Chemical Solutions Inc. A Five Year Marketing Strategy Benjamin Sanders
History Chemical Solutions Inc. (CSI) was founded in 2009. It was started by cofounders Benjamin Sanders and Dr. Joseph Alchemy, a chemist, to develop and market NutriMax, a unique compound placed in chewing gum to curb appetite through nutritional supplementation, supply the consumer with energy, and provide fresh breath at the same time. CSI is a limited liability corporation owned and operated by Mr. Sanders and Dr. Alchemy, assisted by a small team of dedicated employees.
History Continued… Mr. Sanders previously worked at an entry-level position for Hershey’s. After collaborating with Dr. Alchemy on the creation of an excellent nutritional additive Ben approached his supervisor with the creation. Due to lack of foresight, upper management did not see the value of the nutritional substitute additive. Consequently, Ben left the company and teamed with Dr. Alchemy to patent their product and form their own enterprise to pursue future business endeavors. They formed Chemical Solutions Incorporated and NutriMax Chewing Gum was born.
Company Description- ChemicalSolutions Inc. The NutriMax line was initially launched in the Southeast Wisconsin market. It’s high-quality and small product size have gained acceptance in their current markets. It is a high quality product that has large growth potential. CSI has implemented a high-quality, medium-price strategy that has proven successful thus far. Headquarters are located in a secret underground bunker beneath Milwaukee. Facilities are largely automated, requiring minimal human maintenance.
Technology Technology- Technology is heavily used in our secret underground production facility. With advanced robotics being utilized, automated, precise, and efficient work takes place with minimal human supervision required. Also, the recipe for the additive itself uses protein disbursement technology to create the sensation of the consumer feeling full, while still delivering the essential vitamins and minerals the body
Mission Statement ◦ ““The mission at Chemical Solutions Incorporated is to have fun revolutionizing additives for the benefit of all mankind, all the while honoring ourselves, our customers and our Savior.” This mission will be achieved by incorporating these values- ◦ Corporate & social responsibility ◦ Unequivocal excellence in all aspects of the company ◦ Science-based innovation ◦ Honesty & integrity ◦ Profit, but profit from work that benefits humanity
Keys To Success Refusal to accept anything less than the absolute best from ourselves and from our product Aggressive but tactful acquisition of government accounts Positively acclimating the public to the idea of a nutrient supplemented gum additive Build brand value Establish ourselves as an industry leader in innovation and profitability
Goals For the coming five years, CSI seeks to achieve the following goals: Refusal to accept anything less than the absolute best from ourselves and from our product and retain our image as the leading innovator in gum-based supplements Aggressive but tactful acquisition of government accounts, aiming for at least one additional government contract per year for the next five years Positively acclimating the public to the idea of a nutrient supplemented gum additive Build brand value Establish ourselves as an industry leader in innovation and profitability
Core CompetencyIn terms of core competency, CSI seeks to (1) provide high quality, healthy supplemental gum products to our customer and (2) expand past the chewing gum market and segment into other health food/beverage mediums.
Sustainable CompetitiveAdvantage At this point, CSI has a rare monopolistic opportunity. However, after patents expire, and other businesses realize the products’ successes, imitators are sure to follow. The company will work closely with key suppliers and distributors to build business relationships and foster partnerships that will allow CSI to maintain its status as an industry leader. Dr. Alchemy is also diligently working on R&D to further sustain CSI’s competitive advantage
SWOT Analysis•Strengths: Difficult barriers to entry, uniqueproduct, large target markets, cheap to produce, lowstorage and shipping costs, currently protected bypatents•Weaknesses: Public Skepticism, potentialhealth questions, growth restrictions within company,new product hesitation, and high cost to the customer,equipment issues, patents will expire.•Opportunities: Expansion into other foodmarkets, buying our competitors, working withgovernments, and expansion into worldwide markets.•Threats: Patent expiration, improvements onour product by rivals
Industry Analysis Sales of energy drinks in the United States were $3.5 billion in 2005 The nutritional supplements market was valued at over $68 billion worldwide and demand is expected to grow about 12 percent by 2011 The demand in the supplement category is driven by baby boomers, the fastest-growing consumer demographic in the U.S. market, now making up 60 percent of the supplements buyers.” (Nutrition Business Journal) However, there is a drastically high rate of new product entry in the weight management segment which is requiring new industry participants to adopt proactive strategies.
Market Segmentation Bars Shakes Weight Loss Pills Vitamins Protein Gum
Further Analysis From an overall growth perspective, U.S. consumer sales of dietary supplements lagged those of other nutrition industry categories. Yet, of all the categories, supplements were the only one to actually grow more in 2008 than in 2007. Nutrition Business Journal estimates show that total U.S. consumer sales of dietary supplements expanded 6.2% to $25.2 billion last year.
Competitors in the Market Our product is the only one like it in the market. CSI holds the patent to NutriMax and is currently dominating this small niche market of health chewing gum. Potential competitors in the dietary industry include health bars manufacturers, specifically Clif Bars, Odwalla Bars, and Power Bars Harvest due to their calorie, fat, sugar, and carbohydrates ratios. Health shake products such as Myoplex, Slimfast, and Whey shakes could present competition due to their high nutritional value.
