Introduction
Wild Willie Juiced Drinks established by two graduates from
Boston College, is one of the new entrants in the nice market of beverages and
is sold only in New England. The blind test has shown that most of the people
have loved their product in comparison to the existing ones. They have realized
that the sales in New England have dropped to double-digit due to the seasonal
effect of winter. They are looking for the new market where they can expand
their business so that the sale is consistent throughout the whole year.
Wild Willie is a small company and they do not have enough
fund, and brand value to the markets where giant players already exist. They
need better sales to plan to reach this market and compete. They do not have a brand
image to sell their product through the large chains organizations like
Wal-Mart and Target, or supermarkets like Publix and Kroger. They cannot
compete with a big organization who are strong in "direct store door"
from financial, brand, and distribution system.
Discussion
1. What should the two entrepreneurs do first to decide how
to expand their business?
As they are headed to the very competitive niche market of
beverages where they are having a hard time to face the giant players. Firstly,
they need to make a good sales plan and determine goals and objectives. Since
these two are the CEO of the organization, they are responsible for strategic
planning. They can achieve the growth strategy by following steps
·
Define goals and objectives
·
Set policies
·
Establish procedures
·
Devise strategies
·
Devise tactics
·
Develop and enforce controls
They can set goals to expand in Western and Southern state
where they can sell throughout the year since their sales have been hampered
due to the winter season with a fall in revenue with double-digit. Objectives
could be looking for a new market to grow as a brand in a specific period. Procedures
can be steps to establish and manage a supply chain. Devise strategies could be
expanding its business in smaller areas where large manufacturer are less
available. Devise tactics could be "guerrilla marketing" where they
promote their products in streets and public places. This is the best method to
advertise for the start-ups at a low cost. Develop and enforce controls by
comparing the actual performance with the planned results, continue monitoring
and revising the sales plan.
2. If a sales plan is developed, what should it include?
The current situation should be analyzed about the company
current standings and where it will go if being in the same situation. They
need to focus on market characteristics like numbers of potential buyers,
demographic and behavioral profiles. They need to compare their strength and
weakness against the competitors. They should concentrate on the promotional
mix and focus on guerrilla marketing so that they can get into the market at
less cost. They need to figure out a distribution channel and distribution
partners.
They have to make their goals and objectives simple, short-termed
and focus on increasing market share. To achieve the target, they should focus
on penetrating the market by increasing sales, and look for a new market to
expand. They need to allocate the right resources, money, materials, time and
keep the budgets under limitation by minimizing expenditures.
The next step will be implementing the plan and operate
accordingly. They should list out the task that is to be completed, set a timeline
for the activities and place the right people for the job. The final step will be evaluated and control
the performance to the company regularly. This will help to take corrective
measures if the company is going out of its plan and not performing well which
will ultimately improve the performance.
3. One business associate told the owners to get a loan to
expand their business and start "direct store door" delivery. If they
can find the capital to expand, which states and customer segment(s) should
they distribute in first, how many salespeople and truck drivers should they
hire, and how should they be organized?
Direct Store Door delivery means to check and restock by the
company itself or from authorized distributors so for this lots of manpower
will be used if a company operates itself and brand image is needed for the distributors
to operate or good margin should be provided to them. Due to high resources and
high margin for distributors, DSD delivery is a costly method. If they can find
the capital to expand, they should go for the states like Arizona, and
California. Arizona and California are marked as one of the hottest cities in
the world, so these market will be best for Wild Willie "Juiced"
Drinks.
They should do customer segmentation using geographical,
demographic, psychological, and behavioral variables. The primary customer
segment for the product could be kids (love juice a lot), teens (ready to do the
experiment), and housewives (commonly housewives looks after the household
materials). The secondary market could be movie theaters, parks, hotels, bars,
and school and colleges.
It is not a good idea to hire a large number of human
resources, truck drivers directly. Besides they should go for outsourcing and
contract distributors who can do those jobs for them. Investing huge amount of
capitals in the assets like trucks and other tangible materials will only
burden the company. They need to hire smart, hardworking, motivated and
dependable employees who can look after the distribution channel. These employees
only need to organize and monitor the supply chain of the product so at less
cost and with less burden of salaries, and managing large employees the profit
can be maximized. By doing so they can focus more on marketing to improve brand
image and enhance the product tastes according to the consumers choice or can
work on other substitute products.
4. Are there other alternatives to expand geographically and
build the brand with DSD service without incurring the large up-front
investment? If so, how would this alternative still allow the owners to meet
their sales plan?
Without any large investment also, there are lots of
alternatives to expand the business while implementing DSD service. The company
can use independent sales persons without hiring them and work them on a commission
basis. They can also contract local retailers who can sell the products on
their behalf. This will reduce the upfront cost and time to train the sales
force for Willie.
While starting up a company and selling your products, it's
better to avoid investments on fixed costs like buying trucks and hiring a huge
number of employees. The alternative method only suggests outsourcing the
distribution process but not the marketing prospect. While there are people out
there to sell the product, they can concentrate on marketing strategy and
improving brand image. At low cost they can achieve the DSD delivery and the
product will reach to the end customers easily. The use of local retailers will
help them to enter all type of marts, departmental stores due to already
established good relation of the retailers.
Conclusion
Wild Willie Juiced Drinks needs to follow the basic steps of
the sales planning and implementing the plan properly to maintain and monitor
the performance and to find out where they are and where they want to go. They
need to expand their business where they can do the sale throughout the year.
Since they cannot compete in the monetary value, they should go for alternative
methods like hiring individual sales people, contracting local retailers to
minimize their initial fixed cost. They should devise a strategy and implement
tactics that fit best for them. Going for guerrilla marketing to promote their
product will be the best fit for them.
References
Unknown. Expanding Wild Willie Juiced Drinks. Retrieved
April 24, 2019, from
Heath, Taylor. (2013, October 8). Case 6.2: Wild Willie
"Juiced" Drinks. Retrieved April 24, 2019, from
