'Nundies Sase Study Essay\r'

'1. How would you characterize the situation facing modernistic existents with respect to Nundies in January 2008?\r\nNundies essence no undies which ar disposable slenderise step-in that made for woman who like imperceptible panty marchess and wish to smash thin line drive instead of habiliment conventional under wear. Nundies divvy up its returnion by dint of and by dint of different convey but in the main through women’s intensity shops which counted 242 in 2007. It also distributes its increases online at its official website as soundly as many some oppositewise p bentage websites. The main purpose of Nundies is to ecstasy women who dislike underwear a at ease and e precise(prenominal)ayerable product. The turgidgest service for Nundies is that there atomic design 18 plainly substitute products available in the grocery storeplace, the product it offers has no direct competitors.\r\n this instant the primary task Nundies facing is that Nundies’s predictations be failed due to the low reposition re get rate. Apart from the initial purchase, tho approximately 6% memorys placed extra orders for extra units and precisely 10% of reorders argon include in the primitive units s overage. In addition, although the online activity is considered to be positive, it is non apply frequently enough in equipment casualty of reorder. The bar of panties included in a single package is a nonher job and will be discussed in the following question.\r\n some new(prenominal) problems includes the gross gross gross revenue somebody in come ins do non promote Nundies enough. They ring Nundies can sell themselves beca office they ar already displaying on the shelves. So gross gross revenue soulfulness do not talk round the product or recommend Nundies to their guests. Actually, customers with come to to Nundies instructm to be embarrassed by returning their raise in stores. and then the passive att itude of gross revenue person has a direct shock absorber on the gross revenue of Nundies’ products. More over, Nundies’s products displays together with former(a) trade in in shops means its products shuffle in with other goods, customer would mayhap miss Nundies’s products and this solving in a big loss in sales. As a result, if store staff office do not suggest or promote Nundies’s products and Nundies atomic number 18 not properly displayed in stores, Nundies will sheath a decrease in sales as wellhead as take the reordering from other companies. This will contact Nundies’s amplifications and sales.\r\nAdvanced Materials Inc is a manufacturing company with giant industrial customer base. It changed its strategy to focus on promoting its give product and transforming the capabilities of its product development to be customer based. The main butt joint food markets be medical and consumer market. Core capability of AMI is to ass ume single wasting disease medical graze products. whence the dismiss of Nundies was very modernistic for AMI.\r\n2. How would you describe the introductory program for Nundies, including the market nates, value pro military strength, and all(prenominal) marketing concoction element? Advanced Materials Inc.’s wise product Nundies is very different from the quondam(prenominal) products manufactured by Advanced Material Inc. It represents the company’s transition to consumer and trademarked medical products from foam fabricator manufacturing business. The manufacturing be to produce a single liner include material and labor monetary value which is estimated to be $0.6 per unit. Three colors, buff, black and diverse would be produced in a package. And 5 count p rifleic pillow packages would be created to package the liners and each comprise $0.45 to produce. Nundies go forth sell stores 5-count package with the sell toll of $7 and interchange harm to customers is $15.\r\nFurther much, for each 5-count packages s overage, Nundies offers 12% commission on the sell price to its cistrons. This agent’s certificate of indebtedness is to improver Nundies’s dissemination coverage amoung specialty stores for Nundies as well as women’s boutique stores. According to the marketing re essay of Nundies, 30.9 percent, which is the largest role in women’s underwear sales goes to women’s boutique and specialty shops. Department stores rank the stand by with the number of 30.7% and followed by 29.1% from mass merchandise and wareho drill club stores. Internet sellers and other sell outlets handbill for the smallest percentage which is 9.1%. ground on the survey re await from 1042 women of age(p) 18-49 years old, 84% of women have interest in eliminating panty lines products. Among them, 58% women move to eliminate panty lines by wearing no-seam panties.\r\nOnly 22% women wear no panties at all a s a solution for eliminating the panty lines. This means the volume customers pick out to wear something than nothing. 81% of women are interested in not underwear product that has the function to run comfort and hygiene benefits. 35% of women would wear this agreeable of product 3-5 quantify per calendar week which graded the highest followed by the collection of people who prefer notwithstanding to wear 1-2 times per week with the percentage of 29%. Among the people who would wear 3-5 times per week, age 30-35 ranked the highest which account for 39.8% time 41.7% of people age 18-24 depute that they would use this kind of product to a greater utter well-nighover 1-2 times per week.\r\nAbout the distribution bring, 64% respondent said that they prefer to purchase no panty line product from mass-merchandise stores such(prenominal) as order and Walmart, followed by midlevel division stores 49% and online purchase 41%. Women’s boutique ranked the last, tho 28% customers would shop this product in there. However, 53.1% of customers would render out this product online/ meshing if they knew it was for sale which ranked the highest among other transmit. in that respectfore, online sell have bigger emf and should not be neglected.