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Case 3 True Body Products Should a Small Company Extend Its Product Line to Satisfy a Key Customer?

1. Should Shade introduce scented soaps to True Body's product line? Explain.

2. What steps should Shade take to increase the in-store shelf space of True Body's products?

3. Given Shade's vision for her company (soaps that are all-natural, unscented, and affordable), do you think that her concerns over the proposed higher prices that Whole Foods would charge for her unscented soaps are

justified? Explain.

4. Write a one-page memo to Janice Shade outlining the key components of a marketing strategy that will increase her company's in-store shelf space and its sales.

Case 3 True Body Products Should a Small Company Extend Its Product Line to Satisfy a Key Customer? In 2007 , after spending 15 years in product developm e nt and brand mana g ement with lar g e companie s s uch as Procter and Gamble, Welch's, and Seventh Generation, Janice Shade decided to start True Body Products, a company in Richmond, Vermont , that markets all-natural, un s cent e d, a f- fordable soaps. True Body's line of soap s is manufactured to strict quality standards by a New En g land contract manu- facturer and sold in 45 Whole Food s stor e s in the Northe as t , Fred Meyer stores in the Northwe s t, and sev e ral indepen - dent natur a l food s tores acro ss the United States and online at alice.com, an online hou s ehold products marketplace . In it s first full year of operation, True Body generated sales of $45,000. Shad e was op e ratin g the company usin g the $100,000 that s h e a nd privat e inve s tor s had invested in the company at start - up . The buyer from Whole Food s with whom Shade works recently approach e d her with an idea for i ncreasin g sales of True Body products. "Why not introduce a line of scented soaps?" the buyer a s ked Shad e . Scented soaps would be a natural extension of the sm a ll company's product line, would increase its s helf presenc e in stores, and would lead to more sale s. Shade wanted to a void alienatin g or confus- ing existin g customers, many of whom suffered from aller- gies and purchased True Body products because the soaps were unscented. "The most ardent and positive consumer feedback I get is from people who are happy to have found an unscented bar soap," she says. However, Shade thought that the idea of adding a scented line was worth considering. "I want my business to grow to a scale where it makes an impression on the world," she says. Shade began to research scented soaps and consider the options for her company with her advisory board . She asked the company that manufactures her soaps to create samples of soaps scented with fragrances such as laven- der and grapefruit. "Then we started costing them out," says Shade. "That's when the red flags came up." Because True Body ' s soaps are made with all-natural ingredient s, the manufacturer would have to use costly pure essential oils rather than cheaper synthetic fragrances to create the line of scented soaps. The result would be higher prices for the s cented soap s . Sh a de e s timated that True Body s oap s would have to r e tail for $ 6.19 for a pac ka g e of three bar s , compared to ju s t $5.49 for a package of thre e un s cented b a rs. The hi g her pricin g concerned Shade b e - cau s e s h e built her company on th e pr e mise of mark e t i n g s oap s that a re all-natural and afford a bl e. In conver s ation s with the buyer, she learned that if s h e introduced sc e nt e d s oap s , the retail e r planned to s et the price of both the un - scent e d and the sc e nted s oap s a t $ 6.19 for a packa g e o f thr ee bar s. Concerned that cu s tom e r s would bal k at the pri ce i n- crease, Shade con s id e red s ellin g th e s c e nted soap in two - bar package s , a pricing tactic that would allow h e r to offer a lower price point. She a g reed with th e Whol e Food s buyer that True Body needed mor e i n- s tor e s hel f ex posure and be g an to consider other way s to e xpand her company' s product line that would be more con s i s t e nt with her com- mitment to all-natural, unscented s o a p s , includin g liquid hand s oap , shampoos, face soap , and others. "I have every intention of g rowing," says Shade, "but I want to be inten- tional about it." Questions 1. Should Shade introduce s cent e d soap s to True Body's product line ? Explain. 2. Wh a t steps should Shade take to increa se the i n - store shelf space of True Body's products? 3. Given Shade's vision for her company (soaps that are all - natu ra l, unscented, and affordable), do you think that her concerns over the proposed higher price s th a t Whole Foods would charge for her unscented so a ps are justified? Explain. 4. Write a one-page memo to Janice Shade outlinin g the key components of a marketing strate g y that will in - crease h e r comp a ny's in- s tore shelf s pace and its sales. Sources : Ad a pt e d fr om Ad ria n a G ar della, "Can a Sm a ll Company Say No to Whol e F ood s ?" N e w York Tim e s, June I , 20 I 0, htt p : //bos s .blo g s .nytime s . co m/2 0I 010610 I/c an - a - s m a ll-com p a ny-say-no-to-whol e - fo od s ; Adriana Gard e ll a , "Y es , You C a n Say No to Whole Food s ," Ne w York T i mes , Jun e 4 , 2 0I 0 , http : //bo ss. blo g s. nyt i m es . com/20 I 0/06/04/ye s- you- c a n- sa y - no - to -wh ole- fo od s; a n d A dri an a Gardell a , "A Start-Up So ap M ake r S tart s to G e t Tra c t i on," N e w Y o r k T i m e s , Jan u ary 7, 2 011, http://bo ss .blo gs .nyti mes .com/ 20 11/01/07 / mor e -of- e v e ryth ing- fo r -a-start - up- s o ap-maker . 675
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True Body products.docx

1) True Body Products of Richmond, Vt., makes all ordinary, reasonable, and — for the
time being unscented soaps. True Body's leader, Janice Shade, helped to establish the
organization in 2007...

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