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Business Skills Workshop #7
Wednesday, May 19, 2010 & May 26, 2010
Business Skills
Training Handbook
Livelihood Development via Agro-Processing
SFA2006 (GCP/RLA/167/EC) Location: Grenada
Dr. Reccia Charles
Business Skills Training, Page 1
Place (Distribution)
What is Place (Distribution)? Producers try to set up a marketing
channel (or distribution channel)—a set of connected persons or
companies that help make a product or service available for use by
the consumer or business user. The producers have to start with the
needs of target customers, to which they respond by organizing a
chain of resources and activities with the goal of creating customer
value.
Dr. Reccia Charles
Business Skills Training, Page 2
Place
How?
Marketing logistics (place)—also called physical distribution—
involves planning, implementing, and controlling the physical flow of
goods, services, and related information from points of origin to
points of consumption to meet customer requirements at a profit.
Marketing logistics involves outbound distribution (moving products
from the factory to resellers and ultimately to customers), inbound
distribution (moving products and materials from suppliers to the
factory) and reverse distribution (moving broken, unwanted, or
excess products returned by consumers or resellers).
Why?
It involves the entire supply chain management—managing upstream
and downstream value-added flows of materials, final goods, and
related information among suppliers, the company, resellers, and
final consumers. Goods need to be where the consumer has access.
Companies today are placing greater emphasis on logistics for several
reasons:
Dr. Reccia Charles
Business Skills Training, Page 3
You can gain a powerful competitive advantage by using improved
logistics to give customers better service or lower prices.
Improved logistics can yield tremendous cost savings to both the
company and its customers.
The explosion in product variety has created a need for improved
logistics management.
Improvements in information technology have created
opportunities for major gains in distribution efficiency.
Getting to the consumer - Marketing Channels
A marketing channel consists of firms that have partnered for their
common good. Each channel member depends on the others. Each
channel member plays a specialized role in the channel. The channel
will be most effective when each member assumes the tasks it can do
best.
Disagreements over goals, roles, and rewards generate channel
conflict: Horizontal conflict occurs among firms at the same level of
the channel. Vertical conflict occurs between different levels of the
same channel.
Dr. Reccia Charles
Business Skills Training, Page 4
Best Practices
Small Business Best Practices
Multichannel Distribution Systems (often called hybrid marketing
channels): Occurs when a single firm sets up two or more marketing
channels to reach one or more customer segments.
Strategies for Best Practices - getting the results you want!
The company must balance consumer needs not only against the
feasibility and costs of meeting these needs but also against customer
price preferences.
How best to meet the needs of the customer:
Intensive distribution: Ideal for producers of convenience products
and common raw materials. It is a strategy in which they stock their
products in as many outlets as possible.
Dr. Reccia Charles
Business Skills Training, Page 5
Exclusive distribution: Purposely limit the number of
intermediaries handling their products. The producer gives only a
limited number of dealers the exclusive right to distribute its
products in their territories.
Selective distribution: This is the use of more than one, but fewer
than all, of the intermediaries who are willing to carry a company’s
products.
Two Important Players for the Small Manufacturer:
Retailers:
Retailing includes all the activities involved in selling products or
services directly to final consumers for their personal, nonbusiness
use. Supermarkets are the most frequently shopped type of retail
store. Convenience stores (gas station & country shops) are small
stores that carry a limited line of high turnover convenience goods.
The Retailers always make three major decisions:
The Products carried should differentiate the retailer while
matching target shoppers’ expectations.
Services mix can help set one retailer apart from another.
Store atmosphere is another important element in the reseller’s
product arsenal.
Most retailers are driven by:
High markups on lower volume (most specialty stores)
Low markups on higher volume (discount stores).
Dr. Reccia Charles
Business Skills Training, Page 6
Wholesalers:
Wholesaling includes all activities involved in selling goods and
services to those buying for resale locally & abroad.
Wholesalers are those firms engaged primarily in wholesaling
activities.
