In: Operations Management
Read the following extract and answer the questions that
follow:
When a Scented Candle Just Won’t Do
A fragrance called green tea blows through the corridors of Sonesta
hotels worldwide courtesy of Air Esscentials, a 10-year-old company
in Miami that sells scent-diffusing systems. Green tea lemongrass,
another Air Esscentials creation, is the aroma of choice at Morgans
Hotels worldwide. Now, those very same smells are also perfuming
the living rooms and bedrooms of many private residences.
Hotels, resorts and casinos, as well as retailers like Victoria’s
Secret and Thomas Pink, depend on ambient scents to strengthen
brand identity — as well as to get customers to linger and spend.
Piping in those fragrances has long been the principal business of
Air Esscentials, Aroma360, ScentAir and their rivals in what is
known as the air care business. But increasingly, these companies
are finding a new revenue stream in the home market. (In other
words, pull out those plug-ins.). ―Our company grew rapidly because
when we would put a scent into a Sonesta hotel or a Ritz-Carlton or
a Melia resort, guests would go up to the front desk and ask how
they could get it,‖ said Spence Levy, president of Air Esscentials.
―The home market has grown 35 percent a year for us every year
since we started in 2007.‖
Drugstores and other retailers are fully stocked with low-cost home
fragrances, from room sprays to candles and wall plug-ins. Now,
thanks to Air Esscentials and other such firms, there are options
on the higher end: compact yet high-powered diffusers that will
infuse scent throughout a room for hours or days at a time.
Examples include Aera, a $200 device the size of a paperback book
that its parent company, Prolitec, says can perfume a room of up to
2,000 square feet, with fragrance levels adjustable through an app.
Each fragrance capsule costs $50 and, according to Aera’s website,
will last about 60 days if it is placed in ―a 450-square-foot room,
on an average setting running for 24 hours per day.‖
Jeanette Wolfe, a holistic health educator, is a big fan of such
devices and a big believer in the power of scent to increase energy
and ―drop you into a calm place,‖ as she put it. She used to rely
on old-fashioned methods to perfume her Victorian home in
Princeton, N.J.: dried flowers
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and squares of muslin that were infused with essential oils and
placed in the air vents. ―But it
wasn’t as strong or clear or efficient a scent as I wanted,‖ Ms.
Wolfe said.
Now each floor of the house has its own fragrance dispersed by an
AroMini, one of several styles of cold-air diffusers for the home
made by AromaTech. According to the company, AroMini, a
12-inch-tall cylinder that costs $279, is strong enough to imbue
fragrance in a 1,000square-foot room. The essential oil or aroma
oil refills cost $16 to $180, and last about a month.
The home fragrance market is a $6.4 billion business at the retail
level, according to a 2016 study by Kline, a market research and
consulting firm in Parsippany, N.J. Using data from a Simmons
national consumer survey, the online research company Statista
calculated that 73 percent of Americans used room deodorizers and
air freshener sprays last year; the figure is poised to hit 77
percent by 2020.
More than just a way of eliminating odor, home fragrance has lately
become a means of selfexpression. ―It’s an element of design, like
the colors on the wall or the furniture — it’s a way for people to
communicate who they are,‖ said Richard Weening, chief executive of
Prolitec, the Milwaukee-based commercial air care company that
recently introduced Aera. ―I do not think I’ve met an individual
who doesn’t respond to scents,‖ Ms. Wolfe said.
Actually, some don’t respond well. Consider the people who are
allergic to perfumes or just don’t like them. The ―fragrance free‖
movement, which uses the tagline ―think before you stink,‖ has
tried for years to beat back the use of fragrances in public
places, in deference to the scentsensitive. Still, there are many
who consider lemon-infused air to be a luxury, maybe even a
necessity. ―The general principle is: People like places that smell
good, and they don’t like places that smell bad,‖ said Mr. Weening
of Prolitec.
To hear him tell it, the conventional tools deployed for making a
place smell good — candles, sprays, wax melts, reed diffusers, and
so-called liquid electricals like plug-ins — leave something to be
desired. The scents are heavy, inconsistent and, in his view, maybe
just a bit unrefined. ―It’s that New York taxicab smell,‖ Mr.
Weening said. Two years ago, Dimitri Gailit, the chief executive of
AromaTech, based in Vancouver, British Columbia, noticed that his
company was fielding calls from clients who wanted their residences
to smell as inviting as their stores. ―So we decided to make every
one of our products available for home use,‖ he said.
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The devices, sold through the company’s website and Amazon, include
the AromaCube ($30), a battery-operated diffuser meant for a small
space like a bathroom; the AromaPod ($129), designed for up to 500
square feet; and the industrial-strength AromaPro ($849), which
comes
with an HVAC adapter, meaning it can work through a customer’s home
heating and airconditioning system. The company’s cold air
diffusion process breaks down aroma oils and essential oils — the
most popular are white tea and thyme, and oriental garden — and
disperses them in the form of dry vapor.
Depending on the device, customers can digitally adjust the
intensity of the vapor as well as the hours that it is dispersed.
Control of the diffusers via an app is in the planning
stages.
―There are people who are buying our machines for aromatherapy,‖
Mr. Gailit said, ―and then there are customers who want to create a
certain ambience in their home, like when they’re having a party.
They may be having a tropical-themed party or a chocolate fondue
party, so they’ll disperse a fragrance like coconut spice or
chocolate.‖ Customers have responded, Mr. Gailit said: ―Since we
introduced our consumer line, we have significantly increased our
business.‖ Mr. Weening said he had had the same experience since
Aera hit the market. ―We’re way ahead of where we expected to be
with sales,‖ he said. ―People are buying multiple machines.‖
Aroma360’s clients are mostly commercial, ―but a lot of business
owners asked for scents in their home as well,‖ said Meghan
McMahon, the company’s director of marketing. Residential customers
can choose from cold air diffusers that range in price from $149
(for 300 to 800 square feet) to $1,499 (to cover up to 6,000 square
feet). ScentAir, too, ventured into the home fragrance market at
the urging of commercial customers. But rather than sell directly
to the consumer, ScentAir has made its home fragrance system —
which is essentially a high-end plug in that costs $130 — available
exclusively on the websites of hotel clients like Marriott and
Westin.
―It’s a nice tie-in for us,‖ said Edward Burke, ScentAir’s vice
president of customer strategy and communications. ―And by offering
the home version on the hotels’ websites, it helps us be a better
partner.‖
Source:
https://www.nytimes.com/2017/08/02/business/smallbusiness
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Questions:
A Structured Development Process (SDP) is a sequence of steps or
stages to conceive design and commercialise a product. Using the
case study above explain how these organisations:
1.3 Configured their distribution and marketing activities.
Solution 1.3
The marketing as well as the distribution strategies of these scent diffusing systems was based on the principle of the appeal that the product rendered on the mindset as well as the senses of the consumers. The items were deliberately set in inn, resort and shopping center anterooms so the customers get pulled in by the aroma and get inquisitive to purchase the item. The home market had become a great source of revenue for these scent diffusing systems. The organizations did not leave a stone unturned to speak to the home group of onlookers. The variety of products offered to appeal the customers as well as increase their usability. The distribution strategy of the company aimed at making the products available at avenues that are quite accessible for all consumers. The different distribution platforms capitalized were drugstores as well as retailers. The principal utilized was to make the items accessible at basic open settings so the customers can get pulled in and their longing to get it tends to be satisfied effortlessly. The ecommerce platform was also capitalized as the coverage of such platforms is quite wide. The pricing of the products was also done, keeping the purchasing power of the consumers in mind.