Flare Fragrance Company Inc

Satish Kumar Burra

Raghu
Subbramaniam
Company Background and Industry position
Product Sales :
Womens Fragrance
Growth Rate :
2007 12%
2008 2%
2009 3.4% ! ( $7.4 million Target)
Fragrance 93%
Scented Products 7%
Flare share is 9.5%
Retail sales : $361.34M
No .4 in the Market
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
Mass Market 69.5%
Drug Store 4.4%
Department store 24.1%
Other 2%
1960s Sold primarily through Premier and mid tier Dept stores (
SAKs MACYs)
1970s Privately owned Pharmacies(WALGREEN)
1980s Mass Market Shops ( Target, walmart..)
Possible Strategies
1. Increase the effort in drug store channel.
2. Introduce a new brand - SAVVY .
3. Promote Natural brand.
SWOT Analysis: SAVVY
Strengths
Name
Favorable Sales projections ( as it fall under Young age appeal(18-34) who are 74% in US)
Weaknesses
Unknown brand name
Diverging of current sales
For-go investment in current ,established brand
Higher price($40)
Opportunities
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
Already have a drugstore sales team
Strong brand image and well-known products in prestige market
Loveliest is one of the best-selling womwns fragrance in mass market
Weaknesses
Without Savvy launch, Natural will be the only product for youngest market
Drugstore sales team performance is un even
Opportunities
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 $ 2009 Budget in $ 2010 in $
Media, Adv, Promos
Loveliest 1,67,70,443 18782896 20285528
Awash 169827 190206 205423
Summit 2717236 3043304 3286769
Essential 1443532 1616756 1746096
Sweptaway 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
As % of Sale 19.20% 20.68% 20.78%
Total Sales 221129257 232185720 249599649
12% inc 8% inc
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) .