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Vinnie Lee, Matt Rand
Connor Rose, Robert Truglia




                              
Moonpig is a UK based

What?
         e-retailer that sells
         personalized greeting
         cards
An Overview


• Launched in 2000
• Founded by Nick Jenkins
• Considered the founder of the online greeting cards
  industr...
The Product
The Site
Nick Jenkins: Making Pigs Fly


• British-born entrepreneur
• Started career in commodity trading
  in 1991 at Moscow-base...
Greeting Cards Industry

• Characterized by cheap, fast-moving products that are
  both a sentimental and luxury good to t...
Industry Profile

• Greeting card industry can be traced back to 1856 in the UK
• 1990s internet boom revolutionized the i...
UK Market
• While the U.S. is the largest
  regional market, the UK is
  known for its lead in design
• The most successfu...
Competitors


• In 2000, there was little competition
   o Cybercard
   o Sparks.com


• Now, there are various competitor...
Thinking about moving




Q:
     the Greeting Cards
     industry online: where
     do you see
     opportunities to
   ...
Getting the Business Started
         Moonpig's First Steps




                                 
The Early Stages


•What are the viable ideas for a new venture?

•How to start forming the business?
  oWhere are initial...
The Idea for the Start-Up


•One year MBA course at university
  oGraduated September 1999
  oBegan working on Splat.com

...
Examples
More Examples
Our favorite
Executive Summary


• Splat.com is an internet retail outlet for greetings
  cards that uses a new digital print technolog...
The Original Business Plan


S Market Growth
  o   UK £ 1 billion industry         5. Low FC & Scaleable
  o   Online card...
Forming Moonpig


• It's all Nick
   o Who to turn to?


• Paperlink's role
   o Initial Investment


• December 1999 form...
Paperlink’s Agreement
Launching Moonpig

•Launch party
  oApril 2000
    oCreate awareness and initial consumers


•Coincidence and Disaster
•Ju...
The Need for Investment

• Leverage
  o Credibility is a necessity


• Environmental Advantages
  o Internet Boom
  o E-Co...
Survival Funds


• Taking advantage of current
  investing environment
  o   Angel investors interested in the
      "inte...
Share Capital Structures


         Owner          Loans       Equity        Shares Issued     % Equity
         Nick Jenk...
Pricing Policy


• Need to cover costs became greater after failure to meet
  target sales figure in 2001 and 2002

• Rais...
Product Confidence


• Managing Director Iain Martin
  • “If you have a good product you have to be confident and price
  ...
Original Marketing Plan


• Direct mail and online marketing
   o   £1 per customer
• Direct mailing = £8
• Banner ads = £...
No More Marketing


• 2001 marked a philosophical company change
  o  Without direct marketing, customer growth rate reach...
Results from No Marketing

• By March 2002
  o   Amount of customers increased
      from 15,000 to 30,000

• 25-36 age gr...
Cost Cutting Decisions


• Expanded use of software team
   o   Almost able to pay for themselves

• Anti-dilution clause ...
Cost Cutting Decisions cont.


• Price dilemma
   o   High enough for the current VC fund, low enough for new investor

• ...
What is the Last Push?


• Nick revised business plan and financial projections

• Believed that revenue would surpass fix...
Survival Fund Raising 2002


• Because of the internet boom, Angel investment had been at
  a rate of £25 per share, theor...
Survival Fund Raising 2002 cont.


• The VC was disillusioned by other investments in the sector
  o Sold their 35% at £3 ...
Survival Fund Raising 2003


• The extra financing allowed for an increase in sales
  o Wasn’t at same rate that Nick had ...
Third Business Plan


• More general greeting cards
  o Increase customer spending and retention

• Redesigned website

• ...
Reaching a Profit


• More modest projections for 2004 and 2005

• First planned profit in 2005
  o Raised further investm...
Customer Demographics


• In 2005, UK customer based had reached 137,000
  o   1,500 new customers each week

• Average ag...
Customer Demographics (Currently)
Soaring Profits



Source: Financial Director     Revenue growth   Profit growth

          2009                    150%  ...
Soaring Profits


•Currently, Moonpig accounts for 90% of the UK online card
market

•In 2011, Moonpig ranked third in the...
Expansion Across the Atlantic?

