Marketing Plan for for Herborist Cosmetic Company, China

limit i Executive summary3 ii List of graph/ pick up4 1. 0 smear analysis5 1. 1 Company and harvest-feasts background5 1. 1. 1 Company introduction5 1. 1. 2 w atomic number 18s introduction5 1. 2 application introduction6 1. 2. 1 Market coat and shargon6 1. 2. 2 growth trends7 1. 3 Macro-environ workforcetal analysis8 1. 3. 1 governmental and legal environment8 1. 3. 2 Economic environment9 1. 3. 3 Sociocultural environment9 1. 3. 4 Technological environment10 1. 4 Competitive analysis10 1. 5 Customer analysis11 1. 6 dissemination transmit analysis11 2. 0 SWOT analysis12 2. 1 Strengths12 2. 1. 1 Good instinctive nonfunctionals sucker name find12 2. 1. Clear food foodstuffing position13 2. 1. 3 Strong refer partnership13 2. 2 Weakness13 2. 2. 1 large(p)(p) not strong as umpteen extraneous nonfunctional companies13 2. 2. 2 Lack of blot kno followgness14 2. 2. 3 Huge direction of improvement in operations management14 2. 3 Opportunity14 2. 3. 1 Potential ec onomic role capacity14 2. 3. 2 2008 Olympic Games quarter western to traditional Chinese elements (Chinese current of air)15 2. 4 menace15 2. 4. 1 Tough competition15 2. 4. 216 2. 4. 3 investment funds gamble (ROI and cash flow)16 2. 4. 4 Economic crisis17 3. 0 Objectives17 3. 1 incorporate objective17 3. 2 selling objectives17 4. 0 Marketing outline18 4. 1 Tar channel foodstuff18 4. Positioning strategy18 4. 3 Marketing mix19 4. 3. 1 Product strategy19 4. 3. 2 determine strategy21 4. 3. 3 progress strategy22 4. 3. 4 mooring strategy24 5. 0 Budget for the a neverthelessting trine divisions27 6. 0 Projected profit and loss statement28 7. 0 Action program29 8. 0 say-so & feedback29 8. 1 Sales analysis29 8. 2 Market office analysis30 8. 3 lucrativeness by reaping30 8. 4 Efficiency on announce, gross tax income promotion analysis30 8. 5 Sales-force efficiency31 9. 0 Reference32 i Executive summary The selling plan is aimed to blueprint a systematic trade strateg y for Herborist Cosmetic Company, which is peculiar(prenominal)ized in herbal decoratives.This food commercialiseing plan entrust firstly carry appear a roll analysis on the commercialize share, size, macro environment, dispersion channel, competitor, customer and SWOT analysis for Herborist in Chinese augmentative market. And then, ground on the analysis, it go away state the corporate and merchandising objectives of Herborist and then lend oneself proper marketing strategy recommendations for Herborist. On one hand the recommendations will admit the aspect of market segmentation combined with bottoming consumer statement as grave as positioning strategy.On the early(a) hand, the recommendations will withal include the suggestions on marketing mix much(prenominal) as the product strategies, price strategies, distri plainlyion strategies and promotion strategies. ii List of graph/ formula Figure 1 Market share and growth of different nonfunctionals sub-sect ors, 20097 Figure 2 Skin contend brands share of come up gross gross revenue, 2008-09.. 10 graph 1 Marketing budget graph for year 2011 to 201327 chart 2 Projected profit and loss statement (2011 2013). 28 Chart 3 Implementation schedule29 1. Situation analysis 1. 1 Company and products background 1. 1. 1 Company introduction ins bowl Herborist Co. , Ltd. steeped in 1998, as a subsidiary of the leading cosmetic producer Shanghai Jahwa United Co. , Ltd, is independently operated (Herborist semi ex officio website 2010). As its great revolve around on using indigenous Chinese herbs in its natural hit-care products, it has won tribe to a certain extent in the home(prenominal) ease cosmetic market of come up care aspect and was awarded with the title of Shanghai famous brand in 2005(Herborist ordained website 2010).And till the year 2008, Herborist has launched in European market through cooperation with Sephora, which is a leading cosmetics sellers owned by Louis Vuitt on Moet Hennessy Group (Sephora decreed website 2010). 1. 1. 2 Products introduction The personal care products of Herborist personal are innate(p) based on the imagination of combination of both modern ergonomics and traditional herbal medicine.Under the emphasis of the end between traditional Chinese medicine theory and the mettlesome-tech promoter of modern technology, these products in Herborist clear effectively recuperate shinny, body and spirit to achieve the original debaucher and make the users skin as rude(a)ly born (Herborist ex officio website 2010). Herborists products focus on not good the care of side and body hardly in like manner the internal part, which always insist the concept of integrating tralatitious Chinese Medicine into the latest fruits of modern biotechnology.Take its star product siamese connection Chi Mud for example, it limns the brave out-for-ever Chinese aesthetic of balance via the compatibility of Yin and Yang. And at the alike time, imputable to the opening of Herborist Spa since the year 2002, Herborist cooperate the oil from herbal essence and herbal water therapy to offer women with holistic care, which besides shows its concepts of balance beauty and health on the basis of Chinese traditional herbal medicine (Herborist official website 2010). 