Will Casler, Blake Davis, Seung Lee, Tim Grace

Product Development Plan

Executive Summary:
The brand focused on for this project is Olay. We found starting on the new product
development process to be slightly difficult, given the nature of its products. We found that the
ProX facial cleansing system was a product that we could better improve than a facial cream or
makeup. Due to a lack of expert knowledge on the development process of facial creams, we
saw the opportunity to tackle and modify the ProX as our best option.
While working on the Product Innovation Charter for Olay, we focused on the social
trend of people becoming more concerned about their physical appearances. This is due to the
rapidly growing presence of social media. Because more attention is being paid to appearances,
more cosmetics are being sold. Regarding threats to the cosmetics industry, there are studies
that have found many dangerous chemicals in cosmetic products used every day. These
chemicals can cause birth defects, obesity, and diabetes, among other side effects. If traces of
the chemicals are found in any of Olays products, the controversy could dramatically decrease
sales, and negatively affect peoples attitudes toward Olay.
We decided to create both a modified version of the Olay ProX cleansing system and a
new product based on the ProX. The modified ProX is called the ProX Mod, and improves
features of the original ProX that received criticism from many customers. The new product is
called the ProXL, and is designed for both men and women (the original ProX and ProX Mod are
intended for use by women). The ProXL offers a wider variety of existing features, such as brush
head size and speed, which we predict will increase its ease of use.
Based on the calculations done in the ATAR sales forecasting model, we determined that
the gross profit margin of the ProXL to be almost two times greater than that of the ProX. To
conduct the calculations for the ATAR model, we started with an unaided awareness test.
During testing, however, we realized that very few participants knew of specific facial cleansing
brushes or systems. Because of this, we decided to switch to an aided awareness test. Based on
our findings, we decided to proceed with the development of the ProXL instead of the ProX
Mod.
Once the ProXL became clear it was the necessary product to pursue, we conducted a
conjoint analysis. The analysis was done by looking at the product concept statement of the
ProXL and determining the three most important attributes. We created eight conjoint cards
and had two people place the cards in order of their most important attributes. We input this
data into an excel spreadsheet and ran a regression analysis. The results showed that
convenience, durability, and battery life were the most important attributes, respectively.
We plan to use Search Engine Marketing for a successful launch of the ProXL in the U.S.
We will pay Google to be the first result for any search that includes the words facial and
brush. We will also attempt to be the highest bidder for the Pay Per Click (PPC) section of the
search results page. This is because the vast majority of people view web pages starting from
the top left hand corner. We predict that the launch strategy, as well as the other four parts of
the product development process, for the ProXL will make Olay an even more valuable
cosmetics brand.

Section 1:
Background Opportunities (Political)
The Personal Care Products Safety Act (PCPSA) is a bipartisan bill introduced in April
2015 by Senators Dianne Feinstein and Susan Collins to increase regulations on goods such as
lipstick, makeup, and pomade. Since its introduction, however, the bill has only had a second
hearing. It is doubtful that the bill will be passed, due to its lack of progress. The PCPSA was
started because of the U.S. governments current stance on cosmetics. Currently, cosmetic
products and ingredients, with the exception of color additives, are not required by law to have
the Food and Drug Administration (FDA)s approval to go on sale in the skin care market. Based
on the slow progress that the PCPSA has made since its introduction, it seems very unlikely that
the law will be changed.
Background Threats (Political)
Currently in China, cosmetic products manufactured outside of the country are
required, by law, to be tested on animals before being sold. This only applies to products
physically sold within China, but many of Olays sales from the country come from physical
retail stores. This requirement hinders the speed of launching new products in China. If the
topic of animal testing gains enough attention, Olay may lose a high number of customers,
depending on how many of them own pets.
Background Opportunities (Economic)
The U.S. skin care market is expected to reach a value of around $11 billion by 2018.
This can be attributed to the rise of social media, as well as the growing trend of people being
more health-conscious. It is now very easy for anyone to expose themselves to the entire world
through the Internet (Google, YouTube, Twitter, Facebook, etc.). People can receive many
comments on any of their shared videos or images, almost immediately after they are posted.
Before the widespread use of social media, a persons video or image would usually only be
seen by close friends and family. With social media and its enormous user base, the same video
or image can be seen by thousands of people (these can include friends or acquaintances of
friends).
With Donald Trump becoming President-elect of the U.S., a major talking point
throughout his presidency will be the nations economy. Trump aims to produce 25 million new
jobs for the U.S. over the next decade. Additionally, he plans to boost the economys growth to
3.5% per year on average, with the possibility of increasing to 4%. If Trump fulfills his economic
vision, the U.S. will enjoy an increased GDP, which will likely lead to increased spending. If the
U.S. economy becomes very prosperous under Trump, companies or brands known for
providing premium quality products, such as Olay, may have even more customers.
Background Threats (Economic)
Trumps upcoming presidency could also damage the U.S. economy, depending on how
Trump handles trade relations with major foreign countries (e.g. Canada, China, Japan). While
running for the U.S. presidency, Trump proposed a 45% tariff on Chinese imports. This is part of
his plan to reduce the U.S. large trade deficit. Currently, this proposal has not changed. If China
and other major international trading partners dislike Trumps proposals, and begin a trade war

