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Planning A New Perfume

Some thinking, questioning, and dialog engaged in before starting to draft a serious business plan for a new perfume

I received the following email from the UK and it caught my attention for a number of reasons. The writer had done some WORK (always a big plus) toward a specific goal and had come to believe that the project might be taken farther — possibly to the point of launching a new perfume.

At the time I received this email I was at work on a fragrance of my own that overlapped in theme the market described in the email. I was curious to see if, perhaps, we could engage in a dialog that would be mutually beneficial.

What follows is first my immediate "notes" and thoughts interjected into the email in brackets and in red. This is followed by my outline of "missing" information — details that would be needed to develop a serious business plan.

I want to thank the sender of this email for allowing me to publish it — and critique it — here at this website.

A Perfume Proposal

On 22 Jun 2009, at 20:53, a friend wrote:

For my GCSE Graphics Project I produced a perfume package after a year of planning. [OK. Notice the time involved.] I am personally very pleased with the outcome [what have others said? What grade did you receive?] and am now intending to produce the product [as I understand it, at this point the "product" is simply a design]. However I will obviously need support [advice or money?] and was hoping if you could help me do this [let's see what might be required]. Moreover I strongly believe that my product is marketable and will be profitable.

To begin if the perfume production was to continue it will be aimed at 18-27 year old females [young women, what background?] at the price range between £39.99-£49.99 [will the price define the background of the women who would be able to purchase it? Here in the U.S., this is not so cheap]. It will be appreciated if you could give me your opinion on the price [selling price is largely determined by the selling environment, which in turn is determined by marketing. Your price must 'fit' the price expectations of buyers in the venue where the perfume is being sold. Upscale shop? Higher price. Mass merchandiser? Lower price. It's as simple as that]. Additionally the perfume has an Arabic theme [an excellent market to address. But you have to get the Arabic people with money. What country would you propose to sell the perfume in? Are there shops in the UK that would work for you or would you have to take it to the Middle East?]. Furthermore this is different and elegant [just about every new perfume makes this claim but certainly it doesn't hurt], something that isn't currently in the market [if it's not on the market, are you sure that there IS a market for it?].

However the changes I would make is the shape of the box [what? Change the graphic design after a year of work?]. Instead of it being a boring rectangular shape I want it to be a hexagonal or pyramid shape [how will the affect the cost of the packaging?]. I will be happy to show my designs on this. Also another change will be the color of the font, altering it to brown [is this important?]. These changes will be beneficial [has any audience testing been done?] and after these stages would be ready and set to produce [in other words, the perfume itself comes last!].

Another crucial point we must consider if this was to take place was the production of the fragrance [yes. A fragrance at last.]. At the moment I am not clear on the exact scent but do have a certain smell in mind [can this smell be communicated in words? How will you work with a perfumer?]. Therefore this part will need to be revised first. [revised? It will need to be STARTED.]

To conclude I will be grateful if you will provide your aid. I have considered the price, theme, market group. I am fully prepared to be part of this [I certainly hope so as it is your project] and produce success. [we are a long way from that at present.]

I hope you will look into this matter. Hope to hear from you soon. Please do not hesitate to contact me: [done]

An analysis of where we stand now

I. Current Assets

  1. A graphic design for a rectangular perfume box.
  2. A desire to develop and launch a perfume around the concept and marketing ideas that inspired the box.
  3. Lots of enthusiasm.
  4. Perhaps a dollar or two in cash.

II. Issues

  1. Media Considerations
    A market is useless unless a practical, affordable means of reaching it exists. In this case our funds are quite limited so to reach ANY market at all we will have to depend upon sales generators such as:
    1. Face to face sales to shops and/or individuals,
    2. Internet resources — websites, blogs, social networking, RSS feeds, tweets, etc.,
    3. Very low cost promotional events, if appropriate.
  2. Market
    The market has been defined as women, age 18-27, who can afford to purchase an unknown fragrance at £39.99 to £49.99 (approximately $65 to $80 US on 07/02/2009) and will relate positively to an Arabic-themed fragrance. Now for some questions to be answered:
    1. Will the initial market be young women of Islamic background, or will the product have a STRONG appeal to non-Islamic woman?
    2. What country will be targeted first?
    3. Do shops exist in that country that will take our new fragrance on a trial or consignment basis?
    4. Will we be able to walk into these shops and make an arrangement to have our perfume displayed?
    5. Will the women in our target group who shop in these shops be tempted to purchase our new fragrance?
    6. Will one of these shops allow us to put a "demonstrator" in the shop for a few hours a week so that we can spray some women and get their reaction?
  3. Product Costs
    These figures are simply rough estimates of our costs per bottle. Fragrance cost was estimated for filling a 1.2 oz bottle with perfume mixed at 20 percent compound to 80 percent pure (200 proof in the US) ethyl alcohol. Bottle, spray and overshell are assumed to be "stock" rather than custom as a custom bottle will be unaffordable at our initial production volume, which may be no more than as few dozen — or a few hundred — bottles while we 'test the waters.' Notice that we ARE budgeting a considerable amount of money for the packaging which will surround the bottle as the entire promotion is inspired by the graphic theme of our packaging design.
    1. Fragrance (what goes into the bottle) to fill a 1.2 oz bottle — £1.54 to £1.84 ($2.50 to $3.00 US)
    2. Bottle, pump & overshell — £1.84 to £3.00 ($3.00 to $5.00 US)
    3. Box — £0.46 to £6.12 ($0.75 to $10.00 US)
    4. Label — £0.16 to £1.84 ($0.25 to $3.00 US)
    5. Assembly — £0.62 to £1.84 ($1.00 to $3.00 US)
    We can thus anticipate that our total cost per bottle will be in the range of £4.62 to £14.64; ($7.50 to $24.00 US).
  4. Profit Margins
    At a product cost of from £4.62 to £14.64 ($7.50 to $24.00 US) we have the ability to wholesale this perfume at from £20 to £25 ($32.84 to $41.00 US). This should allow us a comfortable margin for advertising, sales promotion, profit, and unexpected expense.

III. Summary

  1. While this promotion is based on a graphic theme for a perfume package design, the success of the project will depend upon the development of a FRAGRANCE that will have the ability to generate sales within the target market.
  2. To succeed, this perfume launch will require a great deal of personal selling and energetic viral (buzz) marketing. At present we cannot be certain of our ability to generate "talk" which will translate into sales for this new perfume.
  3. As funds for this project are limited or non existent, successful test marketing will depend on the ability to develop a reasonably sophisticated promotion at the lowest possible cost.

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Philip Goutell
Lightyears, Inc.