1. 2 Industry introduction 1. 2. Market size and share According to the research from Li and Fung (2009), it shows that the cosmetics market of chinaware has enjoyed a continuous growth over recent years and china has turn over the second largest cosmetics market in Asia nowadays. And mean period, Chinese consumers variety show magnitude purchasing proponent and to a greater extent than and much Chinese womens participation in the workforce cook strengthened growth in the cosmetics market. Li and Fung (2009) alike showed the info that retail value of chinas cosmetics has grown by 26. % and even circulateed ? 48. 83 billion CNY in 2008 from the Nat ional Bureau of Statistics (NBS). Meanwhile, from Figure 1(Li & Fung 2009), we ass follow through the skin care products assume taken up a vauntingly market share even to 26. 3% of Chinese cosmetic market. And meanwhile the major market share of skin care products still prevail by any(prenominal) famous foreign brands much(prenominal)(prenominal) as P&G, Shieido, LOreal and whatsoever local low-end price brands such as Dabao and Longliqi(Li & Fung 2009).As the up-rising star of the cosmetic brand, Herborists market share is about 0. 3% out of the total market share till the first quarter of the year 2010 (Herborist official website 2010). Figure 1 Market share and growth of different cosmetics sub-sectors, 2009 citation Access Asia 1. 2. 2 Developing trends On the basis of the survey from AMA parley run (2010), there is a trend of growing health awareness among Chinese consumers due to the development of chinas economy.Thats why Chinese consumers prefer cosmetic products using natural ingredients than chemical products, e pickyly the ones with strong attachment to Chinese traditional Medicine (TCM), which is an essential part of Chinese culture. cod to this special preference of Chinese consumers, there is a trend that more and more players, not exclusively internal but also foreign ones, undertake to position their cosmetic products with mild chemical formulae as salubrious as herbal and natural ingredients (Li & Fung 2009).P, for instance, added herbal ingredients such as Shouwu and Ginseng to its nurture shampoos series of Chinese market. Lux of Unilever also launched its shampoos series with the addition of Chinese herbal ingredients including Danggui, Gingko and Bai Hao Yinzhen in Chinese market. Under this trend, Herborist Co. , Ltd has launched series of natural beauty care products with the ingredients of herbs since the year of 1998, and now enjoys a reliable popularity of record beauty care brand (Herborist official website 2010 ). . 3 Macro-environmental analysis Macro-environment is the outside factors including political, economic, sociocultural, technological and legal forces, which influence the survival of the organization (Elliott, Rundle-Thiele & Waller 2010). 1. 3. 1 Political and legal environment In chinaware, central government still encourages the municipal products growth, which is some kind of guarantee for the development of domestic cosmetic companies, such as Herborist Co. Ltd (Ting 2009). While, at the same time, with the accomplishation of some tight regulations on cosmetic products such as the Hygiene bill for Cosmetics (2007 Edition) and the Hygiene Standard for Cosmetics Manufacturers (2007 edition), Chinese government and consumers pay more and more attention to the synthetic rubber of cosmetic products, especially after(prenominal) the Japan-based SK-II was tried and true and found to contain some unapproved substances in Chinese coming back (Li & Fung 2009).For instance the total number of forbidden and restricted substances used in cosmetics is laster at 1,286, and there is also strict limitation on the use of certain ingredients contained in preservatives, sun blocker divisor, coloring agent and hair dye agent. This also puts Herborist on busy to focus on their products safety. 1. 3. 2 Economic environment The economic conditions in China offer Herborist Co. , Ltd not only opportunities but also risks. China is the second large cosmetic market in Asia and the total retail gross revenue of cosmetics in China is about ? 48. 3 billion CNY in 2008, which shows the great potential consumption power for cosmetic players both globular and local, including Herborist(Li & Fung 2009). While the tax rate for the skin care products in China is about 8% to 30% or so on and to conform to with the World Trade Organization agreements, the import tariffs of cosmetic products has been gradually minify over the past few years, which bring great pressure for Herborist to face not only the expensive product tax but also the hyper competition from products of foreign players due to the relatively audaciouser price compared to the previous after the reduction of import tariffs. . 3. 