What Type of Strategy Should Nundies Use in Order to Increase Their Repurchase Rate and to Reach the Expected Sales and Profits for 2008?

Problem:

What type of strategy should Nundies use in order to increase their repurchase rate and to reach the expected sales and profits for 2008?

Problem justification:

1. repurchase rate had not met expectations

2. reorders were only 10% of the total units sold

3. online is viewed as positive but not used frequently enough for e.g. reorder

4. amount of panties in one package

5. store personnel thinks Nundies sell themselves

6. staff does not talk about the product or suggest it to consumer

7. people seam to be embarrassed in shops by showing interest

8. display tends to get lost in many shops

company:

- 60% of the sales made by their largest customers

Courses of action so far:

strategy since 2003: focus on branding own products and converting its

products

development capabilities into consumer based solutions.

Primarily medical market

Single use products

Product development: consumer based solution-> panty

Costs for one panty: 0.60$

One package: 5 pieces price: 15$

Cost of plastic: 0. 45 $? 1. 05$

2006: ads in magazines, distributed throughout NY city based retail buyers, promotions with .g. gift bags for woman at celebrity events.

2007: distribution coverage among women's boutiques and showrooms set up by manufacturer agents organization with product information.

Commission of agents: 12 % on the wholesale price ( 1.8$) with a minimum order of 36 packages ( 252. 00$), media and print ads ? total costs: 800 000$

Online sales: 385 units ( 4275$), store purchases min. order 252.00$

2007: sales of 10.7 mil.$

Net profit: 850 000$

?

2008

alternative courses of action:

1. continued development of the women´s wear and specialty store channel

pro:

- saves costs

- costs: 14 400$

con:

- reliance on manufacturers agent organizations to recruit stores via show rooms

2. pursue upscale department store accounts

pro:

- ads, point of sales display and ad plans would be presented

- ability to produce and deliver product in the right quantity and documented

- centralized 300 stores and decentralized 350 stores

con:

- all have different merchandise buying practices

costs: 20 000 to 30 000$

- line fees, warehouse fees, settlement fees, catalogue fees, cooperative ad allowance ( fees are based on annual sales estimated cots: 35000 to 55 000 $)

3. mid level department stores accounts

pro

- centralized ( 1793 stores)

- same costs per size as to 5 upscale department stores

con

- different brand name& packaging ( 7 and paper)

- different price: 8 to 10$

- 25 000 to 35 000$

- line fees, warehouse fees, settlement fees, catalogue fees, cooperative ad allowance ( fees are based on annual sales estimated cots: 35000 to 55 000 $)

4. combination of channels

pro

- ability to produce and deliver product in the right quantity and documented

-