Marketing Plan

Khilauna Inspirations: Marketing Plan

© Texas Southern University

2011

EXECUTIVE SUMMARY

Khilauna Inspirations is a start-up company with intentions to bring diversity, self-confidence and achievement into young girls’ lives. Our focus is to design an Indian Barbie doll, in accordance with the Indian culture, but a doll that will add significant symbolizing attributes to bring empowerment to young girls. Khilauna Inspirations targets local Indian markets in cities such as Bombay and Calcutta. A recognizable, Indian-designed Barbie doll for children is an unmet need in this country===HANSEN COMMENT, NOT QUITE —WHAT WAS THE UNMET NEED?. SELF-ESTEEM? Currently the American Barbie doll is not popular in India because of parent’s lack of recognition with the tradition of Barbie. Hence creating an Indian Barbie doll that embodies Indian culture will become a must-have for little girls.

Factors that affect the purchase decision would be availability and consumer perceptions on whether the doll is a respectful resemblance of a traditional Indian woman. Currently these types of products are increasingly becoming important and the attitudes toward them are positive. Higher disposable incomes, the development of modern urban lifestyles and an increase in consumer awareness have affected buyer behavior in cities, towns and even rural areas.

The Indian toy industry is estimated at about 850 million US dollars and until now has generated only 0.5% of the global market. The growth of around 15% promises to raise this figure rapidly, especially in the context of the growing middle class and the increasing willingness to spend money on luxury goods. India itself has more than 800 toy manufacturers, exporters, and suppliers, which means that 60% of the market is handled by Indian manufacturers and foreign companies with subsidiaries in India.

(HANSEN COMMENT: THEY NEED TO PUT SOMETHING IN HERE ABOUT THEIR EXPECTED SALES AND PROFITS)

Brief Table of Contents

I. Environmental Analysis: General External Conditions4

2.0 Market Analysis6

3.0 S.W.O.T. Analysis9

4.0 Marketing Objectives10

5.0 Marketing Strategies11

6.0 Sales and Distribution Strategy12

7.0. Marketing Implementation13

8.0 Evaluation and Control14

9.0 Financials 15

10.0 Selected References16

1.0 ENVIRONMENTAL ANALYSIS: GENERAL EXTERNAL CONDITIONS

Economic Factors

The Indian market is very large with its one and a half billion plus population. It presents lucrative and diverse opportunities for U.S. exporters with the right products, services, and commitment.  India’s requirements for equipment and services for major sectors such as energy, environmental, healthcare, high-tech, infrastructure, transportation, and defense will exceed tens of billions of dollars in the mid-term as the Indian economy further globalizes and expands.  India’s GDP, growing at 6.7% (for 2008-09), makes it one of the fastest growing economies in the world and the second fastest in Asia.  India has potential for a sustained growth of 8-10% for the next couple of years. India has a large pool of skilled workers, a rapidly growing middle class with a desire to consume. The country also has a rich natural resource base, which includes coal, iron, water, limestone, and granite. Now is the time for U.S. companies to enter the rising Indian market. The type of economy is a former socialist economy; India is now a free-market economy since circa 1990. International competition and foreign investment were key factors leading to the demise of the socialist economy, and growth of the free market it is today.

Trade Factors

India’s top 10 major trading partners not included in a PTA consist of China, USA, United Arab Emirates, Saudi Arabia, Germany, Singapore, UK, Belgium, Hong Kong, and Netherland. India does most of their trade within the Commonwealth. SAFTA is the primary PTA with India. India being an agriculturally rich company have a high export volume with the following resources/products; meat and fish products, rock salt, chemicals, leather, wool, newsprint paper, oils, and wood. Naturally they import many technologically advance goods including machinery, and electronics.

Cultural Factors

India is a high context culture where less information is contained in the verbal part of a message. A person’s word is his or her bond. Trust is ranked above statistics and empirical data when making business deals. There is less need to anticipate contingencies and provide for external legal sanctions; this is because the culture emphasizes obligations and trust as important values. As far as family relations, Indians are very family oriented; they respect family values and commit to family above their individual needs. As far as work ethic, the main reason Indians go to work is to meet and support the needs of their family (they are not money hungry). Education in India is very expensive; a public grade school, with a system that is not so good, is about $658.690 to $1, 536.94 per annum. A more exclusive school has a tuition fee of $1,976.07 to $4,391.27 a year.

1.4 Legal Factors

The Indian government has come to realize that a strong legal framework coupled with an effective implementation structure will help the country have a strong system of intellectual property protection. There are laws but the protection is limited, which may be a problem for our product. Particular for our intended product-market, this will pose substantial concern and we must assume the projected liability and risk going into this sector. Corruption practice affects India’s regulatory concerns, which has prompted a global economic slowdown. This relates to foreign business on a large scale, because if they can bypass official paperwork and taxation laws through bribery, it makes it unfair for other business entering the market, as well as consumers of the products they offer.

