Executive Summary
Prosperous Health Limited has planned to expand its traditional Chinese Medicine to the
American market through its well known and most sellable product called Girl Problem
Relief.
Our goal is to achieve 100% customer satisfaction and therefore our focus will be on
product quality and originality of the Girl Problem Relief. We will not be the first
company to enter this industry therefore we expect a higher competition as well as initiate
to be more creative and value provider for the consumers so we can expect a good market
share within the 5 to 10 year period of our planning .
Our demographic is mainly the female of aged 14 to 44 as we they have the capacity to
purchase as well as the ability to understand the menstrual cramp symptoms and how to
overcome it. We predict that ad least 70 percentage of female population will buy our
product as its cost saving and comes in the convenient pack of tea, powder and chewable
that they can choose according to their preference.
The selling price of The Girl Problem Relief varies according to the type of pack such as
s tea box of 20 sachets of Girl Problem Relief costs USD 5. We assume that the pricing is
very much cheaper and affordable to women of any range, no matter a high school teen
or a lawyer. The company has studied the cost involved in producing the product before
pricing the product to the retail price. The company achieves cost leadership buy
producing in mass so to price the product at a lowest cost compared to other dong quai
medicine so it can be the most affordable with the best quality in the market.
The capital we require to start the project is $240,000 which covers all initial
development expenses, ongoing expenses will be covered by sales and expansion fund
from the head company in Shanghai, China.
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Our expected market share will grow most rapidly in the first 5 years then stabilize after 8
to 10 years as we plan to make an aggressive marketing with the first mover product of
the company so to make a good start in the new market and later minimize every
marketing expenses as we would have benchmark our product with the other dong quai
product. Our promotion strategy includes: direct mail, magazine advertisements, website
advertisements, event sponsorship and affiliation.
Quality is our primary concern so we will be implementing quality control systems
including: audits, documentation and meeting American regulatory standards related to
business and medicines.
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TABLE OF CONTENTS
1. INTRODUCTION ......................................................................................................... 4
1.1. Organization and product ............................................................................... 4
1.2. History............................................................................................................. 4
2. STRATEGIC PLAN AND FOCUS .................................................................................... 5
2.1. Mission Statement ........................................................................................... 5
2.2. Goals and Objectives ...................................................................................... 5
2.3. Core Competencies / Competitive Advantage................................................. 6
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**********************SITUATIONAL ANALYSIS**************************
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3. MARKET-PRODUCT FOCUS ....................................................................................... 7
3.1. Marketing and product objectives .................................................................. 7
3.2. Target Market ................................................................................................. 7
3.3. Points of Difference ........................................................................................ 8
3.4. Positioning ...................................................................................................... 9
4. MARKETING STRATEGY AND TACTICS ................................................................... 10
4.1. Product Line.................................................................................................. 10
4.2. Packaging ..................................................................................................... 10
4.3. Promotion ..................................................................................................... 10
4.4. Place ............................................................................................................. 11
4.5. Pricing........................................................................................................... 12
5. FINANCIAL DATA AND PROJECTIONS ..................................................................... 13
5.1. Expense Distribution ..................................................................................... 13
5.2 Operating Expenses ............................................................................................ 14
5.3. Gross Profit per Unit Sold ................................................................................. 15
5.4. Expected Net Revenue ........................................................................................ 15
6.1Promotion Schedule ............................................................................................. 16
7. EVALUATION AND CONTROL ................................................................................. 17
7.1. Quality Control ............................................................................................. 17
7.2. Risk Analysis ................................................................................................. 17
7.3. Evaluation Analysis ...................................................................................... 18
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1. Introduction
1.1. Organization and product
Prosperous health limited is currently producing a large range of traditional Chinese
medicine products, for the home country as well as for export purpose. “The Girl
Problem Relief “herbal product made of pure dong quai is a first mover product for
the American market from our company which function is to ease premenstrual and
menstrual cramps and stress. Our product is compact, design of a flexible method of
consuming, light weighted and 100% assured in healing menstrual and premenstrual
cramps in women.
The Prosperous Health Limited produces chemical free and high quality of dong quai
herb powder, tea and chewable which can soothe the nerves before and during the
menses period. It is a gift of nature for the dong quai to heal every problems incurred
in women although its more famous for menstrual problem therefore we recommend
the girl problem relief product for overall health of American woman.