•U.S. market potential is eight times larger than the UK

•In 2010, Jenkins establishes an...
Photobox to the Rescue

           •French company, with focus in
           online photo albums and
           personaliz...
The Merger


•Photobox buys Moonpig for 120
million pounds in July 2011
•Jenkins walks away with his
34% value share in ca...
What do you Think?


• How will the merger   • Resources?
  affect Moonpig?
                        • Profits?

          ...
Impact of the Merger
•Jenkins says the merger will allow us to, "take our core greeting
card product to countries which wo...
Expansion: Take II

           •Merger with larger company=
           reduced risks in expansion for
           Moonpig s...
Moonpig USA

            Challenges
•"There is such a cultural
difficulty to greetings cards." -
Jenkins Source: Moules, F...
Staying Ahead

•Moonpig has not attempted to undercut prices of Hallmark and
American Greetings:

                        ...

Marketing in U.S.- TV


•Moonpig TV ad makes its
way to the United States

•Its catchy, maybe a little
annoying, but it ce...
Marketing in U.S.- TV
Marketing in U.S.-Facebook


Moonpig USA
•COMPETITION: Love the 'Keep Calm' Mantra &
posters from the UK? Make your own ca...
Facebook (Cont.)

        •Moonpig USAValentine's Card of The Day! Put
        Your Face and your loved one's face in the
...
Facebook (Cont.)

•Simply spreading the word...
Moonpig USA COMPETITION! Want to win a
mystery prize?! Share on your wall ...
What do you think?



         •Will Moonpig be successful in
         the United States?

         •What should be the
  ...
Our Recommendations


•Embrace expansion opportunities in continental Europe

•Utilize Twitter in addition to Facebook as ...
UK Advertisement
Takeaways


•Consumer satisfaction comes naturally when consumers
create the product
•People like to customize things, so ...
Sources

-Anonymous. “Moonpig set for extra categories and European launch after sale.” Retail
Weekly, July 28, 2011.
-Byr...
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Moonpig presentation

