Sample International Business Opportunity Development

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Introduction

Goodnature is a New Zealand firm that is committed to the provision of pragmatic solutions to one of the most serious environmental challenge, the decline of biodiversity. The firm aims to achieve its objectives by designing and manufacturing automatic traps that can humanely kill pests and rodents animals. After killing the rodent, the devices reset themselves. It is vital to note that the traps designed by Goodnature are toxin free, and they have been designed to save the user’s effort and time. One of the firm’s objectives is to constantly work towards the development of new products that effectively control pests. Goodnature developed a new humane rodent kill and trap technology that is readily available to the wider pest control market. The new product is called A24 Automatic Humane Kill Trap for Rats. During the trial phase of product development, the new product was able to eliminate the predator rat population. The monitoring rounds at the trial site confirmed zero percent monitoring rates. This indicates that the rat populations in these sites had been minimized to zero. The A24 product is a multi-species kill trap that targets stoats and rats. The product is well suited to all environments and terrains.

Purpose of the Project

The aim of this project is to facilitate the creation of strategic partnerships with a major pest control agencies in the U.S. Goodnature seeks to understand strategic partnership opportunities with a pest control agency such as Orkin.

The second aim is to understand the “do it yourself” market in the U.S. This will provide an opportunity for the strategic entry into the market based on the understanding of end user’s purchasing decisions, values and requirements.

The third objective is to understand product requirements, opportunities and channel options for toxin free, commercial pest control solutions. Goodnature seeks to understand these aspects with regards to large scale food storage and productions installations.

Strategic Partnership with U.S Pest Control Agency

Orkin is an American pest control firm that is based in Atlanta. Founded in 1901, the firm became a wholly owned subsidiary in 1964 after it was purchased by Rollins Inc. The firm has successfully formed research partnerships with major universities around the U.S. Additionally, it has formed research partnerships with organizations such as the Center for Disease Control and Prevention for pest related disease and biology research and studies. For pest control, Orkin uses the AIM approach, which stands for assess, implement and monitor. Additional solutions for pest control include assessing activities, implementing programs based on activities and monitoring the effectiveness of their programs for their customers. It is vital to note that Orkin has a proactive approach that incorporates treatment with low environmental impact.

Market Potential, Opportunities and Threats of the A24 in the PCO Market in the USA     

A24 has immense market potentials and opportunities in the pest control market in the U.S. In addition, the product has several threats. A24 has potentials in a market that has annual revenues of approximately $11 billion. Annual growths in the market from 2008 to 2013 were 1.9 percent. The pest control industry or market in the U.S employs approximately 112,858 people in 22,533 pest control businesses. Goodnature is entering into a market that has receptive customers. The recovering housing industry in the U.S will benefit the industry and Goodnature. It is expected that the new home owners and previous home owners will demand A24 in order to eliminate rodents within their premises. This will also create a need for regular inspections. Discretionary incomes are expected to rebound because of the favorable financial conditions in the U.S (Vinturella & Erickson, 2013). As a result, consumers will increase their spending on restaurants and hotels. Increased activities in these establishments attract rodents, which will lead to the creation of a market for A24. 

The main threats to A24’s target market are competition and pest action threshold. The U.S pest control and management market is highly competitive. ServiceMaster and Rollins Inc are the major players in an industry that has 22,533 businesses. The two firms control 60 percent of the market share. In addition to competition, Goodnature may be limited by pest control action threshold. The threshold is set at a point in which environmental or population conditions indicate that pest control actions must stop or start (Pimentel, Lehman & Springer-Verlag, 1993). This means that sighting a pest does not necessarily indicate a need for pest control.

Current Rodent Control Methods within Organizations

Most organizations in the U.S use the integrated pest management strategy. This is an effective and environmentally friendly and sensitive approach to pest management. The approach relies on common sense practices. The integrated pest management method employs comprehensive and current information concerning the life cycle of pests, in addition to the interaction of pests with the environment. A combination of this information with a number of pest control approaches helps in the management of pests based on environmental friendly and economical means (Pimentel, Lehman & Springer-Verlag, 1993). The integrated pest management method uses all appropriate pest control and management options including the use of pest controlling devices and pesticides.

Influence and Drivers to Action for Product Use Decisions of Pest Control Operators

Factors that influence action vary among pest control operators. Most operators are influenced by environmental concerns. Other operators are influenced by economical and social factors. Operators that are influenced by environmental concerns base their decisions on action threshold. They evaluate the need for pest control and use the most appropriate method for pest control. Operators that are influenced by economical factors base their actions on the availability of cost effective pest control methods, regardless of the environmental impact or outcome (Pimentel, Lehman & Springer-Verlag, 1993). Operators that are influenced by social factors consider the outcome of the pest control methods and the impact of the outcome on the society.

