You are the new Vice President of Marketing for Graves Enterprises, makers of consumer and commercial grade floor care products. You have two marketing directors that report to you, each of who is in charge of either the consumer market or the commercial market. Graves Floor Care Products are currently priced comparable to their direct competitors in both markets. They are also distributed through the same distribution channels, although there is no real incentive for the distributors or retailers to carry Graves Floor Care's products over those offered by the competition. The sizes and packaging of Graves products and those of the competition are similar, yet there ...view middle of the document...
Our primary competitors are rented carpet steam cleaners, Kleen Floor Spray 'n Vac and Kleen Floor Spot Cleaner, and folks who do nothing to clean carpets. Most steam cleaning machines are rented through grocery stores. Kleen Floor products are sold in grocery and mass merchandisers such as Wal-Mart. The research suggests that we are just cannibalizing Kleen Floor products and not growing the market. To grow the market, the Graves Consumer Products Group proposes the following:
We suggest the development of a new product line that is promoted as "safe, effective, and eco-friendly." We will price it at 1.5X the price for the eco-friendly aspect. We will also manufacture our container packaging from recycled plastics, which costs less and complements the overall ‘eco-friendly’ unique selling proposition. This should net a 2X profit increase.
We also suggest developing a private label of this new line that will be offered for sale by Walmart and K-Mart, selling more proprietary chemistry and leveraging this offering for premium shelf position of the branded product. We will limit them to 25% of the core chemistry so we can claim “more powerful action cleaners” in the brand by formulating at 50% core chemistry. This private label endeavor will also create another competitor for the market to share advertising costs to broaden the category of consumer carpet cleaning products.
We suggest expanding into other retail outlets with the entire product line. New retailers could include Advance Auto Parts (car carpet cleaner) and a website for online sales.
Rena Morales, Marketing Director: Commercial Products
“After extensive research, we realize that our current market leadership positions in schools, retail, and office buildings is secure and we suggest that we continue with our original plan. We see the growth of our brand in developing a full antibacterial product line that is specific for hospitals and nursing homes. We will price it at twice the cost of our current line, given this added feature. Since the antibacterial additive has a citrus aroma, we will use this as part of the unique selling proposition. We also suggest repackaging our Skid-No-More floor wax that is currently sold in our retail markets, and selling it...