Deodorant use and preferences among teenage females

Marketing

Distribution

In order for Free to be successful, it will need broad distribution. The retail channels will include drug stores, grocery stores, discounters like Wal-Mart, convenience stores, online and perhaps warehouse stores as well. This broad distribution is necessitated by the need to reach a large audience that is distributed across the country. Broad distribution of this nature is also the only way that the sales targets will be met.

To achieve this level of distribution, Free will need to be distributed via a major personal care products distributor. Such distributors have ties with wholesalers across the country. They typically deal with a large number of personal care products, and may deal with direct competitors to Free. However, achieving the desired level of distribution cannot be done any other way -- the capabilities of national wholesalers need to be leveraged. National wholesalers are essentially an oligopoly as there are few personal care product wholesalers with such comprehensive capabilities.

The online space is an interesting retail option. For this, there are two choices of distribution -- either to keep it in-house, or to rely on national wholesalers to act as intermediary. Under such a system, we would process the order, and it would be shipped through an established shipping agent, who would be served by our wholesaler. The latter option allows us to focus on our core competencies in marketing and product development, while leaving distribution and retailing to companies that specialize in that business.

It is important to consider the impact that wholesale distribution has on pricing for the product. Typically, a distribution and the retailer will both add markups, which have to be built into the retail price of the product. Understanding the effect of these markups is important, because we can then set a target price for manufacturing.

Manufacturing

There are several options for manufacturing. The first option is to produce the deodorant in-house. We would need to ensure that we have acquired this capability. Typically, personal care products are made in the country in which they are sold, though it is possible to utilize regional trading blocs such as NAFTA for continental-wide production. If we choose to develop our own manufacturing capabilities, we need to ensure that we have a program to ensure quality and to ensure cost control, and we must decide if we are to produce in the U.S., Canada or Mexico. Several factors would be taken into consideration with that decision, including cost.

The other major option for manufacturing is to have the product produced by a third party. Under this option, we would contract out the production to a firm that is experienced in the production of personal care products, but has excess capacity. This option is utilized by many firms in the industry already and it is believed that excess capacity exists.