Introduction   3

Objectives and method of project   4

Company profile   6

Advantages in the marketplace (strength) 8

Disadvantages in the marketplace (weakness) 8

Product description   9

Moisturizing and nourishing care. 9

Moisturizing cream... 9

Directions: 9

Ingredients: 10

Related products: 10

Specific care. 11

Silica mud.. 11

Directions: 11

Ingredients: 12

Related products: 12

Survey   13

External environment   15

External structure. 15

Economy.. 16

Technological. 17

Political and legal environment. 17

Competitive analysis  19

Market share   20

Company´s offers. 20

The market. 20

Porter’s competitive model   21

The role of the four p’s  23

The product. 23

Price. 23

Distribution.. 24

Promotion.. 24

Revenue and cost   25

Our products: 25

Conclusions  26

Our opinion   27

Promotion methods. 27

Advertising cost. 27

Bibliography   28

Webpages: 28

     When we first met in school at the end of August, Alda Jóna, our Marketing teacher, informed us of the project.  The project was to choose a product to send abroad and find out if it would be possible to put it on the market there. Students from other schools abroad would do the same and send us their products for us to check if the product they chose would work here.

 Alda Jóna set up nine groups and gave each group one or two countries to cooperate with .  We got Finland and Denmark. She also gave us e-mail addresses to contact the groups.

In October we started thinking about what kind of product we would like to put on the market overseas. An idea about The Blue Lagoon geothermal products came from one of us and we all liked it, so the next step was to get permission from Alda Jóna and then contact the company to ask if they would like to cooperate with us. We spoke with one of the marketing directors Lilja Berglind, at the Blue Lagoon, and she was very excited about our project and was approved to work with us. She was going on a vacation so she introduced us to the other market director María.

In November everything was clear about our product and we made a description of the product and a short description of ourselves to send abroad to the groups. We received mails both from Denmark and Finland and got to know what products they had chosen to market here in Iceland. Then we had to search on the Internet for Denmarks and Finlands external environments so we would get to know a little bit about the countries.

In December we took a short break while we were waiting for some answers from the other groups. In January we made a questionnaire to get the information that we could not get ourselves e.g. the market size, market behaviour and the market share. We sent the questionnaire to the countries and waited for the results.

 When we received the Blue Lagoon products in March we made a survey for the public to review so we could get their opinion on the product. We sent the products to both of the cooperating countries including the survey and a description of  how we would like the product to be introduced to the public. At this point we had received their survey and were to explore the market here including feedbacks from ours. We made a pie chart out of the results and our classmates filled out the survey mentioned above and we sent the outcome to Finland and Denmark.

The final step in this assignment was to make a good and detailed report about everything that concerns marketing the Blue Lagoon products in Finland.

The Blue Lagoon was formed in the year 1976, while a geothermal power station was being built, in the middle of a lava field in Reykjanes-peninsula. The cause of the forming was that it was placed on a geothermal area. When the geothermal seawater has gone about 700-800 meters to the lagoon, it is around 160°C, on its way it goes through special equipments which are specially designed to cool the water so that it has the right temperature when it reaches the lagoon. The Blue Lagoon is a natural source which is actually spell water from the geothermal power station at Svartsengi.

In the year 1980 people started to bathe in the Blue Lagoon. People enjoyed bathing in the lagoon and visited it for recreation and therefore its popularity increased by every year. The Blue Lagoon Ltd. was founded in June 1992 and because of the popularity of the warm spa water, the lagoon magnified in the years 1993-1994. But in July 1999 a new and magnificent Blue Lagoon bathing facilities were opened and the lagoon is now one of the most popular destination among tourists who visit Iceland. 64% of the tourists who visited Iceland last year visited the Blue Lagoon, which equals 318.000 people. The place has become one of Iceland’s most famous tourist destination.

 The location of The Blue Lagoon is very convenient. It is situated close to Reykjavik and therefore it has become an excellent destination for those who choose to enjoy a different experience to nourish health and mind.

