Sweat Leaf Bath Co Harvard Case Solution & Analysis

Introduction

Rose Creamer and Stacey Guymer are the partners of Sweet Leaf Bath Co. They manufacture bath and body products and sell them through local retailers, craft shows and exhibitions since 2007. Currently, the business faces some problems. Critical issues are:

  • The growth of sales has been very slow over the past year and they want to develop and implement a new marketing strategy to increase their sales.[1]
  • Furthermore, they want to formalize their strategies for distribution and promotional efforts to increase awareness about their environmental friendly products.
    • Finally, they had limited advertising budget of $ 5000 therefore,they had to make a choicefrom different market strategies.[2]

Situational Analysis

Financial Analysis

Over the three years period, the gross profit margin has risen from 37% to 51%. Initially, it made losses in 2009 and 2010; however, it was able to attain a net profit margin of 13% in 2011. Operating expenses as % of sales also reduced from 65% to 38% over the same period. As far as the sales growth is concerned, it has risen by 218% from 2009 to 2010 but decreased to only 12% from 2010 to 2011[3].

Competitor Analysis TheCompany has five direct competitors with similar product lines that are successful in entering the retail markets of Eastern Canada. Their names are Tashodi, Delapointe, Herbier, Kynk Naturals and Earth to Body.Their strengths and weaknesses are as follows:

Strengths

Weaknesses

They have a large customer baseTheir products are not certified by Fair Trade Association
They have a diverse portfolio of body and bath productsSweat Leaf enjoys a better brand image as compared to competitors.
They have established good relations with distributor of their products
They have a strong presence in the market.
Their products prices are lower than Sweat Leaf

Decision Criterion

 The sales to reach between CDN $150,000 and $CDN 200,000 by 2016[4].

  • Advertising should take place within the budget of $5000.

 Alternatives

Pristine Planet 

            It will reinforce the image of Sweat Leaf Bath Co as a manufacturer of environmental friendly products. As the website traffic is between 4,400 and 14,300 customers per month, the consumer awareness about the company’s offerings would increase and a unique brand image will be established. As the products are certified by fair trade association, SLBC will face no problem in being accepted in their online catalogue[5]. Individual product pages, a dedicated merchant pages and additional free exposure on social media sites are other advantages for the company. However, there is a two month trial cost of $50, and then $50 per month would be the cost for the company.

            Financially, this option provides high margins in all scenarios of high, medium and low quantity being sold. This medium holds a lot of potential and if used effectively will enable the company to achieve sales of $150,000 to $200,000 by the end of 2016 with other effective methods. The margins of 78%, 84% and 89% will be achieved if method is used (Exhibit 4).

Sweet Leaf Bath Case Solution

Vendor Shows

            The products of SLBC will be known to retailers, suppliers and industry experts’ through the Canadian Health Food Association[6]. Moreover, both the partners would get ideas about product innovation in their product line. However, it is a very costly program with the total cost of $3200[7]. This method will be ineffective and costly as far as its financials are concerned. The contribution achieved will be very low as the costs are high even if the premium 0f 50% is added to the sales of this program due to this high-profile event[8].

Point of Sale Displays

            In this method, the retailers will be provided with the point-of-sale displays. It will draw attention of customers to the company’s product line. It would create unique attributes about the products.It would also assist retailers to manage inventory and order the products whenever they are low on stock. However, this method would require investment of $44 with a minimum of 25 items.

[1] Refer to Exhibit 2 (Growth in 2010 is 217% but in 2011 is 12%)

[2] Refer to Exhibit 5

[3] Refer to Exhibit 1 and Financials

[4] Refer to Exhibit 2

[5] All products listed on Pristine Planet are required to adhere to adhere to atleast one of the company’s proprietary tags before being accepted into their online catalogue.

[6] CHFA is Canada’s largest trade association. Its member includes manufacturers,retailers,wholesalers, distributors and importers of natural and organic products.

[7]Vendor Space: 2500, Product Sample: 400, Printed Material: 200, Travel Costs: 100

[8]  Refer to Exhibit 6....................

This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.

Other Similar Case Solutions like

Sweat Leaf Bath Co

Share This