natural cosmetics

A) Executive Summary
Naturally derived beauty products are gaining an ever larger foot hold in
todays market, with sales booming as customers scramble to find products free from
harsh synthetic chemicals present in products of old. The market place is in a prime
position to launch products that tailor to these customers. At Fairest, we see this
potential and hope to utilize it to initiate change in peoples purchasing habits to help
the planet become a little bit greener.
Fairest is a lotion brand that started as a way to bring a more natural lotion to
women in Dallas, Texas. Its name is a word play that utilizes both its Fair Trade status
and its beautifying effect on the people who use it. It is a coconut based lotion that
uses natural alternatives to harsh synthetic chemicals. The lotion uses Fair Trade,
organic ingredients that help to nourish, replenish, and beautify the skin. Fairest is a
new kind of luxury lotion- a sustainable, natural alternative to the synthetic
chemicals found in most products.
Fairest lotion is targeted to socially and environmentally conscious women
seeking a more natural beauty experience, women who are educated, affluent, and
smart. These women are actively seeking little luxuries that will not damage their
environment. Fairest is targeted to these women, and is positioned in the market to
appeal to them. It is priced as an everyday luxury, one that is affordable to the
middle class while still being attractive to both the upper and lower class women of
America.
While Fairest is not alone in promoting luxury products or sustainable lotion, it
is unique in its status as a sustainability-focused luxury brand. The concept of a
sustainable luxury is a new and growing trend that we are confident will take off as
the benefits are seen by consumers
1

Fairest appeals to two important purchasing groups: the eco conscious and the
beauty conscious. Our market implementation will focus on both of these features
and target each based off of the viewing audiences we hope to reach through our
campaigns on social media and beauty magazines.
Fairest is committed to providing the best face lotion available at a small cost
to the environment, as everything from the packaging to the distribution of our
product was analyzed to ensure that our impact on our planet is minimal and overall
positive, while still making beauty one of our main priorities. We here at Fairest are
dedicated to both ideas working in harmony to make out world a little more beautiful.

B) Situation and Environment Analysis

a. Competitors
Fairest has a direct competitor, named Desert Essence. It is a lotion that contains
organic coconut oil, contains no harmful ingredients and is cruelty-free. When
purchased online it sells for $5.89 for eight fluid ounces. There are also several other
lotions that are made with coconut milk, and there is lots of coconut oil for sale by
itself. In addition, there are many other generic substitutes that dont use coconut
oil or similar ingredients but are still viewed as effective lotions. Because our product
is a luxury product, we also have to compete with the companies that provide
necessities like food and housing, since people buy those things before they buy
luxury products.
b. Economic Factors
Currently the economy is stable with little inflation, and consumer confidence is high.
Unemployment is consistently decreasing and there are continually low interest rates.
This means that more people are employed and have more discretionary income to
spend, and because of the low interest rates theyre more willing to borrow money
when they need to. All of these indicate a recovery, a stage in the business cycle
where consumers spend more. This is great news for Fairest because our lotion is a
luxury product. This means that people only buy it when they have extra money,
which the economy is indicating that they have plenty of. Right now would be the
perfect time to introduce our product because more people would be willing to try it
with the additional spending power they have.
c. Cultural/Social Trends
Now, consumers are much more aware of their societal and environmental impact.
They support more green, environmentally-friendly products, natural and organic
products are more popular, and fair trade products are rapidly becoming more
widespread. Since Fairest is all of these, it should be able to do well in todays
marketplace.
d. Impact of Technological Changes
Internet access is becoming increasingly more commonplace, and social media is
quickly changing the way we use the web. Because of this, we plan to sell the lotion
online and have a marketing strategy that emphasizes social media and web-based
advertising, which will also allow us to analyze buying behaviors of our customers.
e. Political/Legal Factors
3

There are many laws we must comply with as a consumer product. The Federal Food,
Drug, and Cosmetic Act is the first one. This act prevents the adulteration and
misbranding of cosmetics and ensures that the labels are accurate and truthful. Also,
we must abide by the Fair Packaging and Labeling Act. According to this act, our
packaging must identify our name and the place from where we distribute and must
state the net quantity the package contains. We have to ensure that our packages
are consistent for similar-sized products and the text on the packaging is easily
legible. (1) In addition, to be certified organic we must meet the USDA/NOP organic
production, handling, processing and labeling standards.(2) To be Fair Trade certified,
we must meet the standards of Fair Trade USA, including purchasing approved
ingredients and undergoing yearly paper and on-site audits of our company in addition
to meeting their packaging standards.(3)
f. Natural Environment
Global climate change has far-reaching effects. If it happens in the future, it could
have an effect on our distribution and pricing. Since global warming causes much
unpredictability in the weather, importing our product and shipping it to customers
could take longer and we have the potential to lose more inventory if accidents
happen. Also, the prices of our raw materials and therefore the price of our final
product will increase if the coconut oil and other ingredients cost more to obtain and
import.

