Marketing Strategia free essay sample

Company has to develop a strategy to remain competitive in the toiletries industry. As of 1980, there were as many as 60 companies and 200 brands in the industry highlighting the highly competitive rivalry in the market and the abundance of substitutes due to lowly differentiated products . Faced, with two options either to introduce a new brand, Cambridge, or to expand distribution into food stores. We have decided to analyze these options based on 3 perspectives; Branding, Sales, Distribution and Competition. All reference to exhibits are made with reference to the case, â€Å"MEM Company, Inc. † by Harvard Business School unless otherwise stated. Branding Consolidation of suppliers met that most companies had access to the same type of fragrances. As a result, branding was a major differentiating factor English Leather was an established brand with a high level of brand awareness, ranking second only to Brut in unaided advertising awareness and being equal in terms of total brand awareness . We will write a custom essay sample on Marketing Strategia or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page However, MEM employees have already begun voicing concerns that the brand was growing ‘tired’. Exhibit 12 provides evidence of this as it states that during a focus group, the participants perceived English Leather as a less Sophisticated brand that â€Å"the guys wore in college†. Further examination of the brands slogans compared with its competition revealed its slogan too be provocative and straightforward. Other brands were trying to be intelligent by using slogans with puns (eg. â€Å"Put a little spice in your life† by Old Spice) or by elevating status (eg. For the man who gets the most of his life† by Pierre Cardin) whereas English Leather’s slogan â€Å"All my men wear English Leather or they wear nothing at all† was just an outright claim that looked boring and overly authoritative. Hence, although launching â€Å"Cambridge by English Leather† allows the new brand to ride on English’s Leather’s established name; it also associates Cambridge with English Leather’s archaic image. Finally, Philip Morris Co formerly used the ‘Cambridge’ name for their low-tar cigarettes brand, which could result in people wrongly associating the name with cigarettes rather than toiletries. Competition With 60 companies and 200 brands in the market, competition was stiff. Furthermore, the large number of new products in the MEM’s price segment (medium priced segment) with large advertising expenditures behind them and the increased competition by Brut and Shulton pressured MEM to act fast. While it may seem like launching new product to create hype for MEM seemed a likely solution, launching Cambridge as name by itself required development of the brand from scratch. This would be difficult as the competing brand ‘Blue Stratos’ marketed by Shulton boasted 50% more advertising expenditure than MEM. Another noticeable point was price. Brut’s Brut 33 and Shulton’s Old spice effectively under-cut English Leather’s 6 product lines. This, coupled with both company’s increasing advertising budget represented a grave threat to English Leather. Also, the proposed introduction of ‘Cambridge’ at $10 placed it in between the medium and high market segments. It seemed like ‘Cambridge’ was going to be very expensive mid-market product or it was going to be a very cheap high-end market product. In both cases the danger of ‘Cambridge’ selling at the expense of other MEM products including ‘Acqua di Selva’ existed. Sales and Distribution MEM’s core distribution channel were general merchandise stores though it’s brand lagged behind Old Spice. Interestingly, Exhibit 6 shows that MEM’s main competitors making up 63. 6% of sales in food stores while MEM had none. This, together with the decrease in rack jobbing this represented a new channel for MEM. While the proposed new brand ‘Cambridge’ would bring with it frequent advertising and trade deals, it was questionable if its $10 price point made it the kind of high-turnover product suited to a fast food chain. Perhaps an alternative would be sell smaller quantities of the other 6 lines of products. Further to that, Exhibit 5 revealed something else. Although MEM had a broad product range, it’s sales were heavily skewed with its flagship â€Å"English Leather† brand taking up 68. 3% of sales in 1980. Though cannibalization of the various product lines cannot be ruled out as a reason, MEM’s low advertising expenditure as compared to its competition suggested that its other product lines still had room for growth. The fact that some of MEM’s executives believed that the full potential of Racquet Club had not been realized adds weight to this. Finally, more strain on the proposed ‘Cambridge’ line of products would present itself in the form of chain drug buyers not willing to provide additional shelf facings for MEM products. Assuming this was still the case at the time of the proposed launch, this would cause Cambridge to be selling at the expense of other MEM products and would not lead to increased income for MEM. Conclusion and Recommendations After considering the case facts, it is our view that the proposed ‘Cambridge’ launch would be inadequate as it faces branding issues with its name, fierce competition from Shulton and because it’s pricing puts it in between segments. Instead, MEM should focus the expenditures intended on the new product launch on updating it’s aging brand, developing existing line of products and expanding its distribution channels to food stores. In addition, we recommend that MEM’s subsequent product launches be targeted at a new segment, possibly the low-priced segment to compete with Brut. This will not only help MEM to diversify its current product offering but to put pressure on Brut.