Dr. Reccia Charles
Business Skills Training, Page 7
Wholesalers buy mostly from producers and sell mostly to retailers,
industrial consumers, and other wholesalers.
Full service wholesalers provide a full set of services.
Limited service wholesalers offer fewer services to their suppliers
and customers.
The limited-service wholesalers perform varied functions:
Brokers and agents differ from full service wholesalers in two ways:
They do not take title to goods.
They perform only a few functions.
A broker brings buyers and sellers together and assists in
negotiation.
Agents represent buyers or sellers on a more permanent basis.
Manufacturers’ agents (also called manufacturers’ representatives)
are the most common type of agent wholesaler.
Most wholesalers are not promotion minded, therefore you cannot
depend on them to promote or market your goods! Their use of
trade advertising, sales promotion, personal selling, and public
relations is largely scattered and unplanned.
Dr. Reccia Charles
Business Skills Training, Page 8
Promotions
What is Promotions? Companies must do more than just create
customer value. They must also use promotion to clearly and
persuasively communicate that value. Promotion is not a single tool
but, rather, a mix of several tools. Under the concept of integrated
marketing communications, the company must carefully coordinate
these promotion elements to deliver a clear, consistent, and
compelling message about the organization and its brands.
Dr. Reccia Charles
Business Skills Training, Page 9
Promotions
The Major Promotional Tools:
Definitions of the five major promotion tools are:
Advertising: Any paid form of nonpersonal presentation and
promotion of ideas, goods, or services by an identified sponsor
Sales promotion: Short-term incentives to encourage the purchase or
sale of a product or service
Public relations: Building good relations with the company’s various
publics by obtaining favorable publicity, building up a good corporate
image, and handling or heading off unfavorable rumors, stories, and
events
Personal selling: Personal presentation by the firm’s sales force for
the purpose of making sales and building customer relationships
Direct marketing: Direct connections with carefully targeted
individual consumers to both obtain an immediate response and
cultivate lasting customer relationships—using telephone, mail, fax,
e-mail, the Internet, and other tools to communicate directly with
specific customers.
Beware of the customer:
Customers don’t distinguish between message sources the way
marketers do. In the consumer’s mind, advertising messages from
different media and different promotional approaches all become part
of a single message about the company. Conflicting messages from
these different sources can result in confused company images and
brand positions. IMC calls for recognizing all contact points where the
customer may encounter the company, its products, and its brands.
Each brand contact will deliver a message, whether good, bad, or
indifferent. The company must strive to deliver a consistent and
positive message with each contact.
Dr. Reccia Charles
Business Skills Training, Page 10
How to communicate:
To communicate effectively, marketers need to understand how
communication works. Communication involves the nine elements
shown in the figure below:
Sender: The party sending the message to another party
Encoding: The process of putting thought into symbolic form
Message: The set of symbols that the sender transmits
Media: The communication channels through which the message
moves from sender to receiver
Decoding: The process by which the receiver assigns meaning to the
symbols encoded by the sender
Receiver: The party receiving the message sent by another party
Response: The reactions of the receiver after being exposed to the
message
Feedback: The part of the receiver’s response communicated back to
the sender
Noise: The unplanned static or distortion during the communication
process that results in the receiver’s getting a different message than
the one the sender sent.
Dr. Reccia Charles
Business Skills Training, Page 11
Determining the Communication Objectives:
The target audience may be in any of six buyer-readiness stages, the
stages consumers normally pass through on their way to making a
purchase. The communicator must first build awareness and
knowledge. Assuming target consumers know about the product, how
do they feel about it? These stages include liking (feeling favorable
about the product), preference, (preferring it to other brands), and
conviction (believing that the product is best for them).
The message:
The message should get Attention, hold Interest, arouse Desire, and
obtain Action (a framework known as the AIDA model).
The Message content:
Rational appeals relate to the audience’s self-interest. They show
that the product will produce the desired benefits.
Emotional appeals attempt to stir up either negative or positive
emotions that can motivate purchase. Communicators may use
positive emotional appeals such as love, pride, joy, and humor.
