KeepCup is an Australian company that specializes in the production of reusable coffee cups. Started in Melbourne in 1998 as a cafe, this firm has experienced massive growth over the years and it is currently operating in the global market. It means that this company must be ready to deal with international market forces to have sustainable growth in the market. In this paper, the researcher focuses on the new marketing campaign plan that this firm will have to employ in its international operations, especially given it is considering to give special attention to the Canadian market.
How Marketing Theory Impacts the Proposed Plan
The campaign plan that KeepCup will be using in the international market will be affected by marketing theory in various ways. I propose the use of online marketing plan as a way of enabling this firm to reach out to a larger audience with its promotional campaigns. According to Gbadamosi, Bathgate, and Nwankwo (2013), a firm cannot effectively operate without due consideration of the conventional marketing theories. These theories define the approach that a firm should take in managing competition, introducing new products, expanding operations and such other important operational and developmental activities. In our plan to expand operations of this company internationally and especially within the Canadian market, there will be a concerted effort to use various marketing theories. For instance, the theories that define how a market scan should be conducted will help in understanding the Canadian market in detail. It will help in knowing the forces that may support or hinder the operations in the market. The theories will also help in understanding when to come up with a plan that seeks to use direct market competition and when to have a plan that emphasizes on strategic alliance. Basing the plan on marketing theory will help this firm make informed decisions instead of acting without a clear sense of direction.
Broad International Business and Marketing Context
Operating in the international market presents a number of challenges that may affect the normal operations of a firm. A company must first understand the international market in which, it seeks to operate and the forces that may have both positive and negative consequences. As mentioned above, the proposed plan is to use online marketing to reach a wider market audience in the international market, and specifically in Canada. In the marketing context, the plan must meet basic principles that define how a firm must classify the market, identify the right segment, and design campaigns that are suitable to the selected segment. The plan is not meant for the clients back in Australia but a new global audience, specifically in Canada. Reusable coffee cup is a relatively new product that is gaining popularity very fast as people become aware of the need to protect the environment. However, the concept behind this product is simple and it is easy for other companies to come up with new products in these foreign markets. The plan is therefore to create a very strong brand in every new market before other firms can copy its concept to help KeepCup gain competitive edge over its rivals.
Mission and Objectives with an Overall Strategy to Achieve the Objective
It is important to define the mission and objectives of KeepCup in its Canadian market and to explain the strategy that will be used to achieve the set objectives. The following is the proposed mission statement.
To offer Canadians affordable, durable, and easy to use reusable coffee cups
The following will be the objectives of this company in the market.
- To create a pool of loyal customers in the Canadian market
- To develop a strong brand in the market that will help KeepCup gain competitive edge over its market rivals.
- To achieve sustainable growth in the Canadian market.
To achieve the above objectives, this firm will need two strategies. The first strategy will be to produce high quality products that will win it a pool of loyal customers. This strategy will also enable it achieve sustainable growth in this new market. The second strategy will be to use online promotional campaigns in the market to create awareness of the brand and its superior products.
How to Add Value to the Target Company
The campaign strategies that will be employed in this marketing campaign plan will help in adding value to KeepCup Company. It will help its brand to become more conspicuous in the market. Customers will also gain a greater awareness about the availability of its products hence it will experience high sales volume. The added value will make it compete favorably in the new market.
Forces Affecting International Marketing
The strategy that a firm uses in local marketing is very different from the strategy needed in international marketing. As Blythe (2013) observes, although the world has become a global village, thanks to the emerging technologies, it is very dangerous for a firm to assume that the forces affecting its operations locally will be the same forces that will affect it at an international level. For our KeepCup Company, the knowledge about the Australian market may help it have an idea of what to expect in Canada given that both are developed countries. However, there are unique forces in the Canadian market that will require this company to redefine its operations at a global level. As such, it is necessary to look at forces that may affect its international marketing.
How International Marketing Environment Has Influenced the Marketing Strategy
As mentioned, I have proposed the use of online marketing plan as a way of developing new marketing campaigns that will be used in the international market, and specifically in Canada. It is important to note that international marketing environment has significantly influenced this strategy over the recent past. The emerging technologies have redefined the approach that companies are taking to promote their products in the online platform. The following are some of the new changes that this firm will have to embrace in its operations.
