Our Research
In order to design a product and brand that aligns with our company mission and consumer/business needs, we gathered both primary and secondary research to investigate four areas: marketing, branding & interaction, user discovery, and unit economics.
Market Research
The first step in creating a marketing strategy is to identify and segment the market. The most lucrative market for sustainable paper products seems to be sustainable packaging, with the current global sustainable packaging market valued at US $232 billion, and projections of a CAGR of 5.5% during 2022-2027, up to $319 billion.
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While sustainable packaging is a broad market, we can create a strategy that can be implemented regardless of the specific companies we may want to target and the subsequent end product our sustainable materials help create. This implies a business-to-business (B2B) marketing strategy. We also see an opportunity to target the end consumer with a ‘pull’ strategy, which will garner excitement for and awareness of our brand amongst the general public.
Branding & Interaction
Through primary research, it was clear that some consumers have reservations about recycled, reused, or sustainably-sourced products being “not as clean” as traditionally-made goods. To address this common misconception, we decided to make our company’s branding as clean as possible, using large amounts of white space on our website and brand content to indicate high quality and “clean” products.
Our brand color palette includes bright green (#3f7529), black (#000000), light gray (#ded9d5), and white (#ffffff). These earthy, clean tones produce a neutral aesthetic for our brand. Since consumers unconsciously associate green with sustainability, health, tranquility, nature, and renewal, we wanted green to be our primary color.
User Discovery
Given the idea that we both needed to have a large target audience as well as a scalable and high area of need for the greatest impact in our sustainability and conservation efforts, we believed we should pursue B2B users in a paper product type that will continue to have need and demand, such as packaging or paper.
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Through research, we found that consumers generally had 3 concerns. First, nearly all customers interviewed cited price and quality as their primary concerns for sustainable paper. Second, customers consider a company’s environmental impact to be more important than their personal environmental impact. Finally, it was clear that education about sustainability and sustainable products will be a large hurdle to overcome, as more than half of our customers demonstrated a lack of knowledge on the topic, despite wanting to help the environment.
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All of these concerns help up create a product that addresses consumer hesitation and implement marketing strategies that attempt to close the gap in consumer understanding.
Unit Economics
Overhead
Advertising
Rent
Website
Assuming a year of rent, the overhead is estimated to be about $40,080.
Raw Materials
Rice Husks
As rice husks are massively available overseas, the rice husks will be bought there then shipped to manufacturers. The cost of rice husks are relatively inexpensive with a price of roughly $90/ton and a required minimum order of 6 tons.
Shipping
China to United States
Standard freight shipping rates are roughly $2/kg. To ship the minimum order of 6 tons, it will cost $540 for the raw materials and $10,886.22 to ship it to the US. With rice husks having a density of 70-110 kg/m³ and a 40-foot shipping container having a volume of 70m³, it means that the order of 6 tons will arrive in five 40-foot shipping containers.
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Once the raw material is ready to be shipped to the manufacturer, it will cost $7,000 per shipping container, totaling $35,000.
Storage
Between Raw Material & Manufacturer
Once the raw materials are in the US, it is likely that they will need to be stored for some time. In order to do this, a warehouse will need to be rented to use for storage. It is estimated to rent 1,000 square feet, it will cost $60,000 a year.
Labor
New Leaf Employees
Assuming 10 employees who are paid $14 an hour, New Leaf will require $291,200 for payroll.
PROFIT CALCULATION
Rice Husk Charge
These items total $437,706.22 of estimated costs. Of these estimated costs, $46,426.22 are variable costs. Considering this calculation was for 6 tons of raw materials, the per unit variable cost is $7,737.70. This means that New Leaf will have to charge the manufacturers $7,737.70 for each ton of rice husks. Therefore, New Leaf should charge at least $8,000 per ton of rice husks in order to be profitable.