The company is primarily a consumer goods company (third biggest in the world with over 170,000 employees [3] and a 2013 annual turnover of just over EYE billion [3]. With over 400 brands, the company has branched out into numerous marketplaces ranging from food, to domestic cleaning to personal healthcare. Some of the more well-known brands include PEG tips, Persia, Lynx (known as AXE in the US), Helmsman’s and Slim-fast With such a wide variety of products the customer base depends entirely on the chosen brand and sales location and it is expected that the customer base for the company are both enders all ages and backgrounds.
With relation to the Lynx product in the UK, as shown below in figure 1, the male to female ratio usage of body sprays is nearly two to one, with females exceeding the use in deodorants, most likely due to the use of perfumes in place of body sprays. It should be noted that Lynx also has a 52% of the body-spray market [5]. Additionally the use of deodorants is mostly common practice amongst people aged 25 and below, with less use in increasing age As previously mentioned Milliner is a worldwide company which turnover billions of pounds in multiple countries.
The greatest increase in market over the past has been in Asia with the most turnover in terms of product being in personal care as shown in figure 3 below. It can be seen that 40% of income is coming from Asia and that 36% of the income is from personal care. As such the product for added value will be of the personal care category with a large potential market in Asia as even small additions in value will have a major impact on the company’s growth. Existing Product Under personal care comes body sprays which are sold by one of Milliner’s more established and well-known brands, Lynx (AXE).
Lynx’s primary product is DOD sprays with varying fragrances. Other products include anti-pertains, aftershaves, shower gels, shampoos and roll-ones. The target market for the whole range consists of 15-25 year old males, with naturally lower incomes due to age range (in education as opposed to work), bachelor incentives as proposed by many of the advertisements (Figure 4 and 5), heterosexual and generally have mainstream mentality Below shows the market Lynx (AXE) has in America with potential to overtake other brands.
Value Chain analysis This analysis is a way for businesses to determine where value can be added or the benefit of the customer and thereby for the company. There are nine sections, as shown in figure 6, each explained below with the Lynx body-spray product as a basis. Each of these nine sections undergo a simple three step process whereby activities are analyses, activates are then screened for value addition and finally evaluate the worth of said added value although the latter will omitted. The two main ways of adding value are through cost reduction and product differentiation which has been taken into account below.
Support Activates Infrastructure This is the compass structure, the planning methods, management technique, laity control mechanisms, accounts and financing (as shown in the first line of figure 6). The infrastructure of the Lynx Company sprouts from Milliner, where similar methods are applied. In terms of adding value through differentiation there is emphasis on quality of fragrances within Milliner’s proposals which the Lynx Company falls under Additionally customer preference is vastly considered in the marketing stunt to launch one of their customers into space.
In addition to increased press, entrants must complete survey like forms to enter, including preference of purchase increasing its understanding [9]. Also Lynx have given users a say in marketing scheme which allows for determination of customer preference [10]. In terms of cost reduction, reduced employees is common practice due to automation as the company has hopes to double in size by 2020 [1 1] . The company is known to cut larger chunks of work force such as in 1995 and 1993 where over 12,000 were made redundant [2].
To add to this management techniques have been implemented due higher levels of automation which in turn required increase training. The techniques included Total Quality Management programmer and Manufacturing and Supply Chain Technology Council. These techniques increased efficiency from 60% to 85% [21 Human resources Management This is the hiring and retaining employees so as to design, produce and market the product. In terms of differentiation to increase creativity and innovation, consultation and communication procedures are implemented under the ‘Code of Business Principles’.
In some instances trade unions can and have been formed to increase productivity and coherence between employees [2]. Reducing cost through improved efficiency of work has been done through increased automation systems as previously mentioned. Technology Development Technology comes into play across all paths from developing to delivering the product and is vital when adding value to it. Through increased research, which has been invested on heavily [1 2], as shown in figure 9, through purchasing new technology the Lynx company was able to provide the same volume of deodorant in a smaller can allowing for easier and lighter travel [13].
A comparison is given figure 7 and 8 below. Procurement This is simply how raw materials and funding are obtained for the product to be produced. As the Lynx company is a part of Milliner the funds come from venue from Lynx itself and if necessary the Milliner company. Additionally with partnerships such as Namespace such investment is all but rare [14]. One of the advantages of being a large company are the reduced prices for bulk ordering and influence over other businesses.
Various methods have been implemented to reduce costs such as implementing routine procedures, procurement of low maintenance equipment and monitoring of supplier behaviors [12]. Inbound Logistics Upon understanding where to get the raw materials, companies need to receive, store and then distribute the materials for the production process, this being now as inbound logistics. Value through differentiation has been added through training staff to work more efficiently and incidentally reduced mishaps involving raw materials [2].
Reduction to cost has been achieved through additional facilities abroad (not in the I-J) as Revenue increase in Asia. The increased turnover has occurred over a number of years, as shown in figure 9, and it is know that labor in Asia is much cheaper than in the west [15]. Further value could be added through more niche materials and negotiations to reduce supplier costs. Operation This step is where the raw materials are converted into the final product to be stored or delivered to a customer.
Value has been added here multiple time based on customer preference primarily on customization of product function as show in figures 7 and 8. Additionally the product appearance has been change multiple times to accommodate new fragrances such as the multi colored designs in figures 7 and 8. Although the fundamental brand image had not been compromised. Additionally TTS has been implemented as described in the infrastructure section. Multiple customer feedback approaches have been taken o further increase the value through use of Namespace [14], Faceable, other social sites and Lynx’s own website for customer enquiries.
