Marketing Case Study for Glitz Essay

1. What factors arrogate the determine decisions for a increase some(prenominal)(prenominal) as Glitzz? Analyze these factors and comment on the range of harms that give the bounce be set.The remunerate turn stunnedlay must generate plentiful gross revenue dollars to invent for the be of developing, producing, distri scarcelying and foodstuffplaceing the crop as healthy as earn a profit for the bon ton. thither be various factors that bear on the legal injury decision much(prenominal) as physical objects, requisites and commercialize forces. We pull up stakes examine these factors in circumstance be paltry.1.1 Company FactorsBefore embarking on determine decisions, it is necessary to understand companys objectives. Lee younger and Albert are flavour to fulfill long-term profit making and sustain major power in the trade. Higher splendour would consequently be effrontery to obtaining increased market share and gross revenue over immediate prof it making. Glitzz deficiencys to focus on gaining foothold in the market, as it would be a invigorated reaping lining relatively found competing notices and results. As such, Glitzz should non be equipment casualtyd at premiums but kind of formulate to support trials, consumer acceptance and submit business. If successful, high profits should follow.1.2 Consumer FactorsConsumer factors such as take up for the specific crossway class, intersection or brand, footing and availability of resembling produce, wrong sensitivity as intimately as perceptions of value can strickle determine decisions and help Lee junior and Albert gauge feasibility and acceptability of termss.The carry for the crossing is extremely important for cost decisions. The greater the demand, the higher(prenominal)(prenominal) can the yield be priced. Demand by consumers is modify by four factors. (1) Consumer Tastes (2) monetary value and accessibility of Substitutes (3) Consumer Incom e and (4) Price of product.Glitzz can be class as unsought reasoneds products that potential consumers do non sanely want or know they can buy. These products are not searched for and do not bring in demand in consumers signly. Consumers of such product yet buy when they perceive the necessity for it. As such, creation of cognisance and education rough product benefits becomes crucial for retailers and creators. This translate to the need for increased budgeting assigned to advertise strategies such as ain selling, relatively obstreperous advertising and benefit consequences, increasing opinionated overhead lives for market and statistical distribution.Glitzz would be a complementary product, with its demand clean predicated on the prices and sales of relevant product classes such as jewelry, diamonds and watches. There is banish cross springyity between Glitzz and the to a higher place mentioned product class, i.e. the decrease in prices of jewelry, diamonds an d watches would puzzle an increase in demand for clean agents such as Glitzz. In quantify of recession, luxury goods such as the preceding(prenominal) whitethorn not be highly sought after, affecting Glitzzs ability to sell due to its nature as a derived product. determine strategies should take into circumstance market trends and demands of these product classes and be correct accordingly.Consumers perception of values and benefits provided by a product go out affect the measuring of money they are imparting to liquidate in exchange for the product and their price springlikeity. Assessing value involves the judgment by a consumer of the worth and desirability of a particular product relative to its substitutes. At the add together take aim of the product, Glitzz is a jewelry cleaner, delivering to consumers the probability to re bare-ass and bring back the scintillation in their precious stones, jewelry and watches.The open benefits pleaded come from the product s non-corrosive, non-abrasive and wanton on skin nature. Premium lifelike ingredients habitd in the making of the product are withal marketed as a key attribute. The attribution values of Glitzz result translate into a definitive price that consumers deem worthy for the product. Lee Jr. and Albert capture already taken travel to survey consumer market and test product responses. The NUS student inquiryers found that few consumers are willing to pay more(prenominal) than SGD20 for the product.Price and availability of connatural products are as well strong molding forces on price for new entry products such as Glitzz. Technological advances and progressively discerning consumers meant heightened awareness about substitute products and prices. The ability to comparison standardized products and weigh out the benefits against represent, affects consumers decision-making and willingness to pay for a product. The way to mitigate such comparisons is to possess strong distin guishing characteristics from its competitors. Glitzz, however, calculate to be substitutable by many alternatives in the market. An in-depth competitor analysis is as follow. shining Restorer and GlitzzBrilliant Restorer and Glitzz go forth to be oblation analogous product benefits and have kindred dispensing system and packaging. It is also under a king-sizedly realised distributor brand, Gordon Max. It is distributed by means of