C) SWOT Analysis
Strength
Fairests strengths include a dedicated management team with a wide variety of skill
sets, along with a high quality product. Fairests dedication to sustainability allows us
to reduce the potential for fines incurred by larger companies by regulatory statutes,
and our smaller business scale allows us to thoroughly regulate the quality of our
product while reducing the amount of money wasted in case of a failed batch of our
product.
Weakness
Fairests primary weaknesses are a lack of capital and lack of market share.
Fairest is a startup company and because of this, it has limited financial resources,
and will need to take out start-up loans. Due to our limited resources, fairest
employees will be paid in company shares, which will limit incentive for employees to
stay long term.
Fairest also faces challenges in building rapport as an online seller in its early stages.
Customers and investors are not familiar with Fairests business model, and as such
are not likely to initially purchase from or invest in Fairest, making it difficult to
expand.
Opportunity
The skincare industry is growing at a rapid rate, and is estimated to reach $102 billion
by 2018.(3) Interest in natural products has grown significantly in the last few years,
leaving Fairest with the ability to penetrate a steadily growing market. As there are
fewer competitors, Fairest could easily take over a large share of the natural lotion
market.
Fairest also as the advantage of being environmentally sustainable, which means that
in comparison to other companies, fairest is less likely to be fined by the EPA for
polluting practices whose fines can reach several thousands of dollars.
Threats
As coconut oil gains rapid popularity in the market, it faces the threat of becoming a
fad and losing popularity as quickly as it was gained. As a small company, Fairests
sales are closely connected to the popularity of coconut oil, and because of this,
5

Fairest will have to spend a large amount of marketing resources on promoting not
just coconut lotion, but the benefits of coconut oil in general as well.
Fairest is also subject to financial downfall if the suppliers of our coconut oil are hit
by natural disaster, political turmoil, or other unpredictable large scale disasters.
Because of this, there is a potential of Fairest losing financial stability at any point.

D) Marketing Objectives
Fairests goals are twofold- to sell our product and penetrate the market, and
to gain a following on social media.
For the first year, Fairest aims to sell 3,000 containers of our product.
Fairests marketing team also looks to gain a social media following of at least 2,000
people via Facebook, Instagram, and Twitter combined, with an outreach on social
media targeted to reach at least 5,000 people on social media through our ad
campaigns.
E) Target Markets
Fairest is targeted towards female customers ages 15-35in Dallas, who are
upper middle class. Our customers are well-off, and beauty conscious. They are
women who may have concerns with acne or other blemishes, and wish to revitalize
their skin .Our customers are women who are tired of using makeup to hid blemishes
and wish to fix their skin instead of hiding it under layers of cosmetics.
Our customers are also environmentally conscious and wish to support social
and environmental reforms. They see themselves as charitable, and wish to feel
beautiful, inside and out. Our heaviest users will be those who continue to struggle
with acne and therefore need the healing effects of our product. We chose this target
market because Fairest Face lotions main purpose is to make young teenagers and
older women who struggle with acne feel more comfortable in their own skin while
doing good and looking good doing it. We want Fairest to be a source of confidence
and sustainable beauty.

F) Positioning
Fairest lotion is a premium beauty product that supports social welfare and
sustainable environmental practices while providing a natural alternative to chemicalladen skin products for beauty- conscious American women. Our value to customers is
based on the lotions ability to enhance, replenish, and beautify their skin without a
greasy overtone.
Our pricing is towards the higher end of the market because of the natural
ingredients in the lotion and the lotions status as a luxury product. Small discounts
may be offered as holiday specials in order to draw a larger following. Fairests
advertisement will focus on the benefits of the lotion as a sustainable product in
order to emphasize the intangible benefit of choosing our product, with the many
healing properties coconut provides for the customer also emphasized.

G) Product
Fairest is unique in that it is devoted to environmentally sustainable practices
while also providing a high quality product. Everything from our production methods
to our efficient online store highlights our commitment to both sustainability and
quality. Our lack of a physical store front allows us to reduce our energy demands and
distribute our product more efficiently, while our use of fair trade products ensures
that we are using quality products that are also environmentally conscious. Our
product is special on its own based off of its lack of synthetic chemicals that can be
harsh on the skin, and its mattifying effect leaves the skin far less oily looking than
other moisturizers.

