international marketing mexico[1][1]
DESCRIPTION
university marketing case study to market flying discs in mexicoTRANSCRIPT
International Marketing Marketing Flying Discs In Mexico
Ross Larsen
Steve Cassidy
Joanna Papageorgiou
Michelle Clarke
James Greaves
Joseph Lin
BackgroundThree Associates Roger Blake (Frisbee Association) Jose Gutierez (VP of Bank) Eloise Dunn (Marketing Consultant)
Ex-O Corporation Major U.S. flying disc manufacturer Owns rights to the product
BackgroundAlejandro Garcia Purchased 4 flying disc molds 6 yrs. ago Did not fulfill contract obligations with
Ex-O corp. Still possess the 4 molds
No one else in Mexico produces flying discs
Background• Potential Market Entry obtained by
Jose Gutierez
• Comercial Mexicana (26 Locations, Nationwide)
• Tiendas Aurerra (45 Locations, Central Mexico)
• Puerto de Liverpool (4 Locations, Mexico City)
Main Case Questions• Should we buy the molds from
Garcia?
• Should we buy Ex-O rights to their discs?
• Should the introduction only be in Mexico City or throughout Mexico?
Additional Substantive Issues
• What are the distribution channels to be used?
• What are the pricing strategies to be implemented?
• Which flying discs are we going to manufacture? Why?
Additional Substantive Issues
4. What advertising strategies will be used? Why?
3. How can we satisfy Ex-O Corp’s request for a detailed marketing strategy?
5. Can the three associates establish the necessary contacts to successfully launch the product?
S.W.O.T. AnalysisStrengths No direct competitors in target marketplace Popularity of sport growing worldwide Name brand “Ex-O”
WeaknessesCustomer awareness is lowProjected retail sales may not meet expectations
S.W.O.T. AnalysisOpportunities Mexican market untapped Cheap production costs High volume of foreign tourists
ThreatsDisc product could be piratedCompetition (Whamm-O Corp.) could move into the market
SolutionPurchase four molds from Alejandro Garcia for production
Set up licensing/royalty agreement with Ex-O Corporation
Market throughout Mexico instead of just Mexico City
SolutionHire a home country broker (firm) with established distribution channels and networks
Gain entry into 5,000 retail outlets for product launch within 4 months
Promotional plan to align with the product launch
ImplementationObtain necessary financing
Present Ex-O Corporation with our marketing strategy
Set up licensing/royalty agreement with Ex-O Corporation
ImplementationSet up legal agreements with the manufacturer
Projected production for first year is 600,000 discs $.30 Production + $.10 Packaging = $.40 600,000 x $.40 = $240,000 U.S.
375,000 discs produced over 3 months, needed for start-up based on average retail requirements (75 discs per outlet)
Fixed ExpensesManufacturing ($.30 per disc)Packaging ($.10 per disc)Broker Fees ($.30 per disc)Royalty Fees (5% of gross sales) Industry AverageMolds Purchase ($4,000)
Advertising ExpenseAllocated $.40 per disc towards ad. Expense
Newspaper (Esto – Sports Paper) ¼ page twice weekly (Friday & Saturday) ½ page once a week (Sunday) Projected Annual Cost - $29,380
Advertising ExpenseTelevision Introduction period (2 months)
4 ads per day (A time – 240 ads total) Months 3 and 4
3 ads per day (A time – 180 ads total) Months 5 thru 12
35 ads per month (A time – 280 ads total)Projected Annual Cost - $210,000
PricingOur cost per unit = $1.10 per disc
Selling price to retailer = $2.50 per disc
Suggested retail mark up 50% = $3.75
$1.40 per disc gross profit before taxes and royalty
Pricing StrategyMarket controlled pricing environment with sales based objectives
Such as high volume and market share
$2.25 $3.75 $4.50
Annual Financial Forecast
$660,000Annual Total
$ 60,000Packaging
$240,000Advertising
$180,000Broker Fees
$180,000Production Materials
Annual Financial Forecast
600,000 x $2.50 = $1,500,000600,000 – Total Production$2.50 – Selling Price To Retailer
Annual Financial Forecast
$1,500,000Gross Sales
$ 533, 000Net Income
$ 228,000Taxes (30%)
$ 761,000Profit Before Taxes
$ 75,000Ex-O Corp. Royalty Fees
$ 4,000Molds Purchase$ 660,000Production & Promo Costs
Future OutlookIntroduce the Pro Model within 6-8 months.
Export the flying discs to Europe, South America, and Central America
Thank you
Any Questions???