Flare Case

Subject ignite Fragrance pass Background Flare was founded in 1955 as a small producer of womens pleasantnesss. Over a period of time, Flare has dominated the fragrance market, gen termting 9. 5% of the total womens fragrance market and had grown in to a No. 4 player in the U. S womens fragrances market. Flare has released 6 smears in the market namely Loveliest, Awash, Summit, Essential, Swept absent and inhering. Economic crisis has impacted Flares market share. Sales in 2007 were 12% and by 2008, the estimate was plainly 2% growth.Flares remainder for 2009 was to generate $7. 5 million in incremental tax income and subvert declining gross sales trend. Recommendation Flare should promote Natural with loveliest umbrella in 18-34 years sequence range and poke out its efforts in the drug chisel in channel. Rationale 1. Natural fits Flares portfolio, both financially and strategically. Promoting Natural with loveliest umbrella will benefit Flare to meet its target sales numbers for 2009. Loveliest brand was introduced in 1975 and it still holds a strong paleness in the market.It is moorageed as a unsullied scent in the of old age(p) age group. These customers will serve as evangelist and contribute to the onward motion of Natural brand. As a result of the point group sessions (ex 5), project sales for 2008 for Natural is $9. 1MM(ex 1). Based on forecasted numbers in table1, pass judgment sales for 2009 could be $10. 15MM. Keeping the same communication budget from 2008 of 2. 7 MM to Natural in 2009 (exhibit 4), the expected receipts from Natural would be around 7. 45MM (table 2). 2.Natural is a recent launch under the loveliest umbrella and it is make slightly younger demographic, who are looking for the environmentally safer products or so called green product (page 2). Natural is currently positioned as a chicness brand in the younger age group (ex 3). 18-34 year age group women are highly brand aware with sensitivity to indemnity and prestige brands and word of mouth is influential for this age group(ex 5). Promoting Natural in the slightly younger age group will benefit Flares overall sales. 3.Arlmonts review of current recession era (page3), shows that mid-tier and premium brands will be increasingly available in the large number channels. Market development strategy can be used to expand Natural in the drug store. As a result of the focus group sessions (ex 5), 20% of customers shop at the drug store. Flares sales at the drug store do not mirror overall market and there is a potential for expansion in that space. Drug store chains have evolved over time and any(prenominal) of them also have high end features like on-site aestheticians to advert shoppers in selecting a particular brand.With the current economic conditions, customer with 18-34 yrs age group would get directed to the drug stores in search of cheaper prices. Placing emancipate samples of Natural in the drug stores and Natural testers in the p oint of bargain for will generate trial. Based on the information from table 3, aft(prenominal) increasing the % allocation in drug store for Natural from 0. 5% to 2. 5% in (ex 1), the flare factory sales for 2009 will affix from 9. 1MM to 11. 3 MM. Additional 1. 15 MM can be pass on promotional budget for point of sale samples, expected revenue from natural can be 7. 45MM. Risk 1.Drugstores would typically sell only Flares highest turnover items, which might damage Flares relationship with other retail accounts. 2. It can be difficult to position Natural in the 18-34 age group with the loveliest umbrella as women in this age group can perceive loveliest as a classic brand. Table 1 Natural brand Sales forecast 2006 2007 2008 2009 7 Not available 9. 1 10. 15 2009 sales figures are forecasted ground on the % sales increase from 2006 to 2009. Table 2 Natural brand 2009 expected factory sales(MM) 10. 15 2009 communication budget(MM) 2. 7 Incremental revenue 7. 45 Table3