In the Ms-Tique company case, the product Soft & Silky is in a critical situation. The manager, Masters, does not have sufficient information on the market, but at the same time, she does not have sufficient choice but to act immediately, even without having such information.
The market for shaving creams and gels is not a very pleasant market. One miss and you are out of the market. Aware of this, Masters have little choice, and to make things worse for her, only one day after her assignment, she has to make the decision immediately. The information at hand may not be very helpful, but it gives a lot of understanding of the situation.
For Masters, the matter is not whether or not to launch the aerosol package. This matter is already over for two reasons. First of all, the declining growth rate of the tube package cannot be tolerated for another year, and following the investment that the company has made in the marketing research, it will be a waste of resources not to make use of the results. After all, a new marketing research will be needed in the following year, and the problem will again be repeated. Because the research results have confirmed the idea of launching the aerosol package, although not completely and clearly, the decision has to be made on this basis, despite the risks that may be involved.
It is very ironical that we can only conduct a market research at the time when we are supposed to conduct the launching of the product. Both cannot go together, and neither can Masters wait for the results of the testing to come up, because by then, she can watch her market share getting lost at the end of the season.
But Masters will not be happy with this conclusion alone because she still has to face another important challenge: Which package will have to be launched, the 10-ounce or the 5 ½-ounce aerosol?
Anyone in Masters’ place will have to make the decision on the following criteria:
Which package is going to make more market share?
Which package is going to make more profits?
Which package is going to cause less harm to our products (cannibalization)?
Which package is going to be more competitive in the market in the long run?
We have to answer these questions carefully to make a decision.
From the results and forecasts that we have, we have the following results:
The 10-ounce aerosol will cause a damage of 20% whereas the 5 ½ aerosol package will cause a damage of 25% in the share of the tube package. This figures represent the number of tube package users who will stop using it and instead use the aerosol package.
Secondly, the 5 ½ aerosol package seems to have more promising prospects with respect to $ sales, because as the forecasts show these range between $778,009.89 to $905,282.63. In contrast, the 10-aerosol can only produce a $ value of $540,839.47 to $562,099.47.
Thirdly, with respect to competitiveness on the long run, the 10-aerosol has more power and leverage because it is preferred by more non-customers. Besides, non-customers will find it more attractive since it is relatively cheaper than the 5 ½-aerosol package, and we should not forget that one of the major concerns of non-customers has so far been the price factor. Accordingly, the 10-aerosol is more likely to survive in the markets on the long run.
So what should Masters do? Choose the more profitable or the more marketable? The more competitive or the one that achieves the better results in the short run or both or neither?
The problem is not in the options. It is in the needs of the company. What does Masters need? Obviously, she wants the market share to grow and at the same time, she is worried about profitability and sales volume.
To follow a sound marketing policy, she should launch the 10-ounce aerosol package for the following reasons:
It will sell more in the future than the 5 ½ ounce aerosol package.
It will result in less losses for the tube package that is already in the market and this will help the company achieve a healthy growth.
It will compete more in the market and will attract more non-customers due to its relatively lower price and convenience factor.
In addition to this, Masters should adopt more marketing and emphasis on the moisturizer characteristic of the product and make sure that the shelving is aggressive to support the image and position of the product in the market.