CAPTAIN PHAB

Jonathan Brady has been enjoying surprising success with the line of Mold and Mildew products manufactured by Captain Phab. The company is located in Peterborough Ontario. Distribution in Canada can always be improved; however, the domestic sales force has proven to be able to expand outlets to the point that increases in sales will start to become difficult.

Captain Phab products have traditionally been distributed through marine and RV (Recreational Vehicle) outlets across Canada. Increased distribution through the large chains will prove to be difficult for such a small product line.

The key products are "Mold and Mildew Stain Remover" and "Mold and Mildew Preventative". The products are completely environmentally safe and work remarkably better than competing products. They come in a 710 ml spray bottle with 12 bottles in a case. The case selling price to the retailer is $120. The per bottle cost to produce is $5. Typical marketing and distribution costs are $50,000 per year. Typical sales in Canada have slowed to about 2000 cases per year.

Mold is considered to be environmentally hazardous and a significant health concern. Since boaters and RV owners live in very close quarters, removal and prevention of mold is a primary concern.

Jonathan now considers that his next step is to find markets for the products outside of Canada. He has three favoured options: United States (close to Canada with a large population, no import duties, and easy transportation), The British Isles (heavy precipitation across the year, a population roughly twice that of Canada, and a well- established tradition of boating and RV use) and France (the bottles are already bilingual, sales across Europe will be easier to establish once on the continent and a well- established boating and RV tradition).

Jonathan estimates that a similar level of market penetration (market penetration can be considered as percent of population who have bought Captain Phab ) can occur in all three market alternatives within one year. The UK and France have about twice the population of Canada and the US has about ten times the population of Canada. He estimates that the marketing and distribution costs to the European alternatives will be roughly $ 150,000. The marketing and distribution costs for the US will be approximately $300,000.

In terms of environmental responsibility, the US seems to continue to favour business development at the expense of the environment as demonstrated by recent refusals to commit to reductions in greenhouse gasses. Whereas the UK and France have enviable environmental records.

Jonathan was born and educated in London England and feels confident that the product would prosper in the UK. He spent his summer holidays on the French Atlantic coast working in a variety of marinas where he became an accomplished racing sailor.

Jonathan is well aware of the the very complex characteristics of world trade which will impact his decision. Issues such as: Trade Agreements, Similarity of Economies, Geographic Proximity, Volume of Trade between partners, Stage of Market Development, Regulatory Similarity, Ease of Market Entry, Currency Conversion Capability, Distribution Channels, Communication Capabilities, and Government Attitude towards Environmental Responsibility.

European and US operations will eventually require the establishment of manufacturing facilities either owned or partnered.

Jonathan needs to create a proposal for senior management for the export of the Captain Phab products. He has recruited and briefed a team of international marketing experts in order to propose an export solution.

Captain Captain PHAB "PHAB BOOKOOHNKE FRESH APPROACH - FRESH IDEAS FRESH APPROACH - FRESH IDEAS MOLD & MOLD & MILDEW MILDEW PREVENTATIVE REMOVER PRESERVATIF DETACHANT CONTRE LA MOISISSURE POUR MOISISSURE CAUTION ATTENTION NET CONTENT 670 ml (22 oz) CONTENU NET IRRITANT Part No. 422 No. de piece NET CONTENT 670 ml (22 oz) CONTENU NET CCD110 - Cleaning and Degreasing Compounds. Biologically Based Composes de nettoyage et degraissants. Biologiquement Base Part No. 250 No. de piece CCD146B - Boat and Bilge Cleaners Bateaux et Detersif de Nettoyage des fonds de cale