Mousetrap created by Trap-Ease America. The company was formed by a group of savvy investors who had obtained worldwide rights to market a revolutionary new mousetrap. The organization had borrowed the idea from a retired rancher who had patented it. In return for the use of his idea, Trap-Ease America would pay the rancher a royalty fee for each trap sold.
Trap-Ease America immediately hired Martha House to manage the organization and create a marketing strategy to introduce the new product into the market. Trap-Ease America then contracted with a plastics manufacturer to begin producing the traps. Martha researched the market and determined that women would be the best target customers for the trap. She found that the majority of women were stay-at-home mothers, most of whom did not have time to clean up the mess that traditional mousetraps left behind. These women wanted an easier way to get rid of the mice. With the new trap that Trap-Ease America had created, these women could set the trap, wait to see if any mice were caught, and then simply throw the trap away.
After targeting women for the mousetraps, Martha set the retail price of the traps at $2.49 for a set of two traps. According to the text, this price was five to ten times more money than the traditional mousetrap. Martha set the price for retailers at $1.98 per set of traps. She then began sending the traps straight to popular stores like Kmart, and other similar retailers.
After the first year of production at Trap-Ease America, Martha had used $250,000 to cover fixed costs, promotion of the traps, and administrative costs. There was revenue brought in, but no substantial profit. How can the Trap-Ease America Organization generate enough revenue to cover all of the expenses of the first year and create a decent profit?
First, one must determine the problems with Trap-Ease America during its’ first year of production. The biggest problem was that not enough customers bought the mousetrap. There are a few possible reasons for this. One possibility is that the price of the trap is too high. At $2.49 for a set of traps, Martha is selling the mousetraps at a price that is significantly higher than her competitors (five to ten times higher). Another possibility is that the traps were not introduced to the market through the correct means. Martha promoted her product through hardware shows and magazines, but she did not think to advertise on television or the radio. What could have caused these issues?
Martha’s marketing strategy for the Trap-Ease America organization was probably the biggest issue preventing the business from profiting. Martha should have created a marketing strategy statement explaining who the target market is, the planned product positioning, and the goals she wanted to accomplish. Also, Martha’s marketing strategy did not introduce the product using the correct distribution channels. Martha chose to present her product through magazine ads and by attending public events such as the hardware convention. She also sold products straight to retail stores such as Wal-Mart, but there were more available channels to distribute and/or expose her product that she did not take advantage of. Television commercials and radio commercials are just two other untapped channels that Martha could have used.
Another issue that may have hindered Trap-Ease America’s ability to profit was the price of the product. The target customers that Martha decided on were middle-aged women, who were mostly stay-at home- mothers. Most of these mothers shop for the cheapest products they can find. They typically wait for products to go on sale and then buy everything in bulk because of their money and time constraints. The mousetrap of Trap-Ease America is too expensive for the target market that Martha chose. Competitors of Trap-Ease America sell their products at five to ten times less, so the target market would rather purchase a large amount of the cheap mousetraps from competitors than a few expensive ones from Trap-Ease America.
The final issue preventing significant revenue from being generated was the training and performance of the delivery man. At one point, a retailer ordered a large amount of mousetraps, and asked them to be delivered between 1 and 3 p.m. This was a simple request that the delivery man did not fulfill. The delivery man arrived at 3 p.m. instead of during the time period the retailer gave. The retailer was very unhappy and decided to cancel the shipment. In this case, customer satisfaction played a large role in the lack of profit. If the delivery man had arrived on time, Trap-Ease America would have made a profit. The fault for this can fall on Martha for not training the delivery man well enough, or it can fall on the delivery man for not being responsible. What can Martha do to solve Trap-Ease America’s problems and make some profit?
The biggest problem with Trap-Ease America was the marketing strategy. In order to create successful marketing strategy, a certain order of objectives must be followed. First, Martha should have determined who the target market would be. She originally determined that the target market would me middle-aged women, which is fine. The second step is to plan the product positioning. Martha chose to sell the mousetraps directly to retailers, and advertise the mousetraps by going out and speaking about them at various public events. Martha could have used television or the radio as another means of distributing the product idea to the population. Television commercials would have been the best choice because of their efficiency. They have the ability to reach a very large audience very quickly and easily. She would need to create a commercial that was both informational and visually attractive to the human eye. Martha needs to make sure that people know what the product is, how it works, and why it is better than the products of her competitors in the mousetrap market. After creating a commercial for the mousetraps, Martha should have completed the second step of the marketing strategy by choosing which television channels to put the commercial on. Channels like Oxygen, The Women’s Network, The Food Network, and Fox would be the best choices since most of the target market watches those channels more often than the others. Finally, Martha needs to set goals on what she wants to accomplish through the sale of this product.
The second issue with Trap-Ease America’s ability to profit was that the price of the mousetrap was too high. Martha could have lowered the price to $1.99 instead of $2.49. A buy-one get-one free sale might have been a smart idea as well. As stated before, this target market buys in bulk, so they will not buy a product that is that much more expensive than the others even if it works very well. These small price changes could dramatically increase profits.
The final issue with Trap-Ease America was the performance of the delivery man when he was asked to drop off a number of the traps for shipment. The story is unclear as to whether Martha trained the delivery man, but she should have because his performance was unsatisfactory. The delivery man was obviously unaware of the importance of satisfying the customer by arriving on time for the shipment. Martha needed to either train him herself, or hire someone else to train the delivery man.
Trap-Ease America is already in debt $250,000. Martha, as the president of Trap-Ease America, needs to find a way to generate profit before the business goes under. First, Martha needs to hire a team of marketing professionals to help her get her business on track because she can not run the business completely on her own. She then needs to ask the new marketing employees to help her remodel her marketing strategy statement as shown above. After completing the statement, Martha needs to begin production of the mousetraps again and stick to her new plan and ask for help when she needs it.
There are some implementation issues that could arise for Trap-Ease America because of last year’s performance. The investors who founded the business are aggravated because they have not profited at all. Martha will need to ask them for more money to start her new plan, but they may not be willing to give her any more. Also, because of the fact that Trap-Ease America is in debt $250,000, a substantial profit will need to be made in order to pay off the debts and start paying out employee dividends. Time will be the major factor. It may take some time for Trap-Ease America to begin to profit on their mousetrap, but if Martha and her new employees stick to the plan, they should be fine in the end.