Facebook marketing. According to a report by Oplatka and Hemsley-Brown (2012), Facebook currently has over one and a half billion active users. In the past, Facebook was considered a communication platform for the youth. However, the middle aged and even the elderly are finding it an effective way of interaction. Facebook is one of the new platforms that offer companies in the international market opportunity to promote their products to the global audience. The management of this company must understand and appreciate the influence of this promotional campaign platform and develop ways of using it to reach out to the target audience within the Canadian market. One of the biggest advantages of this platform is that majority of its users often make a point of visiting the website at least once or twice a day. It means that when it is used, a firm will be assured that the message will reach the intended audience. KeepCup particularly targets the middle working class and the college students who often purchase coffee every morning when going to work or school. The targeted market has people who regularly use Facebook to communicate, which means that it will be a good platform to pass promotional messages to the customers.
Twitter marketing. Twitter is another major force in the international marketing environment that defines the marketing strategy that a firm uses at a global level. Users of this social media are currently over one billion. It is particularly popular with the working class. They consider it a more formal and effective way of sharing ideas as opposed to Facebook. Twitter marketing works under the same concept as Facebook marketing. Its more formal nature makes it appropriate when targeting the working class.
YouTube marketing. YouTube is another unique platform for marketing at a global level. It is considered a direct competitor of television marketing. KeepCup will find this platform very important in its international marketing strategy because it allows users to develop short clips that demonstrate how the product is used and its superiority in the market (Baack, Harris, & Baack, 2013). This Australian company will have opportunity to explain to its Canadian customers how the product is used, its unique features, and what makes it superior to other products in the market.
Email marketing. Using e-mails such as Yahoo and Google mail to send promotional campaign messages to the customers is another factor that this company will have to consider. Email marketing has been in existence for some time and it is still relevant despite the emergence of the social media. KeepCup cannot ignore this force as it seeks to achieve an edge over its market rivals.
The International Marketing Environment
The international marketing environment will affect this firm’s operations in the Canadian market in different ways. It is important to look at these external environmental forces and their impact on the marketing plan that KeepCup intends to use.
Economic Factors
The economic environment in the target market is very attractive. Canada is one of the countries with very high per capita income, which means that the Canadian customers can afford the products that will be offered to them. The country’s economy is growing at impressive rates and it is likely that the size of the middle class will grow even further. However, it is important to appreciate the fact that this attractive economic environment is likely to attract other competitors into the market. Canada has regional trade agreements with United States and other countries that allow companies from these countries to enter the Canadian market without restrictions. It means that the threat of new entrants may be intense. New regional companies can come up with similar products into this market with ease, and that may make competition in the local Canadian market very stiff. As Ravens (2014) says, knowing how to take advantage of the economic opportunities while at the same time managing the threats defines how successful a firm can be in the market. It means that KeepCup will need to master these economic forces and ensure that its online marketing strategy is capable of offering it competitive edge over its market rivals to take maximum advantage of the opportunities.
Social-cultural Factors
Socio-cultural issues can never be ignored by any company that seeks to achieve success in the market. Culture of a given people defines how they view a specific product. Gbadamosi (2016) warns that sometimes a company may take lightly issues such as shape and color of a product while in real sense such a factor means a lot to the customers. For instance, the color red in Europe is associated with danger or forbiddance. A firm should be careful when using the color in Europe. However, the same color means joy, wealth, and authority in China. It means that it is a very powerful color in China and can help a firm to attract more customers. Before coming up with designs and colors of the reusable cups for the Canadian market, it is important to understand the socio-cultural forces locally. It is very likely that the socio-cultural environment in Canada and Australia may not be very different given that both countries have been influenced by the Western culture almost to a similar degree. However, unique practices influenced by the geographical forces must be understood and taken into consideration when coming up with an online campaign plan.
Political Factors
The political climate of a country also plays a critical role in defining the sustainability of a firm’s operations in the market and the strategy that it should use to achieve the desired goals. A firm cannot operate successfully in a politically unstable country (Levy & Grewal, 2015). Canada has experienced a long period of political stability where transition of power from one regime to another happens smoothly. The political stability in Canada makes it a perfect environment for KeepCup to expand its operations. It will assure this company of a market where all can be held into account for their actions and acts of lawlessness are not tolerated. The political class in the country rarely engages in activities that may directly affect the operations of foreign firms unfairly.
