Skin-Tique Corporation Case
Memorandum Date: February 26, 2010 Re: Introduction of new package for Skin-Tique’s Soft and Silky Shaving Gel The industry for women’s shaving creams and gels is small and new. The purchasing of women’s shaving products varies by season. The peak season is summer, while sales decline in the winter. Competition is strong, but Skin-Tique has a strong presence. The women’s wet shaving products industry, as a whole, is rapidly growing and increasing in technological advancement. The wet shaving products market was $400 million in 2002, with sales growth at 3 to 5 percent per year. Shaving creams and gels account for 23 percent of those annual sales. Skin-Tique is in the creams, lotions, and gels segment of women’s shaving products. Other top firms in this segment are S.C. Johnson, Gillette, White Labs, and Inverness Corp. With $3.7 million in Soft and Silky Shaving Gel sales in 2002, Skin-Tique Corp. held 30 percent of the shaving cream and gel market. Regardless of this position in the market, management is concerned with evolving packaging in the industry. The dominant packaging has become the aerosol container. _The Soft and Silky Shaving Gel Brand:_ Skin-Tique specializes in health and beauty products and introduced shaving gel as an extension. They have positioned it as a high quality shaving gel and differentiated the product from men’s products, in order to offer a unique product for women. Soft and Silky Shaving Gel is premium priced, which is widely accepted due to its positioning as a high quality shaving product. The Packaging and Test Market Decision: The recommendation to change the packaging was based on four developments. The developments are: a plateau in unit sales volume for Soft and Silky Shaving Gel, the growth has strained manufacturing capacity, there are currently no expansions plans for manufacturing expansion, and the aerosol container has become the dominant design in the market. With the introduction of a new package,