Skin-Tique Case Study

Robert Ross

Skin-Tique Corporation Case

February 29, 2012

I. Business Metric and Key Marketing Problem Statement

The key marketing problem in the Skin-Tique Corporation case is that if/when the skin care company introduces its new aerosol gel container for their Soft and Silky Shaving Gel product, what size of container should be introduced (5½ oz. or 10 oz.), and how many sales will the company need to have in order to overcome the possible cannibalization rate and variable costs of introducing the new container? Which product will prove to have the most sales/profits of the two different sized products?

II. Alternatives

The reason I have chosen sales as the business metric is because Skin-Tique is very concerned with staying competitive in the market of shaving gels, and to do so, they feel they must introduce a new aerosol container to house their Soft and Silky Shaving Gel product. Because this type of container is what other competing female shaving gel brands have begun to use, Skin-Tique feels they should introduce their own aerosol container to prevent sales from decreasing, and to encourage new sales. When introducing a new container, there are many costs that come into effect, including package design costs, freight costs, profits ‘lost’ from cannibalization, etc. With these costs, it is crucial to the company that the number of sales increases in 2003 in order for the new product release to be successful.

The solution to this business metric problem will come from the decision of which specific product size Skin-Tique decides to introduce into the market, because the number of sales will drastically change depending on whether the 5½ oz. or 10 oz. aerosol container is chosen. This will be the difference in maximizing profits or not, as the cost per oz. of shaving gel is much different with each size of container, causing more sales to be needed to achieve profit for one size versus the other.

Another business metric that can be used is...