Legal and Regulatory Factors
The legal and regulatory environment in Canada will also influence the strategies that this company will use. The country has laws and regulations that define how a new firm must be registered before it can start its operations. Management of KeepCup will need to register this company as per these laws and regulations. Once this firm begins its operations it will have to abide by the laws that define its relationship with its customers, suppliers, government, the public, and other stakeholders.
Ecological Factors
The global society is becoming increasingly concerned about the need to protect the environment. Canada, just like Australia, has come up with policies that firms must embrace to ensure that their operations do not pose threat to the environment. The strategy that this firm uses in production and delivering its products must be in line with the ecological regulations. In its product proposition, the firm should emphasize on the fact that its products help in conserving the environment by significantly reducing plastic wastes.
International Market Research
The management of KeepCup sponsored a market research in Canada to enable it to understand the local market forces. These forces are critical in defining the product, price, place, and promotional strategies in this new market. In this section, the focus will be to look at the initial research that was conducted in Canada and its outcome. The section also looks at the how the research was conducted as a way of demonstrating reliability of the study’s outcome.
The Initial Market Research
The initial market research that was conducted focused on determining a number of factors that were to define corporate and operational strategies, top of which was the market need. It was important to understand what customers need in this market so that KeepCup can develop products that meet these needs in a proper way. As Khachidze (2012) notes, when going into a new market, it is important to understand the needs to help determine if the products of the new firm meet these needs in the best way possible. The other factor that the research focused on was the purchasing pattern of the customers. It was important to determine whether there is a culture where people purchase coffee more often and the nature of the cups they use. The aim was to identify the market gap in terms of the efficiency of the cups used in Canada by the coffee lovers. This information was critical in determining the market size, the viability, and changing tastes and preferences. Through this research, the firm’s main interest was to determine whether this product will have demand in the market. The research revealed that the culture in the country strongly supports this product.
The next factor was to identify the attractive market segment that will be targeted by this product. The research revealed a pattern where those who leave their houses very early in the morning are the biggest consumers of coffee. They have limited time in the morning and instead of preparing tea or coffee at home, they walk to the vendors across the streets and pick take-away coffee. Most of them are middle class workers and college students. They make a very attractive market segment not only because of their purchasing power but also their consciousness about the need to protect the environment. Another factor that the research wanted to determine was the best product proposition strategy that will be appealing to the target customers. Our research revealed that convenience and concern towards the environment are the two most important factors that can influence these customers to purchase this product. Promising them convenience and a safe cleaner environment was in line with what the product offers in the market. The last factor that was established in this initial research was the pricing strategy. It is important to ensure that KeepCup products are affordable to the target market. The study revealed that the purchasing power and pattern of Canadians has similarities with that of Australians. As such, the pricing strategy used in the home market can easily be applied in the Canadian market.
The Process Undertaken to Establish the Market Need
The initial marketing research was done in five major cities in Canada. The cities included Ottawa, Toronto, Montreal, Vancouver, and Calgary. These five cities were selected because of their high population and the living standards of the residents. The limited time available and the need for a detailed data collection and analysis made it necessary to limit the research to these five cities. The researcher identified participants in these cities through random selection. They were interviewed for about five minutes about their purchasing habits when it comes to coffee and their view about reusable coffee cups. They were requested to state their expectations of the reusable cups and the price they consider more appropriate. Data collected from the field was analyzed in order to come up with a clear knowledge of the Canadian market.
International Market Segmentation, Targeting, and Positioning
According to Epps and Trebilcock (2013), when operating in a new market, one of the most important factors is to segment the market based on specific factors and target the best segment based on the firm’s core competencies and needs of the customers. After selecting the appropriate market segment, it becomes easy to position the product in line with the set objectives. This section will look at the strategy that was used to segment the market in Canada, the segment that was chosen, and how the product was positioned to the selected market segment.
