Flare Case Notes

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Flare Fragrance Case Study

Background:
2007 was a year of sales growth with 12% increase then the economic crisis hit. The company took a hit in 2008 with only 2% sales growth and wanted to see better growth in 2009.

Flare Background
* Founded 1955
* Small company for women’s perfume
* N0. 4 in women’s fragrances
* Brand, Loveliest 1975 introduced
* 1996, Awash fragrance introduced
* 1996, afterward – new fragrance every 2 or 3 years (loveliest name) * by 2007, apprx. 93% of Flare’s sales were from six fragrances mass market * 7% sales from drug store channels , soap and body wash products * strength = “prestige brands” mass market

* CEO Jolely Patterson

Analysis: Market research shows that in 2007, US fragrance market was almost $5.7 billion dollars, of which $3.8 billion dollars were from women’s fragrances. Flare’s share in this particular segment is almost 9.5%. In 2007 they have 6 brands: Loveliest, Awash, Summit, Essential, Swept Away & Natural.

Flare has no international markets and no products positioned towards men.

Channels:
* Department stores (Macys, Saks)
* Privately Owned Pharmacies – 1970s
* Mass Market (Wal-mart, Target, Kohls) – 1980s
* Walgreens

Goal: Get 7.5 million in 2009 so company can go public.

Two options that Arlmont Associates, external marketing firm, recommended:

1. increase marketing efforts in the drug store channel? Even though they lack experience in this channel, but other companies may take advantage of their absence in this market? 2. introduce a new perfume brand (savvy) – new product launch, considering contribution over 2 year horizon, if they do – do they launch under the loveliest name??

Can do both or neither. If they do not do anything, the team must identify other options that will increase sales by at least 7.5 million in 2009. If sales strategy works, company could possibly go public.

U.S. Retail Fragrance Market
* 5.70...
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