Herborist is launching a new sustainable marketing approach for its hand cream called "Beyond Just Beautiful Hands" to increase sales and social impact. The approach will donate a hand cream to treat frost bite for every cream purchased. This creates an emotional connection between consumers and those helped. It leverages Herborist's sustainable supply chain and addresses health inequality issues faced by 200 million rural Chinese. The approach is expected to drive strong growth for Herborist over the next 5 years by generating loyalty and brand awareness through its social mission.

1. A Sustainable Marketing
Approach for Herborist
Group 2
Barry , Gary, Lehana, Stella and Vijay

2. Company Introduction
 HERBORIST is the first Chinese
brand integrating traditional Chinese
medicine into skin care products.
 Value Proposition: Nature and
Balance
 Target customers: White-collar women
aged 25-40

3. Snapshot of Hand Cream
Market
• Hand cream is one of the most frequently used skin
care products in autumn and winter.
• Over 100 brands in the Chinese market
• Price ranged from 10RMB-200RMB
• Little product differentiation
L’Occitane HERBORIS MAXAM
230RMB T 12RMB
150ml 120RMB 60g
100g

4. Frost Bites are very serious
problems to rural people.
200m Chinese
suffer chilblains1
At least: 116
58% Urban million pieces of
Population 2 medical cream
needed!
Every patient
needs one piece
of cream to
cure(estimated)
1 http://baike.baidu.com/view/39424.html?wtp=tt
2 http://baike.baidu.com/view/244361.htm

5. Our solution: Buy one Herbosirst hand cream and
donate one for treating frost bite again
Sustainable Responsible
supply chain consumers
•Organic packing •Beyond just beautiful
•Fair trading hands
•Support the farmers •Buy one donate one
•“Beauty extracted from nature” •Emotional bonding: people
in the rural area

6. Competitive advantage: Sustainable Supply
Chain and improving social health inequality
Farming Sustainable
Fair Trade
Add Credibility Solves purpose Assistance farming
NGO FARMERS
Green Herbal
Toxin Free
Packaging Product
PRODUCT
Meet BUY ONE GET ONE
Meet Needs
Needs FREE
Provides
SAFE CONSUM RURAL
relief
ERS CHINESE
RESPONSI Higher
BLE productivity

7. Primary Activities of the value Chain
Primary Activity Description
Inbound logistics  Bind the suppliers into Exclusive Agreements to reduce demand shocks.
 Cost of receiving, storing, and carrying inventory will be lower
 Transportation scheduling stability will reduce logistics cost
Operations  Organic Packaging will reduce the harmful effects of synthetic
packaging on Environment
 Organic products involve less processing
Outbound logistics  Loyalty program will reduce the cost of distribution, warehousing and
manpower due to reduced demand shocks.
 Electrical Vehicles used to reduce cost and pollution for local distribution
of free frost bite cream
Marketing and sales  Product differentiated from competitors will reduce the cost of
acquiring and serving customer.
 Loyalty Program will reduce customer acquisition cost
 Leveraging NGO Partner will help in increasing Emotional Proximity
and Brand Energy
Service  Consultation model of selling the products will help in increasing
personal touch of sales team with customer.
 Customer service and understanding of his needs and concerns will
increase.
 Higher loyalty and hence, higher Brand Energy.

8. Secondary Activities of the value
Chain
Secondary Activity Description
Procurement  To have direct procurement without the middleman
 Cost of placing order and evaluating will reduce considerably
 Model of Contract Farming will increase quality and reliability of
the farm product yield.
 Protecting rate herb species through fallow land and organic
fertilizers
Human Resource  Recruiting will be exclusively based on the local population profile
Management and in all the three components of value chain – raw material sourcing,
Involvement of Top processing and sales.
Management  Extensive training to the staff before launching of organic products.
Meritocratic promotion policy linked with KPI to encourage top
performers to come up
 We will have senior management Task Force, consisting of top
sales oriented people of existing products, with high agility to monitor
the progress of the new initiative.
Technology Development  We propose to use IT in implementation of the direct sourcing, sales
and helping the poor’s.
 IT will reduce the transactions cost and increase the speed to market.
Infrastructure  It is easy to plan out infrastructure investment for stable demand
 This will reduce the cost of funding the project.

9. Overall Value Chain Analysis
Infrastructure development for
Organic processing
Employee motivation effects,
Engagement and bondage
Technology improvement for higher productivity
and farmland yield
End to end connection eliminates the middle man in
Procurement.
Minimized Lead Demand Loyalty Higher
stock outs Industry in Planning enables Engage-
will reduce terms of will reduce higher ment
cost of discharge outbound premium
inbound and waste logistics and
logistics treatment cost demand

10. Overall Value Chain Analysis
Infrastructure development
increased safety and sustainability
derive
Employee motivation effects
Engagement and support for the image
makeover of BP
Technology improvement for higher productivity,
margins and safety
Procurement of long term leases for the Oil and
Gas wells will decrease procurement costs
Cost of Long term Higher
Lead Loyalty
inbound downstrea
Industry in enables Engage-
logistics m contracts
terms of higher ment
reduced by will reduce
discharge premium
long term outbound
and waste and
shipping logistics
contracts treatment demand
cost

11. Beyond Just Beautiful Hands : Creating emotional
bond between consumer and beneficiary
 Take consumer to a journey
 Highlight how a consumer can make difference to a person’s life
 Create a bond between consumer and the beneficiary
 Develop a website – that will communicate the result of program
 Thank Customer for her/his help in changing life
CONSUMERS CONSUMERS

12. Beyond Just Beautiful Hands

13. Beyond Beautiful Hands will drive the growth of
Herborist in the next 5 years with growth picking up
within the next 2 years during the implementation.
2,500,000 0.2
0.18
2,000,000 0.16
0.14
1,500,000 0.12
0.1
1,000,000 0.08
0.06
500,000 0.04
0.02
0 0
2008 2009 2010 2011 2012 2013 2014 2015
Annual Sales Value('000 RMB) Annual Growth %

14. Value Based Matrix- Herborist
Beautiful Hands, Warm Hearts.
Mind Heart Spirit
Mission: Provide a full Customer
Contribute to the skin Targeting those at
range of natural involvement in
health of the the base of the
skin care Beyond Just
community while pyramid
products Beautiful Hands
being One with
Nature.
Vision: To be the Create sustainable Create future value Partnering with
world leader in economic growth by generating local skin health
Trad. Chinese by helping brand knowledge agencies to help
skincare while customer care for among future measure social
caring for our their skin adopters. performance
surroundings.
Nurture our Employees’
Values: Every employees’
Create value from employees the involvement in
contribution is
the nature’s same way we Beautiful
important to the
gift, innovate and would care for Hands, Warm
company
give back to Nature
ourselves Hearts.

15. Q&A
Thank You!