Three geothermal spa’s state-of-the-art facilities include: modern changing rooms and showers, an indoor Blue Lagoon pool, a conference room and a restaurant overlooking the Blue Lagoon are on the premises. A geothermal beach, lava caves and Silica mud are parts of the lagoon area. In addition to bathing in the lagoon, guests enjoy relaxing in a lava cave and a unique geothermal steam bath.

The company and its team of professionals is dedicated to the development of health and tourism-related services. It has grown in recent years and now its activities are divided into three stages. All the activities of the organization is build on singularity and quality of geothermal seawater which contains salt, silica and blue green algae.

            The company produces skincare products under the name Blue Lagoon Iceland. The products are made of the unique chemicals from the Blue Lagoon and they were first put on the market in the year 1995. A new line in the skin care products was introduced in the year 2000.

The Blue Lagoon’s white Silica mud gently cleans and exfoliates the skin and has revitalizing effects on the skin while the blue green algae nourishes and softens the skin. The Blue Lagoon mineral salts have balancing and relaxing effects. Soon it became apparent that the substances of the spa had positive effects on psoriasis patients and other skin ailments. Many significant researches have been made, the studies proved that regular bathing in the Blue Lagoon is an effective treatment against psoriasis and treatments have no side effects.

With all the qualities mentioned above it was a splendid opportunity  to produce skin products from this uniqe natural source.

     Although the cosmetic market is very large and various The Blue Lagoon products have a unique position on the cosmetic market. The Blue Lagoon has strong characteristics against their competitors, which the company has to aim at. The raw materials they use in their skin products are very rare and come from a unique natural source. People around the world look upon Iceland as the Mecca of health and purity, therefore products especially these skin products are considered high quality. Researches have proved the healing power of the product in addition of being a regular cosmetic product it is also a health product. The Blue Lagoon is one of Icelands most famous destination places, and it is quite recognised  overseas as a geothermal wonder.

 Today the cosmetic production is extremely large and many well known competitors have a great deal of the market share on the market abroad. The market has advanced greatly and many companies have created a special status. Thus it is very difficult to market a new and unknown product abroad. Therefore The Blue Lagoon Ldt. has to do an intensive marketing campaign, which would include expenses and give the company positive results.

     The blue lagoon moisturizing and nourishing products are specially produced for dry and sensitive skin. Their ingredients are salt, Silica mud and blue green algae from the Blue Lagoon together with chosen natural ingredients to build up and protect the skin. The product is a moisturizing cream without artificial odorant for dry and normal skin.

     The Blue Lagoon's moisturizing cream for normal to dry skin is formulated with vital mineral salts to provide intensive, quickly absorbed moisture to the skin, leaving it soft, supple and revitalized. Dermatological testing has ensured that the pH is balanced to that of the skin. The cream is suitable for all skin types including those sensitive and prone to dehydration. The cream is great for face, body and hands. When used on the face it provides a perfect base for make-up. The Blue Lagoon moisturizing cream helps rebalance the moisture level of dry and very dry skin, psoriasis and eczema areas.

Apply the Blue Lagoon moisturizing cream on the face and body twice a day after cleansing. Gently massage with fingertips until complete penetration is achieved.

Aqua, petrolatum, paraffinum liquidum, ceteareth-25, cetearyl alcohol, sodium cetearyl sulphate, acetylated lanolin alcohol, isopropyl myristate, simethicon, natural mineral salts from Blue Lagoon, glyceryl stearate, cetyl alcohol, carbomer 940, sodium hydroxide, lanolin alcohol, EDTA, methylparaben, propylparaben.

A moisturizing and softening body care, specially developed for very dry and sensitive skin. It is formulated with the unique geothermal minerals, algae and the silica clay from the Blue Lagoon in Iceland.

Ø     Beutifying body lotion:

The Blue Lagoon beautifying body lotion is a light, delicately perfumed formula based on natural active ingredients.

