Selection of Right Promotional Tactic for Organic Lipstick

The assignment content discusses the marketing strategy of Body Shop, a firm that aims to attract young buyers with its organic lipstick product. The report highlights the importance of selecting the right promotional tactics, including using social networking sites and television advertisements. Additionally, it provides financial data, including sales forecast, income statement, and cash flow statement. Furthermore, the report presents a break-even analysis, concluding that the firm needs to sell around 122762 units of lipsticks to reach its break-even point.

Marketing planning

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PRODUCT AND MARKET FOCUS ............................................................................................1
SMART objectives with regard to the Body Shop organic lipstick ...........................................1
Target market for the product ....................................................................................................1
Segmentation ..............................................................................................................................2
Differentiation.............................................................................................................................2
Positioning ..................................................................................................................................2
MARKETING PROGRAMME.......................................................................................................2
Marketing Mix............................................................................................................................2
Financial data and protection .....................................................................................................4
Conclusion ..................................................................................................................................4
REFERENCES ...............................................................................................................................5

INTRODUCTION
It is essential to develop sound marketing plan in order to market the product in effectual
manner. Through this, awareness among customer is develop and it certainly leads to boosting of
sales volume. In this regard, marketing plan of The Body Shop is developed (Kennedy, 2006).
Specifically, lipstick is focused for the plan which is being planned by company to launch. Main
attributes of this product is that it will be produced with organic ingredients and will majorly be
focusing on kids and adolescents. In this plan, discussion is incorporated on SMART objectives,
segmentation, positioning, marketing mix, financial projection and other related topics.
PRODUCT AND MARKET FOCUS
The Body shop is planning for launching new product in market which is of organic
lipstick. Hence, in accordance with the given context following SMART target is being set by
the company. Herein, it can be said that it is very necessary for the firm that it should set its
targets by using the SMART criteria. This is because, it is through this way only firm can direct
its efforts towards the right direction. Hence, it is through this way only firm can perform
significant improvement in its sales and profitability related condition in an effectual manner.
SMART objectives with regard to the Body Shop organic lipstick
Following are the objectives for the company:
 To attract large number of buyers towards the cited product by making use of number of
marketing tools and techniques.
 To increase the sales of product in UK market by 20% till the year 2018.
These are being regarded as the two major objectives of the cited firm which it wants to
achieve by introducing the new product in market in an effectual way.
Target market for the product
With regard to the organic lipstick, cited firm wants to target two different age group of
buyers such as girls belongs to the age of 10-14 and the girls who belongs to the age of 15-18
year. This mean that the respective product will tend to target the young girls. This is because,
the girls who belongs to the given age category have very sensitive skin (Dibb, Farhangmehr and
Simkin, 2001). Hence, harmful and inorganic cosmetic product damages their skin. Thus, it can
be said that the given thing is taken into consideration while making the product for these girls.
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Segmentation
Segmentation is being regarded as the systematic process of segmenting the group of
customers by using number of criteria (Segmentation, 2016). Furthermore, it can also be said that
it is the tactic of dividing the broad market of product into specific segment. With an aim to do
the same, manager of firm make use of different segmentation techniques such as demographic,
geographic and psychological etc.
The organic lipstick product of Body Shop is segmented on the basis of demographic
criteria wherein age criteria is used (Baines, Harris and Lewis, 2012). In this regard, firm has
targeted two different age group of buyers such as kids and adolescence girls. They are targeted
because they are more fond of using lipsticks.
Differentiation
With an aim to achieve the above mentioned objective, several things or variations will
be carried out in organic lipstick which differentiates the firm product with that of its buyers. For
example, the lipstick will be come in different funky shades. Furthermore, the firm will also
launch sparkles in lipstick which will make these girls ready for the party look. In addition to
this, the lipstick will be made from the organic or natural ingredients which itself will be
consider as one of the most differentiating factor.
Positioning
The Body will use benefit aspect with an aim to build up the positive image of the brand
in the mind of buyers. Herein, the firm will communicate its buyers that the respective product
will not cause any kind of side effect upon their skin (Luther, 2011). In addition to this, the
product will also contain such ingredients which will protect the lips of girls from the harmful
sun rays. Overall, it can be said that by focusing on the benefit aspect, Body Shop can attract
large number of buyers. Thus, it can achieve the framed goal in an effectual manner.
MARKETING PROGRAMME
In this section, discussion is incorporated on marketing mix and financial projection with
a motive to evaluate the validity of proposed products.
Marketing Mix
 Product: Product that been considered for this plan is organic lipstick which will be
favourable for sensitive lips of kids. From the market analysis, it has been found that
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there are no specific lipsticks available for kids in the market. Therefore, this gap has
been filled by developing organic and funky colour lipsticks by Body Shop. This product
will aids in attaining edge by offering funky shades for kids so that it can match with the
colour of apparels and accessories (Park, 2014). Further, there will be option for sparkle
lipstick as well in order to meet with the needs of customers in different segment. Main
agenda behind offering such product is to develop products for kids and adolescents in
order to meet their needs. Further, different colour option will aids to match up with
different occasion. It is a niche market that will help Body Shop in boosting its product
portfolio along with meeting with the needs of customers in effectual manner.

