PRODUCT DEVELOPMENT & OPERATIONS – CATEGORY MANAGER ANALYSIS

This week, you’ll assume the role of a Category Manager for the Beauty Products category at a national discount retail store. 

 As a Category Manager, part of your role is to analyze data and information about how well a product is selling to help the maker of that product improve the product and consider introducing new products. Rochelle and her team at Alikay Naturals have asked you, the Beauty Products Category Manager, to review one of their products and determine where it lies in the product life cycle. Additionally, they have asked you to recommend ways to improve the product in order to increase sales. 

NAME:

INSTUCTOR:

DATE:

Assignment 1

Product Development & Operations – Category Manager Analysis

Due Date: Week 3

Note: While representative of possible situations faced by Alikay Naturals, all scenarios in this assignment are fictional.

Real Business

Let’s roll up our sleeves and use what we’ve learned this week in a real-life business situation. Each week, you’ll encounter a scenario where you will assume the role of a business person who works with or at a national discount retail store, like a Walmart or Target. These companies provide important, everyday staples for millions of people across the country and have become very successful businesses in the process.

Discount retail stores have locations in communities across the country. They often have strong and recognizable brands that are household names. We will explore how business works throughout this course by taking on a few of the many different roles at successful companies like these.

Your Role

This week, you’ll assume the role of a Category Manager for the Beauty Products category at a national discount retail store.

What Is a Category Manager? Category Managers are responsible for related groups of products (for example, baseball equipment or laundry detergents) for a retail business. They use research, information and insights about the category to change shopper behavior and increase sales of the products in the category. They also work with the suppliers of the products in their category to ensure that good products and services are available to customers.

As a Category Manager, part of your role is to analyze data and information about how well a product is selling to help the maker of that product improve the product and consider introducing new products. Rochelle and her team at Alikay Naturals have asked you, the Beauty Products Category Manager, to review one of their products and determine where it lies in the product life cycle. Additionally, they have asked you to recommend ways to improve the product in order to increase sales.

Instructions

Step 1: Product Life Cycle

Read the Product Report for Alikay Naturals Moisturizing Black Soap Shampoo. The Product Report contains important information that will help you to identify where the product stands in the Product Life Cycle and give you clues about what changes customers might like to see.

Respond to Rochelle and her team at Alikay Naturals based on the information in the Product Report.

· Identify where Moisturizing Black Soap Shampoo is currently positioned in the product life cycle.

Underline your selection:

Introduction

Maturity

Growth

Decline

Describe the rationale for your position.

· Compose 3 questions that Rochelle should pose to her team to better understand the product’s positioning and potential at this particular stage in its life cycle. (E.g., if you have determined the product is in the Introduction Phase, you might suggest the question: How have competitors priced similar products?)

Step 2: Product Changes

Based on what you’ve learned:

· What recommendation(s) do you have for Alikay Naturals to improve or replace Moisturizing Black Soap Shampoo?

Step 3: New Product Development

Read the New Product Proposal, which contains three examples of possible products that could be developed to replace Moisturizing Black Soap Shampoo. Based on the information in this proposal and the customer feedback in the Product Report:

If you had to recommend one product, which product would you recommend they create? Underline your selection:

Organic Bloom Shampoo

Moisturizing Black Soap Shampoo with Dandruff Control

Coconut Protein Shampoo and Conditioner

Explain your decision.

Determine which type of innovation this represents from among the four main types discussed this week. Underline your selection:

Sustainable (eco-friendly)

Frugal

Sustaining

Disruptive

Briefly explain why you chose that type of innovation.

Note: You should complete Steps 4 & 5 after reading the material in Week 3.

Step 4: Production Methods

Based on your understanding of Alikay’s position in the product life cycle and expected sales volume:

Which production method do you think Alikay is using for the Black Soap Shampoo? Explain your rationale.

If Alikay chose to keep the Moisturizing Black Soap Shampoo and launch your recommended product as a “limited time only” trial, what production method should Alikay use for the test market product? Why?

Step 5: Real-WORLD APPLICATION

Choose a product at your company or one that you are familiar with that is in the mature stage of the product life cycle. Briefly describe the product, why you believe it is in this phase, and what improvements could be made to change its current path.

