Distribution Channels Case Study
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1 Target market are Women, Married or in a relationship, between age of 21-45, socioeconomic group A, and located eastern South. Target market can be further segmented according to age, working status, weather or season. Moreover married men are also potential customers as they would buy the product as a gift. Special gift packaging would be attractive, maybe a non-polished, light in colour wooden box containing an organic irregular Loofa textured at the sides, and an organic foot scrubber in addition to 5 bare bars of Chic Soap featuring different aromas having regular shapes rectangular, circular, or square.

2 Products would be sold to end-users through independent chemists and …show more content…

Sales bellow 1M unit per annum would result in loss in terms of opportunity cost (ROA). For the first year I suggest launching 3 fragrances only at a volume of 920k unit which will cut the cost per unit to approximately 1.24 ₤. Break even after consideration retailers and wholesalers gross profit would be 570k units selling at a price of 2.78 ₤. This breakeven makes up 11.9% of the premium soap market by sales last year which for sure will grow with the introduction of a huge new

product. Moreover as Chic Soap is priced a bit over competitors it would be better to calculate market share using volume of sales not value, especially the market has low price elasticity. When it comes to the best time to introduce Chic Soap to the market, it would be early November to make all the benefit from Christmas season booming. 75k units would be produced in gift packs (15k pack) at a price of 13.9 ₤ per pack, Chic Soap never discount their products. I recommend price would be something higher than the highest price of premium soap (1.95 ₤) but still below Rive Gauche (3.00 ₤). Shifted more toward Rive Gauche as price elasticity is low and a small decrease in price would not