Download INKAcase Marketing Plan - The Andean Alliance for Sustainable

INKAcase
Marketing Plan FY 2012-2013
Hyo Jung Nam, Jeanne Amrein, Li Li, Liu Chang
IMGT8570 Marketing Management
December 6, 2011
Executive Summary
Laptops are more affordable and accessible than ever before
and the need to protect this product that we have become
universally dependent upon for everything in our lives is
even more important. INKAcase offers a socially and
environmentally responsible laptop case with a trendy and
unique design.
The Andean Alliance for Sustainable Development has
worked closely with several Indigenous communities in the
Sacred Valley of Peru to create a quality product of which the
sales will go directly to the women and communities making
this product by hand and local materials. The partnership
with the local communities and the Monterey Institute of
International Studies allows for a unique marketing model. Many graduate students will have
the opportunity to work with the weavers directly or remotely to help maintain the viability of
the product sales. Buy-in from local communities in Peru and graduate students in the U.S.
fosters the sense of ownership from both stakeholders.
The objective of the project is to improve the quality of life for indigenous communities in Peru
while giving graduate students the opportunity to use their skills and knowledge in an
international professional setting. The purpose of this marketing plan is to ensure a viable
launch of INKAcase on the Monterey Institute of International Studies and Middlebury College
campuses which can be then replicated with little adjustments to the wider public.
This marketing plan outlines the diverse marketing mix, relying heavily on social networking and
the socially conscience consumer adding a fifth ‘P’ to the four “P’s” of marketing. Using
secondary sources with a plan for more market research using primary sources through
surveys, the Andean Alliance and its subsidiary college student clubs will be the primary actors
capitalizing on this specific and ripe market of consumers. Based on the sales forecast of the
Monterey Institute and Middlebury campus we have scaled our sales goals accordingly but also
acknowledge the vast market of the central California coasts’ strong dedication to
environmental and socially awareness and expect the local coordinators to push the product to
the community around the Monterey Institute’s campus.
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Table of Contents
Introduction…………………………….…………………………..………………… 4
Situational Analysis …………………….……………………………………………5
Marketing Planning …………..………..….…..….………………………………..6
Implementation/Control…….…………………….………………………….…12
Budget……………………………………………………………………………………13
Summary ……………………………..……………………………………………….14
Appendices …………………….………………………………….………………….15
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Introduction
The marketing plan for the latest addition to the
emerging field of Social Enterprise is the INKAcase.
A laptop case that is hand-woven by Indigenous
women from remote villages in the Sacred Valley of
Peru. This marketing plan is designed for the initial
product launch which will begin on the campuses of
the Monterey Institute of International Studies
(MIIS) and Middlebury College. The NGO behind this
social enterprise is the Andean Alliance for
Sustainable Development (AASD). INKAcases are
designed for socially and environmentally concerned consumers, with the desire to purchase
products where their money is used to positively impact the lives of those less fortunate.
The purpose of this marketing plan is to provide a roadmap for AASD to begin marketing their
socially and economically sustainable product to university and college campuses within the
United States and ultimately become a profitable business. Using AASD’s connection with MIIS
and Middlebury, the success in the initial target market will demonstrate the viability of the
product and the marketing plan before expanding to more campuses throughout the United
States within the next 2 years. The quality of the product and the social mission, or the
incorporation of the fifth ‘P’ into the marketing mix (Purpose), will prove to be the competitive
advantage and a leading factor of its success.
Outlined in the marketing plan is:





An analysis of the existing market for socially responsible consumer goods including
existing and potential competition;
An explanation of marketing objectives;
Justification of the target markets;
A detailed marketing mix of: product, promotion, placement, price and purpose; and
The implementation and evaluation methods including evidence placed in the
appendices.
