Marketing Research and Forecasting Report

Jordan Arian-Nejad

Emily Grueninger

Rachel Powell

Marketing Research and Forecasting - Spring 2019

Dr. Tony Stovall

Towson University

May 6, 2019
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Table of Contents

Executive Summary 2

The Challenge 2

Situation Analysis 3

Market Research Findings 9

Hon’s Honey Marketing Strategies 18

References 21

Appendix 22
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Executive Summary

Hon’s Honey is a non-profit organization that dedicates its efforts into The Well which

employs at-risk women to promote better lives and hope for a brighter future. We, as

market researchers, devised a marketing plan to assist Hon’s Honey in growing their

business to its highest potential in a competitive market. Throughout the process, we have

performed research on its competitors, such as Lush and SoBotanical, and conducted

surveys to gain an understanding of the needs and wants of the potential target market of

Hon’s Honey. We were able to conclude that through marketing initiatives and product

innovation, as well as making minor adjustments to their target market, they have the

potential to expand and open a storefront, but for the time being they need to focus on

gaining the capital and means for this to be possible. A main area of importance is building

brand awareness and informing the public of the purpose of Hon’s Honey and the goals of

making a social impact on the Baltimore area to employ at-risk women and eventually send

them off to build a happy, healthy, and successful life.

The Challenge

Hon’s Honey currently operates in partnership with The Well to employ women of

Baltimore who are looking to improve their lives. Together, these worker bees create

natural beauty products from natural, locally sourced honey. The current challenge for

Hon’s Honey is when and where to open a storefront, but with that comes questions such as

compensation methods for the women, training facilities/programs, transportation services,

and how to create brand awareness.

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Situation Analysis

Hon’s Honey Company Analysis

Mission Statement:

“Hon’s Honey is a social enterprise dedicated to giving dignity and purpose to women

survivors of addiction, sex trafficking, generational poverty, abuse, and trauma. We know

that employed women take pride in the work of their hands, develop a wide-range of skills,

manage financial independence, and provide for their family. Through a community of

support and encouragement, she finds restoration and discovery of purpose. Hon’s Honey

gives women at risk purpose for their lives and hope for their future. Using local raw honey

and all-natural ingredients, the women employed by Hon’s Honey make bath and beauty

products and bottle raw honey to sell via retail outlets, online, and at craft shows/markets.

Products will also be sold wholesale to local retail shops for additional exposure. Hon’s

Honey gives women at risk purpose for their lives and hope for their future” (Pearce,

2018).

SWOT Analysis:

Strengths

1.​ A
​ s a social enterprise, Hon’s Honey offers not only quality beauty products and honey

but also offers a social impact as well. People like to help others and by purchasing from

Hon’s Honey they are doing that.

2.​ L
​ ocal sourcing of ingredients helps the local economy and local businesses.

3.​ W
​ omen are being employed and equipped for a sustainable life.

Weaknesses
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1.​ A
​ small and inexperienced workforce may slow production and advancement.

2.​ T
​ here is a lot to learn being a new business.

3.​ S
​ low production can lead to unfilled orders, which ultimately leads to unhappy

customers.

Opportunities

1.​ P
​ artnering with local businesses, markets, craft fairs, and other retail locations will

open sales outlets.

2.​ B
​ eing a social enterprise often attracts unique opportunities for partnerships to support

the cause.

3.​ E
​ very purchase contributes to making a difference for the women of Baltimore who are

growing from past and current life challenges.

Threats

1.​ I​ f the economy is not doing well, sales of specialty items diminish which could make it

difficult for a new enterprise to stay in business.

2.​ E
​ mployees who quit the COR Life Program at The Well become ineligible to work at

Hon’s Honey, which decreases likely candidates for employees at Hon’s Honey.

3.​ P
​ roduct, patent, and copyright property infringements pose potential legal issues.

4.​ S
​ mall cottage industry or social enterprises are competitors that make gaining market

share a challenge.