\r\nIn order to underscore the product’s display innovation as well as wonder user impressions, other focus group research was conducted. Participants are women who have over $25000 annual household incomes and aged 21-60. Nundies’s display and packaging are promote by these participants. The repairs they expect are â€Å"cotemporary concepts” location in shops as well as lingerie stores. Participants express the idea that manifestation is helpful to attract customers. therefrom educated sales persons are necessary to increment product sales. The products are expected to be found and purchased in discussion section stores by all participants. Although online purchasing is seen as positive, it is infrequently for reorders.\r\nThese research studies have revealed that Nundies have a good market likely because large amount of women are interested in this kind of no panty-line and convenient product. Nundies hurt their expectations by offering vindications while allowing them to be free at the same time. So Nundies is a single-use, disposable panty that sticks to the inseam of women’s leggings, athletic wear, shorts and jeans. When women decide they presume’t want to wear underwear, Nundies helps bear a protection as well as being convenient at the same time.\r\nThe guide market for Nundies was 36.7 meg aged 15-60 women who has a household incomes over $25000 annually. And the interchange price was set to $15 which was considered to be high by participants. Although it was not a main problem for the coffin nail market, participants stable found 10 liners in a $15 package would be more than than than reasonable. However, Nundies set i ts price to $15 was based on competition from alternatives, manufacturing greet, retail margins and wampum goals of the company. Moreover, Nundies were more popular among high(prenominal)(prenominal) end specialty stores and upmarket plane section shops. Customers in these high end channels show better interest in Nundies. at that place for Nundies keep this interchange price to piss higher margin.\r\nNundies’s launch has limited media advert tolerate and no consumer-oriented advertisement was manifold in the promotion. Nundies was introduced by print advertising through retail trade magazines. as well, these retail trade emptor magazines such as Southern Vanity, Women’s Wear Daily and Fashion invest complimentary feature articles to help Nundies off ken. Additionally, for major celebrity events like Grammys, and 2007 honorary society awards, Nundies promoted its product by placing its sample package in the gift bags to give past to celebrities. It also took the advantage of New York and Las Vegas’s Lingerie Trad Show to exhibit its products. This brought Nundies with child(p) hazard as these showrooms were visited by buyers for women’s boutique and specialty stores, they decided which abetter _or_ abettor lines to carry.\r\n3. Looking again at Nundies behind market, value proposition, and each marketing miscellanea element, how has each contributed to Nundies execution to date?\r\nBy the end of 2007, there were 232 women’s boutique and specialty stores selling Nundies as well as 10 upmarket discussion section stores across 40 states. Nundies had shipped 11383 units of products to these channels, among them, 1777 units were accounted for reorders from 15 stores. 285 units were distributed for online purchase. To see from exhibit 6, it is clearly to see Nundies had the highest sales record with 4506 units arranged in the entropy after(prenominal) part which includes April, May and June. The thi rd quarter July, August and September ranked the import with 3552 units ordered. This record may because of the warmer weather. Women lead to wear dresses, shorts and skirts in spend season so they would choose lilting product that do not show any panty lines and provide them protection at the same time. Nundies’ orders declined dramatically after summer season with only 1656 units ordered in October November and December. The poor sales performance may because of the following reasons.\r\nFirst, Nundies’s put market is represented by15-60 year old women which accounts for 23% of total population. It is important to celebrate that the concentrate of this population is among the age 25 to 52 which accounts for 80.83% of this population. So Nundies should especially accent on this target group to be more efficient.\r\nSecondly, Nundies currently offers only 5 panties per package. Nundies have the prospect to plus the panties amount in single unit. Because with t he current selling price to customer set to $15 per unit, customer found that it would be more attractive if this price is for 10 per package.\r\nthirdly, with the distribution channel Nundies currently place its product, it is absent out the mass-merchandise stores such as Target and Walmart and midlevel part stores like JCPenney. Although women’s underwear are mainly sold through women’s boutique and specialty shops, it is not the best option for Nundies. From the survey result, the majority of participants (64%) expect to purchase Nundies in mass-merchandise stores. The second channel customers expect was midlevel surgical incision stores, 49%. However, Nundies’s products were mainly distributed to women’s boutique and specialty stores as well as upscale department stores and online which less(prenominal) customers would expect to purchase from. Nundies is missing out 59.8% of dickens large markets that would attract the most potential customers.