Marketing Management Dermavescent Laboratories Essay Example
Marketing Management Dermavescent Laboratories Essay Example

Marketing Management Dermavescent Laboratories Essay Example

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  • Pages: 3 (768 words)
  • Published: December 28, 2017
  • Type: Research Paper
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With 77% of manufacturers' sales dedicated to razors and only 23% towards shaving gels and creams, the shave gel and cream sector has significant growth potential (Exalts 1). The women's shave needs market has experienced a yearly growth rate of 3-5%, making this an opportune time to establish a presence in this thriving segment. Derangement's Soft and Silky Shaving Gel, priced at $0.72 per ounce for their 5.5 ounce size, is more costly than many competitors' offerings. However, in the women's shave market, product performance and quality hold greater importance than price, so these higher prices may not pose a significant drawback. Building a loyal customer base is crucial as customers in this industry spend an average of $12.50 per year on shaving supplies (Kerri, 2009).

Transcended Laboratories, Inc., specializes in manufacturing consumer products focused on women's personal care.

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Their product line comprises lotions for the body and hands as well as creams for the face. In 2005, they generated sales worth $258 million with $3.724 million stemming from their Soft and Silky Shaving Gel. Marketed as a premium product, Soft and Silky commands higher pricing compared to its competitors'. Since its inception, this product has proven profitable while garnering a loyal following due to its unique niche positioning.

However, the company is currently considering expanding their product line by introducing a shaving cream alongside their existing shaving gels.

(Note: have been retained)The current production line cannot be modified or expanded due to maximum capacity. Therefore, outsourcing the new product line is a logical choice. However, there is concern that overburdening the production line may cause stock shortages of the gel and overshadow the new product. Some

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cannibalism between the two products is expected but not enough to eliminate the old product entirely.

Additionally, Transcended should consider entering the aerosol can business as they have unique identifiers for successful market launch, allowing them to stand out from competitors. With their past success with Soft and Silky Shaving Gel, they can expect high expectations for marketing this new product as well.

Continued use of rack Jobbers will be necessary to effectively place their products in stores. As an alternative course of action, Masters could choose to maintain a harmonious relationship with Courting and proceed with her test-marketed recommendation. This would involve introducing the new packaging in a test market setting where 5Two different sizes of cans (5 ounces and 10 ounces) were put into separate stores to determine which would sell better (Exhibit 7). The test market analysis revealed that only 45 percent of current Soft and Silky customers would consider switching to the new packaging, meaning that 55 percent would still purchase the original packaging.The text discusses various options for the introduction of new packaging for Soft and Silky gel. According to Kerri (2009), only 25 percent of non-customers would switch to Soft and Silky with the new packaging. Masters need to explore alternative options to determine if conducting a test market is in the best interest of the product line. Alternatively, they could introduce either the 5.5 ounce can or the 10 ounce can while continuing production of the 5.5 ounce tube of Soft and Silky gel. The market search study's probability forecast analysis indicates that introducing the 5.5 ounce can along with continuing production of tubes would result in a net financial

increase of approximately $86,244.6 (Exhibit 4). Another option is for Masters to make no changes and continue producing their original packaging, keeping the option open for introducing new packaging later on. The anticipated gross profit is over $2.9 million (Exhibit 5: Courtship's proposal summarized in Exhibit 7). After evaluating different courses of action, it is recommended to introduce the 10 ounce aerosol can as it offers high financial impact with minimal variable costs, requiring a $10,000 setup fee for suppliers (Exhibit 6). Market research and surveys have provided valuable insights into consumer preferences when considering a new or extended product launchAfter incurring this cost, Transcended can monitor the demand for the new package and aerosol product. This will allow them to consider introducing the 5.5 ounce product within a time frame of 12 to 18 months. To ensure successful placement of the product, it is recommended to utilize rack Jobbers. Additionally, marketing in magazines targeted towards females and collaborating with local newspapers would help generate excitement around the new product size and features. The existing Soft and Silky Shaving customers have shown loyalty to the brand, and although there might be some centralization of these users, it would not significantly impact the overall profitability of the product line. Tan Soup suggests launching the product before the peak shaving season since the 10 ounce aerosol provides a higher margin and return on investment for the company.

References: Kerri, P.R (2009).

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