with the U.S. If a trade war occurs, the U.S. economy could end up in an even worse position
than before Trumps presidency. Unemployment in the U.S. could increase from 4.9% now, to
almost 9% in 2020.
Background Opportunities (Social)
The proliferation of organic, gluten-free, and nut-free foods in the U.S. is one of many
results of an increased desire for longevity and wellness. The Internet has made it very easy for
people to obtain detailed information about almost anything in the world. Informational videos
and articles about the food industry and its practices can and have been exposed to millions of
people in a short amount of time. People can find out what to eat and what to avoid in a near
instant.
Because of social media giving people a larger audience for shared videos and images
through the Internet, thousands of different opinions about them can be created and spread.
Opinions about a person can rapidly disseminate, and either harm or improve their reputation
on and off the Internet. This is one reason why more people in the U.S. are eating healthy; they
want to improve their outward appearances, and leave an excellent impression on others.
Appearances have gained more significance in U.S. culture, causing more people to spend
money on products improving how they look.
Background Threats (Social)
A study conducted in the U.S found that many Americans are being exposed to
hazardous endocrine-disrupting chemicals on a daily basis. These chemicals negatively affect
hormone function. As a result, annual health care costs and lost earnings total over $340 billion.
Some effects of continued exposure to the chemicals include increased rates of male infertility,
birth defects, obesity, and diabetes. The dangerous chemicals are found in many commonly
used products, including cosmetics. Olay must ensure that none of its products contain the
phthalate chemical, which is usually found in many cosmetic containers. It must also check its
products for any traces of polybrominated diphenyl ethers (PBDEs), which can be found in
packaging. Failure to remain cautious can result in customer loyalty and brand reputation being
damaged, if customers find out that Olay (a brand focused heavily on maintaining healthy skin)
is contributing to the chemical exposure.
Background Opportunities (Technological)
Virtual Reality (VR) is a new technology that is rapidly gaining support from notable
companies, such as Sony, Microsoft, Facebook, and Google. It has and is currently being used
for video games, videos, and medical research, among other things. With skin care, the
Givaudan Company has created a VR application called Skin Odyssey, where users learn about
various skin cells and their features. Applications like Skin Odyssey can inform many people
about the importance of having healthy skin cells, if they are promoted well. Also, depending
on how advanced VR applications become, skin cell researchers may be able to use VR to learn
new facts about skin cells that would otherwise have remained undiscovered.

Background Threats (Technological)