Company Analysis Technology is a heavily used resource in CSI’s underground production facility. With advanced robotics being utilized- automated, precise, and efficient work takes place with minimal human supervision required.
Customer Analysis Women are a significant consumer group for the supplements market, because of their unique health needs and because they tend to make most of the purchasing decisions in the home. In general women tend to pay more attention to preventative health care. The nutritional supplement needs of female consumers differ depending on the stage in their lives. Women over 50 are consumers of supplements for bone health, pre-menopause and menopause symptoms, as well as products for heart health. Consumers of both genders in the 18 – 29 year old age group are major consumers of vitamin-fortified food and beverages, and energy, sports and weight-loss supplements.
Product Description NutriMax is a nutritional additive administered to chewing gum composed of proteins, amino acids, minerals, and vitamins. the recipe for the additive itself uses protein disbursement technology to create the sensation of the consumer feeling full, while still delivering the essential vitamins and minerals the body needs to sustain itself.
ProductRaw materials harvested to make our additiveinclude- Gum Base - chicle, mastiche (organic), rubber (synthetic) Softeners - are added to maintain moisture Sweeteners - xylitol, sorbitol, mannitol and aspartame ◦ It is worth noting that frequent gum swallowing may contribute to the formation of a bezoar or enterolith, which is a sort of intestinal stone; however, this is not a problem at CSI, as the elements that cause these symptoms have been removed from our product.
Product Strategy NutriMax chewing gum will be made available in four flavors- bubble gum, spearmint, peppermint, and cinnamon. Product strategy is especially important at CSI because the breath enhancement present in NutriMax is one of the key points of difference. One stick of gum is equivalent to a light meal with 1.5 servings of fruits and vegetables
Location, Location, Location(Place) Company Location & Facilities- Headquarters are located in secret underground bunker beneath Milwaukee, WI. Facilities are largely automated, requiring minimal human maintenance.
Price Strategy NutriMax will be priced competitively with traditional chewing gum. A pack of NutriMax chewing gum $1.50 for a 12 stick pack. Five packs are also made available for $5.00. The added nutritional benefits of NutriMax should provide a competitive edge.
Promotion Strategy Mailer samplers will be sent out with direct mail marketing promotions. Customers will also receive a coupon for .50 cents off a pack of NutriMax. Coupons will be sent out in summer and winter. Also, samples will be available at trade shows, specifically those related to health and fitness. Print ads with the same .50 cent coupon in the mailer will also appear in local newspapers within the target market. CSI will set up demonstrations with samples at carnivals and concerts. CSI will also advertise on the food network and during health shows to reach our target market.
Distribution Strategy- NutriMax chewing gum is distributed in current markets through a food distributor. If company expansion proceeds as expected, negotiations will be made with a broker to sell NutriMax to retail chains, grocery stores, and convenience stores.
Competitive ComparisonCompetitive Comparison- At this pointwe have a rare monopolisticopportunity.However, after patents expire, and otherbusinesses realize our vast successes,imitators are sure to follow.
Competition (Potential) Health Bars: Buying pattern to increase in next five years Health Shakes: Consumption based on fads. Protein/Supplement Powders: Demand 18-30 year olds Weight Loss Pills: Demand based on regulation by FDA and FTA
Points of Difference CSI’s competitive edge is largely based on the fact that NutriMax is the only product of its kind in the huge and still growing health industry. No other company has the formula for NutriMax. CSI has patents and other legal safeguards on the product. Additional points of difference include- - Breath Enhancement- Coffee or energy drinks makes breath taste bad, NutriMax does the opposite - Easily transportable, gum fits in your pocket, convenient, no spilling - NutriMax is a nutritional supplement, does not curb appetite (like Hoodia for example), rather it satisfies appetite
Market NeedsThe Dietary Supplement Market’s current needs are: • A product that is safe and all natural • A product that is easy (and fast) to consume • A product that is affordable • A product with nutritional benefits • A product with low amounts in fat, sugar, and carbs • A product that will encourage and aid in weight loss
Market TrendsCurrent Market Trends include: ◦ Easily loosing weight ◦ Fitness accessories/supplements ◦ Multivitamins specifically designed for: Baby Boomers Women Older women 18-29 year olds
Implementation SalesStrategy Our product will be able to ride the ever-increasing health trend wave. What we need to do is sell our company. In order to do that we need to be available whenever our customers need us to answer any questions or address any concerns. Our service and support is what will set our sales strategy apart along with our unique product.
Cash Flow (monthly) Description Amount (in Totals $)Cash Flow from Operations +57,869Sales (paid in cash) +84,000Supplies/Materials -416Monthly Salaries -23,333Ingredients -233Operations -300Shipping Expense -29Legal Expenses -2,000Cash Flow from Investments -4,000Equipment Maintenance -1,667Insurance -2,333Cash Flow from Loan -1,343RepaymentsBank Loan Repayment -1,343Total: +52,526