  1. 1. Vinnie Lee, Matt Rand Connor Rose, Robert Truglia 
  2. 2. Moonpig is a UK based What? e-retailer that sells personalized greeting cards
  3. 3. An Overview • Launched in 2000 • Founded by Nick Jenkins • Considered the founder of the online greeting cards industry • Has expanded into other personalized products: mugs, flowers, wines & spirits, t-shirts, toys • Core markets in UK, Australia, and U.S. • A very successful company to emerge from Dot-com speculative bubble of 2000
  4. 4. The Product
  5. 5. The Site
  6. 6. Nick Jenkins: Making Pigs Fly • British-born entrepreneur • Started career in commodity trading in 1991 at Moscow-based firm • Developed strong managerial skills and drove more than $ 20 million in profit • In 1998, he returned to England and began work on his new venture
  7. 7. Greeting Cards Industry • Characterized by cheap, fast-moving products that are both a sentimental and luxury good to the consumer • Greeting cards are a cost-effective and feasible alternative for expensive gifts • Little room for innovation due to rigid product structure o Sound, pop-up, light-effects, e-cards, animated e- cards, personalization, interactivity, and brand partnerships • Differentiation is crucial • Categorized into Everyday Cards and Seasonal Cards • Pricing range for individual cards <$1.00 - $6.00
  8. 8. Industry Profile • Greeting card industry can be traced back to 1856 in the UK • 1990s internet boom revolutionized the industry with e- Cards and e-Greetings • Generates £7 billion of annual revenue o Growth from 2004-2007 o Flat growth since 2008 • In 1995, 2.7 billion Christmas cards to be sold • In 2011, figure has dropped 44% to 1.5 billion • Largest publishers include Hallmark Inc., the American Greeting Card Association, Simon Elvin and Carlton Cards • Women purchase 80% of greeting cards
  9. 9. UK Market • While the U.S. is the largest regional market, the UK is known for its lead in design • The most successful greeting card industry in the world, with an average 31 cards being sent per person each year • Over 800 publishers, dominated by smaller businesses • Responsible for the jobs of 100,000 people in the UK • In 2001, 1.3 billion units Source: Datamonitor Report, “UK-Greeting Cards” being sold annually
  10. 10. Competitors • In 2000, there was little competition o Cybercard o Sparks.com • Now, there are various competitors to Moonpig o Funkypigeon.com o Hallmark.com o Cardstore.com o Etc.
  11. 11. Thinking about moving Q: the Greeting Cards industry online: where do you see opportunities to develop a sustainable competitive advantage?
  12. 12. Getting the Business Started Moonpig's First Steps 
  13. 13. The Early Stages •What are the viable ideas for a new venture? •How to start forming the business? oWhere are initial start up funds coming from? oTotally committed, profitable, viable oPulling the pieces together oCapital, location, staff •Launching the business •How will outside investment be handled? •Is the business plan adaptable?
  14. 14. The Idea for the Start-Up •One year MBA course at university oGraduated September 1999 oBegan working on Splat.com •His First Ideas oUK humor card market •Where is the market niche? •The benefits of an internet based business •Name change to "Moonpig"
  15. 15. Examples
  16. 16. More Examples
  17. 17. Our favorite
  18. 18. Executive Summary • Splat.com is an internet retail outlet for greetings cards that uses a new digital print technology to print each card to demand. A customer accessing our web site can choose from a large range of well known cards, personalize the message or caption and have the printed card delivered to them by first class post or direct to the recipient.
  19. 19. The Original Business Plan S Market Growth o UK £ 1 billion industry 5. Low FC & Scaleable o Online card sales from £ 0- £ o Paperlink's 300,000 customer 75 million in 10 years base S Competition o Break-even at 75,000 cards o Not capital intensive o Online Physical Cards o Cybercard & Sparks.com 6. Financing Requirements S The Product o Limited Company o Nick >50% o Customization o Card Publisher<50% o Convenience o E Exit through sale o Advertise through Paperlink S People & Management o High wage high quality o Nick Jenkins o Robin Stevens
  20. 20. Forming Moonpig • It's all Nick o Who to turn to? • Paperlink's role o Initial Investment • December 1999 formed as a limited company o Facility o Capital o Staff
  21. 21. Paperlink’s Agreement
  22. 22. Launching Moonpig •Launch party oApril 2000 oCreate awareness and initial consumers •Coincidence and Disaster •July 2000 trading finally begins •Financial Strains o8 months of paid salaries with no operational business
  23. 23. The Need for Investment • Leverage o Credibility is a necessity • Environmental Advantages o Internet Boom o E-Commerce • Angel Investors and Networking o Friends of friends of friends... • Venture Capital Backing...at a price o Altergraphics o Share redistribution
  24. 24. Survival Funds • Taking advantage of current investing environment o Angel investors interested in the "internet boom" • Friends from MBA course invested o Both loans and equity • Nick had to increase personal investment