Competitive Advantage:

Hon’s Honey offers products made with all-natural ingredients, which is a growing trend in

the beauty industry. Additionally, it is a social enterprise, which may help with gaining
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support because many people search for new charities/ways to help others and with Hon’s

Honey they can get a great all-natural product and know the money spent will make a

difference. Additionally, being a local business allows for opportunities of local exposure

via local news channels, farmers markets etc. Supporting local business is also a growing

trend.

Market Position:

This brand is targeted towards consumers who are looking for natural, handcrafted products

and towards consumers who are eager to support local business and social enterprises.

Lush Company Analysis

Mission Statement:

“We believe in making effective products from fresh organic fruit and vegetables, the finest

essential oils and safe synthetics. We believe in buying ingredients only from companies

that do not commission tests on animals and in testing our products on humans. We invent

our own products and fragrances. We make them fresh by hand using little or no

preservative or packaging, using only vegetarian ingredients and tell you when they were

made. We believe in happy people making happy soap, putting our faces on our products

and making our mums proud. We believe in long candlelit baths, sharing showers,

massage, filling the world with perfume and the right to make mistakes, lose everything

and start again. We believe our products are good value, that we should make a profit and

that the customer is always right. We believe that all people should enjoy freedom of

movement across the world. We also believe words like “fresh” and “organic” have an

honest meaning beyond marketing” (“We Believe”).

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SWOT Analysis:

Strengths

1.​ A
​ ll ingredients are fresh, organic, vegetarian, and vegan, which is a growing trend in

the beauty industry.

2.​ A
​ ll products are animal cruelty free.

3.​ R
​ ecognized for animal rights.

4.​ A
​ ll products are packaged in “naked” packaging, which is eco-friendly.

5.​ I​ ngredients are ethically bought from all around the world in an effort to create positive

change, encourage sustainability and form long-lasting relationships with people around the

world.

6.​ A
​ ll products are handmade which offers a personalized, elevated touch.

7.​ S
​ tores offer in-store demonstration of products.

Weaknesses

1.​ O
​ rganic products require an expiration date, so the products have a shorter shelf life.

2.​ P
​ roducts are a bit more expensive than traditional beauty products, which limits the

amount of potential consumers.

3.​ T
​ he in store demonstration is a waste of product is the customer does not buy the

product.

4.​ L
​ ush lacks advertisements.

Opportunities

1.​ D
​ evelop a product line for men

2.​ C
​ reate partnerships with sustainable, organic, or eco-friendly brands.
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Threats

1.​ O
​ ther sustainable/eco-friendly competitors.

2.​ T
​ here are many less expensive alternative products available for consumers to buy.

Competitive Advantage:

Lush’s competitive advantage is the fact that all of their cosmetic products are available in

store and online. Each item is handmade from fresh fruits and vegetables from ethically

sourced suppliers around the world. Each product is vegetarian and is never tested on

animals, which is a growing trend in the beauty industry. Additionally, since each product

is handmade, the person’s name who made it is on the packaging. This creates a unique,

personalized touch.

Market Position:

Lush’s market position includes consumers that are conscious about taking part in healthy,

ethical behaviors. Additionally, these consumers are aware of the benefits in using organic

products. The target market consists of mostly women, aged 18-35 and are upper middle

class.

SoBotanical Company Analysis

Mission Statement:

N/A, however, the fundamental ethic for owner Theresa is keeping purity and quality a top

priority (“Our Founder”).

SWOT Analysis:

Strengths

1. So Botanical has been awarded Best of Baltimore five times.

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2. The aromatherapy and skincare products can be used for emotional and physical

healing.

3. The founder who created these products has studied with renowned aromatherapy

leaders. This ensures top quality products and is backed by knowledge and

experience.

Weaknesses

1. So Botanical is a small specialty business operation, with one location in Baltimore,

MD, so expanding may be difficult as funds may not allow it.

2. Some people may not be aware of the benefits of aromatherapy and this could lead

to difficulty spreading awareness.

3. Alternative products are beginning to penetrate the market i.e. aromatherapy

diffusers for the home which might be a more affordable and well known option for

consumers.

