Supply Chain Management #2

Assignment 1 is previous work for reference, and assignment 2 is instruction for this week

due by 01/30 Monday

Assignment 2: Financing of an E-Commerce Business & Lead Time Schedule

PART 1

You have a great idea for a wonderful product but as most fledgling companies funding is an issue. This

is one of most involved and complicated aspect of starting a business.  For the purpose of this assignment, we will limit our options to the choices listed below. In real life there are more choices, and some are very worthy. As example are small business loans issued by the government, such as the Small Business Administration.  Another option are investors, and they can come from any walk of life. These are people who like your company’s idea and are willing to take a chance on your company’s success. Lastly, you may be very fortunate and have a rich relative who is willing to help finance your business, or you may have come upon an inheritance.

(Remember to do PART 2 of the assignment which is listed 
below)

For now, let’s consider the following financing methods. These are the same as those discussed in the financing lecture.

1) Asset based financing -a specialized method of providing companies with working capital and term loans that use accounts receivable, inventory, machinery, equipment, or real estate as collateral. It is essentially any loan to a company that is secured by one of the company’s assets.

2) Factoring a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to meet its present and immediate cash needs.

Be sure to respond to each of the questions thoroughly and completely.

1) Please select one of the above listed financing methods you think is best for your company and explain why your company made that choice.

2) What factor or factors influenced your decision

…

PART 2

Lead Time is the amount of time between process initiation and completion. For the customer the lead time is the time between a confirmed customer order and its scheduled delivery based on your company’s terms and conditions.

There are several different types of Lead Time, but we will focus on the Customer Lead Time.

Customer Lead Time focuses on the amount of time taken between order confirmation and order fulfillment.

You will create a flow chart to include the following:

1. Amount of time to process customer’s order and issue order confirmation.

2. Amount of time to process payment.

3. Amount of time to manufacture/produce product.

4. Amount of time to inspect the product (quality control).

5. Amount of time to package the product.

6. Amount of time for transporting the product to customer’s home.

Assignment #1
Product Development & E-Commerce Marketing Strategy

Mungyiu Ma, Cassandra Kunselman, Zenin Tran, Pauniz Bashirtash

FIDM Winter 2023

BUMT 4250 Supply Chain Management

Pauline Garcia

01/24/2023

Introduction
Since 2023, Masc was founded in Los Angeles, California. It is a brand focusing on

men’s skincare and cosmetics. Based on the support for men’s pursuit of exquisite

lifestyle in the new era, the Masc team has always been adhering to the brand value

of high-end aesthetics and affordable prices and strives to create a national makeup

brand for men that can integrate personal style into and daily basis.

Product
Masc’s latest product is a 12-hour long-lasting sunscreen foundation containing

glycerin and galactoarabinan to help men to replenish moisture and improve overall

skin hydration. At the same time, the product has butanediol betaine added. This

small molecule of moisturizing agent further eliminates glycerin caused by a sticky

feeling close to men’s need for refreshing.

Front Label
(Reference: Packaging of YSL 24H Foundation)

12 HOURS

FOUNDATION

OCTINOXATE SUNSCREEN

BROAD SPECTRUM SPF 20

UP TO 12H WEAR

FLAWLESS MATTE

FULL COVERAGE

MASC

Back Label
(Reference: Packaging of YSL 24H Foundation)

Drug Facts:
Active ingredient: Octinoxate 3%

Purpose: Sunscreen

Uses: Helps prevent sunburn. If used as directed with other sun protection

measures (see Directions), decrease the risk of skin cancer and early skin aging

caused by the sun.

Warnings: For external use only. Flammable until dry. Avoid fire, flame and heat

during application. Do not use on damaged or broken skin. When using this product

keep out of eyes. Rinse with water to remove. Stop use and ask a doctor if rash

occurs.

Keep out of reach of children. If swallowed, get medical help or contact a Poison

Center right away.

Directions: For sunscreen use: Shake well before use. Apply generously 15 minutes

before sun exposure. Reapply at least every 2 hours. Use a water-resistant

sunscreen if swimming or sweating.

Sun Protection Measures: Spending time in the sun increase your risk of skin

cancer and early skin aging. To decrease this risk, regularly use sunscreen with a

Broad Spectrum SPF value of 15 or higher and other sun protection measures,

including: limit time in the sun, especially from 10 a.m. – 2 p.m.; wear long-sleeved

shirts, pants, hats, and sunglasses. For children under 6 months of age: ask a

doctor.

Other information: Protect the product in this container from excessive heat and

direct sun.

Questions or comments? Contact: www.masc.us.com

12 months use after opening

0.84 fl. oz. 25ml

MASC

919 S. Grand Ave., Los Angeles, CA 90015

MADE IN THE U.S.A.

http://www.masc.us.com

Product Design

Pricing: $49.99
We looked at similar women’s brands like MAC, NARS, Haus Labs by Lady Gaga,

and others, with price ranges ranging from $39 to $59. Because our product contains

effective skincare ingredients specifically tailored to men’s skin conditions, we have a

good reason to set the price at $49.99. The price is based on an “odd number” and a

99-cent pricing strategy. Some studies have found that prices ending in 0.99 have a

“downshift effect.” That is, an item priced at $49.99 would fall into the “under $50”

category. However, by adding a penny to the price, the product will up into the “$50

and up” class, creating a subtle but essential contrast (Martin et al., 2014). In

addition, the price includes a series of pre-sale and post-sale services and an

experience of the men’s makeup community created by Masc. As a result, buying

Masc products will give consumers added value, such as identity and community

sharing.