  25. 25. Share Capital Structures Owner Loans Equity Shares Issued % Equity Nick Jenkins £160,000 £739 73,900 70% Paperlink £150 15,000 15% 2000 Friends £75,000 £50,075 15,300 15% Total £235,000 £50,964 104,200 100% Owner Loans Equity Shares Issued % Equity Nick Jenkins £260,000 £356,000 91,318 41% Paperlink £150 15,000 7% Angels £540,000 26,120 12% 2001/2 Friends £75,000 £50,075 15,300 7% VC £720,000 74,880 33% Total £335,000 £1,660,150 222,169 100%
  26. 26. Pricing Policy • Need to cover costs became greater after failure to meet target sales figure in 2001 and 2002 • Raised prices from £1.99 to £2.99 o Recognized the price was high o Had to make the change to keep company afloat • No decline in sales was observed
  27. 27. Product Confidence • Managing Director Iain Martin • “If you have a good product you have to be confident and price accordingly. The product was far too cheap and there was not enough margin to sustain the business.” • Similar to Dyson philosophy • “Have confidence in your product. Do the sensitivity analysis and make sure you have a pricing structure that enables you to operate long-term.”
  28. 28. Original Marketing Plan • Direct mail and online marketing o £1 per customer • Direct mailing = £8 • Banner ads = £100 • Buying email lists = £33 • Customer's only spent £20 per year • Marketing costs were crippling the company
  29. 29. No More Marketing • 2001 marked a philosophical company change o Without direct marketing, customer growth rate reached 150% o Speculated to be viral growth from word of mouth o Good PR coverage • Business to business marketing o Vodaphone o Microsoft Hotmail.com
  30. 30. Results from No Marketing • By March 2002 o Amount of customers increased from 15,000 to 30,000 • 25-36 age group is strongest sector • Factors: o Broadband technology o No serious direct competitors o B2B sales increasing o Valentine's Day  30,000 unique visitors in single day
  31. 31. Cost Cutting Decisions • Expanded use of software team o Almost able to pay for themselves • Anti-dilution clause in investor contract reduced ability to receive more funding o Had to wait until April 2002 for clause to expire • Venture capitalist firm announced they would not invest in further rounds of investment o Created opportunity to find investor who would buy out the VC fund and add new money
  32. 32. Cost Cutting Decisions cont. • Price dilemma o High enough for the current VC fund, low enough for new investor • Nick still had £260,000 in loans outstanding o Planned on capitalizing them at new share price o Meant to keep his share holding power in company • July 2002 o Needed £300,000 to keep business running
  33. 33. What is the Last Push? • Nick revised business plan and financial projections • Believed that revenue would surpass fixed costs • Needed a profitable year in 2003 • Needed to price the shares correctly for the next round in order to get the necessary funding
  34. 34. Survival Fund Raising 2002 • Because of the internet boom, Angel investment had been at a rate of £25 per share, theoretically valuing the company at nearly £5 million • The fundraising process had diluted Nick’s 70% share capital ownership to 41% o Average investment cost of £3 per share • New round of investment in September 2002
  35. 35. Survival Fund Raising 2002 cont. • The VC was disillusioned by other investments in the sector o Sold their 35% at £3 per share, wrote off nearly 75% of their original £720,000 investment • New investors agreed to buy at this same price o Raised £120,000 more than the £300,000 needed • Nick maintained share ownership by capitalizing his £260,000 loan o At same £3 price
  36. 36. Survival Fund Raising 2003 • The extra financing allowed for an increase in sales o Wasn’t at same rate that Nick had projected o B2B sales sector was lacking • Design of company structure and business plan had to be altered o Nick needed to revise his direction
  37. 37. Third Business Plan • More general greeting cards o Increase customer spending and retention • Redesigned website • Alternative postcard sizes • Photo upload facility
  38. 38. Reaching a Profit • More modest projections for 2004 and 2005 • First planned profit in 2005 o Raised further investment • The 2004 and 2005 projections were correct • Moonpig had turned a profit
  39. 39. Customer Demographics • In 2005, UK customer based had reached 137,000 o 1,500 new customers each week • Average age: 33 • 55% of customers: female o Accounted for 75% of sales
  40. 40. Customer Demographics (Currently)
  41. 41. Soaring Profits Source: Financial Director Revenue growth Profit growth 2009 150% 178% 2010 50% 69%
  42. 42. Soaring Profits •Currently, Moonpig accounts for 90% of the UK online card market •In 2011, Moonpig ranked third in the London Sunday Times list of the UK's fastest growing companies •Moonpig Finance director Paul Lantsbury: "The business has reached a certain stage in its growth and is kind of ready to get to the next phase." Source: Hinks, Financial Director Journal
  43. 43. Expansion Across the Atlantic? •U.S. market potential is eight times larger than the UK •In 2010, Jenkins establishes an American-managed team in London to create a Moonpig U.S. website •After the 1 year trial, the American team estimated that 20 million pounds of investment would be necessary to fully develop Moonpig USA •Jenkins did not want to use nearly two years of profits to establish business in the U.S. •Bad memories from company's beginning, shareholders stand in the way
