Background Phoebe Masters is the newly appointed Product Manager for Ms-Tique Corporation, a manufacturer of women’s personal-care products that includes facial creams, hand and body lotions, and a full line of women’s toiletries. Ms-Tique products are sold at drug and food-and-drug stores through a middleman known as a rack jobber. Rack jobbers set up retail displays and keep them stocked with merchandise; in return they receive a 20 percent margin off the sales. Ms-Tique is currently marketing a women’s shaving gel called Soft and Silky Shaving Gel. The shaving gel was introduced in the spring of 1986, using the same tubes designed for other Ms-Tique products. Soft and Silky has developed a customer franchise in women’s shaving gel. Despite the price being higher per unit then the shaving cream used by men, Soft and Silky still continues to be a profitable product, due in part to the logistics of where the product is located in drug and food and drug stores.
Wet shaving products are a $300 million industry in the US. Sales growth range from 3 to 5 percent per year since 1994 and the market does not look to diminish in the future. However, what once was a limited market has shown a continued increase in advertising due to new product activities. The reason for the increase has varied depending on the industry analyst. At one point there were only two competitive products available for women in this area, however as of 1999 there were seven major competing brands.

Situation Product Manager, Phoebe Masters, is faced with her first decisions for Ms-Tique Corporation. While Soft and Silky Shaving Gel is profitable, there are some major decisions that must be made concerning the line, decisions that need to take place prior to the upcoming peak months. Soft and Silky Shaving Gel has been in the same package since inception, the idea of a new package