Mem Company, Inc.
CASE SUMMARY (PROBLEM STATEMENT)
After sluggish sales growth in 1980, MEM Company, Inc. was considering ways to increase sales for the company 's line of men 's toiletries. Two main options surfaced; either 1) to expand distribution into food stores or 2) to introduce a new line called Cambridge.
MARKET OVERVIEW
The men 's toiletries market was divided into three groups based on pricing, namely, exclusive, medium and mass priced category. MEM had competed primarily in the medium priced market. Its principal toiletries were marketed under the English Leather line of which generated 68.3% of total sales revenue. This was substantially more than any other line it owned and it also had a market share only second to its main competitor, Old Spice. MEM faced stiff competition from Old Spice, British Sterling, Jovan and Brut, whose new products, since 1979, were being launched in the medium priced market with hefty advertising expenditures of around $7 million. These new products included Chaps by Ralph Lauren, Oleg Cassini by Jovan and Denim by Lever Brothers.
ALTERNATIVES OVERVIEW
MEM had traditionally distributed its products through department stores, men 's specialty stores and merchandise chains. Despite not expanding into food stores like its competitors, it was already ranked second in terms of market share. Expanding into food stores could help MEM overtake its rivals. Furthermore, MEM executives were receiving increasing number of inquiries from food chains about carrying a few of their faster-moving items. As such, this was clearly a viable alternative.
On the other hand, launching Cambridge could create a chance for MEM to penetrate the exclusive group ' closer to a price range of over $10. However, Cambridge would face direct competition from Shulton 's Blue Stratos line, which had a similar target market (men aged 18-34) and price range ($10), among other things. Blue Stratos was due for shipment in March 1981.
ANALYSIS ON ALTERNATIVES
After sluggish sales growth in 1980, MEM Company, Inc. was considering ways to increase sales for the company 's line of men 's toiletries. Two main options surfaced; either 1) to expand distribution into food stores or 2) to introduce a new line called Cambridge.
MARKET OVERVIEW
The men 's toiletries market was divided into three groups based on pricing, namely, exclusive, medium and mass priced category. MEM had competed primarily in the medium priced market. Its principal toiletries were marketed under the English Leather line of which generated 68.3% of total sales revenue. This was substantially more than any other line it owned and it also had a market share only second to its main competitor, Old Spice. MEM faced stiff competition from Old Spice, British Sterling, Jovan and Brut, whose new products, since 1979, were being launched in the medium priced market with hefty advertising expenditures of around $7 million. These new products included Chaps by Ralph Lauren, Oleg Cassini by Jovan and Denim by Lever Brothers.
ALTERNATIVES OVERVIEW
MEM had traditionally distributed its products through department stores, men 's specialty stores and merchandise chains. Despite not expanding into food stores like its competitors, it was already ranked second in terms of market share. Expanding into food stores could help MEM overtake its rivals. Furthermore, MEM executives were receiving increasing number of inquiries from food chains about carrying a few of their faster-moving items. As such, this was clearly a viable alternative.
On the other hand, launching Cambridge could create a chance for MEM to penetrate the exclusive group ' closer to a price range of over $10. However, Cambridge would face direct competition from Shulton 's Blue Stratos line, which had a similar target market (men aged 18-34) and price range ($10), among other things. Blue Stratos was due for shipment in March 1981.
ANALYSIS ON ALTERNATIVES