CASE ANALYSIS: MEM COMPANY, INC. Introduction

The central issue in this case is the need to stimulate sales at MEM. Sales were flat over the most recent operational year reported in the case. Important subsidiary issues exist in relation to this central issue. These subsidiary issues must be addressed as a part of a comprehensive strategy designed to deal with the central issue. These subsidiary issue are as follows:

1. The company's distribution structure is being compromised by changes in the cosmetics industry. The distribution structure may be a factor in the flattening of sales revenues at the company.

2. Both the company and the industry rely heavily on new product introductions to maintain sales revenue growth. The company, however, has a very haphazard approach to new product testing, and this approach may be compromising the effectiveness of the company's new product introductions. This approach may be exerting an adverse effect on sales revenues. 3. The company has relied primarily on a product positioning strategy that emphasizes the mediumpriced market segment. There are some indications that the greate

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remains strong. The prestige segment of the fragrance market has been hurt by inexpensive imitation fragrances called knock offs. Additionally, changes in packaging and distribution processes have created some problems for prestige level cosmetics. Prestigegoods are typically of a higher quality than are other products in the same genre. Even when the actual quality of prestigegoods is not higher, there exists a perception of higher quality among those individuals included in the appropriate target market. Higher quality, or the perception thereof, is accompanied by a significantly higher price. In most cases, price differences are greater than quality differences. Shifts in the distribution of cosmetics are resulting in changes in the industry's product mix. Cosmetics distribution was but a short time ago dominated by department stores. In the contemporary period, supermarkets and drug stores account for a majority of the sales of both makeup and skin treatment products. The distribution shift toward mass marketers has proved to be a boon for mid and lowerpriced cosmetics, and has hurt sales of prestige brand cosmetics whose market image is linked to upscale department stores. The overall industry distribution s
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Approximate Word count = 2720
Approximate Pages = 11 (250 words per page)

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