The Product Being Proposed
In the Canadian market, KeepCup will offer reusable coffee cups as its primary product in the first year of operation. This product is very unique and serves the needs of regular coffee users in the best way possible. The cup is manufactured using a special plastic material that can withstand water at very high temperatures. It means that coffee lovers do not have to worry about issues related to health hazards when using this cup because it is designed to ensure that its users are not exposed to any form of risk. It has unique features that make it different from any other that may be in the market currently. It is light in weight, which means that it is easy to carry. With a lid that one can open or close, the user is assured that there will be no spillage of coffee as they move from coffee shops to school or work. The material is not easily breakable. The cup is designed to have four different parts (cup, band, plug, and lid), each of which can be replaced at our shops. This easy to use coffee cup comes in different shapes and sizes.
A customer can also choose from a wide variety of colors based on one’s personal interests. In the Canadian market, this cup is available in different sizes, but the most common sizes include 8oz, 12oz, and 16oz. One can choose the right size based on the daily needs. This product is very easy to clean. One only needs to follow simple steps to disassemble it for proper cleaning. Once it is clean, it can be reassembled, ready to use. The cup is manufactured using non-toxic polypropylene, which is BPS and BPA free, making it a very safe product. It can withstand liquid temperatures of over 110 degrees. The materials used in manufacturing this product are recyclable at the end of its life. The figure 1 below shows some of the samples of KeepCup products which are already available within the Canadian market.
The Target Market and how it was Chosen
The Canadian market presents a huge potential for KeepCup that will enable it achieve sustainable growth in the market. Crittenden (2015) advises that a firm should be capable of defining its target market very clearly based on the specific needs that it can meet in the best way possible. In Canada, KeepCup will focus on two main targets. The first one will be organizational customers. They include coffee shops and cafes in major cities across the country that can purchase our products in bulk and resell them to their customers at a profit. These organizational buyers will act as our retailers in some parts of the city. The management can reach an agreement with these customers, offer them reasonable prices, and allow them to sell the reusable cups to the customers. In the sections of the market where this firm has these organizational buyers carrying its products, it will avoid setting up stores that may be seen to compete with these customers. The second category of the target market is individual buyers. This company will specifically target the middle class workers and college students with this product. Targeting this population in the major cities across the country will enable this firm to grow rapidly because of the huge population of people who fall in this category in Canada. The target markets were chosen based on their purchasing ability and their need for our product.
The Most Appropriate Way to Segment the Market and Why
According to French and Gordon (2015), market segmentation may sometimes be the biggest challenge of a firm as it tries to select a group of customers that it should target with its products. However, segmentation is a critical process, which ensures that a firm is focused only on a section of the market whose needs it can meet in the best way possible. Segmentation can be done on the basis of demographic, geographic, psychographic, or behavioral factors. At KeepCup, we must segment the market and identify the segment that we should target in order to achieve the desired level of success in the market. Segmentation will be done on both individual and organizational buyers. When segmenting the organizational buyers, the criteria that will be used will be the nature of their business. The primary segments that will be targeted are coffee shops and cafes located strategically in various parts of the selected cities.
The second category will be the individual buyers. When segmenting individual buyers, the most important factors that must be put into consideration are their willingness and ability to purchase the product. They must find the product meaningful to them in one way or the other and they must have the financial capacity to purchase the product. As mentioned above, the segments that this company will target are the middle class workers and college students. The reason why the middle class workers and college students were chosen is because of the fact that they regularly consume coffee and in most of the cases they use low quality non-reusable cups when purchasing take-away coffee. As such, this new product will upgrade the experience of purchasing and taking coffee. These segments include people who are knowledgeable when it comes to environmental conservation and they will be happy playing a role in protecting the environment by using reusable coffee cups.
How the Firm Will Market to Its Chosen Target Market and Why
When a segment of the market has been selected, the next important step is to come up with a strategy of marketing to them (Moran, 2015). The strategy of marketing should take into consideration the demographical, psychographic, geographic, and behavioral factors. To organizational buyers, the firm will use direct marketing because of their purchasing power. A representative of KeepCup will visit these customers, explain to them the uniqueness of these cups and their benefits to the customers, and convince them to stock the product. In turn, KeepCup will promise these firms that it will engage in promotional campaigns to ensure that the brand is known in the market. For every cup sold by these customers, there will be a profit. Marketing to the individual buyers will involve the use of various strategies. This firm will use social media platforms to reach out to the individual buyers. Twitter will primarily target middle class workers who find it easy and more professional using this platform to communicate. Facebook will primarily target college students who are always using it to share. YouTube will be used to target both college students and middle class workers. Periodically, this firm will consider using television marketing, especially during major events that makes people prefer watching news on television. Radio advertisement may also be used when targeting the college students. However, the mass media marketing will be considered secondary to social media marketing. This is so because majority of the targeted audiences are easily found in the social media.
