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Rug Bug Corporation’s Sales Strategy Case Study

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Updated: Aug 21st, 2020

Rug Bug Corporation (Hisrich, Peters, & Shepherd, 2010) is the company which manufactures unique vacuum-molded, plastic, motorized wheelchair. The product is safe for children, has low weight and it is not very expensive. All these factors assure that the company product is going to be sold within the short period of time with the highest profit. Stressing the necessity of the product to disabled children, the corporation forgets about one of the most spread ways of promoting products, the Internet. The company plans to refer to hospitals and similar organizations in order to sell the wheelchair. Additionally, the drugstores are going to be offered the information about where the wheelchairs of this top quality may be bought. Looking at the company financial situation, it is possible to use the Internet promotion in order to increase the population informing about the possible advantages of such a wheelchair.

The main strengths established by the company owner are the price and the product. Offering an innovative product for a lower price, Mr. Young has managed to increase the sales. However, the promotion is not that good as it could be. Moreover, Mr. Young does not use all the possible ways of promotion and does not consider additional places where the product can be solved. As for price, the discount system is not developed, but working with such particular product as wheelchairs for children, the company should think about flexible discount system. The video is not included which may be a good promotional technique.

Reading the information in the case study, it is difficult to check all the aspects of the business plan of the company. The financial side is presented in detail with all the numerical and statistical data. However, the future actions, plans and intentions of the corporations are not considered, as well as it is impossible to see the obstacles the company has faced while promoting its product. Mr. Young assures that the company almost does not have rivals due to uniqueness of the product, however, several big corporations work in the same direction, therefore, the competition may increase in the nearest future. A managerial team of the company consists of the professionals who have much experience in dealing with products of the kind. Therefore, the work is going to be organized in an appropriate matter. However, in case the company plans to spread its business and to enter international arena, the team which exists right now is not enough. It is necessary to think about regional representatives of the company. Having a unique and low cost product, the corporation should offer it to other countries.

Pro Forma Statements are not really satisfactory as payroll tax expenses are missing. Moreover, the compensation for workers is not displayed as well as the research costs. Is this part missing? It is impossible as research and development are the most important stages in creating compatible and innovative product of the kind. Monthly cash position is not calculated. There is no particular discussion of the ways how the start-up capital is going to be used. Therefore, even though the company finances are adequately explained, the Pro Forma Statements are not detailed. Finally, $150,000 is enough capital to ask for, however before being offered such sum of money, Mr. Young will have to explain where exactly this sum is going to be spent.

Reference List

Hisrich, R., Peters, M., & Shepherd, D. (2010). Entrepreneurship. New York, NY: McGraw-Hill.

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IvyPanda. 2020. "Rug Bug Corporation's Sales Strategy." August 21, 2020. https://ivypanda.com/essays/rug-bug-corporations-sales-strategy/.

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IvyPanda. (2020) 'Rug Bug Corporation's Sales Strategy'. 21 August.

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