Monday, November 8, 2010
Portal Gourmet, LLC is a small business located in Atlanta, Georgia that produces a single product, a high quality gourmet sauce. Portal Gourmet Sauce™ is the only gourmet sauce of its kind currently in the market. After a year of customer satisfaction research, the product consistently receives a 100% satisfaction rate in taste, aroma and design. First year sales totaled only about 100 bottles, and the company hopes to increase sales through the implementation of a new business strategy. The Disruptive Innovation model and mobile technology appear to provide the company with its best options for modifying its business strategy to maximize the return of investment.
The DI model suggests that a sales strategy should develop around a product that is simple, accessible, affordable and customizable (Christensen, Johnson & Horn, 2008; Christensen, 2009; Anthony, 2008b). From this perspective, Portal Gourmet Sauce™ started off in the wrong direction. While the product is simple and customizable, problems with pricing and marketing have not made it affordable or accessible.
Establishing a reasonable retail sales price has been a work in progress, and the company has already experimented with several pricing levels. The first 2-liter jars of Portal Gourmet Sauce™ sold for $100 each. Then the price was reduced to $50 per bottle, and after just a few months, the price fell to its current level of $20 per bottle. Portal Gourmet, LLC needs to reduce the price even further to be competitive with other types of sauces. In order to stabilize the price at its optimum level, the company needs to reconsider organizational objectives and business strategies to better adapt to consumer demands.
Even though some customers were willing to buy the product at the highest price level, the financial goal for the second quarter fell far short of expectations. While adjustments in price have already made the product more affordable, accessibility remains a major problem (Anthony, 2008a). The past strategy of just selling Portal Gourmet Sauce™ to people that the sales team interacts with has not yielded suitable results. Selling directly the sauce to retail stores may inhibit growth due to the competition with other brands. By marketing Portal Gourmet Sauce™ in a different way, new possibilities of growth may become apparent (Anthony, 2008b). For example, presenting the product to offices where the employees order food to be delivered may significantly expand the customer base and increase name recognition.
As new strategies for making the product more accessible emerge, customization of the product will be necessary to further expand the customer base (Anthony, 2008b). For example, Portal Gourmet Sauce™ can be customized to meet current popular demand for healthier and natural foods. Since healthy products increase the health and well being of consumers, consumers are willing to pay a higher price. Portal Gourmet Sauce™ already uses high quality ingredients and is easily customized to meet the requirements to qualify for the organic and natural label.
A comprehensive sales strategy will necessarily include consideration of modern technology. Mobile technology appears to be particularly suited for the DI model under consideration. Mobile technology is gaining popular acceptance as new and practical applications are developed (Morgan Stanley, 2009). Smart phones are used by more people than either desktops or laptops. Smart phones are capable of sharing documents (Google Docs), music (YouTube), and photos (Flickr). People with smart phones can make phone calls through Skype, chat with friends using instant messages, or just simply buy products online through Amazon (Morgan Stanley, 2009). Smart phones can utilize networking websites (Facebook) to maintain contact with others (Horizon Report, 2010). A recent research shows that as a result of popular websites, people spend several hours on the internet daily (Smith, Salaway & Caruso, 2009).
This mobile technology not only encourages consumers to spread the word about Portal Gourmet Sauce™, but allows sales representatives to take state of the arts sales presentations directly to the customer. With the trendiest mobile technology, the iPad, associates are able to make powerful and attractive slide presentations where-ever they are needed. These compelling visual presentations of Portal Gourmet Sauce™ encourage people and small businesses to invest in the sauce. The use of animations and special effects add professional quality to the product.
Another important mobile technology that complements the iPad is the iPhone 4. iPhones represent the most popular smart phones in the market (Morgan Stanley, 2009). They are internet accessible and possess business applications similar to iPads that can benefit sales representatives. iPhones 4 have the option to communicate with possible clients using an integrated webcam . Utilizing this capability, sales representatives will improve communication with clients.
Adding the Touch-Pay or Mobile Credit Card Processing technology to the iPhone will increment sales (MerchantSeek, 2010). The Touch-Pay technology permits instant credit or debit card transactions anywhere. Sales receipts are sent via email in case a client requires one. Software is downloaded into the iPhone 4 which allows people to sign or enter their pin number to complete a transaction. The Touch-Pay technology will surprise possible clients positively due to the simple and pleasant process.
