Marketing Plan: Naturalista Hair, Inc.
TeWanda M Terry
Southern New Hampshire University

Executive Summary

Naturalista Hair Inc, is a start-up hair care company located in Greenville, North Carolina that manufactures hair accessories, and organic hair products for natural hair. In addition, Naturalista Hair main products are conditioners, shampoos, and moisturizers for hair. Natural hair in the African American community has become not only a trend or style, but also a lifestyle change for many men and women (Opiah, 2014). Many women with natural hair are looking for more products each day that have organic ingredients and do not contain chemicals or additives that can damage their growing hair. Although there are many companies of natural hair care products, few are using organic ingredients in their products like Naturalista Hair. With Naturalista Hair using all organic and natural ingredients it provides a great opportunity for market growth in the area. Natural hair is a rising lifestyle change especially for African American women and women who have kinky, curly hair. The natural hair products are one section of the hair-care market that is ignored and underserved by the market. There are, however a growing number of hair products competition, including companies that manufacture hair products for African American women with chemical relaxed hair (Mintel, 2013). Naturalista Hair will work to grow the natural hair care market and also help to educate people on how to care for natural hair for cultures of all kind who have natural curly, kinky hair types.
Naturalista Hair will achieve a steady market penetration through a solid business model, intense planning, and a strong management team that is able to execute the plan. Many of the members on the management team are natural themselves and have many years of experience in caring and maintaining natural hair. With the extensive experience in natural hair by management, Naturalista Hair will be able to provide the hair market with a positive outlook on natural hair and also provide high-end organic hair products for customers. Challenges that may be faced by the company are competition from profound hair care companies that have been in the hair-care market for many years. Other challenges could be the issue of a small start up company not having enough resources to market the products and other companies marketing their products as 100% organic. By the end of one year, Naturalista Hair will have developed relationships with hair shop owners, large retailers like Target, and big name beauty brands to sell their product line of hair products.
For almost a decade natural hair has become one of the hairstyles that many cultures are embracing. The natural hair movement in the United States has started to boom over the past 5 years with many women and even men deciding to wear the natural state of their hair and not using any harmful chemicals in their hair. The companies main goals are to: Produce and sell natural hair care products that promote healthy hair growth and educate and inform customers on the benefits of the ingredients in the products as well as the benefits of using the products for their hair type.
Naturalista plan to communicate the brands hair products in two main distribution channels, which will be local beauty supply stores and the national retailer Target. Target will become the main retailer chain for Naturlista. The products will be available in Target stores in North Carolina, South Carolina, Virginia, Georgia and Tennessee. The company may encounter challenges from the market due to other brands and business targeted natural hair customers as well. Competition from other companies that make hair care products may see Naturalista as a competitor since our products will be all natural and organic. More customers with natural hair are leaning toward these types of products and Naturalist may make these customers become loyal to the company because of this ingredients being 100% organic.
The revenue from Natiralist after the first year is estimated to be $172,800 and by the end of the third year it will be $262,340. The toal case for sales and marketing for the first year will be $36,440 and around $55, 240 by the end of the third year. The break-even point for Naturalist will be 126 product that have to be sold a month. This information was calculated using a average revenue of $45 per product set and a fixed cost of $5,691.
One of the main strengths of the company that will insure that sales an revenue are positive is that Naturalist will make sure that all products are created with certified organic ingredients that can be confirmed by the customers. Since the products will be organic certified customers are more likely to try and become loyal to the brand over competitors like Shea Moisture and Carols Daughters, which are the main two natural hair product companies.
The market situation for the hair care products is increasing since the “natural hair movement.” The opportunity for Naturalist Hair, Inc. will be great since the market for natural hair products is becoming more needed since more women especially African American women are becoming natural. Over the next three years natural hair will become even more of a trend for women of color that will make Naturalista have even more opportunities to grow and become one of the major hair care product lines for natural hair.

