...2016 Case #3: Dermavescent Laboratories Problems Statement In January 2006, the product manager for hand and body lotions at Dermavescent Laboratories, Inc., Phoebe Masters, was faced with deciding if a new package design for the Soft and Silky Shaving Gel was necessary. The critical question was whether a 5-½ ounce or 10 ounce aerosol container should be introduced, and whether or not she should accept additional funds for a market test. Women’s shaving increases during spring and summer, and timing was critical because those months were quickly approaching. Previously, the shave gel was only sold in a tube form because the Dermavescent Laboratories did not have the resources available to manufacture a different package. Situational Analysis The brand assistant for Soft and Silky Gel stated, “We have a unique product for the feminine woman who considers herself special”, and has been positioned as a high-quality women’s shaving gel. Placing the product away from men’s shaving products reduced price comparisons, and it was more expensive to emphasize the quality. The suggested retail price for Soft and Silky Shave Gel was $3.95 for a 5 ½ ounce, significantly more expensive than other brands in the industry, and consistent with the brand image. Aveeno Therapeutic Shaving Gel was sold at a price of $3.99 for 7-ounces, and a 7-ounce bottle of Satin Care was sold for $2.99. There are many strengths of the shaving gel product. In a survey ran by Dermavescent in 1995 questioning...
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...Memorandum From: James Perry To: Steven Clinton Date: February 11, 2014 Recommendation: The introduction of a 5.5-ounce aerosol can is the best choice. It will provide Dermavescent Laboratories Inc. with the highest contribution per ounce of $.262. Problem Statement: Should Dermavescent Laboratories Inc, a manufacturer of women’s shaving gels, introduce a new package design in the form of a 5.5-ounce or 10-ounce aerosol can in addition to the existing 5.5-ounce tube? Facts: * Brand Information * Dermavescent Laboratires Inc had total sales of $258 million in 2005. Of these sales, $3,724,000 of which came from Soft and Silky Shaving Gel. * They offer facial creams, hand and body lotions and women’s toiletries. * Soft and Silky was introduced in 1991, offering a high quality shaving gel for women. * They are distinguished from men’s shaving gel allowing for no direct price comparison. * Their current price for a 5.5-ounce tube is $3.95. * Research and Attitudes Toward Shaving * Soap and water is the most popular way to remove hair followed by: shaving creams/gels and electric razors. * Women desire a product that moisturizes, reduces irritation and makes shaving easier when shopping for a shaving gel. This led Soft and Silky to add 3 moisturizers in 1995. * It is estimated that there are 90 million blade users with only 5 million electric shaver users. * Eighty percent of women shave once a...
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...Dermavescent Laboratories, Inc. I. Summary of Facts A) Market – Dermavescent Laboratories, Inc. manufactures women’s personal-care products 1) Two primary markets a) Drug stores b) Food & Drug stores c) Sold through rack jobbers who receive a margin of 20% off the sales price to retailers 2) Dermavescent Laboratories, Inc. a) Sales of $258 million in 2005 b) Sales for Soft & Silky Shaving Gel were $3,724,000 at 1,960,000 units in 2005 c) Downward trend with a 0.32% decrease if no new packaging is introduced 3) Competition a) Oligopoly – As of 2005, several competing brands existed in the women’s shaving cream or gel category. B) Products 1) Women’s personal-care products a) Soft & Silky Shaving Gel introduced in 1991 b) Other women’s products such as facial creams, hand body lotion, and a full line of women’s toiletries sold under different brand names. 2) Benefits a) High-quality women’s shaving gel b) Added moisturizer, lanolin and vitamin E to help moisten, reduce irritation, and make shaving easier 3) Product life cycle a) Maturity/Decline – unit sales volume for Soft & Silky Shaving Gel have slowed and then plateaued. C) Price 1) Premium priced at $3.95 per 5 ½ ounce tube 2) Retailers receive a 40% margin on the suggested retail selling price 3) Rack jobbers receive a margin of 20% off the sales price to retailers 4) Elasticity – elastic; as price changes...
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...product manager for hand and body lotions at Dermavescent, Laboratories, Inc., had to decide whether (or not) to introduce a new package design (5-1/2 or 10 ounce aerosol can) and whether she should move forward with a market test. This case provides the opportunity to consider common issues in product management, namely product life cycle management, and the role of packaging in the marketing mix. As we have discussed, organizations are always looking to grow their business. For the Soft and Silky brand, how do you “bend” the product life cycle curve upwards? Soft and Silky appears to be in the mature stage of its product life cycle. This case also provides the opportunity to address risk (uncertainty and amount at stake) in a straightforward manner. Case data/information allows you to interpret focus group information and case histories, calculate margins and payoffs, compute the expected monetary value (EMV) of the two aerosol packages, and determine the value of “perfect information.” Valuing perfect information provides a benchmark when considering research outlays. You are to read Kerin and Peterson Chapter 3 section (pp. 55-61) on decision analysis and perfect information as a primer (note that these tools are embedded in a discussion of general case analysis). For you margin analysis, you are given suggested retail pricing and associated distribution margins to derive the manufacturer’s selling price (Dermavescent Laboratories, Inc.). Your analysis should...
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...Dermavescent Laboratories I. Summary of Facts A. Market - Women's personal-care products 1. Methods of shaving a. Electric shavers b. Blade and razor shavers 2. Factors of shaving a. Seasons of the year b. Frequency of shaving 3. Trends in shaving a. Attitudes towards shaving b. Market size 4. Economic market a. Monopolistic Competition b. Many sellers with a range of prices B. Product 1. Dermavescent Laboratories Products a. Soft and Silky shaving gels b. Hand/Body lotions, facial creams and women’s toiletries 2. Benefits a. Core - Assist with removing hair b. Protection against skin problems and razor bumps c. Limits dry skin by using moisturizer d. Makes shaving easier by using a sticky thick cream e. Some gels are scented, which allows for a clean smell and feel 3. PLC a. Maturity Stage b. Slowed growth in sales with intensified competition C. Price 1. Retailers receive a 40% margin on the suggested retail selling price 5.5-ounce tube: $3.95 * 40% = $1.58 ($3.95 - $1.58 = $2.37) 5.5-ounce aerosol: $3.50 * 40% = $1.40 ($3.50 - $1.40 = $2.10) 10-ounce aerosol: $4.25 * 40% = $1.70 ($4.25 - $1.70 = $2.55) 2. Wholesalers receive a 20% margin on suggested retail price 5.5-ounce tube: $3.95 * 20% =$0 .79 ($3.95 - $.79 = $3.16) 5.5-ounce aerosol: $3.50 * 20% = $0.70 ($3.50 - $.70 = $2.80) 10-ounce aerosol:...
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