Blog #6

This is our last blog! It has been a wonderful learning experience for all of us. We met so many people with many ideas and opinions. The whole experience was enlightening to say the least.

In the last week, we decided as a group to make a major pivot toward marketing primarily towards African American women. Emily had done research about what was already on the market, and with that in mind, our group decided it would be a good idea to pivot for several reasons. First of all, there are many all natural products for African-American hair, but none that tells a customer what they need directly on the website. They have to do searching around. Secondly, so many blogs decry the benefits of DIY shampoo and conditioner, so Bel-Cantik is taking those recipes, customizing them for the individual, and sending them without the hassle of making their own shampoos. The products offered, even if they are all natural, have some inscrutable ingredients so we are offering something without any mystery.

We learned that most components of the Business Model Canvas can be discovered through simply getting out of the building. The internet offers a rich source of connection and information that, in a place like Bozeman without a large customer base, it becomes very valuable. We used existing reviews, and reached out to friends to get their opinions. It makes sense that with more minds comes more ideas. However, we learned that many ideas and opinions could come our way but we have to decide if it is in-line with our branding. For example, when we talked to people outside of our current target market, older women, they were very interested in the possibility of expanding to bar soaps and liked the gift aspect of Bel-Cantik. Once we pivoted, we had to disregard some of those opinions because that would be too broad at this point for our company.

Although it is a very dense market, we think the business is viable. Especially if we were able to partner with other DIY shampoo makers, Bel-Cantik could be a very unique venture. There is so much practical, home-grown knowledge about what works best for different types of African-American hair; we are barely scratching the surface. It is viable because we would be constantly learning and communicating with our customers to make the best, homemade shampoo and conditioner that will ever touch their scalps. Because it is a small operation, our customer response time would be above average. Overall we believe our value proposition is unique. Finding the right solution for hair is a process that our customers shouldn’t have to go through alone by buying and throwing away product after product. It is true that the value proposition we propose are not high barriers for big companies such as P&G. However, we do not see that as a competitor because our target audience is different to P&G.

Although it is viable, we may not pursue this venture after all because of the time commitment it would require from each of us to be viable.

Here is our last Business Model Canvas!

Blog #5

The revenue model strategy for our business includes pricing for customers on the web. Our bottles of shampoo or conditioner will have the same size. As a startup company we agreed on keeping the size of the bottle steady, and later on we will offer a variety of sizes to the customers. Our pricing tactics is as follow:

  • Bottle of shampoo or conditioner:  22 Fl.oz./650 mL⇒ $ 23
  • A set of shampoo and conditioner ⇒ $ 40
  • Gift cards purchase  ⇒ $25- $500
  • Holiday gift sets $ 30

Our 2 year revenue plan is as follows:

  • Assuming we sell our products to 500 customers/month (17customers/day)
  • 425 customers decide to spend money on a set of shampoo and conditioner ⇒ $40×425 = $17,000
  • 75 customers decide buy either a bottle of shampoo, or conditioner ⇒ $23×75=$1725
  • Monthly sales = $18725
  • 2 year gross annual sales = $224,700

Our 5 year revenue plan is as follows:

  • Assuming that our website attracts about 100 customers and we sell our products to 70 customers on a daily basis:
  • 60 customers decide to spend money on a set of shampoo and conditioner ⇒ $40×60 = $2,400
  • 10 customers decide buy either a bottle of shampoo, or conditioner ⇒ $23×10=230
  • Estimated daily sales( with 3 gift cards purchase with a minimum of $25)= $ 2,705
  • Assuming that the daily sales and number of customers will stay constant :weekly sales = $ 18,935
  • Monthly sales = $75,740
  • 5 year gross annual sales = $908,880

⇒During the holidays seasons we will be expecting a peak in our daily sales so we can roughly estimate our annual sales to be $913,880 ( $908880 + $5000= $913,880)

Metrics that matter for our business model include customer satisfaction, productivity, net income, and cash flow.

Here’s a table of our various costs

Of course this is an optimistic business model, but we believe that by marketing on Facebook and black beauty blogs, offering worldwide shipping, and pivoting as we go, we will reach our five year goal.