Communicators can also use negative emotional appeals, such as fear,
guilt, and shame that get people to do things they should or to stop
doing things they shouldn’t.
Moral appeals are directed to the audience’s sense of what is “right”
and “proper.” They are often used to urge people to support social
causes such as a cleaner environment, better race relations, equal
rights for women, and aid to the disadvantaged.
Dr. Reccia Charles
Business Skills Training, Page 12
Can I afford to promote my products?
It depends:
One of the hardest marketing decisions facing a company is how
much to spend on promotion. A few common methods used to set the
total budget for advertising.
Affordable Method
Some companies use the affordable method: They set the promotion
budget at the level they think the company can afford. Small
businesses often use this method, reasoning that the company cannot
spend more on advertising than it has.
Unfortunately, this method of setting budgets completely ignores the
effects of promotion on sales. It tends to place advertising last among
spending priorities, even in situations in which advertising is critical
to the firm’s success.
It leads to an uncertain annual promotion budget that makes longrange market planning difficult. Although the affordable method can
result in overspending on advertising, it more often results in
underspending.
Percentage-of-Sales Method
Other companies use the percentage-of-sales method, setting their
promotion budget at a certain percentage of current or forecasted
sales. Or they budget a percentage of the unit sales price.
The percentage-of-sales method has advantages.
It is simple to use
It helps management think about the relationship between
promotion spending, selling price, and profit per unit.
Dr. Reccia Charles
Business Skills Training, Page 13
However, it wrongly views sales as the cause of promotion rather
than as the result. The percentage-of-sales budget is based on
availability of funds rather than on opportunities. It may prevent the
increased spending sometimes needed to turn around falling sales.
Because the budget varies with year-to-year sales, long-range
planning is difficult. Finally, the method does not provide any basis
for choosing a specific percentage, except what has been done in the
past or what competitors are doing.
Objective-and-Task Method
The most logical budget-setting method is the objective-and-task
method, whereby the company sets its promotion budget based on
what it wants to accomplish with promotion.
This budgeting method entails:
Defining specific promotion objectives,
Determining the tasks needed to achieve these objectives,
Estimating the costs of performing these tasks.
The sum of these costs is the proposed promotion budget.
The advantage of the objective-and-task method is that it forces
management to spell out its assumptions about the relationship
between dollars spent and promotion results. But it also is the most
difficult method to use. Often, it is hard to figure out which specific
tasks will achieve stated objectives.
Dr. Reccia Charles
Business Skills Training, Page 14
Advertising & P.R.
What is Advertising & Public Relations? Advertising involves
communicating the company’s or brand’s value proposition by using
paid media to inform, persuade, and remind consumers. Public
relations involve building good relations with various company
publics – from consumers and the general public to the media,
investor, donor, and government publics.
Dr. Reccia Charles
Business Skills Training, Page 15
Advertising
Advertising
Informative advertising is used heavily when introducing a new
product category.
Persuasive advertising becomes important as competition
increases. Here, the company’s objective is to build selective demand.
Comparative advertising is directly or indirectly comparing one
brand with another.
Reminder advertising is important for mature products—it helps to
maintain customer relationships and keep consumers thinking about
the product.
Advertising strategy
Advertising strategy consists of two major elements:
Creating advertising messages
Selecting advertising media.
Advertising Appeals
Advertising appeals should have three characteristics:
They should be meaningful.
Appeals must be believable.
Appeals should be distinctive.
Dr. Reccia Charles
Business Skills Training, Page 16
Advertising should be one of the following:
Slice of life: This style shows one or more “typical” people using the
product in a normal setting.
Lifestyle: This style shows how a product fits in with a particular
lifestyle.
Fantasy: This style creates a fantasy around the product or its use.
For instance, many ads are built around dream themes.
Mood or image: This style builds a mood or image around the
product or service, such as beauty, love, or serenity.
Musical: This style shows people or cartoon characters singing about
the product.
Personality symbol: This style creates a character that represents
the product.
Technical expertise: This style shows the company’s expertise in
making the product.
