The channel strategy of Blue E-Cig should include several elements. First of all, the company should market its products through various distribution channels such as large retailers and online shops through which customers can purchase their products.
In particular, they can sell their products through such retail chains as Tesco and Edeka because smokers in Germany and the UK purchase tobacco products in non-specialized stores (Bourlakis & Weightman, 2009, p. 117). In Britain, approximately 80 percent of tobacco sales are attributed to large retail chains (Bourlakis & Weightman, 2009, p. 117). Therefore, potential clients can be exposed in the products of Blue E-Cig.
Such an approach can increase the accessibility of their electronic cigarettes in Germany and the United Kingdom. Furthermore, the company should establish partnership with organizations that will be responsible for after-sale services.
Furthermore, while manufacturing these products, the company should consider the cultural distinctions of buyers. In particular, the package for the product should contain both German and English descriptions. This strategy is vital for ensuring the satisfaction of clients, and it should be adopted in Germany and the UK.
It is also important to discuss the pricing strategies of the company. They should be based on the analysis of economic forces affecting domestic and foreign markets. The most important criterion is the purchasing power of potential clients. First of all, the price of electronic cigarettes should not differ significantly in domestic and foreign country.
It should be noted that British and German customers are equal in terms of purchasing power. For example, their Premium Starter Kit can be approximately 61 Euros in Germany and 55 pounds in Britain (Blue E-Cig, 2013, unpaged).
It should be taken into account that this product will be manufactured in Germany. Therefore, the prices should be slightly higher in the UK than in Germany because the company will have to spend more capital on transportation costs.
Moreover, the company should take into account various economic factors, such as exchange rate. It should be taken into consideration that the company will work with two currencies, namely Euro and pound sterling. The prices of Blue E-Cig should reflect the fluctuations of pound sterling relative to Euro.
For instance, the company can increase its prices in the UK, if the exchange rate of pound sterling declines in comparison with Euro. Furthermore, the company should decrease the prices if the exchange rate of pound sterling increases.
Apart from that, one should pay close attention to the fiscal policies implemented by the governments of both countries. Certainly, at present rates, the EU policies require governments to align their fiscal policies (Ferreiro & Fontana, 2008). Nevertheless, it is possible that fiscal policies can change, especially at the time when economic recession affects the economies of European countries.
Thus, the management of Blue E-Cig should remember about these changes while developing their pricing policies. Their prices should rise if the tax rates adopted in Germany or Great Britain are raised by the government. In turn, they should sell their products at a lower price, if the tax rates are lowered. Furthermore, the company should open its branches in a country with lower taxes.
Finally, they should pay close attention to interest rates. It is a critical indicator showing the extent to which credit is available to businesses or consumers (Ferreiro & Fontana, 2008). Thus, the management of Blue E-Cig should increase its operations in a country with lower interest rates because in this way, they can better finance their operations. This strategy can make the company more cost-efficient.
Overall, the organization can insure itself against risks by examining the fiscal policies and economic situations in various countries. The management should make sure that its retail operations are diversified. In other words, they should be able to enter the markets of various countries, apart from Germany or the United Kingdom. Secondly, they should make use of changing interest rates in order to fund their operations.
Reference List
Blue E-Cig. (2013). The Official Website. Retrieved from https://www.blu.com/en/us
Bourlakis, M., & Weightman, P. (2009). Food Supply Chain Management. London: John Wiley & Sons.
Ferreiro, J., & Fontana, G. (2008). Fiscal policy in the European Union. London: Palgrave Macmillan.