1.2. History
A relief from dong quai for menstrual related cramps was discovered in the early
1940’s which is why its called an ancient medicine which was then later developed
into many products as traditional medicine for menstrual cramp relief and the
medicine was produced by Prosperous Health Limited since 1988 in Shanghai. The
following marketing plan outlines the projected goals established by Prosperous
Health Limited to be implemented within five year period, or until saturation of the
American market occurs.
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2. Strategic Plan and Focus
To attain the organisation’s strategic direction, the company’s mission, goals, objectives
and competitive advantage have been established to provide a vision and foreground for
the company’s success. In addition to that, a measure of the scope of the dong quai
product which the organisation offers, and the underlying environmental commitments
held in relation to both the herbal medicine industry and the herbal environment itself, are
also key players in the company’s strategic direction and focus.
2.1. Mission Statement
Prosperous Health Limited thrives to become the number one leader in menstrual
cramp relief products for chemical free and less expensive medicine ; providing the
highest satisfaction with no side effects and harm for the user as a plant derived
product.
The one medicine that works better than any with providing the highest benefit to
the user.
2.2. Goals and Objectives
Non- Financial
Prosperous Health Limited endeavour to achieve the highest level of customer
satisfaction in relation to both the product and after sales service provided by the
company. This is further achieved by ensuring that the highest quality standards are
adopted on all levels of manufacturing and production of the dong quai product, for
guaranteed 100% customer safety and effectiveness when using the product. This
guarantee is actually a better customer service and added value to the product.
Furthermore the company is committed to maintaining good employment
opportunities in the future for further expansion and working conditions for all
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employees hired in the diverse American market, to build a reputable organisation
culture especially an intercultural working style.
The company is also committed to further working for the host country’s well being
through its corporate social responsibility in relation to reduce the dependence on the
chemicals for medicine production which leads to many types of pollution during
discarding the chemical products by encouraging the extraction of active ingredients
from plants and reduce the usage of chemical containing medicine so the lesser it is
produced, the lesser the pollution will be..
Financial
The primary financial goal of this product is to gain maximum market share over the
first 5 years, and reach market saturation within the following 5 years. As we reach
market saturation, sales will gradually decrease as the Girl Problem Relief product
lifespan is within the 3 years from the manufacturing date and that mean a user will
already been using from more than one batch and it depends on the consumer’s
satisfaction if they will take the 2nd or the 3rd batch of Girl Problem Relief . As sales
become slow in America we will decrease production and expenses for the product in
America and start to globalize the product and shift the concentration on other
Prosperous Health Limited’s product and rebirth the Girl Problem Relief through
better marketing strategies and enhancement of the product itself, the capital will
come from the revenue made in the American market. On the initial of $240,000
capital we expect to make $5.4m profit each year for the first 5 years then decreasing
annual profit for the next 5 years and onwards, the loan will be paid back over the
first 5 years
2.3. Core Competencies / Competitive Advantage
The company’s competencies include world-class innovative technology used for
extracting the active ingredients from the plants until the end process of packaging,
and partnering with herbal medicine researches in the American Research Society on
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Natural Medicine, which will provide consumers with a product that provides 100%
relief from menstrual cramps and stresses without harming them or creating any
pollution in the environment as their easy to discard and release no chemical that can
harm any living object. Such a product has been designed by Prosperous Health
Limited’ s traditional medicine practitioners based in Shanghai, China ; to ensure
safety and ease of use by teens and women, in order to not detract from the
consumer’s experience on plant based medicine. The Girl Problem Relief product is
increasing the level of awareness in traditional medicine and helps make the people
and environment safer through reducing the pollutions and side effects from using
chemical as a base for medicine by giving peace of mind, for individuals, families and
employees.
3. Market-product Focus
3.1. Marketing and product objectives
Prosperous Health Limited has identified its target market as sufferers of menstrual
cramps, seventy percent of females between the ages of 14 to 44. The organisation
aims therefore, to achieve a market share of 40% within a ten year period, and a 30%
share after five years. The ten year goal reflects the competing period of other
competitors in the market and also takes into consideration of our diverse forms of
Girl Problem Relief advantage. At the point of saturation, or thereabouts, the
organisation would propose an expansion phase into the other parts of the world for
the specific product as well as increase its value through analysing its other functions
for the wellbeing of humans.
