A Sustainable MarketingApproach for HerboristGroup 2Barry , Gary, Lehana, Stella and Vijay
Company Introduction HERBORIST is the first Chinese brand integrating traditional Chinese medicine into skin care products. Value Proposition: Nature and Balance Target customers: White-collar women aged 25-40
Snapshot of Hand CreamMarket• Hand cream is one of the most frequently used skincare products in autumn and winter.• Over 100 brands in the Chinese market• Price ranged from 10RMB-200RMB• Little product differentiation L’Occitane HERBORIS MAXAM 230RMB T 12RMB 150ml 120RMB 60g 100g
Frost Bites are very serious problems to rural people. 200m Chinese suffer chilblains1 At least: 116 58% Urban million pieces of Population 2 medical cream needed! Every patientneeds one piece of cream tocure(estimated)1 http://baike.baidu.com/view/39424.html?wtp=tt2 http://baike.baidu.com/view/244361.htm
Our solution: Buy one Herbosirst hand cream anddonate one for treating frost bite again Sustainable Responsible supply chain consumers•Organic packing •Beyond just beautiful•Fair trading hands•Support the farmers •Buy one donate one•“Beauty extracted from nature” •Emotional bonding: people in the rural area
Competitive advantage: Sustainable SupplyChain and improving social health inequality Farming Sustainable Fair Trade Add Credibility Solves purpose Assistance farming NGO FARMERS Green Herbal Toxin Free Packaging Product PRODUCT Meet BUY ONE GET ONE Meet Needs Needs FREE Provides SAFE CONSUM RURAL relief ERS CHINESERESPONSI Higher BLE productivity
Primary Activities of the value Chain Primary Activity Description Inbound logistics Bind the suppliers into Exclusive Agreements to reduce demand shocks. Cost of receiving, storing, and carrying inventory will be lower Transportation scheduling stability will reduce logistics cost Operations Organic Packaging will reduce the harmful effects of synthetic packaging on Environment Organic products involve less processing Outbound logistics Loyalty program will reduce the cost of distribution, warehousing and manpower due to reduced demand shocks. Electrical Vehicles used to reduce cost and pollution for local distribution of free frost bite cream Marketing and sales Product differentiated from competitors will reduce the cost of acquiring and serving customer. Loyalty Program will reduce customer acquisition cost Leveraging NGO Partner will help in increasing Emotional Proximity and Brand Energy Service Consultation model of selling the products will help in increasing personal touch of sales team with customer. Customer service and understanding of his needs and concerns will increase. Higher loyalty and hence, higher Brand Energy.
Secondary Activities of the valueChainSecondary Activity DescriptionProcurement To have direct procurement without the middleman Cost of placing order and evaluating will reduce considerably Model of Contract Farming will increase quality and reliability of the farm product yield. Protecting rate herb species through fallow land and organic fertilizersHuman Resource Recruiting will be exclusively based on the local population profileManagement and in all the three components of value chain – raw material sourcing,Involvement of Top processing and sales.Management Extensive training to the staff before launching of organic products. Meritocratic promotion policy linked with KPI to encourage top performers to come up We will have senior management Task Force, consisting of top sales oriented people of existing products, with high agility to monitor the progress of the new initiative.Technology Development We propose to use IT in implementation of the direct sourcing, sales and helping the poor’s. IT will reduce the transactions cost and increase the speed to market.Infrastructure It is easy to plan out infrastructure investment for stable demand This will reduce the cost of funding the project.
Overall Value Chain Analysis Infrastructure development for Organic processing Employee motivation effects, Engagement and bondage Technology improvement for higher productivity and farmland yield End to end connection eliminates the middle man in Procurement.Minimized Lead Demand Loyalty Higherstock outs Industry in Planning enables Engage-will reduce terms of will reduce higher mentcost of discharge outbound premiuminbound and waste logistics andlogistics treatment cost demand
Overall Value Chain Analysis Infrastructure development increased safety and sustainability derive Employee motivation effects Engagement and support for the image makeover of BP Technology improvement for higher productivity, margins and safety Procurement of long term leases for the Oil and Gas wells will decrease procurement costsCost of Long term Higher Lead Loyaltyinbound downstrea Industry in enables Engage-logistics m contracts terms of higher mentreduced by will reduce discharge premiumlong term outbound and waste andshipping logisticscontracts treatment demand cost
Beyond Just Beautiful Hands : Creating emotionalbond between consumer and beneficiary Take consumer to a journey Highlight how a consumer can make difference to a person’s life Create a bond between consumer and the beneficiary Develop a website – that will communicate the result of program Thank Customer for her/his help in changing life CONSUMERS CONSUMERS
Beyond Beautiful Hands will drive the growth of Herborist in the next 5 years with growth picking up within the next 2 years during the implementation.2,500,000 0.2 0.182,000,000 0.16 0.141,500,000 0.12 0.11,000,000 0.08 0.06 500,000 0.04 0.02 0 0 2008 2009 2010 2011 2012 2013 2014 2015 Annual Sales Value(000 RMB) Annual Growth %
Value Based Matrix- Herborist Beautiful Hands, Warm Hearts. Mind Heart SpiritMission: Provide a full CustomerContribute to the skin Targeting those at range of natural involvement inhealth of the the base of the skin care Beyond Justcommunity while pyramid products Beautiful Handsbeing One withNature.Vision: To be the Create sustainable Create future value Partnering withworld leader in economic growth by generating local skin healthTrad. Chinese by helping brand knowledge agencies to helpskincare while customer care for among future measure socialcaring for our their skin adopters. performancesurroundings. Nurture our Employees’Values: Every employees’Create value from employees the involvement in contribution isthe nature’s same way we Beautiful important to thegift, innovate and would care for Hands, Warm companygive back to Nature ourselves Hearts.