Question

Your company, Image Consultants, has come out with a new line of makeup. This makeup does not clog pores of the skin and can safely be left on for over 24 hours. This product is not a new revolutionary product, but an improvement in the makeup industry. Your company now has a current line of lipstick named “Cover & Glow”.   Your company is unsure what name to use for the brand name and how to price it, how to promote it and what type of distribution should it use. Should your company create a new brand?   What should your company do? Make sure and consider what stage of the product life cycle you are entering, high & low involvement, pricing, distribution and your promotion mix etc?

Answer 1

As per the case, the existing product is probably a mature one, and the company is aiming to stimulate sales by modifying the product's characteristics through quality improvement. This is called a "plus launch" in industry parlance and is usually promoted and advertised as something "better". This strategy can be effective provided that the quality is proven, it is acceptable to the buyers, and there is a sufficiently large customer base willing to pay for it.

As a make-up product is a high-involvement one, quality improvement in an existing brand is likely to be well-received by customers. Hence, the company can leverage on its existing brand and name the new brand based on the current line of lipstick, for example, "Cover & Glow Carefree", to deliver the message that the makeup is safe and the user need not bother about removing it for over a day.

The pricing can also reflect an improvement in quality, as a premium pricing could signal higher quality. The advertising expenditure should also be correspondingly increased, with a different message promoting the new line and emphasizing on its quality and safety aspects. The advertising should target working women and professionals and hence the media mix should focus more on digital marketing and high-end fashion magazines and publications for women. The distribution strategy should focus on obtaining more product support and display in existing outlets as well as introduce new distribution channels such as online selling.

Personal selling using salesgirls who are sophisticated and well-groomed could also help in targeting women professionals and quality-conscious housewives to try out the new offering.

Sales promotion could also be stepped up by tying up with exclusive brands preferred by women such as high-end watches, handbags or sunglasses brands to reinforce the exclusivity of the new brand. Associating with brands related to health and wellness could also highlight the safety aspects of the new brand. For example, by setting up kiosks outside outlets of these brands or entering into trade deals with these brands to create combined offers for their existing customers. Retail co-branding with these outlets could also be explored.

Thus, with the launch of its new brand, the company can boost sales, and create a niche and potentially loyal customer base, while defending its existing market share.