Cross cultural distribution analysis

Cross­Cultural Distribution Analysis Company: Scrub Daddy Product: Scrub Daddy

November 16, 2014

Abstract

Thoroughly cross­examine the current distribution channels for Scrub Daddy in the United States with a new distribution channel in Spain.

Table of Contents The Country Selected............................................................................................................... 1 The Product Selected............................................................................................................... 2 Company Manufacturing the Product and Why........................................................................ 3 Entry Method............................................................................................................................ 3 Explain Why.............................................................................................................................. 3 Comparative Analysis of Environmental Topics........................................................................ 4 Economic Environment of the Country...................................................................................... 4 Currency.................................................................................................................................... 4 Exchange issues....................................................................................................................... 4 Competitive Environment of the country................................................................................... 5 Cultural/Sociocultural Environment within the Country............................................................. 5 Technological Environment....................................................................................................... 6 Legal Environment..................................................................................................................... 7 Political Environment.................................................................................................................. 8 Behavioral Process..................................................................................................................... 9 Comparative Analysis of Distribution Systems of America and Spain........................................ 9 Written description...................................................................................................................... 9 Diagram...................................................................................................................................... 9 Channel Members in Both Systems.......................................................................................... 10 Similarities................................................................................................................................. 11 Differences................................................................................................................................ 11 Structure of Retail Entity............................................................................................................ 11 Similarities.......................................................................................... ...................................... 15 Differences................................................................................................................................ 15 Target Market............................................................................................................................ 15 Similarities........................................................................................ ........................................ 16 Differences................................................................................................................................. 16 Product Issues........................................................................................................................... 17 Pricing Issues............................................................................................................................. 17 Promotional Issues..................................................................................................................... 18 Motivating Channel Members..................................................................................................... 19 Bibliography................................................................................................................................ 20

The Country Selected Spain is a country with a population near 47,700,000 (est. July 2014) spanning over 505,000 sq. km. in the southwest region of Europe. Of that population, almost half fall between the ages of twenty­five and fifty­four. This group is composed almost equally of males and females. The average age of a mother at first birth is 29.8 years old. 94% of the population is Roman Catholic.

Approximately 74% of the total population lives in urban areas. The major urban areas include Madrid (population 6.5 million,) Barcelona (population 5.5 million,) and Valencia (population 797,000.) About 74% of the whole population speaks the official language of Castilian Spanish.

The rest of the population speaks Catalan (17%,) Galician (7%,) or Basque (2%.) Catalan is an (1)​ official language in Catalonia, the Balearic Islands, and the Valencian Community ​ . Spain

became a world empire in the 16th and 17th centuries when it commanded the seas to England.

Since then it fell behind other European powers in economic and political power due to a failure to act on industrial revolutions. Spain managed to remain neutral in both World War I and II. After the death of Dictator Francisco Franco in 1975, Spain was able to grow its economy and become a global champion of freedom and human rights. Recent government, a parliamentary monarchy, has had to recover from severe economic recession that has left the country with one of the highest unemployment rates in all of Europe.

Spain is composed of seventeen autonomous communities and two autonomous cities (Ceuta and Melilla.) The capital city of Madrid is located in the Community of Madrid. The constitution was most recently approved in 1978 and amended in 2011. The country is currently headed by King Felipe VI and President of the Government Mariano Rajoy. Spain has also been a member of the EU since 1986 and uses the Euro as currency. As of 2012, 21.1% of the population lived

below the poverty line. Of the labor force, 71.7% worked in services, 24% worked in industry, (1) and 4.2% worked in agriculture.​

The Product Selected It has been said that a clean home is a happy home. This common idiom perfectly describes the Scrub Daddy in that it can clean one’s home with a smile on its face while putting one on your face. It’s a fusion of a heavy­duty scrubbing pad and regular household sponge made of TM​ (14)​ FlexTexture​ that changes with temperature ​ . Scrub Daddy can clean nearly any surface

without leaving a scratch and even peel a potato. In short, no chemicals are needed with Scrub daddy. Just use water, elbow grease and a smile! Scrub Daddy lasts an average of eight weeks (14)​ depending on the intensity of usage ​ . After each use, it is recommended to submerge the

sponge in hot water to restore Scrub Daddy to its original form without lasting odors.