3.2. Target Market
The target market for Girl Problem Relief is, seventy percent of 64,500,000 females
between the ages of 14 to 44 which approximately equates to 45,150,000 sufferers. It
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was also identified that 50% of the market would either definitely or possibly buy the
product.
The geographical location of the market will be scattered all over the America, in
every states, as the product will be sold in selected cafes as tea, pharmacies as
chewable and powder mix and attached to sanitary packs as a free gift in every retail
and groceries so woman and girls in need of it can look for wherever they are and the
product is meant for all woman who has their menses and therefore the woman are
everywhere in the country which makes us to concentrate in every part of America.
The demographic of the market is approximately 70% female, primarily between the
ages of 14 and 44, school going teens and woman of any age but since most woman
has their menopause after the age of 45, the target market has been chose of those
who are before the 44th age as most of the women at that age still has their menses.
The psychographic qualities of the market are any class of citizens or foreigners
living in the America that’s holds quality for better life through healthy living.
The behavioural qualities of the market are that they live in with the confidence and
awareness of the benefits of consuming traditional medicine and willing to try a new
method of health care and also value a recognised brand name from the other part of
the world.
3.3. Points of Difference
The advantages of marketing such a product include there are very less or none at all
in terms of a dong quai product that comes in various forms such as tea and chewable
like the Girl Problem Relief product. It offers a traditional medicine that in a modern
packaging and design of a convenient product through innovation for the modern
woman in America. Concerning our indirect competitors, it is the competitive
advantage of producing a product that has a the most affordable price at the most
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easiest requirement that is nothing to do but just tear the pack and chew one or
dissolve in water and drink it, which makes our product unique as a substitute to
stretching their body parts in the name of yoga or refilling their hot packs every now
and then to soothe their back ache. As well as this, the Girl Problem Relief is easily
available wherever the woman is, from cafes to pharmacies and lastly its originality
of dong quai herb proves higher quality product.
3.4. Positioning
The Girl Problem Relief will be positioned as a product that offers quick and effective
relief, as well as creates no harm to the nature. This method of positioning would
involve communicating the importance of a healthy body through nature and how we
can save our money and yet still stay healthy with products with higher quality. This
positioning would be through emphasises on the harmlessness of the traditional
medicine produced by Prosperous Health Limited. The high level of perceived benefit
is associated with the quality engineering and reliability of the product as a safe
medicine to be consumed as a dietary supplement as well as menstrual cramp
relieving medicine. As such, the Girl Problem Relief is positioned as having an
immediate and intangible benefit for the consumer.
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4. Marketing Strategy and Tactics
4.1. Product Line
The Prosperous Health Limited has designed a product line that will create positive
impressions in the leading market today. Products need to be readily available to
consumers and significant from competitor’s products. This plays a positive role in
marketing Prosperous Health Limited’ s products, as the packaging are convenient
and eye-catching for the Girl Problem Relief so to draw the curiosity especially as a
first mover product from the company, which is very much important. The key to this
product line is promoting our most famous and needed product in the Asian continent
to the American market, the Girl Problem Relief. The unique product qualities
include our focus on both environmental conservation through no usage of chemicals,
and maximising the natural medicine experience by ensuring the safety of use for the
consumer.
4.2. Packaging
The Girl Problem Relief product is sold in recycled packaging, in order to reflect the
company’s ethical stance on environmental conservation. The Prosperous Health
Limited has a relatively low reliance on packaging of the product, but rather relies
strongly on the recommendation of the Girl Problem Relief by retailers, café
operators and directly by the company as well. The only essential feature would be
appropriate labelling and marking key benefits in an easy-to-read manner including
clinical particulars, company information and brief overview of Dong Quai herb.
4.3. Promotion
The promotional plan to be adopted by Prosperous Health Limited, has two key
objectives. That is, gaining new brand of dong quai for menstrual cramp’s product
acceptance and increasing the opening sales for the company. Promotion of the Girl
Problem Relief product will mainly involve above-the-line promotion techniques
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including advertising in related industry journals and magazines, internet promotion
and to a more limited extent such as the television. Our focus on internet
advertisement is because more and more Americans refer to the internet for almost
everything and it will be easier to reach the market as well as globally though we are
just concentrating the American market. Any below-the-line promotion will be based
around natural medicine expo and trade show appearances, as well as direct contact
with pharmacies, cafes as well as retail stores that sell all type of medicines.