Scientific evidence: This style presents survey or scientific evidence
that the brand is better or better liked than one or more other brands.
Testimonial evidence or endorsement: This style features a highly
believable or likable source endorsing the product.
Dr. Reccia Charles
Business Skills Training, Page 17
Public Relations
Public Relations
Public relations is building good relations with the company’s various
publics by obtaining favorable publicity, building up a good corporate
image, and handling or heading off unfavorable rumors, stories, and
events.
Public relations may perform any or all of the following functions:
Press relations or press agency: Creating and placing newsworthy
information in the news media to attract attention to a person,
product, or service.
Product publicity: Publicizing specific products.
Public affairs: Building and maintaining national or local community
relations.
Lobbying: Building and maintaining relations with legislators and
government officials to influence legislation and regulation.
Investor relations: Maintaining relationships with shareholders and
others in the financial community.
Development: Public relations with donors or members of nonprofit
organizations to gain financial or volunteer support.
Public relations is used to promote products, people, places, ideas,
activities, organizations, and even nations.
Dr. Reccia Charles
Business Skills Training, Page 18
Selling & Direct Marketing
Sales Promotions & Direct Marketing - what is it? Personal selling
is the interpersonal arm of marketing communications, in which the
sales force interacts with customers and prospects to build
relationships and make sales. Sales promotion consists of shortterm incentives to encourage purchase or sale of a product or service.
Direct marketing (online marketing): In many ways direct
marketing constitutes an overall marketing approach—a blend of
communication and distribution channels all rolled into one.
Dr. Reccia Charles
Business Skills Training, Page 19
Selling
Salespersons
At one extreme, a salesperson might be an order taker, such as the
department store salesperson standing behind the counter.
At the other extreme are order getters, whose positions demand
creative selling and relationship building for products and services
ranging from appliances to industrial equipment.
Best Salespersons:
The best salespeople possess four key talents:
Intrinsic motivation.
Disciplined work style.
The ability to close a sale.
The ability to build relationships with customers.
Paying Salespersons:
Pay is made up of several elements – a fixed amount, a variable
amount, expenses, and fringe benefits. Management must decide
what mix of pay elements makes the most sense for each sales job.
Different combinations of fixed and variable pay give rise to four basic
types of compensation plans:
Straight salary,
Straight commission,
Salary plus bonus,
Salary plus commission.
The average salesperson’s pay consists of about 67 percent salary
and 33 percent incentive pay.
Dr. Reccia Charles
Business Skills Training, Page 20
Sales Promotion
What is?
Sales promotion consists of short-term incentives to encourage
purchase or sales of a product or service.
Major Sales Promotion Tools
Many tools can be used to accomplish sales promotion objectives.
Descriptions of the main consumer, trade, and business promotion
tools follow.
Consumer Promotions
The consumer promotions include a wide range of tools.
Samples are offers of a trial amount of a product.
Sampling is the most effective—but most expensive—way to introduce
a new product or to create new excitement for an existing one.
Coupons are certificates that give buyers a saving when they
purchase specified products. Most major consumer goods companies
are issuing fewer coupons and targeting them more carefully.
Cash refunds (or rebates) are like coupons except that the price
reduction occurs after the purchase rather than at the retail outlet.
Price packs (also called cents-off deals) offer consumers savings
off the regular price of a product.
Premiums are goods offered either free or at low cost as an incentive
to buy a product.
Dr. Reccia Charles
Business Skills Training, Page 21
Advertising specialties, also called promotional products, are useful
articles imprinted with an advertiser’s name, logo, or message that
are given as gifts to consumers.
Point-of-purchase (POP) promotions include displays and
demonstrations that take place at the point of sale.
Contests, sweepstakes, and games give consumers the chance to win
something. A contest calls for consumers to submit an entry to be
judged. A sweepstakes calls for consumers to submit their names for
a drawing. A game presents consumers with something every time
they buy.
Event marketing (or event sponsorships) allows companies to
create their own brand marketing events or serve as sole or
participating sponsors of events created by others.
