Question

You’ve had a good run as manager for a leading brand of leave-in conditioner. The product performs better than competition in taming frizzy hair, and has long commanded a premium price based on an attribute-based positioning. But now you’re nervous. There’s been a gradual but steady decline in sales over the past three quarters. Denise, a new member on the marketing research team, has presented you with information that suggests two possible causes. - First, beauty magazines and salon publications wrote repeatedly last year about a shift to free-flowing, natural styles. These styles work best with products that don’t leave residue on hair. You know that secondary data isn’t always ideal, but these stories were consistent and voluminous. - Second, recent focus groups run by Denise complained that your price is too high. Like all focus groups, these included only a small number of people, but the participants were loyal customers. Neither source is perfect, and the information you have is far from conclusive. But there’s nothing else to go on for now. Top management is under pressure from investors and anxious to take action, but wants to make sure the company is set up for long-term success. You can’t effectively address both issues at once, so you must decide which one is more likely to be causing the sales decrease.

A) Styling change.
B) Price.

Answer 1

The issue that is more likely to be causing the sales decrease is:

Styling change.

This is the issue that should be addressed immediately. In addressing this issue, consideration should be paid to the price issue since any production shift to meet customers' styling change will reduce the production of the leave-in conditioner.

Step-by-step explanation:

Identified Problem:

Steady declining sales

Causes;

Styling change

High price