Dermavescent Laboratories
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Dermavescent Laboratories Presentation Transcript

  • 1. Dermavescent Laboratories, Inc.
  • 2. Overview of Presentation ● Brief history of company ● Market ● Product ● Price ● Promotion ● Place ● Other ● Problem/Opportunity ● Recommended Actions ● Plan of Action ● Plausible Alternatives ● Supportive Argument for the Recommended Plan
  • 3. History of the Company ● Dermavecent Laboratories, Inc. is a manufacturer of women’s personal-care products ● Soft and Silky is the product brand name for the company ● Soft and Silky Shaving Gel was introduced in the spring of 1991 ● Soft and Silky Shaving Gel was introduced as a high-quality shaving gel
  • 4. Market Market - Women's personal-care products ● Methods of shaving ● Factors of shaving ● Trends in shaving ● Economic market Monopolistic Competition
  • 5. Product Dermavescent Laboratories Products: ● Soft and Silky shaving creams/gels ● Hand and body lotions ● Facial creams ● Women’s toiletries Product Life Cycle: ● Maturity Stage
  • 6. Product Benefits ● Core - Assist with removing hair ● Provides protection for skin problems and razor bumps ● Limits dry skin with moisturizer ● Makes shaving easier by using a sticky thick cream ● Some gels are scented, which allows for a clean smell and feel
  • 7. Price 1. Retailers receive a 40% margin 5.5-ounce tube: $3.95 * 40% = 1.58 5.5-ounce aerosol: $3.50 * 40% = 1.40 10-ounce aerosol: $4.25 * 40% = 1.70 2. Wholesalers receive a 20% margin 5.5-ounce tube: $3.95 * 20% = .79 5.5-ounce aerosol: $3.50 * 20% = .70 10-ounce aerosol: $4.25 * 20% = .85 3. Variable Costs 5.5-ounce tube price: $3.95 5.5-ounce aerosol price: $3.50 10-ounce aerosol price: $4.25
  • 8. Price 4. Allocated costs a. $35,000 on market research focus groups b. $10,000 one time setup fee c. $30,000 costs on test market 5. Manufacturing Costs 5.5-ounce aerosol: $0.24 10-ounce aerosol: $0.29 6. Sales of $3,724,000 in 2005 with a 1,960,000 unit volume 7. Elasticity a. Relatively Elastic
  • 9. Promotion ● Product placement from rack jobbers ● In-store promotions ● Multi-pack deals ● Media advertising ● Market test using newspaper ads and point-of-purchase displays ● Expansibility ● Relatively High
  • 10. Place ● Drug stores ● Food-and-drug stores ● Channel: Dermavescent Laboratories - Rack Jobbers-Retailers- Consumers
  • 11. Other ● Production issues ● New packaging design ● Potential outsourcing ● Competition
  • 12. Problem/Opportunity ● Primary – Whether to introduce an aerosol container ● Secondary ○ Production issues ○ Aerosol container size ○ Future of the tube package design
  • 13. Recommended Actions ● Primary – Introduce aerosol containers ● Secondary 1. Outsource production to a manufacturing company 2. Introduce both sizes' of the container 3. Stop producing tube packaging
  • 14. Plan of Action ● Introduce aerosol containers ● Do not do a market test ● Outsource production to a manufacturing company ● Introduce both sizes' of the container ● Stop producing tube packaging ● Put market testing budget towards marketing and advertising efforts
  • 15. Plausible Alternatives ● Do nothing ● Put a larger emphasis on their other products ● Keep tube packaging and introduce only one size of aerosol container ● Expand on their own production/manufacturing facility ● Do a market test on the shaving gel ● Merge with another top competitor
  • 16. Supporting Argument ○ Extremely loyal customers ○ Aerosol container is main reason noncustomers don’t use the product ○ Focus group showed: 20% of customers said they would convert to the 10-ounce style and 25% would convert to the 5.5-ounce container ○ Outsourcing would be environmentally friendly and cost effective ○ No market test because the cost is $30,000 and introducing both products ○ Increase marketing and advertising with:social media with a focus on Pinterest, email marketing with product coupons and advertisements in magazines and newspapers.
  • 17. Any Questions?