Soft and Silky Shaving Gel
Problem The Product Manager, Phoebe Masters, at Ms.-Tique Corporation must decide if and how the company will introduce an aerosol can package for its Soft and Silky Shaving Gel, including a determination of product size (5.5 or 10 oz.) and location (personal care or toiletries). Furthermore, the manager needs to decide if a test market is necessary to evaluate the new packaging.
Strategic Issues
Product Soft and Silky Shaving Gel (SSSG), a women's shaving product that contains moisturizers, is currently packaged in a 5.5 oz. plastic tube and is located in the women's personal-care section of drug and food-and-drug stores. Most competitors (men and women shaving products) package their products in aerosol cans and offer them in the toiletry section. SSSG product life cycle has reached a mature phase.
Promotion SSSG is positioned and promoted as a "higher-end" shaving product. This is evidenced by the location within stores and the price.
Price SSSG is premium-priced at $3.95 for a 5.5 oz. tube, or $0.72 per ounce. The average price of representative competitors is approximately $0.51 per ounce.
Physical Distribution Rack jobbers place SSSG in stores. Retailers receive a 40% margin on the retail price and rack jobbers receive 20% of the wholesale price. Alternatives and Analysis Alternatives are listed in the table below. A product contribution analysis is described in Appendix 1. It is assumed that the retailers and rack jobbers will receive the same margins, regardless of package type and location of product placement within the store. The sales forecast data used for the analysis is presented in Appendix 2. An alternative description, projected sales volumes and proforma income statement for each alternative are presented in Appendix 3.
Alternative Pros Cons
1. Do Nothing
Continue to offer only the 5.5 oz. tube in the personal care section Possibly maintain loyalty among existing customers
5.5 oz. tube has highest
Strategic Issues
Product Soft and Silky Shaving Gel (SSSG), a women's shaving product that contains moisturizers, is currently packaged in a 5.5 oz. plastic tube and is located in the women's personal-care section of drug and food-and-drug stores. Most competitors (men and women shaving products) package their products in aerosol cans and offer them in the toiletry section. SSSG product life cycle has reached a mature phase.
Promotion SSSG is positioned and promoted as a "higher-end" shaving product. This is evidenced by the location within stores and the price.
Price SSSG is premium-priced at $3.95 for a 5.5 oz. tube, or $0.72 per ounce. The average price of representative competitors is approximately $0.51 per ounce.
Physical Distribution Rack jobbers place SSSG in stores. Retailers receive a 40% margin on the retail price and rack jobbers receive 20% of the wholesale price. Alternatives and Analysis Alternatives are listed in the table below. A product contribution analysis is described in Appendix 1. It is assumed that the retailers and rack jobbers will receive the same margins, regardless of package type and location of product placement within the store. The sales forecast data used for the analysis is presented in Appendix 2. An alternative description, projected sales volumes and proforma income statement for each alternative are presented in Appendix 3.
Alternative Pros Cons
1. Do Nothing
Continue to offer only the 5.5 oz. tube in the personal care section Possibly maintain loyalty among existing customers
5.5 oz. tube has highest