Soft and Silky Shaving Gel.

University Degree Business and Administrative studies

Soft and Silky Shaving Gel

Executive Summary

Ms-Tique Corporation is a successful manufacturer of women’s care products. Soft and Silky shaving gel (tube packaging) was added to their line of products as a natural extension and has been successful as a high quality shaving gel with high brand loyalty and a stable position in the market. However, competition had increased and the new aerosol can was introduced as a new form of packaging for women’s shaving gels, creams, and lotions. Soft and Silky’s sales are beginning to plateau and it is up to the brand manager to decide whether to introduce a new package (aerosol can) for Soft and Silky shaving gel or leave it in the original package (the tube). Other decisions that must be made include whether to approve funds for a test market for the new package and whether to introduce the 51/2-ounce can or the 10-ounce can or both in the test market or full scale. The suggested alternative to Ms-Tique is to introduce the new package in both sizes into the market full scale as well as the tube package (until it fades out and the new package is adopted). A test market was not chosen due to the fact that the new aerosol can is not new to consumers because similar products adopted it already. It is the dominant package in the market and if Soft and Silky wants to survive it must follow consumer trends.

Problem statement

Phoebe Masters, the newly appointed product manager for hand and body lotions at Ms-Tique Corporations was recently assigned the task of making a very crucial decision. The decision is whether or not the company should introduce a new package design for Soft and Silky shaving gel – to an aerosol can from a tub package. Two additional questions that Master’s must decide on is whether to introduce a 5 ½-once aerosol can or a 10-once aerosol can in to the suggested test market and whether she should approve an increase in funds for a market test.

Situation Analysis

Industry Analysis

At the present, women’s wet shaving products is estimated to be approximately $400 million market in the US at manufacturers prices and sales growth for the market is estimated to be about three to five percent since 1995. With the increase market potential, competitors have emerged with not only competing products, but substitutes as well. Substitutes for shaving gel include soap and water, hair removal creams and electric shavers specially designed for women.

Since the emergence of these new competitors and substitutes, the female consumer now has many different options and with today’s growing population being consumed with more and more responsibility, time saving products (including shaving) are highly in demand. In response to this demand women are now looking for easier and more efficient ways to shave. The dominant packaging for shaving creams and gels is now the aerosol container and only a small percentage of the market still packages their product in plastic bottles or tubs, including Soft and Silky shaving gel.

Company Analysis

Ms-Tique Corporation is a manufacturer of women’s personal care products including Soft and Silky shaving gel. Also included in their product line are women’s facial creams, body lotions and women’s toiletries and last year sales reached $225 million. The company packages all of their products in tubs, bottles and jars and this is due to the fact that the technology was not available to them to produce aerosol cans when Soft and Silky shaving gel was introduced (1986) and at the present they are working at full capacity so there is no room for alterations in their manufacturing process.

Soft and Silky shaving gel was introduced in the spring of 1986 and was a natural product extension of the company’s product line and few alterations were needed to manufacturer the new shaving gel. Soft and Silky shaving gel was positioned as a high quality shaving gel and this was strengthened due to the fact that competitors were few and it was set apart from men’s shaving gel so price comparisons could not be made. Ms-Tique also hired rack jobbers to keep the shelves stocked and kept up. These rack jobbers received 20% off the sales price to retailers ...

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The following SWOT analysis will summarize Ms-Tique’s Soft and Silky shaving gel’s internal strengths and weaknesses as compared to their external opportunities and strengths.

Strengths

Soft and Silky shaving gel is a strong competitor in the shaving market and is a recognized brand.
Soft and Silky shaving gel has high brand loyalty, which can be difficult with this type of product due to the fact that brand switching is quite common with this product.
Soft and Silky shaving gel is positioned as a high quality product and has used this position as a competitive advantage over its competitors.
Brand contribution for 2000 was over $1.3 million, which indicates that Soft and Silky shaving gel produces sufficient resources and is not harming, but helping the company.

Weaknesses

The technology was not available when Soft and Silky shaving gel was first introduced, and as a result, then new trend towards aerosol cans is difficult to follow due to the fact that Ms-Tique would have to invest money and time to alter their plant to include this new technology.
Ms-Tique’s manufacturing facility is at full capacity and this is causing them to be overwhelmed and schedules are falling behind. This is due to the growth of Soft and Silky shaving gel.
Due to production strains, Ms-Tique has not been able to adequately serve demand. As a result, shelf space at retail outlets is empty and sales are lost.
Unit sales growth for Soft and Silky shaving gel is leveling off, which means that a change must be made to trigger sales growth once again.