2.0 MARKET ANALYSIS

Description of Customer Needs:

India 1 (Consumers) – Largest Value Consumer baseConsumers living in the top 30 cities of the country, with household income exceeding Rs. 35,000 per month ($700). Post-graduates or professional graduates, businessmen, self-employed (CAs, doctors, architects etc.), and executives own major white goods like refrigerator, washing machines, TV and a Car. They are at par with the developed world’s consumers in terms of tastes, preferences and propensity to spend.

India 2 (Climbers) – Largest Volume Consumer baseConsumers living in Indian towns having a population of 20,000 and above; with a household income between Rs. 15000 and Rs. 35000 per month ($200 to 600); This includes graduates, white/blue collared workers, small businessmen, traders, and self- employed. They would own any two of the three major white goods – refrigerator, washing machine and TV. The major competing firm for us would be Mattel who currently has operations in India but lack the proper marketing and creative channels to make their Barbie a success.

Competitive Analysis:Some of the competitors our company faces are with popular Mattel Inc. products such as the Princess line from Disney, Mattel Inc., is the world’s biggest toymaker; and inventor of the Barbie Doll. The name of our company is Khilauna Inspiration’s (toy inspirations). We are located in Houston Texas and our business it to create toys that inspire. Kanya Mira is our core product; she is a young Indian woman who was recently engaged and is planning her extravagant wedding. Her detailed “story” (childhood-now) is written on the back of every box sold. This way children will be able to relate to her on a more realistic basis. She can become not only a figment of one’s imagination; but also a new family member with a past, present, and future.

Current customers and target market segmentsBarbie’s target market measurement of a Mattel’s marketing strategy is its ability to impact and improve upon each feature of that strategy. Mattel’s hope is to achieve a long and prosperous relationship with its customer. They must identify certain customers using a marketing mix and implementing the strategies and goals outlined.

Rank competitors by market share in relevant target segmentsLeading the pack Mattel Inc. Barbie’s share of the fashion doll market has shrunk from 75% in 2000 to roughly 60% today. Worldwide sales of Bratz reached $700 million last year—growing more than 45% over the previous 12 months, while sales of Barbie have stagnated.

Based on Nasdaq Mattel’s current stock price is MAT 25.37-0.27 -1.05%

Another competitor that our company faces is the new found BRATZ market share. It rose to 38.2%, up dramatically from 14.6% for the same period last year. The nearest competitor to BRATZ lost significant ground with their market share dropping to 46.1%, down from 69.9% for the same period last year.

Discuss each competitor’s strengths

One of Mattel’s most important strengths is the history that it has behind their company 60 years of rapport with consumers.

Mattel is at the forefront of the toy industry.

Mattel has staying power when facing new competition.

The brand remains very popular among customers.

Weaknesses

Not been able to penetrate the Indian market well

Keep the same product line when selling Internationally (standardization)

Core product (Barbie) had a significant drop in popularity. (No longer listed in the top 5 selling dolls)

Future competitive threatsThe most notable threat in the domestic market is the systematic movement away from tangible toys, which account for a majority of Mattel’s core products, at an earlier age. Children are adopting more interactive and electronic toys earlier in age today, eroding Mattel’s primary market of children under the age of 10. This has already forced Mattel to enter, and may force Mattel to further their involvement in the technological realm, a product category in which the firm has performed very poorly.

The final issue Mattel must address is that of selling in foreign markets. An important aspect of going global is being able to adapt to different cultures and to break down cultural barriers. Mattel has done a little bit of this with the changing of the product packaging, and some of their Barbie lines. However, there are still some countries that are boycotting Mattel because they are offended by some of their products that are being sold.

Supplier and Distributor Network/Situation:Our product will be sold in India’s most popular toy store Hamley’s, which will be via an indirect distributor. Also, to ensure that Kanya Mira is available to every child that dreams of owning her, she will be sold online so that she is available directly to the customer.

Our product, The Princess Bride “Kanya” will be positioned as a role model for young girls who desire to go beyond the expectations others have set for her. She wants to be successful, educated and powerful while being an example to other young girls. This is what differentiates Kanya from any other “Barbie’s” being sold in India. There is a lack of inspiration for tweens in India and our goal as a company is to fill that void while remaining in the boundaries of India’s culture and religion. We also feel that remaining in these boundaries will help maintain good relationships with our distributor as well as the retailer.

