimization, sourcing, quality management and marketing.
Integrated Marketing Communications Objectives
First, to conclusively align the snore reduction aspects of the tooth paste with accentuated health through immunity from bacteria and a feeling of cleanliness from using the toothpaste periodically.
Second, to define a unique and defensible marketing position for the snore reduction tooth paste including a unique value proposition that will make it a substitute for snore medications sold by prescription or over-the-counter (OTC). This necessitates creating the snore reduction tooth paste product position as being one of a low-cost substitute for more expensive snore reduction medicines and treatments.
Media and Market Planning Recommendations
The following table provides the media planning for the launch and continued support of the snore reduction tooth paste. As can be seen from the media and marketing strategy the reliance on online spending is where 37% of the total budget is allocated. This is in response to the growing importance of social networking and the groundswell effect (Bernoff, Li, 2008) on branding and messaging strategies globally. For the snore reduction toothpaste to be effective it will need to generate high levels of awareness and trial entirely online.
Media and Marketing Strategy
Online - Google AdWords Program
Online - Yahoo Overture
Online - Sponsorship of social networking sites
Online - Microsite
Online - E-mail Marketing & Mgmt
Online - CRM System
Offline - Product Brochures
Offline - Sponsored Events
Offline - Medical Trade Shows
Offline - In-store displays and detailing
With the two main Integrated Marketing Communications Strategies defined as first positioning the snore reduction tooth paste as a preventative healthcare strategy to alleviate bacteria, and second as a cost-effective alterative to over-the-counter and prescription medications, the marketing mix must seek to maximize these messages through coordinated execution strategies. The coordination and synchronization of each aspect of the marketing mix must be intertwined to create an effective umbrella strategy (Erdem, 1998). This strategy of coordinating all aspects of the marketing mix, in the case of consumer goods including consumables, has shown to have a supportive effect on pricing overall in terms of stabilizing it (Erdem, Keane, Sun, 2008).
Product considerations for the snoring reduction toothpaste must first begin with the approach of how credibility is shown, earned and trust generated for the toothpastes' ability to also resolve bacterial issues as well. This tooth paste will only be successful from a sales standpoint to the extent it can be shown to alleviate bacteria. Aligning with a clean taste and quality is critical as well. The name of the product will also be critically important in either leading to greater trust and credibility or making the product appear to be "clean washed" into the market (Fox, 2002). Clearly the challenges of the product composition and the need for creating a very strong integration between the development teams and the marketing team, as Crest does (Martin, 1989) will also be essential for the products' success in this aspect of the marketing mix. The product will also need to concentrate on its substitute value aspects relative to more expensive solutions for snoring. The potential of showing there is no significant side-effects of using the snore reduction tooth paste will also be invaluable, as more potent and more expensive treatments for snoring often do.
In terms of pricing, the following table, pricing analysis of the 100g and 250g tubes are presented. The following table shows an assessment of the pricing scenarios for the 100g tube, 250g tube and the 250g tube with the pump. The assumptions regarding cost components are provided based on analysis of comparable tooth pastes (Chu, Chintagunta, Cebollada, 2008). The following table also assumes that ...
250g tube, pump
Net Profit Per Unit
Margin to Distribution Channel (.2)
Net Contribution Margin Per Unit
The promotional strategy will center primarily on the use of social networking to drive up awareness including the use of blogs, Facebook, Twitter, Friendfeed and LinkedIn. In conjunction with the social networking strategy will be on focusing on search engine optimization (SEO) using the microsite with keywords embedded within it. This strategy will allow for the site to be picked up by search engines as they scour the web for new links. Second, the use of Google AdWords will also assist in the development of sales leads and driving traffic to the website to be created for the product launch. The AdWords campaigns are easily created within Google AdWords and be quickly used to generate new sales opportunities for resellers as well. The use of these social networking platforms can also be used to support the channel management strategies of the company. In fact social networking is becoming a prevalent form of support for channel partners globally (Bernoff, Li, 2008). A social media strategy must be coordinated and in synchronization with the broader Integrated Marketing Communications strategy as well (Mangold, Faulds, 2009). Taken together these two aspects of the promotional strategy, when combined with supporting and funding events, will be highly significant in terms of generating awareness and sales leads, and leading to continual strength for marketing and selling efforts.
The last aspects of the marketing strategy, which are the distribution aspects, are critically important. Relationships with channel partners and resellers must be created rapidly and solidified not only with the 20% gross margin offered but also with the offer of continual learning and education, and the use of an online Partner Relationship Management (PRM) system as well. The distribution strategy must also be segmented by big box retailers including Wal-Mart, Costco and Sam's Club in the U.S., Carrefour in France, and Tesco throughout the UK. The second tier of retailers needs to be local and regional grocery chains. A third tier is the drug stores and other dispensaries throughout the UK and U.S.. Distribution must be accentuated with the development of an online support and knowledge management system to give resellers the opportunity to gain as much insight as possible while selling the snore reduction tooth paste.
Internal Marketing Coordination
With such a unique value proposition and one that critically needs to show bacterial control and cleanliness as core concepts followed by the ability to create a viable substitute to more traditional forms of snoring reduction, the proposed product needs to have tight integration of product development and marketing. There also needs to be real-time communication between the supply chain, strategic sourcing and development teams as well, as these teams may be able to find cost reductions in sourcing products over time. Sales needs to be continually kept up to speed with the product development, supply chain implications to pricing and marketing strategies so they can effectively sell into the three tiers of distribution channels mentioned. Beyond merely a cross-functional team, the company needs to embrace a more customer-driven focus on how to transform this unique product into a viable substitute for more expensive and often subscription-based solutions to snoring. Above all of these factors the company must seek to be the trusted advisor to consumers.
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This is considered to be industry-average for distribution of retail products (Steenkamp, Gielens, 2003). This costing structure also assumes that the company continually seeks to create cost efficiencies in raw material sourcing and look to external packaging as part of its branding. The net contribution margin per unit of £.30 for the 100g tube, of £.71 of the 250g tube and £.78 of the 250g tube with pump which provides funding for future supply chain optimization, sourcing, quality management and marketing.
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