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Situational Analysis
“64% (of global consumers) believe it is no longer enough for corporations to give money; they must
integrate good causes into their everyday business.”1
Fair trade products have been around and marketed as such for about 60 years 2 and the field
has recently boomed with the success of products such as Tom’s Shoes. Studies show that this
trend is not dying anytime soon and is likely in fact to become the norm, replacing corporate
social responsible giving.
The 2010 Edelman goodpurpose® global study, found that 86 percent of global consumers
expected businesses to consider societal interests at least as much as their own interests. AASD
collaborates with indigenous communities and socially responsible entities to create a positive
lasting environment which supports human development and a healthy future. The profits from
INKAcase sales will directly benefit the poverty alleviation programs of the AASD.3 Almost half
of Peruvians live below the national poverty line and the purpose of improving economic
opportunities, especially for women and their children represents the type of mission
consumers will support.
In addition to the purpose, there is a demonstrated need and want for laptop cases within the
United States as the sale of laptops, is expected to be “61.1 million in 2012.”4 Targeting the
small campuses as the first locations for the product launch will demonstrate the success of the
product and the viability of scaling-up to campuses across the country.
Our competitors create awareness and are in fact are assisting in the expansion of this market
of socially responsible consumer goods. One local competitor is Rising International out of
Santa Cruz, California. This organization focuses on its mission of offering a platform for women
in high-risk environments to sell their handicraft items but not exclusively laptop cases. The
other direct competitor does not focus any aspect of their company on corporate social
responsibility and has not included socially responsible products in their product line, incase©.
The phasing out of corporate social responsibility currently considered as “buying-off”
communities, where companies pollute and take advantage of is not good enough for the
American or global consumer. Consumers are expecting more companies to not only give back
but to create an overall environment and product of sustainability. Based on our market
segment, competitors in the socially and environmentally responsible category will be
considered “co-opetition” rather than direct competitors while the non-socially and
environmentally unaware companies selling laptop cases are at a disadvantage and stand to
lose part of their market segment to our product.
1
Fourth Annual Global Consumer Survey. Citenzens Engage! Survey, Edleman goodpurpose Study 2010, 2010.
Kocken, Marlike. Sixty Years of Fair Trade: A Brief History of the Fair Trade Movement. International Fair Trade
Association , 2006.
3
http://www.wix.com/indigocraftwork/indigo#!partners
4
(http://eeepc.itrunsonlinux.com/the-news/1-latest-news/155-idc-report-shows-netbooks-are-boosting-laptopsales).
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Marketing Planning
OBJECTIVES
1. Increase overall sales by 330% for Fiscal Year 2012 beginning August 1. The current sales
(15 cases a month) will be increased to an average 50 cases a month.
2. Raise brand awareness by blogging once a week on MIIS and Middlebury students’ blogs
and participating in campus activities.
TARGET MARKETS
The target customers are socially and environmentally conscious laptop owners who are willing
to spend a little extra money because of the added values that are beneficial to the global
community and the environment. Their age ranges from 19 to 39 and average income is from
$10,000 to $60,000. They are both technologically and media savvy, also they spend about half
an hour daily on Facebook, Twitter or any other social media sites. They are keen on trends and
social events which they consider being socially and environmentally responsible as such.
Trend setters or trend followers who are interested in different and/or innovative designs are
often found on college campuses. The option to purchase socially responsible goods in person
or online will be an additional channel to reach the trendy and trend followers, expands the
reach to the target customers. The FY 2012 students at the Monterey Institute of International
Studies in California and Middlebury College in Vermont will be the primary market. Table 1
shows the potential size of the target market.
