Market overview:

 The size of the total toilet soap market was around £190 million at retail. The top
quality premium soap market was estimated to be 7 per cent of the total which is
equivalent to £13.3 million.

Quality Market Share % Market Size £

total 100% 190,000,000
Premium
Quality Soap 7% 13,300,000
Other
Quality Soap 93% 176,700,000

m
er as
co
Variable cost Calculations:

eH w
o.
 The below items are all the direct Material & labor cost that can be identified per unit.
Item
rs e £ cost per unit
ou urc
High quality packaging with the appropriate perfume design 0.14
base costs for a 150 gram bar 0.08
incorporating the perfume in the soap on a minimum annual quantity of 300,000
o

units 0.4
aC s

Variable production costs (raw materials and labor) 0.02

vi y re

carriers to distribute the products to the customer average £0.50 per kilo 0.075
total 0.715
ed d
ar stu

Fixed cost Calculations:

 The below items are all the manufacturing overheads.
sh is

Item £
Th

average expenditure for advertising 400000

sales representative cost 12000
company car cost 3000
production process skilled staff to monitor quality 35000
production line cost 25000
location of the factory costs 30000
total 505000

https://www.coursehero.com/file/13743223/Case-Study-Chic-Soap/
 Estimates:
 Variable cost (more than 300,000 units)= £0.715 per unit.

 Fixed cost = £505,000.

 Proposed Price is the AVG of the most 5 competitors.

(1.60 + 1.75 + 1.85 + 1.95 + 1.45)/5 = £1.72.

 Estimated Market share for Chic SOAP in the

1st year is 10%.
£13,300,000 * 10% = £1,330,000.

m
 Contribution Margin (CM) = 1.72(U.P.) –

er as
0.715(U.V.C.) = £1.005 Per Unit.

co
eH w
 Contribution Margin% (CM%) = 1.005/1.72=

o.
59%.
rs e
ou urc
 No of Units N:
1.72*N = Million£1.33 = 768,786 Units
o

Break-even Analysis:
aC s
vi y re

 Break-even Point Units = FC/CM = £505,000/£1.005 = 502,487 Units

 Break-even Point Money = FC/CM% = £505,000/0.59= £855,932

ed d
ar stu

Total profit:
sh is
Th

 Profit = 768786*1.005 – 505000 = £267629.93

 Expenses for Marketing Campaign as we are in the launching phase estimate is £67,6298.
 Then Total Profit will be = £200,000.

Who are your target audience:

The main consumer is the working female from 25-45 is the target segment. Also, the working women
from 35-45 according to market research socio-economic group A.

https://www.coursehero.com/file/13743223/Case-Study-Chic-Soap/
 What is the product benefit that you will be providing:
 The product benefits is on offer could be:
 High quality perfumes.
 long lasting soap.
 rich foaming.
 Competitive price.

How are you intending to reach the target audience:

m
er as
 the product is packaged using the logo of the perfume plus a chic soap.

co


eH w
the use of already established perfume concept to promote the soap.
 access to the distribution achieved by the perfumes.

o.

rs e
The advertising in the women magazine.
ou urc
 Gift pack for Christmas according to the market trend.
 Sponsorship charities department related to women, like breast cancer NGO’s.
o
aC s

Which distribution channels will be most appropriate:

vi y re

 territories for distribution is the south eastern of England & the Large cities.
 Whole sales, department stores & independent chemists.
ed d
ar stu
sh is

How are you intending to support such channels:

Th

 Facilitate the payment for the whole salters.

o Cash discount
o Long-term credit.
o Bonus system.

https://www.coursehero.com/file/13743223/Case-Study-Chic-Soap/

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