Recommendations: Purely should focus on developing a consistent brand image by clearly identifying the marketing mix. Commercial users should become the main target market. Promotion expenditures should be kept to minimum to free up capital for capacity expansion.
Short/Medium Term – Immediately to One Month
1) Purely should focus on commercial users. Firstly, fewer competitors exist in this market. Moreover, servicequality, competitive prices, and word-of-mouth advertising are effective for these users. Longer-term contracts reduce demand volatility and facilitate forecasting.
2) Expand newspaper advertising to publications used by businesses and leverage current network in the Filipino community to penetrate and further expand in the commercial business segment. This would expand customer audience without significantly increasing the cost.
Long Term – One Month to Six Months
1) Streamline pricing strategyacross distribution channels by contractually fixing the price of Purely’s bottles for final consumers. The price should reflect the premium quality of Purely and communicate an image that is consistent with this positioning. This price should include a margin that is convenient for sales representatives, who realize most of the company sales.
Control and Feedback
Monitor brand perception and response to promotions to ensure effective communication of positioning. Continuously measure profitability and demand growth to plan capacity expansion.
Contingency Plan
If commercial users do not buy Purely water, the company should keep some focus on residential users. Alternatively, commercial users outside Canada can be targeted via sales representatives.
Purely Gr8! Water Company Inc. (Purely) – Executive Summary
Purely is a company located in Scarborough. It specializes in producing premium “pure water”. Purely targets primarily Toronto Filipino residential users. Rapid growth led to capacity constraints. Henry and Romil Reyes, the owners of Purely, plan to expand the company and are applying for a loan. This capacity expansion leaveslittle capital to finance amarketing strategy.
Problem Statement: Development of the Purely’smarketing strategy that stimulates further company growth, while keeping the cost of promotional activities low to preserve limited financial resources for capacity expansion.
Recommendations/Implementation
Short/Medium Term – Immediately to One Month
1) Purely should focus on commercial users. This market is characterized by less intense competition and relatively stable demand, as businesses conclude longer-term contracts with their suppliers. Purely’s competitive prices and service quality would be appealing to this user group. Purely can leverage on its expertise in networking and word-of-mouth advertising that are effective for commercial users and would not add costs.
2) Promotion strategy should be based on the currently newspaper advertising, but expand into publications used by businesses. This approach would create awareness among commercial customers. Moreover, it would not entail major costs or promotion strategy reformulation, therefore it can be effectively implemented even with the Purely’s limited financial resources.
Short/Medium Term – One Month to Six Months
1) Streamline pricing across distribution channels. Currently, sales representatives use different price strategies depending on their own operational needs. This practice leads to the fact that Purelywater is sold at a very high premium by some sales representatives, while being offered at a discount by the others. Such pricing communicates anunclear brand image and blurs Purely’s market positioning. To address this problem future contracts with sales representatives should fix the final price. This price already includes a margin that is convenient for sales representatives, who help the company to realize most of the sales. The decision on the price level should reflect the premium position of Purely and communicate an image that is consistent with this positioning.
Control and Feedback
Monitor customer perception of the brand and response to promotions to ensure that marketing efforts effectively communicate Purely’s positioning. Considering the relatively small number of commercial users, customer surveys and interviews could be used to measure customer satisfaction and brand perception. Continuously measurement of profitability and potential demand forecasting should be done by the accounting department. This is especially important considering the limited financial resources that Purely has, its growth strategy and the current level of debt. More precise forecasting would help to plan capacity expansion more effectively and facilitate loan application.
Contingency Plan