Here is our latest Business Model Canvas

Blog #4

So far, our marketing plan was mainly focused on the Internet and some sales at hair salons. Our marketing plan for the Internet would be showing our presence in all social media. This includes Facebook, Instagram, Pinterest, Etsy, and SnapChat. We have also found that many people like the idea of the availability on Amazon, specifically Amazon Prime and their Startup section. Another virtual location recommended would be Groupon and similar discounted websites. With that in mind we will create discounts, and hopefully link our product offerings to Amazon, and PayPal.

According to Business Model Generation, a project sponsorship and communication campaign are two very important aspects when implementing a business model. With that in mind, we are going to invite various blogs dedicated to African-American empowerment (news, beauty tips, advice, etc) to try Bel-Cantik’s products and write a review. This will help engage people in the logic and rationale of our business model, as attaching a narrative to a product is important. We will also offer our product to popular YouTube and Instagram stars to try out. For example, Instagram user @blackhairstyles has 33.5k followers and often reviews products, and the website blackgirllonghair.com often engages readers with deep conditioner recommendations.

On our website, we decided to not offer free samples but instead offer sample sized products with purchase, either at a minimal price or for free. Another marketing plan would be to offer seasonal scents, as it is rather limited to the season, and this would created exclusivity and excitement. Similar to how Starbucks only sell Pumpkin Spice coffee in Fall and Eggnog Latter as Christmas rolls around, customers purchase them because they do not get it all year round. Also, in the spirit of Christmas, we are also producing Gift Cards for customers to purchase for their loved ones. This idea was well-received and not much comments were made about this.

Considering the “Business Model Perspective on Blue Ocean Strategy (p. 226), we thought about what factors we need to eliminate, reduce, raise, and create in our marketing scheme. In talking to our customers this week, we discovered their frustration at the trial and errors they have to go through to get their hair care routine right. We know Bel-Cantik needs to raise the bar of providing customers with information on what they’re buying as they’re buying it. No searching around the web to discover if certain ingredients are bad: we will include a list and exactly what each one does for hair. We want to eliminate the need to either make your own shampoo or buy synthetic chemical shampoos from the store that might work alright, but not as well as a DIY shampoo would (and does, based on our research). We are eliminating the need to invest in ingredients and make these nourishing DIY shampoos at home, or order them from sellers on Etsy without knowing exactly the effect they’ll have on hair.

Other than the virtual world, we will also be selling our products by the masses to hair salon. This would allow customers to try our product during their appointment and be able to purchase it as they leave the salon. We were reminded that distribution may be a problem for us, especially at the early stages. With that, we decided that we could start off with big cities. This would allow a more cost efficient distribution plan as we would reach out to larger coverage per capita within a city like Seattle or Los Angeles, than traveling intercity in Montana.

Another marketing idea we received was to somehow do a viral video. This spark an idea of collaborating with extreme outdoor sports YouTuber, Devin Graham(@devinsupertramp). With his influence and subscribers, our product would easily reach out to 500,000 to 1 million viewers.  This also gave us the idea to sponsor an outdoor event. These are all in-line with our value proposition because outdoor fanatics love the outdoors and would also be interested in protecting Mother Nature. We could also do joint-project with companies such as GoPro or REI.

 

#3

Because our product will be delivered primarily via the web, the website is an extremely important thing to get right.

With that in mind, we sent private links to what we have so far in our Bel-Cantik website and asked those with the link for their feedback. Using the customer Empathy Map, Emily made hypothesis on what customers would like and dislike from our website prototype.

We thought people would like the interaction of information popping up when the user hovers their mouse over it, but people mostly found that confusing. We asked how well they understood the product after using our website. We thought people would wish the process was a little bit easier, but would understand the product itself. Every user got the gist of it, but we didn’t emphasize the all-natural ingredients as well as we should have. With that feedback in mind, we are going to continue simplifying and clarifying the product website, as well as emphasizing the benefits to Bel-Cantik shampoo.

Another “experiment” we conducted was the scent tests. People tended to like the more floral scents over the fruit scent we concocted. With that in mind, we are going to change the fruit scent, and make a few different iterations of the floral scent.

The final experiment we conducted involved reading through reviews of our closest competitor’s products. We wanted to see if they failed in any ways that Bel-Cantik improves upon. Sure enough, many customers shopping at Function of Beauty complained of chemical smells and their hair being left with a crunchy, greasy, film after washing. They also commented that Function of Beauty claims to have a ‘chemist’ available for consultation 24/7, but it’s actually just a computer. Some complained that the scent was too strong. From our tests, our shampoos and conditioners don’t leave any film because of their all natural ingredients. Because we use essential oils instead of artificial scents, they aren’t overwhelming. However, we think it would be beneficial to use extremely responsive consultation (not 24/7) about customer’s questions and concerns when creating their shampoo through a “contact us” section in our website.

