Introduction
Since it’s established in mid 2005, KirkEL Company popularity has become immense especially in health and cosmetic products. Its full potential was realized when it shifted its focus from marketing and promotion of health products to development of innovative natural, gentle and effective skin care products. It provides customers with new products and solutions that are easy to use and seamless integration. The relevant competitive models chosen for this assessment includes the Porte’s five forces such as entry of competition, threats to substitutes, bargaining power, power of suppliers and rivalry and SWOT analysis as well as monitoring procedure in order to assess KirkEL Company strategic capabilities and suggest future directions for the business. KirkEL Company assessment also analyses the results of a study presented to examine how it utilizes customer satisfaction data obtained from formal feedback mechanism.
Mission Statement
KirkEL Company provides natural, gentle and effective health and cosmetics products offering no- nonsense approach to its unique formulation.
Market Objectives
With mainstream health and beauty care products, KirkEL Company target market would be health seekers pursuing natural organic products. Since consumers are continuing to opt for health and cosmetic products made from natural products, KirkEL Company will create ingredients that are safe and healthy to target organic markets. Statistics from 2004 indicated that 57.6% of California residents aged between 23 and 45 spent their income on beauty and health products. We may use this information to attract the same population on organic mineral-based cosmetics with the slogan name “The Organic Youth”.
The product objective will be based on the four marketing strategies of price, product, place and promotion. With regards to promotion strategy, KirkEL Company will have a health section in large retail markets to display organic health and cosmetic products in their shelves. The promotion objective would be based upon rich aroma oils and foundations that will suit both men and women of different facial colors. The product objective will consist of both health and cosmetic products bearing the name “The Organic Youth” with a clear guidance.
Since organic products are relatively expensive, KirkEL Company will set prices that maximize the volumes sold by setting prices very low in order to attract a large portion of the market and increase when the product becomes established in the markets.
Place objective will target a new market segments that promotes the organic youth. Hollywood popularly known to influence body images, California would be the perfect place to set the company. Promoting organic youth alongside the current trend of toned, healthy-looking and perfect skin would be the best way to go.
Competitive Situation Analysis
KirkEL’s Company will group products to enable consumers search, view and validate their products lines by using the three-way consumer products classification system. This includes convenience, shopping and specialty of the products provided.
With regards to pricing objective, the prices will be set relatively low for convenience purposes and also since KirkEL’s product are organic mineral based with non-chemical properties; consumers will be directed to buy products frequently. Shopping classification will prioritize natural and organic personal care products as essential to well being of the body and the skin. This way consumer will consider KirkEL’s Company products as high priority needs. Specialty classification on the other hand will keep in mind the unique organic anti-oxidant formulation including special extracts of sea buckthorn designed to heal skin imperfections. Consumer products classification system enables a company pre-select group expected to buy the products which helps in speeding the ability to react to consumer needs.
Five Porter’s Forces
Porter’s five forces focuses on the threat of new entrants, bargaining power of suppliers and buyers, power of substitutes and rivals on profitability in a company.
The following table presents Porter’s five forces analysis of the KirkEL Company
SWOT Analysis
SWOT analysis determines company’s competitors and develops sales & marketing strategies to allow it to achieve its marketing & strategic objectives.
Understanding KirkEL’s position in the market is necessary for the development of the marketing plan.
Marketing Strategies
Promotion strategies
Building brand awareness; this will be done by engaging in sales promotion as a strategy to increase sales and increase the likelihood of customers to recognize , attach value to the product and be informed of the availability of the products.
Differentiate the product; this will be achieved engaging in advertising activities for product awareness (brand building) and market dominance.
Building corporate image; also known as corporate advertising should include “The Organic Youth” slogan that customers can identify with in years to come.
Therefore, by building brand awareness and corporate image as well as differentiating the product from other organic health and cosmetic lines, KirkEL’s would promotion objective based upon rich aroma oils and foundations would attract a wide customer base.
Product strategy
Line extension; the existing health and cosmetic products should extend to new flavors and shades to include people of dark skinned complexion and those of Asian origin.
Multibrands; this requires the company to introduce a new brand name in the same product category. For example neem facial oil could also have neem foundations.
Brand extension; the existing brand name ‘The Organic Youth’ should be extended to new product categories. For example, use of ‘new and improved’ selling preposition will generate new life and renewed interest in the product.
Since products attribute customer’s decision, product objective that consist of both health and cosmetic products bearing the name “The Organic Youth” with variety shades to choose from and of the required multi-brands will enable the product to compete with each other fairly.
Pricing Strategy
Penetrating pricing; KirkEL will set prices relatively low as a strategy to increase sales and market share. And once customers familiarize with the products, prices are expected to go higher.
Psychological pricing; here, KirkEL will position prices a unit lower than the market place price. For example, neem oil will be priced at $9.99 instead of $10.00
Bundle pricing; KirkEL will be required to sell its ‘Organic Youth’ products alongside other products. For example, customers who buy bundles of products will enjoy reduced prices. The idea of buy one get one free and membership subscription should also be encouraged. The pricing objective of setting prices very low in order to attract a large portion of the market and increase when the product becomes established in the markets should be given the highest priority.
Place Strategy
Distribution centers; The Organic Youth products will be distributed in all retail stores within California and neighboring states.
Warehouse; designing regional distribution centers to handle shortages.
Transportation; for membership subscription, customer who purchase products online should be provided free delivery.
Place objective of targeting new market segments should consider having distribution centers in case of stock-outs.