The Prosperous Health Limited will be also adopting a product development strategy,
in relation to the promotion of the Girl Problem Relief. This will involve targeting an
existing market of menstrual cramp relieve consumers, with a brand new and a lower
cost version of the Girl Problem Relief especially for all types of menstrual cramps
and stresses..
4.4. Place
The Prosperous Health Limited will be acting as a distribution channel to retail stores,
cafes and pharmacies, to almost all capital cities in every state as a beginning of the
product. Prosperous Health Limited sells its product to the consumers directly
through its chain stores that will be set in every major town of each states of America.
It will also sell the product to the interested third party distributors who then resell
those products to hospitals and retail pharmacies including those ones in Wal-Mart
outside the North American region. Within the North America, it will also sell its
products to hospitals and retail pharmacies through Prosperous Health Limited
Distribution besides the interested third party distributors. Our intentions would be to
expand distribution to every state within five years and also to all parts of America if
the acceptance of the product is very well. Our website will also allow for direct
sales.
The placement of the main warehouse in the New York will allow distribution
through sea and land although there will be mini warehouses in Virginia, San Diego
and San Francisco. The Girl Problem Relief is relatively light and small no matter in
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what form, e.g. tea box, powder pack and chewable pack and so transport will be
easily contractible to any logistic company.
4.5. Pricing
The company applies a cost-plus pricing strategy where the company will be earning
fixed gross profit and which will also enable a better control of costs.
The pricing of the product will be from USD 1 to USD 5 depends on the net weight and
quantity of the product. Each box of Girl Problem Relief tea with 20 sachets which is the
minimum sachet box will cost around USD 5 and each packet of Girl Problem Relief
powder will cost USD 1 and each pack of Girl Problem Relief 10’s chewable will cost
about USD 2.80. The price is derived from the production cost on each type of Girl
Problem Relief product and a mark up of 30 %. This mark up is based on rule of thumb
mark up figures provided by the internal cost accountants of the company based in
Shangai, China. The price ranging from USD 1 to USD 5 can look as though cheaper for
Americans as well as when compared to other competing products but the idea is to be
the most affordable product with the highest benefit for the user. Besides, the product
caters for all types of woman ranging from professionals to school going teens, therefore,
pricing it at the lowest as possible, can attract all of the women as well capture the market
easily even if the current economy has a higher unemployment due to its affordable range
of price.
Although many people assume the quality of the product is of higher importance than the
price or value of the good, that doesn’t mean, Girl Problem Relief should be expensive
due to its good quality. We are suggesting the price of our product that reflects the
willingness of consumers in our target market can buy.
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5. Financial Data and Projections
5.1. Expense Distribution
Initial Expenses:
We estimate that the capital required to bring the business into operation will total
$240,000 which includes construction, land, equipment, fees, brand development and
Marketing expenses. The costs of each are illustrated below.
Construction ($90,000) – Construction is our largest initial expense which is the cost
of building a production area that will be used to derive the active ingredients from
the plant imported from China.
Land ($50,000) – The land where we will place our factory and warehouse will need
to be paid rental ad least until the company can achieve the first projected revenue
Equipment ($60,000) – The equipment and machinery required to build the first
mover product of the company.
Fees ($20,000) – The legal fees and various fees associated with registering a
copyright and various other fees.
Brand Development and Marketing expenses ($40,000) – we will be a hiring a
marketing team as well as a brand manager to establish the reputation of the
Prosperous Health Limited’ s Girl Problem Relief brand of dong quai product so it
can be distinguished by the consumer as there are many other dong quai products in
the market
The next page illustrates the initial expenses distribution.
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5.2 Operating Expenses
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The annual operating expenses necessary to run the business will initially total
$200,000 including staff, utilities, marketing, and research and development. These
expenses will vary each year and will gradually drop; yearly estimates follow.
