Problem The Product Manager, Phoebe Masters, at Ms.-Tique Corporation must decide if and how the company will introduce an aerosol can package for its Soft and Silky Shaving Gel, including a determination of product size (5.5 or 10 oz.) and location (personal care or toiletries). Furthermore, the manager needs to decide if a test market is necessary to evaluate the new packaging.
Strategic Issues
Product – Soft and Silky Shaving Gel (SSSG), a women's shaving product that contains moisturizers, is currently packaged in a 5.5 oz. plastic tube and is located in the women's personal-care section of drug and food-and-drug stores. Most competitors (men and women shaving products) package their products in aerosol cans and offer them in the …show more content…
The promotional efforts for the introduction of the 10 oz. can should avoid drawing existing customers away from the 5.5 oz. tube and to the 10 oz. can, since they are thought to be loyal and because the tube configuration has a higher per ounce contribution. This is a reasonable one or two year strategy, after which time, the product manager should evaluate the conversion to the 10 oz. can and consider introducing a smaller size product (5.5 oz. can or travel size) and/or reconsider the placement within the store and the price. In general, this product should maintain a slightly higher per ounce price, no matter where it is offered within a store, than the competitor in order to maintain its premium image.
The manager should not approve the expenditure for the test market for several reasons. First, the results from the focus group and case histories provide adequate and logical information with enough detail to take action. Second, the $35,000 needed for the test market will erode the potential gains projected from the 10 oz. can introduction, provided the test market indicates this type of strategy. Third, by the time the results from the test market are evaluated and action can be taken, the peak season for women's shaving products will have past for 2001.

Appendix 1 – Product Contribution Analysis
Package Type Tube Can Can
Size (oz.) 5.5 10 5.5
Cost per unit $ 0.40 $ 0.29 $ 0.24
Cost per ounce $ 0.07 $