Opportunities

The market for women’s wet shaving products is growing at 3 to 5 percent per year, which allows for growth in the company.
Approximately 45 million shave with a razor in the US. The second most popular method is shaving with a razor and shaving cream/gel.
Soft and Silky shaving gel is a well-known brand with high brand loyalty which is uncommon for this type of product.
Ms-Tique is a profitable company and has access to the monetary resources needed to change the packaging of their Soft and Silky shaving gel.
Finding from the focus group suggested that all of the members were in favor of the new aerosol can for Soft and Silky shaving gel.

Threats

Master’s fears that her working relationship with Heather Courtwright may be harmed pending the Soft and Silky product decision due to the fact that there is strain between the two ladies.
By late 2000, there were many competing brands on the market, including shaving creams, gels and lotions.
There has also been an increase in substitute products competing with Soft and Silky shaving gel. These include razors and soap, electric razors and hair removal creams.
Ms-Tique’s manufacturing facility does not have up to date technology of sufficient capacity to meet demand. This creates a competitive pitfall for the company due to the fact that they are loosing sales, start out sourcing and have no plans for expansion.

The SWOT analysis shows that the company has many internal strengths and weaknesses as well as external opportunities and threats. At the present, the company is doing well, however, there could be a problem on the rise. The company does not have an adequate manufacturing facility to meet demand. This is causing the company to loose sales and will also cause their growth to eventually plateau and level off due to the fact that they cannot grow with the market.

Competitor Analysis

Since the year 2000, the women’s shaving market has been saturated with competitors and substitute products. These products include competing shaving creams, gels and lotions and substitute products include electric razors, soap and water and hair removal creams. Companies that produce products that directly compete with Soft and Silky Shaving Gel include Skintimate (S.C. Johnson), Satin Care (Gillette), Soft Shave (White Labs), Aveeno Therapeutic Shaving Gel (S.C. Johnson), Inverness Ultra-Lubricating Shaving Gel (Inverness Corp.). All of these products are competing with Soft and Silky shaving gel and besides Soft and Silky, there are only two other products that are still being packaged in tubs. These are Soft Shave Lotion and Inverness Ultra-Lubricating Shaving Gel.

Customer Analysis

Customers who use Soft and Silky shaving gel are women who use shaving gel and a razor to shave. Studies show that 45 million women in the US shave with a razor and the second most popular method used is shaving with a gel/cream (the first popular method used is soap and water). Women view shaving as a necessary evil so they want a shaving gel/cream that reduces irritation, contains moisturizer and makes shaving easier. The following is a consumer profile that summarizes who Soft and Silky’s customers are:

Who: Women who shave with gel and want to use a quality product that prevents dry skin and irritation. These women also consider themselves “special”.

What: Soft and Silky is premium priced as a quality product and is available for those women who are not price sensitive and want a quality product.

When: The average women shaves 11 times per month. However, peak season for shaving is during the summer months and most women shave everyday during this period. Soft and Silky shaving gel responds to the increased use during the summer months by offering more of the product and promotions.

Where: Soft and Silky is distributed through drug and food and drug stores away from men’s shaving products. This placement emphasizes the products positioning strategy because this is where women can find quality-shaving products.

Why: Women purchase Soft and Silky shaving gel because it contains moisturizers, including aloe and vitamin e. Thus preventing dry skin and irritation.

Marketing Objectives and Decision Criteria

Soft and Silky shaving gel has forecasted volume of 10,745,174 ounces (1,953,668 51/2-ounce tubes) which is lower then last years (2000) volume output of 1,960,000 51/2-ounce tubes. However, this forecast applies if the company does not change the package and continues with the status quo. Ms-Tique may want to forecast sales for the new package as well and then they must figure out if this forecasted volume is reachable or not. This can be done by market research as suggested in the case. A break even analysis and sensitivity analysis will also give the company a better idea as to whether or not the new package will be a success. Also, cost associated with the production of the new package will be analyzed due to the fact that Ms-Tique will be outsourcing the making of the package and additional fees will come in to play.

Alternatives and Analysis

Alternative 1: Status Quo.

The status quo option is should always be taken in to consideration whenever a company decides to alter one of their components. Status quo is considered the company’s current situation and is the alternative to keep everything the same.

Pros

This requires no additional funds from the company due to the fact that nothing will be altered.
Costs will remain average with Ms-Tique’s production because nothing will change.
This is a positive alternative because it is the less risky one. For the company to remain at their current state they do not have to incur any more risk then they currently have.

The Status quo option can also lead to unhappy outcomes for the company.