Expense Year 1 Year 2 Year 3 Year 4 Year 5
Staff $33,000 $35,000 $50,000 $40,000 $60,000
Utilities $55,000 $60,000 $60,000 $60,000 $60,000
Marketing $82,000 $75,000 $70,000 $60,000 $60,000
Research & $ 30,000 $30,000 $20,000 $40,000 $20,000
Development
Totals $ 200,000 $ 200,000 $ 200,000 $ 200,000 $200,000
5.3. Gross Profit per Unit Sold
The gross profit made on each sale is the sale price minus the product’s production
cost, the gross profit per unit sold of the Girl Problem Relief’s 10’s Chewable is each
USD 2 while Girl Problem Relief Tea box of 20 sachets is each USD 4 and Girl
Problem Relief Powder Mix of net weight of 10 gram is USD 0.75 each. The price of
this product can be referred to 4.5 of Pricing in this Marketing Plan.
5.4. Expected Net Revenue
Based on our 5 year goal to capture the market, we can expect to gain 8.5% market
share in the first year which equates to 59,500 sales of Girl Problem Relief which is
good enough as it has higher competition in the market and the first year will be an
introduction year to the product. With ad least an USD gross profit per unit sold
depend on the type of Girl Problem Relief, our first year of expected annual gross
profit will be $400 million. Our target market penetration is 30% over 5 years and
40% over 10 years. The yearly market penetration is illustrated below.
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Market Share by Year
40%
35%
30%
25%
20%
Market Share
15%
10%
5%
0%
0 1 2 3 4 5 6 7 8 9 10
The chart illustrates that the consumer’s interests on the Girl Problem Relief will
decrease as every year falls and therefore the net revenue of the business will decrease
each year until it stabilizes after 10 years, it will then turn a profit.
6. Implementation Plan
6.1Promotion Schedule
The implementation of Girl Problem Relief promotional schedule is a critical aspect that
will determine the success of the product.
The company’s promotion will include the following:
Direct Mail to offices and cafes to help spread our brand name to working
woman and everyone at cafe.
Paid magazine articles and advertisements to generate sales and brand
awareness.
Event sponsorship to create brand awareness.
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Creating affiliations with sales websites such as Amazon.com to capture the
online sales market.
Placing classified advertisements in newspapers.
7. Evaluation and Control
Prosperous Health Limited pride itself on high levels of control and evaluation
methods. These have been depicted by the company in extensive quality control, risk
analysis and evaluation.
7.1. Quality Control
It is a continual process for Prosperous Health Limited to ensure Total Quality
Management (TQM) is met within the company. The Prosperous Health Limited
works in accordance with government regulations in order to meet American business
and healthcare standards.
Such standards will be met through employees checking every Girl Problem Relief
product for 100% accuracy in design of the packages, the purity of the dong quai herb
and the originality of the product to contain the company’s hologram and information
as well as date of manufactured and expiry.
Through audits, team leaders and management staff will document progress in order
to continually improve quality of all forms of Girl Problem Relief production.
7.2. Risk Analysis
The Prosperous Health Limited employs a 24hr security system to secure each of its
warehouses in different states. The company will also have insurance on equipment,
vehicles and the warehouse in the case of stolen or damages occur.
Furthermore, if malfunctions occur within the RCT technology or machinery used to
derive the active ingredients from the dong quai, it will automatically and
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immediately close down itself to ensure the safety of employees. If employees are
working in the warehouse, it is mandatory that one wears a jump suit and PVC boots
are worn along with safety glasses where necessary for hygienic of the work process
carried out as well as for the safety of the employee as well.
In terms of deliveries, Prosperous Health Limited will keep a record of receipts in
order to ensure that purchasing is performed correctly and no error occurs during the
distribution.
7.3. Evaluation Analysis
The Prosperous Health Limited evaluations will be based primarily on meeting sales
and expanding further with its other traditional medicines. We will be conducting
sales analysis every 6 months and adjusting the promotion budget accordingly.
Furthermore, key performance indicators will be undertaken by all employees in
order to maintain a high standard of achievement within the organisation and to
minimize every problem that may occur in an intercultural management and
organisation.
Reference:
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1. Marketing plan assignment 1 of BaBM Y3 S1
2. Marketing plan of Ivana Haute Couture done for the subject of Marketing in the
BaBM Y2 S2 for Mr. Nagendran.
* 4137 words.*
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