Swot Analysis and Flare Fragrances Swot

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Flare Fragrances Company, Inc.
Britt Miller Rebecca Orsher Allie Steinle 12/07/2010

Executive Summary
• Flare Fragrances has experienced declining sales growth • CEO set goal to increase incremental revenue by at least $7.5M and reverse declining sales trend • Conducted two SWOT analyses to determine best strategy – Emphasize Natural and increase drugstore presence

• Developed advertising budget and implementation plan
Flare Fragrances

Agenda
• SWOT – Savvy launch • SWOT – Natural emphasis and drugstore expansion • Financials – advertising budget and pro forma income statement • Implementation • Conclusion

Flare Fragrances

SWOT Analysis: Savvy
Internal factors

Strengths
• Name • Favorable sales projections

Weaknesses
• • • • Unknown brand name Cannibalization of current sales For-go investment in current, established brands Higher price

Flare Fragrances

SWOT Analysis: Savvy
External factors

Opportunities
• Reach a new customer segment: 18 – 24 year old females • Arlmont study predicts prestige image fragrances will be best performers • Innovation and originality • Build relationships with department store channel

Threats
• • • • • • Dulcet brand to be launched at same time High competition in market Difficult economic conditions – consumers trade down Declining sales in high-end department stores New fragrance may migrate to mass market quickly Competitors outspending Flare in advertising Flare Fragrances

SWOT Analysis: Natural/Drugstore
Internal factors

Strengths
• Already have a drugstore sales team • Strong brand image and well-known products in “prestige” market • Loveliest is one of best-selling women’s fragrances in mass market

Weaknesses
• Without Savvy launch, Natural will be the only product for younger market • Drugstore sales team performance is uneven

Flare Fragrances

SWOT Analysis: Natural/Drugstore
External factors

Opportunities
• • • • Expand into retail areas 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 damage relationships with other channels and may harm brand image

Flare Fragrances

Conclusion of SWOT Analyses
Natural/Drugstore

Pursue Natural/Drugstore Strategy
• • Increase support of Natural to continue sales growth Strengthen presence in drugstore channel • Take advantage of growing trend in mass market Special emphasis on Natural and sponsorship events as well as sales materials for drugstore expansion



Focus on existing brands – increase advertising


Flare Fragrances

Budget: Objective-and-Task Method
Natural/Drugstore

Objectives:
• Grow revenues by at least $7.5M in 2009 and reverse declining sales trend • We believe we can achieve 5% sales growth in 2009 and 7.5% in 2010

• Increase support for Natural • Increase presence in drugstores

Tasks:
• Increase advertising budget for all lines and communications • Special emphasis on Natural and sponsorship events as well as sales materials

Flare Fragrances

Financial Analysis: Advertising Budget
Natural/Drugstore
2008 Budget Media, Advertising, & Promos Loveliest Awash Summit Essential Swept Away Natural Subtotal $16,770,443 $169,827 $2,717,236 $1,443,532 $509,482 $2,755,447 $24,365,967 $18,782,896 $190,206 $3,043,304 $1,616,756 $570,620 $3,306,536 $27,510,319 $20,285,528 $205,423 $3,286,769 $1,746,096 $616,269 $3,571,059 $29,711,144 2009 Budget 2010 Budget

Co-op Advertising Sponsorships

$7,926,688 $2,233,229

$8,877,891 $2,679,875

$9,588,122 $2,894,265

P.O.S. Samples
Sales Sheets/Flyers Gift/Purchase Promos

$6,457,682
$878,856 $297,198

$7,232,604
$1,054,627 $332,862

$7,811,212
$1,138,997 $359,491

Public Relations
Subtotal...
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