Distribution and retail

Word limit: 1000 words per answer (500 each for A and B)
You should not research any data for this assignment. You should rely on the information in the scenario and make reasonable assumptions (articulate your assumptions). You should review and use materials covered in class and are advised to undertake some research into distribution and retail theory by deepening and broadening your knowledge of distribution and retail beyond that covered in lectures.

Question 1

‘Youthful’ is an upscale cosmetic positioned at the very top of the market. The company produces only one skin care product targeted at affluent middle aged women. The product is positioned around an especially powerful ingredient that is said to have an almost magic effect on preventing and in some cases improving wrinkles, improving skin texture and lessening blemishes. Available in 3 sizes Youthful is distributed in a limited number of department stores in the world’s major cities. In London for example it is only available at Harvey Nichols, Harrods and Selfridges. The large tub (75ml) retails at £300 with the medium tub (45ml) at £200 and the small tub (20ml) retailing at £100.

Youthful does not advertise but encourages inclusion of the product in product trials conducted by glossy magazines that are relevant to the target market. Mostly Youthful relies on word of mouth with a bit of spontaneous celebrity endorsement from users. Sales attendants in the department stores are trained to recognise visitors to the counter who have the potential to become users of the product to give them a sample to try.

The company is eager to expand their market and sales while preserving the Youthful brand. They have decided to develop a new range of products utilising the magic ingredient somewhat diluted but still effective. The new range of products is not to carry the Youthful brand name. It is to be named ‘ONE’. The positioning is to be based on excellence of the product in encouraging a clear skin and preventing lines and the signs of ageing. The range of products is to remain simple, a cleanser (in face wash form) for all skins, tonic for 3 skin types and moisturiser for all skins. Cleanser and tonic in 200ml plastic bottles to retail at £25 with the moisturiser in a 40 ml tub £40. ONE is to be targeted at image conscious men and women aged 25 – 40.

You have been retained as channel strategy consultant to the company.
a) What are the alternatives for distributing ONE? (50%)
b) Which strategy do you recommend? Explain your answer. (50%)

Make any reasonable assumptions necessary. Articulate you assumptions

Question 2
Recommend the retail mix for a start up retailer of men’s clothing targeted at men aged 40+ of the A and B social grades. The main competitors are department stores and specialty stores including bespoke tailors (made to measure). The business intends to sell goods and will not make suits for individuals.

Make reasonable assumptions where necessary and make these assumptions clear.