Opportunities

1. Partnering with other local businesses.

2. Finding new ways to advertise via social media platforms, television, billboards

downtown.

Threats

1. Big retailer competitors like Sephora.

2. Not having enough exposure to the marketplace because it is a small business.

Competitive Advantage:
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So Botanical’s founder has worked with renown aromatherapy leaders to create her

products, which is appealing because most people take pride in products backed by

industry specialists. Additionally, So Botanical has worked with well-known hospitals

such as John’s Hopkins which spreads awareness of the positive effects aromatherapy and

speciality skin care can have.

Market Position:

This brand is for consumers who are upper to middle class and are seeking a holistic

lifestyle. This brand is all about creating natural aromatherapy and cosmetic products to

lift spirits and provide physical healing.

Market Research Findings

Zip Code:​ 21234

Census
Population 69,752

Median Age 40.1

Education Attainment: 91.5%

Percent high school graduate or higher

Median Household Income $61,748

Individuals Live Below Poverty Line 8.8%

Retrieved from (DADS, 2010)

Race
White 43,967
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Black or African American 19,839

American Indian and Alaska Native 107

Hispanic or Latino 2,954

Asian 3,616

Native Hawaiian and other Pacific Islander 28

Other 560

Two or more races 1,532

Retrieved from (DADS, 2010)

Analysis

This could be a great location to plan a retailer for Hon’s Honey. Of the population, 40.7%

are Financial Optimists, which is composed of young professionals who do not shy from

spending money; 23.7% Parks and Rec, which eludes to the middle-class in which they are

financially stable, comfortable and satisfied with their position in life, and are wise with

their financials; 14.2% Bright Young Professionals who typically hold white-collar jobs

and are hip to the mobile generation; and 11.7% Pleasantville composed of higher wages to

support family style homes (“Explore”).

There are additional factors that contribute to the potential success of this retail location.

First, 11.9% of the population have a graduate or professional degree, which means these

people are less likely to rely on social welfare programs and have higher income, better
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health, etc. (“Explore”). Also, 43.1% of the zip code population utilize online banking

services (“Explore”). This statistic is not only surprisingly high, but also very useful as it

can conclude that 43.1% of the population is tech-savvy and values convenience. Lastly,

the population density is 5,252.9 people per square mile of land (“Explore”). This is a great

indicator of wise areas to plant retail locations.

Zip Code:​ 21230

Census
Population 33,568

Median Age 32.1

Education Attainment: 87.5%

Percent high school graduate or higher

Median Household Income $73,762

Individuals below poverty level 14.7%

Retrieved from (DADS, 2010)

Race
White 22,336

Black or African American 9,651

American Indian and Alaska Native 107

Hispanic or Latino 2,046

Asian 1,372

Native Hawaiian and other Pacific Islander 13

Other 571

Two or More Races 607

Retrieved from (DADS, 2010)
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Tapestry Segmentation
Population Density 5,572

Median Age 33.9

Monthly Credit Card Charges 13.3%

Online Banking Users 43.9%

Financial Optimists 44.6%

Graduate and Professional Degrees 21.7%

Manufacturing Workforce 5%
Retrieved from (“Explore”)

Analysis

The individuals that live in the region are well educated consumer and many of those went

to college (“Explore”). This area is known to be the host of those that value education, fine

arts, and creativity (“Explore”). This area is big on public transportation, taxis, walking,

and biking are popular ways to navigate around the city (“Explore”). In the table above, it

shows how individuals in this area are slight financial optimists, and often have some

education (“Explore”). Also, individuals that live here prefer environmentally safe products

(“Explore”).

