Our client is a consumer packaged goods company looking for top-line growth opportunities. They are considering extending its pre-existing baby products brand (e.g., Huggies) into a new product category – baby clothing.
They are looking for this business to generate +$300M revenue per year, beginning in Year 1.
Should our client enter the baby clothing market?
How would you help the client decide whether they should enter the baby clothing market?
One driver of revenue is pricing. Does our client have estimates on price points they can charge for their baby clothes?
How many units would our client need to sell to reach their revenue target? Is this a feasible goal?
If your client is still interested in entering the baby clothes market, what other options might they explore?
If the client asks for your initial recommendation, what would you say?