I. Product Description

Naturalista Hair Inc., is a start-up hair care company located in Greenville, North Carolina that manufactures hair accessories, and organic hair products for natural hair. In addition, Naturalista Hair main products are conditioners, shampoos, and moisturizers for hair. Natural hair in the African American community has become not only a trend or style, but also a lifestyle change for many men and women. Many women with natural hair are looking for more products each day that have organic ingredients and do not contain chemicals or additives that can damage their growing hair. Although there are many companies of natural hair care products, few are using organic ingredients in their products like Naturalista Hair. With Naturalista Hair using all organic and natural ingredients it provides a great opportunity for market growth to the target group of people who have kinky, curly patterns. Natural hair is a rising lifestyle change especially for African American women and natural hair products is one section of the hair-care market that is ignored and underserved by the market. There are, however a growing number of hair products competition, including companies that manufacture hair products for African American women with chemical relaxed hair. Naturalista Hair will work to grow the natural hair care market and also help to educate people on how to care for natural hair.
Naturalista Hair will achieve a steady market penetration by implementing a solid business model, intense planning, and using a management team that will be able to execute the plan. Many of the members on the management team are natural themselves and have many years of experience in caring and maintaining natural hair. With the extensive experience in natural hair by management, Naturalista Hair will be able to provide the hair market with a positive outlook on natural hair and also provide high-end organic hair products for customers. Challenges that may be faced by the company are competition from profound hair care companies that have been in the hair-care market for many years. Other challenges could be the issue of a small start up company not having enough resources to market the products and other companies marketing their products as 100% organic. By the end of one year, Naturalista Hair will have developed relationships with hair shop owners, large retailers like Target, and big name beauty brands to sell their product line of hair products.
II. SWOT Analysis

Strengths * Customer driven marketing for the use of organic hair products

* Creative ingredients implemented in products

* Industry experience and insight from executives/management

* Quality of ingredients being used

Weakness * Products already present in market in some form

* Product Accessibility * Dependence on third party retailers for sales

Opportunities * “Natural Hair Movement”

* Participation in a industry that is growing due to the hair movement

* Huge market potential

* Innovative marketing techniques

* Increased demand for unique organic products in industry

Threats * Economic crisis affecting demand for special organic ingredients

* Potential competition from well known hair care product companies * Carol’s Daughter * Shea Moisture

* Increased number of competitors coming into the hair care market

* Brand insistence lacks in the hair care market
III. Target Markets

Market Demographics

Geographics

* Naturalist Hair, Inc does not have a specific geographic target area. With the increase in the natural hair trend Naturlista can serve domestic and international clients.

* The targeted population will be 5 million users.

Demographics

* Women will be the main users of Naturalist Hair, Inc products. 5% of users will be men.

* Target audience belonging to different age groups ranging from infants to adults. More users will be in the age of 18- 30 due to the trend of the natural hair movement (Opiah, 2014).

* Adult users will have a income range between $20,000- $55,000.

* Primary race of users are African American women and women of mult-culutre: Hispanics, African, Mixed- Raees

Behavior Segments

* Users of the products will be people who are self conscious of the benefits of natural hair.

* Users spend more time and money into the care of their hair.

* Users tend to live healthier lifestyles, which also benefits the growth of their healthy natural hair.

Psychographics

* Users tend to take into consideration of their hair health and body in the same context.

* Users are more classified in the lower and middle social class of society.

The targeted marketing segments that have been chosen are due to the high demand of organic natural hair products for this population. The targets markets are attractive to Naturalista because the company is aware of the natural hair movement and also aware of the many users who are looking for hair care products that are not only organic but have ingredients that will promote healthy hair.
Nautiral Hair care products have demonstrated a drastic increase in the hair care market. The anticipated growth of this market seems to be positive since more people are becoming aware of the benefits of natural and organic ingredients for hair. Due to the natural hair products not being a known market in the past there is little information on the past performance of the target market. Present performance for the market has increased and seems to be increasing everyday with more companies creating a product line for natural hair users.

IV. Competitive Analysis

The two competitors that will be focused on is Shea Moisture and Caro’s Daughter. Both companies have created a product line for users of natural hair.

