Marketing 101

Instructor: Han Jin Kyung

Case Write up 1: MEM Analysis

Submitted by

Group 6
Sofia Almeida
Sonia Mao Yilin
Jonathan Long Jide
Ng Yi Long
Section G4

20 September 2010
Central Problem and Report Outline
The central problem faced by MEM Company, Inc. (hereon referred to as “MEM”) is sluggish growth
in sales since the 1980s. Causal factors will be analyzed, as well as the current market and economic
situation of MEM through SWOT Analysis. Through examining both the internal and external situation
of MEM, we aim to address two of MEM’s main considerations:
1. Expansion into distribution lines into food stores and,
2. The introduction of the new product line “Cambridge”.
Recommendations will also cover how MEM may make changes to their Marketing Mix in a bid to
improve sales. For a comprehensive approach to the problem, non-marketing aspects such as operations
will also be considered.

SWOT Analysis
Strengths: MEM has established very strong brand awareness, especially that of the English Leather
series. In addition, it has:
 Achieved wide distribution penetration for its products through various channels;
 A strong and experienced sales force; and
 Maintained its price competitiveness despite the rising cost of raw materials
Weaknesses: MEM’s weaknesses begin right from the fragrance selection process. Current methods
are not a true reflection of the customer’s wants and preferences as it is based solely on a few senior
management staff.
Next, MEM has an only slightly differentiated and wide Product Mix which all target the same medium
priced market segment. The consequences of such a broad product line include production Inefficiency,
lack of budget for certain lines and lack of retail space.
Another weakness is the outdated slogan of English Leather and its little advertising support. English
Leather is an established brand that has been around since before the Cold War and thus is easy to have
'unaided awareness'. However, MEM aims to target a market that is typically slightly younger than
those targeted by competitors.
If no fresh marketing efforts are channeled, once the current segment 'grows up', there may be
insufficient awareness, or an undesired perception that it is for the older generation, by the younger
consumers when they enter the segment. MEM may possibly lose the brand awareness that it has built
over the years. Further compounding this weakness is how MEM’s marketing budget pales in
comparison to its competitors.
Opportunities: MEM has an untapped distribution channel of food stores, which only accounted for
less than 2% of sales in 1980. In addition, market conditions are optimistic as the market demand for
male cologne and toiletries is still expanding. Furthermore, with English Leather’s established brand
name, MEM may use it for Brand Extension to launch other product lines.
Threats: MEM faces strong opposition in the medium-priced segment especially since the market for
the segment is getting increasingly saturated with the existence of many other competitor brands.
Cambridge: The SWOT Analysis sheds some light on the feasibility of Cambridge. MEM’s strong
sales force will indubitably help in the marketing of the new product line, however the medium price
range target of Cambridge at $10 is in direct competition with MEM’s existing lines. The market is also
becoming increasingly saturated with competitors that are “backed by substantial advertising
expenditures”. Cambridge, being a new brand that will not ride on English Leather’s established
awareness with different packaging and name, might be outclassed by products such as Blue Stratos
which launches in the same timeframe but with an enormous marketing budget of $12 million. Thus,
due to the lack of budget, conflicting price-range of Cambridge, saturation of market and untimely
product launch, we recommend MEM choose a different strategy to boost sales.

Recommendations & Alternatives: Formulating the Best Marketing Mix for MEM
Product:
Fragrance Selection Process: MEM should start by looking more at The Marketing Concept rather than
The Selling Concept through making its fragrance selection process more stringent. MEM could include
consumers in its selection process by getting a substantial sample size of 100 loyal customers to
participate in the product development process. Revisions should be made according to the feedback
received. Ultimately, products should cater to their needs.
Product Line: Next, MEM should consider streamlining and reducing its product line. In using the
Boston Consultancy Group Approach, one may determine which Product lines should be dismissed.
The market share captured by Lime and Wind Drift have been dwindling at a measly 2% (Exhibit 5)
and can be classified as Dogs. These should be removed from the list. Product lines such as English
Leather, promise to be Cash Cows as they have already reached a substantial brand awareness level
(Exhibit 3). Thus, they should be allowed to continue generating profits for MEM.
Streamlining the Products would invariably mean lower production costs due to increased efficiency
and also more shelving space for the more popular products. To further lower costs, MEM should
source for suppliers with better/automated production facilities.
Promotion:
Market Segmentation: MEM should identify more precise target segments for its product lines and
reposition itself based on important psychographic factors such as lifestyle and personality instead of
merely age and income. Refer to Annex A and B for a segmenting model they could use and an ideal
personality for each product line. After identification, MEM can then look into implementing and
channeling the marketing efforts to these segments.