1 BUS508: INTRODUCTION TO BUSINESS

ASSIGNME NT

Product Development and Operations
Category Manager Analysis

1

DU E DATE

Week 3

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PRODUCT REPORT FOR ALIKAY NATURALS
MOISTURIZING BLACK SOAP SHAMPOO

Product Description:

Finally, a way to get your hair and scalp truly clean with natural
ingredients. Traditional cleansers tend to strip your hair
of its natural moisture, leaving your scalp dry and itchy. This
sulfate – free shampoo cleanses and moisturizes at the
same time. Made from natural Raw Black Soap, it gets deep
down into the scalp to remove product buildup. The tropically –
scented blend contains a natural mix of Coco Seed Powder,
Plantain Skins, and Tea Tree Oil to protect and moisturize the
hair from scalp to root. No artificial thickening agents have
been added, but don’t be fooled by the watery texture. This
shampoo gets the job done. This product is 100% natural
and 100% organic.

Product Background:

The Moisturizing Black Soap Shampoo product was launched in 2014, with the majority of
sales coming from national retail stores. The product has not undergone any significant
changes or improvements, with the exception of its packaging.

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Sales Report:

2015 2016

Q1 Q2 Q3 Q4 Q1 Q2

Units Sold 381,0 0 9 36 5,775 366,0 0 8 338,9 9 0 296,9 9 0 275,776

Revenue $ 4,572,10 8 $ 4,389,30 0 $ 4,392,0 96 $ 4,0 67,88 0 $3,563,88 0 $3,30 9,312

Turnover
(Avg. days on shelf)

3.1 2.9 3.2 3.6 3.9 4.1

Market Share
(% of total discount retail
store shampoo sales)

3.8% 3.7% 3.7% 3.4% 3.0% 2.8%

Q U I C K D E F I N ITI O N S

QUARTERS
The financial world splits the year into four quarters, each 3 months long

Q1: Quarter 1, January – March
Q2: Quarter 2, April – June
Q3: Quarter 3, July – September
Q4: Quarter 4, October – December

UNITS SOLD
The number of total products sold in a given time period

REVENUE
The money received by a business for the sales of its products in a given
time period

TURNOVER
The average number of days individual products sat on store shelves
waiting to be sold in a given time period

MARKET SHARE
A company’s market share is its portion of total sales in relation to
the market it operates within. For example, if a company sells $100 million
worth of tractors a year domestically, and the total tractors sold in the
United States is $200 million, the company’s US market share for tractors
would be 50%.

User Survey Summary:

Consumers who purchased the Alikay Naturals Moisturizing Black Soap Shampoo at any
one of the national discount retail stores were asked to complete a survey. 2,000 consumers
responded.

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ALIKAY NATURALS MOISTURIZING BLACK SOAP SHAMPOO USERS (%)

Strongly
Disagree

Disagree
Neither
Agree

or Disagree
Agree

Strongly
Agree

My hair looks and feels
better after two weeks
of using Moisturizing
Black Soap Shampoo

8 22 32 22 16

I like the density and
consistency of Moisturizing
Black Soap Shampoo
relative to other shampoos

22 41 16 12 9

Moisturizing Black Soap
Shampoo leaves my
hair more hydrated
than other shampoos

6 26 18 21 29

Alikay Naturals leaves
my hair smelling
great relative to other
shampoos

22 31 20 18 9

Moisturizing Black Soap
Shampoo gives my
scalp a deeper clean
than other shampoos

2 8 18 43 29

Moisturizing Black Soap
Shampoo prevents
my scalp from feeling
dry and flaky

31 14 23 12 19

Moisturizing Black Soap
Shampoo will be the
only shampoo in my
shower in one month

32 14 23 12 19

I’d be more likely to
continue regular use of
Moisturizing Black Soap
Shampoo if it were
available at a lower
price point

4 22 44 18 12

What suggestions do
you have to improve
Moisturizing Black Soap
Shampoo?