Ø      Intensive cream for very dry skin:

The Blue Lagoon intensive cream has a unique composition which prevents dehydration by promoting an intensive moisturizing and nourishment.

 Specific care

The Blue Lagoon specific care products are special nature products designed to work on skin problems, e.g. dry skin, eczema, psoriasis and problems of the scalp. The products are also good for nourishing the skin and give it a fresh look. The products are the Blue Lagoon mud. They remove dead skin cells and revitalise the outer layer of the skin.

A natural therapeutic mud for face and body. Blue Lagoon silica mud exfoliates and removes dead cells and impurities from the skin. It can be used on any type of skin and is particularly recommended for areas affected by psoriasis and eczema. It absorbs an excess of sebum in the case of oily and acne affected skin, leaving it soft, smooth, comfortable and pure.

Massage gently and leave it on the concerned areas of the face and body for a few minutes. For dry skin, psoriasis and eczema leave for up to 5 minutes, for oily skin and acne up to 15 minutes before rinsing off with lukewarm water and gently towelling dry. Then apply the Blue Lagoon moisturizing cream or the intensive cream in case of very dry skin. Repeat the application 2-3 times a week.

Aqua (purified water), cocamidopropyl betaine, sodium laureth sulfate, lauryl glucoside, PPG-26 buteth-26, PEG-40 hydrogenated castor oil, silica, glycereth 5 lactate, hydrogenated jojoba oil, Blue Lagoon natural mineral salts, propylene glycol, ethoxydiglycol, algae (algae extract), Blue lagoon clay extract, kaolin, hydroxypropyl guar, parfum (fragrance), hydrolyzed sweet almond protein, phenoxyethanol, ethylparaben, buthylparaben, methylparaben, propylparaben.

Ø     Mineral bath salt:
A natural combination of minerals processed from the geothermal seawaters of the Blue Lagoon.

Ø      Silicamud:
A natural therapeutic mud for face and body.

     MALE                               IN FINLAND                                  FEMALE

     Age 15-30                                                                                                                       Age 15-30

Finland is situated in northern Europe between the 60th and 70th parallels of latitude. A quarter of its total area lies north of the Arctic Circle. Finland's neighbouring countries are Sweden, Norway and Russia, they have land borders with Finland, including Estonia which is across the Gulf of Finland. Much of the country is a gently undulating plateau of worn bedrock and boreal forests, presenting a striking mixture of wooded hills and waters. High rounded fells form the landscape in Finnish Lapland, mostly the northern part of the country.

            Finland is the sixth largest country in Europe with a low population density of 17 persons per square kilometre. 67 % live in urban areas while 33 % remain in a rural environment. The capital city of Finland is Helsinki with the population of 555 500 people in its metropolitan area. Other important cities are Tampere, Turku, and Oulu.

Average life expectancy for females is 81 years and for males 74 years. Finland has 5,181,115 inhabitants and there is not a big difference between the population of men and women in the country. Men are about 2,530,000 and women 2,652,000. The age structure is as followed:

     Finland has two official languages, which are Finnish and Swedish, but business can be conducted in English. English is the principal foreign language studied, and many Finns are multilingual. There has been complete freedom of worship in Finland since 1923. The Evangelical Lutheran Church is the country's biggest denomination. 89 % of the people are baptised as Lutherans, while 1 % belong to the Finnish Orthodox Church. Christianity, represented by the Roman Catholic Church, reached Finland before the end of the first millennium, but the Church was not firmly established in the country until the 12th century.

