Conglomerated Industries, Inc. is a small Midwest manufacturer of fragrances. The company was organized in 1889 by Curtis and Garland Graves. Both men had been traveling salespeople for several firms on the east coast of the United States. As fate would have it, they each represented manufacturers of health and beauty aids and fragrances. On one auspicious day, they happened to meet while staying at an inexpensive rooming house in town. The food at this particular establishment was notoriously terrible, so they decided to have dinner together at a local bar and grill. While enjoying their meal, they discussed the challenges of being on the road so much and the pain of being absent from their families.
The discussion meandered to how the business was growing, especially for fragrances. After much debate on better ways to make a living, the two salesmen decided to go into business. At this time, the U.S. fragrance market was composed primarily of importers and a few manufactures of cheap dime store products. The men saw an opportunity to develop and market a line of high-quality, premium-priced colognes and perfumes.
The company grew quite well into the turn of the last century and well into the 1970s. However, in the 1980s, the market for high-end fragrances for men became saturated, and abundantly more sophisticated marketing strategies were being enacted, causing the market to become immensely fragmented. Conglomerated Industries (CI) fell into a downward spiral since they did not have the marketing expertise and deep pockets of larger, more diversified manufacturers who partnered with well-known fashion designers. Further, because of the diverse product portfolio of well-entrenched and fast turning items, store buyers were more apt to assign increasingly more shelf space to these brands until finding CI’s products were a challenge for the consumer.
One by one, CI discontinued manufacturing their products or sold them to other firms until the only brand left in the CI product catalog was Gentle Persuasion, a cologne for men with a very distinctive aroma. The brand was still considered a high-end offering due to its price point churned along but could not compete in the department stores. So, Gentle Persuasion was relegated to drugstores and the occasional mass merchandiser. The revenue and profit from the brand were just enough to provide a steady income for the families of the two entrepreneurs. However, changing tastes and the dated image of the brand convinced industry experts that the product was steadily sinking in the decline stage of the product life cycle and was being treated as a “cash cow.”
At a board meeting, the directors decided that they should give invigorating the brand one more try before either selling it to another firm or merely getting out of the business. They unanimously felt that Gentle Persuasion was viewed as one’s grandfather’s product. It was antiquated in many ways. However, research conducted by Madison Avenue Insights suggested that the aroma was still appealing. The company just had to focus its efforts on a 21st-century target segment or segments. But they needed help.
The board hires you since you are young, recently graduated with a marketing degree, and might appreciate the challenge of re-positioning the brand. They realize that challenging the major players in the high-end category was too costly and risky. Through a unanimous vote, the board informs you that they want to appeal to a younger consumer and are willing to reduce the product’s price, currently the only product in the catalog.
You are given the below data relative to the 2019 business year. It is hoped that it will be of assistance as you begin your work.
For this exam, the market for men’s fragrance is composed of three main competitors: Gentle Persuasion, Hammer, and Adventure.
Hammer has a tobacco-like, earthy aroma and is marketed to appeal to young men who work with their hands. These are rugged individuals that may be construction workers, mechanics, or plumber types. They don’t want any hint of femininity in the fragrances they wear.
Adventure is formulated for young men who have a desire to see the world. They are attracted to different cultures, foods, and ways of doing things. The fragrances used in this product line are a combination of bay rum, lemon, and ginger.
Gentle Persuasion maintained its distinctive aroma of leather, fine brandy, and air-dried linen. It is designed for the man who fancies himself as a refined gentleman and a romantic. In the past, it was a favorite of royalty, diplomats, heads of industry, and high government officials.
NUMBERS ARE ATTACHED IN THE WORD DOCUMENT
Please construct an Excel spreadsheet and calculate the following:
A) Relative Market ShareB) Brand PenetrationC) Unit MarginD) MarginE) Average Price per UnitF) Marketing as a Percentage of SalesG) Optimal PriceH) Based on your calculation of the above metrics, write a short essay offering suggestions on what business year 2020 performance objectives should be. Your essay should address the following:
1. The Product Life Cycle2. Brand Strategic Differentiators3. Proposed Market Position4. Segment Description5. Social Media Presence
Format: In addition to the submission of an Excel spreadsheet, provide the paper as a business memorandum to the professor, who will act as the company president. The memo should be double-spaced with 1-inch margins as per the APA style guide. The use of main and subtopic headings should be used to assist in guiding the reader through the document. Remember, while this is part of your final exam, your audience is a business reader. Therefore, aim to be clear in your writing, direct, and on-topic.
Conglomerated Industries, Inc. is a small Midwest manufacturer of fragrances. The company was organized in 1889 by Curtis and Garland Graves. Both men had been traveling salespeople for several firms
Gentle Persuasion® BY 2019 Unit Selling Price ($) Gross Revenue ($) Cost per Unit ($) Unit Sales (#) Customers Who Have Purchased (#) Marketing Spending ($) Variable Cost ($) 5.25 6,431,250 1.85 1,286,263 1,225,000 5,000,000 .85 Fragrance Industry, Men’s Cologne, Data BY 2019 Revenue ($) Unit Sales (#) Average Price ($) Reservation Price ($) Total Population (#) Average Marketing Spending ($) 250,000,000 48,276,935 5.20 5.95 122,500,000 7,500,000 Hammer® Data BY 2019 Unit Selling Price ($) Gross Revenue ($) Cost per Unit ($) Unit Sales (#) Customers Who Have Purchased (#) Marketing Spending ($) Variable Cost ($) 5.10 11,387,906 1.75 2,232,922 2,762,895 4,500,000 .85 Adventure® Unit Selling Price ($) Gross Revenue ($) Cost per Unit ($) Unit Sales (#) Customers Who Have Purchased (#) Marketing Spending ($) Variable Cost ($) 5.30 13,096,091 1.65 2,567,860 3,177,329 4,000,000 .75