international marketing mexico[1][1]
DESCRIPTION
university marketing case study to market flying discs in mexicoTRANSCRIPT
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International Marketing Marketing Flying Discs In Mexico
Ross Larsen
Steve Cassidy
Joanna Papageorgiou
Michelle Clarke
James Greaves
Joseph Lin
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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
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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
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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)
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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?
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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?
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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?
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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
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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
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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
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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
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ImplementationObtain necessary financing
Present Ex-O Corporation with our marketing strategy
Set up licensing/royalty agreement with Ex-O Corporation
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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 = $240,000 U.S.
375,000 discs produced over 3 months, needed for start-up based on average retail requirements (75 discs per outlet)
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Fixed ExpensesManufacturing ($.30 per disc)Packaging ($.10 per disc)Broker Fees ($.30 per disc)Royalty Fees (5% of gross sales) Industry AverageMolds Purchase ($4,000)
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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
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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
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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
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Pricing StrategyMarket controlled pricing environment with sales based objectives
Such as high volume and market share
$2.25 $3.75 $4.50
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Annual Financial Forecast
$660,000Annual Total
$ 60,000Packaging
$240,000Advertising
$180,000Broker Fees
$180,000Production Materials
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Annual Financial Forecast
600,000 x $2.50 = $1,500,000600,000 – Total Production$2.50 – Selling Price To Retailer
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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
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Future OutlookIntroduce the Pro Model within 6-8 months.
Export the flying discs to Europe, South America, and Central America
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Thank you
Any Questions???