Alfin: Marketing and Cosmetic Industry

Topics: Management, Strategic management, Project management, Sociology, Marketing, Learning / Pages: 14 (3289 words) / Published: Jul 22nd, 2010
Case summary

Alfin Fragrance Inc. was a US based importer and marketer of high end French perfumes and cosmetics. The company was going to introduce an industry breakthrough product – Glycel, which was acted like an anti aging crème. The product would be demonstrated and sold at the best departmental and Glycel was expected to provide Alfin Fragrance a fortune as an annual sales of $ 30 million was expected in 1987.
The industry observers speculated that Alfin Fragrance needs some external financing to support its growth. But Alfin had to make its financing choice – whether the company will go for external debt or it will issue equity.

Problems Statement:

In this case, we are going to analyze the following problems which are relevant to the case: • How Alfin Fragrance Inc. would finance its growth if it introduced the highly anticipated anti aging cosmetic miracle – Glycel. Should Alfin go for debt or it should issue new equity capital to finance the growth? • How Alfin Fragrance Inc. would manage its problematic working capital? • Trademark and licensing infringements were very common in the industry. Was there any possibility that Alfin might face any legal suit? • The marketing campaign of Alfin Fragrance was very traditional and their focus was only niche market. Was a traditional marketing effort enough for Alfin to sustain in the market?

Macroeconomic and Market overview in USA in 1985:

Overall economy and the market was not so stable in 1985 but economy and market speculators view that the depression of the economy and the market would turned to a growing one in 1986 because of the changing pattern among the American consumers. Many industries observed downturn because customers were reluctant to buy nondurable. Though this happened in 1985, some industry observers estimated that the cosmetic industry would turn around in 1986 because of the possibilities of introducing industry breakthrough products like Glycel

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