Dermavescent Laboratories, Inc.

Overview of Presentation● Brief history of company● Market● Product● Price● Promotion● Place● Other● Problem/Opportunity● Recommended Actions● Plan of Action● Plausible Alternatives● Supportive Argument for the Recommended Plan

History of the Company

● Dermavecent Laboratories, Inc. is a manufacturer of women’s personal-care products

● Soft and Silky is the product brand name for the company

● Soft and Silky Shaving Gel was introduced in the spring of 1991

● Soft and Silky Shaving Gel was introduced as a high-quality shaving gel

Market

Market - Women's personal-care products● Methods of shaving● Factors of shaving● Trends in shaving● Economic market

Monopolistic Competition

ProductDermavescent Laboratories Products:

● Soft and Silky shaving creams/gels● Hand and body lotions● Facial creams● Women’s toiletries

Product Life Cycle:● Maturity Stage

Product Benefits

● Core - Assist with removing hair● Provides protection for skin

problems and razor bumps● Limits dry skin with moisturizer● Makes shaving easier by using a

sticky thick cream● Some gels are scented, which

allows for a clean smell and feel

Price

1. Retailers receive a 40% margin 5.5-ounce tube: $3.95 * 40% = 1.58 5.5-ounce aerosol: $3.50 * 40% = 1.40

10-ounce aerosol: $4.25 * 40% = 1.70 2. Wholesalers receive a 20% margin

5.5-ounce tube: $3.95 * 20% = .79 5.5-ounce aerosol: $3.50 * 20% = .70 10-ounce aerosol: $4.25 * 20% = .85

3. Variable Costs 5.5-ounce tube price: $3.95 5.5-ounce aerosol price: $3.50 10-ounce aerosol price: $4.25

Price

4. Allocated costs a. $35,000 on market research focus groups

b. $10,000 one time setup fee c. $30,000 costs on test market5. Manufacturing Costs

5.5-ounce aerosol: $0.24 10-ounce aerosol: $0.29

6. Sales of $3,724,000 in 2005 with a 1,960,000 unit volume7. Elasticity

a. Relatively Elastic

Promotion

● Product placement from rack jobbers● In-store promotions ● Multi-pack deals● Media advertising● Market test using newspaper ads and

point-of-purchase displays● Expansibility

● Relatively High

Place

● Drug stores● Food-and-drug stores ● Channel: Dermavescent Laboratories -

Rack Jobbers-Retailers- Consumers

Other

●Production issues●New packaging design●Potential outsourcing●Competition

Problem/Opportunity

● Primary – Whether to introduce an aerosol container

● Secondary○ Production issues○ Aerosol container size○ Future of the tube package design

Recommended Actions

● Primary – Introduce aerosol containers

● Secondary1. Outsource production to a manufacturing company2. Introduce both sizes' of the container3. Stop producing tube packaging

Plan of Action

● Introduce aerosol containers● Do not do a market test● Outsource production to a manufacturing

company● Introduce both sizes' of the container● Stop producing tube packaging● Put market testing budget towards

marketing and advertising efforts

Plausible Alternatives

● Do nothing ● Put a larger emphasis on their other

products● Keep tube packaging and introduce

only one size of aerosol container● Expand on their own

production/manufacturing facility● Do a market test on the shaving gel● Merge with another top competitor

Supporting Argument ○ Extremely loyal customers○ Aerosol container is main reason noncustomers

don’t use the product○ Focus group showed: 20% of customers said they would convert

to the 10-ounce style and 25% would convert to the 5.5-ounce container

○ Outsourcing would be environmentally friendly and cost effective

○ No market test because the cost is $30,000 and introducing both products

○ Increase marketing and advertising with:social media with a focus on Pinterest, email marketing with product coupons and advertisements in magazines and newspapers.

Any Questions?