Report On Cuddly Of Jones Inc. Essay, Research Paper
Jones Inc. sold disposable diapers under the name Cuddly. This company had developed different kinds of diapers and pull-up diapers and they suffered a loss of share of diaper sales in the stores they served, and a downward sales trend between 1993-1997, due to a series of price wars. So the company strove to reverse the situation and to increase sales volume by making changes to packaging, physical design of the diapers, and introducing new pull-up trainer diapers to the market, and promotion through advertising to encourage the involvement of children in the process since 1995.
They had also developed a new multipack that contained different prints of pull-ups by 1997. This report will focus on whether multipack, a new pull-up variety of diapers with adjustable straps newly developed by Jones Inc. is ready for testing, and how the test should be carried out. We will also look at the past sales performance of other pull-up diapers of this company to gain insights and relevant information to find out the consumer choice criteria, and the trend of the diaper business. In this report, we will also analyse whether a market research for the multipack carrier is worthwhile, considering the benefits and costs of the research, clarify what decision motivates the research, and diagnose possible problems and opportunities regarding the test proposed by Charles Krieger, the president of Jones Inc..
Jones Inc.’s sales had grown from 1990 until 1993 to and annual level of $3.75 million, but since then until 1997, a series of price wars had cut the company’s sales to $3.6 million, with a new low of only 853 unit sales in April 1995. So Jones Inc. had to strive for an improvement in sales volume and look for ways to reverse the downward sales trend. Their business objectives are to increase sales volume, increase the share of diaper sales in the market and to increase profit. A right market research could provide them with the information the managers of the company need to solve their problem of having a downward sales trend. The information the managers needed were what make their products more favourable and preferable to their customers, the changes within households in terms of income levels, number of working members, number of children, what attributes of the product induce sales most effectively, and how the customers perceive their products compared to those of competitors, and if packaging is one of the factors that affect customers’ decision, and what changes customers want to see in their products that are necessary for boosting sales. And the decisions the company had to make were whether to make changes to the packaging and design of the diapers, what changes should be made, and whether or not to introduce the new multipack to the market or not, the placement of the multipack, and how it should be tested.
Jones Inc. had experimented with several different types of diapers before they developed the multipack by 1997. They had tried to increase sales volume since 1995. What they needed to know beforehand was what should be done to their products in order to increase sales, with the question of what changes and improvements should be made to their diapers, what benefits people seek in their products in mind, and hypothesized that a change in packaging and design of the diapers could attract more customers and boost sales. beforehand was1995, they tried to increase sales by changing the packaging, and design of the diapers. They changed the size of the packages being offered with intention to best suit the needs of households considering storage and ease of carrying them home, they changed the diaper design to accommodate the differences in gender, and one main design change they made to their diapers was to gradually increase the diapers size range. With a wider range of diaper sizes, diapers can comfortably accommodate young children starting from infants and lead up to toddlers. For young children of different stages had different weights and mobilities, the diapers were designed with better straps and better fitting side elastics. Jones Inc. made this change to their diapers because they believed that wider range of diaper sizes that were able to reach different age groups of infants, and the design that comfortably accommodated both genders were of the attributes that customers sought, thus such a change could attract more parents to buy their products no matter which age group their infants were in, no matter the genders of the infants, and package sizes that were suitable for the households thus this could develop consumers’ preference, expand the company’s market, increase sales volume and recover the loss of share of diaper sales in the stores they served that they suffered before due to the price war. .
Their effort in boosting sales by changing the packaging and design was proven to be effective as the sales volume had increased steadily from August 1995 through to 1997.
This shows that the market accepted the changes they made and liked the changes. And this also means that the range of sizes of diapers, their physical design that suits both genders, and the package size are three of the customer choice criterion. These are the factors that make customers favour one product over another.
In the meantime, Ms. Shawn, the general manager of Jones Inc. implemented the pull-up trainer diapers in the market by 1996 with aggressive marketing strategy. The pull-ups were specially designed for toddlers who were to be trained to get over diapers.
Before this new product was developed and released to the market, it was essential for them to get information on whether a new product should be developed, what the alternative diapers they could offer to publics, what attributes people want in the new diapers, and then finally, after they got all these information they needed, they developed the new pull-up trainer diapers which could act as a aid for children to get over the diaper. These new pull-up diapers replaced the old larger diaper sizes to parents who chose to use they as a training tool for their children. Ms. Shawn also decided that the package of the pull-ups had to facilitate the involvement of the toddlers, thus to stimulate the use of the product. With the rest of product line unchanged, the unit sales of the new pull-up diapers were increased by more than three times the unit sales of old, larger diapers. It is obvious that the new pull-ups were responsible for such an increase in sales. This clearly shows that the pull-up diapers which encouraged toddlers to use and could help train toddlers to get over diapers was another attribute that customers valued and it was another one of the customer choice criterion that the company had handled successfully to win customers over from competitors.
