A Report on
OrganicKidz: Marketing Strategy
LETTER OF TRANSMITTAL
Date: September twenty, 2009
Subject: Regarding Costco's offer to offer stainless steel baby bottles Special Ms Her Walter,
With regards to the above mentioned subject, please discover my report enclosed. The report includes an research of the scenario, problem assertion, a list of the choices available, conditions for analyzing these choices and one last recommendation with the proposed course of action. I recommend one to delay the Costco provide for now and prepare a new design on their behalf. Yours seriously,
Enhancements made on consumer inclination away from polycarbonate baby containers has opened an opportunity to build a market to get stainless steel wine bottles. Having previously seized the first mover advantage, OrganicKidz faces a dilemma to simply accept the pitch to sell wine bottles through Costco or certainly not. The options offered are: to accept or perhaps reject the offer or create a fresh design to become sold just to Costco. They may be weighed against the possibility of repercussion from existing customers, understanding of higher revenue growth and lesser upcoming risk regarding distribution. The option to create a fresh design results high on all three criterions thus has been recommended.
(Word Count вЂ“ 107)
STANDARDS FOR EVALUATION7
EVALUATION OF OPTIONS7
Popularity of a new product line constantly attracts various bidders and OrganicKidz continues to be approached simply by one such. Early on success of stainless steel baby bottles because BPA-free and shatter resistant alternative to polycarbonate (PCB) types, which commanded a whopping 95% market share till early 08, has motivated Costco to approach OrganicKidz to let it sell all their product. Even though the baby bottle market was mature, it was looking for a safe alternative to PCB which can be construed from the big response the stainless steel jar received in the " DASAR Kids ExpoвЂќ even without virtually any sample to show. Visit from retail majors and niche stores suppliers from half a dozen countries further establishes its future growth prospect. Bestowed with several sector awards, the item has established its quality as well. There has been substantive effort to take care of the high grade image of the narrow-necked baby bottle by causing it offered at only niche stores. To cater to the need from mass merchandisers a great altogether fresh line of baby bottles вЂ“ wide-mouthed versions was designed with price range $15 to $18 as against $19. 99 to $24. 99 intended for narrow-necked one particular. It was an excellent strategy to lessen the conflict with client positions] as they cater to two very different market sectors. The narrow-necked design offers met with instant success inside the very first 12 months of the launch with sales of about 6000 bottle for $65000. Distribution likewise expanded to 12 countries from the first of 5. The market reveal in a $250 million market might still be low but the growth looks positive together with the sales likely to hit $22.99, 000 indicate by the season end. With the prospect of greater revenue in the future seeking bright, Costco has got into contact with the company with a pitch to let it sell the bottles through its stockroom stores. Costco earns profits on the trading cash because of timing big difference of cash receivables and payables whereas current distributors earn profits simply by charging margins on end consumers. This approach allows Costco to hold the sales prices low which in the latest case is often as low while $10 to get low end jar whose sales price for OrganicKidz by using an average is $9. forty five. Such low cost might power mass merchandisers and specialty stores to lower their price and operate on reduce margin that might not become a feasible organization option for them. Contingent on the success of first...