3 Sociocultural environment There is a special preference on natural ingredients specially the addition of herbal material in skin care products, due to the Chinese Traditional Medicine therapy is the essence of Chinese culture (AMA conversation Services 2010). As for Herborist, this preference on natural ingredients skin care products of Chinese consumers is a great advantage. 1. 3. 4 Technological environment The increased usage of the profit in China is the impart from the development of technology, which results in the popularity of expansion the online syllabus for product sale for most cosmetic companies.Under this situation, Herborist has also set up online platforms to show its products in order to adjoin more young customers (Herborist official we bsite 2010). 1. 4 Competitive analysis As shown in figure 2 (Li & Fung 2009), the top 10 skin care brands accounted for tightlippedly 80% sales in 2009 of Chinese market, in which the foreign players take up a large share in the mid- game school and high-end segments such as P&G, LOreal and Shiseido. For Herborist these foreign brands including Olay, LOreal, Aupres, Yue-Sai, Avon, Shiseido and so on which also admit the preference on mid and mid-high segments are the powerful opponents.Figure 2 Skin care brands share of total sales, 2008-09 2009 2008 BrandCompany nameShare of total sales (%) OlayProcter & Gamble (Guangzhou) Ltd 29. 71 AupresShiseido Liyuan Cosmetics Co Ltd 18. 94 LOrealLOreal China11. 83 LancomeLOreal China7. 60 ShiseidoShiseido Liyuan Cosmetics Co Ltd 3. 47 Yue-SaiLOreal China2. 52 DeBonLG Household & Health Care Ltd 1. 32 TJOYNanjing Jianong Chemical Co. Ltd1. 11 DabaoBeijing San Lu Factory0. 61 PondsUnilever China Ltd 0. 61 differents22. 29 BrandCompany nam eShare of total sales (%) OlayProcter & Gamble (Guangzhou) Ltd 34. 0 AupresShiseido Liyuan Cosmetics Co Ltd 13. 91 LOrealLOreal China8. 36 DabaoBeijing San Lu Factory 5. 74 LongliqiJiangsu Longliqi Group Co Ltd 3. 61 TJOYNanjing Jianong Chemical Co. Ltd 2. 58 Yue-SaiLOreal China2. 33 AvonAvon (China) Co Ltd 1. 36 MininurseLOreal China1. 08 PondsUnilever China Ltd 1. 01 Others25. 82 1. 5 Customer analysis According to the research carried out by AMA Communication Services (2010), the average monthly expenditure on beauty and skin care products of feminine white collar consumers in Shanghai, Beijing chain of mountainsed 1,000 RMB (about cl USD).And in otherwise secondary cities of China, there is also large consumption capacity on skin care products. According to the data from Herborist official website (2010), there are at least 270,000 consumers as its members and near 90,000 stub member, who contributes close 45% consumption of Herborists products. Moreover, most of the core m embers of Herborist are the ones who shift from using international high-end skin care products to Herborists products and they admit great brand loyalty to Herborist.Meanwhile these core members are also have great influence on motivating other consumers choosing Herborists products. 1. 6 Distribution channels analysis There are diverse dispersion channels for Herborist to deliver its products to domestic consumers such as opening counters in Chinas major department stores and professional stores and setting up durability stores to sell its products (Herborist official website 2010). For instance, Herborist has already opened nearly 450 military posture stores until 2008, 70% of them are franchises. 2. SWOT analysis For Herborist, to have a demote business performance, it is crucial to be able to under footstall the current opportunities in the market place, the major threat it whitethorn faced at the empower as sanitary as in the future, the strengths that Herborist owns c ompared with other competitors and the weakness which whitethorn affect its performance and future development (Elliott, Rundle-Thiele & Waller 2010). The SWOT analysis for Herborist will be implemented in the interest, which will indentify the internal strengths, weakness, the external opportunities and threats related to Herborist. . 1 Strengths 2. 1. 1 Good native cosmetics brand figure of speech Since the year of 1998, Herborist has begun to distinguish itself via intergrating Traditional Chinese Medicine into the latest fruits of modern biotechnology. And till now, it has already build a good image of organic cosmetics. The school of thought via Yin-Yang balance to enable skin, body and spirit to reach idea consistency and radiate natural, individualized and sanitary beauty, has welcomed by a great many Chinese consumers(Herborist official website 2010). . 1. 2 Clear marketing position Herborist has posited itself as organic skin care brand and oriented itself marked a t center and high income female white collar consumers, which attracts more than 270,000 consumers as its members and near 90,000 core members (Herborist official website 2010). 2. 1. 3 Strong parent company The parent company of Herborist is Shanghai Jahwa United Co. , Ltd, a leading Chinese domestic cosmetics producer, which is good at integrating R&D, production, distribution and service.And meanwhile, Shanghai Jahwa has planed to induct ? 170 million to arouse the market share of Herborist, which give the axe serve the development and maturity of Herborist(Herborist official website 2010). 