Table 1
(a) 800 MIIS students, 150 faculty and adjunct faculty at MIIS, 715 Middlebury Faculty, 9,750
Middlebury students
(b) Annual number of purchases per person: .25 (every 4 years)
(c) Total potential market:
a*b=c 11,415*.25= 2,854
(c) Total potential market: 2,854
(d) Percent of total market coverage: .75 estimate based on percent of students/faculty with
laptops and including those without or new cases already
(e) Total available market:
c*d=e 2,854*.75= 2,141
(e) Total available market: 2,141
(f) Expected market share: between .5 and .3 (30-50%)
(g) Sales forecast (in units): at 50%= 1,071 at 30%= 642
e*f=g 2,141*.5= 1,071 or 2,141*.3= 642
(g) Sale forecast (in units): 1,070 (642)
(h) Price: 50
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(i) Sales forecast (in dollars): 1,070 *50= $53,550 (642*30= $32,100)
*Does not include online sales, outside MIIS and Middlebury communities (targeted at farmers
markets), nor account for gifts
The target market was decided based on the analysis of previous customers. Despite no
marketing or advertising, there was a steady small amount of sales, mostly through word of
mouth. It turned out that 10 cases (2010) and 15 cases (2011) were sold on average per month
and majority of customers were female. The average income level was $30,000 (2010) and
$25,000 (2011). The most outstanding finding is that 80% (2010) and 90% (2011) of customers
were students and 80% (2010) and 90% (2011) of customers were based in California.
According to these numbers, we conclude that it is safe to start with the current customer base
which are university students and faculty.
2010 (Jan-Dec)
Average number of cases
2011 (Jan-June)
10 cases per month
15 cases per month
Gender ratio
8: 2 (female: male)
7: 3 (female: male)
Age range
19 -29
20 -27
Average Income
$30,000
$25,000
Profession
Student (80%), professional
Student (90%), professional
(20%)
(10%)
California (80%), other U.S.
California (90%), other U.S.
cities (20%)
cities (10%)
sold
Region
Based on findings from a focus group of 10 participants aged 21 to 29 years old in Monterey,
the response was that they were interested in social and environmental issues and $50 for a
laptop case is a bit pricy, but given the good cause of this product, they showed interest and
willingness to purchase. They were all students who own a laptop. Some even commented it
would be a good present candidate for the holiday seasons such as Christmas. In regards to
questions about the design, most participants found it unique and/or innovative. Some asked
about availability of different sizes. Profiles of several participants are shown in Appendix A.
MARKETING MIX
Product
Currently there is only one size laptop case fitted for a 13 inch laptop. But in order to make a
more diversified product mix, making a richer product line, we will add two more sizes for
laptop cases: 11inches and 15 inches.
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The product is made with sheep’s wool combined with 10 percent alpaca wool. This
combination creates a water resistant material. The padding protects the computer from
outside damage. The distinct indigenous patterns are one of a kind and fashionable
distinguishing from other non-handmade fair-trade similar products.
The production rate: Each of the 15 women make 3 cases a month to equal 50 cases or the
alternative is that 3 groups of 15 women produce 1 case a month to equal 50 cases before the
start of the first sales period August 1, 2012. During and before the second sales period
beginning February 1, 2013, there will be either an increase in productivity and skill or the
addition of another women’s weaving group added to scale up to 70 cases a month.
Price
“When choosing between two brands of equal quality and price… Social purpose continues to
rank as the number one deciding factor for global consumers above design, innovation and
brand loyalty.”5
Based on research represented in the above quote, it is believed that the price point of $50 for
a hand-made, environmentally and socially sustainable product fitted for a 13 inch laptop will
sell. The company selling laptop cases of a solid color and no social or environmental
responsibility are selling at $40 a case for the same size. They offer cases with designs for $50$60 and with no alternative purpose for society or the environment; it is believed that the
INKAcase will have a solid sales in this market, “I would switch brands if a different brand of
similar quality supported a good cause.”6
When a laptop case is sold, the cost is broken down as shown in the Table 3. For the first year,
this cost structure will be maintained. From the second year, various pricing strategies will be
considered if both sales and production rates grow. For example, the unit price per case may be
lowered down to $40 or $45 (a more simple or plain design will be priced lower), this however
lowers the funds which go to AASD.
