Specialty Gifts Business Plan

Over the past ten years, an average of 150,000 women annually have been diagnosed with breast cancer. The most recent year’s statistics, 2001, cites over 200,000 women affected. Another 23,000 women will be afflicted with ovarian cancer. Each of these women easily touch the lives of ten family members, friends, and others who care.

This unfortunately identifies over 20 – 30 million affected people in the U.S. who have a mother, grandmother, aunt, sister or loved one who have been diagnosed with cancer. That is approximately 1 out of 10 people in the U.S.

What these numbers speak to is the need for funding for research, education and treatment. It also describes a very large group of the United States population that is emotionally tied to the cause.

4.1 Market Segmentation

The “Fund-raiser” wants distinctive items that ties their event with their cause and also establishes a memorable occasion. The people in this group and their constituents also overlap the “Affected Family and Friends.”

“Affected Family and Friends” are ubiquitous. This group, by far, constitutes the largest potential. The conservative estimate is that 15 million people are touched in some way by breast cancer alone. That number could actually be higher; possibly 30 million.

The “Medical Community” segment, comprised of radiology/oncology/surgical physician/nursing/hospice groups, in addition to the pharmaceutical companies, wants to provide goodwill gifts that help raise funds in addition to raising spirits.

The “Interested By-standers” will be attracted to our unique products and interesting designs. Their recognition of the Pink Lady Bug brand will lead them to purchase our products on a casual basis.

4.2 Target Market Segment Strategy

Fund-raiser Segment

We will focus our marketing initially on the Fund-raiser segment for the various women’s health organizations. The reason for this is two-fold:

• To generate cash flow through higher volume and lower overhead, and;
• To use this volume to get the brand recognized.

We will aggressively market the chocolates to various fund-raisers across the United States. The Susan G. Komen Breast Cancer Foundation is the preeminent awareness building and fund-raising organization for breast cancer. This foundation sponsors and supports hundreds of events throughout the year. We will pursue a partnership with this foundation.

The American Cancer Society sponsors and coordinates the largest charitable golf tournaments in the world. More than 800,000 golfers participate in over 800 tournaments held in 41 states. Winners from each of the local tournaments then compete for the state title. Each state then sends their champions to the ACS National Tournament.

The potential for bulk sales at each level of this tournament is substantial. These contests frequently culminate in luncheons and dinners. Many of these events routinely offer a “favor” at each place setting for the guest. We will aggressively market a four-piece favor size box of chocolate with the distinctive pink chocolate ribbon as a unique and impressive reminder of the purpose for the event.

Affected Family and Friends Segment

Affected Family and Friends is clearly the largest and all-encompassing group. We will concentrate on national advertising through magazines such as Rosie and “O”, from Oprah Winfrey and our Web page to get the message out. The formation of strategic alliances with national retail chains is being researched.

Additionally, we will target teenage girls through educational programs that use the Pink Lady Bug brand and products.

Medical Community Segment

Oncologists, radiologists, surgeons, nurses, and hospice workers that are involved with breast cancer have expressed an interest in purchasing Pink Lady Bug Chocolates to give to their patients as a token of their concern and to brighten their spirits. We will approach pharmaceutical companies to underwrite this as a goodwill program. The pharmaceutical company would be allowed to associate their name with the program as an underwriter. The chocolates would be offered to patients along with Linda Herter’s story of hope and inspiration.

Primary Markets

• Fund Raising Event Coordinators – Reaches 300,000+
• Radiology/Oncology/Surgical Physician/Nursing/Hospice Groups
• Annual Association Meeting Coordinators – Reaches 50,000+
• Breast Cancer Victims and Their Family and Friends 15-30 million

Sources: American Cancer Society, The Susan G. Komen Breast Cancer Foundation, The Race is Run One Step at a Time, Nancy G. Brinker

4.2.1 Market Needs

Each of the market segments have their own needs. By maintaining a variety of products and price points, we will serve these needs. By tying our chocolates and confections into the women’s health cause through a visual indication, such as the pink ribbon, or pink lady bug, we strongly influence the buying decision of the fund-raising and gift-giving markets. Our image is enhanced by providing distinctive products that make their event or occasion more memorable.

Favor – Based upon our research, the majority of fund-raising events will offer a favor at each event. Dinners at these fund-raisers will most always have a favor at each plate. This favor-sized item can also be used as a fund-raiser itself.

Favor/Gift – The intermediate-sized products can transcend both the favor and gift segments. From a favor standpoint items such as four and eight piece boxes, in addition to the “business card” products, can be used for upscale lunches and dinners. These products can also be used for gift-giving.

Gift – A range of elegant chocolates and confections are being developed to market to special occasions, i.e.; birthday, anniversary of successful treatments, Mother’s Day, Christmas, Easter, etc.