Emily began considering pivoting toward a predominately African-American market, and visited websites to look at their advice for DIY all natural shampoos and conditioners target toward African-American hair. The websites she visited were: Three Easy Homemade Shampoos for Dry Natural Hair and Coconut Milk Shampoo DIY. By reading the comments, she discovered that many potential customers wanted to try this out, but commented questions on where to get the ingredients. This is valuable information for Bel-Cantik because it shows that natural shampoo is important to our customers, but the obstacle between what she needs is a lack of enthusiasm about the time commitment and materials-gathering for making DIY products. The ingredients are often sold in bulk, so that might be a risk she fears taking.

Emily also researched what ingredients to avoid when catering to African-American hair, from sources like Reading the Label: 10 Ingredients to Avoid When Shopping for “Natural” Hair Products and 5 Warning Signs of Bad Natural Hair Products. From that, she learned about ingredients not to add, and to keep the ingredient list simple. Emily tried to imagine the emotions of a woman buying a product claiming to be for her natural hair, and have it not work. With that in mind, she wants to really emphasize the fact that they’ll know what they’re getting, and how it will effect their hair with Bel-Cantik’s simple, customize-able guide.

This week has been extremely productive in terms of solidifying our product, and we feel that we are moving forward in the right direction.

Here is our Business Canvas Model.

Blog #2

For this week, we focused on hitting our customer segment more accurately. Before we began our interviews, we hypothesized that our customer segments would be divided into two. One for the African American and the other for White American.

Our African American customers

  • 16 to 70 years old
  • Middle-income
  • Eco-friendly
  • College educated

Our White American customers

  • 16-70 years old
  • Middle-income
  • Eco-friendly
  • College educated

Based on last week, Biiancaa found that if we moved away from college students, we might be able to find customers who are willing to pay more. With that, this week, Biiancaa found working adults and to her delight, her hypothesis deems true. They were willing to pay $15 to $25 for an 8oz. bottle of an all-natural organic shampoo or conditioner. Based on the cost price for a small production, it becomes more feasible for us. Other than moving to older adults, Biiancaa also found that customers were more willing to spend money on our products because of their sensitive scalp issues. This includes customers who have dandruff and dry scalp but have not found a shampoo or conditioner that solves their problem. Based on these findings, our customization feature would include the benefits for each individual ingredients the customer has the option to include in their bottle.

We also found that women from a middle income families would purchase our products for their family. From this information, we could offer our customers to start a subscription with us. As a result, this would make it less convenient for them to try another brand. Sales would also be more stable and consistent. In addition to constant sales, with prolong usage, customers would feel the difference in their hair and scalp health. From there, our customers would become loyal and advocate for our shampoo and conditioner. They would recommend us to their friends and family. They would even purchase gift cards as a way to let their loved ones try the greatness in our products. From there, we could start a recommendation sales tactic.

Also, after some interviews, Annsarah found that it would encourage customers to try different products if we provided sample size bottles with their first purchase or when we have a new product in our line. Customers could also give these sample to their friends and family. Thus, encouraging them to buy from us as their confidence have been built thanks to the recommendation of friends and family, and the results they received from our sample.

In conclusion, we found that with an older target market with a family, 25-70 years old women in a middle-income family, they are more willing to pay a higher price. We also learned that people with sensitive scalp or unsolved hair issues, they are more willing to try an all-natural organic brand. Due to the lifestyle of our new target market, they are more loyal and are stronger advocates who will promote our product to their friends and family as long as we have proven to be worth it. We also learned that our customers would be more willing to try other products or customization if they are able to receive cheap or free sample size shampoo or conditioner.

Here is the link to our Business Model Canvas

 

Blog #1

Benson Inc. has pivoted a lot since the first blog post. Originally, our project wasn’t too unique: all natural soaps and shampoos that wouldn’t harm the Earth. Products like these are easily found on websites like Etsy. Instead, we chose to make our value proposition stronger and more unique by adding customization. Benson Inc. is now going to be a website in which customers can fill a virtual shampoo/conditioner bottle with various ingredients (after first choosing a base) that work best for them. We’re also going to send a prepaid postage sticker so customers can send back their shampoo bottle for refilling. We also toyed with the idea of sending sample bottles of various mixtures for a low price so customers can determine what works for them.