With its versatility of use, the Scrub Daddy can speak to numerous different segmentations and markets on a both national and international scale. Predominantly purchased by the busy housewife and mother constantly cleaning up messes around the house, Scrub Daddy has broad market appeal since cleanliness is universally desirable and critical for one’s health. Scrub Daddy is currently headquartered in Folcroft, PA and distributes to the following countries: (14)​ United States of America, Canada, and United Kingdom ​ . With its proven national

profitability and success of recent international expansion, Spain is a logical country to house the Scrub Daddy.

Company Manufacturing the Product and Why A company located in Germany will be utilized for the manufacturing of Scrub Daddy. This company is currently the only manufacturer who has the technology to create the material the Scrub Daddy is made from. The location or name of the company manufacturing is not known to the public. However, we know the German company will create the material, cut it into its (14)​ shape, and put it into its packaging ​ . It is more cost efficient to use the manufacturing plant in

Germany instead of opening up one in Spain. After the product is manufactured in Germany, it will be exported into Spain through trucks and railway. Since the Scrub Daddy does not have an expiration date, transportation time does not have to be short to ensure the product stays fresh.

Entry Method Scrub Daddy will be manufactured in its original factory site in Germany. From there, it will be exported to Spain and sold through Mercadona, a supermarket in Spain. Since the Scrub Daddy is a convenience good, opening up a new store just to sell the product is not cost­efficient or the most effective. By selling in Mercadona, the Scrub Daddy will be in all seventeen autonomous communities and reach million of consumers.

Explain Why Mercadona is a supermarket in Spain with 1,512 stores located in seventeen of Spain’s (17)​ autonomous communities. Mercadona sells products to 4.8 million households in Spain ​ . Even

with the bad economy, Mercadona has been improving their stock share and continues to make (18) ​ profit​ . Scrub Daddy will reach many consumers while they shop for their convenience goods.

Comparative Analysis of Environmental Topics Economic Environment of the Country Spain had an above average GDP growth until the second quarter of 2008 when the country (1)​ entered a recession ​ . Spain’s recession had caused deleveraging of the private sector, fiscal

consolidation, and continued high employment. In turn, this has weighed on domestic demand ​ and investments.​ Even with the recession, exports have shown resistance to the economic

downturn. With the recession and poor economic growth, foreign investors are cautious when (1)​ entering Spain’s economy ​ . Even though Spain’s economy is slowly growing, the country’s

economy is still struggling.

Currency ​ Spain currently uses the Euro for currency.​ Spain chose to use the European Currency Symbol, ​ €, in 2002.​ Euros come in denominations of five, ten, twenty, hundred, two hundred, and five

hundred. The United States currency is the dollar (USD.) It comes in denominations of one, two,

five, ten, twenty, fifty, and one hundred. When comparing the Euro and the USD, the Euro is (2) worth more at .8012 USD per Euro.​

Exchange issues The euro has been depreciating in relation to the USD over the last few years. Even though it is worth more than the dollar right now, the dollar to euro rate could decrease more in the next few years. Currently, the Euro is worth 25% more on consumer purchases than the USD.

Competitive Environment of the country A national competitiveness ranking can help some countries gain insight into the best policies (3)​ ​ and strategies to increase their own competitiveness.​ ​ Since 2005, the World Economic Forum

has based scores off of the Global Competitiveness Index (GCI,) an analysis that measures the (3)​ microeconomic and macroeconomic elements of a country ​ . There are twelve elements the GCI

uses: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market (3)​ development, technological readiness, market size, business sophistication and innovation ​ .

(3)​ Spain is ranked 35th out of 148 country economies ​ . The United States is ranked 3rd out of the ​ 148 country economies.​ The United States improved two spots while Spain has not improved due (4)​ to their economic struggles ​ . Both Spain and the United States have innovation driven ​ economies that focus on business sophistication and constant innovation. ​ Business sophistication (2)​ is the quality of a business’s network and operations strategies ​ .

(2)​ Innovation is the country’s technological and non­technological knowledge ​ . Even though

Spain and the United States are innovation driven economies, Spain is having difficulties (4)​ attracting and retaining talent whereas the United States is not ​ .

Cultural/Socio­Cultural Environment within the Country Like in many countries, Spain’s culture is rich and is full of traditions. It is these traditions that make Spain unique. For example, business offices in Spain typically are run from the hours of (5)​ 9:00AM­2:00PM​ . This is typical for not only small shops but large ones as well. The only (5)​ businesses that really remain open after these hours are restaurants​ . This is not similar to how

American businesses are run. American companies run from 9:00AM­5:00PM and are sometimes opened earlier and run until much later in the evening. Although we would not be manufacturing the product in Spain, distribution may be affected. Products would have to arrive at a very specific time to make sure they arrived during the appropriate business hours.

