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MADDI ENGEL

BIRCHBOX MARKETING
PLAN

Birchbox Campus Representative Initiative

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

CONCLUSION AND IMPLEMENTATION


MARKET-PRODUCT FOCUS 10
THE MARKETING PROGRAM11-14
FINANCIAL PLAN AND
PROJECTIONS.....................................................................................................
........14
IMPLEMENTATION OF
INITIATIVE ........................................................................................................
.........15
Birchbox Marketing Plan

Birchbox Campus Representative Initiative

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.

Mission of Birchbox & Company Value Proposition


The mission of Birchbox is to be the best discovery service for beauty items
to help customers find what they love. Birchbox prides itself on having the
best customer value proposition in its products, customer service, sample
sizes, and online shopping experience (Birchbox).

Campus Representative Initiative


I propose that Birchbox initiates a campus representative initiative at the University
of NorthwesternSt Paul to make up for what Birchbox lacks in chain stores, gain
brand-awareness, and be exposed to their target market of college aged women.
This change in product placement and distribution would allow Birchbox to become
a prominent part of campus universities; while also gaining clientele, prominence,
and notoriety.

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

Birchbox Marketing Plan

Threats
-Fellow subscription
services such as
Julep or Ipsy
-Lack of college
engagement upon
initiative beginning

Birchbox Campus Representative Initiative

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

Birchbox Campus Representative Initiative

Beauty or Sephora have chain stores, allowing them to be in the world. To


make up for what Birchbox lacks in chain stores, the company must initiate a
campus-representative program on top of their affiliate program. I propose
that Birchbox initiates a campus representative initiative at the University of
NorthwesternSt Paul.

Campus Representatives Initiative


Because the target market for Birchbox is college-aged women, college-aged
women should be representing the brand at their respective universities.
Implementing a campus representative initiative for Birchbox would bring
Birchbox and its products into their target field. Campus representatives
would have unique access to distribute samples, host Birchbox Parties, gain
valuable resume experience, and advocate for the brand. This change in
product placement and distribution would allow Birchbox to become a
prominent part of campus universities; while also gaining clientele,
prominence, and notoriety. Also, starting at a smaller school would also allow
Birchbox to expand throughout the Minnesota metropolitan area for a low risk
and low venture cost.

3. Strategic Focus and Plan


This section covers four aspects of corporate strategy that will influence the
marketing plan: 1) Mission, 2) Non-financial and financial goals, 3) Core
competency/sustainable advantage, and 4) The value proposition of
implementing this plan.

The Mission of Birchbox


The mission of Birchbox is to be the best discovery service for beauty items
to help customers find what they love. Birchbox prides itself on having the
best customer value proposition in its products, customer service, sample
sizes, and online shopping experience (Birchbox).

The Mission of the Campus Representative Program


The mission of the campus representative program would be to increase
sales and brand awareness for Birchbox. Hopefully, the representative
initiative would start at the University of Northwestern-St Paul, expand to
other colleges, and eventually, become a nation-wide opportunity for
students. I believe that this program can both impact Birchbox for good, and
help create innovative student leaders across the country.

Birchbox Marketing Plan

Birchbox Campus Representative Initiative

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.

4. Core Competency and Sustainable Competitive


Advantage
In terms of core competency, the Birchbox Campus Representative program
seeks to achieve a unique ability to:
1) Increase sales and brand awareness of Birchbox and
2) Provide high-quality customer service and representation for various
brands at college campuses.

Core Competencies and Sustainable Competitive Advantages


To translate these core competencies into a sustainable competitive
advantage, Birchbox will implement the campus representative program to
increase brand awareness at the University of Northwestern- St Paul on the
date of March 1, 2016. Birchbox will work closely to develop their campus
representatives to build positive relationships, ensure proper training, and
increase the overall quality of the program.
Birchbox Marketing Plan

Birchbox Campus Representative Initiative

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

Birchbox Campus Representative Initiative

-Positive
environment for
entrepreneurial
ventures

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

Following the SWOT overview, the analysis includes information about


industry trends, competition, the company itself, and customers.
Internal
Factors
Manageme
nt

Finance

Marketing

Strengths

Weaknesses

Experienced management (CEOs)


with a reliable creative vision and
strong business foundation. Open
environment leads to collaborative
efforts from all company employees.

Co-management and
ownership within our company
can cause internal
disagreements, leading to
negative external perceptions
about Birchbox.

In just 3.5 years, Birchbox has grown


to over 800,000 subscribers, which
equates to about $96 million in
annual sales.

