BIRCHBOX MARKETING
PLAN
TABLE OF CONTENTS
INTRODUCTION
TABLE OF CONTENTS 1
EXECUTIVE SUMMARY
COMPANY
DESCRIPTION.....................................................................................................
............................3
STRATEGIC
PLAN.................................................................................................................
............................4
DISCUSSION OF FINDINGS
CORE COMPETENCY & SUSTAINABLE ADVANTAGES 5
SITUATION ANALYSIS (SWOT ANALYSIS)
6-7
INDUSTRY
ANALYSIS...........................................................................................................
............................8
ORGANIZATIONS STRENGTHS AND
WEAKNESSES............................................................................................9
1. Executive Summary
Objectives
There were two primary objectives for this Marketing Plan:
1. To provide pivotal market information about Birchbox.
2. To convey the message of the College Representatives program, core
sustainability measures, and financial or non-financial goals.
SWOT Analysis
Strengths
-Value proposition of
customer service
and unique
representative
program
Weaknesses
-Elastic demand
for products
-Unstable college
economy budget
makes an
-Exclusivity, novelty, unstable college
prestige of Birchbox target market
Opportunities
-Expand target
market by 56%
(Reaching colleges
nationwide
-Reach 40% of
college universities
by 2020
Threats
-Fellow subscription
services such as
Julep or Ipsy
-Lack of college
engagement upon
initiative beginning
Products
-Positive
environment for
entrepreneurial
ventures
-Funding deficit
-Lack of current
-Attaining pivotal
brand-prominence brand engagement
and awareness
from a younger
generation
-Lack of trained
college
-Use exclusivity of
entrepreneurs
products for a
sustainable
advantages
-Elastic demand
makes Birchbox
products easily
replaceable or
interchangeable
2. Company Description
Birchbox is a multi-generational beauty and lifestyle e-commerce
company that sends out monthly subscription boxes filled with deluxe samples for
$10 a month. Birchbox gets beauty samples from brands who want their products in
front of interested buyers. After subscribers test their grooming, beauty, or lifestyle
samples they can readily purchase a full-size version from the online shop. While
beauty and lifestyle products may appeal to anyone of any age, Birchboxs target
market is college women between the ages of 20 and 25.
Services
Not only does Birchbox offer samples of their products, but they offer
amenities such as free shipping, a points system, and an online shop filled
with unique articles only accessible by Birchbox subscribers. The online shop
at Birchbox.com is filled with interesting content about the latest beauty and
lifestyle news. Also, Birchbox has a partner program where affiliates can be
ambassadors of the brand through their social media channels. Fortune
magazine sums up the Birchbox phenomenon perfectly: By distributing
samples, Birchbox creates awareness and demand for new beauty brands,
the same way that womens magazines have been doing for decades. With
this in mind, essentially, Birchbox subscribers are paying to be marketed to.
Proposal
Since Birchbox is almost exclusively an online retailer (there are only two
actual Birchbox locations), it uses mostly media and online advertising to
gain subscribers. And while Birchbox has an impressive digital presence, they
lack a real life, the open aspect of their brand. Birchbox lacks one of the most
valuable marketing strategies, grass-root marketing. To keep growing, it
needs to have representatives of the company going into the world with
them to share what Birchbox can offer. Many comparable brands such as Ulta
Birchbox Marketing Plan
Non-Financial Goals
Our core non-financial goals for this program are to do the following:
Elevate Birchbox brand awareness and engagement with college aged
youth by increasing brand reach and impact at the University of
Northwestern- St Paul.
Give college students an opportunity to earn money and expand their
marketing, sales, and communication skills as campus representatives.
Become the primary service for discovering up-and-coming beauty trends.
Financial Goals
Our core financial goals are to do the following:
Increase overall revenue and subscription of product orders by at least 8%.
To obtain a profitable net-worth of $500 million by 2017.
Value Proposition
Implementing a cutting edge campus representative program will promote
customer satisfaction, engagement, and loyalty. When we bring the product
into the marketplace, not only do we change the game for online retailers,
but we provide a face-to-face interaction aspect that our brand lacks.
