Marketing

management

Distribution channel
case study

Dina.Samir
 Distribution channel case study

Chic soap

Marketing management

Prepared by: Dina samir

Class: 50 H

Under supervision of: Dr Ashraf Talaat

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 INTRODUCTION
The goal of this case study is the successful incorporation of Chic soap in the England market
South East

A marketing strategy is based on expected customer behavior toward my product in a certain

market. So, Successful marketing plan is achieved via the proper STP and 4 Ps study

SEGMENTATION, TARGETING AND POSITIONING

Segmenting: is the process of dividing the market into segments based on customer
characteristics and needs.
The main activity segmenting consists of four sub-activities. These are:
1. determining who the actual and potential customers are
2. identifying segments
3. analyzing the intensity of competitors in the market
4. Selecting the attractive customer segments

Targeting: After the most attractive segments are selected, a company should not directly
start targeting all these segments -- other important factors come into play in defining a target
market. Four sub activities form the basis for deciding on which segments will actually be
targeted.
The four sub activities within targeting are:
1. Defining the abilities of the company and resources needed to enter a market
2. Analyzing competitors on their resources and skills
3. Considering the companys abilities compared to the competitors' abilities
4. Deciding on the actual target markets.

Positioning: When the list of target markets is made, a company might want to start on
deciding on a good marketing mix directly. But an important step before developing the
marketing mix is deciding on how to create an identity or image of the product in the mind of
the customer. Every segment is different from the others, so different customers with
different ideas of what they expect from the product. In the process of positioning the
company:
1. Identifies the differential advantages in each segment

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 2. Decides on a different positioning concept for each of these segments. This process is
described at the topic positioning, here different concepts of positioning are given.
The process-data model shows the concepts resulting from the different activities before and
within positioning. The model shows how the predefined concepts are the basis for the
positioning statement. The analyses done of the market, competitors and abilities of the
company are necessary to create a good positioning statement. When the positioning
statement is created, one can start on creating the marketing mix.

Different premium soaps in the England

Market

Roger &Gallet

Penhaligon range

yardley

Morley

Three internationally
available soaps

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 South East Regional GDP

Berkshire
Buckinghamshire
Oxfordshire
Milton Keynes
Brighton & Hove
East Sussex CC
Surrey
West Sussex
West Sussex
Portsmouth
Southampton
Hampshire CC

South east England market for soaps around 190 million , 7 % of the market go to
the high premium soap which distributed between 5 brands Roger and Gallet ,
Penhaligon range, Yardley, Morley and three internationally available premium
soaps .
This market has a high purchasing ability and high level of living standard
especially in three regions (of highest GDP) and also high level of education which
help in shifting to perfumed soap instead of aerosols.
The competitors depend on the same idea of Co _branding with perfumes but lose
the creativity in shapes and colors.
The target is to shift people from ordinary soaps to high quality premium soaps
Our product marketing will mainly depend on the Co branding with perfumes, high
quality , natural product ,creativity in colors and shapes and image discussed later
in details

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 THE MARKETING MIX

The marketing mix is a business tool used in marketing and by marketers. The marketing mix is
often crucial when determining a product or brand's offer, and is often associated with the four
P's: price, product, promotion, and place.

Suggested Price = (1.60 + 1.75 + 1.85 + 1.95 + 1.45) /5 = 1.72 (to be an average of all
the competitors)
Place: the highest 3 GDP regions via direct sales and independent chemist _will be
discussed in details in Which distribution channels will be most appropriate?
Promotion _will be discussed in details in How are you intending to reach the target
audience?
Product : will be discussed in details in What is the product benefit that you will be
providing?

Estimates :
Estimated target market = 10% of total market soaps = 1 900 000
Proposed Price = (1.60 + 1.75 + 1.85 + 1.95 + 1.45) /5 = 1.72
Target no. Of units to be sold = 1104651 units
Variable cost (more than 300,000 units) = 0.715 per unit.
Fixed cost = 505,000.
CM units = S-VC =1.72 -0.715 =1005 per unit
Breakeven point units = FC/CM = 505,000/1005 = 502.49 units

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 WHO ARE YOUR TARGET
AUDIENCE?
Our target audience will be married and unmarried highly
educated, working females of age ranges from 25- 45 years,
socioeconomic class A , located in areas of the highest GDP
and their children especially in the occasions e.g. summer , sports , parties , birthdays ,and
Christmas season as gifts.