A new product called SiliSponge is currently gaining large amounts of attention on the
Internet. It is a clear, patty-like sponge that is used to apply makeup. People are intrigued by
the SiliSponge, because of its high ease of use and low cost. If the product succeeds, it may take
a great number of sales from traditional makeup applicators, such as brushes and cloths. The
success of the SiliSponge would negatively impact Olay, because the company offers a wide
selection of brushes and cloths that are more expensive than the SiliSponge.
Focus
Being one of the biggest players in the skin care market, Procter & Gamble (P&G) can
afford to pay hundreds of gifted scientists to develop advanced technology for Olays new
products. Some of Olays technology is used to research skin genes and how changes to them
can damage skin. Besides skin and skin genes, Olays research teams also analyze various
potential anti-aging ingredients. The ingredients selected by Olay are then used to create the
products in its various product lines, such as Total Effects and Regenerist.
Thanks to its vast resources and strong focus on research to maintain access to cuttingedge technology, Olay is capable of selling skin care products that have both unique features
and high quality. Very few competitors can match Olay in terms of product features and quality,
let alone resources. This is a major reason why Olay has been so dominant over the last two
decades.
Olay, with its sole focus on skin care, has a product portfolio consisting of various
creams, cloths, facial scrubs, eye rollers, bar soaps, lotions, body washes, and facial brushes.
This project focuses on the product line of facial brushes inside the ProX product family.
Olays brand platform consists of the same Olay logo being placed on the front of all
products packaging and the products themselves. Each product, even those belonging to
product lines, has packaging that varies in shape, size, and color. Olay and its logo have become
associated with high quality, but none of the colors Olay uses for its products have. Colors can
be used by multiple companies, which can cause consumers attitudes toward products
sporting similar colors to negatively change. Using the same color for all products could reduce
production time and costs, but because Olay values producing high quality products above all
else, it is unreasonable for the company to do so.
Currently, Olay is struggling to sell its products to millennials. This is because of its focus
on mitigating the effects of aging. Even Olays slogan, Ageless, implies that it is better suited
for use by adults. Besides high quality, the Olay name and logo have also become associated
with old age. Naturally, teenagers and young adults are unconcerned with the age and
condition of their skin. As a result, many of the brands sales come from adults aged 30 to 50
years, and very few sales come from millennials. To appeal to a younger audience, Olay should
start a new product line with a focus on enhancing outward appearances, with little to no
regard for anti-aging. Changing the slogan and brand image could backfire, and cause both
younger and older audiences to become disinterested in Olay.
Since Olay is owned by P&G, it adheres to the same code of ethics as P&G. P&Gs World
Business Conduct Manual (WBCM) is the main source of guidance for the company when it
makes business decisions. P&G strives to remain consistent with its purpose, values, and

principles (PVPs) established in the WBCM. The PVPs are important not just for making ethical
decisions, but also for maintaining good relationships with both customers and distributors.
P&G relies on hundreds of different suppliers, distributors, and retailers to make its brands
products available to consumers. Decisions that damage P&Gs reputation may cause some
third parties to stop doing business with the company altogether, which would necessitate
adjustments to its supply chain management.
Olay was an early entrant in the anti-aging sector of the personal care industry, and
enjoyed much success from its innovative products. However, more competitors are selling
anti-aging products comparable to Olays, saturating the market. Currently, Olay has a high rate
of innovation, as it is always looking for its products to offer a superior benefit relative to the
competitions products. Regarding the ProX brushes, a new model may be released about every
six months, in accordance with Olays high rate of innovation. The brushes will be designed with
a planned obsolescence in mind. Ideally, each new brush will be designed with new features
that convince customers to upgrade from their old brushes.
Goals
Olay has been rated by BrandFinance on its brand strength, risk, future potential, and
financial strength, relative to its competitors in the cosmetics industry. It has been rated 18th,
in the top 50 most valuable cosmetics brands of 2016. This is a sharp decline, as Olay was
ranked ninth in 2015. A crucial financial goal for Olay now is to make itself more appealing to a
wide variety of consumers, not just adults.
Olay provides over 80 million women on five major continents with high quality
products that make skin healthy and beautiful. A market goal for the brand is to expand to the
remaining two major continents, and sell its products there. Doing so will increase both sales
and brand awareness.
P&G, the company that owns the Olay brand, is constantly trying to improve its supply
chain efficiency. Doing so will help the company reduce stockout chances for products sold in
retail stores. It will also reduce the overall time it takes for a product ordered online to reach a
customer.
Guidelines
Olay follows the same ethical standards as P&G does. P&G looks to its unique World
Business Conduct Manual (WBCM) when making business decisions. The WBCM is focused on
upholding the companys Purpose, Values, and Principles (PVPs). The PVPs form the reasoning
behind P&Gs global standards, as well as its legal and ethical responsibilities. Practicing ethical
standards is important for P&G, not only for keeping healthy relations with important
distributors and suppliers, but also for maintaining customers brand loyalty.
P&G relies on hundreds of distributors and suppliers to ensure that its products reach
major retail stores, such as Wal-Mart and Target, in many parts of the world. This is why it is
important for both P&G and Olay to always practice ethical decisions. Scandals can cause third
parties to want to stop conducting business with P&G.
Olay offers many skin care products with price ranges of around $10 to $20. This is
because the brand promises high quality products at an affordable price. This is a form of
disruptive innovation, where products are made to be easier to use and more affordable. Many

