PROBLEM STATEMENT:
How to fuel up the overall growth of the business by providing value to the end consumers of the company?
SUPPORTING FACTS:
The top management of the company, Olson and Gran off, has been making their back breaking efforts over the period of time in order to enhance the overall revenue and profitability of the company. The top management of the company has been earning handsome revenue however;the top management of the company is not satisfied with the overall profitability of the company.
Competition in the entire industry:
In addition to this, the competition in the entire wine industry has been increasing robustly as well as there are various customer segments with respect to their varying needs along with varying level of disposable income.
Ineffective Distribution Network:
In addition to this, the company receives only 60% of the retail price of the product because of a large number of elements and parties in its distribution network.Also, this is because of the shipping cost and additional taxes on the product; this also decreases the overall profitability of the company.
Direct Mail program:
The company uses direct mail programs for marketing its products to the consumers which costs almost 25% of the retail price. This also decreases the profit margin of the company at a wide spread scale. In addition to this, direct mail program does not proved out to be a viable option, as the cost associated with such program exceeds the benefits associated with such programs.
The Technology:
The technological sector of the entire industry has been continuously evolving at a very high speed. In order to cope up with the latest technologies, the top management of the company has to incur high investment costs, which further decreases the overall profitability of the company.
Customer Segment
The top management of the company is unable to identify the potential customer segment in the entire industry. Since the company values most to the customers who have less knowledge about the products of the company, this decreases the overall profitability of the company. In addition to this, the top management of the company has limited its target customers to only upper class and upper-middle class. This has limited the growth and expansion of the company to some extent.
Tracking Customers:
Furthermore, the top management of the company has not employed any appropriate system for evaluating the number of visitors on their website as well as the top management of the company casually checks the number of visitors on its website.
This further decreases the ability of the company to understand and comprehend the needs and requirements of the customers, which subsequently decreases the ability of the company to innovate its products according to the needs and requirements of the company efficiently and effectively.
Purchase and Repeat Purchase:
According to the survey, it is identified that approximately 50-70% of the sales made by the company were to repeating customers. This shows that the top management of the company is unable to attract new potential customers towards the company. This limits the overall expansion, growth and customer base of the company to some extent.
ALTERNATIVES
Alternative # 1
The top management of the company should make effective strategies in order to identify the potential target market and the customer segment which would likely increase the overall profitability of the company. The top management of the company should strive to identify the particular needs and requirements of those particular targeted segments with respect to the products of the company.
The top management of the company should bring the necessary innovations in the products of the company in such a way that it caters the identified needs and requirements of the customers efficiently and effectively. The top management of the company should offer customization of drinks on their websites efficiently and effectively so that the customers could easily customize the drinks according to their needs and requirements.
In addition to this, the top management of the company should consider simplifying the distribution channel of the company in order to ensure quick delivery of the products to the end consumer, as this would increase the overall loyalty of the customers towards the brand. Increase in overall customer base would also allow the top management of the company in global expansion of the operations of the company efficiently and effectively.
The top management of the company should focus on developing their website on timely basis as this would also readily attract the customers towards the brand.Moreover, the company should offer various attractive discounted packages and deals to the customers of the company as this would also attract the customers towards the company. .....................
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