“Too watery”; “Have to use too much to do the job”; “While I feel
like the product works, I’m not a fan of the scent”; “I’d like some-
thing I can put on my hand versus directly on my scalp”; “While it
cleans effectively and dries out my scalp less than other sham-
poos, I wish it would treat dandruff”; “Seems like the quality has
declined since I first tried it”

User Survey Summary (cont’d):

4

NEW PRODUCT PROPOSALS

Alikay Naturals Organic Bloom Shampoo

This custom product is designed to clean and moisturize hair while stimulating significant
hair growth without residue buildup. This all-natural, organic blend includes 14 of the best
essential oils and herbs that strengthen the hair at its foundation. Hair follicles absorbes-
sential nutrients to promote growth and nurture fresh, new, shiny hair. Our product in-
cludes many botanicals, such as Olea Europaea (Olive) Fruit Oil, Simmondsia Chinensis
(Jojoba) Seed Oil, and the rare Emu Oil, which regrows hair by increasing cellular activity at
the scalp. This one-of-a-kind product helps customers’ hair bloom and flourish, leading to
impressive and almost unbelievable results.Some testers have even seen up to four inches
of hair growth within ten weeks.

Alikay Naturals Moist Black Soap Shampoo with Dandruff Control

Our original Moist Black Soap Shampoo is renewed and improved to promote a healthy
scalp. Melaleuca alternifolia (Tea Tree) Oil prevents dandruff by reducing scalp infections,
fungus and inflammation, and Horsetail Powder, a plant powder, reduces dandruff due to
its silica content.These essentials break down undesirable residue at the roots to support a
clean and moisturized scalp.This product may be ordered online with custom scents mixed
according to your preference.This new twist on a classic favorite is bound to revive hair and
scalp.

Alikay Naturals Coconut Protein Shampoo and Conditioner

Indulge your senses with this exclusive blend of organic coconut milk to nourish your hair,
hydrolyzed keratin to add strength and elasticity, and weightless coconut oils to add hydra-
tion and balance. This thick formula is fortified with Prunus Amygdalus Dulcis (Sweet
Almond) Oil, a natural protein that envelops the hair shaft to build strength and elasticity,
add softness, reduce frizz, and revitalize incredible shine. This tropically-scented shampoo
will make your hair look, feel and smell great.

Non-User Survey Summary:

An online survey was conducted asking consumers that 1) frequent any one of the national
discount retail stores and 2) have never used the Alikay Naturals Moisturizing Black Soap
Shampoo about their shampoo preferences. 4,000 consumers responded.

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NON-USE RS, IN TARGET MARKET (%)

Strongly
Disagree
Disagree
Neither
Agree
or Disagree
Agree
Strongly
Agree

Having an organic
shampoo with all
natural ingredients is
important to me

2 9 14 52 23

I prefer a thicker
shampoo that is heavy
on proteins to revitalize
my hair

8 9 17 43 23

Most natural shampoos
I use are not rich in
proteins and don’t
provide additional
nutrition to the scalp

12 16 23 32 17

A daily dose of proteins
can strip out the
nutrients and therefore
is unsafe and unhealthy
for the hair

33 29 18 12 6

I use anti-dandruff
shampoo only under
a doctor’s recommen-
dation

16 48 18 12 6

Men and women should
have different hair-care
products

32 22 14 18 14

In my opinion,
shampoos with protein
conditioners cannot
be used on color-
treated hair

14 31 32 11 12

Assuming equal qual-
ity, I prefer a shampoo
+ conditioner in one
versus two different
products

12 6 54 18 10

I’d be willing to pay a
premium for a shampoo
that stimulates hair
growth

6 9 16 34 35

Non-User Survey Summary (cont’d):

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NON-USE RS, IN TARGET MARKET (%)
Strongly
Disagree
Disagree
Neither
Agree
or Disagree
Agree
Strongly
Agree

I feel herbal shampoos
tend to be watery and
need to be used in large
amounts to create a
good lather

12 14 28 19 27

I choose my shampoo
based on its specific
function

12 7 22 30 29

The scent of a shampoo
is just as important as
its effectiveness

19 22 15 24 20

Keratin and soy proteins
give a better shine
to hair than artificial
foaming agents and
synthetic colors

3 7 15 45 30

Dandruff shampoo
effectively prevents
a dry, itchy scalp and
flakes

12 10 9 44 25

The shampoo industry
is already flooded with
too many effective
options

22 32 23 14 9

I am willing to pay more
for high-quality,
effective hair products

8 18 12 37 25

I value an all-natural
shampoo that reduces
dandruff

3 18 8 40 31

Non-User Survey Summary (cont’d):