of Olays customers cannot afford to purchase ultra-expensive skin care products, such as those
from La Prairie. A disruptive innovation strategy means that Olay focuses on selling to the vast
majority of skin care consumers, while ignoring the small, elite portion of the market.
Means-End Chain
The average Olay customer has been established as someone who is concerned about
the healthiness of their skin, as well as the price of the skin care solution they will use. The Pro
X Mod acknowledges both concerns in its means-end chain. Customers who want a high quality
product that prevents aging and improves skin will enjoy the ProX Mods high ease of use. They
will also be pleased about the low cost of the ProX Mod, relative to its competitors.
The ProXL compensates for its slightly higher price than the ProX Mods, with its greater
convenience and wider selection of features. Customers will find it to be easier to become
more popular with the ProXL, than with the ProX Mod. The enhanced convenience of the ProXL
reduces stress from having to manage space for various tubes of cream, and remembering
where each specific tube is located. The added sizes and speeds for brush heads will improve
the overall experience one has with cleaning their face, also reducing stress.
Section 2:
Modified product: ProX Mod
The ProX Mod Is Olays more reliable cleansing device designed for young female adults. It is a
rechargeable, waterproof facial scrubber that ensures healthy skin and ease of use in both wet
and dry environments. The ProX Mod will leave users faces feeling younger giving them the
confidence to boldly express themselves.
This product concept statement is based off the improvements to Olays original product the
ProX cleansing brush. In order to be able to compete with its competitors, some necessary
modifications to the product was needed. When our group first sat down, we looked at all the
customer reviews online we could find about Olays ProX. After looking at the reviews, we
wanted to update the product to our customers expectations. Taking all the positives and
keeping them the same, as well as looking at some of the major negatives and modifying them.
The biggest attribute that we needed to modify that received the most complaints about was
that the brush was water resistant not water proof. This was the first concrete attribute we
focused on updating, we wanted to make the product more convenient, allowing the brush to
be used in any climate without losing the quality of the cleanse. (abstract attribute)
The main complaint from customers was that they couldnt bring the brush into the shower
with them, and couldnt use the brush while they were cleaning the rest of their body. With
most of our competitors having a waterproof cleansing brush, this was a must needed
modification in order for our product to remain competitive in this market. By making the brush
waterproof it also improves upon another complaint of not being durable. These types of
products are used around sinks, showers, and bathrooms, giving it a high chance of coming into
contact with water. By making the change to a waterproof product, it eliminates many of the
complaints customers had with the original ProX. The next attribute that we focused on was

battery life. Making the cleanser waterproof will help the battery life, because once water
seeps into the products battery the product will not perform at the same level as it did when it
was first purchased. Still more was needed, so we decided to make the products battery
rechargeable instead of having to purchase costly AA batteries. The ProX was ridiculed about it
just sucking the life out of batteries, so we then made the battery rechargeable. The ProX mod
will come with a holster that will charge the product when it is not being used, assuring that the
product will never die on a customer.
After reading the reviews about our product we knew that we needed to make these two main
modifications of our product for it to be competitive and gain market share. We knew what we
had to fix about the product, yet didnt know exactly how to go about these changes. After
reading the reviews, our group used the brainstorming technique to start getting realistic with
how we were going to update this product. We then found it more effective to use the role play
method, it helped us actually put us in the mindset of our customers, allowing us to make the
appropriate final modifications this product needed. This method was so effective for the
modification of our product that it lead us to our new product, the ProXL.
New product: ProXL
The ProXL is a new, durable and rechargeable cleansing system from Olay. It is designed for
those who consistently clean their face and are looking to save time and shelf space. This
product maintains both beautiful and young skin, while also being the first cleansing product
that is designed for both men and women. The ProXL allows you to store three skin
moisturizers inside it at once, making any facial care need available at the touch of a button.
With your choice of three different brush sizes and textures and also three different speeds, the
ProXL distributes the perfect amount of skin care cream. The built-in dispenser eliminates
excessive mess and decreases waste. The ProXL reduces stress, time, and skin imperfections,
leaving you feeling larger than life.
We came up with the ProXL to go along with the brand platform for our new product. After
conducting research on Olays other ProX, we found that their customers felt that there were
three major problems. First, some felt that the brush on the ProX was too soft or too rough and
that the brush was not durable enough. Because of this we included attributes such as three
different brush sizes and textures, three different speeds, and the durability into our concept
statement. The customers also felt that the product dried out there skin. With the ProXL, we
made it so the device automatically distributes the appropriate amount of facial cream to make
sure an excessive amount is not used which could lead to the drying of the skin. Moreover, we
emphasized in the concept statement that customers can insert moisturizers so drying does not
have to be a concern for them. There were also complaints about the product being smaller
than the expected, so we wanted to make a bigger facial scrubber. To emphasize this we gave
the product the name ProXL to promote its largeness and values like feeling larger than life in
the concept statement. We also included consequences like reduce stress and time in the
concept statement because we found that some of the keywords in the customer reviews of
the other ProX were annoying and inconvenient. Therefore, we wanted to promote to our
target market that this new product would not leave them feeling those ways. We also