How the Firm Will Position Its Product
Positioning the product is critical because it defines whether the customers targeted can associate themselves with it or not (Louw, 2012). The reusable coffee cups must be positioned in a way that college students and middle class workers can have a favorable view towards them. Efficiency and environmental friendliness are the two main promises that this product offers to its customers. However, the positioning of the product will emphasize more the environmental friendliness of the product. This product will be positioned as one that plays a direct role in environmental conservation. Its use will be a sign of direct commitment to conserve the environment by reducing plastic wastes. Carrying this cup will, therefore, create a sense of responsibility and class among user. The users will be viewed as champions of a green environment. The strategy is expected to attract a large number of customers.
International Marketing Mix
KeepCup is currently operating in a global market. When analyzing the marketing mix elements for this firm, it is important to include brand, besides the four Ps of product, price, place, and promotion. This is important specifically because this company is introducing its operations in the Canadian market and it is critical to find ways of strengthening the brand. It is expected that the competition will become very stiff. It is easy for new companies to develop similar products in the Canadian market, making it even more difficult to differentiate KeepCup products from that of its rival companies. In such a competitive business environment, the only way of remaining competitive is to develop a strong brand. The brand must not only be known but associated with values that the society embraces. The section will look at the international marketing mix factors with the view of finding ways in which this firm can gain competitive edge over its rival firms.
Discussion and Justification of the Product Strategy
In the marketing mix elements, the first factor that must be considered is the product. KeepCup is offering its customers reusable coffee cups that they can refill every morning or at any time that they want to purchase coffee. Instead of using conventional plastic coffee cups which are disposable once the coffee is taken, this new product will come up with a completely new paradigm. Once the coffee is used, the cup will be kept, cleaned once the user gets back to the house, and be used again the following day as may be necessary. This product will not only enable the users to play a significant role in protecting the environment, but it will also enable them to reduce the cost of coffee. The coffee shops will be able to reduce the cost of their coffee because their customers have their own cups. These vendors no longer have to purchase the plastic cups, which means that their cost of production will decrease. They can afford to charge lower prices because of their reduced cost of production.
It is normal that other similar products will come up in the market. As such, it is necessary to come up with a unique product strategy. KeepCup will need to understand its market segments and develop unique products for each segment. It means that there will be a huge variety of these products in terms of color, shape, and size. Women often favor bright colors more than men do (Hardina, 2012). There are also shapes and sizes which are more popular among different market segments based on their gender, race, age, religion, and such other demographic or psychographic factors. To ensure that customers get the exact cup that they prefer in terms of size, shape, and color, a wide variety will be offered to the Canadian clients. It is believed that when offered variety, it is possible that a wider market segment will be captured. The firm’s products will meet a wide range of customers’ needs in the market.
The materials used in manufacturing these reusable coffee cups are unique. The plastic can withstand very high temperatures, which means that it poses no health risks. The targeted customers are always very sensitive when it comes to issues that relate to health. Cheap plastics are known to be carcinogenic. As such, many people aware of this fact are often keen when using plastic materials. Our cups are uniquely made to withstand very high temperatures and as such, our customers have very little to worry about. For those who are completely uncomfortable when it comes to using plastic materials to handle food, we have an alternative product. There is the glass cup that is very similar to the plastic cups.
Discussion and Justification of the Branding Strategy
When developing a branding strategy, it is important to come up with a strong reason that will make a given brand superior to others in the market. In this case, the strategy must explain reasons why people have to choose KeepCup instead of other brands. There must be a strong message about the brand that will make customers be convinced that this brand offers the best value in the market. In our branding strategy, there will be a deliberate attempt to communicate with the customers and ensure that the product offered meets their basic needs but in a unique way. A research had already been conducted, making it possible to come up with an effective branding strategy. In this branding strategy, the following are the specific factors that will be taken into consideration.
