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Marketing PLAN KaYAK BUtter, LLC

Market Research

Product development among companies and brands providing chemical consumer products ranging from lotions, to food products, to protein powders, and everything in between is changing drastically. Large companies and conglomerates, that previously were able to push slightly altered versions of their products with only a small amount of ingenuity and creativity incorporated in the product development cycle are no longer able to keep up with that strategy. Consumers are becoming more and more educated in products they put in or on their bodies. As a result, we are seeing massive growth from small and nascent brands specializing in one or very few products, developing what is truly a buyers-first formula, marketing it through highly specialized social media and influencer channels, and then gaining previously unheard of market ownership among their niche.

While there are many large brands and specialty chemical consumer producers, consumers are rapidly swaying their buying behaviors and prefer products which feature less ingredients, ingredients they recognize from social media influencers they follow and trust, and natural ingredients.

It is exceedingly challenging for the larger billion-dollar brands to suddenly pivot and create such products in a genuinely creative and refreshing package that consumers not only trust but are intrigued and compelled to purchase.

Here lies the problem for the consumer: simple products that are creative, genuinely unique, and highly effective, with minimal ingredients that they don’t want or recognize (especially with names that at least sound like a synthetic chemical), are in need.

On any given day, there are quite a large number of Americans looking to positively change their body. Survey data consistently shows that:

  • 40% of people in the US say they are “on a diet”. People in America spend $2 billion on weight loss supplements alone every year. Personal Care Products make up $5 billion annually in sales in the US.
  • Additionally, 60% of people admit, when surveyed, that they are influenced in the products they buy to affect their health and body by Instagram influencers and 39% say that YouTube has become their primary place to educate themselves on health and fitness specific goals and questions. (Mintell Market, 2019)

The market is under developed (BBC, 2018). An even more auspicious element of the opportunity is that interest premium health, wellness, and personal care product-related searched are increasing. From years 2007 to 2018, Google trends reported year over year increases in frequency of search terms “healthy food”. This is a key take home point to consider when reviewing the market size projection in Market Size Analysis.

Google Trend for Keyword "Healthy Food"

Annually, $2 billion dollars is spent on premium health and wellness products in the US. (Mintel Market, 2019). If Kayak Butter Group were able to achieve a market share of 5%, the opportunity equals an annual revenue of $100 million.

Positioning

Kayak Butter offers premium products designed using customer feedback as the primary factor in determining ingredients, formulas, styles, and overall design and couples that with a network of youtube and Instagram personalities that give the product an entirely new level.

A premium formula or design optimized for value in what consumers want from that particular type of product and the wellness related results it aims to deliver

2) Links to talented social media authorities such as youtube and instragram who vouch for the ingredients in the products, connect to, and educate people on how to use them, their benefits, etc… (much like the experience of using a peloton bike and connecting with other people and trainers doing the same routine and who have similar interests)

Target Market

  1. Household online buyers of premium health, wellness, and personal care products, 900.1 million
  2. Specialty Health and Wellness Stores: Whole Foods, Trader Joe’s, Lush, B2B at micro/local level via Amazon, Alibaba, and a Wholesale page on our ecommerce stores. 290 million
  3. Other Special Health and Wellness Facilities including Gyms, 1.04 million (NCES, 2015; Bureau of Labor Statistics, 2017) Total Kayak Butter market share (5% total market): 4.5 million

Competitive Analysis

  1. Threat of entry by new competitors: The threat of entry by new competitors overall is low to moderate, since the barrier to entry for effectively assembling the talent (youtube personalities, plus Instagram personalities, plus product development engineers) is fairly moderate. Such a comprehensive platform requires the ability to quickly reach a critical mass to allow for the greatest “exponential growth” ie desired viral marketing effect among the health and wellness community to materialize. New potential competitors entering to the market usually enter with simpler product offerings, and do not attempt to create what is essentially a marketplace of health and wellness information disseminated by youtube stars (or people Kayak Butter deems capable of being such “stars” after partnering with the brand) coupled into premium products all owned under one conglomerate, so in that regard Kayak Butter is not in the same league and has a moderate potential of threat.
  2. Threat of Substitute Products is moderate to high considering the fact that substitute products are being developed and offered at an increasing rate, particularly on Amazon, Whole Foods, and online premium health, wellness, and personal care stores. Again, the success of combating this depends on the ability of Kayak Butter to reach market eminence and gain enough loyal followers to powerfully self promote related brands and partners owned by Kayak Butter to keep consumers buying and consuming content all owned by Kayak Butter.

Marketing Strategies

The opportunity at Kayak Butter Group, in essence, is in identifying talented individuals in the health and wellness industry, who can benefit from a platform that contracts them to produce high quality products and/or genuinely valuable YouTube and Instagram content that connects with people.

Youtube personalities will offer tutorial videos on how to use products, either as recipes or how-to videos focused on results and optimized for SEO keywords that data shows people are actually interested in. This means that is a brand under Kayak Butter develops a line of easy-to-prepare keto-friendly breakfasts, YouTube personalities partnered and tailor picked will perform a video series on keto lifestyle, highlighting how that product can fall into a daily routine. Complimentary, an Instagram personality will add a dimension to the experience of using the product by posting interesting and beautiful value-packed pictures and stories of creative ways they are fitting that product into their healthy lifestyle and enjoying doing so.

All in all, customers receive the full package in every product they buy. Important to this framework for the value proposition and business model is to make sure that people are effectively funneled to the appropriate Kayak Butter social media partners, to optimize promotion and to grow the Kayak Butter community and brands strategically. A qualitative goal that, if achieved, contributes massively to the success of this business model, is if a critical mass of followers and brand loyalty is obtained to graduate the Kayak Butter social media network of personalities into a reputable and sought after platform, with a reputation that attracts more talent. Such a dynamic would contribute to an increasing rate of growth which allows principles ad classical mathematics governing viral and exponential growth seen in highly popular, i.e. famous brands and accounts on YouTube, Instagram, and other platfororms.

Budget & Forecast

As can be seen from the financial statements, our company requires $111,700 to start the business, which include the cost for first year fixed costs plus purchasing 300 units of Kayak Butter pack from the manufacturer. The Five owners will invest $30,000 at $5,000 each. $50,000 will be a bank loan from a commercial Bank, and the remaining $31,700 from outside investors. Payment on the $50,000 will be made monthly and amount of $900 per month (5-year period).

The Breakeven point in the first year of operation is 498 units. The financial projections anticipate breakeven point will remain overall consistent. Forecasted Income Analysis shows that our company will have a net loss of $43,901 at the end of its first year. And will have a net loss of $3,746 by the end of its second year. The earnings projections for the third year are expected to be $16,378. Last but not least is that the Forecast Sensitivity Analysis shows that the actual number of units sold will have a significant impact on the revenue.