According to the book, ‘Kiss, Bow, or Shake Hands’ by Terri Morrison and Wayne Conaway, friendliness is not appropriate for the typical Spanish business office. When making business propositions, it is important to respect authority and stick to talking about what is important and the business at hand. The book also mentions that systems are very hierarchical and people stick to the job assigned to them, different from the business culture of the United States. It will be important for Scrub Daddy to adapt to these differences. Often, business people in the US will dedicate more time developing a relationship of trust than on the business itself. If these practices were continued while trying to conduct business in Spain, the new Spanish channel members could become frustrated leading to a gap in communications.

Technological Environment As far as technological advancements go, Spain is slightly below the world averages while the United States is slightly above. In a study done in 2009, it was seen that technology had begun to change how the world was communicating and sharing information. The ICT (information and communication technology) value is the sector gross output and consumption of information and (6)​ ​ communication technology ​ .​ It is a term that covers any type of communication device

including but not limited to phones, computers (hard and software), radio, television, and (7)​ satellites ​ . These effects were measured using employment growth, productivity growth, and (6)​ ​ through the economy ​ .​ In 2009, only 6.4% of value was added by technological advancements

in Spain and in the United States there was a 9.4% increase. The world total average was 8.3% (6)​

. This shows the United States is only slightly more technologically developed than Spain.

Although Spain has the same technology available to them, they prefer meeting in person. This will necessitate face­to­face meetings with Spanish business associates. Due to the countries similar advancements with technology, there will be no need for equipment to be updated nor made to move faster for production. Instead, production may need to actually slow at first as Spain does not provide as large of a market as the United States.

Legal Environment Spain has fewer legal boundaries on exports and imports than United States, making it easier ti import the Scrub Daddy from the manufacturer in Germany. The Spanish market is known to be accepting of other countries products and it is open to trading overseas. Since the product is

manufactured in Germany, transferring the product to Spain will be an easy process. Spain will welcome the product without any legal difficulties because the United States, Germany, and (6)​ ​ Spain are all members of the World Trade Organization ​ .​ Also Germany, Spain, and France are

all members of the European Union. The European Union was created to help the countries in (8)​ Europe can readily trade with one another and become ‘interdependent’ ​ . Since these countries

all cooperate with each other there would be no legal issues in taking the product from Germany, and carrying it through France to Spain.

It will be simple for an American company like Scrub Daddy to follow these rules. International companies are accustomed to jumping through hoops to ensure that their product can be delivered in the United States. The US goes as far as specifying how products must be packaged (9)​ and documented ​ . Scrub Daddy is already dealing with international import regulations from

having the product delivered from Germany into the United States. Having the product moved across Europe is less complex making the marketing mix easier to modify.

Political Environment Spain has both a national and regional government. Spain is a constitutional monarchy and the country’s constitution was written in 1978. Spain has a chief of state, giving legislative power to ​ the Cortes (parliament.) ​ The Cortes has two chambers: the Congress of Deputies and the Senate.

The Universal Suffrage elects the Deputies and Senators who serve four years. The Cortes is responsible for the executive branch consisting of the prime minister and his deputy and (8)​ ministers ​ . Spain is divided into seventeen autonomous communities and two autonomous

(10)​ ​ cities ​ .​ The autonomous communities and cities have regional governments making decisions

for education, health, social services, culture, and urban and rural development.

The United States is a federal republic system, giving individual states jurisdiction over their state. Every four years a president is elected who is both chief of state and head of the government. The legislative branch is made up of the House of Representatives and the Senate.

Behavioral Process Spaniards typically are hard headed and stick to their original opinions; it’s often difficult for (8)​ them to understand complicated rules ​ . As far as businesses go, employees typically prefer job

specific training as opposed to cross­training. With a clear breakdown of job responsibilities, this system makes it easy to find where an error occurs if there is one. It also allows for responsibility to be revoked immediately. The work environment is competitive because workers are commonly seen as ‘replaceable’. Because of this, some workers are careless with the responsibilities given to them. Specific rules are made for every situation and can be seen as complex and detail orientated . People are not focused on being friends within the workplace and often find it easy to say ‘no’ to requests.

Comparative Analysis of Distribution Systems of America and Spain Written description In the United States, Scrub Daddy has taken off at numerous national retailers since closing a deal on ABC’s hit television show “Shark Tank”. After partnering with the “Queen of QVC”, Lori Greiner, it comes as no surprise that the television home shopping retailer is Scrub Daddy’s strongest retail venue. They sold nearly 3 million dollars in Scrub Daddy sponges in one day this (9)​ past July on QVC and are on track to hit 25 to 30 million dollars in sales this year ​ .