Measurability
According to statista.com, as of July 1, 2021, there were about 97.15 million men

aged 18-65 in the United States. Among them, 3.9% of males may identify as LGBT

(Frank Newport, 2018). Overall, 15% of heterosexual men aged 18-65 in the U.S.

currently use men’s cosmetics; Another 17% would consider using it in the future,

which would double the size of the market (Ipso, 2022). According to the information

above, as of July 1, 2021, the male makeup market in the United States is estimated

to reach 0.57 million population (97.15*3.9%*15%) and will grow by 0.64 million

population (97.15*3.9%*17%) in the future.

On top of that, while Masc’s 12-hour long-lasting sunscreen foundation can

theoretically be purchased and used by all ages, we will focus on Generation Z and

millennials in the product design and promotion process. According to statista.com in

2021, with the exception of Gen Z (11-14 years old), who do not have the purchasing

power, male 14-44 consumers in the U.S. makeup 61.8% of male 14-64 consumers.

Thus, we can estimate further that Masc’s future target consumer market will grow by

0.39 million population (0.64*61.8%) and reach a total of 0.74 million (0.57*61.8% +

0.39).

Accessibility
As the product will be sold on e-commerce, its accessibility is determined by the U.S.

business environment of the Internet, social media, and traditional media. Currently,

common sales and promotion channels in the U.S. market include the brand’s official

website, Instagram, Facebook, and Amazon. Therefore, we will focus on designing

and maintaining these platforms to enhance user awareness, operability,

comprehensibility, and accessibility to the disability community to ensure an inclusive

shopping experience.

Profitability
According to hitbusinessideas.com, the profit margin for cosmetics companies is

between 20 percent and 60 percent. In other words, after subtracting the cost of

goods and operating costs, Masc could generate a gross profit of $9.99 – $29.99 by

successfully selling a bottle of liquid foundation for $49.99.

In addition, JUV Consulting estimates that the global men’s makeup market was

worth about $1.14 billion in 2019. According to a survey conducted by Euromonitor,

more than 56 percent of American male respondents admitted to using some form of

facial makeup, such as foundation, concealer, or B.B. cream, at least once in 2018.

(Kelly Kovack, 2020) If the above valuation is accurate, the male cosmetics market

will have a huge growth space in the future.

Actionability
In recent years, an increasing number of young men have become interested in

buying men’s cosmetics amid growing calls for gender equality and sexual

orientation equality. That opens the door for brands to target this group and portends

a possible evolution in the definition of masculinity (Ipsos,2022). Therefore,

developing effective marketing plans for target consumer groups is something Masc

should focus on. According to the Ipsos report, there are two things traditional men’s

cosmetics brands should emphasize in order to drive the buying behavior of men

aged 18-34:

● How can cosmetics improve their appearance and help them cover up

blemishes and defects?

● How cosmetics are widely accepted and “suitable for people like me.”

On both points, Masc has come up with its solutions. First, the new foundation

contains effective skincare ingredients specifically formulated for men’s skin. Thus, in

addition to immediately enhancing the facial image, Masc also leads consumers on a

long-term path to improve the condition of their original skin. Secondly, Masc is not

only a company that is “selling men’s skincare and cosmetics,” but more importantly,

it established a harmonious and dynamic men’s beauty community. Here, all

self-identified gender and all-age customers can discuss male makeup equally, and

there are plenty of beginner’s guides available provided by professionals.

Masc promised that our team would always stick to our commitment to support our

customers unconditionally and endlessly to advocate their lifestyle. We firmly believe

that we are actively supporting an influential culture of the era and devote ourselves

to promoting it, strengthening it, and making the world a better place.

References

Martin, S. J., Goldstein, N. J., & Cialdini, R. B. (2014). 37. Why might a SMALL

change in number ending make a BIG difference to your communications? In The

small big: Small changes that Spark Big Influence. essay, Grand Central Publishing.

Erin Duffin, (Sep 30, 2022), Resident population of the United States by sex and age

as of July 1, 2021,

https://www.statista.com/statistics/241488/population-of-the-us-by-sex-and-age/

Frank Newport, (May 22, 2018), In U.S., Estimate of LGBT Population Rises to

4.5%, https://news.gallup.com/poll/234863/estimate-lgbt-population-rises.aspx

Ipso, (Mar 21, 2022), There’s a market for men’s cosmetics–and a generation gap,

https://www.ipsos.com/en-us/knowledge/customer-experience/there-is-a-market-for-

mens-cosmetics-and-a-generation-gap

Kelly Kovack, (Jan 20, 2020), THE FUTURE OF MEN’S GROOMING CATEGORY: 3

BRANDS TO WATCH,

https://beautymatter.com/articles/the-future-of-mens-grooming-category-3-brands-to-

watch

hitbusinessideas, (Jun 3, 2022), Is Cosmetic Business Profitable? 6 Things You

Should Know, https://hitbusinessideas.com/is-cosmetic-business-profitable/

https://www.statista.com/statistics/241488/population-of-the-us-by-sex-and-age/

https://news.gallup.com/poll/234863/estimate-lgbt-population-rises.aspx

https://www.ipsos.com/en-us/knowledge/customer-experience/there-is-a-market-for-mens-cosmetics-and-a-generation-gap

https://www.ipsos.com/en-us/knowledge/customer-experience/there-is-a-market-for-mens-cosmetics-and-a-generation-gap

https://beautymatter.com/articles/the-future-of-mens-grooming-category-3-brands-to-watch

https://beautymatter.com/articles/the-future-of-mens-grooming-category-3-brands-to-watch

https://hitbusinessideas.com/is-cosmetic-business-profitable/