myles blog

Marketing Blog

Apex Soap products

Today I want to write about a case study from my COMM 349 Logistics Services Management class. The case is about Apex Soaps logistics cost problems between their companies trucking fleet and contract trucking fleets.

John Apex is a chemist and the inventor of Apex biodegradable soap. He has managed to create a successful company with considerable market share. In 1997 the company had increased its sales margin by 10% but experienced a drop in profit by around 5%. This was somewhat explained by the recent price war that the soap industry was in. However the company needed to dig deeper to find the real problem with their current strategy.

The bigger problem was the 17% increase in transportation cost over one year. Since 80% of Apex’s transportation fleet was owned by Apex they started investigating there. The problem was quickly discovered.  The private fleet cost where nearly 27% more than benchmark average.

Discussion of eliminating the private fleet was met with uproar from the marketing division. They claimed that the added value of having their own trucks with Apex advertisements on the side outweighed the added cost of owning a fleet.

A cost benefit analysis could confirm or reject this thought.

Also thoughts on how customers actually learn about this product would be important to consider. Do ecofriendly people who generally research a product before use find advertising on the side of a truck inspiring? I don’t really know the answer to this question but I’m leaning towards no.

Another thing for Apex to consider is if they get an entire trucking company to work for them they could make that company show Apex soap advertisements on the side. This would be the best option in my opinion.