Finland's road to industrialisation started in the 19th century with the harnessing of forest resources. Forests are still Finland's most crucial raw material resource, although the engineering and high technology industries, led by Nokia, have long been the leading branches of manufacturing. Finland has a highly industrialized, largely free-market economy, with per capita output roughly that of the UK, France, Germany, and Italy. The industrial structure of Finnish exports has changed dramatically over the past decades. The wood and paper industry accounted for well over half of exports less than thirty years ago. Now the paper industry is only one of three major export sectors, the other two being electronics and other metal and engineering. Electronics is the most spectacular success story in Finnish exports. Its outstanding growth in the 1990s is mainly based on mobile phones and other telecommunication equipment. The year 2000, unemployment had reach over 9% in Finland and the inflation rate was about 3%.  Finland was one of the 11 countries joining the euro monetary system (EMU) on the 1^st of January in the year 1999.

Telephone lines in use in Finland are 2.861 million cable lines, microwave radio relay and an extensive cellular net provide domestic needs. The international system has one submarine cable and shares earth station with the other Nordic countries. The net wealth of Finnish households is at the average level for member states of the European Union. The Internet is big aspect in the Finnish daily life and Internet service providers are 23. The total number of Internet users are 2,27 millions. There are 1,5 radios for each person in Finland and 63% of the inhabitants have television in their homes and television broadcast stations, plus 385 repeaters.

     Finland is a constitutional republic which became independent on the 6^th of December in the year 1917. They got their constitution on the 17^th of July in 1919. The head of state is the President of the Republic, Tarja Halonen, who is elected for a period of six years and may serve a maximum of two consecutive terms. She was elected in 2000 and the next presidential elections will be held in the year 2006. The President is chosen by direct popular vote, with a run-off between the two leading candidates to emerge after the first round of voting.

The government must enjoy the confidence of parliament, the Eduskunta, which has 200 members elected by universal suffrage every four years. Women are very much accepted in high levels of government and business. That may be caused by that in the year 1906, Finland was the first European country that granted women the right to vote. The main international organizations that Finland takes part in are: EMU, ESA, EU, OECD, OECD, OSCE and WTrO.

    You must have in mind a few questions about your competitors before you put your product on the market. The company must estimate how strong the competition is today, although the future competition is more threatening.  It is necessary to come up with new ideas and innovate to reach new customers.  To study our competitors it is important to have the following questions in mind:

·        Who are the competitors?

·        What are their goals?

·        What methods do they use?

·        What are their strengths and weaknesses?

·        Competitor’s reaction against competition?

·        Can we learn anything from our competitors?

    Nowadays consumers can choose between great deals of products. The companies compete upon their time and disposable incomes. Therefore you can conclude that the competition is stratified:

At first we market our product for the whole market to reach as many new customers as possible After the total marketing we introduce another product line which has different qualities, characteristics and size so the consumers have options. Then we analyse the market and divide the market into sectors with various products which fulfill our customers needs. The Blue Lagoon products will at first be introduced to the public, then we would introduce a new skinproduct line. In the end we find our target group; which are mostly women from the age of 15 and over.

     The picture above shows the Porter model, which describes the position of the product when the main facts of the market are summarised; what are the benefits and disadvantages on our prospective market. The Porters model guides us through the marketing process.

     The threat of new entrants isn´t a factor which can be an obstacle for our products progress. To enter the Finish market is difficult, it is expensive and competetive.

The skin products which are already on the market, have a clear advantage; people are familiar with them. The cosmetic market is large and therefore they have many substitutes and strong competitors, which have advantages such as price and distribution. The products of The Blue Lagoon have a uniqe position on the market because of their natural substances that other regular cosmetics do not have, we are therefore diffrent from the rest. We must aim at our characteristics and what makes us different from our competitors. We must find our target group and aim at their needs. Once our customer spreads out our good reputation we will have a loyal share of the customers. The bargaining power of buyers and suppliers will affect the pricing of our product. The Blue Lagoon is not dependant upon suppliers because it provides its raw materials from its natural resource. It has one manufactor in France where the raw materials are sent abroad and the product is made, which it is quite dependant on. Based on this model we can figure out our strenghts and weaknesses in our marketing abroad.   