Since there is no cost for


cancellation, subscribers can
opt out at any time which
could cause an unexpected
shortage of revenue.

Excellent market share and stock


rate (12% rise since January, 2015)
Excellent digital presence, online
website design and functionality.
Social media advertising is top of the
line.

Employees Quality without quantity. (Only 250


employees nationwide).

Birchbox has not invested a


lot of money into marketing or
external advertising (beyond
social media channels).
There is not always enough
employees to satisfy every
need of the company.

Birchbox Marketing Plan

Birchbox Campus Representative Initiative

Offerings

External
Factors
Consumer
& Social

The discovery of high quality beauty


products delivered to the doors of
customers, in this case, college
students.
Strengths

The customers desire to


sample new beauty products
can change.

Low price for subscription services


offer for college students. High rate
of interest from college girls for a
beauty sampling service.

The target market tends to be


unreliable and fluctuating
depending on the economy,
price of education, and elastic
demand.
Competitors could attempt to
duplicate the Birchbox
sampling concept with
subscription-service success.
There are plenty of other
successful beauty blogs online,
leaving Birchbox as one of
many.

Competitiv Brand prominence and


e
trustworthiness. Customer value
proposition and high levels of
customer engagement online.
Technologi Recent innovations have allowed
cal
Birchbox to be an app. Easy access
to website and online store, easy
access to appealing Birchbox beauty
blog and articles.
Economic
College students typically do not
have a strict budget, allowing them
to take chances with a subscription
service like Birchbox.

Weaknesses

College students may back out


of their subscription depending
on their income for each
month. Unreliable incomes=
unreliable customers.

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.

Birchbox Marketing Plan

Birchbox Campus Representative Initiative

Trends within the Cosmetic Industry


According to Statistics.com, the cosmetic industry is developing
more than ever. With the implementation if internet companies,
about 17.3 billion U.S. dollars were generated in sales in 2013.
Cosmetic sales keep growing because consumers feel that
beauty products can help them achieve social and economic
goals (Statistics.com). The main threat for the cosmetic
industry is that is consists of entirely elastic products; products
that will be pushed aside due to a lack of income, need, or want. When the
economy fluctuates, the cosmetic industry fluctuates as well.

Competitor Analysis
Birchbox has three main subscription beauty box competitors:
1) Glossybox
2) Ipsy
3) Julep
4)

Birchbox also struggles to compete against brick-and-mortar stores like Ulta


Beauty, Sephora, and Department stores. However, most of those companies
have died out because they lacked the same value preposition that Birchbox
has. Essentially, the major disadvantage of the Companys competitors are
their lack of customer service and engagement. The products, prices, and
place are all comparable but Birchboxs way of promoting good customer
service exceeds its competitors.

7. Organizations Strengths & Weaknesses


Strengths
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. Birchbox is one of the fastest growing companies in New
Birchbox Marketing Plan

Birchbox Campus Representative Initiative

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).

8. Market- Product Focus

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Birchbox Campus Representative Initiative

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.

Marketing and Product Objectives


Birchboxs marketing intent is to take full advantage of its brand potential while
building a base from which other revenue sources can be attainedboth in and out
of the campus representative initiative. The marketing and product objectives are
detailed below:

Current Markets: Current markets will be grown by expanding the Birchbox


brand and implementing campus representatives at the local level.
Additionally, current markets will be reached by establishing consumer
awareness of the campus representative initiative, thereby leading to a
better understanding and brand prominence of Birchboxs representative
program.
New Markets: New markets will be reached by 54% by 2017. By the end of
Year 5, the campus representative initiative will represent 35% of the major
U.S. target market. This will represent an estimated 26% of cosmetic sales
and market share for Birchbox.
Cosmetic Industry: The cosmetic industry is expected to grow exponentially
over the next five years. Sales are expected to reach a record-breaking 29
million by the end of Year 3, and 52 million by the end of Year 5.
New Products: As Birchboxs campus representative program helps Birchbox
grow, we will begin to implement newer, lower priced products for college
consumers. This will be accomplished by new-product concept screening and
testing in Year 1. If we think that these new, lower priced products will be a
success, we will bring them into the market in Year 2 and 3 on a trial basis.
After the successful completion of such a trial, Years 4 and 5 will hold
complete product implementation.

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.
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Birchbox Campus Representative Initiative

Market- Product Grid


Market
Segments

Birchbox Campus Representative Program


College students
interested in
representing

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.

