Commercial Awareness Report

Commercial Awareness Report

Report Prepared By: Ruby Ruggles, Grosverner Investments Pvt. Ltd.

Report Submitted On: 30th December, 2020

Executive Summary

The purpose of this summary is to critically analyse the performance and internal management of the company named ‘Melmotte’, which is owned by Ms. Hetta Carbury. The aim of this report is to find if the business will continue in its current trajectory of growth in the coming years and where it should direct capital investment in order to grow optimally. The report finds that structural changes in the organization and a growth strategy abroad are the two essential things that this organization needs to focus on.

1. Introduction

Melmotte is a perfume production company which has been operating since 2008. It is started with its own perfumery and later expanded to a line of lotions and candles. Currently, it produces 11 different perfumes, 4 lotions and 15 flavours of candles. Since 2015, the company has been executively headed by sales director Hamilton Fisker. The report seeks to understand what are the hindrances to further development after 10+ years in the market and how the brand can develop a separate customer base for itself.

2. Basic Structure and Corporate Governance

Melmotte’s is a Limited Liability company (LLP), which essentially means that it is a company which has two or more owners who own the total shares. It differs from a sole trading company as a sole trading company wouldn’t make its shares public. From the perspective of investment, Grosvenor hopes that the company will be able to go public in the next few years, which means it will not limit itself to only owning shares by partners, but open its shares to the public. In the UK, the business owner must undertake an Initial Public Offering (IPO) to the London Stock Exchange or The Alternative Investment Market. It is recommended they conduct audits too, since shareholders will need concrete information about their profits and losses. With regards to Grosvenor’s comments on the structure of the organization, the advantage of Ms. Carbury being both the chairman and the COO of Melmotte is that it provides for a strong and unified base, a rationale companies like JP Morgan Chase use. However, most UK companies encourage division of owner and executive duties as that would mean effective management and less conflict of interest. A post which can be considered by her is being a non-executive director, who is a member of the board of directors but not an executive of the company. Benefits of being a non-executive director is that they can provide strategic direction to the planning of the company policy without the bias of being an executive. Second, Hetta will have more time to concentrate on the creative aspect of the production. A separate corporate governance committee should be in place which should include Marbury and the COO of the company, who should be appointed in due course. Considering how valuable Fisker has been to the company, aside from the 25% shares and higher salary, the company should consider making him a partner with equal share as well.

3. Management

Leadership and management are different as a leader needs to provide vision and direction to the company, but a managers job is to also make concrete policies to realise that vision. Decision making, organization and leadership are three important qualities Melmotte needs in its leadership. In terms of the new clientele ‘Luxury’ newer directions in negotiations have to be made in terms of payment. Fisker must consult with the clientele because lack of negotiations are leading to higher interests in loan repayments. The CEO of the company must possess the quality of decision making because based on the testimonials, the major decision for expansion taken so far has been the contract with Luxury, which has proven profitable. cisions like contracts with celebrities to develop their lines of fragrances, partnership with international retailers to operate in flourishing markers of Asia and the US. Given the current scenario, three must-have skill the potential CEO must have are: Experience in industry of luxury grooming products is essential as the business is still new and needs to develop sustainably. A strong background in multinational business, for international expansion. Strong contacts with suppliers and brands to eliminate sourcing problems of Melmotte.

4. Overseas Expansion

Because the company has no prior experience in expansion strategies, it could employ the help of institutions which work with business for expansion. One such institution is the UK’s Department for International Trade which has various e-exporting programs to help UK business sell their products online in foreign countries. Additionally they help companies apply for export opportunities online (www.gov.uk). A highly emergent market in contemporary world is the South Asian nation of India. Three cultural issues it will have to consider in the region are: The cooperation of local players is important as the nation has deep ties of loyalty with their domestic business (Gupta and Bhaskar, 2016) Negotiations are usually made at the highest level in the hierarchy (ukibc.com) The regional diversity ensures that cultural identity is varied and highly sectional (Ibid). The strategy Melmotte could do in order to remedy these are as follows: Establish connections with local retail giants like Goenka group or Reliance in order to enter the Indian market. Make local contacts to gain better access to company heads. Local contacts will help the company get inroads into the domestic businesses. Cultural research should be based on region, not nation as the nation is very culturally diverse. Additionally, three socio-cultural factors it should take into consideration are: Marketing needs to target the young groups in India as 50% of the Indian population is below the age of 25. That being said, it is one of the most populous developing countries and Melmotte needs to target both children and young adults with its products as well (Sharma and Singh, 2015). Younger population must be provided with affordable perfume options, like Zara did with its in-house brand of perfume, since it is still considered a luxury item. Because of pervasive western influence on the Indian youth, the company can save capital by retaining its western collaboration collections, should it decide to undertake that.

5. Marketings

This section will elucidate on the newest product of Melmotte, the ‘Juliet’ perfume and the most effective strategy to market it. An important framework to keep in mind while advertising this perfume is taking into consideration that four P’s of marketing: 1.Product: Testimonials mention that innovation in their product is one of their first priorities and they try to keep their products as trendy as possible. However, the brief fails to mention what motivates the development and production of a product and how does it come about. What the company can do to market ‘Juliet’ better, is dissect the production process and use the innovation in the production process as a marketable distinguishing factor in the advertising of the product. Price: Although the perfumes Melmotte makes is a luxury product, what it needs to understand is that in the current scenario luxury product sales may fall in the domestic market. The brief did not contain figures for 2019 and 2020, but to maintain an upward projection, Melmotte could provide discount codes for ‘Juliet’ for the first 100 online customers, to drive up sales. 2.Place: One of the main channels for marketing for ‘Juliet’ should be social media as this form of marketing is free and has an in-depth reach, across borders. Reiterating on earlier advice, the company needs to do collaborations with social media influencers to reach target audience. Promotion: Promotion strategy for ‘Juliet’ may include perfume samplers in magazines and mail, lucky draws at retail stores, online giveaways, discount codes to YouTubers and so on. 3.Three ways in which Melmotte’s could market ‘Juliet’ are as follows: Personalized Bottles: Melmotte’s could provide engraved bottles to customers who purchase the perfume. This would assign a uniqueness to the perfume and earn cult status for customers. However, it could lead to increased cost of engraving per bottle. Release Date: The release date should be centred around the holiday season like mid-December or the month of February. That way, customers can find their ideal gift item for Christmas or Valentine’s day. The downside is, they have to compete with the overwhelming number of brands who use the same strategy. Focusing on Ingredients: As mentioned before, the marketing strategy needs to focus on the origins of the perfume ingredients while advertising it. This strategy legitimises on the naturalness of the perfume. Alternatively, it could appear ingenue to the target customer base, but the broadcast ad needs to be filmed accordingly.

6. Conclusion

For Melmotte, the major recommendations have been given in the area of administrative restructuring and hierarchical changes, changes in the executive structure of the business, strategies to globally expand the business in economically viable nations and best strategies for marketing the upcoming perfume ‘Juliet’ in the existing markets. Total Words (excluding references): 1531

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References

• GOV.UK. 2020. About Our Services. [online] Available at: [Accessed 29 December 2020].
• Gupta, S. and Bhaskar, A.U., 2016. Doing business in India: cross-cultural issues in managing human resources. Cross Cultural & Strategic Management.
• Office), L. and Delhi, N., 2020. Business Culture In India - UK India Business Council. [online] UK India Business Council. Available at: [Accessed 29 December 2020].
• Sharma, M.K. and Singh, M.K., 2015. Impact of Changing Socio-Economic Environment on Business in India. International Journal of Research, 21.