Brand positioning. The way in which a brand is positioned in the market determines how much the target audience would want to be associated with it. In our initial research, it was established that health and environmental conservation are two factors that almost every Canadian cherishes. As such, these are the two bases upon which the brand will be position. In all our advertisements, there will be a constant reminder about these two factors. Customers will be reminded that when they use these reusable coffee cups, they will be playing a great role in protecting the environment from pollution. They will also be taking personal initiatives to protect themselves from some of the currently dreaded diseases such as cancer. As such, the overall image that will come out is that using products bearing our brand name is a sign of responsibility. The brand will be associated with responsibility towards the environment and one’s own health.
Messaging strategy. The messaging strategy that this firm is taking is unique. It completely avoids the idea that this company is focused on making quick profits. Instead, it brings out the idea that although the activities of this firm may be profitable, it is greatly concerned with the well-being of the customers and that of the environment. As such, the messaging strategy must bring out this concept in a very clear way. The message will emphasize on the need for the audience to take a leading role in protecting the environment and take control in managing their health. They will be reminded that they can start by simply avoiding the cheap plastic cups that cannot be reused because of their negative health effects and adverse impact on their environment. The message will remind them that by using our products, they will be doing themselves and their environment a favor as opposed to using other products.
Brand name: It will be important to ensure that the brand name of our company is popular in the Canadian market. The name KeepCup worked well in the Australian market and we intend to use it in this new international market. The brand name is appropriate for the positioning strategy discussed above. It is a simple instruction to the customers to keep the cup after use instead of disposing it. The name in itself is passing a message that the cups are reusable.
Brand logo. The logo will help in creating a clear image of the product in the mind of the customers. As Lefebvre (2013) notes, brand image should help in promoting a good memory of a brand every time it is seen. The corporate leadership of this company has come up with a corporate logo. The figure 2 below shows the logo.
The chosen logo is appropriate because it emphasizes on the need for the customers to remember about the brand name. It is a sign that the company is keen on making the brand name very memorable by developing a logo that echoes the name.
Brand color. Tastes and preferences of customers are often determined by socio-cultural forces within a given region. The color chosen for a brand must not be in conflict with the social and cultural beliefs. People should be comfortable associating themselves with the color. As shown in the figure above, the management chose a color that is less controversial in the international context. This color will be appropriate in the Canadian market.
Considerations That Will Influence the Packaging
Packaging is critical, especially in a market where differentiation cannot help a firm to gain competitive edge over its market rivals. The products will be packaged differently based on the quantity being purchased. For every cup, a smart carton will be used for packaging. The carton will have the logo of the company and labeling that shows its size. The figure 3 below shows how each cup will be packaged.
As shown in the figure above, each cup will be packed in a beautiful carton that allows customers to have a clear view of the product without necessarily taking it out of the box. This packaging strategy not only eliminates time wastage when clients have to open the package to view the product but it also protects the carton itself from excessive handling. Each of the fully packed cups will be placed in larger cartons that contain a dozen cups. The larger carton will also have the logo of the company and a description of the cups in it. In each carton, there will be cups of the same size but different colors. The use of cardboard cartons is meant to ensure that wastes from this product pose no threat to the environment. According to Azevedo (2013), sometimes customers make their purchasing decisions based on the packaging of the products, especially in cases where the alternatives available are very similar. A perception is often created in the mind of the customers that a product that is packaged in a unique way has a unique value to offer. It is, therefore, important for this company to remind its customers that it has something unique to offer to them by using unique packaging strategy.
How the Firm Will Test Its New Product in the New Market
Test marketing is critical before commercialization when a firm is getting into a new market for the first time. It is expected that the Canadian market will have a number of characteristics which are very similar to that of Australia in terms of purchasing power, social-cultural, and political forces. However, the fact that this is a new country for this product, the relevance of test marketing cannot be ignored. Five major cities, Ottawa, Toronto, Montreal, Vancouver, and Calgary, had already been selected in the initial market research. They are the same places where test marketing will be conducted to determine if this business venture is viable in Canada. Test marketing will take two main approaches. The first approach will be to test the organizational buyers. This firm will approach selected coffee shops and cafes, which are located strategically in these major urban centers. The marketing representatives will approach the management of these organizational buyers and explain to them the benefits of our product. They will inform the management of these organizations the benefit of these reusable coffee cups to the coffee buyers and coffee sellers. The representatives will also explain to these managers the financial benefits, in terms of profits, that these organizations will get when they carry our products. This strategy is meant to determine the possible reaction of these organizational buyers. The representatives will be instructed to be flexible to enable them understand the expectations of the customers.
