Stagreen Case

Executive Summary

HydroCan is a startup company looking to distribute their new fertilizer product StaGreen. They only have five people employed by the company, with 4 being engineers and one being a financial accountant. The benefit of StaGreen is that when applied to grass, it retains more water, so that grass does not need to be watered as frequent. No matter what segment is chosen by HydroCan, this product will benefit both consumer and commercial markets, by saving them money in the long run. The only thing is that they have limited production capacity and must to act accordingly.

The challenge they are presently faced with is what segment should be chosen, how must StaGreen be positioned and how should they launch this new product. All of these challenges lead to one main issue, which is what channel should HydroCan choose to pursue. Three channel opportunities that have the possibility of distributing the StaGreen product are: All of the Consumer Market, Commercial Market (Golf Courses) and exclusively through the Discount Stores channel. Once all of these choices were analyzed, it was the Commercial Market (Golf Courses) that is the most appropriate channel for HydroCan to launch their product. The objective will then be to obtain 7% of the Golf Course market, with in the first year, so that HydroCan will be able to achieve immediate profits.

Choosing to go with selling the StaGreen product to Golf Courses allows HydroCan to get accustomed to the market. They will also be selling StaGreen in a larger quantity, at a higher cost, leading them to break-even much quicker in units (25,469 units) and dollars ($3,820,333.33). It is also projected that this will bring in $7,888,695.65 in revenue for the first year and subtracting break-even in dollars and expenses that must be covered will lead to a profit of $1,776,162.32 for HydroCan in their first year.

Identification of the Problem/Challenge

Challenge:

• To determine the most appropriate channel for HydroCan to select, in order to launch its StaGreen product.

Rationale:

• Product has not yet been introduced to the market.

• No segment has been chosen to target.

• Launch strategy is needed.

Situation Analysis

Company

• Start-up manufacturers of chemical fertilizer products.

• Want product portrayed as quality/value based.

• Product will benefit both commercial and consumer markets.

• Need additional capital