H) Price
Fairests pricing will be based on both consumer importance and competitive
positioning. Because Fairest is a luxury product with high quality ingredients, we are
placing it towards the upper middle prices of other lotions with similar qualities. We
feel that we can sell our lotion within this range as it will easily cover the expenses of
producing each bottle while still being a competitive luxury brand. Our price of
$14.92 is set so as to seem lower than the approximate cost of $15.00 while still being
an even number to reduce the effects of cheapening the brand in the minds of
consumers that can happen when the price ends in an odd number.

I) Promotion
A large portion of our promotion campaign is going to be pioneering
advertisements to show consumers the benefits our lotion will provide them. These
ads will describe our product, the featured ingredients, and the benefits of using it,
and will mention where people can buy it. We also will focus on advertising the
intangible benefits of our product, such as our Fair Trade status and the sustainable
and environmentally-conscious features of our business model. The campaign will
have to appeal to the target market, so we are specifically placing our ads to where
young and middle aged women will get our message. We will focus on Internet-based
advertising, especially concentrating on social media such as Twitter, Facebook, and
Instagram, and will also include a few advertisements in beauty magazines as time
goes on, and will provide sample packets of our product in beauty salons and spas.
Our budget for marketing is based off of an objective and task approach, with
an estimated budget of $10,000 for the first year, with $7,500 of the budget to go to
sending out samples, and a budget of $1,500 to promote advertisements via social
media, and $1,000 to run advertisements in local beauty magazines, with each
advertisement estimated to cost around $200 each.

J) Place (distribution)
For the first few years, Fairest will be run through an online system, with no
physical store front. This will enable us to expand our business and focus on
convenience for our target customers, who are busy women who tend to prefer online
shopping. This will also allow us to reduce company costs, which will allow us to
break even faster. The product itself will be stored in a temperature controlled
storage unit, to allow easy access to the product as it ships out from Dallas to
surrounding areas. We intend to allow customers to purchase our product from both
our website and Amazon, which will allow us to thrive as demand grows.

K) Implementation
January 2015During January, the key focus for marketing will be to gain awareness. Starting
January 5th, each Monday during the month of January will have a promotional
campaign feature. For the first week, it will be a social media campaign that focuses
on self-care and stewardship of the environment that will be distributed through a
series of images available on Instagram, Twitter, and Facebook. A page will be
created that links to the company website. The second week, free samples will be
distributed through a social media campaign that will require the recipient to Like
Fairest on Facebook, follow them on Instagram or Twitter, or sign up for an email list.
An extra sample may be obtained for every ten people referred to try Fairest. The
following Mondays will be used to gain further awareness through videos that
demonstrate the benefits of using our product using makeup tutorials that feature the
product on YouTube.
February 2015On February 1, Fairest will launch Valentines Day campaign focused on love for
others, the earth and love of the consumer via social media. This campaign will
continue through the month of February and include a discount aimed at Valentines
Day shoppers.

March 2015Marchs campaign will focus on International Womens day. On March 8th, a
portion of all purchases for Fairest will be used to provide womens shelters with
basic beauty products. This will be marked by a womens rights social media
campaign put out by Fairest using a miniseries of videos that promote global activism,
allowing Fairest to gain attention in the womens market of beauty supplies amongst
the target market of women seeking luxury that seek low effort social good.

April 2015Social media posts about Fairests benefits to the earth will be advertised
through Facebook and Twitter. These posts will be concentrated towards Earth Day,
with a new post each day during that week that reflects Fairests commitment to fair
trade environmental practices, featuring those who run the farms where Fairests
9

ingredients are produced.

May 2015Mays social media posts will focus on giving Fairest to mothers for Mothers
day. An ad will run on Facebook to gather the attention of young adults seeking a
luxury gift for their mothers.
June 2015June will host weekly social media posts about summer beauty focusing on our
posts. Makeup tutorials featuring our lotion will be available on our site, with
sponsored posts on Pinterest to help them gain attention.
July 2015Posts from June will continue on, going into August on a biweekly basis.
August 2015This month will focus on college students looking to enhance their appearances
for school with a back to school focus on social media posts, still running on a weekly
basis, along with an ad to run in the Dallas morning news.
September 2015Septembers social media posts will focus on the moisturizing qualities of
Fairest as autumn begins to come in, while continuing to release back to school posts.
October 2015Octobers main focus will be on targeting luxury markets by portraying the
product in a commercial reminiscent of those for designer perfumes in beauty
magazines.
November 2015November 10- 31, Twitter ads will be released for our product, displaying
Fairest as a luxury perfect for Christmas giving. Discounts will be given on Cyber
Monday in order to stimulate sales.
December 2015Social Media ads will continue, and discounts will be available up until two days
before Christmas, along with a reduced cost for two day shipping during the final
week.
10