Zip Code:​ 21204

Census

Population 20,250

Median Age 34.5

Education Attainment: 94%

Percent high school graduate or higher
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Median Household Income $81,086

Individuals Live Below Poverty Line 13.9%

Retrieved from (DADS, 2010)

Race
White 17,022

Black or African American 2,643

American Indian and Alaska Native 93

Hispanic or Latino 788

Asian 842

Native Hawaiian and other Pacific Islander 0

Other 251

Two or more races 444

Retrieved from (DADS, 2010)

Analysis

Most of the Towson, MD (21204) zip code is comprised of the College Towns

Segmentation at 35.4% (“Explore”). This segment prefers environmentally friendly

products and are typically college students who make impulse buys and splurge on the

latest trends (“Explore”). Towson, MD would be a successful location to start a storefront

for Hon’s Honey because each of the segments in the area would be prone to buy from

them. Given the fact that college students are willing to splurge on trendy items and the fact

that Hon’s Honey is engaging in the production of “trendy items” like luxury scrubs,

moisturizers, lip products, soaps, and soon bath bombs, a store in Towson would be a new,
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non-mainstream cosmetic store to shop in. Additionally, the top tier segment is comprised

of socially responsible consumers. Hon’s Honey sources its honey from local hives, which

supports local business, which is appealing to socially responsible consumers. Even the

smallest segment, the golden years, would be attracted to Hon’s Honey for its charity

aspect as it would offer a local charity to contribute to.

Marketing & Product Mix

Hon’s Honey currently offers an array of products:

Product Price

Raw Local Honey $16.00

Dem Lips Moisturizer $5.00

Hon’s Lotion Bar $12.00

Lavender Shuga Scrub $10.00

Da Balm Beard Salve $14.00

Lemongrass Peppermint Warsh Bar $7.00

Charcoal Tea Tree Warsh Bar $7.00

Patchouli Bergamot Warsh Bar $7.00

Lavender Rose Warsh Bar $7.00

These products are sold online and through a market or craft fair (Pearce, 2018). Via

conversation with Erin, Hon’s Honey is not sustaining the business quite yet. Majority of

the funding is from fundraising events and grants. Erin mentioned that when Hon’s Honey

was first founded, they started with low, introductory prices but then began to raise the

prices to try to gain a position in the competitive market and also to prove the products are
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of high quality ingredients. The prices were originally in the range of $4.50 - $12.00 and

now are in the range of $5.00 - $16.00. Although the difference is slim, these incremental

increases in price can make a huge difference on profits. However, it is important to still

ensure you are not priced too high to the point consumers will not bother purchasing the

products. Searching through the websites of a few of their competitors, such as Lush and

SoBotanical, most of their similar products are in the price range of $6.00 - $30.00 due to

amount, size, and product. Therefore, Hon’s Honey is currently priced relatively

competitively.

From our survey, we were able to conclude that the male respondents either do not

currently use all-natural beauty products, or are unsure if they do. Additionally, in general,

women are more willing to do the research to find a product that will work for their skin

and health overall. While Hon’s Honey has an array of products that are generally gender

neutral, they should also use this research to their advantage as they can start designing

products that are more geared towards men to build on this demographic. Currently, they

have the “Da Balm Beard Salve” which was a perfect start. Through some actual

conversations with the respondents in regard to the survey, I specifically spoke with a few

male respondents to hear their thoughts on the survey. The gist received was again, they

were unsure of the ingredients in their current products and most defaulted to thinking of

their deodorant products. A trend that Hon’s Honey can leverage on is creating an

all-natural, bee based deodorant. Studies have shown many deodorant products currently on

the market have aluminum in their ingredients which has a correlation to cancer (Lapidos,
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2018). This is a concern to many consumers and could be a niche market for Hon’s Honey

to tap into to potentially kick start their business.

Throughout the duration of the project, I would navigate through Hon’s Honey to look out

for any updates, changes, etc. Towards the end, Hon’s Honey added a “Mother’s Day Gift

Bag” and I decided to do some research of trends and noticed this is quite common in the

beauty industry. These are great marketing tools to utilize for special holidays. Tying this

back into the male demographic, Hon’s Honey could put together Father’s Day gift bags, or

non-month specific birthday gifts bags for both males and females. Additionally, these

keywords will certainly help Hon’s Honey with their search engine optimization. Having

“birthday,” “Mother’s Day,” “Father’s Day,” or holidays on their website are impactful as

an average consumer searches these words frequently. There are numerous ways for Hon’s

Honey to grow their product line, but these marketing tactics are useful to help them reach

some of their goals of expanding.

