1. An Amazing Launch in the Past, an Awesome One in the Future
Consulting Team
Marketing Plan
2.
3. Company Background
oFounded: 2011 by Jessica Alba and Partners
oHeadquarter: Santa Monica, CA
oFMCG: organic, eco-friendly and ethical
oMarket: USA & Canada (2015)
oRevenue: $250M (2016 projected), $170M (2015)
oCompany Value: $1.7B (2015)
oMission: “Our mission is to empower people to live a
healthy, happy life. We're committed to creating effective,
safe, delightful, accessible, responsible products”.
Source: Forbes, Honest
5. Brand
Vision
Key
Insights
Environmental awareness. Sense of Security. Care for the planet.
Customization – personal design – unique and stylish
Brand
Promise
Honest. Safe. Healthy. Cared for. Proud and Confident Parent.
Brand
Personality
Supporter. Reliable Friend. Fresh and Young. Stylish and Caring.
Brand Strategy
Reasons to
Believe
Organic non-toxic materials. Absorbent Botanically-Infused.
Delightful Product Design options.
Protecting people and the planet with high quality products. Bringing
safety and health to families through organic awareness.
7. Market trend: Chinese diaper market
expand rapidly
Consumer trend: Shift from economy-
types to premium diapers
Channel trend: 40% of E-commerce
channel by 2017
Market Analysis
Manufacturing in China
Organic essentials & eco-friendly
State-of-the-art diaper collection
Brand Recognition: Jessica Alba
E-commerce / Subscription
Honest Company’s Strengths
How to penetrate Chinese premium market by competing against
existing competitor such as P&G, KAO, Kimberly-Clark?
Challenges
Market Research & Opportunities in China
Source: Honest, Credit Suisse
Chinese diaper market is the most attractive market for Honest Co. to
use their core strength and get into the Asian market
Opportunities
8. Affluent, young generation with western values and
qualitative preferencesTarget
Customer
Why?
Sweet spot Lived and studied abroad. Celebrity driven. Return
to China and Continue their American lifestyle.
The Sweet Spot in Premium
10. 2.5%Share
Sales $ 112mn
5%
$ 223mn
8.6%
$ 379mn
* The sales of 2015 in USA & Canada is projected to be $ 250mn, Chinese Diaper market in 2015: $4,460mn
Estimated Market Volume: $223M
Worst Case
Average
Case
Best Case
Source: Euro Monitor, Credit Suisse, China Daily
11. High Quality
Organic Products
Attributes
American Lifestyle
Safe and Eco-Friendly
Product
Price: 3 Yuan ($0.4) per Diaper
The same price as other premium
brands in China
Additional Pricing Strategy- Bundling
Price
Launch Strategy
12. E-Commerce
Company Website
Alibaba.com
Establishing our first Flagship Shop – Tier
1 Shanghai or Beijing
Place (Distribution)
Free samples through company’s Website
Promote Jessica Alba’s image
Target Audience seeking western
culture
Distribute samples e.g. to premium
Chinese hospitals to appeal safety
Promotion
Ziyi Zheng
15. Approx. 1985
JA´s childhood
illness
2008
JA´s first child &
illness
2010
Raised
Venture Capital
2011
Launched
Company with
17 products
JA lobbied with
US congress
2014: 275 employees
75% online commerce & majority from diapeters
2014: available in retail 2016: 120 products
Entrepreneur & Co-Founder
Brian Lee
(same experience)
Co-Founder:
Christopher Gavigan,
Sean Kane
No marketing efforts (5 mio. followers)
2016: 350 employees
2016: 130 customer service representative
JA gained
knowledge
Some Facts
Background & History
Source: Honest, Forbes
16. • In China, a local celebrity spokesperson can prove especially valuable for prestige brands
• public is generally prone to be highly influenced by celebrity recommendations on social media
• Aligning with the right local celebrity is a smart strategy for luxury brands in China, especially as they enter a market where many may still be
unfamiliar with them
• 80% of brands in this year’s Index produce videos exclusively for the Chinese market, featuring Chinese actors and cities. 30% of the top 20
most viewed videos featured a Chinese celebrity
• When Dior promoted the Chinese launch of their online magazine, DiorMag, the brand only received 33 reposts and 21 comments on its
Sina Weibo page, compared with 8,187 “likes”, 252 shares, and 111 comments for the same content on Facebook. Less than a week later, the
brand enlisted popular Chinese media personality Hung Haung to live-tweet a haute couture event on Dior’s Weibo page. With more than
4.5 million followers, Haung’s tweets dramatically boosted engagement
• To promote its “Sparkling Secrets” exhibition in Shanghai, Swarovski announced on Sina Weibo that celebrity/actor Wu Qilong would
attend the opening party. Boosted by Wu’s personal Weibo following of nearly 12 million fans, the post received 13,124 reposts and 1,969
comments
https://www.l2inc.com/china-key-finding-the-celebrity-effect/2012/blog
Impact of Celebrities in Chinese Society
17. S
Eco-friendly, non-toxic essentials
Online sales / distribution
Brand Recognition: Jessica Alba (5 Mio. follower)
Business connections through management
State-of-the-art diaper collection
W
Brand awareness outside the US
Considered to be expensive
Limited packaging size
Remaining product portfolio (excluding diapers)
Targeting small and specific target
O
Growing modern young families
Increasing health awareness
Increasing sustainable appreciation
Lower market barriers: Impact of Celebrities
Increasing online sales
Available financial funds and / or IPO
Evolving “life style” families
T
Relying on diapers
Financial strong competition
Always “Honest”?