Cons

As discussed above, Ms-Tique’s manufacturing facility is at full capacity and with the growth of the company; production schedules are beginning to fall behind. This can seriously harm the company in the long run due to the fact they are not fulfilling demand and they are loosing sales.
This problem is beginning to be apparent to Ms-Tique, however there are no plans to expand their facility and the problem may turn in to a serious one in the near future, especially with the busy summer months around the corner.
Unit sales volume (exhibit 4 in case) also suggests that this option may not be the best one to implement. Sales for Soft and Silky shaving gel have begun to plateau and this means that the product has reached maturity on the product life cycle and if no changes are made, sales will soon begin to decline.

Alternative 2: Introducing the new aerosol can package for Soft and Silky shaving gel.

Pros

Introducing the new aerosol can as a new package for Ms-Tique’s Soft and Silky shaving gel posses many opportunities. Firstly, this new package will follow the current trend with the other aerosol packaged shaving products.
The new package design may also trigger sales growth once again for Soft and Silky due to the fact that it may get them away from the maturity stage of the product life cycle and back some where in the growth stage.
Out sourcing the aerosol can package will also free up Ms-Tique’s production schedule allowing them to keep on schedule with their other products and accurately fulfill demand once again.
The new aerosol can will not contain CFC’s that are harmful to the environment and will be rust proof so that no rust ring will appear in the bathtub. These value added features will also strengthen the products positioning as being a quality product.
In a consumer focus group, all of the contestants were unanimously in favor with the idea of the aerosol packaging.

Cons

The chosen supplier can manufacture only 51/2-ounce and 10-ounce cans. While the typical sizes for women’s shaving cans are 6-ounce and 10-ounce ones. This does not go along with the norm and may confuse consumers who are considering to purchase a 51/2-ounce can while all of the other shaving creams/gels are packaged in 6-ounce cans.
The manufacturer requires an additional setup charge of $10,000 (a one time expense).
The new aerosol can package Soft and Silky gel will cannibalize sales from the Soft and Silky gel sold in the 51/2-ounce tubes.

Alternative 3: Introducing the new package into a test market for three months.

Pros

More marketing research can be implemented so that Ms-Tique can be sure that the new package design will be a success.
Soft and Silky shaving gel’s new packaging will be tested besides the original tube packaging. This allows for the consumer to compare the two package designs and purchase whichever one suits them best. This will be valuable consumer behavior research for Ms-Tique and will let them know whether or not the new package will be dominant over the original tube package.
If the new packaging design does flop, then the company would not had spent as much money as they would have to launch the new package fully.

Cons

Since most of the other competing brands have already introduced their shaving products in aerosol cans, it is not a new thing for consumers to see and launching the package into a test market may be a waste of money.
The test market will cost the company $30,000. This extra expense may not be necessary since the aerosol package is not a new thing to consumers.

Suggested Alternative

Considering the above alternatives, the suggested recommendation to Phoebe Master’s is to launch the new package full scale in to the market. This alternative is the chosen one due to the fact that consumers are already familiarized with the aerosol can because most shaving products are now packages this way and therefore there is no need for a test market. Launching the new package full scale will also allow Soft and Silky to once again compete effectively with similar products that have already adopted the new product. Although there will be cannibalization of the tube package, it was calculated that even with the cannibalization rates, the new aerosol package will still be brining in new contribution for the company (see exhibit 2). Also, as can be seen in exhibit 1, break even for the new package will be 617,160 cans, and looking at exhibit 2, this goal is attainable. However, this breakeven is not accurate, due to the fact that it does not take tube sales in to consideration, and it does not include the extra advertising costs needed for promoting the new aerosol can package.

Marketing Programs

The same consumers who purchased Soft and Silky in the tube package will be targeted for the new aerosol package as well. Soft and Silky will still be positioned as a high quality product even thought there per ounce price has dropped a small amount for the new 10-ounce aerosol package. The promotional efforts will do not have to change due to the fact that consumers are already aware of the aerosol can, however, it should be stated on the package, the cans value added features (CFC free, and rust free). The new packaged product will be placed beside the original tube product until the new aerosol can is fully adopted by their consumers.

Monitors, controls and contingency plans

Although consumers using other shaving products have already adopted the new package, it may be a good plan to keep producing the tube package as well until the aerosol can is fully adopted by their consumers and the tube packaging fades out (as it has already begun to do). Since Ms-Tique is outsourcing the production of the new aerosol can, it is also important that they keep a close eye on the quality of the can since it is not them who is producing it, the new producer may not be aware of a slip in quality.

Soft and Silky Shaving Gel.