20-28 young professional womenWhat will happen after twenty years? What’s the problem? CB: FF should develop consumers in their early age.
Mass market is doing good nowDepartment store’s premium image is an enhancement with new brand buildingdrop-down effectDrug store has potential for FF’s sales growth because of its broad reach to consumers. FF has little presence in this channel right now. Drug store wants only high turnover rate product like Loveliest. In order
Numbers in red indicate a continuous increase over the three years.Industry average percentage: 23%
New brand needs more investment.FF focuses on mass market and prepacks occur in mass market, instead of department stores.
* Loveliest Five Brands under Loveliest UmbrellaPricing $32 $30-$36Target Audience Women ages 34-65 Women ages 25-34Advertising 70%-80% of annual 20%-30% of annual budgetBudget budgetMarketing Plan Television and print focus Promotion focus
* 2008 Channels Mass Market Department Other Stores 2% J.C. Panny Saks Department Target Macy’s Stores Wal-Mart 24.1% Kohl’s Drug Stores OtherDrug Stores Mass Market 4.4% 69.5% Walgreen Internet
*Consumer Promotion • Timing: Mother’s Day, winter holidays • Gift-with-purchase or purchase-with-purchase in the form of mixed prepacks • Mixed prepacks feature a variety of products from the same or different product linesTrade Promotion • Timing: periodically • Promotional prices of 5%-10% above the usual 40% margin
** Consumers: Luxury Brands Mass Products* Lower-Priced Scented Products Functional Products* Brands: Exclusive in High-End Channels Mass Channels* Though Waning, Hype Introduction* SKU and brand proliferation
** Department store discounting, store closing, incorporation of pop-prestige boutiques (Sephora in J.C.Penney)* With consumer growing, mass market stocking trendy products and hiring beauty consultants* Retail channels blurring, new products moving quickly from prestige department stores to mass market
* High-end Channel Mass ChannelPrestigeBrand Mass Brand N.A
* • Brand- oriented • Elegance, Exclusivity • Chic • Word of Mouth • New Product Trier and Become LoyalYounger Older 18 35 64 • Luxury Brand • Perfume Heavy User • Classic • Loyal to Signature Scent • Familiar with Loveliest
** Company performance: is $7.5M a difficult goal to achieve?* $7.5M = 3.4% growth in 2009 Growth Rate 12% 2% 3.4% 2007 2008 2009E
* Savvy Product Line Communication Retail Price Budget• Perfume • Plan1:$2.25M• Bath soap and body lotion • $40 • Plan2:$4.5M • Plan3:$7.5M Dulcet Product Line Communication Retail Price Budget• Perfume• Additional product under • $42 • $10 Million the name.
* 18-34 years old Young, confident, and women. In College or career. successful.
* Being sold exclusively at department store. Mainstreaming into mass markets. Being sold in the mass mass market from the beginning.
* Savvy Savvy By Loveliest $7.5M Factory $More $$$ on the Increase Sales product line Through Distribution in Drugstores
* + -New brand Largeimage. investment. Fierce competition dueTap into the to the SKU andyoung segment brand proliferation. Savvy Savvy By Loveliest $7.5M Factory $ More $$$ on the Drugstores product line Expansion
* + - Less marketing Hard to build cost up a new brand image with Halo effect younger theme Tap into the Conflict with young segment umbrella brand Savvy Savvy By Loveliest $7.5M Factory $More $$$ on the Drugstores product line Expansion
* Savvy Savvy By Loveliest $7.5M Factory $ More $$$ on the Drugstores product line Expansion + -More supportto developebrand. Haven’t launched new productBetter effect since 2006.in currentproduct line.
Savvy Savvy * By Loveliest $7.5M Factory $More $$$ on the Drugstores product line Expansion + - Hurt the Increase sales relationship through more with current retail stores. distributors. Degrade the Reach more brand image by consumers in decreasing the new channels. product rarity.
** Which of the four options do you prefer to achieve the incremental sales of $7.5M?* How is Natural doing? What would you suggest Flare Fragrance to do with its Natural brand? Increase investment in Natural for the next year? Or?* Which of the four options is most beneficial for Flare Fragrance’s long-term development?
* Persona: Chloe just graduated as Master of Accounting from PSU. She found a good job in an accounting firm in Philadelphia. Once she loves to go shopping at Forever 21 and Urban Outfitter. But she decided to turn to J.crew and Banana Republic since she wants to be recognized as a young professional other than a green hand.Name: Chloe She is a perfume user. Once using Daisy of Marc Jacobs, now she is considering to change the scent.Age: 23 years old Something representing the professional statusDegree: Master would be the best choice.Major: Accounting SOMETHING SAVVY.
*Channel Available Exclusive in high-end department stores• Channel strategy should be consistent with the brand image.• Stay exclusive to drive word of mouth.• Department store is not as popular as mass market but it still has a big market share of the total fragrance market.• Bloomingdale, Neiman Marcus, Saks Fifth Avenue• Sephora, Macy’s, ect