Problem & Solution
Problem Worth Solving
The modern world brings knowledge about the human body and the convenience of having things sent to one’s home. Why should that only be an option for people with more income? We will make sure that everyone has the option of health and convenience.
Nature’s Candy’s mission is to provide the finest in natural supplements using the Internet to lower the consumer’s cost. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.
Market Size & Segments
The market for vitamins and nutritional supplements has grown to over $6.5 billion annually. Herbal sales alone are growing by 20% per year. This market is lead by the aging Baby Boomer who is concerned with his/her mortality. Also, there has been a paradigm shift of perception of nutritional supplements. Homeopathic and naturopathic products are seen as normal. In addition, positive medical results from major studies have further legitimized these products.
4.1 Market Segmentation
A significant trend in America, and abroad, is that people are taking a more proactive interest in their health. This is exemplified by the increase of health clubs and health club memberships. People are looking to avoid invasive surgery and powerful pharmaceuticals. People are taking an active role in the maintenance of their health and practicing preventive medicine. Naturopathic medicine promotes the diagnosis, treatment, and prevention of human disorders through the use of non-invasive, non-pharmaceutical products and practices. In 1993, the United Stated government recognized this trend when it established the Office of Alternative Medicine.
Besides the general development of naturopathic medicine, the aging of the American population is a significant trend driving the use of naturopathic and homeopathic health supplements. The Baby Boomers are now reaching middle age and mortality is becoming a focus. This demographic segment, which is comprised of 80 million people, represents over 50% of our county’s discretionary income. It is reasonable to believe that this wealthy market segment will continue to grow the sales of naturopathic products.
Another global trend is the emergence and popularity of e-commerce. Brand-focused Web retailers that can provide quality products, customer service, information, and the intangible, emotional buy-in by the customer are becoming hugely successful. E-commerce retailers have an advantage in that "Unlike traditional retailers, Web-based sellers are not slowed by the friction of store growth and local marketing" (J.W. Gurley, Fortune, 1/11/98). In addition, e-commerce companies do not have the excessive overhead of a traditional brick and mortar retailer. As seen by the recent success of Amazon.com and Gap.com, consumers are comfortable buying online and will pay for convenience. Experts predict Web sales to grow to $12 billion by 2003.
This enthusiasm about the Internet is not irrational but grounded in reality in light of the recent market crash of Internet retailers. The recent Internet crash was based on too-easy access to capital invested into retailers and other dot-coms without reasonable business plans or revenue models. Regardless of the recent fallout, the Internet is a very efficient marketing and distribution model that if done right, significantly decreases costs of serving the consumer. Nature’s Candy will harness these efficiencies and will grow intelligently unlike other .dot-coms that became dot-bombs.
Within the mass market retailer channel, the three main primary vitamin and supplement product categories are national brands, broad-line brands, and private label brands. The national and broad line brands consist of 60% of the domestic market, which the private label brands account for the remaining 40% of the market.
Examples: Centrum, One-A-Day.
Generally do not provide a full line of vitamins or other supplements.
The product formulas are conservative and generic in nature.
Examples: Rexall Sundown, GNC’s Nature’s Fingerprint, Country Life.
Full lines of produce under one brand.
Manufactured by company.
This is the market segment where most of the product development and innovation occurs.
Stronger potencies and cutting edge ingredients.
Private Label Products
Under retailer’s name.
Smaller line of products than broad-line brands.
Manufactured by a third party.
More conservative potencies than broad line.
Tend to be the cheapest.
Nature’s Candy’s competitive edge will be their easy-to-use website and superior customer service. The website design will be a competitive advantage because research indicates that an easy-to-use website significantly increases sales. The design of Nature’s site will encourage purchases because it is so easy and quick to make the purchase. Too often sales are lost because of complex websites that are far from intuitive.
Nature’s Candy’s other competitive edge is superior customer service. The mantra of the customer service department is to serve the customer in any way required. Customers that call in with problem/issues will be amazed at the amount of personal attention they receive and how quickly issues are not only resolved, but significantly improved. This will be a powerful asset.
Keys to Success
Keys to Success
Nature’s Candy’s keys to success are:
- Web design.
- Product quality.