The purchase processThe distributor’s purchase will be based solely on the demand of Kanya in India. We anticipate that our doll, The Princess Bride will be sold heavily in the toy store, therefore creating a large demand. India has the youngest demographic profile among the world’s large nations. More than half the population is younger than25. The number of young people younger than 14 is greater than the entire US population. 42% of India’s population is below the international poverty line of U.S $1.25 per day, leaving 58% of the population above the poverty line. That is our primary target demographic.

Market Demand:

Overall market

The current size of the overall foreign toy market in India is (833 million) dollars per year, roughly 35 billion R’s.

Individual Market

The current size of our market is children living in tier 1 and tier 2 cities in India that range from ages 3-12; whose family make over 40,000 R’s per year. Based on our research, there are 38 million people living in these two tiers, and an average of 3.1 children per family. This data makes our target market approximately 2.4 million.

The potential size of our market is greater than 2.4 million, because although tier 1 and tier 2 cities have majority of the nation’s wealth, there are families located outside of the aforementioned tiers that make well over 40,000 R’s per year. For this reason we have estimated our potential market size to be around 4 million.

The actual penetration of current products within our market is as follows; Mattel owns a 26% Market share, and Funskool has a 30% market share. They produce dolls sold to young Indian girls, but they are all the same dolls sold to young American girls. This makes our penetration of current product zero, because no American doll is comparable to Kanya Mira.

Usage Rates

The average Indian child spends only $5 US dollars on a toy in India, while the average American child spends $281 dollars on a toy in the US. This tells us that based on the family incomes in India the purchase of toys is very infrequent. By an estimate less than 5 times a year.

3.0 SWOT ANALYSIS

Strengths:

At this time, our company does not have any recordable strength; other than the talents we have acquired through employees internally.

Weaknesses:

The first weakness is the high barriers to entry, as you can see from our research dolls are expensive. The U.S. created “Barbie” sells anywhere from $17.00- to 25.00. The average Indian child only spends $5.00 on any toy. This poses another weakness; our company will be forced to do business with manufacturers in China to reduce our retail costs.

Opportunities:

That may arise for our company includes expansion; we plan to manufacture several different versions of Kanya if she is successful. If we combat the odds and acquire a large market share, we may be offered a partnership with a large toy company already present in India.

Threat:

The main threat posed is that our competitors copy our “product” and takeover our market share.

We may not meet the required cultural requirements to entice the parents to purchase the doll.

4.0 MARKETING OBJECTIVES

Khilauna Inspirations plans to use the word of mouth strategy as our main marketing vehicle through the use of online toy stores, our website traffic, and being sold at local Indian toy store Beachland. We want to place billboards in the neighborhoods of our target market.

5.0 MARKETING STRATEGIES

5.1 Mission Statement

Khilauna Inspirations mission is to create a product that reflects uplifting leadership, poise, achievement, and triumph giving the female youth inspiration allowing them to rise to the occasion not allowing failure to outweigh their futures.

5.2 Target Markets

Primary

Middle class Indian families that comprise 30% of the overall country; Catering to the ages (3-12)

Secondary

Secondary market will constitute of the upper middle income throughout Indian that make up 15% of the overall country.

5.3 Product-Market Positioning

Kanya Mira will be a quality product that will provide quality results. Inspiring the middle youth teach values that will be instilled even as an adult. The dependability and benefits of the product should be enough to create demand within Indian. With inspirational values being our main focus, the youth of India will support the product. This will lead to a rise in the demand of dolls and thus more sales creating a popular following.

5.4 Marketing Mix

Product: Our product is a (n) inspirational doll geared to the young woman of the Indian people. Place: Our company is located in America catering to the youth of India.

Promotion: marketing to parents with young daughters embedding the idea to purchase a unique product that meets the traditional standards they want for their daughters Price: Kanya Mira will be sold for 55.28 rupees

6.0 SALES AND DISTRIBTION STRATEGY

6.1 Overview

Khilauna Inspirations will render services from Mulia Company Ltd. in Indonesia. Mulia has over 20 years expertise in their field. The company recently added plastic toys to their everyday manufacturing. By using Mulia, we will save a large percentage in our budget for manufacturing costs and using the remainder of the money set aside to have the product shipped to India. It will cost on average, $0.27 to make each doll. Each doll will be sold for $1.25 in US dollars and 55.28 in rupees.

6.2 Priority Actions

Control the safety quality of every toy batch; ensuring every child can have a safe toy for knowledge and joy while playing with Kanya Mira.

6.3 First Step

We will export the product by sea from Indonesia to India. The distance between the two countries is 3,391 miles.

6.4 Second Step

Mulia Company Ltd. will be the distributor to Beachland Toys, which is a local toy store in India. Our product, Kanya Mira will be available for everyday purchase at all Beachland toy stores in New Delhi, India. Also, in the near future, India will have several Hamley’s toy stores opening and we also plan for Kanya Mira to be available there as well.

