FLARE FRAGRANCES

Submitted By:
Jyotika
Kundu
Akrate
Sharma
CONTENTS
Executive Summary

Protagonist

Product Lines

Flare Background

U.S. Womens Fragrance Market

Arlmonts review of fragrance industry

Sales and pricing

Advertising, promotion and Marketing Communications

SWOT Analysis

3 Strategies

Recommendation

Reference
EXECUTIVE SUMMARY
This case is about fragrance (perfume) brand whose
sales have declined in 2008.

Back in 2007, sales rose to12% but at the end of

2008 sales came out to be only 2%.

So in this case several strategies have been

introduced to improve the sales in 2009.

The idea should deliver at least $ 7.5 million

incremental revenues in 2009.
PROTAGONIST
CEO Joely Patterson

Arlmont

Marketing Director- Bill Charters

PRODUCT LINES
Loveliest

Awash

Summit Appeals to more mature, successful women

Essential

Swept Away

Natural Appeals to a younger demographic

Mixed Prepacks

Savvy (Yet to come)

FLARE BACKGROUND
From its origin in 1955 as a small manufacturer of
womens perfume.

Flare has grown into the number 4 player in the U.S.

womens fragrances market.

Flare products generated 9.5% of that total, exceeding

only by

1. Depuis

2. Suzanne Water

3. Aromatique
CONT.
The brand Loveliest had been introduced in 1975
and was companys sole focus for some time.

Starting in 1996 with the launch of Awash, Flare

began introducing new brands every two three
years, each with loveliest name on its label.

By 2007, approx. 93% of Flares sales came out from

the six line of fragrances and the remaining 7% of
sales came from scented products based on these
individual fragrances like soaps and shower gels etc.
CONT.
For decades Flare had sold its brand through premium
and mid-tier department stores and remained an
established presence there.

In the late 1970s, Flare moved into privately owned

pharmacies and in the late 1980s it entered into the
department stores like Target, Wal-Mart, Kohls where it
became a prominent player.

Loveliest was the classic perfume which has strong

appeal among women over age 35.

By introducing Natural, it is seeking younger

U.S. WOMENS FRAGRANCE
MARKET
Besides the fact that Loveliest is the best selling
lines of women fragrances.

But Ailment study highlighted gaps where our sales

dont mirror the overall market

1. Prestige Department Stores

2. Drugstore Chains

3. Other channels including the internet

 DESCRIPTION
TYPICAL PRICE
EAU DE PARFUM AND EXAMPLE
POINTS
BRANDS
PREMIUM
BRANDS(PRESTI
Often designer
GE
based $ 70 and above for
DEPARTMENTS, brands have 1.1 1oz. spray bottle
GIFT STORES) to 2.8 % share
Ultimately sold
MID-TIER in Mass and $ 30- $ 60 for 1.7
BRANDS(ORIGIN dep. stores oz bottle spray
ATION Prestige image Loveliest $ 32
DEPARTMENT with leading Flares other
STORES)) brands 3-3.5 % brands $ 30-$ 36
share.
MASS Affordable
BRANDS(FOOD
DRUG AND
Lower end
offerings by the
MASS
ARLMONTS REVIEW OF
FRAGRANCE INDUSTRY
Product Selection

Consumers under pressure laid down from luxury brands to

mass alternatives.

Diminishing exclusivity: mid-tier and premium brands

increasingly available in mass channels.

Substitution of lower priced scented products with the skin care

creams and products from which consumers expect results.

Constant hype, through recently a waning trend, of celebrity

and designer fragrance introductions.
CONT.
Channel Activity

Department store discounting, store closings and incorporation

of pop-prestige boutiques.

Mass market evolution as consumer traffic grows in these

stores and they overhaul beauty departments by stocking
trendier fragrances and employing beauty consultants.

Overall market trends show slight decline in sales through high-

end department stores and sales of mass brands through the
mass channel, countered by small percent increases in sales of
prestige brands through mass and relatively stable sales
through mid-tier department stores.
SALES AND PRICING
Recently, Patterson had held Flares prices steady.

