By adding stand up paddles the product line of

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paddle owns one, growth will start to slow. By adding Stand up paddles the product line of Relajante, it allows them to access another market, which is growing faster than kayak paddles, and increase sales and revenue growth. Go into ecommerce – Expanding Relajante’s Kayak paddles in more stores across the Vancouver area has not increased sales dramatically and in some areas sales have decreased. This shows that the current area is saturated, and Relajante needs to expand even further. With the use of the Ecommerce, Relajante can sell and market their products globally to areas that are not saturated without needing to find physical stores in those areas. This can help increase growth and revenue. New Factory Space- Relajante’s current factory space could be considered more of a liability than an asset, as the maintenance fees are eating away at their profit margin. A newer, larger factory space should be invested to not only increase Relajante’s long term assets, but to also allow for more growth in conjunction with the other recommendations. 2
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Recommendation 1: Diversify Product Line Relajante currently has a single product line of basic Kayak paddles. This standardised way of producing has allowed them to focus on quality of product and build a reliable brand name. Now it is apparent that sales have slowed down (see table 1), which indicates that the market is becoming saturated and in order for Relajante to continue increasing sales, Liam will have to diversify his product line. Year Number of Units Sold Percentage Growth 2014 10,945 - 2015 13,902 27% 2016 14,820 6.6% Table 1: Relajante’s Sales Growth form 2014-2016 A friend gave Liam the suggestion of starting production of stand up paddles, and although from a marketing perspective the marketing manager turned it down, Liam should really consider to begin production of Stand up paddles for these reasons. Relajante is currently not producing near to full capacity and as a result is wasting resources. They have the spatial capacity to produce 24000 units and so far have only maximally produced 14,000 plus. If Relajante could produce at full capacity or near, they could benefit from economies of scale and increase their profit margins. Economies of scale are how many units are the fixed costs of a company spread across. By starting to produce stand up paddles, Relajante would have to produce more, allowing it to fulfil its production capacity and not waste anymore resources. A fair assumption can be made based on the nature of the product, as seen in figure 3 the consumer decision journey that it a onetime purchase product, and the declining percentage of sales growth that the market is becoming saturated. Therefore introducing a new type of product can increase sales, as you are entering a new market with unmet demand. The market of stand up paddles also is growing at 25% versus the kayak paddles which is growing at 15%. This means that there is already
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