     The four p´s are the sales determinant, product, price, place and promotion. The marketing process includes selecting these four options together in an entirety which is called a marketing mix.  A descision must be made what amount  should  be spent on the marketing process to get the expected progress. Among this the executives must estimate how the assets should be divided between the sales determinants.

Promotion is the advertising and selling part of Marketing. Often, promotions are categorized into push versus pull. Advertising pulls by making the consumer aware of and ask for the product or service. Incentives, such as  price reductions, push the product out the door by encouraging your customers to purchase in volume or more often than he would otherwise purchase. This is also the communication element of marketing. It includes press conferences with important individuals who promote the product, magazine and newspaper articles, or a presentation tour to special target audiences. In the beginning we have to introduce ourselves and our characteristis with an andvertising campaign which attracts attention. The advertisements must be placed at the right time at the right place to reach to our target group.

Before a company determines its 4p’s and enters the market, it is very important to take into considderation and obtain information on how the competitors are using their 4p’s.

Many parts of the project have influence on the pricing. Customers, competitors, the government, participants in distribution, policy of a company and the production cost are among these parts.

One tube (200 ml) of moisturizing cream costs 816 Ikr. in wholesale and for customers it costs 1555 Ikr. 200 ml of Silica mud costs 1218 Ikr. in wholesale and for customers 2310 Ikr.  The valu-add tax is 22% in Finland and they can add 1000 Fim as tariff.

10.000 items of the product will be shipped straight from Iceland to Helsinki, Finland, with Samskip. Estimated price for the transport is 33.300 Ikr. which is about 350–400 Euros. When the products reach Finland the distributors handle the work after that.

            The Blue Lagoon geothermal products are in top quality according to the competitors in the world. It is an unknown product but still has the advantage that many people have heard about the natural source, The Blue Lagoon, which is one of the Icelandic hallmarks. Finland is one of the seven Nordic countries and Iceland has a history of trading with those nations. Therefore we thought that it would be great to use this opportunity and market the products first in Finland.

             We have thought of sending overseas about 10.000 pcs. of 200 ml tubes to begin with. When the products arrive in Finland we would get them to one of the many distributors there.

After a long consideration of marketing the product in Finland we have found out many strenghts and weaknesses. According to our calculations the product will not pay off at first. It takes the product a few years to adjust to the market and for the the consumers to accept it. After all we have decided to take the jeopardy and export the products to Finland.

We are going to introduce Iceland to the Finnish nation and create a stable connection between the two countries. We’re planning on having a campaign to focus on the people who deal with psoriasis and other skin syndromes.

The Blue Lagoon products are going to be introduced to the public as a nourishing product that consumers are able to relate to and buy on regular basis. Furthermore, to use the clean image of Iceland and its culture by promoting the product in a way which is seen as profitable and respectable.

     To promote the product we are going to advertise on television and in newpapers, put up poster and advertisments on buses, taxis and buildings. We are also going to bre sponsor for various athletic competitions and tonaments bacause Blue Lagoon products will have a image.

     We are setting ourselves goals, defining special projects and valuing the cost of these goals and are going to compare them to the best possible result. Advertising costs will be very high because this is an unknown product on a foreign market but we estimate that the cost will be around.

Bogi Þór Siguroddsson, Sigur í samkeppni, Bókaklúbbur atvinnulífsins, Reykjavík, 2000

John Mole,  Mind your manners, Nicholas brealy publishing, London, 1990

 Terri Morrison, Wayne A. Conaway, George A. Borden,  Kiss, bow or shake hands, Adams Media Corportaion, 1994

 Terri Morrison, Wayne A.Conaway, Joseph J. Douress, Doing business around the world, Prentice Hall Press,  2001

 Webpages:

 http://www.bluelagoon.is

http://www.nationalgeographic.com

http://www.ma.is/nem/99inli/Blaa_lonid/um-blaa.htm

http://www.utflutningsrad.is

http://www.finland.fi

http://www.britannica.com