Trade Promotions
Trade promotions persuade resellers to carry a brand, give it shelf
space, promote it in advertising, and push it to consumers.
Manufacturers direct more sales promotion dollars toward retailers
and wholesalers (78 percent) than to final consumers (22 percent).
Manufacturers use several trade promotion tools:
Offer a straight discount (also called a price-off, off-invoice, or offlist).
Offer an allowance (usually so much off per case).
Offer free goods.
Offer push money.
Offer free specialty advertising items.
Dr. Reccia Charles
Business Skills Training, Page 22
Business Promotions
Business promotions are used to generate business leads, stimulate
purchases, reward customers, and motivate salespeople.
Conventions and trade shows: Firms selling to the industry show
their products at the trade show.
Vendors receive many benefits:
Opportunities to find new sales leads,
Contact customers,
Introduce new products,
Meet new customers,
Sell more to present customers,
Educate customers with publications and audiovisual materials.
Reach many prospects not reached through their sales forces.
Sales contests: Contests for salespeople or dealers to motivate them
to increase their sales performance over a given period.
Dr. Reccia Charles
Business Skills Training, Page 23
Direct Marketing
Forms of Direct Marketing
Personal selling,
Direct-mail marketing,
Catalog marketing,
Telephone marketing,
Direct-response television marketing,
Kiosk marketing,
New digital direct marketing technologies,
Online marketing.
Dr. Reccia Charles
Business Skills Training, Page 24
Online Marketing
Online marketing is the fastest-growing form of direct marketing.
The Internet, a vast public web of computer networks, connects users
of all types all around the world to each other and to an amazingly
large information repository.
Internet household penetration in the United States is approximately
72 percent, with more than 221 million people now using the Internet
at home or at work. The average U.S. Internet user spends some 70
hours a month surfing the Web at home and work. Worldwide, more
than 540 million people now have Internet access.
Click-only companies operate only on the Internet. They include a
wide array of firms, from e-tailers such as Amazon to search engines
and portals (Google), transaction sites (eBay), and content sites
(ESPN.com).
Click-and-mortar companies operate both as existing brick-andmortar retailers and online.
Can I do business on the internet?
The four major online marketing domains are:
Dr. Reccia Charles
Business Skills Training, Page 25
Business to Consumer (B2C)
Business-to-consumer (B2C) online marketing is selling goods and
services online to final consumers. U.S. consumers generate over
$175 billion in online retail sales, up 22 percent in a year. Then
Internet now influences 35 percent of total retail sales.
Business to Business (B2B)
Business-to-business (B2B) online marketing is using online
resources to reach new business customers, serve current customers
more effectively, and obtain buying efficiencies and better prices.
Consumer to Consumer (C2C)
Consumer-to-consumer (C2C) online marketing occurs on the Web
between interested parties over a wide range of products and
subjects. eBay’s C2C online trading community of more than 275
million registered users worldwide transacted some $60 billion in
trades last year.
Consumer to Business (C2B)
Consumer-to-business (C2B) online marketing occurs when
consumers communicate with companies. Consumers search out
sellers on the Web, learn about their offers, initiate purchases, and
give feedback.
Dr. Reccia Charles
Business Skills Training, Page 26
Case Examples
Miss Meena’s Starch Production
Miss Meena wants to start her own business. She thinks about
processing potatoes into starch. In September she wants to buy an
electric grinder at $600; three basins at $50 each; and three sieves at
$30 each. In October she plans to buy 500 lbs of potatoes at $0.4 per
lb. After processing she will sell the starch within the same month. In
November and December she plans to do the same.
Since she only needs the grinder for one week a month, she agreed to
rent her grinder to her neighbour, who will pay $50 rent at the end of
each month.
Miss Meena's fixed assets can be used for 10 years, except for the
sieves, they need to be replaced every 3 years.
Miss Meena has only $350 in savings of her own, and needs to borrow
$800 from the credit union to be able to realize her plan. She will
borrow the money in September and plans to repay the full amount
on January 1. The duration of the loan is 4 months. The credit union
charges 2% interest per month.