7.0 MARKETING IMPLEMENTATION

7.1 Marketing Organization

The primary objective of our company is to develop and manage a cost-effective marketing, sales, and distribution Barbie doll in India. As stated earlier, our primary target will be middle class Indian households who have children between the ages 3-12. Cities like New Delhi has become a strategic investment destination in the region because its economy is one the growing economies in India. With consumer products such as toys being in demand in the New Delhi area our marketing plan for our product will lead to a successful venture.

7.2 Activities and Responsibilities

Khilauna Inspirations marketing implementation will be based on the following steps:

We will first conduct personal interviews with local Indian school children to get proper feedback concerning our ideas and attributes for the doll.

Develop a strategic partnership with Disney for exclusive licensing.

Assume all responsibility for marketing research information that will be communicated to all buyers based on production feedback from consumer use.

Advertise in local areas to support the community newspapers and utilize local distributors in product movement.

Establish and maintain a partnership with local Indian toy store Beachland to serve as the “Kanya” headquarters.

Establish new and build on existing contracts to improve the overall marketing strategies by feedback methods of products use through surveys and marketing analysis.

Remain competitive in market by reasonable sale price of product.

Train and educate distributors and maintain a commission structure that is comparable to ongoing markets.

8.0 EVALUATIONS AND CONTROL

8.1 Performance Standards

Sales averaging over 309,580 – 353,806 rupees the median income rate will indicate that Kanya Mira is willing not only generate profit but set the tone for the toy industry in Indian actually generating profits. It is estimated that the Indian toy industry volume is US $ 1 billion in the organized sector and about US$ 1.50 billion in the unorganized sector This standard is set forth in order to be realistic enough and allow room for error. With the generation of profits, will be able to keep supplying the product at a standard price with a guaranteed return. This will also mean that the strategies that the company is planning to implement are working in our favor.

8.2 Monitoring Procedures (Audits)

Khilauna Industries will employ Malik Wright; a CPA graduate from Howard University to audit our company, to make sure that our marketing money as well as advertising is being spent efficiently. Our company will also keep up with the sales of the Kanya Mira brand and make sure that Indonesian Manufacturer Company isn’t marketing its own brands throughout Indonesia. The results will be measured with the performance standards to evaluate the effectiveness of the strategies implemented.

9.0 FINANCIALS

We found that the average price spent on any toy in India is $1.00. We know that Kanya Mira will serve her purpose in uplifting and inspiring the young Indian girls. We believe that the quality of the product we are offering is very high. Unlike several toys offered in India, Kanya Mira has wardrobe changes that cost us a base of $0.25. We will charge the children/families $0.75 for a brand new wardrobe for their doll. Kanya Mira will be sold for $1.25 in US dollars and 55.28 in rupees. If they pay the initial cost of $0.25 above average for the doll, it will be like they are getting a new toy every time they purchase a new wardrobe for her, and this will be less than the average toy cost. Kanya Mira will cost on average $0.27 per doll to make leaving us with a profit of $0.98 for each doll. A 20-foot container exports from Indonesia to India for approximately 500 U.S dollars. We can ship 1,156 dolls in each crate. To ship 20,000 dolls it will cost 10 million dollars, which exceeds our starting budget of 3 million. We will have to have a joint venture to share our cost.

10.0 References

The World Factbook: India. Last updated January 20, 2011

Heritage Foundation: 2011 Index of Economic Freedom. Promoting Economic Opportunity & Prosperity.

HYPERLINK “http://www.business-standard.com/india/news/post-pta-india-mercosur-trade-to-touch-10-bn/360072/”http://www.business-standard.com/india/news/post-pta-india-mercosur-trade-to-touch-10-bn/360072/

HYPERLINK “http://blogs.worldbank.org/eastasiapacific/papua-new-guinea-coffee-farmers-face-challenges-as-demand-for-crop-continues”http://blogs.worldbank.org/eastasiapacific/papua-new-guinea-coffee-farmers-face-challenges-as-demand-for-crop-continues

HYPERLINK “http://www.state.gov/r/pa/ei/bgn/3454.htm”http://www.state.gov/r/pa/ei/bgn/3454.htmHYPERLINK “http://www.state.gov/r/pa/ei/bgn/3454.htm”http://www.state.gov/r/pa/ei/bgn/3454.html

HYPERLINK “http://www.differencebetween.net/miscellaneous/difference-between-american-and-indian-culture/#ixzz1FEORQvtu” http://www.differencebetween.net/miscellaneous/difference-between-american-and-indian-culture/#ixzz1FEORQvtu

http://www.indiahorizonz.com/business-etiquette-for-india-a-primer/

http://www.suite101.com/content/india-imports-exports-2007-a60728#

http://www.economywatch.com/indianeconomy/export-import.html