SWOT Analysis

Strengths
Carol’s Daughter Tradition of using natural ingredients in products
Increased demand for unique products
Product Strategy
Market driven by customers wanting line of products with great customer relation
Products available in retail stores and online retailers ie. Target, QVC

Shea Moisture
Increased demand for unique products
Pricing of products is reasonable for users.
Product Strategy
Products available at major retail stores ie. Target, Walgreens

Weakness
Carol’s Daughter
Pricing of products to expensive for some users
Accessibility of products in stores that are only in major metropolitan areas

Shea Moisture
Increase number of products created by other hair companies- competition

Both companies above have been in the hair market for a while and have made a great impact for users with natural hair. SheaMositure and Carols Daughters both market their products has products that use natural ingredients. SheaMoisture products indicate products are made with natural certified organic ingredients that help promote hair growth. (SheaMoisture, Inc) Carol’s Daughters seems to be the company that is more competitive due to the company providing a variety of collections and products. Caro’s Daughter provides hair care products not only for one user of natural products but also for users with any kind of hair texture. The unique variety of the hair line makes it appealing to more users which makes the company have a better chance of selling more products to user.
After the release of Naturlista Hair, Inc both companies may feel that our company may be a threat. Due to the natural hair movement many natural hair products already exist in the hair market. When Naturista Hair Inc starts to make a impact in the retail market and sales become more the response from both of the competitions above would likely be each one developing new products that compare to Naturalist Hair, Inc products or modifying their existing products. To differentiate our products from the competition Naturalist will make sure that each product created will be unique and provide certified organic ingredients that can be confirmed by consumers who use the products. Consumers will be more likely to try the products due to the ingredients being certified organic products.

V. Financial Analysis

Projected Cash Flow
Naturalista Hair, Inc will expect to manage the cash flow over the next three years by growth of the cash flow, which will cover all expenses.

------------------------------------------------- 2014 2015 2016
-------------------------------------------------
Cash from Operations:

Cash Sales $172,800 $228,122 $262,340

Cash from Receivables $0 $0 $0

Subtotal Cash from Operations $172,800 $228,122 $262,340

-------------------------------------------------
Additional Cash Received:

New Investment Received 0 0 0

New Long –term Liabilities $3,300 $3,300 $3,300

New Other Liabilities 0 0 0

Subtotal Cash Received $172,800 $228,122 $262,340

Expenditures 2014 2015 2016

Expenditures from Operations:

Cash Spending $0 $0 $0

Payment of Accounts Payable $155,847 $201,325 $228,670

Subtotal Spent on Operations $155,847 $201,325 $228,670

-------------------------------------------------

-------------------------------------------------
Additional Cash Received
Sales Tax $0 $0 $0
Long-term Liabilities Principal Payment $12,000 $12,000 $12,000
Dividends $0 $0 $0
Subtotal Cash Spent $167,847 $213,325 $240,670

Net Cash Flow $4,953 $19,750 $21,670
-------------------------------------------------
Cash Balance $4,953 $19,750 $21,670

Projected Profit & Loss
Naturalist expects income be $172,800 by the end of the first year, By the third year income should be $262,340.

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Profit & Loss
-------------------------------------------------
2014 2015 2016

Sales $172,800 $228,122 $262,340

Direct cost of Goods $0 $0 $0

Other $0 $0 $0

Total Cost of Sales $35,304 $32,400 $27,600

Gross Margin $172,800 $228,122 $262,340

Gross Margin % 100,00% 100,00% 100,00%

Expenses:

Sales & Marketing $36,440 $49,840 $55,240

Utilities $4,200 $4,200 $4,200

Rent $18,000 $18,00 0 $18,00 0 Payroll (Staff) $90,000 $90,000 $90,000

Insurance $1,000 $1,000 $1,000

Other $0 $0 $0

Total Operating Expenses $149,640 $163,040 $168,440

Profit Before Interest and Taxes $23,160 $65,082 $93,900

Taxes Incurred $6,554 $18,222 $26,479

Net Profit $16,606 $46,860 $67,421

Break Even Analysis

Naturalista has a good start on pricing and balancing the fixed cost and sales to remain positive. The break even point is 126 products being sold a month. This information was calculated using a average revenue of $45 per product set and a fixed cost of $5,691

