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Parallel Import of Aurora Lotion in Switzerland: Problems of Grey Market Dilemma
Parallel Import of Aurora Lotion in Switzerland: Problems of Grey Market Dilemma
Lotion in Switzerland
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Prepared by
Date of Submission
Dhaka.
Dear Sir,
As you have instructed, I have analyzed the case from the learning from your course.
At last I appreciate having this case study. It has really given me the knowlendge of how
conflicts are held and managed in real business world. I have learnt a lot from it and thanking
you for giving me this assignment.
Sincerely yours,
Introduction
Market Briefing
The Manufacturer
My recommendations
Introduction
Parallel importing or grey markets are have been always been a big problem for the authorized
channel members specially for those, who face severe competition from the unauthorized
importers. In many countries this is not illegal so were a foreign product is more popular channel
members are often experience this irritation. Produits Pour Fammes (PPF) is a authorized
subsidiary for marketing AURORA lotion in Switzerland this is a product of Smythe-Dabney
International Ltd,UK. John Farechild is the overseas manager who are facing a big dilemma
when the general manager of PPF reported him about the parallel importing.
AURORA lotion was the brand leader in a growing line of beauty products which included hand
lotion, mosturiture and bath preparations.PPF imported to 200 000 bottles were 120 000 bottles
were parallely imported by grey markets.
Market Briefing
Switzerland is a small, topographically rugged country in the centre of western Europe. The
swiss enjoyed relatively high standard of leveling with per capita GNP of SFr. 22500. That was
the highest leaving cost in Europe in 1975. The population was 6.4 million people, 3.28 million
people among them were women and the majority portion of them were adults, The target market
aurora lotion.
The Manufacturer
The parent company for PPF was Smythey-Dabney international (SDI) Ltd, with headquarters
outside London. A keen sensitivity to the needs of both consumers and channel distribution
caused the company’s directors to search continually for ways to make their products and
services more competitive. They quickly earn a reputation for having the company’s product in
stock in a timely fashion, providing a valuable service for their distributor. The basic guideline of
corporate management were
Lower PPF’s recommended selling price for aurora lotion to distributor the suggested
price were SFr 5
Cutting the subsidiary advertising budget. Though the product were well known and
popular, It was justified to have an alternative to cut cost from advertising
Trimming the sales force. Train the subsidiary sales force for work in a more competitive
market place
Rising the prices of other products.
My recommendations
Through the case analysis, I have understood the dilemma of John Fairchild. He had to eliminate
the irritating parallel import for the betterment of the subsidiary, other hand the existence of the
parallel marketers proved the inefficiency of PPF, and was also profitable issue for the UK main
branch.
So, above all the alternatives, I suggest for the alternative of cutting the unnecessary cost of
advertising by PPF, so their gross profit will be higher, and the distributors will not be
unsatisfied. The threat of parallel importers for the PPF will be minimized, and also the parent
company can have the same margin from their subsidiary.