7/17/2019 Flare

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Flare Fragrances Company, Inc.: Analyzing Growth Opportunities – GroupD5

1. Understand Flare’s position in women’s fragrance market.

• Market and Competition: Starting out as a small manufacturer of women’s

fragrances in 1955, Flare has grown into the No. 4 player (behin competitors !epuis,Su"anne #eber an $romati%ue&, accounting for 9.5' ()*+1 million& of the total .S.retail mar-et for women’s fragrances ()*. billion&. /his is a highly cluttere mar-et,with 400 new fragrances being launche in the .S. in 002 alone.

• Product Mix: 3y 002, 9*' of Flare’s sales came from its si lines of fragrances,

while the remaining 2' was attribute to other bran etensionsproucts that werepart of gift pac-s. /he contribution to 00 pro6ecte sales of each of the proucts isshown in Fig 1.

•   Place (Distribution): 7ass mar-et is the main istribution channel, followe by

epartment stores (Fig &.

•   Promotion:  Flare’s communication buget is roughly 1980' of sales, with 5+85' of the buget being spent on meia, aertising an web promotions. :oeliest isthe most aggressiely aertise bran.

•   Pricing: Flare’s brans are sol at price points for )*08)*+ (with :oeliest at )*&,

placing them in the mi8tier categories of fragrances.

 2. What are the pros and cons of Flare’s possible growth strategies?

;atterson re%uires a minimum of incremental )2.5 million sales in 009, which implies a *.4' <=<growth oer the current 00 sales of )1 million. /he strategies shoul therefore be ealuate ontheir ability an probability to achiee this target.trategy !ros Cons>ncrease e?ortsin the rugstore channel

8 @urrently uner8utili"eA may helpachiee penetration8 =pportunity as rug stores will haehigher8en features

8 >n conBict with the Cprestige’image8 !irect competition with massbrans

>ntrouceSavvy  foryoung chic

segment

8 Denture into the young emographicwith an image inepenent of Loveliest  to increase sales through epartment

stores

8 #ill be pitte against$romati%ue’s Dulcet 

8 7ay partly cannibali"e Natural

>ncreasebuget ofNatural

8 @aters to the young emographicApotential to increase sales if promotioninestments are mae

8 Not enough to meet target(assuming <=< growthE*0'&Aery niche

3uiling otherscenteproucts

8 @urrently low contributor, scope formore sales uring gifting occasions

8 /angential to core mar-etingan sales epertise

>ntrouceSavvy  foryoung classicsegment

8 ;ositioning resonates with results ofF!s wanting image of elegance aneclusiity within 18*4 emographic8 $oi competition with Dulcet an

cannibali"ation of Natural

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3. Should oel! "atterson introduce the new perfume brand?

 Hoely ;atterson can introuce the new perfume bran Savvy  to achiee the incremental sales targetIoweer, it is suggeste to change the positioning from the chic segment to the classic segment fothe young emographic to aoi competition with Dulcet   an cannibali"ation of Natural! GGSomcalculations on epecte sales, an which meia plan to use.GG