Jim Wells’ must determine how to promote and distribute a new product, which is a shoe made for cattle suffering from hoof disease. The target market is predominantly dairy cattle however, beef, show, research and breeding cattle were all potential users of moo shoes. Together Wells’ and his brother-in-law have $25000 they can invest into this business venture without risking their personal property. Wells’ has chosen Kaufman Footwear to work with in producing the shoes, as they are a company with an excellent reputation for quality. Kaufman has determined a production price of $19.00 per shoe. There are a few alternatives and promotional options that are considered. The three distribution alternatives considered are direct mail, local dealers, and using a mix of the both options. With the direct mail alternative, the Foundation for the Mentally Handicapped has offered to take care of all of the shipping for an additional fee of $0.67 for packaging on top of $2.00 postage fee. Shoes for Moos will not have to carry any inventory under this method because Kaufman has agreed to carry a minimum of 100 units. This method provides a one-to-one relationship with customers. The second alternative is to develop dealers in each area where customers are able to purchase shoes from. This allows customers the chance to visually see the product before purchase. Under this method Wells’ will have to consider hiring a sales representative to obtain shelf space in each of the dealer locations. The promotion alternatives that are considered are trade shows, magazine advertisements, and printing flyers. It is recommended that Shoes for Moos use the direct mail method to distribute moo shoes to the target market. After considering the criteria as well as alternatives the direct mail distribution method has the lowest fixed costs and provides a one-to-one relationship with customers.
Shoes for Moos is a potential business enterprise between Jim Wells and his brother-in-law to distribute footwear Wells’ designed specifically to prevent hoof disease, a common disease among cattle. Hoof disease often occurred during the spring and winter, at this time the fields were wet and the disease became highly contagious. The decision Wells’ and his brother-in-law face are whether or not to go through with this venture. Jim Wells knew that there was a need for this product, but if he was unsure of the price he would need to charge to make a profit, as well as how to promote and distribute it. Together Wells and his brother-in-law had about $25000 to invest in this venture.
Internal Analysis/ Issues
Jim Wells’ is the owner of Wells’ Work and Casual Wear in Elmira, Ontario. This provides Wells’ with an advantage in the following ways; he has management experience, knowledge in sales and promotion, and the option to sell his product from his store. Wells’ has gained knowledge from his current customers, local farmers, and veterinarians that there is a need for this particular product. However, Wells’ had no current experience with foot ware nor did he have any experience distributing products for cattle. He has decided to hire Kaufman Footwear produce the product as they have an excellent reputation for quality across Canada. Kaufman also had strong research and development and production capabilities. Kaufman has agreed to charge $19.00 per unit for the production process. As determined by Wells’ research, there are only two current competitors in the market, which are positioned differently than Moos. One competitor was seen a poor quality, and the other was used only for medical reasons and very expensive. This meant moo shoes had the potential for market share and a high growth rate. Wells has the flexibility to price and position his product the way in a number of different ways.
The potential buyers of moos shoes are owners of dairy, beef, show,...
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