A target audience is the intended audience or readership of a publication, advertisement, or other

message. In marketing and advertising, it is a specific group of people within the target market at
which a product or the marketing message of a product is aimed (Kotler 2000). For example, if a
company sells new diet programs for men with heart disease (target market), the communication
may be aimed at those men but also perhaps at their spouses (target audience). Targeted
marketing and targeted advertising strive for narrow casting rather than broadcasting.
A target audience can be formed of people of a certain age group, gender, marital status, etc., e.g.
teenagers, females, single people, etc. A combination of factors, e.g. men aged 2030 is a
common target audience. Other groups, although not the main focus, may also be interested.
Discovering the appropriate target market(s) and determining the target audience is one of the
most important activities in marketing management (Niewenhuizen et al. 2000). Perhaps the
biggest mistake it is possible to make in targeting is trying to reach everybody and ending up
appealing to no-one.

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Geographic
Country England
Region South East
City Berkshire, Buckinghamshire, East Sussex, Hampshire, the Isle of
Wight, Kent, Oxfordshire, Surrey and West Sussex.
Metro size Motorways and airport
Density 8,635,000 (2011) , 1,200/sq mi (450/km2)
Climate Warm summers, mild winters, light rain all year, especially summer
Demographic
Age 25 - 45
Gender Females
Family life cycle Married /Unmarried
Family size 3-4 individuals
Income Socioeconomic Class A , GDP = 22,624(higher than the average of
Britain )
Occupation Education , high technology industry and health sector
Education Highly educated
Religion N/A
Race N/A
Nationality English
Psychographic
Social Class Upper _upper
Lower _upper
Working
Middle
Life style Sport oriented
Outdoor oriented
Innovator, thinkers , achievers and experiences
Behavioral
Occasions Summer , sports , parties , birthdays , Christmas season as gifts
Benefits Premium and quality
User status Non user , potential user , first time user and regular user
User rates once every 3 weeks
Loyalty status Strong and Shifting
Readiness stage Aware, interested , afford and desire
Attitude toward Positive
The product

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WHAT IS THE PRODUCT BENEFIT THAT
YOU WILL BE PROVIDING?
Benefits versus features
They are 100% natural and organic soap bars that enhance the beauty and radiance of
your skin. Now, you dont have to worry about getting pimples or having a blemished
skin that is often the result of using too many cosmetic makeup things. With one wash
using the natural soaps we have, you can get a soft, smooth, and radiant skin just like
that! With consistent use of these natural soap bars that have only natural ingredients,
you wont need makeup to look pretty.

Be one of the stars

We were in Hollywood at the time of the 2015
Oscars. We were invited to be a part of the pre-
Oscar celebrity gift room on February 21, 2015,
the night before the Academy Awards show, a
party frequented by celebrity singers and actors.

Premium soap with highest quality

Chic Luxury Soaps is the newest premium soaps with all natural, handmade products in
luxury skin care.
Our products are of the highest quality. We are sure that once you try them you will be
very pleased.
This is no ordinary product these are premium luxury cosmetics with premium
ingredients with the highest level of customer service. Buying from Chic Luxury Soaps
and Cosmetics is an experience

Creativity in designs, colors and packaging

Most of our products are unique and handcrafted. The soaps are beautiful and they have
unique designs .
Our Soap Artists are constantly coming up with new and exciting products inspired by
the seasons, holidays and the freshest ingredients!

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 This considered a competitive edge over other competitors which have the classical shape
of soaps as Roger and Gallet, Penhaligon range, Yardley, Morley

High level of customer service

Our online collection grows almost daily. For your convenience, feel free to
shop online from the comfort of your own home. Just maybe not while youre in the
bath! You can create a gift basket and ship it to a friend or family member or just
purchase products for yourself. We are also associated with CHIC Girls Club and CHIC
Lingerie Club.

Give your baby the care he/she need

Amazing colored shapes related to seasons with all the natural ingredients which give
your baby maximum care

Co_ branding
Be one of the users of perfume brands in more affordable form. Experience the luxury
sensation in lower price.
Co-branding, also called brand partnership, is when two companies form an alliance to
work together, creating marketing synergy. As described in Co-Branding: The Science
of Alliance. The typical co-branding agreement involves two or more companies acting
in cooperation to associate any of various logos, color schemes, or brand identifiers to a
specific product that is contractually designated for this purpose. The object for this is to
combine the strength of two brands, in order to increase the premium consumers are
willing to pay, make the product or service more resistant to copying by private
label manufacturers, or to combine the different perceived properties associated with
these brands with a single product.