Research shows that failure to use technology in businesses reduces economic development in the United States (Nelson & Quick, 2009). Old habits, services, and methods must be improved to facilitate business and connections with clients. Technology helps businesses find new ways to compete. As a result, technology facilitates business procedures anytime and anywhere (Nelson & Quick, 2009). Mobile technology offers a means to efficiently reach more clients. Using the iPad to make slide presentations, the iPhone to maintain contact with clients, and the Touch-Pay technology to complete sales in the field, sales volume for 2011 should dramatically increase.
Portal Gourmet, LLC understands the need to restructure the organizational objective and business plan. Principles of the DI model (i.e., simple, accessible, affordable and customizable products) will be used to market and advertise Portal Gourmet Sauce™ efficiently. Following the DI model and taking advantage of the latest mobile technology should help Portal Gourmet Sauce™ position itself more competitively in the market.
Bibliography
Anthony, S. (2008a). How to spot disruptive innovation opportunities. Retrieved November 3, 2010 from http://www.youtube.com/watch?v=KGzXWO_anLI
Anthony, S. (2008b). What is disruptive innovation? Retrieved November 4, 2010 from http://www.youtube.com/watch?v=9L66OH-x7a4&feature=related
Christensen, C., Johnson, C. & Horn, M. (2008). Disrupting class: How disruptive innovation will change the way the world learns. New York: McGraw-Hill.
Clayton Christensen. (2009). Key concepts. Disruptive innovation. Retrieved November 3, 2010, from http://www.claytonchristensen.com/disruptive_innovation.html
Horizon Report. (2010). Retrieved October 25, 2010, from http://wp.nmc.org/horizon2010/
MerchantSeek. (2010). Touch-Pay. Wireless credit card processing. Retrieved November 7, 2010 from http://www.merchantseek.com/wireless-credit-card-processing.htm
Morgan Stanley. (2009). Retrieved October 26, 2010, from http://www.morganstanley.com/institutional/techresearch/mobile_internet_report122009. html
Nelson, D. & Quick, J. (2009). ORGB. Ohio: South-Western Cengage Learning.
The DI model suggests that a sales strategy should develop around a product that is simple, accessible, affordable and customizable (Christensen, Johnson & Horn, 2008; Christensen, 2009; Anthony, 2008b). From this perspective, Portal Gourmet Sauce™ started off in the wrong direction. While the product is simple and customizable, problems with pricing and marketing have not made it affordable or accessible.
Establishing a reasonable retail sales price has been a work in progress, and the company has already experimented with several pricing levels. The first 2-liter jars of Portal Gourmet Sauce™ sold for $100 each. Then the price was reduced to $50 per bottle, and after just a few months, the price fell to its current level of $20 per bottle. Portal Gourmet, LLC needs to reduce the price even further to be competitive with other types of sauces. In order to stabilize the price at its optimum level, the company needs to reconsider organizational objectives and business strategies to better adapt to consumer demands.
Even though some customers were willing to buy the product at the highest price level, the financial goal for the second quarter fell far short of expectations. While adjustments in price have already made the product more affordable, accessibility remains a major problem (Anthony, 2008a). The past strategy of just selling Portal Gourmet Sauce™ to people that the sales team interacts with has not yielded suitable results. Selling directly the sauce to retail stores may inhibit growth due to the competition with other brands. By marketing Portal Gourmet Sauce™ in a different way, new possibilities of growth may become apparent (Anthony, 2008b). For example, presenting the product to offices where the employees order food to be delivered may significantly expand the customer base and increase name recognition.
As new strategies for making the product more accessible emerge, customization of the product will be necessary to further expand the customer base (Anthony, 2008b). For example, Portal Gourmet Sauce™ can be customized to meet current popular demand for healthier and natural foods. Since healthy products increase the health and well being of consumers, consumers are willing to pay a higher price. Portal Gourmet Sauce™ already uses high quality ingredients and is easily customized to meet the requirements to qualify for the organic and natural label.