channels that Glitzz is thought process of using, taking up counters at large departmental stores such as Tangs. It appears to be Glitzzs main competitor, targeting similar markets, offering similar benefits and trade in similar channels.Connoisseur and GlitzzConnoisseur practices product differentiation, offering a range of specialised alter agents for different kinds of metals. It may lose out on the convenience associated with the all-purpose Glitzz, but can market its specialized uses as a plus consign. The company has strong advertisi ng roots, marketing its products in mainstream newspapers and online. Glitzz may face threats stemming from Connoisseurs strong advertising efforts.Powervescent and GlitzzPowervescent is a tablet-form cleaning product, offering similar benefits at very low price. It may be less convenient to use when compared to Glitzzs meat bottle design. Powervescent does not distribute in Singapore and is in process of setting up its e-store. speckle Powervescent may prove to be a competitor among price sensitive consumers in the future, its low prices may also be viewed as a reflection of its quality. As such, it may not be as big a contest to Glitzz as some others.Cleaning Machines and GlitzzThe second tiered competitors offer jewelry-cleaning machines with high technology performances such as the Connoisseur jewelry Bath ($49), Savco Jewelry Cleaner ($95) and OSIM uSonic ($108). It is priced much higher than cleaning solutions such as Glitzz but seem to promise better and more targeted r esults. The products may be marketed at affluent consumers or retailers to the highest degreely. It is not as close a substitute as portable, self-administered cleaning products such as Brilliant Restorer.Other solutions for waterlogged or tarnished jewelry include putting surface soap and likewisethpaste as well as free cleaning services provided by retailers as a value-add for purchases.The large repress of substitutes makes demand for such products very elastic i.e. consumers are price-sensitive and decrease in prices will lead to increase in demand for the product. Glitzz would have to pay extra heed to Brilliant Restorer and Connoisseurs as they are close substitutes and their prices will be censorious in the price decision. Glitzz is a normal good and is relatively price elastic as compared to necessity goods or luxury goods. As such, debaseing prices and keeping contain with competitors prices becomes the key to increasing consumer demand.1.3 Competitive FactorsPrici ng for Glitzz is constrained by the type of market in which it copes. Jewelry cleaning products compete in a monopolistic competition market structure. There are a number of competitors competing on both price and non-price factors. For example, Lockhart competes with its low prices in the sector patch OSIM offers high technology solution as the unique selling dit. Understanding the milieu in which they compete will leave alone a deeper insight into the range of delicious prices, extent of market differentiation and importance of advertising. In such an environment, Glitzz should allocate more budgets to advertising to distinguish itself from its competitors. This means a rise in be and subsequently, a necessary rise in pricing. Also, its prices should get hold of to not deviate besides much from the competing products prices.To be effective, pricing must work to cover the be and make profits. It is hence necessary to take into considerations the various addresss involve d in producing, packaging, marketing and distributing the product. The constitute of production for Glitzz in this chemise includes the SGD5000 re-packaging reference point slant and the direct production cost of Glitzz cleaning solution and fees associated with packaging it into 30ml pump bottles to achieve sales state. Overhead costs may also include distribution fees such as retailers cut in exchange for sales services and media fees to advertise the product.Keen research and delicate mediation of all the supra company, consumer and competitive factors will appropriate ratiocination of a feasible price that is most symbolic of the value Glitzz hold.I direct a price range of SGD13 to SGD17. The eventual(prenominal) upper limit as surveyed by NUS students is SGD20. The ultimate lower limit is turn outed with the unit variable costs and other production costs in mind, which will be SGD5 at the initial head. The barracked price ranging between SGD13 to SGD17 takes into con sideration competitors prices, companys objectives and consumers buying responses. The suggested price should work to stinger competitors prices and consume trials while not deviating too much from the market rate. This way, Glitzz can roost profitable, competitive and achieve a breakeven at heart a short period of time.2. What price would you recommend for Glitzz? Why?I would recommend Glitzz be sold at SGD14. In the monopolistic competition market structure, Glitzz cannot simply establish its price as an self-reliant company. It has to be subjected to the market demand and append forces, causing prices to be relatively similar to its close competitors.To use a demand-oriented pricing approach, Glitzz should withdraw in keenness pricing. By setting a relatively lower price to its competitors, Glitzz can ensure disport and high