mentioned in the concept statement that the ProXL is designed for both men and women
because we found in our research that more men are starting to care more about facial hygiene
(Mintel). Moreover, we felt that a facial scrubber that can also be used for things like aftershave
would be a beneficial attribute to help attract our make target market.
Section 3:
For our product we decided to use the Atar model because the product already had secondary
sources for us to use. Also, we could use students at JMU to answer surrogate questions to
forecast our financial performance of our new product. The target Market for our ProX Mod is
Females 20-34 in the United States that care about their appearance and the health of their
skin. Based off of the US census report in 2015 there are roughly 33 million females between
the ages of 20-34 but our product would only reach about 58% because according to (mintel)
showed that 58% of females in the last year have used or were interested in the ProX. Making
our target market for the ProX Mod about 19 million (19,087,523). With our target market
being 19 million we then focused on how many people were aware of our product by first using
unaided awareness. However, found that we needed to give the people we were surveying a
little help because our product was such a small part of such a big cosmetic company. We then
used aided awareness with our product and three of our top competitors. The Olay ProX was
shown to 10 females in Showker lobby compared to the Clarisonic Mia 2, DDF Revolve, Nutra
Sonic PE 8013. After being compared we found that 5 of the 10 females were aware of our
product, making our product aware to 50% of females. Even though only half of the females
were aware of our product we still asked all of them to do our trial survey questions, since they
still were a part of our target market. We asked each female 5 questions and to give us a rating
of 1-5, 1 meaning strongly disagree and 5 strongly agree. Our first question was a perceived risk
question, which asked do you think this product is too expensive? This questions average
response was a 2.3, which for most questions is usually not good, but for this is a negative
question so the lower the average response the better it is for the product. The second
questioned we asked was a complexity based questioned, we asked this because complexity is a
huge issue in new technology products. We asked does this product seem easy to use? This
question average response was 4, which is very reassuring for us meaning the females we
surveyed found our product very easy to use. The third question we used was a
communicability question, we found this question to be important because of how many
competitors Olay has, we want our consumers talking about our product. Our third questions
states I would suggest others to use this product? this question received an average response
of 3.6, which means some of our consumers would suggest this product but is definitely
something we could improve upon. Our fourth question is a compatibility, and or a relative
benefit question. These questions are important to know in our market because there are so
many competitors and little differences that separate them. The fourth question states I would
rather have rechargeable batteries over replaceable? The average response from the 10
females was a 4.2, which means we are doing the right thing with our modifications because
clearly rechargeable batteries are far more preferred than replaceable batteries. The last trial
question we asked our 10 females was Waterproof is an important quality for me when
purchasing electronics? this received an average response of 4.7 which means nearly everyone

