Flare share is 9.5% Retail sales : $361.34M No .4 in the Market
•
Growth Rate :
2007
12%
2008
2%
2009
3.4% ! ( $7.4 million Target)
Reasons for Decline in Growth Underutilized market 18-34 aged year old women. Increased Competition Comparatively low ad spending ( Flare is spending 19% of sales on Adv where as the competitors are approaching 23%) • • •
Sales and Distribution
1960’s
Sold primarily through Premier and mid tier Dept stores ( SAK’s MACY’s)
1970’s
Privately owned Pharmacies(WALGREEN)
1980’s
Mass Market Shops ( Target, walmart..)
Mass Market
69.5%
Drug Store
4.4%
Department store
24.1%
Other
2%
Possible Strategies 1. 2. 3.
Increase the effort in drug store channel. Introduce a new brand - SAVVY . Promote Natural brand.
SWOT Analysis: SAVVY •
Strengths – –
•
Weaknesses – – – –
•
Unknown brand name Diverging of current sales For-go investment in current ,established brand Higher price($40)
Opportunities – – –
•
Name Favorable Sales projections ( as it fall under Young age appeal(18-34) who are 74% in US)
Reach a new customer segment 18-34 old females Arlmont study predicts Prestige image fragrances will be best performers Innovation and originality
Threats – – – – – –
Dulcet brand to be launched at same time High competition in market Difficult economic conditions-consumer trade down Declining sales in high-end department stores New fragrance may migrate to mass market quickly Competitors our spending flare in advertising
SWOT ANALYSIS: Natural/Drugstore •
Strengths – – –
•
Weaknesses – –
•
Without Savvy launch, Natural will be the only product for youngest market Drugstore sales team performance is un even
Opportunities – – – –
•
Already have a drugstore sales team Strong brand image and well-known products in “prestige” market Loveliest is one of the best-selling womwn’s fragrance in mass market
Expand into retail arears in which Flare products are not currently sold Sales of Prestige brands expected to grow in mass markets Increase advertising for current brands Increase scented product availability outside of gift sets
Threats – – –
Two years since last product launch Drugstore chains only want to sell highest turnover items Drugstore sales could damages relationships with other channels and may harm brand image.
Advertising Budget 2008 Budget in $ Media, Adv, Promos Loveliest
2009 Budget in $
12% inc 1,67,70,443
2010 in $
8% inc 18782896
20285528
Awash
169827
190206
205423
Summit
2717236
3043304
3286769
Essential
1443532
1616756
1746096
509482
570620
616269
Natural
2755447
3306536
3571059
Subtotal
24365967
27510319
29711144
Co-op Adv
7926688
8877891
9588122
Sponsorship
2233229
2679875
2894265
Samples
6457682
7232604
7811212
Sales sheets/ flyers
878856
1054627
1138997
Gift/purchase promos
297198
332862
359491
Public relations
297198
332862
359491
Subtotal
18090851
20510720
22151578
Total communications
42456818
48021039
51862722
19.20%
20.68%
20.78%
221129257
232185720
249599649
Sweptaway
As % of Sale Total Sales
Conclusion Recommendations: •
Increase Marketing support of Natural along with other Products.
•
Further penetrate drugstore channel .
Projections : 5% increase in top line sales for 2009 ( $ 11m increment in revenue) .