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HOW ARE YOU INTENDING TO REACH
THE TARGET AUDIENCE?
The core of reaching to the target audience is WHAT IS THE BEST WE OFFER TO YOU?
In the form of previously discussed benefits, the ease of having the product and the best
customer service.

Direct (Zero level channels)

Engage on social media

Online promotion and direct orders (advanced website and face book)
Media: TV and radio
Pitch to the publications they read: Catalogues and magazines and street advertising
Speaking opportunities via Sales Team ( Campaigns in malls)
Beauty salons and girls club
Incorporation in important social events like Oscar, Golden Globe ,.etc

Indirect
Wholesaler/Distributor / Retail
Value Added: You sell a product to a company who bundles it with services or other
products and resells it. That company is called a Value Added Reseller (VAR) because it
adds value to your product. A VAR may work with an end-user to determine the right
products and configurations, and then implement a system that includes your product.
Consultant / Dealer

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 WHICH DISTRIBUTION CHANNELS
WILL BE MOST APPROPRIATE?

As the target audience is women (25 - 45 years) ,working years , engage on social media
via online promotion and direct orders (advanced website and face book) , media by
TV and radio to save time in shopping and to be updated for the latest soaps.
The most appropriate physical distribution channels will be in the large cities of highest
GDP mainly in independent chemists.
As chic soap target the premium class (socioeconomic class A ), so, campaigns in malls
and beauty salons are very important and useful
As people buy image and brand perfumes so Co branding with brand perfumes and
Incorporation in important social events like Oscar will attract more people from the
target audience
The establishment a direct supply channel ( e.g small factory ) in the target region (South
east England ) will be more beneficial to decrease the transportation cost and the
intermediate suppliers cost _wholesales .

Distribution channels: The chain of businesses or intermediaries through which a good or service
passes until it reaches the end consumer. A distribution channel can include wholesalers,
retailers, distributors and even the internet. Channels are broken into direct and indirect forms,
with a "direct" channel allowing the consumer to buy the good from the manufacturer and an
"indirect" channel allowing the consumer to buy the good from a wholesaler. Direct channels are
considered "shorter" than "indirect" ones.
The word distribution may conjure up images of trucks loaded with boxes, but distribution is as
much a sales and marketing issue as it is a delivery issue. We can define distribution as the
method companies use to deliver products or services to their target market and channel as the
means by which products or services are distributed, but these definitions hide an important
truth.
Your distribution channels are not only a means to ship your goods or deliver your
services; they may also provide you with additional opportunities to sell your products.

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 HOW ARE YOU INTENDING TO
SUPPORT SUCH CHANNELS?
Reach:
Provide the fastest way of transportation to deliver the proper product to the
customer.
Establish a high quality website and other web pages with daily updates
Establish a side business of salons carrying the same name of chic to market
the product
Co branding with well established perfumes to combine the strength of two
brands, in order to increase the premium consumers are willing to pay.
Campaign in malls and social clubs

Contribution
More contribution in social events e.g. Oscars celebration,..etc .
More contribution in the social responsibilities (e.g. charities and donation) as
you say that premium customers is to help also not only consume expensive
brands .

Support:
Technical support in increase in designs , colors , perfumes included and more
sectors as children.
The establishment a direct supply channel ( e.g small factory ) in the target
region (South east England ) will be more beneficial to decrease the
transportation cost and the intermediate suppliers cost _wholesales

Customer Service
Develop channels to come contact of customers to provide the maximum care
through surveys, websites, hot lines ..
Establish after sale services (recalling systems , reporting system ,)

Way of payments:

Facilitate the payment for direct customers (online payment)

Facilitate the payment for wholesales via long-term credit, bonus system.

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 REFERENCES

https://chicsoaps.com/
https://en.wikipedia.org/wiki/South_East_England
http://yardleylondon.com/index.php/category/soapcollections/premiumbathbarcollection/
http://www.rogergallet.
co.uk/BathShower/RoundSoaps/f102.aspx 1
http://www.penhaligons.com/soap/
http://yardleylondon.com/?page_id=21
https://en.wikipedia.org/wiki/Marketing_mix
https://en.wikipedia.org/wiki/Cobranding
http://www.callcredit.co.uk/productsandservices/consumermarketingdata/segmentationanalysis
http://www.metoffice.gov.uk/climate/uk/regionalclimates/so
How to Develop a Distribution Channel Strategy by Ian Linton, Demand Media
https://publicrelationssydney.com.au/4waystoreachyourtargetaudience/

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