believes that having their electronics waterproof is a big factor in buying electronics. This shows
that making our modification to waterproof will give us a huge competitive advantage over
other products that do not have a waterproof cleansing brush.
Having add up all of these average responses and using reverse coding on question one we got
an average of the average responses of 4.04. We then divided this number by the number of
people we surveyed and figured about 40% are willing to try our product. The next step of the
ATAR model is availability, our distribution strategy is intensive because our product is sold in
the biggest retail stores such as Target, Walmart and so on. We predict that we can get this
product out to about 75% of buyers in the target market. Based on the Mintel database source,
we found that 14% of the people who purchased the original product would buy it again. We
project that once we modify our product to have a rechargeable battery and make it
completely waterproof, the repeat percentage will increase to 25%. Though we improved the
durability of our product we still believe that if someone uses it every day they would buy 2
every 5 years or .4 a year. With it costing Olay $20 to make this product and selling it for $40
the profit margin on this product would be $20 a unit, we determined this number through TD
ameritrades website of P&Gs profit margin percentage in 2016. Their profit margin was %50 in
2016, with their product being priced at $40 we determined that it cost them about $20 to
make each unit. This number $20 of profit margin per unit is then multiplied by 286,313 units
projected to sell, giving Olay forecasts $5,726,260 gross profit margin.
ATAR Equation used: 19,087,523() * .50 (Aw) * .40 (T) * .75 (Av) * .25 * .4(Q) = 286,313
estimated units
$40 - $20 = $20 UPM
286,313 x 20 = $5,726,260GPM

For the ATAR model for the ProXL, our target market consisted of males and females 20-34. The
total population of males between the ages of 20-34 was 33,966,992. However, after taking
behavioral demographics into consideration we found that 26% of men were interested in facial
hygiene. Therefore, we multiplied 26% by 33,966,992 and got 8,831,417 as our total target
market for men. For the women we went through the same process and found that there were
a total of 32,909,523 women between the ages of 20 and 34 in the country. However, only 58%
of women who were interested in facial hygiene have either tried, used or have thought about
using the ProX in the last year. Therefore, we came to the number of 19,087,523 as the total
market for women. After adding the men and women markets we got 27,918,940 as out total
target market. We decided to include men into our market with the ProXL because of the
added aspect of being able to include things like aftershave into the device and also due to the
growing interest of facial hygiene in the male population. Next, when it came to awareness we
started off asking unaided questions to 5 men and 5 females due to the quality emphasis of the

Olay brand. However, as we mentioned before we also did aided due to the high volume of
products that Olay offers. After we showed the different men and women the pictures of the
ProX and the three other competitors, we found that 4 people were aware of our product
giving us an awareness percentage of 40%. Next, we asked 5 males and 5 females trial
questions and they are shown below.

This product is expensive (Perceived Risk)

1= strongly disagree 5= strongly agree

4.0

This product seems easy to use (Complexity)

1= strongly disagree 5= strongly agree

3.5

I would suggest others to use this product

(Communicability)

1= strongly disagree 5= strongly agree

4.0

I would like a bigger brush when using a facial

scrubber (Compatibility/relative benefit)

1= strongly disagree 5= strongly agree

4.5

Having the brush being able to apply the facial

creams automatically is convenient (Relative
Benefit)

1= strongly disagree 5= strongly agree

4.5

We based all of our questions off of what customers were saying in comment sections and
reviews. Customers expressed how one thing they liked about the ProX was that it was less
expensive than other facial scrubbers in the market. It initially concerned us that there was an
average of 4, being that people agreed that our new product was expensive. However, it was
also realized after further research that a lot of the customers who were saying that the ProX
was cheap complained that it worked as well as its price and that it was poor quality. We then
asked a complexity question. Due to the added attributes of our new product of being able to
insert creams into the device and it also having different speeds and brushes, we wanted to
ensure that our new product was still easy to use for our target market. Next, we asked a
communicability question to see if there was likelihood of customer evangelism. We wanted to
make this a priority because of the fact that when we conducted unaided question in the
awareness process the ProX and other facial scrubbers were difficult for people to recall. Next,
we asked a question regarding the brush size due to the fact that customers complained about
the singular brush that came with the original ProX. Finally, we asked about the automatic
application attribute of the ProXL to ensure that our target market felt that this was a positive