This strategy could potentially make the product more competitive and eventually increase
sales. The disadvantage is that AASD will receive lower funds, but it will be a temporary
situation as raised sales means more funds in the long run. In the similar sense, a pricing
discount will be also considered from the second year especially when the target markets are
extended to the corporate consumer. Businesses are often open to long term contracts with
more volumes. If the management team determines that production rate is stable enough to
deal with larger volumes, a pricing discount can be considered as an option to boost sales. The
projected revenue for the first year is shown in Table 4 (located in Appendix B.
5
6
(Fourth Annual Global Consumer Survey 2010)
(Fourth Annual Global Consumer Survey 2010)
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Table 3 Cost breakdown
Cost
$50
$24
$20
$5
$1
Breakdown
Purchase
Fair trade manufacturing
AASD (Andean Alliance for
Sustainable Development)
Management fee
Overhead cost
Promotion
“I would help a brand to promote their products or services if there is a good cause behind
them.”7
The INKAcase will be highly promoted in the following sites:


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
Campus events such as: new student orientation, club fairs, book sales, special events
focused on Latin America and other socially or environmentally themes;
On-campus and online bookstores;
On-campus club sponsorship and promotion;
Farmers Markets; and
eBay, etsy.com, and other online sales platforms.
Sales and Marketing dimensions:
For student councils and clubs with missions geared towards concerns of humanity and
sustainable development, an incentive plan will be rolled out to boost the sales and promotion
on campus. For example, there will be one designated group of students or a club responsible
for promoting this project per campus.
The incentive system is carried out to encourage better service and sales performance.
Students in the selling process with outstanding performance will be rewarded “Best Service of
the Month” and “Best Sales of the Month” in the club as well as on the INKAcase webpage.
As an incentive, the club will receive a portion of the sales if the actual sales volume exceeds
the monthly target:
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




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1%-5% extra: 5 dollars bonus
6%-10% extra: 10 dollars bonus
11%-20%: 17 dollars
21%-35%: 28
36%-50%: 40
51%-70%: 55
(Fourth Annual Global Consumer Survey 2010)
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

71%-90%: 75
90%-100%: 100
With a target of college students and faculty, the timing to launch the promotion activities is
very important. During the orientation week in August and other special events throughout the
semester there will be specific booths set up for promotion and sales. Brochures can be
obtained from the library, alumni office, student center, and local recreational sites.
A competition will be organized such as a weaving competition during an art or international
festival on campus or as a special event to create a buzz and reach more people about
INKAcases and the unique meaning of handmade products by the women in Peru.
Distribution (Placement)
Placement of the INKAcases will be in school souvenir shops, alumni offices, and during farmers
and local handicraft events. The samples of the four cases will be shown and will serve as a
media strategy as a way to use a pulling strategy. When people get the case information from
the handouts or brochures, they know they can go to see the real case in the alumni's office.
All the promotional activities and brochures and handouts serve as effective tools as a pushing
strategy in distribution, “I am more likely to recommend a brand that supports a good cause
than one that doesn’t.”8 In addition to the official website, which needs to be refurbished, an
eBay account should also set up so as to get orders online, boosting the sales of INKAcase
through increased accessibility.
8
(Fourth Annual Global Consumer Survey 2010)
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Implementation and Control
Implementation
INKAcase will conduct both online shopping and on-site shopping services. The personnel
structure of the marketing is shown as Appendix C.
The whole INKAcase project is overseen by Tina Novero, who will also be in charge of the online
marketing. The INKAcase website will be linked to all the involved schools’ Team Peru webpage.
Also, INKAcase will have an online shopping platform to create accessibility and reach a larger
potential market.
Student Clubs at MIIS and Middlebury will have booths at on campus events to provide selling
services and at the same time increase the publicity of the project.
The marketing plan will be carried out starting from August 1, 2012 and throughout the whole
year. Peak sales are expected to happen during the two orientation weeks at the end of August
and the months of the new semesters. More focus will be put on the on campus selling channel
at these time periods. During vacations and festivals, INKAcase will pay more attention on the
market of gift giving and hold special sales events.
