Jade Shampoo Case Solution
Executive Summary of the case
In the shampoo market; Jade Shampoo is one of the widely used products, which has gained massive popularity over the period. Jade Shampoo was known as the leading product all over the industry,capturing a 5 percent market share which was expected to grow at the same steady rate.However, the market shampoo is highly competitive, fragmented, and volatile. Moreover, the biannual usage and attitude survey results revealed that the customers purchase shampoo from brands that have-introduced flip-top dispenser caps to replace their old fashioned twist-off caps. The factors affecting the purchase decision of customers included ease & convenience in terms of the process of squeezing the shampoo from the bottle&ease of washing the bottle. Thus, Debbie Kennedy realized the fact that following the trend was of high importance to preserve the company’s primary target market, i.e. 40 adults over the age of 40 and children. Also, the change in the shape of the bottle cap would lead towards the yield of various benefits to the customers, such as it would lower the chances of leakages, falling of the shampoo & making the use of shampoo more easy and convenient for the customers. If the company intends to pursue the project it would allow the company to generate a profit of 3,652,920,000 by selling 49,316,000 units per year, and if the company ejects the project;it would be able to generate profits of 3,606,930,000 per year. Hence, the company is recommended to change the shape of the bottle cap and switch to a new dispenser bottle cap to generate an enormous amount of profit in the future by selling shampoo with new dispenser bottle caps. It would appeal to a wider base of customers and would help the company in addressing the problem of declining sales. Furthermore, the company would be able to lead the market and beat the head-to-head competition.
Decision Problem – in the form of a statement
The assistant product manager of Jade Shampoo – Debbie Kennedy is concerned about changing the Jade Bottle’s Cap. From the start of the 18th-month projection; she was-strongly convinced that the replacement of the traditional twist-off cap of Jade bottle with a more convenient flip-top dispenser cap would help the company in retaining the existing as well as attracting the new customers. The test results have confirmed her position in the organization, i.e. sales in the test market exceeded the level of breakeven. Despite the increased benefits of changing the bottle cap; the company’s management is reluctant because it would increase the cost which is associated with the project.
Analysis of the Industry and the Company
The shampoo market is recognized as one of the fragmented, competitive, and volatile in the health & beauty aids business. The retails sales of 1.8 billion dollars made the health & beauty aids business the largest after analgesics. Shampoo is one of the profitable products with high margins and it uses simple technology. The shampoo is a fashion-driven product and the demand for shampoo is continuously increasing among-adults and children. The firms operating in the health & beauty aids business category have accelerated-their efforts to add different scents and addictive to different consumers to increase the sales of the product and follow the trends in the shampoo market, such as: making shampoo bottle attractive and appealing to grasp the customer attention and to improve the sales. Moreover, the competitors are in the race of stealing the share of other players by following the major trends in the shampoo industry, such as: increasing the celebrity endorsement, rise in demand for organic and natural products, availability of small travel-size packs, and ease of usage………………..
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