Slendertone Analysis

1. Describe the root causes of SlendertoneÐŽ¦s French sales revenue losses?

ANS:

All sales of slendertone were through distributors except of home-market. Since the investments being made in research and production, the companyÐŽ¦s marketing resources were very limited, they thought it could develop new market for Slendertone more cost-effectively and quickly. However, there were some poorly resourced and inexperienced distributors.

In France, the company was concerned about the growing dependence on one distributor.

There are 5main basis causes of SlendertoneÐŽ¦s French sales revenue losses listed below:

Ñ"Ь Increasing competition continued to put pressure on price:

from 1993 to the beginning of 1996: drop the retail price to compete the other EMS products.

Ñ"Ь Lack of seconday data for the EMS product class, and the distributor reluctant to share sales data with Slendertone.: ItÐŽ¦s hard to to determine what market share different companies had. Also, lack of data made it difficult to determine the size of the existing market for EMS products in each company.

Ñ"Ь Lost the TV slot: the distributor had lost the television slot for the Gymbody8 to cheaper product.

Ñ"Ь Tacky advertisement: Some advertising featured topless models alongside sensational claims for the productsÐŽ¦ effectiveness.

Ñ"Ь Distributor: in 1996 Slendertone decided to develop the UK market directly, without any distributor. The decision was made on the basis of the failure to attract good distributor in the past. That ЎҐs very clear to know that the problem of distributor.

2. When OÐŽ¦Donohue arrived at Slendertone, he thoroughly researched customers reasons for purchasing Slendertone, losing weight or improving appearance. Why did he choose improving appearance as the message for men and women age 20 to 60 years.

ANS:

Through Mr. OÐŽ¦Donohue gathered data on consumer behaviors and motivations relating to those different markets, he built up a clearer picture of the markets for Slendertone and found out its brand positioning, product emphasis, market segmentation, target market.

Market Segmentation

Positioning Strategy

for Each Target

Marketing Program

for Each Target

Originally, Slendertone was defined as ÐŽ§women between the ages of 25 and 55,ЎЁitÐŽ¦s a few niche segments were targeted, including ÐŽ§prenuptials,ЎЁ ÐŽ§postnatals,ЎЁ But by early 1999, the target market for Slendertone is a woman and men age 20 to 60 years. The earlier niche segments, such as the ÐŽ§postnatals,ЎЁ no longer are being targeted separately. Also, Male users now represent an important and fast growing market for EMS products. OÐŽ¦Donohoe believes it is important to keep the Slendertone message focused rather than having different messages for different segments of the market. We can use Product Markets Segmentation Bases to segment each target .

Why does he focus on women and men age 20 to 60 years? Because the person who between 20 to 60 needs social contact and have good looking. Moreover, they are able to purchase this kind of stuff. Furthermore, both of women and men may consider of ÐŽ§Self-confidence through improves appearance.ЎЁ

Since Slendertone had a very confused positioning: It was variously associated with dieting, weight loss, health, fitness, exercise, toning and body shaping, but all of elements are in order to improve appearance. The chart will describe this statements as fallow:

3. Why did he prefer retail stores as his placement for sales growth versus direct marketing?

What is retail store?

„c A store that sells products purchased by individuals for their own use and not for resale.

„c As opposed to wholesale, retail concerns the direct traffic routing between a carrier and the end user

„c Merchants selling tangible goods in a face-to-face environment who normally use conventional terminals and swipe transactions.

What is direct marketing?

„« A marketing strategy that attempts to communicate marketing messages directly to individuals, rather than to market segment groups.

„« A transaction category for providing customized services and procedures for merchants which offer merchandise or services via catalogs, telephone calls, mailings, and/or advertisements.

„« The variety of approaches a marketer uses to promote a product directly to the buyer and elicit and immediate response. Includes direct mail, catalogs, telephone sales, TV, radio, or newspaper ads that usually invite consumers to call a toll-free number or fill out a coupon

ANSWER:

Direct marketingÐŽ¦s disadvantage and problems:

Legal restrictions- for example, DR television was not allow in Germany

Cultural factors: for instance, Germany and Switzerland are more conservative than French, Spanish, and South Americans. For the reason, they may not to be interested in a product like Slendertone.

Save cost effectively and quickly: compare with Direct shop(charged high margin), they can save more cost. Slendertone wanted to attract new customers in a cost-effective manner using the retail stores as a new route to market.

High return rates: the return rates of product from customers as hing as 35 percent, very often the outer packaging hadnÐŽ¦t even been opened by the purchasers.

Lower than