Business Analysis of HydroCan
The company HydroCan is planning to launch a new type of lawn car product called “StaGreen”. They have hired a consulting group called “Stone Age Marketing Consultants” to create a marketing plan to launch there new product. They can’t decide between launching the product to the consumer market or the commercial market. So research is conducted on both markets to determine where the product should be marketed to.
The StaGreen is a chemical fertilizer created to improve your lawn but with a unique benefit that no other lawn care product has. The fertilizer reduces the need for manual watering on most types of grass by 40%.
The Consumer Market
The consumer lawn care market is a very pricey market with Canadians spending $2.3 billion in 1995. Not only does the consumer market have high spending, it also has high competition. StaGreen’s competitors would be “Scott’s Turf Builder” , “Scott’s Miracle-Gro”, and “Ortho” . These three products control 50% of the total consumer market.
Lawn care products are mainly sold in three types of stores; discount stores, specialty stores, and home improvement stores. The most lucrative of the three are discount stores because in 1994-1995 it is estimated that 60% of fertilizer sales were purchased in discount stores. This is a large comparison to 30% in specialty stores and 10% in home improvement stores.
The Commercial Market
The commercial market is mainly fixed of Golf courses but also includes office properties and apartment complexes. Golf courses are being blamed for groundwater pollution and owners are looking for new ways to reduce this problem. StaGreen will statistically reduce water usage by 1/2 and fertilizer usage by 1/3.
The apartment and office complex market are about 1/8 the size of the Golf course market. They also do not face the same pollution issues that Golf course owners face. They tend to purchase lawn care products in bulk because they are not used nearly as much as Golf courses.
The StaGreen product is torn between two options; the consumer market or the commercial market. Both markets have pro’s and con’s that can benefit the product and with the research collected the HydroCan company can come to a conclusion on which market is right for them.
The problem faced by...