Dermavescent Laboratories produces women's personal care products including Soft and Silky shaving gels and creams. The company is considering introducing aerosol containers of their top-selling shaving gel which is currently only available in tubes. Their recommended plan is to introduce both 5.5 ounce and 10 ounce aerosol containers, outsource production, increase marketing and advertising, and discontinue the tube. This will allow them to gain new customers who prefer aerosols and focus group results showed customer interest in both proposed sizes. Outsourcing production will reduce costs and increase efficiency.
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
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
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
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.
