CleanSpritz Case Solution
1. Do you believe the refill package encourages switching by non-CleanSpritz users and/or new trial by non-users of household surface cleaner, or merely cannibalizes CleanSpritz’s existing consumer base. Defend your position.
The refill options such as option 2 A, that are refill and the option 2 B that is the refill dis solvable packet pouch (including the 4:1 product line concentrate in recyclable pouch for 32 ozone of the bottle refill).
It is analyzed that the refill will provide the encouragement to its existing clients due to its best packaging and marketing that provides the positive environmental messages and heavy investment is made in promotions that would result in increase in sales more than 5 times. Along with this, its packaging options provide the strong platform for promotion that may also increase the new customers as well.
Along with this, the option 2 A, cannibalizes its existing product sales that is diluted spray by 55% and the company is not meeting up to fulfill the demand due to contractors a it takes time from packaging to supply by delivering high quality product.
2. Evaluate Beaton’s alternatives. What are the risks and rewards associated with each?
The company’s sales are decreasing and it is deciding two options such as relaunch the new product; by using two alternatives such as: add a new product with the strong recyclable concentrated pouch or adding a strong concentration in dis solvable pack or marinating the current situation without any change and wait for upcoming environmental change.(Par Asmae, 2015)
Option 1: he existing 3:1 with promotion of concentrated that provides benefits to environment:
The main advantage is that its packaging cost is less as compared to dilated spray by 0.15 that provides the company competitive advantage in producing cost saving product. If this product is introduced than the company would be at the number four in its market player.
This product would may lead to increase in the cannibalization by 55%, it results in low operating margin if 6% is used on add spending. If Claire is using the option of 5M units to development of 3:1 concentration would increase the sales but the cannibalization impact will decrease the combined contribution margin.
Option 2: add the product line of 4:1with different packaging of dissolvable pack:
It results in decreased in packaging cost and reduced retail cost that will increase the chance of margin by 9%. It increases the advertising expense due to positive environment message that would be increased by 6.5%, which may result in low income in order to cover the cost.
The cannibalization impact seems to be higher than the option one as it results in 60%.that may lead to reduce the sales of main product as well as core product (diluted spray). The problem arises with the government regulation in both the options in terms of labeling that provides short term media message that may cause future disturbance.
Therefore, it is recommended that the company should use the option 2 that can be produced through 99% bio-degradable that makes the unique and competitive product. It requires the clear advertising that provide the message of concentration and save the money and environment by reusing the 32, oz. bottle. The consumers would be attracting with this innovative and new experience of cleaning items.
3. Given your decision, what marketing mix, do you recommend for the CleanSpritz product line? What are the economics of your recommendations?
The marketing mix is very crucial for the company in order to satisfy the marketing needs, which consists of product, price, place, and promotion. (Cole Ehmke, 2016)
Product:The product concentrated in recyclable packet for refilling, it is an innovative product with variety of development and technology change that creates the competitive advantage and helps in increasing the market share……………………
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