Flare Fragrance Company Inc

Satish Kumar Burra

Raghu
Subbramaniam
Company Background and Industry position
• Product Sales : Fragrance 93%
Scented Products 7%

•Women’s Fragrance Flare share is 9.5%

Retail sales : $361.34M
No .4 in the Market

2007 12%
•Growth Rate : 2008 2%
2009 3.4% ! ( $7.4 million Target)
 Reasons for Decline in Growth

•Underutilized market 18-34 aged year old women.

• Increased Competition
• Comparatively low ad spending ( Flare is spending 19% of
sales on Adv where as the competitors are approaching 23%)
 Sales and Distribution

1960’s Sold primarily through Premier and mid tier Dept stores (
SAK’s MACY’s)
1970’s Privately owned Pharmacies(WALGREEN)
1980’s Mass Market Shops ( Target, walmart..)

Mass Market 69.5%

Drug Store 4.4%
Department store 24.1%
Other 2%
 Possible Strategies

1. Increase the effort in drug store channel.

2. Introduce a new brand - SAVVY .
3. Promote Natural brand.
 SWOT Analysis: SAVVY
• Strengths
– Name
– Favorable Sales projections ( as it fall under Young age appeal(18-34) who are 74% in US)
• Weaknesses
– Unknown brand name
– Diverging of current sales
– For-go investment in current ,established brand
– Higher price($40)
• Opportunities
– Reach a new customer segment 18-34 old females
– Arlmont study predicts Prestige image fragrances will be best performers
– Innovation and originality
• Threats
– Dulcet brand to be launched at same time
– High competition in market
– Difficult economic conditions-consumer trade down
– Declining sales in high-end department stores
– New fragrance may migrate to mass market quickly
– Competitors our spending flare in advertising
 SWOT ANALYSIS: Natural/Drugstore
• Strengths
– Already have a drugstore sales team
– Strong brand image and well-known products in “prestige” market
– Loveliest is one of the best-selling womwn’s fragrance in mass market
• Weaknesses
– Without Savvy launch, Natural will be the only product for youngest market
– Drugstore sales team performance is un even
• Opportunities
– Expand into retail arears in which Flare products are not currently sold
– Sales of Prestige brands expected to grow in mass markets
– Increase advertising for current brands
– Increase scented product availability outside of gift sets
• Threats
– Two years since last product launch
– Drugstore chains only want to sell highest turnover items
– Drugstore sales could damages relationships with other channels and may
harm brand image.
 Advertising Budget
2008 Budget in $ 2009 Budget in $ 2010 in $
Media, Adv, Promos
12% inc 8% inc
Loveliest 1,67,70,443 18782896 20285528
Awash 169827 190206 205423
Summit 2717236 3043304 3286769
Essential 1443532 1616756 1746096
Sweptaway 509482 570620 616269
Natural 2755447 3306536 3571059
Subtotal 24365967 27510319 29711144
Co-op Adv 7926688 8877891 9588122
Sponsorship 2233229 2679875 2894265
Samples 6457682 7232604 7811212
Sales sheets/ flyers 878856 1054627 1138997
Gift/purchase promos 297198 332862 359491
Public relations 297198 332862 359491
Subtotal 18090851 20510720 22151578
Total communications 42456818 48021039 51862722
As % of Sale 19.20% 20.68% 20.78%
Total Sales 221129257 232185720 249599649
Conclusion
Recommendations:
• Increase Marketing support of Natural along with other
Products.
• Further penetrate drugstore channel .

Projections :
5% increase in top line sales for 2009 ( $ 11m increment in
revenue) .