Target Market

Hon’s Honey defined their ideal retail consumer as “men and women who are 22-60

year-old professional working class adults with millennials being the primary target since

they are most willing to spend their money on quality products with wholesome

ingredients. The target customer will also be a person who is passionate about supporting

the cause of at-risk women entering the workforce” (Pearce, 2018). Ultimately, Hon’s

Honey is targeting consumers with social responsibility. However, we feel this target

market is too broad. Although the product line has a story behind it, the products have to

prove themselves in order to gain customer loyalty. Hon’s Honey has to put more focus on
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the quality and brand they are building for their products instead of relying on the reward

aspect because although people may have a positive feeling after a purchase of one of their

products, but they will not then become a return customer. Additionally, as college

students, of being in the age range of 18-23, a good portion will not purchase products

simply on a reward factor as a high majority have loans to pay off and are not willing to

just throw cash here and there. Therefore, the target market should begin at the age of more

established working professionals between the age of 25-28. Lastly, as mentioned above, if

they want to attract male consumers, more products need to be directed to this

demographic.

Complete Survey Results

The majority of our respondents were females in the range of 21-29 years old who

identified as white or caucasian and were a bit more price conscious. They voted that they

would spend $10.00 - $20.00 on beauty products. Additionally, a large portion of our

respondents said they sometimes, rarely, or never purchase organic beauty products. Then,

when asked for the reason for purchasing organic beauty products, majority of the

responses were in the range of health reasons, environmentally friendly, no animal testing,

etc. Therefore, the fact that Hon’s Honey uses bees as the base of their product could be a

disadvantage especially with the rise of concern for animal cruelty and the trend of diet

changes to veganism. Another finding was a high percentage of respondents said price and

quality are the most important factors when making a purchasing decision for beauty

products. As mentioned, Hon’s Honey is competitively priced in comparison to their

competitors, therefore, as long as their quality holds true to their word, then Hon’s Honey
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could do well when immersing themselves in these markets. Lastly, we inquired where our

respondents purchase their beauty products and majority voted from specialty stores (i.e.

Sephora) or drug stores (i.e. CVS). Hon’s Honey has goals of expanding into retail shops

and with their mission being a small business with a passion for quality products that make

a social impact on the community (Pearce, 2018). This can be attained, while also putting a

focus on well-known specialty stores and drug stores to help build awareness and customer

loyalty. With hopes of majority of their sales being driven online and through fairs can be a

disadvantage as many consumers go to the retail locations in order to make the purchasing

decision on their beauty products.

Hon’s Honey Marketing Strategies

Hon’s Honey is still very new to the market and is still trying to gain a reputation and

awareness as an organic, socially responsible brand. The research findings found that

young, females living in the Baltimore often do not buy organic beauty products but are

well informed of the reasons to use quality, healthy and safe products. With women very

likely to try new products, willing to spend the money on products that are like Hon’s

Honey strategic pricing strategy, and buy from a specialty store, Hon’s Honey would

benefit off the following marketing strategies:

· Continue to build a brand through an online presence,

· Continue to reach new clientele through trade shows, festivals, and farmers

markets,

· Partnering with more local beauty salons to aid in women empowerment by

spa and beauty treatments,

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· And, wholesaling through Specialty Stores like Ulta or Sephora.

Hon’s Honey can benefit through building the social media pages through requesting

customers to review the product, reposting pictures of those who bought or whom are using

the product, and offering branded t-shirts, and eco-friendly tote bags. With the

demographic leaning toward young women entering the business world, Hon’s Honey can

use Instagram to post stories at local events and dropping spontaneous discount codes.

These individuals can also be reached at trade shows, farmers markets, and music festivals.