Our employees, the campus representatives, will become the face of our
brand. This adds more value than television or radio advertising could ever
do, because it ensures that there is a face to the product. We would be the
first online-retailer or cosmetic company to enlist campus representatives,
setting us apart from our competition.
5. Situation Analysis
The situation analysis starts with a snapshot of the current environment that
Birchbox finds itself starting in by providing a SWOT (strengths, weaknesses,
opportunities, threats) analysis.
Strengths
Weaknesses
Opportunities
Threats
-Value proposition of -Elastic demand
-Expand target
-Fellow subscription
customer service
for products
market by 56%
services such as
and unique
(Reaching colleges
Julep or Ipsy
representative
-Unstable college nationwide
program
economy budget
-Lack of college
makes an
-Reach 40% of
engagement upon
-Exclusivity, novelty, unstable college
college universities
initiative beginning
prestige of Birchbox target market
by 2020
Products
-Funding deficit
-Lack of current
-Attaining pivotal
Birchbox Marketing Plan
-Positive
environment for
entrepreneurial
ventures
-Elastic demand
makes Birchbox
products easily
replaceable or
interchangeable
Finance
Marketing
Strengths
Weaknesses
Co-management and
ownership within our company
can cause internal
disagreements, leading to
negative external perceptions
about Birchbox.
Offerings
External
Factors
Consumer
& Social
Weaknesses
6. Industry Analysis
Trends within Subscription Services
Starting around 2010, the concept of subscription box services were all the
rage. Everything from coffee, razors, wine, diapers, and household items
were curated as subscription boxes. The novelty of subscription box
subscription is what keeps the industry growing. Customers love getting a
gift in the mail every month. Without ever leaving their house, customers
receive a curated gift every month.
Competitor Analysis
Birchbox has three main subscription beauty box competitors:
1) Glossybox
2) Ipsy
3) Julep
4)
York and is backed by Accel Partners and First Round Capitol (Curated
Reviews, Jennifer Smiriglio).
Weaknesses
The biggest weakness that Birchbox is currently facing is their lack of personto-person marketing or sales. The internet can serve an incredible purpose.
Online shopping can bring products to doors and satisfy customers in ways
that were unforeseen ten or twenty years ago. However, unforgettable
brands need unforgettable locations. Since Birchbox only has two brick-andmortar locations, they need to make up for their lack of physical presence
with opinion-changing individuals in college campuses.
Customer Analysis
The target demographic for Birchbox is young, educated women with an
interest in self-improvement and personal growth. Typically, the
socioeconomic background of Birchboxs subscribers range from lower-middle
to middle-upper class.
All Birchbox subscribers have access to sampling all brands sold in the
Birchbox shop. The ultimate goal of the Company is to get customers to love
their samples, and purchase the full-priced items in the store. Because fullsized product orders make up 30% of Birchboxs annual revenue, they sell a
wide variety of items at different price and interest points.
Chief Executive Officer of Birchbox, Haley Burna sates that Our customers
are a very special bunch. We are constantly challenged by you to evolve and
improve our service. Burna continues to describe the demographics of
Birchbox as more of a psychographic. Our customers consist of anyone who
wants to try new things and discover something that can make them feel
beautiful (Burna, blog.birchbox.com).
10
This section described the five-year marketing and product objectives for Birchbox
including the target markets, points of difference, and Birchboxs positioning of the
campus representative program.
Target Markets
The primary target market for Birchboxs campus representative initiative is upper
to middle class college students. These students are typically young, educated
women with an interest in self-improvement and personal growth. They tend to be
extremely self-aware and spend over $500 a year on cosmetics or personal/
lifestyle improvement.
Birchbox college student customers are likely very involved in social media, popular
culture, and the media. They tend to be subscribers of magazines such as
Cosmopolitan or Elle. Birchbox representatives will likely be socially involved and
well-liked by their peers. They will also likely have a background in business,
communication, or marketing and have strong entrepreneurial aspirations.