Unique Accessibility: Unlike any other cosmetic company, Birchbox would be


uniquely accessible to college campuses, starting with the University of
Northwestern-St Paul. This accessibility would enable the brand of Birchbox to
transcend past where it previously was able to go.
Customer Service: Campus representatives will need to undergo thorough
training in customer service. Since they will be getting commission for sales,
their customer service will determine how well their sales quotas are met.
Differing from almost all companies, the easily-accessible campus
representatives will also be on the location of the customer. If a customer has
a problem with a product, their representative can easily and readily help
them.
Mutual Beneficiary: This program is beneficial for all parties involved. For the
seller (representative) they gain pivotal resume experience in college. For the
consumer (the college student) they learn more and have the opportunity to
sample and test out different cosmetics. For distributers and suppliers of
cosmetics such as Urban Decay, Smashbox, Pur, and Clarisonic; their brands
are given more attention and more desire from a younger generation.

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.
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Birchbox Campus Representative Initiative

9. The Marketing Program


The four marketing mix elements of Birchboxs campus representative marketing
program are detailed below.

Product Strategy
After first summarizing the product line, this section describes Birchboxs approach
to product quality and unique campus representative packaging ideas.

Product Line: Birchboxs product line consists of beauty, lifestyle, and


grooming products supplied from high-scale vendors worldwide. Most of
Birchboxs products are available in differing colors, sizes, and flavors.
Birchboxs product prices range from $4.00 to $300. We will be offering
select, exclusive products to college representatives and their respective
customers at a discount of 25%.

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.

Campus Representative Program: Reflecting the in the marketplace


strategy of its competitors, Birchboxs unique campus representative
program will be changed by implementing the product into the marketplace.
Now, customers can attain a product at their convenience, without the hassle
of driving to a store or paying for shipping costs. Because of this, the
products purchased from the college representative program will be stylishly
and specially branded. They will incorporate a specific logo complete with a
market-proven technique of only being black and pink products.

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Birchbox Campus Representative Initiative

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.

Email Blasts: Email blasts will be sent to current Birchbox customers


segmented between the ages of 18 and 25. The email blasts will include an
introductory email to the program, incentives, and revised points system.
Email blasts will be designed through the email design system called
Constant Contact. They will use heavy action language such as NEW
UNIQUE and EXCITING OPPORTUNITY to gain the attention of recipients.
They will also include pictures, a video marketing campaign, and a link to
apply as a rep on their chain of correspondence.

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.

The primary hashtag for Birchboxs college representative program is #RepBB.


The Instagram and Twitter handles will be @BirchboxReps while the Facebook
page will be called Birchbox Reps. This short, easy to remember verbage in the
name of the social media accounts will increase remembrance of the pages and
consistency.

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
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Birchbox Campus Representative Initiative

to this page and interested in following and engaging with posts in order to
receive freebies.

Strategic Partnerships: Birchbox will be partnering with well-known Beauty


Instagram posters with over 10K followers to promote the brand and drive
audience to the Birchbox Rep Instagram page. These Instagram posters will
be paid for each click derived to the Birchbox Rep Instagram page.

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.

Distribution: Birchbox will be distributing products through campus


representatives on a person-by-person basis. This will promote the idea of
face-to-face interaction along with giving representatives a chance to
creatively innovate sales promotions for the products they are representing.
As sales grow, we will potentially be opening up a Birchbox wholesale shop in
the Twin Cities area.

Unique Packaging: Birchbox products will be hand delivered by


representatives in the above wrapping and branding. Representatives will
also be encouraged to write hand-written notes on each product delivery to
increase entanglement.

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Birchbox Campus Representative Initiative

10. Financial Data and Projections


Financial Data
Historically, Birchbox has had great success in their financial stability. The company
has grown exponentially since their introduction in 2011. In just 3.5 years, Birchbox
has grown to over 800,000 subscribers, which equates to about $96 million in
annual sales. They also hold an excellent market share and stock rate (12% rise
since January, 2015).

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%.

11. Implementation and Evaluation


Introduction
Introducing the Birchbox campus representative program to the marketplace is a
very complex process and requires the creative promotional activities outlined in
the Marketing Mix section to succeed. The introduction of this plan will happen on
May 5thBirchboxs 5th anniversary.
If, however, such promotional activities gain consumer awareness and
engagement, Birchbox Reps will successfully be implemented into the
marketplace. We will turn our plan into results by campus recruitment, social media
dominance, and an effective creative vision that has the power and transcend and
transform the current way beauty products are distributed.

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.

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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

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