The second approach will be to test the individual consumers. The management of KeepCup will enter into a business deal with major retailers in these cities. The retailers will be requested to lease to use shelf space within their stores. Once given the shelf space, we will place our products in these stores and have two sales representatives in each store to help promote purchase of our products. These attendants will inform the customers about the product, its purpose, and what makes it unique among the rest. The aim of these attendants is not just to inform but directly influence these customers to purchase these products. As a new product, it is expected that customers may have questions, specifically when it comes to assembling or disassembling this product. These attendants will be there to demonstrate to the customers how this product is used. It will be possible to determine the viability of this product in the market through test marketing before investing a lot of resources on commercialization.
It is expected that a number of issues will arise during the testing process. One of the most significant issues expected is lack of interest among the targeted organization. We will need the support of the retail outlets, coffee shops, and cafes. However, for them to give us an audience and accept to be part of the process of test marketing, they must be interested in the product itself. Lack of interest among these institutions may complicate the process. A study by Davis, Demirkan, & Motahari-Nezhad (2014) shows that Canada has one of the lowest unemployment rates in the world. It means that cost of labor is also high compared with other parts of the world. KeepCup will spend significant amount of financial resources to pay the sales representatives involved in test marketing.
The Pricing Strategy and Pricing Policy for the Product
As we prepare to commercialize this product in the Canadian market, one of the biggest tasks is to come up with an effective price for the cups based on the prevailing market forces and the costs used to deliver a unit product to the customers. The first factor that will be considered in our pricing strategy is the cost of production. The price set must be capable of paying all the costs of delivering that product to the customer, including the tax, and a reasonable profit that can assure this firm of sustainability in its operations. The second factor will be the prices charged by rival companies. Our price should not be lower than the least price offered by rival companies because it will make customers consider it to be of lower quality. Charging very high prices compared with what the rival companies offer may make it less affordable to a section of customers. The policy that will be adopted is to price our products in line with clients’ expectations but in a way that will bring out the superiority of these products in the market. The strategy is to ensure that customers view our products to have premium value compared with that of the rival companies.
KeepCup will not use discount as a strategy in its pricing. Instead, there will be sales promotion strategies that will be used. For instance, for every reusable cup, there will be a detergent attached to it that will be used for washing. It means that the set price also includes the price of the detergent. The strategy will motivate customers to purchase the product because they will not have to purchase the detergent. The other strategy will specifically target families. There will be a family package of four cups, eight cups, and ten cups. When one purchases a package of four cups, he or she will not pay for the fourth cup. It means that the customer will purchase the four cups at a price of only three cups. Similarly, if one purchases eight cups, he or she will only pay the price of six cups. The last two cups will be bonus for them. In case one purchases a package of ten cups, he or she will only pay the price of seven cups. The last three cups will be a bonus. This pricing strategy is meant to motivate customers to purchase more products from this company. The cups will be of small, medium, and big sizes. The small plastic cup will go for $ 5; the medium will cost $ 8, while the large cup will go for $ 12. Then there is the premium quality cup made of glass instead of plastic. The small glass cup will go for $ 21; the medium cup will be $ 38, while the large cup will be $ 57.
Environmental Influences That Are Likely To Affect the Pricing Decisions
It is important to appreciate that there are environmental forces that may influence the pricing decisions, top of which is government regulations. Sometimes the government may set minimum prices to protect local firms or maximum price allowable to protect customers. In case the Canadian government comes with such regulations, then this firm will adapt by setting prices within the set range. Another environmental influence will be the price set by competitors and that of alternative products. Although this firm will avoid price wars as much as possible, it will ensure that the price of its products is not below the market average. The price will not also be way above the most expensive alternative in the market. The management will always ensure that there is stability in its pricing to avoid unnecessary dissatisfaction among its customers. However, care will be taken to ensure that this firm is responsive to disruptive environmental forces such as inflation. When inflation directly affects the cost of delivering a unit product in the market, the increase must be transferred to the customers to ensure that the firm remains sustainable in its operations.
