Flare Marketing Challenges and Solutions for Flare Case Study

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Flare Marketing

Marketing Challenges and Solutions for Flare Fragrance

Marketing Challenge

Flare Fragrance faces a multitude of challenges at the time of the case study, with the uncertainty of the economic situation not only leading to a real and already-present drop in growth rates and new sales but also making it difficult to select and promote a strategy for future growth, and with intense competition and proliferation in the industry creating further complications and challenges. Selecting appropriate demographics for future sales growth, determining how to most effectively select and implement a channel strategy, and a variety of other specific operational and strategic concerns exist for Flare and its executives and managers, and how these challenges are met will determine how successful the company will be in the coming years. Though many of these challenges are not marketing challenges in and of themselves in any direct sense, they all affect the marketing and channeling strategies and challenges that the company faces now and will face in the coming years, and al will have an impact on the decisions made in regards to the marketing challenges specifically. It is only in the context of current large-scale economic issues and industry competition, that is, that a marketing challenge can be properly understood and addressed.

The central marketing challenge that can be identified in this case is the need for Flare to capture greater market share and achieve sales growth -- twin outcomes that are truly two sides of the same coin, as one cannot happen without the other -- in the coming years. Though this can be said to be the central marketing challenge for virtually any firm in any industry in almost all circumstances, it is an especially pressing and immediate concern in this case as a result of the several options the company has in attempting to pursue this goal and the various obstacles and opportunities associated with each option or strategy. The release of the new Savvy brand and fragrance is one option -- or one set of options, truly, as there are significant potential variances in the pursuit of this strategy -- that could potentially expand market share in the young (18-34) demographic while also increasing the dollar value of sales through a higher price tag. Proper channel strategies would need to be developed and implemented to carry this off effectively, however, and marketing costs would be substantial without clearly predictable returns; the question of releasing the brand outside the Loveliest umbrella brand would also need to be answered. Alternatively, Flare could cancel or postpone the Savvy release and focus marketing efforts on improving channel distribution and sales of existing products, especially Natural for the desirable younger demographic. Choosing the appropriate solution to this marketing challenge will require a consideration of many market and industry factors in addition to stated company goals and projections.

Company and Industry Analysis

In order to effectively assess alternative marketing strategies, it is necessary to develop a comprehensive view of the internal and external situations Flare Fragrance finds itself in, meaning an assessment of the strengths, weaknesses, opportunities, and threats that the company faces as it moves forward and attempts to achieve greater market share and a significant growth in sales revenue. The company has a significant strength in the brand loyalty of its consumers and the longevity of its signature fragrance and umbrella brand, Loveliest. A recognizable and trusted brand name is a significant marketing strength regardless of industry, and though Loveliest is not a first-tier or premier brand it is a long-worn and long-trusted perfume and name that will continue to serve the company well if properly updated and capitalized (Armstrong & Kotler, 2010). The company also has a sizeable market share and has not only remained profitable but has achieved growth during the recession, which is another significant strength. Though a part of the challenge facing the company is the slower-than-desired growth rate, the fact that one could still speak of a growth rate in positive terms means that there is cash flow and capital available for a marketing campaign and potentially for a new product launch. Weaknesses exist in the company's confidence and, it would seem, in some areas of its experience, as new product launches and new (to the company) distribution channels seem to be ineffectively utilized when real attempts are made, and they are often simply ignored or purposefully avoided outright. Filling knowledge gaps and more effectively utilizing available resources could be very advantageous.

This leads directly into one of the major opportunities Flare has: reaching a younger demographic through more careful channel strategy.

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Though the company has relatively strong sales, it does not effectively utilize many of the distribution channels that currently exist -- the Internet, drugstores, and more. Marketing on the Internet can be seen as a daunting prospect to unfamiliar businesses, but most of the same basic rules apply and this medium allows a company to reach a much younger demographic -- just the demographic that Flare is hoping to attract (Armstrong & Kotler, 2010). Though sales of fragrances have recently declined worldwide according to recent research, numbers have remained more consistently strong in the United States, and the disruption of companies with greater international spread could also be a boon for Flare (Bombourg, 2012). Sales are also expected to climb as part of a longer-term trend of urbanization and increased emphasis on grooming and personal appearance continues to occur in cultures throughout the developed world, and this means that if Flare can gain a stronger foothold now it will be that much more able to take advantage of future market growth (GIA, 2011). At the same time, prestige brands experienced a sharp drop-off during 2008, and 2009 does not offer any clear signs of relief, making the entrance of a new product and especially of a new higher-tiered product especially risky at this time (Burr, 2009). All of this, of course, greatly impacts the chosen market strategy.

Marketing Alternatives

There are many distinct alternatives from which Flare's executive and management team could choose in taking the company forward and implementing a new marketing strategy. Differences in these alternative strategies range from the extreme to the more subtle, and there is not space enough here to exhaustively list and discuss all potential strategies. A consideration of three broad strategy choices delivers a clear understanding of the potentials the company faces and the various challenges it will meet with in the future.

First, the company could move forward with the Savvy fragrance aimed at younger women and with a higher price tag, hoping to boost market share and per-unit profits and thus meet the targeted sales growth amounts. Significant money would need to be spent on marketing in order to achieve the sales level that the company is seeking, however keeping the Savvy fragrance under the Loveliest umbrella brand would reduce the marketing costs and give the campaign (and the perfume) an initial edge in terms of efficacy/sales. True efficacy in such a product release, with the demographic focus that the company has expressed a desire in, would require a greater flexibility and comprehensiveness in terms of channel strategy, especially with a greater Internet presence in terms of product availability and marketing, without which younger consumers simply will not be reached. The Loveliest brand could also be detrimental to achieving sales with a younger demographic due specifically to its longevity and lack of "newness."

For this reason and others, a second alternative would be for the company to move ahead with the Savvy release as Flare's first new brand outside the Loveliest umbrella. This would avoid potential brand dilution, enable the company to recreate a younger and fresher image for the brand as a whole, and potentially create a separate department for this fragrance line that would enable a faster transition out of current modes of doing business and towards activities and marketing strategies that are more flexible and responsive to current trends and demands. Marketing costs will substantially increase without the Loveliest name if the same sales level is desired, however, and a the opportunities of a new brand come with all of the problems of a new brand -- problems the company hasn't dealt with in decades, and that its current executives and officers do not seem fully equipped to handle. Both of these options also have the problem of being yet one more new perfume in an overcrowded sea of competitors.

A third option avoids this major problem -- all of the prblems associated with a new brand, in fact -- by avoiding the release of the new brand itself. Instead of moving forward with Savvy, the company could focus its efforts, including and especially its marketing efforts, in the creation of more effectively utilized marketing and distribution channels and campaigns intended to promote current brands towards younger consumers. The promising performance amongst the younger demographic of Nature in particular suggests that more effective channel strategies and marketing efforts could quickly lead to….....

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