Founded in 1955, as a small manufacturer of women’s fragrance, Flare has grown into the No. 4 player in the U.S. women’s fragrance market. Introduced in 1975, the brand Loveliest is one of its strongest thus far. Faced with a growth challenge in a difficult economic environment, CEO Joely Patterson outlines two growth opportunities for her marketing staff to evaluate. One involves launching a new scent and possibly separating it from the trusty "umbrella brand" that comprises Flare's other scents; the other involves deepening Flare's penetration into the drugstore channel. In Patterson's view, the firm can pursue the first opportunity, the second, or both but it must do something in delivering at least $7.5 million incremental revenue in 2009 and reverse their declining sales trend from 12% in 2007 to 2% in 2008.
Flare should introduce the new brand Savvy under the Loveliest umbrella. They should target teenage and young women aged 18 – 34. Launch Savvy at a retail price point of $45 for 1.7oz spray bottle at high end department stores initially and mass stores later
#1 Key data points supporting the launch of Savvy are
* Savvy received favorable responses in focus groups. The name Savvy was seen as stylish, upbeat and classy. Most fragrance wearing respondents say they switched between two or three brands over time. (Exhibit 5) * It has been 2years since their last product launch and Flare needs to stay relevant, invigorate sales and generate excitement in the market.
#2 per data from the article, 75% of younger women in the US market purchase fragrances. The goal is to build loyalty earlier following the Loveliest model. The 18 -34 age group tends to be brand aware with sensitivity to prestige branding. They tend to gravitate towards brand that portrays an image of elegance and exclusivity. Last but not least this age group has a high willingness to try a new scent.
#3 Department stores accounted for...