The Backstory: LusterLast

Scenario 1: Module 1

LusterLast is a manufacturer and distributor of hair care products and other consumer packaged goods. The company was founded by Ed Gardi and his wife Lois in 1994 in New York. Ed was a school teacher with five children and needed additional income to support his family. Doris was a beautician and told Ed that maybe he could sell haircare products door-to-door and hair salon-to-hair salon. He agreed that he could do it Friday nights and Saturdays.

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Ed built up quite a clientele. By 1998 his popularity in the community grew to the point where he thought maybe he could manufacture his product and keep more of the profits rather than working on sheer commission. So, he and Lois research the marketplace and concluded that it might be best to launch their firm manufacturing and distributing a shampoo formulated especially for curly, coiled or tightly textured hair.

They experimented with several variations of shampoos, hosted multiple focus groups, and gave away samples to gauge which formulation seemed most appealing to their target market.

Without question, those who tried the product felt that a shampoo with keratin proteins and a leave-in conditioner with softening agents were the best combination. They additionally agreed that the essence of lilac would be their signature aroma, a sort of brand identifier.

Ed and Lois purchased an old garage large enough for mixing, bottling, and packaging in the warehouse district of New York. Along with their children, they began producing their first product line, which they called LusterLast.

The product has been ticking along modestly growing in orders, revenue, and net income.  However, now due to the tremendous competition to remain on the shelves of mass merchandisers such as Walmart, their sales were now primarily being generated from online orders, small beauty and barber supply shops, and grocery stores. Lois and Ed are happy that their brand has a loyal following and steady sales.  However, their children who have now taken an active role in the firm, felt it was time to hire a professional marketer to grow the brand.

They hired Ashanti Johnson as the new director of marketing. She brought invigorating ideas to the company, having worked for a major cosmetics and consumer packaged goods manufacturers. Her last position was as a product manager with a global producer of hair care products and salon equipment. She convinced the family that there was plenty of room for growth for the company, which was now called LusterLast, Inc. Still, she felt there were ways to add value to the brand, grow the product line, and increase incremental sales.  But, realistically she needs an assistant. And, after a protracted search for an assistant brand manager, she selected you.

Since the company is considered a small company, as is the norm, employees often wear a number of hats. They have to perform various duties that typically would be handled at a much higher level or by multiple personnel. From Ashanti’s experience knows she will have her hands full and will need to delegate many duties to you. The tasks she will assign to you are significantly focused on evaluating situations, collecting data, analyzing the data, and making recommendations.

Your First Assignment

Ashanti wants you to calculate market share for LusterLast. She has asked that you investigate market share from a unit sales perspective as well as revenue. For good measure, she is equally interested in market and brand penetration.

You have been provided the following information for the past year.

The Market for Shampoo (General)

Market Sales Revenue             Market Unit Sales                 Total Shampoo Consumer          Total Population

175,000,000                                   35,000,000                               105 million (US)                      350 million (US)

LusterLast Stats

Unit Revenue Sales           LusterLast Purchasers

23,500,000                                15 million

The director of marketing for LusterLast wants to know their market share in terms of gross sales, their market penetration as a percentage of category sales, and brand penetration.

Begin the development of an Excel spreadsheet.  Throughout the course you will be given data requests from the company in the scenario.  As you continue through the homework assignments your spreadsheet or workbook will expand as you input various metrics you have calculated (or had the Excel program do this for you) based on the information requested and the data given.

For this homework assignment, populate cells with the requested data.  On the spreadsheet, have a section called “Notes.”  In this section provide the instructor with your interpretation of the metrics and what they could mean for the business.  If you were in a short meeting with Ashanti, what would you tell her about the numbers at which you have arrived?

All individual homework assignments should be saved as a Word document in the following manner:  Last Name_Homework Assignment X

The “X” is a placeholder for whether the assignment is number 1 or 2.  Please submit the assignment through the designated drop box.

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