Diagrams1

Channel Members in Both Systems In Spain, the selection criteria for channel members involve asking more questions because of the unfamiliarity of the country. The manufacturer was chosen based on what the company already has established in Europe. Scrub Daddy has a primary manufacturer in Germany that creates the basic material for the product. Afterwards it proceeds to cut and package the sponges.

This channel member was kept for convenience in distance and cost for distribution throughout Spain. Since the product is being sold through retail outlets, instead of primarily online, a

1

The Blue Diagram outlines the flow of channel members and/or distribution system in the United States.

The Green Diagram is for Spain.

supermarket was chosen as the final member in the channel. This choice is in response to the need for a retailer that has already been well established within the country, a good reputation among consumers and manufacturers, and a steady growth incline in profits. Considering all the criterion, the retailer that was chosen is Mercadona. According to the company website, it is a family owned supermarket with a main focus customer satisfaction. The company has a presence (22)​ in 48 provinces in Spain with 1,511 stores scattered throughout the country ​ . They are well

established with a 14.1% market share of total food retail space in Spain. In a report of company (22)​ shares from 2009, Mercadona grew from 15.3% to 18.6% ​ . This is the ideal retailer for this

product because with the rapid growth of Scrub Daddy, it will need a retailer that can keep up with its’ expansion.

However, in the United States, one of Aaron Krause’s, the inventor of Scrub Daddy, main reasons for going on “Shark Tank” was to acquire capital to create an independent manufacturing (10)​ facility ​ . Krause had a few prior appearances on QVC before pitching to the sharks and

realized there were numerous logistical hurdles to be cleared if a QVC affiliate company continued to be the sole manufacturer.​ ​ This allowed Scrub Daddy to become less dependent on (10)​ QVC’s schedule by independently manufacturing its own products ​ . With this distribution

strategy, Scrub Daddy can ensure quality by personally manufacturing while leveraging QVC’s distribution power.

Similarities The main similarity between the two countries is the use of the independent manufacturer. Scrub Daddy found the factory in Germany that had all the capabilities needed to create their unique product. This works out perfectly for expanding into any market in Europe as railroad

infrastructure has closely and efficiently connected the region. This makes distribution easier and less costly even if it is being shipped over multiple countries.

Differences The differences in culture create a huge gap in how business is run and how distribution works.

The unfamiliarity of Spain will cause the company to ask many more questions in order to find the most efficient way of entering the market place. This creates searching costs and valuable time spent planning the perfect distribution method. Another difference is the use of Ecommerce in the US compared to Spain. Because Spain prefers to do business face to face, there is much less use of the internet for shopping. This creates the issue of having to establish close relationships with all contacts in Spain, as well as having to deal with the issue of inventory stock in retail stores.

Structure of Retail Entity Given the environmental factors and target markets of both the United States and Spain, we chose television shopping retailer, QVC, and Spanish supermarket, Mercadona, respectively. In the United States, QVC is the ideal retail entity for Scrub Daddy in that given market. With its numerous features, Scrub Daddy is most effective in a visual infomercial type space. Naturally, (11)​ QVC is the answer with 69% of the home shopping retail market as of mid­2013 ​ . Consumers

can watch the Scrub Daddy in action and purchase it as oppose to just reading all its features and benefits on its packaging. ​ Since solely viewing the product versus seeing it in a brick and mortar store does not hinder Scrub Daddy’s effectiveness, QVC’s unique retailing model is not a

negative​ . It’s rather effective given the product, hence it is resulting in the vast majority of Scrub (12)​ Daddy’s total sales ​ .

In Spain, Mercadona is the number one retailer in the country. Despite their stagnant economy and high unemployment, Mercadona still managed to have the greatest increase in revenues from (22)​ 2012 to 2013 amongst supermarkets​ . Mercadona is the most viable retail outlet for Scrub

Daddy due to the manner with which people shop in Spain. In person, face­to­face communication is imperative to making a relationship and thus a sale. With no television shopping retail entity, Spain’s most effective space for Scrub Daddy is in a grocery store. The only true downside of selling in this space is that the product is not being visually sold to consumers via demonstrations.