2. 2 Weakness 2. 2. 1 Capital not strong as many international cosmetic companies Although Herborist has the provide from Shanghai Jahwa, the capital of it is still not strong as some international cosmetic companies, which limits its spending on research and development (Whiteman & Krug 2008). . 2. 2 Lack of brand awareness Although Herborist has gain a reputation of healthy and orga nic skin care brand, it still lack brand awareness among several Chinese consumers, due to the limited investment in advertising. For instance, Herborist only promotes its products in print advertisement while ignoring other channels such TV ads, wireless ads and so on (Chinairn 2009). 2. 2. 3 Huge elbow room of improvement in operations management Operations management is some other weak part for Herborist.It is reported that unforesightful logistics management has led to hanker lead-time, high inventory as well as capital dead end which place heavy burden on the future development of Herborist (Chinairn 2009). 2. 3 Opportunity 2. 3. 1 Potential consumption capacity In family line 2006, the products of SK-II was tested and found to contain some unapproved substances in Chinese counter, followed by other world famous cosmetic brand including Clinique, Lancome, Dior and Estee Lauder whose cosmetic products were said to have prohibited substances (Ting, C. 2009).Due to these in cidents, more and more Chinese consumers began to occupy some organic and herbal skin care products, which is a great opportunity for Herborist to invite. According to the National Bureau of Statistics (NBS), the consumption power on cosmetic products will reach at ? 60 billion CNY in 2010, in which skin care products will take up nearly 30% of the total number, which for Herborist is really good refreshful chance (Li & Fung 2009). 2. 3. 2 2008 Olympic Games attract western to traditional Chinese elements (Chinese wind) Because of the 2008 Olympic Games, all the attention was focused on China which brought a Chinese wind.In skin care aspect, not only the Chinese consumers began to switch to choose herbal and organic products but also the foreign consumers show great interest in the skin care products with traditional Chinese medicine inside (AMA Communication Services 2010). As organic cosmetic brand specialized in herbal cosmetics, Herborist has developed under the concept of in tergrating Traditional Chinese Medicine into the latest fruits of modern biotechnology, which make Herborist compel one of the most popular domestic organic cosmetic brands in Chinese market under the Chinese wind(Simon 2009). 2. 4 Threat 2. . 1 Tough competition For Herborist, the giantgest threat is the tough competition largely from international players. Chinese skin care market is almost in use(p) by international cosmetics giants including LOreal, P&G, Estee Lauder Shiseido and so on (Li & Fung 2009). And because of the excellent brand building and management force, massive advertising efforts as well as leading research and development capability, the products from multinational cosmetics corporations stand for quality, reliability and reputation in hearts of Chinese consumers compared with the local brands (Li & Fung 2009).For Herborist, to palpitate these international cosmetics giants and win more customers from them are really a big challenge. 2. 4. 2 Image of make in China The tag of made in china often stands for cheap price while poor quality, which also exits in skin care products (Wharton n. d). Just like the foreign brands stands for quality, reliability and reputation, the Chinese made skin care products for foreign customers representation poor in quality and even the same for some Chinese consumers.For Herborist, this kind of phenomenon is a great threat to both extend the domestic market share and especially position itself for the international markets. 2. 4. 3 Investment risk (ROI and cash flow) From the official website of Herborist (2010), the company has planed to invest ? 170 million to recruit the market share. Although it is good news for Herborists future development, it has to choose the issue on the period of return on investment (ROI).Herborist has the own of in any case capacious time ROI, for instance, Herborist began to make profit after it came into the domestic cosmetic market seven years (Herborist official w ebsite 2010). If the return on this times ? 170 million investment still last too long, Herborist has to face the risk of cash flow problem, which may result in big financial dilemma for Herborist. 2. 4. 4 Economic crisis Due to the economic crisis in the recent year, the purchasing power is reduced and preference is inclined to relatively cheap products which for Herborist oriented on midriff to high cosmetic products is a kind of pressure (Li & Fung 2009). . 0 Objectives 3. 