Monthly Units Break –Even 126

Monthly Sales Break –Even $5,691

Assumptions:

Average Per-Unit Revenue $45.00

Average Per-Unit Variable cost $0

Estimated Monthly Fixed Cost $5,691

VII. Channels of Distribution

Natualista Hair, Inc will be using two forms of distribution channels for the company. Due to the company starting out small in a urban are area Natualista will use a direct-to consumer distribution model. Doing this will jump start the company and also allow customers to learn more about the company by visiting the store and speaking with the direct owners and managers. By the second year the channel Naturalista will use retailers as well. The first retailers that will have access to the product will be neighborhood beauty supply stores that are located in the Eastern part of North Carolina. By the middle of the second year Target will become one of the main retailers and the product will be able to be purchased in Target stores located in North Carolina, South Carolina, Virginia, Georgia and Tennessee.
Channel members who will include primary the local beauty supply stores will work with Naturalista, Inc to ensure the products are marketed in the most positive way. A push and pull promotion strategy will be used to implement having managers from the local stores become familiar with the products and its benefits by attending a seminar that will be held by the executives of Naturalista.
Products from Naturalista will be manufactured and warehoused at the local business company located in Greenville, NC. After the manufacture of the product it will then be mailed and brought to the local beauty supply stores located in Eastern part of North Carolina. After the second year the products will also be packaged and shipped to the designated Target stores selected. Channels members should expect all products to be in the best condition; regular updates on the products, as well as semi-annual training and conferences about Naturlista hair care products.
Due to the company starting out small there will only need to be 5 employees that will run the main business store where sales will be done. The sales staff will be compensated each month and given $1,500 for salary. Each staff member will be educated and trained in the hair care products so that they can inform customers that purchase the product directly about the benefits and value of the natural hairline.

VIII. Integrated Marketing Communications Promotion Plan

Naturalista Hair, Inc challenge is to live up to the hair care market by providing consistent quality hair care products for customers who have natural hair. The companies main goals are to: Produce and sell natural hair care products that promote healthy hair growth and educate and inform customers on the benefits of the ingredients in the products as well as the benefits of using the products for their hair type. For almost a decade natural hair has become one of the hairstyles that many cultures are embracing. The natural hair movement in the United States has started to boom over the past 5 years with many women and even men deciding to wear the natural state of their hair and not using any harmful chemicals in their hair. Naturalist will take steps to communicate to consumers the benefits the entire product line.

Communication objectives. To inform the public about Naturalist’a hair care products by implementing goals:

* Increase the awareness of the new company to potential customers in the surrounding areas. * Inform customers on the healthy hair care practices * Communicate to customers the products of Naturalista and the pricing.

Marketing objectives. By the end of the fist year Naturalist hopes to gain numerous customers and increase the awareness of the available new hair care product line for natural hair. The marketing objectives that will be set for the company are:

* Increase customer purchasing by 20% by the second quarter of 2014 * Increase the annual revenue of the company by 15% by the end of 2015. * Establish a retail presence by making products available in local beauty supply stores as well as one main retailer Target.

Strategy
Selling proposition. Naturalist will have a unique selling proposition that will be “ Natural hair is in!” The company and staff of Naturalist know that the natural hair movement has started to become even more prominent. Being able to find natural hair products for all types of hair types that are also organic will all natural products can be hard to find especially in small urban areas. Naturalista would like to give people in these areas the opportunity to have a brand of these hair products that is good quality.