International Supply Chain Management
When going global, one of the new challenges that the management of KeepCup must be ready to deal with is coming up with an international supply chain management strategy (Ballantyne & Packer, 2013). Immediately when the management makes the decision to commercialize the operations of the firm after test marketing, it will be necessary to ensure that the products reach the market at the right time. The process of moving the products from the point of manufacture to the market should not cause any damage to the cups. KeepCup will not establish a new production plant in Canada. Instead, it will continue with its productions in Australia. The products will be packaged properly and then shipped from Australia to Canada. This firm will identify shipping companies that can charge it least possible cost and assure it of timely delivery in Canada. When shipping, the cups will be stuffed into one another to reduce the space used as much as possible. There will be an assembly warehouse in the port city of Montreal where these products will be taken directly after processing the necessary documents at the port. Within this warehouse, the products will be packaged, ready for delivery in the shops.
KeepCup will need its own trucks and vans that will be used to drop the products at major supermarkets, restaurants, coffee shops, and cafes within the country. The trucks will help in moving the products from the port city to major distribution centers within the selected cities. From these distribution centers, the vans will be used to ensure that the products are delivered to the individual customers. This distribution strategy is expensive but unavoidable because most of these customers will not be willing to spend their resources to have access to these products. As such, it forces this firm to ensure that these products are delivered to the customers at their preferred premises. Although it is expensive, the strategy gives this company full control of its supply chain activities in this new market.
References
Agarwal, R., Selen, W., Roos, G., & Green, R. (2015). The handbook of service innovation. London, UK: Springer
Azevedo, A. (2013). Advances in sustainable and competitive manufacturing systems: 23rd International Conference on Flexible Automation and Intelligent Manufacturing. Cham, Germany: Springer.
Baack, D. W., Harris, E. G., & Baack, D. (2013). International marketing. Thousand Oaks, CA: SAGE.
Ballantyne, R., & Packer, J. (2013). International handbook on ecotourism. Cheltenham, UK: Edward Elgar Publishing.
Blythe, J. (2013). Principles and practice of marketing. Hoboken, NJ: John Wiley & Sons Publishers.
Crittenden, V. L. (2015). Proceedings of the 1992 Academy of Marketing Science (AMS) Annual Conference. New York, NY: Cengage.
Davis, J., Demirkan, H., & Motahari-Nezhad, H. R. (2014). Service research and innovation: Third Australian Symposium, ASSRI 2013, Sydney, NSW, Australia, November 27-29, 2013, Revised selected papers. Sydney, Australia: McMillan.
Epps, T., & Trebilcock, M. J. (2013). Research handbook on the WTO and technical barriers to trade. New York, NY: Springer.
French, J., & Gordon, R. (2015). Strategic social marketing. Hoboken, NJ: John Wiley & Sons.
Gbadamosi, A. (2016). Handbook of research on consumerism and buying behavior in developing nations. Hershey, PA: Business Science Reference.
Gbadamosi, A., Bathgate, I., & Nwankwo, S. (2013). Principles of marketing: A value-based approach. Basingstoke, UK: Palgrave Macmillan.
Hardina, D. (2012). Interpersonal social work skills for community practice. New York, NY: Springer Pub.
Khachidze, V. (2012). Contemporary research on E-business technology and strategy: International conference, iCETS 2012, Tianjin, China, August 29-31, 2012. Berlin, Germany: Springer.
Lefebvre, R. C. (2013). Social marketing and social change: Strategies and tools for health, well-being, and the environment. San Francisco, CA: Jossey-Bass.
Levy, M., & Grewal, D. (2015). Proceedings of the 1993 Academy of Marketing Science (AMS) annual conference. New York, NY: Springer.
Louw, A. (2012). Ambush marketing and the mega-event monopoly: How laws are abused to protect commercial rights to major sporting events. The Hague, Netherlands: T.M.C. Asser Press.
Moran, A. (2015). Managing agile: Strategy, implementation, organisation and people. London, UK: McMillan.
Oplatka, I., & Hemsley-Brown, J. (2012). The management and leadership of educational marketing: Research, practice and applications. Bingley, UK: Emerald.
Ravens, C. (2014). Internal brand management in an international context. New York, NY: Springer.
Tate, C. (2015). Conscious marketing: How to create an awesome business with a new approach to marketing. Hoboken, NJ: John Wiley & Sons.