Known in the US solely
Product Statement
S W O T
Opportunity and Challenges in China
18. Power of Suppliers
Diapers Made in China
Competitive Rivalry
Size of different companies
# of firms
Oligopoly?
Power of Buyer
# of buyers
Do we have to conform a price
Health Awareness / Education
Barriers to Entry
Governmental regulations
Access to Distribution
Pampers is a synonym for diapers
Threat of Substitutes
Other diapers fulfill same need
Honest entering new niche market
5 Forces
19. The Asian region is now the largest baby diaper market, accounting for around 30% of the global total (on a sales
volume basis).
The Chinese and Southeast Asian markets continue to expand.
Market Trend all over the World
20. 34
43
53
66
82
102
0
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013
Diaper (100 million RMB)
Source: https://www.jetro.go.jp/ext_images/jfile/report/07000885/cn_babygoods_report.pdf
Company Brand
1 P&G Pampers
2 Unicharm
Moony / Mamy
Poko
3 Kimberly-Clark HUGGIES
4 Kao Merries
5 Hengan QMO
Main Player and
Brand
Chinese diaper market is increasing rapidly due to economic growth
The main players are “P&G”, “Unicharm”, “K-C”, “Kao”, and “Hengan”.
Market Size China
21. Kao and Kimberly-Clark (K-C), which have a strong presence in premium diapers popular among the mid- and
high-income group, are currently expanding market share in China.
Market Share by Company
22. Premium and pull-up increasing share, especially “Premium” share will increase from 10% to 24%
Market Share by Product Type
23. E-commerce emerging as the most important sales channel; shift to premium products gains momentum
Market Share by Channel
24. Kao holds top share in premium category in e-commerce channel; top share overall for P&G
Market Share by Channel & Company
Editor's Notes
Agenda
The client’s business & Industry
Market Research
Opportunities & Challenges (Problem)
Segmentation and Positioning
Proposal of Marketing plan
Portfolio: Diapers / Feeding / Bath & Body care / Cleaner, Laundry & Dish care / Vitamins & More
Manufacturing: China
Sales: USA and Canada
Channel: E-Commerce & Retail
Business (New market)
Making plans to serve England, Australia and China in the near future.
Finance
Currently aiming to IPO
Market trend: Chinese diaper markets continue to expand rapidly.
Consumer trend: Shift from standard and economy-types to premium diapers because of high quality demand
Channel trend: 40% of E-commerce channel by 2017 because of greater convenience and lower prices. Especially, their needs are high quality products.
They lived in USA in the past because the trend of studying abroad have started from 2000.
They know what is American culture and after coming back to China, they would like to continue American lifestyle as well as celebrity in USA.
We will target late 20’s or early 30’s Chinese who never left the country are working in China.
Even if the scenario will be pessimistic, the sales of the Honest Company will be 112mn*.
It’s a huge opportunity for the company.
Personal story which makes it tangible
Product Statement: Economies of scale (channel through wholesale) or online distribution and own shops only?
China: family restrictions / regulations, 2 parents working
Competitive Rivalry: How intent competition is in the industry? Size of different companies, number of firms, oligopoly?, what happens in the market
Barriers to Entry: What you have to overcome to get access to the market, capital expenditures, cost advantages, brand loyalty
Threat of Substitutes: Not identical on the surface but fulfill same underlying need, you want to enter a market where threat of many substitute products
Buyer Power: Exert control over price, do we have to conform to a certain price? What will they pay?
http://www.cmo.com.au/article/585589/5-tactics-jessica-alba-used-grow-honest-company-brand/
Supplier Power: Exert control over price, few or a lot suppliers
New Entrant: barriers to entry to be low
