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As the number one natural nutrition company in the U.S.

, Shaklee has been making people healthier for over 50 years. Shaklee is one of very few companies conducting business benefitting the triple bottom-line. The sense of responsibility towards people and planet is made part of Shaklees business. This sense of responsibility and mode of business is greatest asset for Shaklee. Despite the unique value proposition, quality of products and increasing consumer appetite for this class of products, still, the sales of Shaklee hardly changed. The key issues are with the brand positioning, marketing strategies and their customer segmentation. I summarize my recommendations below and each of this is explained with a rationale: 1)Identification of target customer and market segment: My recommendation is the health conscious segment- age group of 35 and above, athletes, growing kids, corporations who want to be eco-friendly. 2) Product categorization specific to customer segment: The health and nutrition product line must be primarily targeted to the segment pointed above. The cleaning products must be targeted for women and corporations. Partnering with certain salons in order to market the beauty products are recommended. Weight management products can be reached to more consumers by involving doctors and fitness instructors as distributors for Shaklee products. 3)Action plan down the line: Business Model: Transforming more women and young professionals as distributors and marketing professionals. Modification of the current business model from complete direct marketing to hybrid model (outlets and ecommerce). Marketing: Emphasis on new marketing strategies using social media, blogging, Building brand equity: Viral videos showing the unique recognitions of company, video footages from distributors, consumers who are successful and benefitted with the products. Publishing daily articles in newspaper or on internet about health, health tips, suggestion from doctors.

Building relationships: Partner with corporations towards using the eco-friendly products thereby increasing the brand image of both (win-win strategy). Partner with sports authorities to emphasize using Shaklees supplements to athletes. Increasing the first time consumer: Enable the product availability in trail sachets or packs. The market segment in which Shaklee operates is highly fragmented amongst a number of brands. It is good option to choose new brands with in its own existing strong brand as it helps to capture more market share. The reason is that having 4 out of 10 brands in such a market will give a greater overall share than having 1 out of 8. Individual brand names naturally allow greater flexibility by permitting a variety of different products to be sold without confusing the consumer's perception of what business the company is in or diluting higher quality products. My first recommendation lays emphasis on identification of market segment. The product lines of Shaklee are unique and each of the products is targeted towards a specific purpose. Hence, distributors, marketing strategies must be targeted towards specific product and specific consumer segment. The next part of recommendation emphasizes on what product line should be focused on the customer segment. The health and nutritional products are proved to be great supplements and results are evident that users of Shaklees products are in better health. Hence this product line must be targeted to people of middle age group (35+) who are health conscious, players and athletes, growing kids. The cleaning products must be additionally targeted towards corporations who are trying for eco-friendly image and have a sense of responsibility towards environment. I suggest partnering with certain salons in order to market the beauty products to women and new customers as Natura (beauty products company) did in Brazil. Weight management products can be reached to more consumers by involving doctors and fitness instructors as distributors for Shaklee products. The short term and long term action plan formulated as shown in appendix A. The first step is to improve distributor efficiency which would take 0-6 months. This involves involving distributors more efficiently by conducting training sessions, supplemental practical training, involving more young and passionate distributors in to the network. This would be typically a combination of existing system of using network of friends/relatives, as well as recruitment by the company. The

next step would be to increase the social media and print media presence. The primary way in which green consumers obtained information about corporate environmental behavior was through the Internet. The negative publicity about Shaklee scam must be defended by a suitable internet marketing campaign using blogs, articles, showing videos of actual customers who were benefitted from the company and its business model. This is not an expensive way, in fact it is the best way to defend and retain the brand value. Staying connected with the customers through Facebook fan page, giving twitter updates about the eco-friendly activities of company is a good way to create a brand equity. The next step should be focused on building relationships with different segments of the markets such as the beauty salons, doctors community, and fitness centers so as to market our products through them. Offer environmental tips, health tips online and through print media so as to get good publicity. The next crucial step is transforming the business model.The existing business model of the company uses social marketing which is a unique distribution model. But the increasing competition requires lot more than this. The company is using certain dated strategies such as attending meetings at hotels, recruiting family and friends and home party promotions, which are known to take up a lot of the distributors time and could possibly set him/her up for failure. Due to the fact that the internet serves such an important purpose in the network marketing industry of today, as a dedicated marketer we need to invest our effort and time in learning the most advanced strategies that will aid in creating wealth and freedom that will last a lifetime. The recommended new business model is shown in Appendix D. This model combines the existing social marketing with the in-store sales and sales through online/e-commerce store and smart phone apps. The stores are located at suitable locations so as to facilitate the customer and make the product available easily. The customer may be either referenced by a distributor earlier or he may be a new customer. If he is referenced by one of the distributor, the sales commissions of the products go to the distributor directly. If the customer is a new customer, then the commission amount is distributed annually among the distributors local to that area. The schema for the online/e-commerce store is shown in appendix C. The user selects the product and enters the area code. The distributors in the area are notified about the order. The distributor who responds first through the online system gets the commission. The required product will be shipped to the customer by the distributor. Providing sample or small sachets for

trial use, lowering the costs with increasing the buyer value creates a blue ocean (unique market) for Shaklee (appendix E). As shown in Appendix F, the new business model improves the buyer experience as shown. We are enabling the customer productivity through easy purchase and delivery of products through online and in- store. The easy to dispose material which is biodegradable adds to buyers experience. The short term action plan gives a strong foundation for the long term action plan as shown in the appendix B. To realize the goals for global expansion, we recommend the short term action plan which improves the business results in North America. North America is certainly a right place to focus. The long term focus as shown in the appendix B aims at new emerging markets of China, India and Brazil. There is increasing necessity to engage in sustainable business to create a point of difference. The green economy offers a great growth opportunity for companies like Shaklee. This is certainly a way for Mr Barnett to realize his goals. Shaklee stands for offering highest quality natural nutrition and personal care products, environmentally-friendly household products, and state-of-the-art air and water treatment systems that have helped millions enjoy a healthier life. This company can be named as the only company that has been delivering the consumers needs in a eco-friendly manner and with sustainable acts. The environmental consciousness and concept of making green as a part of their business and not just a fad or trend, are sufficient to realize the ideas of Mr Barnetta and offer an incentive for his future works.

Appendix A: Short term action plan:


Improving Distributor efficiency

0-6months

Social and print media marketing

0-2 months

Building relationships

0-8months

Changing the business model 0-12months

Appendix B Long term Action Plan:

Penetrate into existing markets

New emerging markets

China, India, Brazil

Flexible business model

local to the operating country. cross train distributors

Country specific -ecommerce website

Appendix C Ecommerce/ Mobile application schema:

User website/ Mobile application


User selects product Enters area code

Connect to distributor
Distributor is notified Distributor-fastest one grabs the order

Shipping
Identified distributor delivers shipment

Commision given to distributor

Appendix D New Hybrid Business Model:

Appendix E Blue Ocean Strategy:

Costs Blue Ocean

Buyer Value

Appendix F Positioning of Shaklee:


Purchase Delivery Use Customer Productivity Shaklee Shaklee Shaklee Supplements Maintenance Disposal Shaklee

-------------New addition to the positioning of Shaklee-----------

Simplicity

Convenience

Risk

Fun and Image

Environmental Friendliness Shaklee

Shaklee

Shaklee Shaklee

Shaklee

Shaklee

<------------------------Existing Position of Shaklee-------------------