A comprehensive sales strategy will necessarily include consideration of modern technology. Mobile technology appears to be particularly suited for the DI model under consideration. Mobile technology is gaining popular acceptance as new and practical applications are developed (Morgan Stanley, 2009). Smart phones are used by more people than either desktops or laptops. Smart phones are capable of sharing documents (Google Docs), music (YouTube), and photos (Flickr). People with smart phones can make phone calls through Skype, chat with friends using instant messages, or just simply buy products online through Amazon (Morgan Stanley, 2009). Smart phones can utilize networking websites (Facebook) to maintain contact with others (Horizon Report, 2010). A recent research shows that as a result of popular websites, people spend several hours on the internet daily (Smith, Salaway & Caruso, 2009).
This mobile technology not only encourages consumers to spread the word about Portal Gourmet Sauce™, but allows sales representatives to take state of the arts sales presentations directly to the customer. With the trendiest mobile technology, the iPad, associates are able to make powerful and attractive slide presentations where-ever they are needed. These compelling visual presentations of Portal Gourmet Sauce™ encourage people and small businesses to invest in the sauce. The use of animations and special effects add professional quality to the product.
Another important mobile technology that complements the iPad is the iPhone 4. iPhones represent the most popular smart phones in the market (Morgan Stanley, 2009). They are internet accessible and possess business applications similar to iPads that can benefit sales representatives. iPhones 4 have the option to communicate with possible clients using an integrated webcam . Utilizing this capability, sales representatives will improve communication with clients.
Adding the Touch-Pay or Mobile Credit Card Processing technology to the iPhone will increment sales (MerchantSeek, 2010). The Touch-Pay technology permits instant credit or debit card transactions anywhere. Sales receipts are sent via email in case a client requires one. Software is downloaded into the iPhone 4 which allows people to sign or enter their pin number to complete a transaction. The Touch-Pay technology will surprise possible clients positively due to the simple and pleasant process.
Research shows that failure to use technology in businesses reduces economic development in the United States (Nelson & Quick, 2009). Old habits, services, and methods must be improved to facilitate business and connections with clients. Technology helps businesses find new ways to compete. As a result, technology facilitates business procedures anytime and anywhere (Nelson & Quick, 2009). Mobile technology offers a means to efficiently reach more clients. Using the iPad to make slide presentations, the iPhone to maintain contact with clients, and the Touch-Pay technology to complete sales in the field, sales volume for 2011 should dramatically increase.
Portal Gourmet, LLC understands the need to restructure the organizational objective and business plan. Principles of the DI model (i.e., simple, accessible, affordable and customizable products) will be used to market and advertise Portal Gourmet Sauce™ efficiently. Following the DI model and taking advantage of the latest mobile technology should help Portal Gourmet Sauce™ position itself more competitively in the market.
Bibliography
Anthony, S. (2008a). How to spot disruptive innovation opportunities. Retrieved November 3, 2010 from http://www.youtube.com/watch?v=KGzXWO_anLI
Anthony, S. (2008b). What is disruptive innovation? Retrieved November 4, 2010 from http://www.youtube.com/watch?v=9L66OH-x7a4&feature=related
Christensen, C., Johnson, C. & Horn, M. (2008). Disrupting class: How disruptive innovation will change the way the world learns. New York: McGraw-Hill.
Clayton Christensen. (2009). Key concepts. Disruptive innovation. Retrieved November 3, 2010, from http://www.claytonchristensen.com/disruptive_innovation.html
Horizon Report. (2010). Retrieved October 25, 2010, from http://wp.nmc.org/horizon2010/
MerchantSeek. (2010). Touch-Pay. Wireless credit card processing. Retrieved November 7, 2010 from http://www.merchantseek.com/wireless-credit-card-processing.htm
Morgan Stanley. (2009). Retrieved October 26, 2010, from http://www.morganstanley.com/institutional/techresearch/mobile_internet_report122009. html
Nelson, D. & Quick, J. (2009). ORGB. Ohio: South-Western Cengage Learning.
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3 comments:
Hi Max,
This all looks really great! First off, it was awesome to hear a little bit about your business (I may need to get a bottle of your sauce shipped out to Houston soon!). Further, I really enjoyed how you applied the concepts from class to your business and are now planning to make adjustments. Thanks for sharing!
Absolutely! We have family in Houston. As soon as we go there, I will let you know!
I am captivated. As soon as your product markets online for individual sale I am making a purchase. In fact I think I am going to click the 'like" button on your Facebook connection now. Gotta go an and click that link, bye.
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