1 Corporate objective Corporate objective for Herborist is to stupefy a world clear enterprise with the capability of innovation and creativity to not only endlessly introduce high quality new products to meet the needs of the consumers but also reserve good quality products under the concept of integrating Traditional Chinese Medicine into the latest fruits of modern biotechnology (Herborist official website 2010). 3. 2 Marketing objectives The marketing objectives for Herborist include two parts.On the o ne hand, Herborist plans to expand its cover of domestic distribution channels to 170 main cities and expand the retail terminals from 700 to 1,200. On the other hand, Herborist plans to expand its market outside the China mainland market via the cooperation with Sephora (Herborist official website 2010). Herborist aims to achieve ? 1. 35 billion of sales revenue in the end of 2014 and increase the revenue as well as Compound Average Growth Rate (CAGR) to 21. 98% within the next five years (Herborist official website 2010). . 0 Marketing strategy The following is the market strategy for Herborist including the targeted market, position as well as marketing mix strategies, which is based on the above analysis. 4. 1 Target market As the organic cosmetic company, Herborist is specialized in herbal cosmetics. In the full of furious competition cosmetic market of China, the primary consumer target for Herborist is heart and soul to upper income white collar females who prefer natural, mild but effective skin care products.The secondary consumer target is college female students, who estimate for mild products to maintain their young and fresh skins. This segment is focused on these female college students who prefer buying international cosmetic brand while have pressures on the pricing part. According to the survey that there is an increasing rate on the purchasing capability of female college or university students towards position to high end cosmetic products, which is an grievous segment for Herborist to focus(AMA Communication Services). . 2 Positioning strategy Herborist will position itself as the middle to high end cosmetic products which focuses on the balance between traditional Chinese medicine theories adherence to Chinese elements of Tai chi, lotus, green and the high-tech inwardness of modern technology to continuously introduce high quality new products to meet the needs of the consumers on their skin care. 4. Marketing mix Marketing mix descr ibes these different elements such as price, product, promotion, place, people, and summons and so on that marketers need to consider (Elliott, Rundle-Thiele, & Waller 2010), which is essential for Herborist to consider in its marketing process to achieve better performance. The following will analyze four areas of marketing mix including the aspects of price, product, promotion, and place for Herborists marketing process. 4. 3. Product strategy Product is defined as a good, service or idea offered to the market for exchange, which plays a vital role in the marketing process, which is the means for companies to pay the functional, social and psychological needs, wants and demands of customers (Elliott, Rundle-Thiele, & Waller 2010). For Herborist, it is important to emphasize the importance of the product strategy. 4. 3. 1. 1 Product diversification strategy Palmer (2009) advocated the importance of product diversification strategy, which is also proper for Herborist.Products all have their lifecycles and especially the skin care products have the relatively short lifecycle (Kotler& Armstrong 2008), so it is important for Herborist to focus on the product innovation and providing a wider product portfolio to meet the market requirements under deliberate market analysis. Moreover, besides the innovation on skin care products, Herborist is recommended to deepen its R&D capacity on color cosmetics, hair care, and mens cosmetics to perfect it products range of cosmetic products.Only under these activities john Herborist meet Chinese customers consumption concept of pursuit for practical, fresh, beautiful as well as top quality. 4. 3. 1. 2 Establishing strong brand loyalty Kotler and Armstrong (2008) recall the importance of establishment of brand loyalty. For Herborist, besides the already built social status system, it is also recommended to apply for the ISO9001 quality system certification, which notify enhance the customers agency of Herborist to impro ve customers favorable attitude and purchasing behavior towards Herborists products. 4. 3. 1. sustentation its druthers As the organic cosmetic brand, its important for Herborist to maintain its advantage on herbal cosmetics. To search the future development, its so essential for Herborist to maintain its image of Chinese characteristics. Only depending on this distinctiveness, smoke Herborist have more chances to become world famous cosmetic brand just like the road of the body shop and Shiseido does. 4. 3. 1. 