However, while the increased sales volume was surely welcomed, there was also an increase in packaging cost by 4.8 cents, which was really unwanted. This more than offset the 4 cents the company generated by decreasing the number of pull-up diapers in each package. With high packaging cost, the entry into the diaper market was difficult and this problem was soon idenified by Ms. Shawn and it had to be solved. Then she figured out a way to tackle the problem: Cost would be reduced if more units were produced and sold because economies of scale came into play when producing pull-ups’ stronger lining. So the very thing that the company had to do was to increase units sold, and carrying out some form of promotion to boost sales, and in order to reduce cost with increased units sold. Ms. Shawn believed that packaging needed to be made more convenient. They also carried out promotion through advertising was that children had to be seen as participants in the process, so there was not only different kinds of prints on the pull-ups, but also consideration was given to the differences in the tastes of the two genders. The promotion was done with the intention that children would take part in the process of choosing the diapers they wanted to use, encouraged parents to give children the right to make decisions on what diapers to use, and the prints on diapers that appeal to children would attract more children to buy Jones Inc.’s products rather than those of competitors. Here, the company had found the information that showed children’s involvement in the process of choosing diapers can increase sales volume.
By 1997, the company had begun developing a new multipack that contained different prints of pull-ups. There had been some problems concerning the new multipacks and the packaging was updated and the pull-ups were adjusted in terms of quality, prints and design. Finally, the new packages of multipack seemed to be performing satisfactorily. Ms Shawn decided that the best mulipack carrier possible had been designed, thus she focused on testing the new packs for consumer acceptance.
As Ms. Shawn was confident that the best multipack carrier had been designed, it was unnecessary for the company to carry out test or a research for the new multipack carrier. This is because for a research to be effective and useful, it has to be associated with a decision, and aid in decision making. Also, whether to carry out a research or test or not depends a lot on how much the managers already know about the problem, the uncertainty that surrounds the decision, and whether the market environment is constantly changing. And most importantly, a test will only be carried out be the cost of the research is outweighed by the value and benefits of the information that the research is likely to generate, where one component of cost to be considered is the time involved. Only when the research is cost-effective that it will be carried out. In Jones Inc. case, Ms. Shawn was certain that the very best multipack carrier had already been decided, with not much uncertainty left to be explored, the result of a research would not contribute much to the decision making, and as Ms. Shawn was already familiar with the market environment and understood the problem well, the cost of carrying out a test would be greater than the benefit the test was likely to give. So it would only be a waste of time and resources to carry out a test for the multipack carrier. So it was not worthwhile to do a test.
However, if a test is judged necessary, the criteria for success
Concerning the marketing testing of the new multipacks for consumer acceptance, Mr. Charles Krieger, the president of Jones Inc., suggested that they could place their new multipacks at a few outlets where they were not competing with other manufacturers, give these outlets a special deals on the multipacks for one weekend, and deliver the multipacks and not the single packs at all, then in the third week they would deliver both the multipacks and the single packs, and then station someone at the aisle during the third weekend to observe what customer would choose, and to make a survey, that was to question the customers why they chose the multipacks or the single packs. There were a number of management problem that Jones Inc. faced before they actually released the new multipacks to the market. Firstly, one of these problem was that most parents tended to stick with tried-and-tested diapers as very often the size of the pull-ups was not suitable for the toddler. Secondly, it was very difficult for the company to maintain the margin while replacing the gathers used in diapers with elastic band, which increased the production cost. Thirdly, it was hard to sell large packs as the usage rate per day was less compared to old diapers. So ultimately, the problems facing the management were whether they should produce large amount of multipacks and introduce them to the market, how to introduce them to the market, what market segment they had to target, what attributes customers value most, the distribution of this new product, and what promotional effort they should make in order to attract more customers.
The test proposed by Charles Krieger was useful to an extent where they could find out important information that were needed to help managers to solve problems. These findings included whether customers preferred the new multipacks, the factors that caused customers to favour their new multipacks over their old single packs, whether customers were satisfied with the new multipacks, the strengths and weaknesses of the new multipacks with respect to the single packs, current trends and preference for the two varieties of pull-ups. These informations were also useful showing whether the multipack performed satisfactorily in the real market, whether multipacks generate enough sales, and it gave idea on the ration of single packs and mutlipacks that should be put into the market, and what attribute in a product attracted customers. However, while this proposed test was very useful and appropriate in providing the management with the information stated above.
However, this test failed to give enough information about the differences in the natures, lifestyles, financial statuses, and age ranges of the customers who bought multipacks, and those who bought single packs. Understanding the differences in these areas about the customers could help the company to target the right market segment for the selling of its new multipacks, and hence could help them find appropriate locations of outlets where they could sell multipacks.