Alternative 2: Website Redesign
The website redesigning will increase the professionalism and add more information about products. The option of website redesign at a cost of $3,500 does not seem reasonable because it will have the capability to increase the visitors by almost three folds that is necessary to achieve the desired sales.
Alternative 3: Facebook Ad Campaign
The company already has a Facebook and Twitter presence. The limited budget of $5000 will not generate the desired results for the company. Since the conversion rate per click is very low and the relative cost is very high; hence, the company should look for other options.
Alternative 4: Google Adwords Campaign
The expected results from Google Adwords Campaign are pretty unclear. Being highly optimistic, 1% of 1900 views or 200 clicks will not be enough for the company’s targeted sales growth.
Alternative 5: Daily Deal Site Promotion
The expected 50 to 70 percent of regular prices along with a fee of equal to 50 percent of the discounted retail value would reduce the company’s gross margin drastically.
Alternative 6: Point-of-sale Displays
The low involvement products are usually sold on impulse purchase when a visibility strikes their unconscious mind that magnifies the need for the product. In relation to this theory, the point of sale display will work best for Sweet Bath Company. The cost is also within the range for this alternative.
Conclusion, Recommendation and Action Plan:
The distribution option of Online Marketplaces through Etsy fits best for the intended purpose of the company. Although the costs are huge but the resulting revenues offset the effect of cost and both the decision criteria get fulfilled through this option. Along with that, to increase the sale of the product through physical retail stores; the point of sale display should be used.
The expected sales increase for the first year should be restricted to $75,000. If the results of the chosen strategy are positive, then the other partner should choose the full time partner in the company again.
Appendix: SWOT Analysis
The strategies derived from this analysis:
Strength-Opportunity:
The company had a command on products of personal care and was verified by fair-trade. The consumers relied on third party certification for the verification of the product claim. Thus, the increased visibility on the website and point of sale about the use of fair trade could increase the sales of the company.
Sweet Bath Company could use its strength of bundling the products to increase the sales because a little discount would attract the price sensitive consumers that use these products.
Weakness-Threat
Consumers who wanted to purchase green product could not do so because of the financial purpose. This threat can be positively used because lowering the product price can lead to increased sales.
Sales from supermarket channel have reduced as focus on other methods was increasing and Sweet Leaf products were available only in 20 retail locations across Canada. Thus, it was very important for the company to increase its retail presence and switch to online media in order to increase its sales and avoid losing customers to its competitors.......................................
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