77690743 GM Flare Fragrances PDF

Preview

Summary

Download 77690743 GM Flare Fragrances PDF

Description

Flare Fragrances: Analysis

5Cs

Company & Competitors

•Company

• A leading U.S. producer of women’s fragrances.

•Customers

• Projected annual growth in 2008 sales declined to 2% after rising 12% in 2007.

•Collaborators

• Revenues were $193.6 million in 2006, followed by $216.8 million in 2007, and projected to be $221.1 million in 2008.

•Competitors

• Options for 2009 sales growth • expansion of current distribution into drug stores • introduction of a new brand.

•Context

• Late in 2008, major competitors is also planning to introduce a new brand in the same price range and targeted at the same market but with a substantially higher level of advertising and promotion support.

Company Situation

Customers/Segmentation

• At the end of 2007, Flare had a 9.5% share women's fragrance market

• Consumers segmented by prices willing to pay & where they shop for them. • Demographic target is women aged 18–34 • Heaviest users of women's toiletries • Advertising is mainly targeted to • users themselves • women who buy fragrances as gifts, • men who buy fragrance gifts for women.

• Strong, 33-year-old Loveliest brand name • Acts as an umbrella for five more recently introduced brands. • May add to the efficiency of Flare's advertising expenditures • Flare also has a good record of • (1) regular new product introductions • (2) good brand and advertising awareness • (3) good penetration of general merchandise chains and mass merchandisers • (4) a high-quality sales force with low turnover.

Possible Segmentation

• With the increasing number of prestige products selling through mass channels • May be partly responsible for weak dollar sales in 2008. • Flare department store distribution is weaker than its mass market penetration • Flare is dependent on the medium-price segment and mass market for the bulk of its sales. • Flare's dependency on a single brand name may be inadequate to straddle an increasingly segmented market. • Flare's share of industry advertising is weakening. Flare advertising expenditures in 2007 were 19.2% of sales ($41.6 million/$216.8 million—Case Exhibit 4), compared to 23% for the industry. In 2008, Loveliest appeared likely to be outspent by its competitors again.

• A typical brand probably attracts a user group within the high usage 18–34 age segment, who often demonstrate loyalty to the fragrance as they age. • The brand has difficulty appealing to younger women entering the market, so need for newproduct introductions to appeal to new age cohorts and to capture users looking to own more than one brand of fragrance. • Perfume is sold largely on the basis of psychic performance • Brand names, advertising appeals, and packaging • Create an image or portray a life-style which reflects aspirations • For example, Natural is likely to appeal to women who emphasise healthy living and a concern for the environment; • Various brands enhance a woman's chances of being or feeling attractive, successful, and loving, or reinforce a particular self-image.

Possible Segmentation

Strategic Options: Ansoff

• Loveliest brand gradually broadened its potential customer base and its appeal to more priceoriented classes of trade.

Female AGE AND SEX OF PURCHASER

Under 18

OBJECTIVE OF PURCHASER (USER)

Gift For Mother, Create Self Image

NATURE OF BRAND(S) PURCHASED PRICE SENSITIVITY

WHERE PURCHASED

18-34

Female AGE AND SEX OF PURCHASER OBJECTIVE OF PURCHASER (USER)

18-34

CREATE SELF IMAGE

MAINTAIN SELF GIFT, PROJECT GIFT, PROJECT IMAGE AND/OR HAS IMAGE On To IMAGE Onto Woman IT (USER) Woman

BRAND USED REGULARLY BY RECIPIENT

MULTIPLE BRANDS FOR SPECIFIC OCCASIONS & FOR EXPERIMENTATION (HEAVY USER)

REGULAR BRAND, LESS BRAND SWITCHING

BRAND ALREADY USED OR NEW BRAND

BRAND ALREADY USED OR NEW BRAND

ADVERTISING SENSITIVITY Frequency of Purchase

HIGH

LOW

MEDIUM

LOW

LOW

MASS/DISCOUNT/ DRUG STORES

SPECIALTY/ PRESTIGE DEPARTMENT STORES

SEARS, PENNEY DEPARTMENT STORES

SPECIALTY/ DEPARTMENT STORES

SPECIALTY/ DEPARTMENT STORES

HIGH

MEDIUM/LOW

MEDIUM

MEDIUM

Loveliest

New

Awash

Essential

1

2

Swept Away Natural Savvy

Product

Dulcet?

New

3

4

Competitors High Price

MEDIUM/HIGH

ADVERTISING SENSITIVITY OCCASIONAL

Medium Price Low Price

Frequency of Purchase

Occasional

High

Medium

Medium

Medium

35+

PRICE SENSITIVITY

Summit

Existing

18-34

Channel Positioning? Chan nnel

Existing

Maale 35+

WHERE PURCHASED

Specialty Stores

35+

18-34

NATURE OF BRAND(S) PURCHASED

Maale 35+

Under 18

Prestige Department Stores

Discount Department Stores

Drugstores

Discount/ Club Stores

Internet/ Other

Food Stores...