Influences and Drivers to Action for Customers Requesting Rodent Control Services From Pest Control Operators

Most customers are influenced by economical factors, and driven by the need to eliminate the population of rodents within their premises. Once these customers identify pests, they request the most cost effective pest control method that will eliminate the rodent and other populations within the premise. These customers use this approach in order to minimize their costs of pest and rodent control (Pimentel, Lehman & Springer-Verlag, 1993). In some of the cases, customers request highly targeted approaches such as trapping, mechanical control and the use of chemicals that will disrupt the physiology of pests. In case these approaches do not work, the customers shift to the use of non-specific chemicals. 

Health and Safety Standards and Requirements for Pest Control Operators with Rodent Trapping Devices and Competitor Products Such As Toxins

There are guiding principles for pest control using rodent traps and toxins. These principles guide on the usage of non-lethal or lethal means for rodent control. The aim in either case is to control rodents without causing harm to the environment, humans, plants and other animals. For the case of trapping devices, the health and safety requirements stipulate that the trapping devices must be regularly inspected. Inspection will ensure that the trapped animals are disposed off before they compromise the health and welfare of people and animals living around the trap. Regular inspection also ensures the removal of non-pest species. The American law, Wild Mammals Protection Act 1996, states that animals should be killed in a humane and reasonably swift manner (Maredia, Dakouo & Mota-Sanchez, 2003).

The health and safety requirements for using toxins need pesticide formulations, compounds and application methods to present the lowest possible hazard to the environment and humans. The application or use of toxins should observe all precautions. All works that require the use of toxins should be performed in strict accordance with applicable state, federal and local health, environmental and safety requirements. In cases where the applicable regulations and legislation are in conflict, the most stringent regulation takes effect (Maredia, Dakouo & Mota-Sanchez, 2003). Most importantly, the applicant of pest control toxins takes full liability and responsibility for compliance with applicable regulations concerning environmental protection, safety and health of personnel and residents during the execution of the work. 

Regulations, Import Restrictions, Tariffs and Customs Requirements on Mechanical Trapping Devices in the U.S

The importation of mechanical pest control devices in the U.S is subject to several fees and taxes. These are paid as the devices undergo the customs clearance process. The mechanical devices are subject to three critical taxes, the industrialized product tax, import duty and merchandise and service circulation tax. Importers of the devices into the U.S market must register with the Foreign Trade Secretariat. The main requirement for the importation of the devices is the marking and labeling requirement. The U.S Protection Code states that mechanical rodent control devices should have labels that provide customers with easily readable and precise information about the device (Maredia, Dakouo & Mota-Sanchez, 2003). The U.S government may place restrictions on products or devices that it deems to cause harm to human health and the stability of the environment.

Contact List of Appropriate Executives within the Pest Control Operator for Engagement and Pitching Of the Product

Executives of Orkin

Name

Contact information

Title

Eugene A. Larocci

2170 Piedmont Road, NE
Atlanta, Georgia 30324
United States

Phone: 404-888-2000

President

Harry J. Cynkus

2170 Piedmont Road, NE
Atlanta, Georgia 30324
United States

Phone: 404-888-2000

Chief Financial Officer and Treasurer

Gary W. Rollins

2170 Piedmont Road, NE
Atlanta, Georgia 30324
United States

Phone: 404-888-2000

Director, Chief Executive Officer Of Rollins Inc

Greg Clendenin

2170 Piedmont Road NE
Atlanta, Georgia 30324
United States

Phone: 404-888-2000
Fax: 404-888-2012

President of Southeast division

Freeman Elliot

2170 Piedmont Road NE
Atlanta, Georgia 30324
United States

Phone: 404-888-2000
Fax: 404-888-2012

President of Orkin’s Atlantic division

 

 The User Practices Of the “Do It Yourself” Pest Control Market

Matrix of Competitor Products and Competitor Marketing Strategies

Competitor Product

Competitor Marketing Strategy

Terminix (ServiceMasters)

The marketing strategy used by Terminix International is focused on identifying customer attrition and creating customer retention solutions. ServiceMaster gathers existing data and verifies the data through additional market studies. Based on this data, the firm develops new services and training programs. These are aimed at resolving service and product quality issues, in addition to creating marketing collateral that builds value for customers. The firm also adjusts its corporate culture and attitude in order to ensure that customers are well served. Additional marketing strategies include the development of sales techniques and scripts that overcome objections, and assist customers to fully understand the value of their services. The firm also increased the number of surveys that target customer satisfaction in order to understand customer needs and wants.  

Rentokil

The marketing strategy used by Rentokil is based on five strategic aspects. The first aspect is the delivery of exceptional customer services. This strategy will help in driving customer services across the firm’s business range. The second aspect is the development of the capability of the organization and its people. This strategy involves the establishment of category capabilities in pest and rodent control. The third aspect is the delivery of operational excellence in the firm’s functions and processes. Using this strategy, the firm will introduce consistent performance and goals measures. The fourth aspect is the facilitation of operations at low costs. The strategy will increase agent productivity, maximize route optimization and increase daily sales. The fifth aspect of the strategy is the delivery of profitable growth through bolt-on acquisition and organic action. Through this strategy, the firm aims to obtain increased sales productivity by targeting the right customers. Additionally, the strategy will facilitate the appointment of talented sales representatives and teams.

