Overview & Context

A manager at Glossier is trying to make decisions on her portfolio. She manages three products: Milky Jelly Face Wash, Generation G Lipstick, and the new Silky Hands Sanitizer. These products are in separate sub$-$industries within the overall beauty industry.

Because of the pandemic, the lip color category has taken a hit. Sales have declined for the past $2$ years. Most analysts agree lip color is going to shrink by $1\%$ next year. The pandemic shifted consumer preferences towards skincare. Hand care is expected to grow by $5\%$ next year and face skin care is expected to grow three times as fast as hand care.

Product Portfolio

Luxury Hand Sanitizer. For Glossier, hand sanitizer revenues were $$800$K$.$ Each costs Glossier$$s R&D team $$2\mathrm{.}99$ to produce and they sell each bottle for $$14.$ They ran an online advertising campaign that cost $$100$K$.$ Their biggest competitor is a brand called Touchland, that had $$1\mathrm{.}2$M in revenues, but they distribute through Sephora. Glossier and Touchland represent small shares of the overall $$hand care$$ market, but they represent the dominant players in their smaller $$luxury hand sanitizer$$ market: $33\%$ and $42\%$ each, respectively. They are each other$$s nearest largest competitors.

Ultra$-$Gentle Facewash. The face wash category is fractured. Glossier Milky Jelly $($$$12$M revenues$)$ competes most closely with Fresh Soy Face Cleanser $($$$11$M revenues$)$ and E$.$L$.$F$.$ Bounce Coconut Cleanser $($$$6$M in revenues$).$ Glossier Milky Jelly comes in two different bottle sizes: retailing for $$18$ per bottle $($full size, accounting for $75\%$ of revenues aka $$9$M$)$ and $$9$ per bottle $($mini size, accounting for $25\%$ of revenues aka $$3$M$).$ The per unit COGS for both the full and mini bottle is $$1\mathrm{.}55.$ To advertise this product Glossier took out ads in major beauty magazines in the amount of $$75$K per month for $12$ months. These three brands represent the dominant players in the ultra$-$gentle facewash category. Glossier$$ relative market share is $1\mathrm{.}1,$ while Fresh has a relative market share of $0\mathrm{.}9,$ and E$.$L$.$F has a relative market share of $0\mathrm{.}6.$

Trendy Lip Color. The market for color lip products is projected to be $$200$M in revenue, with closest competitors Kylie Lip Kits and Fenty Lip Paint with $14\%$ share each. Generation G Lip is projected to capture about $11\%$ of the market in revenues. Each tube of Generation G costs $$0\mathrm{.}65$ to manufacture and retails for $$18.$ Glossier ran $$200$K of billboards in each of $20$ top cities to advertise this product.

For all products, assume units sold $=$ units produced.Question $610$ pts

How much does Glossier spend to promote their Facewash?

Group of answer choices

$$900$K

$$5$M

$$75$K

Flag question: Question $7$

Question $710$ pts

What was the Contribution After Marketing for Glossier's Milky Jelly face wash $($across all bottle sizes$)?$

Group of answer choices

$$900,000$

just under $$9\mathrm{.}7$M

just over $$9\mathrm{.}8$M

around $$600,000$

Flag question: Question $8$

Question $810$ pts

What was the Contribution After Marketing for Glossier's silky hands sanitizer?

Group of answer choices

roughly $$9\mathrm{.}8$M

roughly $$601,000$

roughly $$529,000$

roughly $$7\mathrm{.}2$M

Flag question: Question $9$

Question $910$ pts

Imagine that the Glossier advertising team is recommending an additional $$600,000$ of ad spending $($across digital and television$)$ on the hand sanitizer product next year. They forecast that this would lead to a total sales volume of $250,000$ units of the Silky Hands product. Imaging all else remains the same next year $($i$.$e$.,$ all are identical from the previous year$),$ would this campaign be justified?

Group of answer choices

No

Yes

Flag question: Question $10$

Question $1010$ pts

Imagine Glossier wants to undertake a cost$-$reduction project to reduce the cost of production for each of their face wash bottles, both the small and large size. The R&D department says they can reduce the cost of the larger bottle to $$1\mathrm{.}35$ and the smaller bottle to $$1\mathrm{.}25,$ per unit. The R&D department is able to execute this project for $$200,000.$ Is this cost reduction project worth it$?$

Group of answer choices

Yes

NoA manager at Glossier is trying to make decisions on her portfolio. She manages three products:

Milky Jelly Face Wash, Generation G Lipstick, and the new Silky Hands Sanitizer. These products

are in separate sub $-$ industries within the overall beauty industry.

Because of the pandemic, the lip color category has taken a hit. Sales have declined for the past $2$

years. Most analysts agree lip color is going to shrink by $1\%$ next year. The pandemic shifted

consumer preferences towards skincare. Hand care is expected to grow by $5\%$ next year and face

skin care is expected to grow three times as fast as hand care.

Product Portfolio

Luxury Hand Sanitizer. For Glossier, hand sanitizer revenues were $$800$K$.$ Each costs Glossier's

R&D team $$2\mathrm{.}99$ to produce and they sell each bottle for $$14.$ They ran an online advertising

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