Case Summary
Burt’s Bee is a company which produces natural personal care products. John Replogle was the CEO of the company in the year 2006. Roxanne Quimby was the founder of the organization. The products are advertised by using the symbol of Burt’s bearded face half shaded with a flaky hippie hat. Burt’s Bee was highly committed to the environment and it was reflected in the materials that they used for producing their products. The company uses recycled packing and uses only those materials which are offered by the Mother Nature. The company takes special care to mark the percentage of natural ingredients that are used in the product. Initially they started producing bee wax lip balms, furniture polish and moisturizing cream. In 1989 Quimby attended the New York City gift show and he analyzed that there was huge demand for his products and that was the only stall which experienced a huge queue. After that Burt’s Bee grew quickly and attained sales of $3 million. In 1995 they opened a retail showroom and it was a failure for them. But, later the sales were over $40 million and in 2003 the shares were sold to AEA New York Private Equity firm. AEA in 2005 selected some qualified workers and then started the growth of the firm tremendously. Dough Hansel the new CFO, point out that there was no specific infrastructure for the company to support the manufacturing and controlling the policies and procedures. The company sells its product in the market at price of $4.50 at a wholesale price but actually the retail price of the product must be $9. This created a sense of feeling in the minds of the consumer that the product does not meet the quality. The company researches show that 15% of the customers sold its product at a discount to consumers and 15% is sold at premium. The company’s main problem is they want to go for mass marketing. Among all the competitors the customer prefers the products that are manufactured by Burt’s Bee.
Environmental analysis
Environmental analysis means identifying and understanding the different aspects within the environment which consist of social, economical, political, global and technological factors that influence the functioning of the company. The environment includes both internal and external. The company is more committed towards the environment. Every enterprise will be affected by the environment directly or indirectly. The environmental analysis is mainly done to identify what all factors must be considered while operating an organization. Globalization has made the organizations to concentrate more on quality products. The increasing number of products and competitors made the market more complex. The social factors include all the rules and regulations of the society and the commitment of the organization towards the society. Before introducing a product into the market, the company should understand the culture, taste and preferences of the consumers. The political factors consist of rules and regulations adopted by the government. In order to diversify the distribution channel, a set of marketing sales force should be facilitated. The company should focus on updating technology, because technology plays a significant role in the growth of the organization. The economic factors such as the demand and supply of the product must be taken into consideration. The customers’ taste and preferences should be identified before introducing a new product in the market. Even though there are many other products, the customers prefer Burt’s Bee product more. Environmental analysis is mainly done to identify the risks associated with the functioning of company and what measures have to be taken to overcome such risks. By recognizing the environmental factors, the company can grow successfully in the market.
Corporate strategy- And does it fit the Environment? There is a gap?
CEO of the company once said all their products are “harvested form nature.” (Wathieu & Winig, 2007, p.7). The real meaning of above words is that the ingredients of their products are derived from various sources such as plants, fruits and seeds. They do not use any kind of chemicals and fillers in their products. Chemicals and fillers can be things like petroleum, sodium, propylene etc. Majority of their products are coming out in the market with a label indicating ‘hundred percent natural’ and it describes the ratio of natural ingredients used in the product. Also colors used in the product are only natural and fragrances. Not only that, this company is very much concerned in packing and they use only recycled materials for packing so that it can be reused afterwards. Thus, to an extent, creating of waste materials in the environment can be avoided.
The research team of the company always tests their products and makes research on certain ingredients before using to verify whether such ingredients will work more and provide better quality for consumers. While making such product developers are mainly concentrated to use unique and effective natural products. Just using natural ingredients and keeping aside is not the strategy of this company. Once a product is manufactured, it is tested before introducing the product in the market.
Company is very careful in mixing the natural ingredients to make sure it won’t lose the value. So workers of the company are very careful until the products are packed out. Being environmental sensitive, workers of the company are very much careful and they produce very little waste while making products. There is no doubt whether these products fit in the environment or not. Using of natural ingredients only increases the market value and consumers’ attraction. The company’s product carrot lotion is unique. No other company has manufactured carrot lotion till now. Company people say that carrot has got unique features in repairing and refreshing damaged skin. Another product is tomato soap that is made from tomato. Using of these products won’t do any harm to consumers. Also, this won’t affect the environment as these products do not contain any chemicals. So there is no question whether these products fit with the nature or there is any gap.