4 Developing the wadding and design of products One of the important means for gaining more market share is to have a distinct product design and packing (Elliot, Rundle-Thiele & Waller 2010).For Herborist, it is essential to focus more on packaging design to attract more consumers with high quality packaging materials for different products series and pass away people apprehension of domestic goods while foreign quality. For instance, the introduction of Chinese elemen ts tooshie be adopted in the product designing and packing such as Chinese painting, lotus and so on are all very Chinese style and give people an impression of elegance and fresh, which is fit for Herborists image of herbal cosmetics. 4. 3. 2 Pricing strategy The price of products setting has great influence on companies rofit and marketing process, as the competitive environment changes, companies are recommended to consider when to initiate prices change and when to move to them (Kotler &Armstrong 2008). For Herborist, it is important to consider proper pricing strategy to respond to the fluctuant marketing environment. 4. 3. 2. 1 Prestige pricing strategy To maintain the image of middle to high end cosmetic brand and accelerate the footprint of advance to the high-end market, Herborist is recommended to adopt prestige pricing strategy (Kotler & Armstrong 2008), which requires Herborist to introduce its new products as a relatively middle to high price.For instance, with the g ift box priced at ? 500 CNY, refreshing Tai Chi Mud veil ? 380 CNY and so on, Herborist has set a relatively good image of middle to high end cosmetic brand which shows the image of prestige, quality and exclusively to Chinese consumers who often hold the opinion that high price means high quality(Whiteman & Krug 2008). 4. 3. 2. 2 Product bundle pricing The price of Herborists products is almost at the same level with the international middle to high end cosmetic products especially the Shiseido.To strengthen its position of middle to high end cosmetic brand, it isnt recommended for Herborist to discount its products too much and too often, because there is a deep rooted concept among Chinese consumers that cheap means low quality. While to attract consumers, it is necessary to offer discount. So it is recommended for Herborist to adopt product bundle pricing, which means combining several products unneurotic and offering the bundle at a reduced price (Kotler & Armstrong 2008), which can servicing Herborist improve profit via motivating more buying power. . 3. 3 Promotion strategy Promotion is the creation and caution of communication with target markets, which makes potential consumers, partners and society aware of. Deliberate designed promotion strategy can abet Herborist make consumers aware of and interested in its products and effectively and efficiently communicate its message about the products to the market place (Elliott, Rundle-Thiele& Waller2010,). The promotion strategy for Herborist is as below. 4. 3. 3. Outstanding special features Because Chinas consumers are almost pragmatists, if we only use some abstract and vague slogan and general propaganda tactics, it is delicate to persuade consumers to buy the products. The professional TCM report plus practical comment in advertisement is recommended to highlight the effect of Herborists products to strengthen the cartel of consumers brand loyalty. And meanwhile, it is also recommended for Herborist to offer some free trial to consumers to get more feedback after they used, which can also help Herborist promote its products. . 3. 3. 2 Advertising and brand ambassador Based on the survey from Solomon (2009), celebrities and beauty experts have huge influences on cosmetic purchases in Chinese market, which results in consumers relying on trial and error from celebrities and beauty experts rather than spending too much money on their own cosmetic trials. Due to this special scenario, finding a proper brand ambassador is recommended for Herborist to attract more customers via the convincing power from celebrities.The proper brand ambassador can help Herborist reach the needs of more consumers and strengthen its healthy and fresh image as herbal cosmetics and enhance its brand cognition. At the same time, it is also wise for Herborist to strengthen its propaganda coverage via ads on the newspapers, magazine as well as in public places such posting large beak in bus statio n, MTR station and other public places to attract more attention, which can largely incent consumers desire to purchase Herborists products.Furthermore, sponsoring TV and radio programs on healthy life and beauty can also help Herborist to portray the image of advocating healthy, natural brand. 4. 3. 3. 3 Perfect customer similitude management (CRM) Palmer (2009) claimed that it is so crucial for companies to develop good customer relationships because good quality alone may be insufficient for a company to gain competitive advantages in increasingly competitive markets, while good customer relation management can supplement a theaters competitive advantage.For Herborist, it is necessary to improve the pre sales and after sales service. For instance, before purchasing products from Herborist, it is necessary to give proper and professional suggestions and guidance, which is an important part of brand building. Furthermore, providing professional beauty care lectures for consumers, free skin analysis under the help of professional skin analytical creature as well as providing customers with improved return protection to enhance the reputation and the customers sense of belonging are all good approaches. 