  44. 44. Photobox to the Rescue •French company, with focus in online photo albums and personalized gifts, such as mugs, puzzles, and calendars •Operates in 15 European countries •Served 8 million more customers and generated 34 million more pounds of revenue than Moonpig in 2010 •Looking to expand into Moonpig's product line
  45. 45. The Merger •Photobox buys Moonpig for 120 million pounds in July 2011 •Jenkins walks away with his 34% value share in cash, agrees only to work as an advisor •Moonpig investors receive a pay day ten times their initial investment •Moonpig will remain a separate brand
  46. 46. What do you Think? • How will the merger • Resources? affect Moonpig? • Profits? • Expansion?
  47. 47. Impact of the Merger •Jenkins says the merger will allow us to, "take our core greeting card product to countries which would be difficult to access as a standalone business." Source BBC News •Partnership with Photobox equals: •IT expertise •More contacts and larger consumer base •More capital •Greater investment opportunities •Diversified product line in Europe- (mugs, wine, stuffed animals, T-shirts) •The logical next step....
  48. 48. Expansion: Take II •Merger with larger company= reduced risks in expansion for Moonpig shareholders •Renewed enthusiasm for expansion to the U.S. •Photobox is currently exploring expansion options for Moonpig in continental Europe
  49. 49. Moonpig USA Challenges •"There is such a cultural difficulty to greetings cards." - Jenkins Source: Moules, FT •Competition- Hallmark and American Greetings have both adopted Moonpig's strategy of selling personalized cards •They are one of Hallmark's "fastest growing products." Source: Byron, WSJ
  50. 50. Staying Ahead •Moonpig has not attempted to undercut prices of Hallmark and American Greetings: 5x7 personalized card Moonpig $3.99 Hallmark $3.49-4.29 American Greetings $2.99 •Moonpig distinguishes itself by offering a wider range of templates: School exam, driver's test, new job promotion, and Muslim, Jewish, and Hindu holiday cards
  51. 51.
  52. 52. Marketing in U.S.- TV •Moonpig TV ad makes its way to the United States •Its catchy, maybe a little annoying, but it certainly makes you remember Moonpig
  53. 53. Marketing in U.S.- TV
  54. 54. Marketing in U.S.-Facebook Moonpig USA •COMPETITION: Love the 'Keep Calm' Mantra & posters from the UK? Make your own cards with your own text. Make your version here and share a pic of your slogan on the card with us and we'll give the funniest one a prize. Make it here: http://bit.ly/y9dirr
  55. 55. Facebook (Cont.) •Moonpig USAValentine's Card of The Day! Put Your Face and your loved one's face in the center of this Twilight card!: You can make your own here:http://bit.ly/x4jDBC We'll print and mail the real card with your photos to you or your recipient as we do all for all our cards! xoxo
  56. 56. Facebook (Cont.) •Simply spreading the word... Moonpig USA COMPETITION! Want to win a mystery prize?! Share on your wall the following: 'Moonpig makes great personalized cards!' & Tag a friend! Post the same message on our wall so we know you've entered! Will be a good prize so go for it!!!!! xoxox Moonpig Like · Comment · January 31 at 3:13am · 
  57. 57. What do you think? •Will Moonpig be successful in the United States? •What should be the company's course of action?
  58. 58. Our Recommendations •Embrace expansion opportunities in continental Europe •Utilize Twitter in addition to Facebook as a customer service and marketing tool •Exploit Moonpig’s recognizable name and logo through guerrilla marketing in the U.S. •Target that guerrilla marketing towards women in Moonpig’s core demographic: 25-36 years-old
  59. 59. UK Advertisement
  60. 60. Takeaways •Consumer satisfaction comes naturally when consumers create the product •People like to customize things, so marketing should play into imagination and creativity •Persistence while in the red can pay off in the long run •Once profitable, selling out can be beneficial to the company's future growth
  61. 61. Sources -Anonymous. “Moonpig set for extra categories and European launch after sale.” Retail Weekly, July 28, 2011. -Byron, Ellen. “Making Cards Cool Again.” Wall Street Journal, June 20, 2011. http://ezproxy.library.tufts.edu/login? url=http://search.proquest.com/docview/872421887?accountid=14434 Hinks, Gavin. “Bright Future on the Cards.” Financial Director, September 2011. http://search.proquest.com.ezproxy.library.tufts.edu/docview/879722541/134EE2AD6BE5A8D47 -Moules, Jonathan. “With best wishes from the chairman: A business plan devised during an MBA has become an international online greetings card company.” Financial Times, October 21, 2009. http://ezproxy.library.tufts.edu/login? url=http://search.proquest.com/docview/250240114?accountid=14434 -“Photobox announces merger with Moonpig.com” BBC News, July 25, 2011 http://www.bbc.co.uk/news/business-14275632 -“About the Industry.” Greeting Card Association http://www.greetingcard.org/AbouttheIndustry/tabid/58/Default.aspx -- “Global Greeting Cards Market to Exceed US$30.4 Billion by 2015” PRWeb. October 29, 2010 http://www.prweb.com/releases/greeting_cards_everyday/birthday_seasonal/prweb4695304.h .
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