To improve the quality of the starch Miss Meena will use a chemical.
To process the 500 lbs of potatoes, 0.5 lb of the chemical will be
enough. This chemical is only sold by the lb, at $30 per lbs; so she has
to buy 1 lb in September.
Miss Meena thinks she can produce a total of 150 lbs of starch out of
500 lbs of potatoes. She will sell this to the local macaroni factory.
The factory's price depends on the quality. Miss Meena thinks she can
sell 80 lbs of the highest quality at a price of $3/lbs; 40 lbs of medium
quality at $2/lbs and 30 lbs of low quality which sells at $1/lbs. Each
time she sells, a total of $80 of other expenses, such as for
transportation are made.
Dr. Reccia Charles
Business Skills Training, Page 27
Miss Meena invited you to come and review her preliminary business
plan with her. She wants to know whether this is a good business and
wants your advice on how to proceed.
Tasks:
1. Explain Ms. Meena’s channel of distribution? Can it be improved?
2. Imagine that Ms. Meena has asked you to advise her on the best
way to create her advertising budget. Do so.
3. Explain what Miss Meena needs to consider when designing her
advertising campaign.
4. Should Ms. Meena focus only on advertising? Or will you advise
her to consider public relations, salespersons, sales promotions,
trade shows and direct marketing as well? If so how?
5. Explain how Ms. Meena can design a direct marketing campaign.
Dr. Reccia Charles
Business Skills Training, Page 28
Ms. Meena’s Starch vs.
Ms. Meena’s Starch
Ms. Meena’s Starch
Ms. Meena’s Starch
Potato Starch
(USA)
Potato Starch
(USA)
Potato Starch
(China)
Potato Starch
(China)
Potato Starch
(China)
Potato Starch
(China)
Dr. Reccia Charles
Business Skills Training, Page 29
Case Examples
Lin's cabbage world
Lin is a farmer in the Birchgrove village in Grenada. She has 2
children. Her husband works as a store worker.
Lin tills 5 acres of banana land. For many years she has been
harvesting bananas and has not made good profits.
Because of her very low profits from cultivating bananas, she thought
about planting vegetables. But before she made a decision, Lin made a
careful survey in the market of which types of vegetables are in
demand and commands higher price. She went to several market
places and found out that cabbage sells at a very high price and were
in high demand.
She went to an agricultural technician from the Ministry of
Agricultural and asked how cabbage is grown. Fortunately there was
a workshop to be given on cabbage for 2 days. She attended the 2 day
workshop and learned how to raise cabbage. Since the workshop was
basically conducted through demonstration and field practicum, Lin
learned how to plant, water, fertilize, weed and harvest cabbage. She
also learned that on 5 acres of land, she will need $2,000 for land
preparation, fertilizers, chemicals, labor and other incidental
expenses.
Lin has only $1000. She went to her parents and requested for a loan
of $1000 at 2% interest per month. Then she went to the market
place and secured the commitments from buyers for her cabbage
produce. With a ready market for her cabbage, she started to grow
cabbage in her land. She religiously followed what she had learned
Dr. Reccia Charles
Business Skills Training, Page 30
from the workshop at the Ministry of Agricultural. Lin recorded all
her production expenses on cabbage production.
After 3 months, she started harvesting cabbage and selling them to
her buyers. She also recorded all her sales. Her total sales amounted
to $6,000. She made a profit of $4,000. Out of the profit, she paid her
loan of $1,000 to her parents including the interest. All the rest of the
profit, she reinvested in cabbage production by renting an additional
5 acres of land.
Tasks:
1. Explain Ms. Lin’s channel of distribution? Can it be improved?
2. Imagine that Ms. Lin has asked you to advise her on the best way
to create her advertising budget. Do so.
3. Explain what Miss Lin needs to consider when designing her
advertising campaign.
4. Should Ms. Lin focus only on advertising? Or will you advise her to
consider public relations, salespersons, sales promotions, trade
shows and direct marketing as well? If so how?