4. 3. Place strategy Herborist has already built a diverse distribution channels to deliver its cosmetic products to consumers, such as opening counters in Chinas major department stores, professional stores and setting up specialty stores to sell its products (Herborist official website 2010). To become a world class Chinese cosmetic enterprise, Herborist is recommended to expand and strengthen its distribution channel. 4. 3. 4. 1 Open counter in big chain supermarkets Big chain supermarkets in China are important sales channels for lower-priced cosmetics products in a long history.While due to the launching of middlerange brands of broadening products such as Mininurse, Garnier and Maybelline in these retail chains by LOreal, P and other cosmetic giants, bi g chain Supermarkets in China have become new channels for middle price cosmetic brand to reach a wider audience (Li & Fung 2009). These foreign-owned hypermarkets and supermarkets such as Carrefour and Wal-mart as well as locals such as Lianhua , Hualian as well as deposit mart are often the initial choices.For Herborist, it is also recommended to open counters to launch its middle price range products in these hypermarkets and supermarkets just like LOreal, P and other leading cosmetic companies do, which can help Herborist to reach its secondary consumer target of college female students and other consumers who are searching for middle price cosmetic products in supermarkets and hypermarkets. 4. 3. 4. 2 Online sales Online sales may just represent a small share in boilersuit cosmetics sales, but we cant ignore its potential.And on the basis of the data got from the China Internet Network Information Centre, in the first half of 2007 there are more than 70% of the 162 million In ternet universe of discourse aged under 30 (Li & Fung 2009), for Herborist it is a powerful channel to reach parts of its primary and secondary consumers such as the young female white collar and college students. Although Herborist has set up online platforms to show its products, it hasnt begun its online sales.To curb the huge potential, Herborist is recommended to launch online sales on its online platform, just like other successful cosmetics players have done, including DHC from Japan, SaSa and Sephora (Li & Fung 2009). For launching online sales, it can help Herborist to save more cost in hiring stores. For instance, some professional software for online sales such as Integrated Distribution System adopted by P have the distinctiveness of quick, effective, low cost, low risk, which is recommended for Herborist to adopt (AMA Communication Services 2010). . 3. 4. 3 Choosing proper agent The failure of Herborist in Hong Kong market is as below (Herborist official website 2010) . At first, Herborist directly copied the sales model of the mainland market, which cant localize itself it the Hong Kong market. Secondly, Herborist invest too much to build its sales channel, which largely increased its sales cost. Thirdly, the strong resistance to the new brand such as Herborist in the Hong Kong market, which cost Herborist too much to enhance its brand cognitive.For Herborist, it is more suitable to find proper local agent to facilitate it expand in the market outside mainland China. For instance, it is recommended for Herborist to relaunch its products in Hong Kong market via the cooperation with SaSa. As a Hong Kong-based cosmetics retailing and beauty services provider, SaSa has already built well sales network and is experienced in solving the problems on new brand cognitive as well as has a good image of cosmetics retailing and beauty services provider (Li & Fung 2009), which can facilitate Herborist successfully come into the Hong Kong market. . 3. 4. 4 Ph armacies As a organic cosmetic brand and specialized in herbal cosmetics, Herborist is recommended to launched its products in pharmacies just as these successful cosmeceutical brands do, including French Eau Thermale Avene, Vichy and La Roche-Posay, Japans Kanebo, Freeplus and Shiseido Ferzea and so on.As the research from AMA Communication Services (2010) showing, the skin care products in pharmacies to Chinese consumers means mild, soft, effective and professional, thats why most of the Chinese cosmetic consumers have begun to switch their choices to cosmetic products in pharmacies, especially after the Japan-based SK-II was tested and found to contain some unapproved substances in Chinese counter. For Herborist, pharmacies are recommended distribution channels to gain more potential consumers. 5. Budget for the next three years The Chart below outlines the following three years budgets of Herborist on sales, promotions, distribution, and other related areas from 2011 to 2013. Ch art 1 Marketing budget chart for year 2011 to 2013 Items Budget for 2011Budget for 2012Budget for 2013 Advertisement ? 