Control
Marketing Control Process:
Objectives
Assessment
Diagnose
1.
2.
Have the sales and
traffic objectives
been met?
Why or why not
were the objectives
achieved?
Increase Sales
Increase
Awareness
Action
What measures
should be taken out
to improve, is there
a market?
Marketing Information Collection:
Customer purchasing information is acquired through a customer survey. Customers are
encouraged to complete a survey upon purchase to learn: why consumer was attracted to
INKAcase, how they discovered the product and whether it is a gift or for personal use. Also,
market research will be conducted through surveys on local colleges and universities and
farmer’s markets. A sample survey is located in Appendix D.
A calculation and analysis of the online traffic will be used to demonstrate the effectiveness of
the marketing campaign of creating publicity and awareness. This information will be calculated
bi-annually and will also show peak periods of sales and activity.
Assessment:
Based on information from surveys, online activity and sales data, an assessment will be made
to determine if the objectives were achieved. Sales in different channels (online and in-person)
will also be compared and analyzed in order to better determine the future plan and focus.
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Diagnose:
Quarterly evaluations are conducted to ensure that the plan is going well and that adjustment
can be made in time. Also, after every peak period and festival period, a summary of the market
should be conducted for lessons learned.
Action:
If the set objectives are achieved, a new market shall be targeted. New marketing research and
plan shall be based on the information and data accumulated in this year.
If the objectives are not achieved, after analyzing the marketing data and information,
adjustment of the market plan should be made in time so that the overall goal of the year could
be achieved.
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Budget
The marketing budget for the Andean Alliance and more specifically INKAcase is almost
nonexistent. Capitalizing on student participation and involvement in the projects are how the
majority of outreach and marketing will occur. With the moderate sales of 50 cases a month
the revenue per month will average $2500. However, based on the monthly cost breakdown in
Table 4, only $5 of each $50 dollars goes towards management fees.
The monthly revenue of $250 per campus will cover the stipend of the online marketing
manager at $100 and the remaining $150 will remain for eBay account fees and farmers market
table fees as well as the incentive bonus for groups selling more than the target 50 cases a
month amount. The amount not spent will go towards savings for slower sales months.
The most important aspect of the budget is the revenue of $6,000 which will go towards
training new communities to weave INKAcases for expansion in 2 years. This will certainly
increase sales as well offer more economic opportunity to more communities. Included in the
technical training are courses on financial education to balance the increased income.
Semi-annual Budget
Revenues
Case sales per month
6 month period sales
EXPENSES
Manufacturing: ($24/case)
Case Shipping material
Management Fees
Marketing Manager stipend
Online sales fees
Savings
Total Expenses (6 months)
Total Revenue
50
$15000
$7200
$300
$600
$600
$300
$9000
$6000
Table 4 Monthly Project Revenue
Projected revenue
Sales (50 cases/month x $50)
Expense
Manufacturing ($24/fair trade
case)
Overhead ($1/case shipping
material)
Management fee ($5/case)
Monthly profit
$2,500
$1,200
$50
$250
$1,000
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Summary
The sales goal of averaging 50 cases a month is
ambitious but it has been taken into account the
amount of current interest and unmet demand
on campus. Currently, sales are taking place
without any marketing or efforts focused on
sales and this detailed plan is strategic in where
to place efforts and how to make adjustments
when necessary.
The additional and broader objective of
increasing awareness about the brand of the Andean Alliance for Sustainable Development and
the on campus club, Team Peru, is an important aspect to the sustainability of projects
dedicated to this region. Also, with sufficient support, the program has the possibility of
expanding to other areas in the world. This program offers the opportunity of professional
experience for students but the opportunity for indigenous communities to become financially
independent while preserving their native traditions and cultures.
