Question

In: Economics

Select a product you are familiar with. Based on your knowledge of the product life cycle, what types of changes will occur to your selected product as it continues through the product life cycle?

Select a product you are familiar with. Based on your knowledge of the product life cycle, what types of changes will occur to your selected product as it continues through the product life cycle? How will this affect the marketing of your selected product?

Subject: MARKETING

Solutions

Expert Solution

Revlon - Products :-

REV  was founded in 1932. The company markets its products through its own stores, mass volume retailers , chain drug and food stores and the internet.

Product with volatiles sales periods, largely depending on the popularity of the Products and advertising expenses.

Recent growth primarily though acquisition.

Brand Names :   

  • Revlon.
  • Almay
  • Charlie
  • Jean Nate
  • Ultima II
  • Gatineau
  • Mitchum

Products :

  • Skin care
  • Bath and Body
  • Cosmetics
  • Hari Care
  • Fragrance Products

MACROECONOMIC REVIEW Of product life cycle:-

The makeup market was worth $43.6 billion in 2007 growing at a rate of 7.1 % per annum. However this sector proves to be very cyclical. The market value growth rate declined to 6.6 % in 2008 and even turned negative to -3.3% in 2009. As the economy picks up, the market is expected to reverse and in 2011 many projections of the growth are approximately 3%

Decline in volume growth rate in 2008 - 2009. The number of makeup users grew at a stable 1.2 % ( Global population growth rate). The growth rate of consumption per user dropped from 1.4% in 2007 to 0.7 % in 2008 and further down.

It has been noted that the average per unit price has declined during the recessionary times as consumers substituted lower-priced brands of a product on account of reduced disposable incomes.

Revlon - Five Forces :-

  1. Bargaining Power of Customers
  2. Threat of New Entrants
  3. Threat Substitute Products
  4. Competition within rivalry
  5. Bargaining Power of Suppliers.

Global focus :

US is a major market for color cosmetics, amounting to over 18 % of the global market size and Revlon commands over 20% share of the US market in color cosmetics.

Anti - aging creams and anti - cellulite skin care products are in high demand among an aging population in the developed countries, notably Japan (with the oldest demographic) the US and western Europe.

Key Drivers of Profitable Growth to affect other market :

Innovative, high -quality, consumer - preferred brand offering.

Effective brand communication.

Appropriate levels of advertising and promotion.

Super execution with retail partners.

Nets sales :-

Net sales - $ 1,381.4 Million as of 2011

  • united states - 55%
  • outside U.S - 45% ( Canada, Australia, China and UK)

Increased $ 60 Million (4.5 %) year over year

  • Driven by the inclusion of sinful colors in march 2011
  • Improved profitability offset by june 2011 fire at venezuela facility.

Higher Net Sales expected for 2012 fiscal year after the acquisition of pure Ice in july.

Future Revenue Growth :

  1. Buliding our strong brands.
  2. Developing our organizational capability.
  3. Driving company to act on a global scale.
  4. Increasing our operating profit and cash flow
  5. Improving our capital structure.

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