Outbound logistics Upon producing the final product this section concerns the distribution channels to the customers. Through use of storage and orders the products are transported from the production plant. Lynx has multiple outlets including websites and supermarkets who pre-order body spray. This allows for exact distribution processing methods and timely delivery. Additionally such supermarkets order in bulk increasing the efficiencies of delivery [16]. With the SE of Unlisted other brands such as Helmsman’s delivery to similar areas can be coordinated with, further increasing efficiency.
Sales and Marketing This aspect of the analysis involves advertisement, distribution channels, pricing, customer relations, promotions and correct targeting of the market. The price here is targeted at lower ages with less income and ranges from E-5 [17] which then generates the need for mass sales. To do this Lynx have a very large advertising campaign through use of social sites, posters, celebrities, magazines, newspapers, Lynx dating sites, Lynx debates, television and radio adverts. This is for the general public and specificity is in short and so there is no real personal aspect to the campaign besides the varying fragrances.
Service This is the maintenance of the products performance after it has been purchased by the customer. Such examples include insurance, installation regular maintenance, repairs, training and warranty. Due to the disposable nature of Lynx body sprays and the relatively low price, little further assistance is needed in terms of the product itself. Although Lynx do offer customer service through emails, simple phone communications and letters. This being said gift wrap options are available on some of the more expensive products.
In terms of the most value added, it seems clear that the amount of expenditure on marketing and promoting in advertisement of the Lynx body spray indicates that Sales and marketing are the biggest aspects to add value to the company and product. Changes to Existing Product The current Body spray lynx product has been analyses and it has been found that there are multiple areas to add value to the product. Notable of which are the following three; increase the female appeal through design change, increase the female market through change in marketing approach and increase marketing in Asia.
A SOOT analysis has been done for the Lynx product as shown below in table 2. Design change Currently the mass market for lynx body sprays are male customers. This intention of primarily male customers has been advocated by Lynx The Times Newspaper acknowledge male dominance in this market claiming 70% of consumers are men [18]. As shown in figure 5 the male to female ratio of body spray usage is approximately 2:1. If there is a change in the operations to a more appealing design and coloring of the Lynx container it would reduce he alienation of the female gender.
Such examples would be lighten the dark colors to lavender purple and blue to portray delicateness and warmth [18]. Additionally rounder shapes to the canisters instead of the sharp may also be more appealing to women [19]. This new shape with more elegant and less brass colors may also enhance the appearance value as bold colors have been shown to be perceived as cheap [20]. Additional value will be added in human resources making it easier for women to work in a less male and sexually orientated drenched environment [21]. An example of female deodorants are even in figures 12 and 14.
The product can be placed in the company under the same product as it is for men but for women, the body spray personal care section. This may prove to be difficult due to mass competition (as shown in figure 1 5) for female deodorants and Lynx reputation for male promiscuity. A new outtake could be to promote female promiscuity to keep with the brand identity. It should be noted that Lynx have already attempted to increase the female customer base (figure 13) and although there was a change in color little was done to the shape, to preserve brand identity.
This in turn reduced the effect of the ‘new Lynx on the female market [23]. The cost for modifications to the machinery involved, developing a new design in terms of colors and shapes for the product, releasing the product to market, promoting, legalities the new product including staff has been approximated using a ratio of capital, to operating cost of 1 Using this the operating cost has been taken from the original Lynx product as this is a close estimate and the remainder calculated.
Where the operating cost is 5% of personal care operating cost which approximates to EYE million thereby making capital costs at El 1. 6 million. Staffing cost has been approximated to EYE million [8] [12]. There’s unlikely to be change in the male market with this addition as has been seen through other gender changing trends such as men wearing accessories meant previously and solely for women [25]. Marketing Change As previously mentioned the Lynx marketing campaign is aimed primarily at men due to their large stake in the deodorant market.
With marketing as those shown below in figure 17, there is hardly any appeal to women (even though there is a market, figure 16). To increase the value in the marketing section, there needs to e an increase in marketing directly towards women, between ages 15-25 with less derogatory advertisements. This would again not only increase value in the human resources, for the aforementioned reason, but also directly increase mass sales simply because of the market share Milliner and Lynx has in the current market (figure 4 and 16).
Currently deodorant marketing towards women is primarily has a soft care persona [25]. To keep in line with Lynx, so as not to lose the Brand Identity completely, marketing should focus on hinting towards female promiscuity without objectifying them, opposite to its intention in the male’s notepaper advertisement. This will in itself due to its boldness and variance from the standard woman’s deodorant advertisement will standout and promote itself.
The implementation of this change will occur primarily in all forms of marketing used for the original Lynx advert (as previously mentioned) In addition to this certain TV adverts will have to be place between certain programmer, such as, stereotypically (in the 7(Yes) for the male Lynx advert would prior or after Top Gear whereas the female directed advert would be during strictly come dancing. Although 40% of Top Gear views are female [26]. Similar methods with a research base would dictate such paths for magazines, radio times, social networks and other forms of distribution channels.
Similar tactics have previously been used in perfumes where the woman is in complete control of the scenario with hints of promiscuity, as shown in figures 19 and 20. Financial costs to the company will be solely based on marketing and can be assumed to be similar to the marketing costs of the original Lynx advertising which is approximately SO million [12]. Other cost include reduction in male trends in using the body spray seeing it become more feminine due pious amounts of adverts to be used for the female Lynx promotion.
