February 21, 2016
The Beach Carrier 1. What is the nature of the product? What are its strengths and weaknesses?
The Beach Carrier is a bag that is large enough to carry all the items that one needs for a day at the beach. It is large enough to carry a beach chair, but when empty, it can be folded down to 12x12 square inch for easy and convenient storage. The strengths of the product are that is more affordable than the competitor’s products and the material of the bag is perceived as durable. The weaknesses of the product are that the fluorescent colors lessen the perceived quality of the beach carrier and the size of the bag is far larger than necessary. 2. What are the limitations …show more content…
Ricci will have to rely on repeat business from customers and as stated, “beach bags are replaced every three years”, which will impact sales. Even though there is a significant amount of work that goes in to direct mail advertising, 44 percent of people that receive advertisements in the mail throw them away without even reading it. The company will spend a great deal of money on these advertisements for them to be just thrown away.
5. What are some of the manufacturing issues Ricci will face?
One manufacturing issue Ricci will face is that the product will be manufactured in New England. Manufacturing products in the United States is far more expensive than outsourcing a product to manufactured overseas. This will greatly increase the operating costs of the product and lessen the margins for profits. Another issue is that after the product is manufactured, it then has to be drop-shipped at a storage facility since Ricci does not have a warehouse. The only place that Ricci has available to store inventory is in the garage and this places a cap on the amount of products that can be manufactured at one time, thus increasing cost per product. If Ricci had a warehouse, the product could be manufactured in larger batches in order to reduce the cost per product and increase the profit margins.
6. Is the financing sufficient to fund the roll out of the Beach Carrier as planned?
The financing is not sufficient to fund