 Market Research

The U.S pest and rodent control market is full of potentials, threats and opportunities. By entering into a strategic partnership with Orkin, Goodnature will be strategically positioning itself to harness these potentials and opportunities, while effectively dealing with the threats. The potentials in this market are derived from a steady revenue growth over the last 5 years. The industry has experienced revenue growth despite the recession that hit home ownership. Additionally, there are potentials from a rebound in home ownership and the housing market.

Opportunities in this industry come from the rebounding housing market, training and partnerships. One of the results of a rebound in the housing market is an increase in the demand for rodent control. The U.S market presents one of the largest pest control markets in the world. Therefore, there are numerous opportunities to introduce new products and services to customers. The new products and services must be effective in meeting the needs of customers. There are opportunities to enter into partnerships with the numerous pest control operators in the country. The industry and market has over 20,000 operators. Most of these operators are willing to enter into strategic partnerships as they seek to expand their market presence. Additional opportunities are presented in training and product development. The experiences gained from the U.S market will help the firm in product development and training of its employees, particularly the sales and marketing team.

End users usually meet during product exhibitions. These exhibitions are held in different locations throughout the country. According to surveys and interviews conducted on end users, the market has a high demand for pest and rodent control. These interviews and surveys indicated a need for the introduction of mechanical approaches in rodent control.

Retailers usually meet during these trade exhibitions, which are held on a monthly basis throughout the country. During these trade exhibitions, retailers have opportunities to display their products, and educate customers on how the products are used. Surveys on retailers indicate that they prefer mechanical and chemical based rodent and pest control approaches. Their preferences are based on customer preferences. According to these interviews, most retailers in the U.S showed a willingness to enter into strategic partnerships in order to expand their market. They are also receptive to new products that can satisfy the needs of customers. The retailers identified regulation as the major challenge for the industry.

The retail of pest control products in the U.S is conducted using different approaches. In addition to selling their products in stores, retailers also use online platforms to advertise and sell the products. 80 percent of the rodent and pest control businesses in the U.S have an online platform. The retail of these products is highly competitive. Each retailer claims to have the best product and most professional team. The retail of the “do it yourself” rodent control products is also competitive with each retailer creating an impression that their product provides business and home protection against rodents and pests. These products are sold on the basis of professionalism and effectiveness.

The percentage sales volumes of store and online sales show a difference between the two sales platforms. Most customers prefer to purchase the rodent control products from stores, rather than making online purchases. Online platforms are mainly used by retailers as they make orders from manufacturers and producers. Store sales of these products surpass online sales by 45 percent. 55 percent of all purchases are made from stores while 45 percent of the purchases are online. Customers prefer store purchases because they will meet with sales representatives, and are educated on how to use the product.

Define Influence and Drivers to Action for Purchasing Decisions of End Users of Pest Control Products

End users are influenced by their peers and advertisements as they make purchase decisions. Peers, family and friends have the ability to influence end users by influencing their attitudes. These people also provide crucial information and support to an end user. Advertisements play similar roles to peers in influencing end users to make purchase decisions. Advertisements also provide crucial information and support to end users. End users are driven by pest management and control, financial considerations and health and safety management. An increase in the population of rodents and pests within a neighborhood may compromise the health of people in the neighborhood. Therefore, end users are motivated by the need to eliminate the pests before they become health hazards (Maredia, Dakouo & Mota-Sanchez, 2003). End users are also driven by the need for pest control and management. They may seek to reduce the population of the pests and rodents in an environment. Financial considerations are based on the costs and benefits of using the pest control product.

Investigate Health and Safety Standards and Requirements for Private Users of Pest Control Devices

There are safety and health standards, and requirements for the private users of these devices. The safety standards and requirements require the product to have a user manual, in addition to other information pertaining to the date of manufacture, licensing and manufacturer. The health standards require the private user to regularly inspect the device (Maredia, Dakouo & Mota-Sanchez, 2003).

Regulations, Import Restrictions, Tariffs and Customs Requirements on Mechanical Trapping Devices within the U.S

The industry is regulated by pest control regulations and environmental management agency. According to these regulations, the mechanical devices should have minimum effects on the environment and be reasonably humane. Import restrictions are placed on all mechanical products that do not meet the standards and requirements of the U.S import laws. Tariffs and additional fees are paid as the devices undergo the customs clearance process (Lynn, 2007). The mechanical devices are subject to three critical taxes, the industrialized product tax, import duty and merchandise and service circulation tax. Importers of the devices into the U.S market must register with the Foreign Trade Secretariat.

Engaging Potential Retail Outlets For In Store Sales Trials

The sales trials for potential retailers were conducted at the firm’s head office in New York. The trials were based on the sampling idea. Approximately 100 retailers turned up for the sales trials. The firm’s sales representatives were involved in the trials, which involved showing the potential retailers how the device worked. The potential retailers were also shown how to fix the different parts of the device (Lynn, 2007). After the trials, sales associates showed the potential retailers on how to handle customers, make orders and repair the device. 

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