By maintaining price-competitiveness and a prestige

image, this strategy reflected the importance of
capturing new consumers entering the market who
often become loyal customers.

Department stores hired dedicated beauty advisors who

were trained and educated by Flare to suggest the
customers.

Fragrance industry is seasonal and mostly concentrated

around Mothers Day and winter holidays when both
CONT.
Retailers garnered 40 % from the sales of Flare
products.

Flare paid its account executives an industry average

3% commission on factory sales.

Flare drove trade interest through promotions such

as

1. Gift with purchase

2. Purchase with purchase

ADVERTISING, PROMOTION
AND MARKETING
COMMUNICATIONS
In the U.S. market in 2008 approximately 74% of adult women and
75% of teenage girls used fragrance products.

With this, companies were trying to use different strategies like in-
store demonstrations to interactive websites with interactive and
emphasising Loveliest.

Flares promotions typically involved pre packs featuring variety of

products shipped in a package of individual items.

Under the Loveliest brand, Flare sponsored fashion events, movie

industry gatherings, educational programs and television shows.

Flare also place free samples in department stores and testers at

the point of purchase.
CONT.
Flares advertising focussed on fashion and lifestyle,
with the themes of imagination and fantasy.

Flare dedicated the bulk of its advertising budget to

Loveliest, as its umbrella brand.

With Loveliest name on all packagings, Flares other

products benefitted from a halo effect.
 FLARES OTHER BRANDS
LOVELIEST UNDER LOVELIEST
UMBRELLA
RECEIVES 70-80% OF
Receives 20-30% of Flares
FLARE ANNUAL
ADVERTISING BUDGET
annual advertising budget
TELEVISION AND PRINT
Promotion focus
FOCUS
YOU ARE THE LOVE IN Expected halo effect from
LOVELIEST THEMES Loveliest and advertising.
Strongest with those aged
STRONGEST WITH THOSE 25-34
AGED 34-65 often become loyal to a
LONG TIME USERS new scent
TEND TO HAVE willing to try new scents
SIGNATURE SCENT
REGULAR PURCHASERS Vary scent acc. to activity,
OF GIFTS (MEN FOR outfit
Regular purchasers of gifts
SWOT ANALYSIS
Opportuniti Threats
Strengths Weaknesse es Major
No. 4 s Market for competit
player in Confined women is or
U.S. to U.S. huge launchin
market only Drugstore g a new
Dominat Drugstor markets perfume
es sales e sales are huge Dulcet
of team but Flare
fragranc lack has only
es experien 5.7% and
through ce and 2.6%.
mass manage
channels ment
3 STRATEGIES
Evaluation of each option:

Plan 1: Launching Savvy

Plan 2: Deepening Flares penetration into drag store

channel

Plan 3: Launching a new premium brand targeting at

high-end market and thus shore up and even
penetrate department stores/Prestige channel.
CONT.
Flares shares of drug store channel and department store channel
are 2.6% and 5.7%, with the each market size of $367 million and
$930 million. To meet the goal of $7.5 million incremental revenue,
the shares of drug store channel and department store channel
should increase by 2% and 0.8%, respectively, after the penetration.

Savvy s target market and its price are not so much different from
those of other brands under the Loveliest. Savvy is not a proper to
be a breaking-out brand and is less likely to shore up department
store market.

Moreover, since Loveliest already has five brands with it, the adding
of another will not dilute so heavily. Therefore,

Savvy should be advertised with Loveliest labelled on it and the

media plan should be$2,2500,00.
OUR RECOMMENDATION
According to the our analysis, the final
recommendation is Project 3: introducing a new
breaking out premium brand targeting at high-end
market, thus Flare thus can shore up and even
penetrate department stores/Prestige channel. The
new brands target consumers are women aged from
34 to 65, who have the highest likelihood to buy
perfume and to be loyal to a favourite brand and
scent.

In addition, using its possible halo effect due to

umbrella brand, Flare can gain more profit in long-
term profits.
REFERENCE
John A. Quelch, Lisa D. Donovan. Flare Fragrances
Company, Inc.: Analysing Growth Opportunities.
Harvard Business School,2010.print