The best way to promote Scrub Daddy and foster brand recognition is through the use of end caps and physical demonstrations in grocery stores, a strategy currently used in some similar (12)​ American retailers ​ . Though both options are not the cheapest, these two additions could truly

assist in the selling of Scrub Daddy in a new international market. Scrub Daddy is rather expensive at first glance. Until one realizes the numerous features and benefits for Scrub Daddy and its product life, a purchase will not happen as frequently. In short, using end caps and demonstrations are the best way to launch Scrub Daddy in Mercadona.

Logistical Systems

(20) Figure 1.1 ​

When it came to deciding what logistical systems to use in Spain, we decided to research manufacturers currently residing there already. Upon researching our options, we found that Scrub Daddy was already manufactured in Germany. This left us with finding a way to get our product from Germany to Spain. We will use the already established relationship with Hermes to move the product from the manufacturer to the rail system. In 2013, DB Schenker Rail systems (19)​ signed an agreement with Renfe to open up rail goods transport​ .​ T​ his partnership lead to

increased rail freight between the two countries and increased Spain’s competitiveness in goods transportation. This agreement helped Spain to bring its goods transportation by rail, which had a market share of around 4%, up to the European average of 17%. The agreement between Renfe and Germany’s DB was signed by two state operators in the already­liberalized market of rail goods transport, and came as the Spanish Government was attempting to boost rail freight traffic through various initiatives, one of the most significant of which was the Mediterranean Corridor.

DB Schenker Rail claims to be the only rail freight transport firm with a European network. The (19)​ company moves 5,100 freight trains per day, most of them on international routes​ . Using this

railway into Madrid sets us up for delivery to the third­party logistics company, Ingram Micro,

which will then deliver Scrub Daddys to Mercadona, a retailer with over 1,500 locations throughout Spain.

As previously mentioned, Scrub Daddy utilizes QVCs distribution resources to disseminate to the masses. One of the ways that Scrub Daddy logistically achieves mass distribution is through QVC’s partnership with Hermes. Located in Hückelhoven, Germany, Hermes has four German subsidiaries that spearhead the following logistical systems: sourcing & (13)​ product, transportation logistics, fulfillment, and distribution​ . QVC; and by proxy, Scrub

Daddy, use Hermes’ logistics systems to ground transport covering all of Europe, global ocean freight products, worldwide air freight products, tailored customs services, pre­shipment (13)​ inspection, quality control, delivery to homes, shipping of packages to and from Germany ​ .

These transportation resources are imperative to the overall logistical systems of QVC USA, which, in turn, play a vital role in the logistics of distributing Scrub Daddy.

Similarities In both countries, Scrub Daddy will utilize the distribution services of a third party provider. The United States will take advantage of the services offered by QVC, and Spain will take advantage of the intricate and highly useful railway systems established throughout Europe.

Differences Logistics will differ in the two countries by method. In the United States, the material is shipped from Germany back to the US final manufacturer who cuts, shapes, and packages it. Then it is distributed by truck to retail stores and for personal orders. In Spain, the railway system will be

used to transport the product from the manufacturer to the retail stores. Trucking may be necessary, but it will be significantly less.

Target Market Considering market geography, size, density, and behavior; the following target markets were selected for Spain: Women, wives, mothers of few children, aged late twenties to early thirties, who are working in (25) middle class to low income.​

Example: Sofia is a 32­year­old wife and mother of one boy. She works as a teacher for an elementary school. She keeps the house clean on a regular basis, and with a 6­year­old son, she has lots of messes to clean up. She needs a product that can do most of the work for her and is a good price.

In the United States the target market is women, wives, mothers, aged late twenties to early thirties, homeowners with a successful job alongside a husband.

Example: Stephanie is a 29­year­old wife and mother of one boy. She and her husband own their own home. Stephanie leads an incredibly busy life while working and maintaining a family, so she does not have much time to devote to cleaning up after her family in their house.

Similarities The United States and Spain share similar family culture aspects. The nuclear family is getting smaller, and extended family is not as important as it used to be. The two countries are also

similar in that there is less emphasis applied to businesses staying within the family. People are encouraged to go to university and build their own lives. The idea of masculinity is also very (24)​ close.​ It is not surprising to see women taking classes or in the workplace among men in both

cultures. This leads to women in both countries focusing more on their careers and starting a family later in life. While all this is true, it still is the case that women are personified as the (25) gender epitome of the “homemaker” for the family in both cultures.​

Differences The economy in Spain is causing the market to decline and buying patterns to dwindle. Both the U.S. and Spain were hit by a recession in 2008, but Spain has had a harder time getting back on its feet. This is causing the target market to be focused on a lower price point. Whereas in the United States, unemployment rates have decreased versus the Americans’ disposable income that has increased. This way, the target market can be focused on an efficient, high quality product while price is the second most important selling point.