4.2.2 Market Trends

Although the medical community is developing treatments, and ultimately a cure, the unfortunate fact is that each year the number of women world-wide diagnosed with life-threatening diseases increases. This unfortunate trend, by its nature, creates the need for further efforts for fund-raising.

Regarding High-Quality Chocolates

The retail chocolate industry in the U.S. is worth approximately $13.79 billion per year and continues to grow at an average rate of 1.3% per year. The high-end chocolate market is growing at a rate of about 10-20% per year. The following quote supports that fact:

“…high-end chocolates account for $2.5 billion in annual sales in the U.S. alone. That segment is growing by 10% to 20%. Add to this mix the rising popularity of chocolate for corporate gift giving, plus recent indications that dark chocolate may actually be healthy for you – and you have the makings of a veritable boom. In fact, some high-end chocolate companies are reporting annual sales increases of well over 100%, particularly in dark chocolates. A growing proportion of these sales are coming from the Web.”

Source: www.businessweek.com/smallbiz/0007/tr000731.htm

4.2.3 Market Growth

The following statistics are sobering reminders of how many women in the United States are stricken with the two most prevalent forms of cancer. We do not want to refer to this as market growth, yet an opportunity to cite the urgency to raise funds for treatment, education, and a cure.

General Breast Cancer Statistics

• An estimated 203,500 new invasive cases of breast cancer are expected to occur among women in the United States during 2002.
• An estimated 39,600 women will die from breast cancer.
• It is estimated that 1,500 men will be diagnosed and 400 men will die of breast cancer during 2002.
• Breast cancer is the leading cancer site among American women and is second only to lung cancer in cancer deaths.
• Breast cancer is the leading cause of cancer deaths among women ages 40-59.

General Ovarian Cancer Statistics

Ovarian cancer is a serious and under-recognized threat to women’s health.

• Ovarian cancer, the deadliest of the gynecologic cancers, is the fourth leading cause of cancer death among U.S. women.
• Ovarian cancer occurs in one out of 57 women.
• The number of women diagnosed with the disease is projected to increase slightly, from 23,100 new cases in 2000 to 23,400 expected cases in 2001.
• An estimated 13,900 American women will die from ovarian cancer in 2001.

Sources: www.breastcancerinfo.org/bhealth/QA/q_and_a.asp and www.ovariancancer.org/general/

4.3 Industry Analysis

Pink Lady Bug Designs is entering into an industry that can be best described as pathos-driven retail marketing and merchandising. Because one of the primary goals is to raise breast cancer awareness and funds for research and other related programs, we will use the growing awareness and sympathetic feelings of customers in the market to help build brand awareness and fuel sales. Consumer expenditures for high-quality chocolates are expected to reach $3.2 billion in 2002. The following industry information supports our belief that the market will strongly support our high-end chocolate product. 

“…high-end chocolates account for $2.5 billion in annual sales in the U.S. alone. That segment is growing by 10% to 20%.”

Add to this mix the rising popularity of chocolate for corporate gift giving, plus recent indications that dark chocolate may actually be healthy for you – and you have the makings of a veritable boom. In fact, some high-end chocolate companies are reporting annual sales increases of well over 100%, particularly in dark chocolates. A growing proportion of these sales are coming from the Web.

Source: www.businessweek.com/smallbiz/0007/tr000731.htm

4.3.1 Competition and Buying Patterns

The competition may very well be other fund-raising organizations in the women’s health realm. They may also be allies. We will make every attempt to form strategic alliances with organizations such as Susan G. Komen Foundation and others.

Because we will be first to market on a large-scale basis, it is hard to isolate the competition. Other companies market unique gift items. Most of these seem to be of the jewelry genre.

There are four main buying periods each year for the breast cancer awareness products: October, which is breast cancer awareness month; Mother’s Day; Christmas; Valentine’s Day. 

4.3.2 Main Competitors

Direct Competition – Other fund-raising organizations, i.e., Susan G. Komen Foundation.

Indirect Competition – Specialty chocolates, such as; Frango, Godiva, Ghiradelli.

4.3.3 Industry Participants

Our competition is difficult to define because of our multi-layered approach to the market. We are competing with the multitude of fund-raising organizations for a share of charitable dollars. Because we are incorporating several different retail products, we will also be in direct competition for those consumer dollars.

We feel that our product ideas and marketing strategies are unique. From our research we have not discovered any competition that has taken the aforementioned marketing approach.

4.3.4 Distribution Patterns

We will employ several methods for order placement. Primarily, bulk product orders will be placed through Pink Lady Bug Designs and fulfilled through Bissinger’s French Confectioners of St. Louis, Missouri. We will also develop national retail accounts. These will also be fulfilled through Bissinger’s. Our intent is to deal with volume accounts as much as possible.

Our Web page will allow customers to browse our product and read about product development and programs. Individual orders can be placed on our Web page and will be linked to Bissinger’s page for direct order placement and fulfillment.