\r\n Fourthly, Nundies launch has limited media advertising support and it lacks of consumer-oriented media advertising. Many people don’t know this product exist or have no idea what is utilise for. So in order to add-on sales, Nundies’s primary task is to ontogenesis grunge awareness by top media advertisings via commercial or print media.\r\nOther factors that affect Nundies performance include the impact of sales personnel. Sales staffs are ill-defined about how to merchandise Nundies. They think Nundies would sell itself by displaying it in stores. However, many Nundies displays come out to merge in with the rest of other merchandise items. Moreover, many customers feel ill at ease(p) to show interest in Nundies away from those customers who are already panty free. Therefore an informative brochure or advertisement is needed for departments and retail stores so sales personnel could mention and suggest Nundies to customers clearly. In addition, Nundies displa y should be suggested and checked by Nundies agents to ensure Nundies occupies a favorable position and does not get lost with other items.\r\n4. Mr Mortensen asked his team to revisit the market and sales potential for Nundies. How large is the market for a product like Nundies and Nundies sales given its current marketing program?\r\n36.7 zillion of women aged 15-60 is seen as Nundies target market. Among them, Nundies’s focus is largely emphasized on 25-54 year old customers with the targeted segment to be 29669 which account for 80% of the total target market. Most of them have annual income over $25000. According to the survey, more than 36% of women are interested in Nundies product’s idea (plus 41% maybe). They accounted for 13.2 million (plus 15 million) of the target market. 28% of women said they would test this product in stores (plus 49% maybe) and they accounted for 3.7 million (plus 6.5 million) of the market. About 1.07 million target customers would use Nundies 1-2 times a week, 1.3 million would use 3-5 times a week and only 0.7 million would use it 6 or more a week. Users for special make purpose ranked the last with only 0.63 million. As a result, Nundies’s total yearly usage reached 365million or 73 million units.\r\n5. What are the pros and cons of the suggestions identified for Nundies\r\n plan one: Continue development of the women’s boutique and specialty store channel. base on the performance in 2007, sales revenue was $34150, variable toll was $13887, and therefore margin was $20263. Net income equals margin subtr treat fixed write downs which was $14400. So Advanced Materials’s net income achieved $5863 in 2007. As a result if AMI continues its development in women’s boutique and specialty channels, it will result in profit and would possibly be enough for the firm to cover all the fixed expenses. Another scenario for the company is barricade even. The sales of Nundies have to achi eve at least 1618 packages or 8090 units with the total sales revenue of $24283.\r\nPros for this final cause includes it only represent $14400. It is inexpensive and saves courts. excessively it allows AMI to gain more profit on the basis of last year’s performance. Considering the worst case, AMI could still achieve break-even if it sells 8090 packages. This is not a big task so AMI should have no pressure to achieve this goal. Another advantage is that the exhibition and display in these channels would help increase the sales opportunity because Nundies maintain its awareness to customers. This also increases the brand recognition.\r\nCons for this proposal includes as AMI’s agent’s ability and responsibility only restrict to find stores that are impulsive to sell Nundies and collect orders. They are not responsible for any process involved in merchandising Nundies at stores. So many variable factors in retail stores have the potential to affect Nundies sales.\r\n proposition deuce: Pursue the upscale department store channel. There are two types of acquire practice in upscale department which are alter purchase and decentralised buying. In centralized buying, retail sales consultant contact the department store account directly and provide the account information about target market, market size and sales displays. There are three hundred stores in the drawing string of top quintette upscale centralized buying department stores and 350 in the cooking stove of top five upscale decentralized buying department stores. The commission for AMI’s agents on wholesale price would be 12%.\r\nThe cost is much higher compared to women’s boutique and specialty store channel which cost $20000 to $30000 for the sale presentations and retail consultant fees. Other costs such as warehouse, catalogue and pay line cost nigh $35000 to $55000. Based on 2007’s performance, 242 department stores sold 11383 units. Therefore for the 300 centralized buying department stores, an estimated number of 2800 packages can be sold, while for the 350 decentralized buying department stores, an estimated number of 16500 units can be sold.\r\nPros for this proposal are with the number of department stores, Nundies could be more exposed to the target market. Ads and displays would be presented to customers more clearly.\r\nCons includes this channel gets higher costs so the cost of goods sold per unit increase as well. Lower profit is another disadvantage for this channel.\r\n proposition three: wage midlevel department store accounts. Midlevel department store accounts include stores such as JCPenney with grand stores and Kohl’s with approximately 930 stores and they all use centralized buying strategy. Midlevel department stores are treated as house accounts as well and retail sales consultants are involved. This proposal requires Nundies with different package materials and graphics. Also 2 extra liners are included in every package with the selling price to be $8-$10. However the percentage for retail margin remains unaltered as for current department store accounts.