Clean spritz Harvard Case Solution & Analysis

Clean spritz Case Solution

Introduction

The case analysed the importance of pricing and costing decision of Clean Spritz related to the new product launch, Claire Beaton was the brand manager of the new launching product that would be used to increase the profitability margins and to overcome the declined sales levels occurred during the past five years.

MJ Brenner was the company who produced the household, industrial and auto cleaning products since its inception. However, the level of sales margin in industrial products was quite high as compared to other two product lines. During the financial crisis, theincreasing demand of household products had made the decision to improve the level of cost and pricing for different companies. Therefore, the customers shifted their level to the substitute products due to high prices, thus Beaton decided to make certain decisions about the quality and uses of the existing as well as willing to launch the product with different features related to the packaging in order to meet the customer’s demand for low prices.

Claire decided to propose different scenarios to analyse the potential outcome from the new product sale. She was quite aware of the advertising as well as promotional activities within the company. Therefore, she determined two types of options that the new product could benefit the customers under the packaging terms. The first typewas to tryto introduce under the recycle packaging case, which would decrease approximately 14% of cost and was of less size, whereas the other option was to cover the product with dissolvable packaging. It wouldbe most beneficial for the customer to hold dissolvable packaging product but it could cost more for the company as compared to the recycle concentrate product.

Therefore,in order to analyse the potential benefit for both the packaging scenarios, Claire determined the market analysis that could provide the related information about the consumer’s demand and their need to use the new product of concentrate cleaning. But the threat of increasing the sales would cannibalize the existing product level under dilute.

Hence,the main objective was to critically evaluate the cost and pricing level of the new packaging launch, the analysis was focused on the standard unit of the product, the advertising campaign cost, the labour cost as well as connected with the chain of retailors. It also determined the level of profit margins each retailor made for holding the product and deliver to the desired customers.

Lastly, it was decided that whether this new technological innovation could increase the profits of MJ Brenner in order to recover the losses incurred during the past years. If yes thenwhat would be the reaction of the existing customers who were using the dilute product line and not willing to shift into the new packaging because of the excess cost associated with it instead of quality.

Market Analysis

According to the current market situation for the product under new packaging, the market analysis has been considered to determine the potential increase or decrease in demand of the customers as well as the company’s overall operations.

Company

If we look at the company’s perspective, it has been determined that the promotional activities of the new packaging product will benefit the overall operations and to recover the loss of minimum sales of Clean Spritz. It will allow to reduce the cost of product under new features consist of recycle and dissolvable product based. Therefore, the level of revenues will tend to increase because of less fixed as well as variable cost associated with the packing and delivery to the end users through the retailers. However, these cost might be higher than the diluted products but it will satisfy the customers’ demand under the competitive price range.................

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