Flare Fragrances Company, Inc. Case Analysis

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Flare Fragrances Company, Inc. Case Analysis Since 1955, Flare Fragrance Co. has grown to be the No. 4 player in the U.S. women’s fragrances market and generated $221 million in factory sales in 2008. The economic crisis had taken its toll on Flare over the past few years. The CEO wants to finalize Flare’s 2009 strategic initiatives and is looking at options that will offer the greatest potential for growth. Flare’s goal it to pursue an option that will allow the company to gain at least $7.5 million in incremental revenue in 2009 and reverse the declining sales trend caused by the recession.
To make a justified recommendation for Flare, an analysis of the advantages and disadvantages of the company’s options are reviewed in Figure 1.
Figure 1
Option 1: Advance in drugstore channel Advantages
Disadvantages
• Considered a great prospect market in the future
• Market trends should decline in sales through high-end department stores and mass channels
• Reorganized chain drugstore sales team with experience
• Redesigned stores will attract younger women
• Drug chains are evolving, some with higher-end features, on-site aestheticians
• Typically, consumers first experience a product in a department store
• No beauty advisors
• Consumers can find premium and mid-tier fragrances in mass market retailers
• Meaningful consumer experiences can create shopper retention among specialty stores and mass market retailers
• Only wanted to sell Flare’s highest-turnover items
• Could damage Flare’s relationships with other retail accounts
• If NOT in the presence of drugstore repositioning, Flare could lose to competitors
• Flare only receives approximately 4.4% of total sales from drugstores as of 2008
• Competitors could enter and take lead Option 2: Introduce new perfume brand – Savvy Advantages
Disadvantages
• Power of Loveliest as an umbrella…...

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