Introduction
Working in a dynamic market environment requires large business owners to adapt to competition and apply adequate solutions to build a sustainable entrepreneurial background. In such conditions, the creation of sub-brands is one of the approaches that allow for establishing successful sales and expanding the sphere of influence. As an object of analysis, Febreze will be considered, a Procter & Gamble-owned brand that specializes in the production of household odor eliminators. The Febreze product line is broad and includes both traditional aerosols and wax melts, candles, and other compact products that ensure freshness (“Our products,” 2021). These products will be evaluated from the perspective of the key inputs, fixed and variable costs, and factors influencing production. Analyzing these criteria can help determine optimal manufacturing solutions to maximize profits with minimal costs.
Key Inputs and Costs
The manufacturing of Febreze products depends on specific inputs or factors that need to be considered to allocate resources adequately and plan costs. While taking into account the standard criteria that determine the conditions for maintaining the production process, one can distinguish three main inputs: human labor, the nature of entrepreneurial activities, and available capital. Each of these factors is associated with specific costs that can be either fixed and independent of the volume of production or variable that, conversely, are determined by manufacturing dynamics.
The labor factor falls into the category of fixed costs because targeted activities, including workforce training and performance monitoring, are needed all the time. Available capital can also be referred to as the group of fixed costs and does not imply a money background but an infrastructure base, for instance, factory premises and machines. Febreze products are chemical, and the costs of laboratory equipment, formulation preparation, and other essential aspects of production are imperative.
Entrepreneurship, in turn, is a variable cost and depends on how actively the manufacturer promotes its products in the market. The Febreze line has a wide range, but in addition, these goods are sold under the Procter & Gamble brand, which helps increase the share of sales through brand value and, therefore, generate more active sales (“Our products,” 2021). In case of a decrease in marketing activities, this input will become less significant, which allows it to be classified as a variable cost.
Factors Influencing Inputs
The choice of inputs for the manufacturing of Febreze products is not a one-time procedure. Market fluctuations, high competition, and other aspects of entrepreneurial activities create a volatile business environment to which organizations need to adapt regularly. When considering the principles of the production of odor eliminators by Procter & Gamble’s sub-brand, one should take into account specific factors. They are the stability of the supply of raw materials, the sustainability of demand, and competitors’ activities.
The stability of the supply of raw materials is an aspect that directly affects the smooth production of Febreze products. Since deodorizing formulations are chemical, the brand has partnerships with suppliers selling the necessary components. If deliveries become less frequent or are interrupted for any reason, Procter & Gamble will either have to urgently set up individual laboratories or abandon Febreze products. Therefore, the stability of supply chains and interaction with suppliers are valuable aspects of maintaining smooth and profitable production.
The sustainability of demand is another factor that may influence the choice of inputs. If sales decline, the company will have to reorganize its manufacturing strategy and allocate more funds to marketing to maintain business productivity. Therefore, the analysis of the demand indicator is an aspect to take into account. Based on this criterion, competitors’ activities are another significant factor. Household products are in demand among consumers and should new goods of this profile with different characteristics or at a lower price appear, Febreze production will also have to be adjusted to the current market conditions. Thus, various nuances can affect the production process, which proves the dynamism of the business environment and the importance of drawing up development strategies timely.
Production Decisions
To avoid problems with the sale of Febreze goods, Procter & Gamble should set up the production process so that consumers could count on relatively inexpensive and, at the same time, quality products. An emphasis on design is meaningless because, according to Lafley and Martin (2017), the corporation has already tried to change packaging more than once, but this led to the opposite result and developed disrupting habits among customers. The production process should be based on two important aspects: the stability of the supply of raw materials and the demand. In case any of these criteria deviate from the given norm, urgent changes are required. This timely response will help avoid unnecessary costs and enable the brand to retain targeted consumers.
Conclusion
To maximize profits and minimize costs, Febreze, the sub-brand of Procter & Gamble, should take into account the individual inputs that affect production. The nature of costs depends on numerous factors, and some costs may be either fixed or variable. A focus on competitors’ activities, stable delivery of raw materials, and control over demand are valuable aspects to consider to establish a sustainable and profitable manufacturing process.
References
Lafley, A. G., & Martin, R. L. (2017). Customer loyalty is overrated. Harvard Business Review, 95(1), 45-54.
Our products. (2021). Procter & Gamble. Web.