Flare Fragrance Company - Individual Case Study

Flare Fragrance Company- Individual Case Study

Problem and Solution:

In December of 2008, Flare Fragrance launched its final analysis of 2009 strategic initiatives and CEO Joel Patterson was determined to make 2009 better than 2008. In 2008, the estimated year- end numbers were projected to be only 2% in contract to their 2007 sales of 12%, leaving a 10% decline than the year before. The recession affected Flare, like many other companies, and Patterson wanted to make sure the company was able to get back on track. The main problem they were facing was choosing a strategy that would gain $7.5 million incremental revenue for 2009 and reverse the declining sales trend bought on from the recession.

Flare consulting group, Almont Associates, came up with two promising solutions: either increase the efforts in the drugstore channels by penetrating further within this market or introduce and launce a well-positioned new perfume brand. They can do one, both, or neither. However, if Patterson were to go with the ‘neither’ option, that leaves him to find another way to produce the outcome he is looking for of generating $7.5 Million and to reverse the declining sales trend brought on by the recession. Another option that should be considered is for Flare to focus on their new perfume brand Savvy through selling the products in department stores as well as mass stores. I believe this to be the best option for Flare. In addition to focusing on a new brand, Flare should try to expand on advertising to better reach their target market and consider advertising online as well.

Executive Summary:

As stated above, Flare Fragrance is looking to increase their revenue all while reversing the declining sales trend. I believe that Flare should do so by moving forward on the release of their new fragrance brand: Savvy. Doing so should include releasing the new brand in department and mass stores and working towards the increasing online sales and advertising. Savvy had received favorable  responses in focus groups. These series of focus groups, conducted during April of 2008, consisted of a brief marketing plan aimed at confident, successful young women ages 18-34 who were in college or starting careers. Some of the key findings found through the conduction of a series of women’s focus groups, Flare learned that the name Savvy for a women’s fragrance was perceived as stylish, upbeat, and classy. In addition, almost 50% of women preferred to shop for fragrances in department stores whereas nearly 40% shop for fragrances in mass stores such as Target and Wal-Mart and specialty stores like Sephora, through use of these channels declining with age.

Later in 2009 during a final analysis meeting, Patterson found out that Flare’s major competitors, Aromatique, would be launching a new perfume brand, Dulcet, at a suggested retail price of $42. Aromatique would be aiming for the teen and young adult market, the same as Flare’s Savvy. While Flare is only spending roughly 19% on advertising spending, competition has been spending about 23% which shows that competitors  understand the high competition of this market, with over 400 new fragrances launched in the US in 2007.  With women’s fragrance consisting of 66.6% of the US retail market, Flare products generates 95% of that total, exceeded only by Depuis, Suzanne Weber, and Aromatique, with shares ranging from 11.5% to 15.6%.