The important aspect of the marketing plan is the evaluation and monitoring of progress as well
as documenting for future students and staff to continue using this plan as a guideline while
constantly improving sales and brand awareness. The competitive advantage of being a one of
a kind product with a socially and environmentally conscious product will ensure a welcome
entrance into the market but a strong marketing strategy will ensure a lasting presence.
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Appendix A: Data analysis of focus group research
Customer 1: Hilda Diaz
Age: 29
Hometown: San Pablo, CA
Profession: Translator and Interpreter, Stanford Medical Center
Annual Income: $50,000
“I am interested in buying an INKAcase because of the social responsibility aspect of the cases.
Plus the design of the case is innovative compared to other similar products. Most importantly,
I know my money will go back to people who really need it and communities well benefit from
my purchase much more than if I buy another computer case. I think I will also consider buying
it as a present for my friends or family on holidays.”
Customer 2: Matthew Huters
Age: 29
Profession: Graduate student, Monterey Institute of International Studies
Annual Income: $20,000
“Not only do these laptop cases look nice, but the economic impact of my purchase will be
helpful to the people who make them. Considering my financial situation, I find the price a bit
high, but I know when I purchase this case I am contributing to someone’s well-being rather
than to a shareholder’s portfolio.”
Customer 3: Ellen Compernolle
Age: 27
Profession: Ph.D Candidate, University of Michigan
Annual Income: $25,000
“I would need to buy a laptop case anyway, but this option is pretty and serves a socially
responsible purpose. But my laptop is 11 inches which doesn’t fit the current product size. Do
you have various sizes other than 13 inches?”
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Appendix B
Table 5
INKAcase Labels
INKAcase
by
in.di.go
www.wix.com/IndigoCraftwork/InDiGo
indigenous designs on the go
In.di.go offers impoverished artisans a way to continue
their craft and increase their income significantly.
INKAcase is our first line of sustainable laptop cases with
social value. The majority of the artisans we work with are
women and the increase in income for these women will
benefit the family as a whole. In general, women spend
90% of their income on their family. The traditional process
for making textiles is great for the environment. Our
weavers use natural plant dyes and renewable material.
These products also aim to preserve local culture by
promoting pattern designs that are unique to the specific
community with which we work. Profits from the sale of this
case benefit the poverty alleviation projects of the Andean
Alliance for Sustainable Development.
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Appendix C
Organizational Structure
Aaron Ebner
Tina
Novero
Campus
marketing
Online marketing
manager
INKAcase
Website
eBay/etsy
Selling
MIIS
Students
Team Peru
Middlebury
Students
Team Peru
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Appendix D
Customer Survey
1. Your Age:
a. Under 18 b.18-25 c. 26-35 d. above 35
2. Your occupation:_________________
3. Your average salary (yearly:
a. Under $10,000 b.$10,999-20,000 C.$20,999-40,000 d. Above $40,000
4. What is your laptop accessory purchasing habit (as in frequency)
a. Never b. rarely c. sometimes d. often
5. Which aspect(s) of the INKAcase interests you the most? (You can choose more than one).
a. Price b. Design c. Quality d. Good cause (purpose)
6. What best describes your thoughts on the price of INKAcase?
a. Too low b. appropriate c. too high
7. What best describes your thoughts on the design of INKAcase?
a. Not satisfied b. ok c. very satisfied
8. What best describes your view of the quality of INKAcase?
a. Not satisfied b. ok c. very satisfied
9. You consider “good cause” as a _________ element when purchasing INKAcase.
a. Less important b. somewhat c. very important
10. How did you learn about INKAcase?
a. INKAcase Website b. School Club c. Brochures d. Booth or Alumni Shop e. Friends
11. Would you like to introduce our project and product to your friend?
a. Yes
b. no
If you leave your email address here, INKAcase will update you the latest events of INKAcase
and inform you about how your purchase has helped to improve the lives of the rural women
of Peru.
Your Email Address:_____________________________________________
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