relative benefit for them. After collecting that data we completed the equation below to find
our trialability percentage.
Trial Equation: (6-4) = 2
(2 + 3.5+ 4.0+ 4.5+ 4.5)/5= 3.7
3.7/10= .37 or 37% willing to try
Next, we came to the conclusion that our availability was 75% due to the intensive
distribution strategy that Olay has with the ProX product line. ProXs are available at major
chains like Walmart, Walgreens, CVS and online. When it came to our repeat percentage, Based
on the Mintel database source, we found that 14% of the people who purchased the original
ProX would buy it again. We believe that with the ProXLs bigger brush and built-in dispenser,
the repeat percentage will increase to 30%. Finally, when it came to the quantity we came to
the conclusion that our target market would buy 2 within a 5 year time span. We came up with
this number due to that fact that the ProXL is based off of quality and an innovation strategy
such as planned obsolescence. For our calculation since our percentages and numbers are
based off an annual period the quantity is .4(2/5). To calculate the estimated units we
completed the calculation below.
27,918,940() * .40 (Aw) * .37 (T) * .75 (Av) * .30 (R) * .4 (every year) = 371,880 estimated
units
Olay makes 50% profit on sales according to TD ameritrade and we are selling the proXL for
60$. Therefore, our UPM is 30$. So, to find or GPM we multiplied our UPM by our estimated
units and got 11,156,400.

Section 4:
Conjoint Analysis:
The conjoint analysis was done by looking at the ProXL product concept statement and
determining what three attributes needed to be focused on the most. We chose the ProXL after
running the ATAR model on both the ProX mod and the ProXL. The ProXLs GPM was almost
double that of the ProX Mod, therefore we chose to pursue ProXL. We looked at online reviews
of the original product as well as attributes competing products possessed. As a team we
determined that the preferred attributes of battery life, durability, and convenience were the
top three to focus our efforts on. The consumers preferred attribute levels were broken down
into rechargeable and disposable for battery life, water resistant and waterproof for durability,
and manually applying the facial cream or having the product automatically dispense the cream
for convenience.

We determined the total number of possible outcomes given that each attribute had
two levels and we had a total of three attributes. Given this information, there should be eight
possible outcomes because of the formula (# of levels ^# of attributes). After creating our eight
possible combinations or conjoint cards, we then asked two people in the POD of Showker to
place the cards in order of most important to least important. Using a binary rating system we
entered the card combinations into excel and ran a regression model. It was then clear that the
preferred attribute levels as surveyed by customers was rechargeable, automatic, and water
proof. A more in depth look at the regression analysis reveals that the most important attribute
to focus on would be convenience followed by durability and lastly battery life. Specifically,
making the product water resistant and having it automatically disperse the facial soap should
be two main attributes we focus on during new product development. This is not to say we
ignore the battery life aspect of the analysis. Making the new product rechargeable would likely
increase its value. If there are circumstances such as budgeting restrictions on the new product
development plan, leaving out this attribute would likely not affect the sales as much as leaving
out something that affected convenience or durability.
You can see how we input the information into excel here:

Prototyping:
The influential factors we focused on for the ProXL are as follows. The key success factor
of quality weighed the heaviest mainly because price was not a deciding factor by our
consumers and the time aspect did not bother the average user. Our degree of innovativeness
would best be described as a product improvement seeing that the ProX was the original
product. Given this information, we conducted beta tests by printing out the amazon profile of
the ProX. The profile included pictures, price, a description of the product, and specifications on
its size. Next, we explained to the testers our changes of the product. Specifics like the three
insertable creams that allow the users to reduce their excess cream usage, the larger brush size
and variation of speeds, as well as the rechargeable aspect. With this information, we asked
two guys and three girls to evaluate our new and improved version of the ProX. This was a
monadic test with branded awareness because there was only one prototype being tested and
the testers were aware that Olay was the brand.
A comprehensive exam on the entire product was done to focus on the quality of the
ProXL and we asked primarily modification questions to better understand what potential
consumers thought of our improvements. Given the fact that this is a personal care product,
very little supervision and training is required. In reference to the amount of time given to the
beta tester, they were given as long as they needed to understand our product and make their
assumptions. Once they had finished reading the Amazon profile page and looked at all of the
given information, we conducted personal, face to face analysis.

