Marketing subject homework 2
Trap-Ease: The Big Cheese of Mousetraps
One April morning, Martha House, president of Trap-Ease, entered her office in Moncton, NewBrunswick. She paused for a moment to contemplate the Ralph Waldo Emerson quotation that she had framed and hung near her desk: “If a man [can] make a better mousetrap than his neighbor … the world will make a beaten path to his door.” Perhaps, she mused, Emerson knew something that she didn’t. She had the better mousetrap —Trap-Ease—but the world didn’t seem all that excited about it.
Martha had just returned from the National Hardware Show in Toronto. Standing in the tradeshow display booth for long hours and answering the same questions hundreds of times had been tiring. Yet, this show had excited her. Each year, National Hardware Show officials hold a contest to select the best new product introduced at the show. Of the more than 300 new products introduced at that year’s show, her mousetrap had won first place. Such notoriety was not new for the Trap-Ease mousetrap. Canadian Business magazine had written an article about the mousetrap, and the television show Market Place and trade publications had featured it. Despite all this attention, however, the expected demand for the trap had not materialized. Martha hoped that this award might stimulate increased interest and sales.
A group of investors who had obtained worldwide rights to market the innovative mousetrap had formed Trap-Ease in January. In return for marketing rights, the group agreed to pay the inventor and patent holder, a retired rancher, a royalty fee for each trap sold. The group then hired Martha to serve as president and to develop and manage the Trap-Ease organization.
The Trap-Ease, a simple yet clever device, is manufactured by a plastics firm under contract with Trap-Ease. The trap consists of a square, plastic tube measuring about 15 cm long and 4 cm square. The tube bends in the middle at a 30-degree angle, so that when the front part of the tube rests on a flat surface, the other end is elevated. The elevated end holds a removable cap into which the user places bait (cheese, dog food, or some other tidbit). A hinged door is attached to the front end of the tube. When the trap is “open,” this door rests on two narrow “stilts” attached to the two bottom corners of the door.
The trap works with simple efficiency. A mouse, smelling the bait, enters the tube through the open end. As it walks up the angled bottom toward the bait, its weight makes the elevated end of the trap drop downward. This elevates the open end, allowing the hinged door to swing closed, trapping the mouse. Small teeth on the ends of the stilts catch in a groove on the bottom of the trap, locking the door closed. The mouse can be disposed of live, or it can be left alone for a few hours to suffocate in the trap.
Martha believed that the trap had many advantages for the consumer when compared with traditional spring-loaded traps or poisons. It appeals to consumers who want a human alternative to spring traps. Furthermore, with Trap-Ease, consumers can avoid the unpleasant mess they encounter with the violent spring-loaded traps—there are no clean-up problems. Finally, the consumer can reuse the trap or simply throw it away.
Martha’s early research suggested that women were the best target market for the Trap-Ease. Men, it seems, were more willing to buy and use the traditional spring-loaded trap. The targeted women, however, did not like the traditional trap. They often stay at home and take care of their children. Thus, they want a means of dealing with the mouse problem that avoids the unpleasantness and risks that the standard trap creates in the home.
To reach this target market, Martha decided to distribute Trap-Ease through national grocery, hardware, and drug chains such as Safeway, Zellers, Canadian Tire, and Shoppers Drug Mart. She sold the trap directly to these large retailers, avoiding any wholesalers or other intermediaries.
The traps sold in packages of two, with a suggested retail price of $2.99. Although this price made the Trap-Ease about five times more expensive than smaller, standard traps, consumers appeared to offer little initial price resistance. The manufacturing cost for the Trap-Ease, including freight and packaging costs, was about 31 cents per unit. The company paid an additional 8.2 cents per unit in royalty fees. Martha priced the traps to retailers at $1.49 per unit and estimated that, after sales and volume discounts, Trap-Ease would realize net revenues from retailers of $1.29 per unit.
To promote the product, Martha had budgeted approximately $60,000 for the first year. She planned to use $50,000 of this amount for travel costs to visit trade shows and to make sales call son retailers. She would use the remaining 10,000 for advertising. Because the mousetrap had generated so much publicity, however, she had not felt the need to do much advertising. Still, she had placed advertising in Chatelaine and in other home magazines. Martha was the company’s only salesperson, but she intended to hire more salespeople soon.
Martha had initially forecast Trap-Ease’s first-year sales at 500,000 units. By the end of April, however, the company had sold only a few thousand units. Martha wondered whether most new products got off to such a slow start, or whether she was doing something wrong. She had detected some problems, although none seemed overly serious. For one, there had not been enough repeat buying. For another, she had noted that many of the retailers kept their sample mousetraps on their desks as conversation pieces—she wanted to traps to be used and demonstrated. Martha wondered whether consumers were buying the traps as novelties rather than as a solution to their mouse problems.
Martha knew that the investor group believed that Trap-Ease had a once-in-a-lifetime chance with its innovative mousetrap. She sensed the group’s impatience. She had budgeted approximately$150,000 in administrative and fixed costs for the first year (not including marketing costs). To keep the investors happy, the company needed to sell enough traps to cover those costs and make a reasonable profit.
In the first few months, Martha had learned that marketing a new product is not an easy task. For example, one national retailer had placed a large order with instructions that he order was to be delivered to the loading dock at one of its warehouses between 1:00 and 3:00 p.m. on a specified day. When the truck delivering the order had arrived late, the retailer had refused to accept the shipment. The retailer had told Martha it would be a year before she got another chance. Perhaps, Martha thought, she should send the retailer and other customers a copy of Emerson’s famous quotation.
1. Martha and the Trap-Ease investors believe they face a once-in-a-lifetime opportunity. What information do they need to evaluate this opportunity? How do you think the group would write its mission statement? How would you write it?
2. Has Martha identified the best target market for Trap-Ease? What other market segments might the firm target?
3. How has the company positioned the Trap-Ease relative to the chosen target market? Could it position the product in other ways?
4. Describe the current marketing mix for Trap-Ease. Do you see any problems with this mix?
5. Who is Trap-Ease’s direct competition? Who are indirect competitors?
6. How would you change Trap-Ease’s marketing strategy? What kinds of control procedures would you establish for this strategy?
Marketing subject homework 2