Product Issues The Scrub Daddy is currently sold in the US in a variety of packaging options to appeal to the various target markets that have emerged. There have also been several product line extensions on the original yellow smiley face to include colors, lemon fresh scent, and heavy duty. Each variety is sold in different quantities to best fit the needs of consumers. These packages range from a single sponge for the wary, first time buyer to a pack of eight for the messy family household.

In Spain the product will keep its original “smiley face” shape because we want to keep steady global brand recognition while expanding. Considering that Spaniards tend to live in smaller houses and the amount of people within the household is lower, the product should be packaged (25)​ in smaller amounts.​ Scrub Daddy would be most profitable when sold by twos. This way the

cost of packaging can be lowered slightly. Also, selling fewer sponges will fit better for the target market. The smaller packaging will position the product in such a way that it will be perceived as a low price item as well as a good deal for the quality and variance of uses.

Pricing Issues (26)​ Due to “la crisis económica” that started in 2008, families have less disposable income.​ This

means they will require a lower price for a convenience good such as a sponge. Since Spain is (26) not as avid with online shopping as the U.S., the retail channel of choice is in a supermarket.​

This will add on more costs such as overhead and inventory expenses. Selling in bulk to supermarkets will help the company keep the costs down for the manufacturer and the seller, which will translate into lower prices for consumers. Getting the retailer to buy in bulk saves the manufacturer on inventory costs. This means we will sell the package for 7 euros in supermarkets. This should be able to yield sufficient profit margins for the retailers as well as provide a low cost option for consumers. One Scrub Daddy sells for as low as $3.99 retail in the (27)​ United States ​ . Considering that ​ €1 ​ is equal to about 1.24 dollars, the price of ​ €7 ​ should be

easily accepted in the market.

Scrub Daddy is sold mainly through online and television retailers in the United States. The biggest retailers include Amazon, QVC, Bed Bath & Beyond, EveryCasa, and Autogeek.net.

There are various package sizes for the different retailers. The lowest cost is $3.99 for a single

Scrub Daddy at Bed Bath & Beyond. Meanwhile the most expensive option is a pack of eight .(14)​ for $26.99 at Amazon and EveryCasa​ Due to a large increase in online and home shopping in

the U.S., the Scrub Daddy has seen large success thus far with QVC leading retail sales.

Promotional Issues (25) Members of the business world in Spain appreciate and rely more on personal relationships.​

Using this information, the best course of action for promoting the selling of the product throughout the channel is having close contact with each manager along the line. Also, in order to get the retailer to want to buy in bulk, there will be incentives offered such as advertising contributions from the manufacturer. If the retailer feels that they will be able to sell a high volume of product faster, they are more likely to be compliant with buying high volume at one time. This means that Scrub Daddy will take on the push strategy in Spain through selling in supermarkets and apply the pull strategy in the United States through the use of E­commerce.

After Scrub Daddy’s recent partnership with QVC, demand for the product has dramatically increased. This has led to a pull­strategy throughout the supply chain as the consumer demand has driven the entire process. ​ ​ The increase in online shopping in the U.S. has also been beneficial for Scrub Daddy as its’ largest retailers are also online thus increasing demand for the product and assisting the pull strategy. A pull strategy has been efficient and effective thus far as the Scrub Daddy is not being marketed to big box retailers. Because of this retailing arrangement, Scrub Daddy does not need to have a large amount of product available to any one retailers and can better meet the needs of its various online retailers. Also, retailers experience

the benefit of not having to house the product themselves. Instead, it is shipped directly to consumers upon purchase.

Motivating Channel Members Throughout our involvement in Spain, there are various ways we will be able to motivate channel members. The first method we will implement will be to have a Scrub Daddy representative located in Madrid in order to create a partnership with all members of the channel.

We will focus on a continuing and mutually supportive relationship in order to create a competitive advantage. We will work side­by­side with channel members to build communication, balanced powers, and equal rewards at all levels. Next, we will use different incentives through promotional support. Some examples include using promotional allowances, slotting fees, contests and incentives, and special promotional deals. Treating and supporting channel members correctly at all levels increases motivation to sell. If we take care of our team, they will take care of us.

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27. "Scrub Daddy® Cleaning Sponge." ​ Buy Scrub Daddy® Cleaning Sponge from Bed Bath & Beyond​ . Bed Bath and Beyond, n.d. Web. 17 Nov. 2014.