Media Strategy. The goal of the entire IMC plan is to increase the awareness of the new company Natualista and make customers aware of the new hair care product line for natural hair. The target market of the company will be mostly African American women but also women and even men of other ethnic groups with kinky curly texture hair that is natural. The cost per customer to reach the targeted group is around $4 a person. This will be done using advertisements, and online tactics. Sales promotion will be used in the form these tactics: print-ads, website, and customer newsletter, and Social Media

Advertisement. Full back page ad ads in a special edition magazine called Her Magazine which is a premiere publication for women of all ages that include fashion, health, beauty and more at $1076.50 for each edition. Ads will run each month for 12 months with a total cost of $12918 (Reflector Newspaper, n.d.). Another ad will be printed in the special edition Mixer that is an entertainment source for students and you professionals in the Greenville area. The full page at $750 will run in each edition for 12 months with a total cost of $9,000 (Reflector Newspaper n.d.).
Online advertisement will also be done for the company through Google Adwords. Naturlista will be a sponsored ad that is viewable on the search engine window. Keywords that will be used for the advertisement to display will be: Natural hair, natural hair care; natural hair products; curly hair; kinky hair; 4c hair; organic hair products. Adwords will bill monthly according to the number of times our advertisement was clicked on. The Adwords account will use campaign daily budgets which will allow us to manage the amount of money that will be spent each day. We have estimated the budget each day for this method to be no more then $30 a day with a total of no more then $1,000 a month for Adwords (Google Ads. n.d.).

Website. A website will be created about the new company and all of the products that will be available. The will be a page that list all prices for items. A page will also be created on the website with educational information on the benefits of the ingredients in the products for all hair types. Visitor’s of the website will also have the chance to signup for the company’s newsletter that will be emailed to them when upcoming sales are happening as well as coupons. The domain of the website will be NaturlistaHairinc.com. The website will be built using the provider godaddy.com. The cost will be 5.99 a month making the website total $71.88 for the first year of the company (GoDaddy, n.d.).

Newsletter: A monthly newsletter will be sent out to all customers who sign up on the website. Email addresses will also be obtained from customers who visit the companies Facebook page. The newsletter will discuss hair tips and will also inform and teach on how to use the hair care products and also teach a few styles so that customer can get the most out of their hair products. Customers who sign up for the newsletter will also receive coupons and be informed of upcoming store sales. A birthday coupon will also be emailed to all customers who have signed up for the newsletter, which will include 25% off of any one product. The cost to distribute the newsletter will not be any cost due to this being included in the website features.

Social Media. A Facebook site will be created for the company. The site will include all pricing and products that will be distributed. Information about the local store hours and promotions will be displayed as well. Updated status will be done to make sure customers are able to know recent updates and statuses of all products and new products that will be created and available. The Facebook page will also have a direct link so that customers can visit the official companies website where more detailed information will be available. A Twitter account will also be created for the company so that regular tweets will be done on promotions of the product line. Advertisement will also be implemented on twitter where customers can be informed about the new product line through hashtags like: #natural hair; #kinkycurly hair; #natural hair movement, and #naturals.
Direct Marketing. Since Naturalista will be based in Eastern North Carolina, samples will be available for customers who visit local beauty supply stores. Print advertisements will be displayed in the stores where samples of the product line will be available. Samples will be mailed to the beauty supply retailers every time they buy shipment of the products from Naturlista. Retailers will be direct to display the samples with the print advertisement at the front of the store near the checkout area.

IX. Integrated Marketing Communications (IMC) Budget Annually

Print Advertisement

Her Magazine $12,918

Mixer $9,000

Online Advertisement $12,000

Website $71.88

Customer Newsletter (Online) $0

Social Media

Facebook $0

Twitter $0

Samples $3,000

Total $36,989.50

References
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Natural Hair Care, Natural Beauty Products, Natural Skincare - Carol's Daughter - Hair. (n.d.). Natural Hair Care, Natural Beauty Products, Natural Skincare - Carol's Daughter - Hair. Retrieved July 13, 2014, from http://www.carolsdaughter.com/hair
Opiah, A. (2014, January 23). The Changing Business of Black Hair, a Potentially $500b Industry. The Huffington Post. Retrieved August 17, 2014, from http://www.huffingtonpost.com/antonia-opiah/the-changing-business-of-_b_4650819.html
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SheaMoisture. (n.d.). Ingredients. Retrieved July 13, 2014, from http://www.sheamoisture.com/Ingredients_c_16.html