\r\nPros are the market size is huge. There are over 1793 stores with centralized buying which is a big market for Nundies. Also the cost of goods sold is discredit per unit.\r\nCons includes this proposal requires to change brand name and packaging. Nundies’s awareness and recognition among customers was a problem all the time. If it changes brand name and packaging, it would overcloud customers. In addition, this proposal requires a increase in the amount of panties but the MSRP do not increase enough. Also the expense is between $25000 to $35000 which is relatively high, means the profit margin is lower. Another con is increase in fees. Nundies need to pay a estimated cost of $35000 to $55000 for department store chains.\r\nProposal four: a confederacy of channels\r\nPro for this channel is that products can be produced and delivered documented and in the right quantity. The combination of channel consist both 300 upscale centralized stores and 1793 midscale centralized stores which means this helps increase advertising and the distribution refinement would reach more customers.\r\nCons: However the higher fees and costs are the major problem. It would cost AMI vast amount of money.\r\nProposal five: style magazine advertising\r\nPros: The extent of earshot for fashion magazine is very wide. 56% of 13 year old above women prefer to purchase product that is recommended by fashion magazines. And the target market for fashion magazines are the same target market for Nundies. So Nundies could take this opportunity to promote its product more efficiently.\r\nCons: The cost is too high to place advertisement on fashion magazines. It costs $115000 and $200000 for Cosmo young woman and Cosmopolitan respectively. So Nundies margin would be very low.\r\nProposal six: metropolitan-area adv ertising\r\nPros: the cost is lower than advertising on magazine. The advertising period is longer. It targets people at large which would attract more potential buyers instead of end users. Also the advertisement is near stores where Nundies are available. It could boost sales in those areas.\r\nCons: it does not focus on its target customers would possibly lead to advertising inefficiency. Also less people seek fashion inspiration from newspapers so newspaper may not be a good media for Nundies.\r\nProposal seven: search engine marketing\r\nPros: when people search relative word to intimate apparel, Nundies will show with a link to its website. This brings Nundies more opportunities as people all around the world would get to know Nundies instead of only where Nundies sells.\r\nCons: reorder rate is less online. And the cost per month is too high. With the selling price and cost of goods sold of Nundies, if the market demand is low, the margin will be lower.\r\n6. What are the li kely sales and profit impact of these proposals?\r\nFor women’s boutique and specialty stores, cost of goods sold per unit is $3.45, with wholesale price of $7. The continual sales cost is $14400 plus 12% commission. And for the worst scenario, the break-even send is 5313 packages which are 26565 liners produced. Therefore the profit at full capacity equals $39800. The second is upscale department stores, cost of goods sold and wholesale price remains the same as boutique costs which are $3.45 and $7 respectively.\r\nUpscale department stores have extra upfront costs which are $195000- $305000. It does not include continual sales cost. For the break-even case, 70422 packages or 352110 liners are produced. Therefore the profit is negative, $179000. Third is midscale department store. The cost of goods sold is lower, $3.26 with lower wholesales price which is $4.65. The upfront costs are $225000-$340000 and no continual sales cost as well. The break-even scenario requires 205 036 packages or 1435252 liners to produce. As a result, the profit comes to negative $265143.\r\n7. What is you recommended course of action? Why?\r\nAs a shoemakers last to the above analysis, boutique stores are the most profitable distribution channels for AMI. Because the entryway cost into this channel is the cheapest. The margins are higher than other proposals. Also, production limits are more compatible in this channel. Furthermore, it is the only feasible proposal that do not require huge expansion. As 13 times the packages sales are required to break-even for upscale department stores and 54 times the Nundies sales are required to break- even for midrange department stores. With limited capital amount, these two proposal seem to be less feasible.\r\nFor the winner of Nundies, AMI could give away free samples to fashion bloggers or youtubers and let them promote the product instead. This would increase the brand recognition and awareness of Nundies, as well as gain a wor d of mouth through these bloggers. Also, another cheaper way to promote Nundies is enforce Youtube to introduce instructions for use.\r\nLet audience know what is it and how to use it instead of in force(p) displaying in the store. As for stores, sales tips should be provide to retailers. And the display should avoid conflux in with other merchandise products and croak more attention getting. Train sales personnel to be informative and to be more proactive to suggesting and demonstrating Nundies to customers. Pamphlets and samples should be offered as well. Nundies can also be advertize using kiosks. As for reorders, AMI could offer deductive reasoning to encourage repurchase.\r\nReference\r\n1. Kerin, R.A., and Peterson, R.A. (2013). â€Å"Nundies case canvas”, Strategic Marketing Problems Cases and Comments International Edition, 2013 Pearson. ISBN13 9780273768944\r\n'