All these things will take time, though, so in the beginning, Benson Inc. will only offer a few different mixtures/ingredients, so the customization potential will be low. However, our goal is to offer the very custom version of the website around various holidays. We would do advertising to increase the hype leading up to these holidays. It would be a nice, relatively low cost test, and because it’s for a limited time, it wouldn’t be too large of a commitment.

Essentially, this updated project is the one we took to the streets lately. Annsarah talked to three African-American women, all of whom thought it was a great idea. They liked the customization, but were all looking for something cheaper. However because African-American hair generally takes more specialized care because of it’s texture, they really liked the idea of complete customization for the natural products that work for them personally. Biiancaa, in her conversations, doesn’t believe that college students are the Benson Inc. target audience, as they aren’t generally the ones to spend more money on all natural products. Her goal now is to talk to older working class individuals. Her friends expressed contentment with their current shampoos and conditioners. Of the products offered at most stores, some college students are willing to spend a little bit more for natural products, but not too much more than normal. Emily talked to her mom, Aunts, and a few friends. Her mom expressed worries that people wouldn’t buy Benson Inc. products as presents. She would buy bars of soap, because she wouldn’t want to spend a lot of money on a whole bottle of shampoo that the recipient might not even like. She suggested offering gift cards, as that product would be something fun to receive. Emily’s mom was also concerned that this wouldn’t be something people would buy for themselves, as it’s feels like a luxury. Her Aunts think cheaper bar soap creations would be more fun.

Benson Inc might have to pivot some more, maybe offering customized shampoo gift cards only during holiday seasons, and base products the rest of the year. We learned that our market will be fairly unfamiliar to us — middle to upper middle class women who do their shopping online.

Here is the link to our Business Model Canvas.

Blog #0: Who we are and what we’re going to do

We are Benson Inc, an eco-friendly company that offers an all-natural, organic solution to hair care and styling. Our company offers two lines of hair products  are:

  • Hair wax for straight and wavy hair
  • Shampoo,  conditioner, leave-in conditioner, and hair serum  for girls/women with  African-lineage hair type

Despite the extra cost of providing all natural ingredients, Benson Inc believes that protecting the Earth is first priority. Moreover, using organic products made with unrefined ingredients on your hair provides great benefits.Why not have great hair too?

We believe men will be interested in the hair wax, and African-American women will be interested in the shampoo,  conditioner, leave-in conditioner, and hair serum . In order to test this hypothesis, we will ask everyone within our target market what they currently use, and if they would be interested in Benson Inc products.We  will  offer free samples  to anyone who shows interest in our products, so we can get feedback on the quality of the products.  We will also create a survey and join online chat rooms, network with members of natural hair movement platform. Naturalistas use youtube a lot for tutorials. We will offer free tutorials with our products so people can have a better idea on how to use it. From their comments on each tutorial, we will be able to pinpoint who is interested or not.  If people seem content with the products they already have, and show little interest in Benson Inc, we will consider that a failure and pivot.

Our value proposition relies on the fact that our products is organically made with unrefined/ unprocessed  natural ingredients and the packaging, and it is basically suitable for all hair types.  We will create a mockup of our packaging and ingredient list, comparing it to similar brands on the market to create a distinct product. This experiment is closely tied to the target market test, as we will show those within our target market our mock up. We will also show trusted friends, including graphic designers,hair stylists,  and health-minded individuals, to get their input on what value this adds and how we can do better. If the value proposition doesn’t spur any interest in our target market, and/or if our trusted friends believe we aren’t being stylish or health conscious enough, we will consider that a failure.

In order to see how saturated the market is, we will study various channels such as Etsy, Pinterest, Ebay, Facebook ,and Amazon. On Etsy, we’ll direct message the sellers to get their view on sales of such a product online. If the market is entirely saturated, we will find another place to sell our product, such as smaller community stores, or local drugstores.

We will attempt to sell both online and by setting up a table at MSU. If we haven’t sold anything in the first week, we will definitely pivot. If by two weeks, we’ve only sold between 1-5  product units, we will also pivot. Each week we will assess our sales, compare it to our business model and determine where to go from there.

Here is the link to our Business Model Canvas.