Marketing Strategy: Addressing the issue of a low marketing budget, MEM could overcome this by
using Concentrated Marketing Strategies instead of its current Undifferentiated Strategy to market more
effectively. Instead of mass-marketing all its products to consumers with an annual income above
$10,000, MEM should focus its efforts on targeting the different sub-segments within this group. For
example, Racquet Club which targets people who play racquet sports, should not be advertised in
magazines such as People, Playboy and Cosmopolitan. Instead, they should be advertised in sports
magazines or channels where exposure to the targeted market segment is optimum. Refer to Annex C
for a suggested list of marketing channels each product line should use.
Slogan: MEM should edit its current slogan into something purposeful such as:" English Leather, for
men who have no fear weathering the storms". Since the age range targeted lies from 18 to 34, they are
probably individuals who just started the working phase of life, and should remain relevant to them.
This slogan could embed an identity onto its wearers that showcases wearers of English Leather being
capable of overcoming whatever challenges life throws at them.
Place:
Expanding Distribution: MEM should look into expanding into food stores as a distribution channel as
competitors such as Old Spice have achieved 20.8% of their sales through foods stores (Exhibit 6). This
should greatly boost MEM sales and we can expect at least 15% of total sales to be from food stores
once implemented. Furthermore transition should be fairly easy as MEM already has strong connections
with drugstores and independent drugstores, which tend to be merged with food stores. Taking into
consideration the fast shelf turnover rate of products and space constraints, MEM should look at
convenience products or faster-moving items such as the cheaper 2oz. cologne and after-shave when
deciding which product lines to place at food stores.
Price:
Lowering Operation Costs: As competitive prices have been one of MEM’s strengths, they should
continue with this More-For-The-Same Approach. This strength can, however, be further capitalized
upon if MEM further cuts down on costs such as shipping costs which account for a high 8% of Gross
sales (Exhibit 7) by finding suppliers located nearer to retailers.

Overall Marketing Strategy for MEM

The current product mix proves to be wide for MEM to effectively and efficiently market its products.
Thus, MEM should revise its business portfolio and implement strategies to downsize the number of
product lines and keep only the profitable SBUs. Once it has achieved substantial customer equity and
brand awareness for its product lines, it can then consider strategies for growth and look into new
markets for profits.
Annex A: Segmentation Model

Product Line Age Personality Preferences Income

Looking for a light,
Sporty, young, university students. Below $10,000
Racquet Club 18 – 25 everyday wear that is
Free-spirited. a year
also affordable.

Affordable, but also a

Travelers, adventurous and $15,000 -
Timberline 20 – 30 trademark scent that is
independent. $20,0000
memorable.

Mature, beginning to significantly Self-confident and

English Above $20,000
30 – 40 advance in their career. Exudes willing to invest in
Leather a year
confidence. themselves.

Executives and the sophisticated

Attracted to luxury;
Acqua Di businessmen who want to feel and Above $30, 000
30 - 45 Willing to indulge on
Selva look good. Self-assured and a year
themselves.
competent.

Annex B: Ideal Personalities for each Product Line

Racquet Club Timberline English Leather Acqua Di Selva

ANDY RODDICK HUGH JACKMAN HUGH GRANT GEORGE CLOONEY

Annex C: Ideal Marketing Channels

Racquet Club Sports Channels and Sports Magazines such as ESPN.

Outdoor Magazines such as Explore, Fitness Magazines such as
Timberline Men’s Health, Outdoor Activities Association, Sports Magazines.
English Leather Lifestyle Magazines, TV Advertising, Movies.
Acqua Di Selva Business Magazines such as Forbes.