Marketing Proposal for Handmade Soap Term Paper

Excerpt from Term Paper :

Business Plan

January of 2003 will mark the launch of a company called Personal Touch that will specialize in producing handmade soaps. Personal Touch will begin as a private company backed by several large investors who have experience in marketing and creating toiletries for an upscale market. These investors will serve in a role similar to a board of advisors. They will make recommendations on high-level decisions and strategies, but they will not be involved in any day-to-day activities unless their help is asked for or they see something that calls for a drastic change. Personal Touch plans to stay private for the immediate future, as it is marketing a product that will probably be part of a small niche, and will not see the need for the large amounts of capital brought in by a public offering.

As far as the daily operations of Personal Touch goes, the company will be run by a very small staff. The owner, who is the brains and vision behind Personal Touch, will make most of the decisions concerning the marketing of the product, i.e., product positioning, brand development, and promotional strategies. He or she will also be involved in making personnel decisions and determining what the distribution system will be and what channels will be used. The owner will hire a full-time financial specialist who will help with budgets and deal with the investors concerning any financial strategies. As a result, Personal Touch will begin operations with only two full-time workers. The main reason for this is financial. Personal Touch is marketing a product that will hold a very small piece of the overall soap market. It will be marketed as a luxury item and will probably never own a substantial share of the market. Because of this, profits are expected to be small in the beginning, making it hard to meet payroll for a large staff. If business starts out well and the work is more than two people can handle, the owner will probably look to hire help on a consulting and freelance basis in order to avoid the costs of paying benefits to those employees.

Personal Touch will be aggressively marketing itself as a handmade soap company and will position itself against brands like Dial and Ivory that mass-produce their products. This strategy will result in Personal Touch concentrating in the beginning on producing only bar soaps that are used for bathing. In the company's promotional strategies, a strong emphasis will be placed on the care and attention that goes into each bar of soap created by Personal Touch. It would not make sense to create powered or liquid soaps with this strategy, mostly because they all look the same and it would be hard for Personal Touch to differentiate their product in this instance. The company will start out by creating two different sizes of soaps. One will be developed as a soap to be used in the bathtub or the shower. It will be similar in size to the bars the larger companies such as Dial and Ivory produce and will be oval-shaped, as time has proven that this is the shape that most users prefer. The second size will be developed and marketing as a hand-washing soap that will be placed at sinks. It will be much smaller in size and will be circular-shaped. Marketed along with the hand-washing soap will be soap dishes. They will also be circular in shape and will be sized so that the hand soaps will fit perfectly in the dishes so that they can be marketed together. No other accessories will be developed by Personal Touch in their start-up phase. The owner believes that Personal Touch, especially considering the relatively small amount of money it has to work with, should specialize in a small number of products and concentrate on their production and development, as opposed to creating many products and having them be of a lesser quality.

No matter how good an idea may be, how much money a company was able to raise from investors, or how well produced a product is, if that product is not marketed to the proper audience and does not use the proper promotional tools, it will fail. Therefore, the most important decision Personal Touch will make will be how to properly market their products.

Philip Kotler defines the marketing mix as the set of marketing tools that a firm uses to pursue its marketing objectives in the target market. Most marketers classify these tools into broad groups that are known as the four P's of marketing: product, price, promotion, and place. To maximize profits for its target markets, Team U. needs to give equal attention to all four marketing tools, and Personal Touch will use these strategies as a basis for their plan. The product has already been determined. Personal Touch will produce handmade soaps that will be marketed as a luxurious household item. The soaps will come in two different sizes: a larger, oval-shaped size made for bathing and showering, and a smaller, circular-shaped size made for hand washing and meant to be placed by sinks. Another product, meant to be marketed in tandem with the hand soaps, will be small soap dishes that the hand soaps will be placed inside.

Initially, Personal Touch will base the price of its products on the price of similar items that are currently in the marketplace. Mass-produced soaps such as Dial, Ivory, and Irish Spring generally run around 75 cents a bar for bathing sizes and come in packages of multiple bars. Meanwhile, other handmade soaps sell for anywhere from three to six dollars a bar for bath sizes and one to two dollars for smaller sizes. Soap dishes can cost from four or five dollars up to twenty, depending on the size. Personal Touch has an interesting decision to make when it comes to setting prices. It needs to set a high enough price that it can turn a profit, but at the same time it does not want to price itself out of the market. In addition, the company is attempting to target the luxury market, and people in this market often associate higher prices with higher quality, and expect to pay higher prices. As a result, Personal Touch will price its soaps on the high end of the spectrum, but not the highest. Prices will start out at five dollars per bar for the bath soaps. The hand soaps will be sold in sets of six for nine dollars. The hand soaps will also be sold in a set with a soap dish for five dollars. Soap dishes will be sold separately for four dollars, as they will be small in size compared to others on the market.

It is extremely important for luxury items to promote themselves in such a way that their target market will be aware of the product. Personal Touch will begin by promoting their products specifically to females, as they are the ones who buy a large majority of the handmade soap sold today. Even more specifically, Personal Touch will target educated women who have an above-average income. These women can be categorized as Actualizers by the VALS2 Lifestyle System that divides adults into nine segments based on their values and lifestyles. The soaps that Personal Touch creates will be promoted as luxury items that women will use to pamper themselves after a hard day's work. Print ads will feature an attractive woman soaking in a bath in a bathroom that is obviously part of a very nice house. Tag lines will emphasize the fact that it individual bar is handmade with the finest ingredients possible so that the user can take the time to enjoy the finer things in life. Due to the lack of money Personal Touch possesses, it will concentrate on using print ads for the majority of its promotions. Television ads will simply be too expensive for a company that is just starting out. Personal Touch will attempt to place ads in magazines that its expected users often read, such as Cosmopolitan, Women's Day, and Martha Stewart's Living.

As a forward thinking company, Personal Touch will definitely use the power of the Internet as a place to sell its products from. A quick check of the Internet through the use of a search engine found hundreds of companies selling handmade soaps online. Personal Touch expects that its customer base will be well educated and make a sizable income, and that is the portion of the population that makes the most online purchases. The company will also use standard brick-and-mortar stores, and will place their products in retail shops such as Bed Bath & Beyond and Target, in addition to smaller and individually owned boutiques that may be able to give Personal Touch more attention in their promotions.

Another reason Personal Touch will use the Internet to market its product is because it also doubles as a distribution center. Personal Touch will set…

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