1. As a part of the management team, how would you handle distribution and marketing of the O-Fold?
Within the text I really liked the 2nd and 3rd option of distribution, which was going an online route or advertising I travel magazines. Although the adverting in magazines option is appealing when it comes down to it I don’t think it would reach as many people as online distribution. I would chose to create a website and distribute the O-Fold product through there. Creating a website would be extremely cost effective. I believe there are even some sites you can use for free, such as weebly.com. However, this option is risky because marketing would have to be very effective in order to generate the business he is looking for.
Since the cost of a website is low, he should consider advertising in travel magazines. He probably would not need large ad space, which would help with the cost. If he could get a small section in the Sky Mall magazine on aircrafts with the link to his website, that could be a rewarding starting point. Another option is advertising on other large online retail sites, such as Amazon.com who now gives consumers an option to purchase provides from other retailers by providing a link to that product on their site.
2. At what points should Alex consider bringing on additional management? What positions should he fill and in what order? Defend your answer.
I am a supporter of Alex’ crawl-walk-run strategy. I think initially he should partner with his brother and begin to make the product together and sell online through a website he creates. This way he can get an idea of how he can proceed with next steps and be able to create a business plan to present to Anger investors. Once he can seal the investment funds he should bring on a sales and marketing manager. This is one of the most important positions in a company. Alex needs to have someone with experience in sales and marketing, especially not having experience himself. He’s already contemplating different options in this area; someone who has worked in this department can give him real examples of the outcomes and weigh in on the best decision for O-Fold.
Next, after he gets an investment, he should go with the outsourcing route. He already had a connection to hire a barn full of employees. He will need to hire a manager to oversee the production of these employees, and also a Human Resources Manager since he will have employees. He cannot manage everything himself so a good candidate for the productions manager would be his brother since he should have a good understanding by then of how to produce the items.
3. What are some pricing strategies you would consider utilizing in order to get the O-Fold to market? Do you agree with Alex’s pricing point?
I would consider giving a special price to first time customers, or a discount when purchasing more then one O-Fold at the early stages of marketing. Alex will want to be competitive and the first thing that customers probably look for is good deals. If he creates a website and is directing people there through advertising he should try to close the sale with a discount. An option would be first time users get free shipping, or $5 off shipping. Customers buying more then one could receive $5 off their second purchase. I like the 123 percent market with the outsourcing options at $12.50 However, that would only be beneficial at wholesale, so he should price his products per item at $25, and offer the discount for the first 100 customers. He does not need to advertise the part about it only being for the first 100 customers but he should price out shipping costs for 100 people or costs of giving discounts and set a budget for it.