Marketing strategy- does it fit the target market?
Marketing nature-friendly products always fits the target market. Presently more people are looking for products which are made from the natural ingredients. Some examples to highlight this are products made from tomato and carrot. No other companies have tried yet to manufacture products from carrot and tomato. Trying things which other companies are not trying is one of the marketing strategies to attract the consumers. Consumers are always attracted to products which are different from other products.
Another peculiar marketing strategy to attract consumers is not to use any chemicals while manufacturing personal care products. This will give a feeling to consumers that using of such products won’t give any problem to their body. That is, if the products are manufactured by using only the ingredients derived from nature, then there is nothing to worry about any kind of harmful effects. This is one type of marketing strategy to attract the consumers. Even though the products are completely made by using only the ingredients from nature the price of the product is very less while comparing with other brands available in the market. This feature also adds to get more attraction from consumers.
Burt’s Bee did not have any marketing team to sell their products. The company didn’t invest much in marketing. The retailers directly come to the company and take the products for selling purpose. It is through them this company will get the feedback of the consumers.
Another marketing strategy which this company follows is in product pricing. They sell their product at a very low price. An example for this is if a product can be sold for $9, this company sells it for $4. Their marketing strategy is that customer should be honored. One cannot say all these strategies will fit the target market but they are good to a certain extent.
Marketing strategy, positioning, and target market
Marketing is an important concept in today’s economy. Marketing is an important branch which consists of various marketing strategies, positioning and target market. In a marketing strategy, the main objective is customer satisfaction. The strategy of an organization is to use its limited resources in an effective manner to attain competitive benefit. Burt’s Bee is an organization marketing various products like beeswax, lip balm, hand salve, moisturizing cream, ointments etc. The strategy they adopted to sell their product is to fix the product in small attractive bottles. This is adopted to attract more customers towards their products. AEA is a company who has got a good name in buying smaller companies and then making improvements in their sales and images, and making them available to the strategic buyer. It is the aim of the AEA to widen the Burt’s Bee product in order to bring the company into a $500 million national brand in the year 2009. From 2006 onwards the management team tried to increase the growth of Burt’s Bee by introducing newer products. Quimby was the CEO of the company at that time. Tom’s of Maine concentrated on oral care rather than other competitive products. ’Kiss my face’ is another product launched by Bob MacLeod and Steve by chiewicz. The main product line is personal care products. In order to develop their products, the company featured that their products are made of natural ingredients. For packing the products the company uses recycled material. They use wholesale distribution channel for the personal care products. Their strategy of thinking is that price will not promote a brand. Creating image for their products is the main aim of product positioning. Burt’s Bee consumers are loyal towards the product. Consumer reaction is more on Burt’s Bee products. They are fervent about Burt’s Bee. They treat the product of the company as part of their life style. Thus they create a good image for the products by creating brand loyalty. Target market aims at a single product to the entire market. Burt’s Bee targets the buyers who are health conscious and also youngsters who are conscious about their beauty.
The 4 p’s (place, product, price etc)
Place, product, price, promotion, packing etc are the main marketing strategy used by any organization. Burt’s Bee sells in the places where it has actual buyers. Consumption is aimed by the company. The product is the life of an organization. The company introduced many products like honey products, hair products, candles, beeswax, lip balm, hand salve, esotenic creams etc. New product introduced by the company is yellow honey. It has more buyers as consumers are health conscious. Price of the product is another factor governing marketing. Replogle found that the company lacked the rational scheme in pricing. Sometimes the product is priced on cost plus basis. They price the product differently in wholesale market and in retail market without considering production costs. Burt’s Bee charged same price for all their customers. Promotional activities are more in Burt’s Bee. This has been a criticism on the part of the customers.
Recommendations
- Establishing separate marketing department can help the organization in framing separate policies and procedures.
- The pricing strategy of the company should be changed; the cost of production should be included in the actual cost of the product.
- Direct selling of products can also be done.
- Advertisements in televisions and magazines can increase the product sales.
- Various sales promotion activities such as gift vouchers, discounts can be offered to increase the sales.
- In order to improve the mass marketing the company can implement distribution channels in major cities.
Reference
Wathieu, L R., & Winig, L. (2007). Burt’s bees: Leaving the hive: Product development and manufacturing: “Harvesting from nature.” Harvard Business School, 7.