New “Perfume By Subscription” Business Model In The United States

The main purpose of this study is to evaluate the viability of a project that proposes a new company,which will introduce a new,disruptive business model of “perfume by subscription” into the perfume industry in the United States.Within this study,different critical analysis have been made in order to define the strategic moves that need to be done to ensure the success and profitability of the new business.The project is based on the hypothesis that there are some specific groups of people(potential customer base)who would like to own different options of perfumes to wear according to the occasion,but do not want to purchase full bottles of perfumes.Unfortunately for them,nowadays,with the current models used in the perfume industry,customers are forced to buy full bottles of perfume in the standard formats of 50,75,100 or 200 milliliters,and,in order to have available a wide collection of different perfumes at home,they need to spend a lot of money.Basically,the idea of the project is the creation of a new company in the United States,that will offer to its customers “subscriptions of perfumes”,where the customer will pay a monthly fee,and the company will deliver a box with different perfume bottles in small presentations(10 ml.).The company will offer different subscription types according to the customer's needs,in which they will pay an amount of money proportional to the number of perfume bottles they want to receive each month.To implement this project,we have started by understanding the perfume and fragrance industry,its major existing players,the way it is segmented,its current distribution channels and statistical information within the American market.Then,a literature review has been conducted,in which we have reviewed all the relevant literature that will be useful for the project,such as subscription business models,sensorial marketing,and the perfume industry,to make sure that we really understand its current status,plus we have critically analyzed the industry by using tools,concepts,models and frameworks that are well known in today's business world and will help us to define the most suitable strategy to succeed with the project.Regarding our market research,both qualitative and quantitative methods have been used,such as a focus group study,an online survey,in-depth interviews,mystery shopping and benchmarking,which have allowed us to confirm that a market gap exists between what customers want and what the market is offering,and that there is a potential market for our business idea.Analyzing the information resulting from the research,we have been able to identify the segment of customers that would be interested in our idea,their needs and likes,and the optimal ways to attract them towards our business.Finally,after projecting the potential sales revenues,investments and costs,and performing a financial analysis,we can observe that the company will reach its break-even point on the first month of the third year of operations,and according to the calculated Net Present Value and Internal Rate of Return,which look very promising,plus the fact that the initial investment is reasonable,it would be very advisable to take the risk.As a main conclusion,we can say that given all the information presented in this study,and the know how acquired through hours of research and analysis,it would be fair to state that the implementation of the project is completely viable,and that it would be advisable to start with it as soon as possible,before someone else takes the opportunity.