Birchbox Marketing Plan
11
Percentages 42%
College students
spending over $500/
year on cosmetics
Students interested
in self-improvement
and growth
40%
18%
Points of Difference
The points of difference, or characteristics that make Birchbox different from
competitors, fall into three important areas.
Positioning
In the past, beauty products have only been available in department stores,
specialty cosmetic stores, or online. Now, beauty products will be readily available
easily at the hands of college students desiring cosmetics. Thus, samples and high
quality variations of products will be available for campus representatives to
distribute, entangling themselves within their respective college campus.
Birchbox Marketing Plan
12
Product Strategy
After first summarizing the product line, this section describes Birchboxs approach
to product quality and unique campus representative packaging ideas.
Unique Product Quality: Since Birchboxs product lines are from exclusive,
prestigious cosmetic franchises, the quality of their products are inevitably
higher than what one could find at a drug store or local convenience store.
The quality of Birchboxs products are a direct correlation to the
environmentally friendly, ingredient conscious and animal-free testing
methods of making such products. Free from harmful chemicals, made with
all natural ingredients and freshly supplied to maintain cosmetic standards
Birchbox cosmetics are of remarkable quality. This unique method of creation
will continue in the future of the product.
13
Price Strategy
The price strategy of Birchbox itself will not be changing too much in regards to this
plan, because the plan does not pertain to specific products. However, it is
important to note that Birchbox has already implemented an exceptionally
effective strategy of a points system where subscribers can review products and
receive points redeemable for cash in the Birchbox store.
The pricing of products for campus representatives will be changing exponentially.
When a representative sells over 20 products at their college, (or 5 subscription
services) they will receive two products worth $50-$100 each. This will serve as a
strategic incentive along with encouraging reps to continue excellence in their
partnership with Birchbox. This pricing idea also provides adequate margins for
wholesalers and retailers in Birchboxs distribution channels.
Promotion Strategy
Key promotion strategies feature online advertisements on the Birchbox website,
email blasts, and social media implementation.
Social Media Strategy: The key promotional aspects of this plan include a
heavy social media presence. Birchbox will be utilizing Instagram as its
primary social media platformhowever, all social media channels (Twitter,
Facebook, and Pinterest) will have consistent and similar content and
messaging.
Social Media Giveaways: A unique aspect to this social media campaign is the
implementation of Instagram-only giveaways from commenting or sharing
posts. This will promote brand engagement and customer entanglement from
the get-go. In addition, social media giveaways will engage a wider audience
than previously possible. People like free things, therefore they will be drawn
Birchbox Marketing Plan
14
to this page and interested in following and engaging with posts in order to
receive freebies.
Place/Distribution Strategy
Currently, Birchbox products are distributed through their online site:
www.birchbox.com. However, once the program is initiated and campus
representatives are selling products, the products will be in the market place.
15
Projections
Five-year financial projections for Birchbox include the continuing growth in the
number of campus representatives, gross profit, net sales, and operating profit.
Birchbox is predicted to grow by 15% by 2017 and 32% by 2021 according to an
operating budget of 14K and a profit margin of 4%.
Evaluation
The sales of campus representatives will be monitored carefully in order to assess
whether or not minor modifications need to be made to ensure success. As the
rollout of the rep program continues to other Minnesota universities, the marketing
mix and promotional plan may need to adjust accordingly in order to reflect the
unique sets of factors that exist among each college or university.
The evaluation of each universities success after two years of implementation will
include one-on-one interviews with key personal, social media evaluation, creative
evaluation, and a sales projection to highlight key performers and outstanding
representatives.
16
12. References
Below you will find the links to online resources used to create this marketing plan.
http://www.privco.com/private-company/birchbox
www.birchbox.com
http://www.inc.com/30under30/2011/profile-hayley-barna-and-katiabeauchamp-founders-of-birchbox
http://www.prnewswire.com/news-releases/birchbox-launches-athleisureinspired-brand-called-arrow-300200704.html
17