11

L) Financial projections
For the year beginning January 1, 2015
Income Statement
(Based on 3,000 units sold.)
Revenues
Cost of Goods
Sold
Expenses

Sales Revenue

$44,760
(14,250)

Miscellaneous Expenses
Marketing Expenses
Certifications Expenses
Website Maintenance
Expenses
Income Tax Expense

(6,000)
(10,000)
(1,000)
(300)

(2,912)
Net Income
$10,098
The revenue projection comes from an estimated 3,000 bottles sold at $14.92
each. The cost of goods sold is calculated by adding the variable expenses for a single
bottle, then multiplying that times the number of bottles sold. The variable cost per
bottle is $2.00 for the ingredients. Fair trade coconut oil in bulk costs about $1.38 per
bottle ($0.23 x 6 ounces)(4), and other ingredients are estimated to cost about $.60
per bottle. Add in $0.70 cents for the biodegradable plastic bottle, and $0.50 cents
for shipping costs, which adds to a $3.20 variable cost. This cost is multiplied by the
3,000 bottles we sold for the year to get the total cost of goods sold of $14,250.
The marketing budget is estimated by using the objective-and-task approach.
We would like to reach a total of 100,000 people this year. To do that, we plan on
giving away $7,500 in free sample packets to spas and beauty stores ($0.75 per packet
x 10,000 packets). In addition, advertising in the magazines and on the web will cost
about $2,500 for the year. This adds up to $10,000, so this is what were estimating
for the marketing budget the upcoming year.
We have other fixed costs that must be subtracted from the revenue to get the
net income. These are the certification expenses. It costs a small business about
$1,000 per year to keep their organic and Fair Trade certifications, including all the
paperwork and outside auditing. We have accounted for website maintenance to cost
about $500 per year. Our website is very important because it will be the primary
way well sell our product for the first few years, so we made sure to consider the
costs of it. For the first year, other than paying for the farmers per unit price
(included in material cost), all labor will be compensated by distributing shares in the
12

company, with $6,000 dollars allocated to personal or miscellaneous expenses.

Income tax of 15% is also deducted because even though we are a small business, the
state will still charge income tax. All of these fixed expenses and the cost of goods
sold are subtracted from the revenue to obtain the net income for the year.

13

M) Evaluation and Control

Fairests goal for the overall 2015 year is to sell 3,000 bottles of our product
and to gain customer satisfaction. In order to accomplish this, for the first quarter,
our goal is to sell 700 units of product and reach 1,000 people via social media
advertisements. The second quarter, our goal is to sell 750 units and reach an
additional 1,500 people through our advertisements. The third quarter we hope to
reach sales of another 750 units while reaching 1,250 people via advertising. We hope
to have 800 units sold in the final quarter, and reach another 1,250 people. Actual
sales and reaches will be compared with these figures, and as they fail or succeed,
the marketing budget will be adjusted accordingly, with the potential to increase the
budget marginally.
A continual post purchase survey emailed to customers will provide us with
satisfaction rates, with our goal to get a 90% return of Good or excellent from the
survey, evaluated at each quarter.

14

N) Appendix

15

O) References
Text references:
1. "Regulatory Information." Fair Packaging and Labeling Act. United States Food and
Drug Administration. Web. 5 Nov. 2014.
<http://www.fda.gov/RegulatoryInformation/Legislation/ucm148722.htm>.
2. "National Organic Program." USDA.gov. United States Food and Drug Administration.
Web. 13 Nov. 2014.
<http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5068442>.
3. "Fair Trade Standards." Fair Trade USA. Fair Trade USA. Web. 16 Nov. 2014.
<http://fairtradeusa.org/certification/standards>.
4. "Gold Label Virgin Coconut Oil." Coconut Oil. Web. 8 Nov. 2014.
<http://www.tropicaltraditions.com/virgin_coconut_oil.htm#Buy-Gold-Label-VirginCoconut-Oil>.
Image taken from:
"Kahleen." America's Next Top Model. Photo. 8 Nov. 2014.
<http://rinaziedayz.exteen.com/images/kahlen03.jpg>.

16