 Place: It is required to deliver product within the convenient reach of customers so that
same can be demanded by them and hence overall sales can be increased. In this regard,
above stated lipstick will be available at the physical store of Body Shop across UK in
order to boost the sale in significant manner (Michman, 2006). Further, Body Shop will
be increasing its distribution channel and in order to reach to every target customer. In
this respect, cited lipstick will be available in shopping mall, kids apparel store and
beauty parlour in order to enhance the sale significantly. This distribution channel will
aids in attaining the marketing objectives in effectual manner. Also, it will help in
reaching to wide range of audiences in desired manner. Price: It is one of the significant factor that needs to be considered very significantly in
order to attract more of customers. Hence, with regard to the given product firm will
make use of price penetration tactic (Mohr, Sengupta and Slater, 2010). In this regard, at
first firm will charge low price for the product gradually after establishing an effective
presence in the market, corporation will raise the price of given product. This is done
with an aim to lure the large number of buyers.
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 Promotion: The success of any firm also depends upon the type of promotional
techniques which is being employed by it. This is because, selection of right promotional
tactic will help firm in term of attracting the targeted buyers towards the corporation.
Thus, in accordance with the given context with regard to the organic lipstick, Body Shop
will make use of social networking site (Rust and Verhoef, 2005). This is because, it is
highly popular among young buyers which firm is targeting. In addition to this, with an
aim to give information about the product the advertisement about the same will also be
placed by firm in the television.
Financial data and protection
Sales forecast
Year 1 Year 2 Year 3
Average Customers per day 1000 1150 1323
Avg spend 3 3 3
Sales 1080000 1242000 1428300
Income statement
Income Statement Year 1 Year 2 Year 3
Revenue
Sales from Products and services sold 1080000 1242000 1428300
Less: COGS (50%) 540000 621000 714150
Gross Profit 540000 621000 714150
Operating Expenses
Market Research 30000 0 0
Utilities (Electricity/water/telephone) 25000 26250 27562.5
Promotion and advertisement 40000 44000 48400
Insurance 20000 20000 20000
Salary 172800 190080 209088
Miscellaneous Expenses 20000 22000 24200
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Depreciation 20000 10000 10000
Less: Total Operating Expenses 327800 312330 339250.5
Operating Profit 212200 308670 374899.5
Less: Interest 56000 28000 14000
PBT 156200 280670 360899.5
Less: Tax 31240 42101 54135
Net Profit 124960 238570 306765
Cash flow statement
Cash flow statement Pre-Operating Year Year 1 Year 2 Year 3
Cash Inflow
Opening Balance 0 1065000 240200 379120
Cash Sales 0 1080000 1242000 1428300
Owner's capital 750000 0 0 0
Bank Loan 800000 0 0 0
Total Cash Inflow 1550000 2145000 1482200 1807420
Cash Outflow
Fixed Assets 200000 0 0 0
Market Research 30000 0 0 0
Utilities (Electricity/water/telephone) 0 25000 26250 27562.5
legal registration charges 25000 0 0 0
Promotion and advertisement 50000 40000 44000 48400
Working Capital 150000 0 0 0
Interest 0 56000 28000 14000
Insurance 0 20000 20000 20000
Tax 0 31240 42100.5 54134.925
Salary 0 172800 190080 209088
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Miscellaneous Expenses 30000 20000 22000 24200
Loan Repayment 0 200000 200000 200000
Total Cash Outflow 485000 565040 572431 597385
Closing Balance 1065000 1579960 909770 1210035
Break Even Analysis
Average selling Price 3
Variable Cost 0.9
Contribution 2.1
Total Fixed cost 257800
Contribution 2.1
BEP 122762 units of Lipsticks
per day Organic lipstick 1000
days 123
Weeks 18
Months 4
In order to reach at the break even point firm will have to sale around 122762 units of
lipsticks. The firm will start earning profits after 4 months.
Conclusion
From the above report, it can be stated that by framing an effective marketing plan
organisation can set the direction of its employees towards the correct path. Hence, the framed
goals and objectives of marketing will be met.
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REFERENCES
Books, journals and online
Baines, R. P. Harris, P. and Lewis, R. B., 2012. The political marketing planning process:
improving image and message in strategic target areas. Marketing Intelligence & Planning.
20(1) .pp.6–14.
Dibb, S., Farhangmehr, M. and Simkin, L., 2001. The marketing planning experience: a UK and
Portuguese comparison. Marketing Intelligence & Planning. 19(6) .pp.409–417.
Kennedy, D. S., 2006. The Ultimate Marketing Plan: Find Your Hook. Communicate Your
Message. Make Your Mark. 4th ed. Adams Media.
Luther, W. M., 2011. The Marketing Plan: How to Prepare and Implement it. AMACOM Div
American Mgmt Assn.
Michman, R., 2006. The Affluent Consumer: Marketing and Selling the Luxury Lifestyle.
Greenwood Publishing Group.
Mohr, J. J., Sengupta, S. and Slater, F. S., 2010. Marketing of High-technology Products and
Innovations. Pearson Prentice Hall.
Park, H., 2014. US retailers' cooperation with manufacturer promotional support. Journal of
Fashion Marketing and Management. 8(4). pp.412–424.
Rust, R. and Verhoef, P., 2005. Optimizing the Marketing Interventions Mix in Intermediate-
Term CRM. Marketing Science. 24(3). pp.477-489.
Segmentation. 2016. [Online]. Available through:
<http://economictimes.indiatimes.com/definition/segmentation>. [Accessed on 4th May
2016].
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