1. Describe the root causes of Slendertone¡¦s French sales revenue losses?
All sales of slendertone were through distributors except of home-market. Since the investments being made in research and production, the company¡¦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 Slendertone¡¦s French sales revenue losses listed below:
ƒÜ 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.
ƒÜ Lack of seconday data for the EMS product class, and the distributor reluctant to share sales data with Slendertone.: It¡¦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.
ƒÜ Lost the TV slot: the distributor had lost the television slot for the Gymbody8 to cheaper product.
ƒÜ Tacky advertisement: Some advertising featured topless models alongside sensational claims for the products¡¦ effectiveness.
ƒÜ 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 ¡¥s very clear to know that the problem of distributor.
2. When O¡¦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.
Through Mr. O¡¦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.
for Each Target
for Each Target
Originally, Slendertone was defined as ¡§women between the ages of 25 and 55,¡¨it¡¦s a few niche segments were targeted, including ¡§prenuptials,¡¨ ¡§postnatals,¡¨ 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 ¡§postnatals,¡¨ no longer are being targeted separately. Also, Male users now represent an important and fast growing market for EMS products. O¡¦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...