At these events, it can be a great opportunity to demo the operational excellence of the

products and educate individuals on the social responsibility of the products. Hon’s Honey

can start partnering with more local beauty salons to not only sell the products but also aid

in women empowerment by supporting spa days and treatments for single parent, low

income women that may not have the chance to have a comforting day to themselves. This

event can also be tailored towards younger women in poverty that are heading to prom that

may need beauty supplies. This can be done by the act of donations because every woman

remembers what went into going to prom and the excitement building up to that one

unforgettable night. At these Hon’s Honey events, women can be given a gift bag with a

relaxing bath bomb and rejuvenating lip balm, and spa treatment, receive the up-dos and

make up of their choice. This campaign instills The Well and Hon’s Honey COR values,

identity, and created purpose through building community, opportunity, and responsibility

during life changing events for women (Pearce, 2018). Ultimately, the main goal is to earn

a spot and be able to support a demand in a specialty store like Ulta and Sephora. This is a

goal that can be associated with the 5-year plan; where it can be supported with the
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projected financials and new “worker-bees”. Hon’s Honey social responsibility is its main

driven purpose and should continue to do so in the future.

Recommendation

Hon’s Honey should continue to look out for the well being of the “worker bees” and

growth will come from the suggested marketing strategies. Hon’s Honey main priority

should be building a brand and educating individuals about environmentally safe and

socially responsible products. The company has the ability to reach the community through

word of mouth, events, and social media campaigns. With Hon’s Honey project financials,

the conclusion is to hold on the storefront and continue to sell through small to medium

size companies and produce in The Well. Overall, the suggested recommendation is to wait

until Year 2 or Year 3 to open a storefront; it can be demonstrated in the Pro Forma

Balance Sheet the need for capital, demand, and the workers to supply that for that demand

to open that store front (Pearce, 2018).

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References

Data Access and Dissemination Systems (DADS). (2010, October 05). Retrieved from

https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml?src=bkmk

Explore Your Neighborhood. (n.d.). Retrieved from

https://www.esri.com/en-us/arcgis/products/tapestry-segmentation/zip-lookup

Lapidos, R. (2018, October 2). What to know about aluminum in deodorant. Retrieved

from https://www.wellandgood.com/good-looks/deodorants-without-aluminum/

Pearce, A. (2018, June 30). Business Plan for the Hon’s Honey Social Enterprise. Retrieved

May 5, 2019, from

https://blackboard.towson.edu/bbcswebdav/pid-5142415-dt-content-rid-34467007_

2/courses/004857-01-1192-1-002-03948/HonsHoneyBusinessPlan2018.pdf

Our Founder. (n.d.). Retrieved from https://sobotanical.com/pages/about

We Believe. (n.d.). Retrieved from

https://www.lushusa.com/story?cid=article_we-believe-statement
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Appendix
Exhibit A- Social Media Question

Exhibit B- Social Media Survey Top Responses & Platform

23
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Exhibit C- Complete Survey

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Zip Code Frequency Location

21209 Mt. Washington

21244 2 Windsor Mill

20723 3 Laurel

21784 Sykesville

21236 3 Nottingham

98219 Invalid

21114 3 Crofton

20876 Germantown

21204 7 Towson

21771 Mount Airy

8401 Invalid

19904 Dover, DE

20715 Bowie

20902 Silver Spring

20758 Friendship

19063 Media, PA

20601 Waldorf

21093 2 Crofton

21252 2 Towson

17327 Glen Rock, PA

8221 Invalid

15778 Timblin, PA

21286 3 Laurel

20708 Towson
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21044 Columbia

21234 4 Parkville

20707 Laurel

20740 College Park, MD

21842 Ocean City, MD

21122 Pasadena

21013 Baldwin

20639 Huntingtown

20781 2 Hyattsville

20646 2 La Plata

21755 Braddock Heights

19958 Lewes, DE

20772 Upper Marlboro

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Why do you use/buy organic beauty products?

Responses Frequency

Health (safe, prevent harsh chemicals) 15

Environmentally friendly (no animal 11

testing either)

MISC (a gift, word of mouth, sensitive 9

skin)

N/A 12
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Correspondence
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Powerpoint Slides