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Burts Bee

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Submitted By aminaleman
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Executive Summary

lndustry Overview
The college bookstore market can be divided into two major segments, four-year traditional schools and two-year non-traditional community, technical and junior colleges. In total 14 million students will enroll in these 4500 institutions this year, and this number is estimated to grow to 16 million over the next ten years. It is also estimated that $90 billion represents college student spending, and of that 23% is non-essential. Students at four-year schools are insulated in avery enclosed environmen! typically attend full-time and attend from age 18-22. Students at two-year schools typically attend part-time, commute to school and are 29 years in age on average. Each type of school represents 50Yo of the college bookstore market. Buyers

will use reps and distributors as well as buy from a company direct. Reps commissions are l0-l5Yo, they are the most frequently used form of distribution and best way to atfract

attention to a new product. Mark-ups typically range from 20%-50%. The buying cycles revolve around the major quarters, semesters or trimesters.

Key Trends & Attitudes
Recently, college bookstores have been faced with a substantial increase in outside competitive forces i.e. school supplies and computer outlet stores. In an attempt to compensate, many stores are moving towards a one-stop-shopping approach. Items such as Starbucks, designer clothes and Clinique cosmetics have begun to appear in stores nationally. This provides significant opportunities for new product categories to enter the market. Thidy percent of the college bookstores are managed by a handful of private institutions and this is estimated to increase at a rate of 3-5%o annually. For a vendor to sell within these stores they must fnst receive corporate approval. A vendor may enter the college bookstore market without having already received these corporate approvals, but would be wise to seek them out and thereby expand the market potential signifi cantly.
Students and bookstore buyers do not consider the bookstore a venue for purchasing HBA products. The overwhelming consensus, by both groups is that they will always choose to go to a drugstore or Wal-Mart where the selection and prices will be better. While many bookstores have an IIBA section, it is usually very small and bare bones in nature. The buyers, whom I spoke to, from stores that purchased Burt's Bees at the CAMEX show, did not do so with the intent to display them in their HBA section. They bought them as a novelty gift item or impulse buy to be displayed as such, separate from the HBA section. Student's affitudes are very positive towards natural products.


I am recommending that Burt's Bees sell io both two-year and four-year schools within three distinct regions of the country, where Burt's Bees products are currently meeting with great success. Because Burt's Bees is looking to grow their business substantially through this channel, I recommend using reps not only as a distribution network, but also as the most effective promotional tool available. In addition, Burt's Bees should continue to attend CAMEX, which is considered to be the next best way for buyers to find new products. The product lines which, I am suggesting will meet with the most success are Burt's, Farmer's Friend and Farmer's Market and should be positioned, initially, as a group of products in the gift section, rather than as individual items in the basic product categories in the HBA section. Burt's Bees should maintain their current pricing strategies. The company should promote to students through in-store displays, pillow-pack sampling and T-shirt and product giveaways that should help create a product image around campus. Sales and expense forecasts are in the attached appendix.…...

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