levels of appeal during the launch stage in the market. Whether or not penetration market works is predicated on several(prenominal) factors. Firs tly, consumer base should be relatively price sensitive. This aspect is fulfilled in the case of Glitzz. With the existence of many substitute products in the market, there is high demand elasticity.Consumers with no immediate preferences or prior experiences may make purchase decisions based on prices. By setting the price at SGD14, Glitzz can subtly cut its competitors and establish its value. Secondly, as a new product in its introductory stage, Glitzz has to work on overcoming its weakness in terms of its new entry and unknown brand identity. Glitzzs main objectives should then be to stimulate trials and slowly accumulate market share. sagacity pricing helps to encourage first purchases and can work hand-in-hand with quality control and good brand management to manakin market share. Increased volume of sales will help maximize profits for Glitzz as unit production and marketing costs falls.That being said, Glitzz products must not be priced too low and deviate too much from si milar competitors. Assuming Glitzz in conclusion decides to market and distribute its product through large departmental stores like Robinsons, its breakeven price for the initial batch of 20,000 where total cost = profit margin will be at SGD10.50. We have to price higher than SGD10.50 to break even and lower than SGD14 to SGD17 to undercut the competition. It is not feasible for Glitzz to price its product closer to the end of SGD10.50. Firstly, it may encourage a price war where competitors engage in successive price-cutting to increase or maintain market share. This can lone(prenominal) be detrimental to the entire patience in the long run. Secondly, Glitzz as a new company needs to have buffer in profits to post in further marketing or advertising efforts, cope with emergency working(a) issues or save up for brand expansion.Also, the skimming pricing method would not work for Glitzz as its product is too homogenous and not differentiated generous to justify premium pricin g.In addition, the pricing of Glitzz cleaning solution at the higher end of the SGD10.50 to SGD14 range ensures Glitzz have future opportunities and space to conduct furtheranceal initiatives such as discounts and still be profitable. Consumers may not take kindly to products increasingly their prices after a successful intitial promotion period where low prices were offered. This may affect their perceived image of the brand and be detrimental to future sales.In essence, Glitzz product pricing must be low enough to undercut competitors to generate kindle in consumers and high enough to allow profit maximization. While the penetration pricing strategy can help to build volume, managers must keep close star of the costs and monitor its effects on the market.3. What strategy would you propose for Glitzz? What costs and expenses would be involved? Calculate the break-even point.Glitzz at its point of entrance would be at the mental institution stage of its product life cycle. Here, the marketing objective should be to gain awareness. This objective is further amplified by the nature of Glitzz as an unsought good. There is high level of need for promotional and advertising efforts to inform and educate the public about the straw man and benefits of Glitzz. According to past track records, Glitzz did well in promoting with in-store counters and consumer exhibitions.This has roots in the personal selling and benefits-demonstration means of promotion. I would recommend Glitzz to continue with such channels of marketing and to distribute and promote their products with departmental stores such as Robinsons. As a new product, this would allow consumers to experience the benefits of Glitzz first-hand at well-established shop places, triggering first purchases and trials.To give a concrete example, on top of in-store distribution, Glitzz could hold demonstration booths at shopping mall forums to interpose its products. Free samples could be given out to generate b rand awareness and trials.cost involved and Assumptions made* Production cost of one bottle of Glitzz at SGD5 (Unit inconsistent Cost) * Branding Consultation Fee at SGD5000 (Fixed Cost)* Promotional Event at virtually SGD25000 (Fixed Cost) Amount from assuming a 3 days (6 hrs/day) promotional event at a shopping mall be about SGD9000 in rentals, with an estimated 3000 samples to be given out and an employment of 3 sales assistants at SGD100 per day. The event will total up to about SGD$24900 * Distribution bank for Retailers at its maximum of 50% shekels Margin * One bottle of Glitzz is priced at SGD14Hence given the list price of SGD14, the newly incurred marketing cost coupled with the sunk cost of consultation fee will result in the breakeven point being at 15 000 bottles of Glitzz, a highly feasible goal. I reckon that promotions and demonstrations should be used at the initial stage of the product launch to create awareness and inform consumers of its existence. Subseque ntly, advertising in other forms should follow to distinguish Glitzz from its competitors and achieve brand recognition and preference. Glitzz would have to measure costs and prices to determine next marketing move then.