30,000? 40,000? 50,000 Sale force training and remark? 5,000? 5,000? 5,000 Distribution channel expansion? 3,000? 4,000? 5,000 Distribution channel nourishment? 2,000? 2,500? 3,000 Website maintenance? 2,000? 2,000? 2,000 Website improvement ? 0,000? 8,000? 8,000 Public relations? 4,000? 4,000? 3,000 R? 20,000? 22,000? 25,000 Total? 76,000? 87,500? 101,000 In thousands (CNY) 6. 0 Projected profit and loss statement The chart below is the d profit and loss statement forecast of Herborist for year 2011 to 2013 Chart 2 Projected profit and loss statement (2011 2013) Subjects Time ? Thousands (CNY)Total ? Thousands (CNY) 201120122013201120122013 Total sales revenue ? 1,200,624 ? 107,052 ? 1,093,572? 1,253,049 ? 120,493 ? 1,132,556? 1,367,446 ? 35,240 ? 1,232,206 Advertisement &Promotion? 30,000? 40,000? 50,000 Sale force training and comment? 5,000? 5,000? 5,000 Dis tribution channel expansion? 3,000? 4,000? 5,000 Distribution channel maintenance? 2,000? 2,500? 3,000 Website maintenance? 2,000? 2,000? 2,000 Website improvement? 10,000? 8,000? 8,000 Public relations? 4,000? 4,000? 3,000 R&D? 20,000? 22,000? 25,000 Tax ? 21,052? 21,961? 23,997 Other expenses? 10,000? 11,032? 10,243 Total expenses Profit In thousands (CNY) 7. Action program Herborist will implement series of activities to facilitate itself achieve its business objectives in from the year 2011. Chart 3 Implementation schedule Subject123456789101112Total ? (CNY) 76,000,000 Sale force training and stimulant 5,000,000 Modification and improvement on website. 12,000,000 Integrated propagandas campaign on targeting consumers via on print, radio, TV, internet means 4,000,000 sales promotion with the continuing of the multimedia advertising campaign. 30,000,000 Research and development on products 0,000,000 Deliberate research to expand its distribution channels and maintenance 2,0 00,000 Expansion of its business to more locations. 3,000,000 8. 0 sustain & feedback 8. 1 Sales analysis Herborist is planning to strengthen the systems for sale analysis, due to the timely data on sales is curial for the whole marketing plan. Furthermore, the sales analysis is recommended to be implemented monthly, which can facilitate Herborist to develop possibility plans to address the fast moving environmental changes, especially the customers needs (Kotler & Armstrong 2008). . 2 Market share analysis Under the stage of expansion, the market share analysis is necessary for Herborist to conduct which is recommended to be done quarterly in order to watch the market closely. 8. 3 Profitability by product To facilitate R&D programs of Herborist, the profitability by products analysis can be done yearly and used as reference to help Herborist decide its future investment on products modification and innovation which can bring better profit for the company. . 4 Efficiency on adv ertising, sales promotion analysis To analyze the efficiency of advisements and sales promotion quarterly for Herborist quarterly is essential, which can make Herborist have a clearly picture of the effectiveness its promotion strategy and facilitate the modification and better orientation of the advertising and sales promotion campaign more effectively in the following quarter. 8. Sales-force efficiency The sales force efficiency should be measurable both on the bases of the sale volume that they have brought to the company, and the potential capability of staffs in the sale force, which help Herborist best position its sale forces to win more income. 9. 0 Reference AMA Communication Services 2010, High-end cosmetics trends in China, greenbook. org, viewed 11 July 2010, Chinairn 2009, (Successful case study on domestic cosmetic industry), chinairn. om, viewed 12 July 2010, Elliott, G. , Rundle-Thiele, S & Waller, D. 2010, Marketing, John Wiley & Sons Australia, Ltd, Australia, He rborist official website 2010, Company profile, herborist. com. cn, viewed 11 July 2010, Kotler, P. & Armstrong, G. 2008, Principles of marketing, 12th edn, Pearson Education International, New Jersey, Li & Fung 2009, Latest developments of Chinas cosmetics market, Li & Fung Research Centre, viewed 11 July 2010, Palmer, A. 009, Introduction to marketing theory and practice, 2nd edn, Oxford University Press, New York, Sephora official website 2010, Sephora stories, sephora. com, viewed 11 July 2010, Simon 2009, Herborist A successful Chinese cosmetics brand, enovate 2010, viewed 13 July 2010, Solomon, J. 2009, Skincare companies dominating the cosmetic market in China, seekingalpha. com, viewed 14 July 2010, Ting, C. 2009, Chinas homegrown report gains popularity, Beijing kswchina. om inc. , viewed 12 July 2010, Wharton n. d. , Special report New challenge for made in China, electronic version, Boston Consulting Group, Whiteman, G. & Krug, B. 2008, Beauty and the beast Consumer stak eholders demand fulfil in China, vol. 1, Journal of International Business Ethics, Xia XH. 2010, (Suggestions on strategic stigmatization for Herborist), Chinas science and technology research center of citation index evaluation, viewed 14 July 2010,