Yorktown Technologies Case Study. The largest problem that plagues Yorktown is negative media attention regarding its genetically engineered GloFish, as well as strict new regulations from several key markets for the product.
Yorktown Technologies Case Analysis
Yorktown Technologies is a fairly new company that is marketing and introducing GloFish into the market. In 2002 Yorktown raised $500,000 fro investors under the projection that it would have $4,000,000 in profits in 2004. Sadly the company only had $500,000 in revenues and had an outstanding $620,000 in expenses leaving the company $120,000 in the red (Roger A. Kerin, 2010). Alan Blake of Yorktown Technologies is searching for what to tell the board of directors in the next board meeting. Major changes are needed in order for Yorktown to turn around and become profitable.
The largest problem that plagues Yorktown is negative media attention regarding its genetically engineered GloFish, as well as strict new regulations from several key markets for the product. Blake is of the belief that Yorktown can be successful and despite steady growth over the past few years it has not tapped its true capacity due to distribution challenges with the product. Competition is steep as the competition has similar products for a cheaper price. The continued enhancement of the product that Yorktown carries gives them a strong position in the market if the distribution can be sorted out, this would make the product more price effective and increase sales across the board.
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Yorktown is a company that sells genetically engineered zebra fish, that due to the genetic altering glows under specific conditions. The first few years Yorktown came under heavy fire from several entities due to the genetically enhanced nature of their product. They have had steady growth in sales but are still far below projected sales and revenues. Investors have been very patient to this point but that patience will soon fade. Drastic changes must be made according to Blake in order for Yorktown to increase revenues and sales.
There have been some struggles in getting contacts with Wal-Mart and Petco to carry their product, although there has been some hesitation both companies have agreed to carry the product even if it is on a trial basis. Other avenues for marketing and sales must be pursued and analyzed in order to increase sales and revenues.
Blake has been considering marketing the product on ebay and through direct internet sales to the consumer. Pricing has become a serious issue in this consideration. Competitors are selling similar products for far less than Yorktown can provide their product for. The consideration for international sales has been discussed, along with the possibility of regulating the illegal infringement of the patent through sterilization of the fish prior to sales in some areas that are difficult to regulate due to the international nature of the sales.
Identifying the Root Problem Components
The first problem that is plaguing Yorktown is the difficult of cost effective distribution and marketing. In the US, Yorktown has come under fire due to the genetically engineered nature of the fish. This makes the pricing of the product difficult, because the price is higher than the consumer has been willing to pay. The company has had steady sales since its inception several years ago, but is still far below projected revenues.
Pricing is another problem that haunts Yorktown. Competitors are selling similar fish for far below the hard bottom on Yorktown’s product. Yorktown cannot make a profit while effectively competing with the competition’s product. The three major distributors of fish, Wal-Mart, PETCO and PetSmart were slow to pick up Yorktown’s product but now Wal-Mart and PETCO both are carrying the product.
Blake believes that the presentation of their product is lacking and thus not exhibiting the true nature and potential of their product. The GloFish are best displayed under black lighting and dark rooms. None of the retailers are displaying the fish in such an environment, which is diminishing the potential sales of the fish.
Evaluation of Alternatives and Recommendations
Several alternatives and solutions have been considered by Yorktown. The first is the direct internet marketing to the consumer, however this is a difficult task because competitors are selling similar product for far cheaper than Yorktown’s cost including shipping and taxes.
There has also been discussion about a kiosk in the shopping mall. This is a fairly good option because it would give Yorktown the freedom to display the fish in the best possible environment as well as sell the proper kits as well as the fish. This is a great opportunity with the only downfall being discussed as the price of the lease of space.
Another alternative is to begin increasing marketing to the smaller independent pet stores, as well as other chain stores. This alternative will produce some increase in sales but has the potential to run into the same problems Yorktown has had with the big three distributors. The negative media that has been received may affect his alternative.
The biggest problem according to Blake is the refusal of distributors to show the fish properly and showcase the in the proper lighting environment (Roger A. Kerin, 2010). Due to the nature of the fish, they are best shown under black light and dark conditions that are rare among the existing distributors.
Drastic changes must be taken in order for Yorktown to increase sales and revenues. The problems discussed must be resolved in order for this to happen. The major problem of distribution and pricing must be overcome in order for Yorktown to tap into its full potential.
Roger A. Kerin, R. A. (2010). Strategic Marketing Problems. Prentice Hall.