5. Explain how Ms. Lin can design a direct marketing campaign.
Dr. Reccia Charles
Business Skills Training, Page 31
Ms. Lin’s Cabbage vs.
Ms. Lin’s Cabbage
Ms. Lin’s Cabbage
Ms. Lin’s Cabbage
Competing Cabbage
Competing Concept
Competing Concept
Competing Cabbage
Competing Concept
Competing Concept
Dr. Reccia Charles
Business Skills Training, Page 32
Case Examples
Netty’s Herb Tea Processing Project
Ms. Netty is one of the active members of the women's group in the
Victoria village, a farming community with rolling terrains located
some 20 miles from the George’s town. Like other households in the
village, her husband is engaged in farming. She's 33 years old and
takes care of the household work and their three children.
Since she joined the group she has been thinking how to help her
husband generate additional income for the family. At first, upon
discussion with other women members, she thought of a small scale
furniture workshop. But the start-up capital required was $50,000
and she could not afford such capital.
She finally decided on a herb-tea processing project. The raw
materials (herb leaves) are readily available in the village since most
farmers, including her husband, grow herbs in the village. Moreover,
she learned from the sales-van traffickers who often visit their village
looking for herbs, that processing herbs would earn her good income.
She learned from them that if she sells in George’s Town, she can
make a gross profit of $2 per lb and or even higher at $20 if she sells
in the U.S. Also, she has a younger sister who used to work in a herbtea processing factory in the U.S. and she was confident she could
learn the techniques required in such activity.
Encouraged by the potential of the project she obtained a loan from
the women's group. In addition, she had some savings of her own and
she was able to start the project in March 1993.
In dry season the herb crops produce the best quality tea leaves. Ms.
Netty decided to process herb-tea only during this season For the
whole season she was able to sell 56 lb. In selling at George’s Town
she later learned that there are different prices depending on the
quality of dried tea and the appearance of the packaging.
Dr. Reccia Charles
Business Skills Training, Page 33
Nevertheless after investigating which among the three
supermarkets in George’s Town offered the best price, she settled into
one supermarket. She however incurred losses when she tried to sell
in the U.S. About 20 lbs was not paid for at all.
She personally took care of the project. Her husband and children
assisted her in some of the activities of the project like preparing the
stove and stirring the leaves on the pan. They could process 5 lbs of
wet leaves per day. She had minimal expenses for the project. She
bought about 50% of the wet tea requirements from the village. The
rest of the wet herb-tea leaves, she obtained from their own harvest.
She also had sufficient cooking gas which was already good for the
whole season She did not buy the needed pans as she had already two
before the project and these were enough for the quantify she has
been processing.
She was not able to keep records of the financial transactions but she
is confident she was able to earn from her business. Although the
income of the project is mixed with their other household income, she
was sure that the whole net profit could be used to invest in another
project, a furniture-manufacturing project. At the same time, she is
planning to expand her herb-tea processing project for the whole year
that is including during dry and rainy seasons. She also plans to hire
workers so that she can process more.
Tasks:
1. Explain Ms. Netty’s channel of distribution? Can it be improved?
2. Imagine that Ms. Netty has asked you to advise her on the best way
to create her advertising budget. Do so.
3. Explain what Miss Netty needs to consider when designing her
advertising campaign.
Dr. Reccia Charles
Business Skills Training, Page 34
4. Should Ms. Netty focus only on advertising? Or will you advise her
to consider public relations, salespersons, sales promotions, trade
shows and direct marketing as well? If so how?
5. Explain how Ms. Netty can design a direct marketing campaign.
Dr. Reccia Charles
Business Skills Training, Page 35
Ms. Netty Herb Tea vs.
Ms. Netty Herb Tea
Ms. Netty Herb Tea
Ms. Netty Herb Tea
Lipton Herbal
(UK)
Celestial Herbal Tea
(USA)
Good Earth Tea
(India)
Stash Herbal Tea
(USA)
Bigelow Herb Tea
(USA)
Yogi Herbal Teas
(USA)
Dr. Reccia Charles
Business Skills Training, Page 36