Prototyping Results:
The reaction to our ProXL was positive and constructive. We asked the testers to tell us
what they thought of the modifications we made to the ProX and their likes and dislikes. We
learned that the larger brush size was very appealing to all testers and the rechargeable aspect
as well. Three out of the five testers expressed their worries on the three insertable creams.
Describing the issue being that the cream tubes will be too small and need changing to
frequently. Another concern beta testers brought up was the impact different bristles will have
on their skin. Those with sensitive skin where worried the brush would irritate their face.
Section 5:
Launch
To create awareness to our product we first decided to create buzz about our product by
offering a pre order deal of buy one ProXL brush and get three facial creams of your choice for
free. We hope that the hands off applying cream and the free cream it comes with, will make
customers go from their average brush they have now to our far more efficient mess free
brush. This is how we will get a good base of customers early on to create excitement for our
new product coming out. We also will create awareness by using Search Engine Marketing. We
will purchase Cleansing Brush for the top left spot of the SEM, because this is the spot that
gets the most recognition. We decided to choose these words because on google trend these
two words typed in together has only been increasing, from 2013 to 2016 nearly doubling the
searches. With there being many competitors and pretty low barriers to enter the market of
cleansing brush; we want our product to be seen first when typed into on the internet. To
create even more buzz around our product we made a descriptive pay per click ad, because
more customers are intrigued in a descriptive ad, like to know what the product can do for
them.

Pre order the ProXL brush now and be the first to experience
the new rechargeable multi speed brush that is guaranteed to
rejuvenate your skin!
With our new Product the ProXL we are trying to reposition Olay cleansing brush to reach out
to both Males and females. Other cleansing brushes only really focus on females, so we added
attributes to the ProXL that would appeal to men. Our ad shows a men and a women fighting
over the cleansing brush, because we already have a female audience, so we are trying to show
in this add that our new product is not only for females but for males as well.

Careful ladies, men use it too

Our product is trying to reach out to the male market more because more and more men are
starting to care about skin care than ever before. With that being said we will be using a
penetration pricing strategy because most cleansing brushes are overpriced and we feel if we
price ours lower than it can limit our competition from targeting males with their cleansing
brushes. We are the first cosmetic brush to target the males with this type of product, and with
having our prices low it will make it difficult for competitors to compete with our price and
target males. Therefore, because we are a late entry product, we hope to undercut other
earlier skimmers in our market.
Three Cs of Pricing:
The Consumer C of pricing relates to the ATAR model under trial in reference to the relative
advantages associated with the ProXL. Advantages such as the larger brush head size and
automatic dispensing of the chosen facial cream can drive the price of the ProXL up in the
minds of consumers. There is also perceived risk associated with the ProXL such as high cost.
Since the trial equation number in our ATAR model associated with price was slightly high, we
see this as a potential risk. If we have to raise the price any more this could significantly
decrease sales. Complexity associated with the ProXL is at a minimum because it is a personal
product with few complex workings. The compatibility aspect of the product has to be able to

exchange brush heads and plug into the charger, if this does not work properly the price could
decrease. In reference to communicability, people can talk about the ProXL and how it differs
from its competitors which could increase demand therefore price.
When it comes to the cost C we found that P&G has been nearly making %50 on profit margin
from 2012-2016, we found that it costs about $20 to make the old ProX. With our
improvements in our new product the ProXL we figured it will cost about $10 more to make
then did the ProX version. That being said the ProXL will cost around $30 to make (price floor)
and with P&G profit margin percentage being 50, we determined the price for our new product

to be $60.
Gross profit margin percent
2012: 49.3%
2013: 50.01%
2014: 47.6%
2015: 48.5%
2016: 50%
(TD ameritrade)
When taking our competitors into factor when determining price, we researched early entry
cleansing brushes and found that many were priced in the hundreds like the Clarisonic Mia 1
Device. To go along with our Penetration pricing strategy, we priced lower than our more

expensive competitors. We also looked at our cheaper competitors like the DDF revolve Pro
500x that is priced in the mid-fifties to make sure we were in a good price range.
For our product line replacement strategy we decided to go with butt-on replacement. There
will be no need to expand our portfolio due to the fact that the ProXL not only increased in
quality when compared to the original ProX but it also includes added attributes. This
eliminates the worry of strength of buyer preferences. Also, there is no need to do a strategy
like low-season switch or high- season switch because facial cleansing systems are not a
seasonality type of product.

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Appendix: