Distribution Case Study
ENJO Canada Cleaning Inc.
Stefanie Lyons, Elisa Reyes, Marillon Desmarais Beaupre,
Jennifer Wong, Kyle Jasper, Tom Seeman
Marketing Management – Set A
November 12, 2013
ENJO Distribution Case Study
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Table of Contents
Introduction ................................................................................................................................................................3
Problem Statement ..................................................................................................................................................3
Target Market.............................................................................................................................................................4
Market Share ..............................................................................................................................................................5
SWOT Analysis ...........................................................................................................................................................6
Competitive Analysis...............................................................................................................................................7
Alternative Strategies .............................................................................................................................................7
Implementation Plan............................................................................................................................................ 10
Course Concepts ..................................................................................................................................................... 11
References ................................................................................................................................................................ 12
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Introduction
ENJO is a company that sells green cleaning products for in home use. Their company is
based strongly on providing a product that is clean, healthy, and chemical-free. ENJO’s
products are produced in Austria and the company is looking to expand into a different
distribution channel within Canada.
ENJO currently offers over 65 products that are frequently sold in bundles. Prices range
from $249.99 for starter packages to $699.99 for complete home packages. Their premium
cloths on average have a lifetime of 3 years; this results in saving households between $400$600 per year in home cleaning products.
They have a current distribution strategy that deals through a direct channel. This channel
is based on the company having sales agents that provide the products to customers
through in-home demonstrations and parties.
Trish Ronan is the CEO of ENJO Canada Cleaning Inc. She has successfully led the company
to have 350 sales consultants within Canada. She has set aside a budget of $50,000 to
improve and develop a sales and distribution plan. Trish is considering both direct and
indirect strategies and is open to a change in the distribution strategies of ENJO Canada
Cleaning Inc.
Problem Statement
What distribution should ENJO take that will bring sales of 4,000,000 in 2011 up 50% to
6,000,000 by December 31,2014 while still portraying ENJO’s positive traits of being clean,
healthy, and chemical-free?
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Key Facts and Assumptions
The following chart explains the key facts and assumptions that directly relate with
our problem statement.
Key Facts
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Big box and grocery stores
accounted for approximately 85
percent of total green household
cleaner sales in 2011
(CleaningGreen, 2012).
Canadians are among the least
concerned about leaving a carbon
footprint according the GlobeScan
Greendex report for 2012. The data
collected is able to show the
connection between emerging
markets and developing nations and
how they experience trends and
environmental changes (GlobeScan,
2012).
The green cleaners industry is
constantly under review. The
Environmental Working Group has
been testing and reviewing
products, including cleaners that are
labeled as “green”. These reports are
able to bend and change a market.
For example, the sunscreen market
was drastically changed due to
results that were found by this test.
People will listen to scientific claims,
resulting in the potential to damage
the green household cleaning
market, or in turn, benefit it
(Sarnoff, 2012).
Key Assumptions
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ENJO will continue to distribute
their products through direct sales
representatives.
Trish expected sales of $4,000,000
in 2011, and she met those sales.
We can assume that with whichever
strategy we choose to take, ENJO
will continue to ship to the current
warehouse in Mississauga.
Our distribution strategy will not
limit the amount of items available;
all products will still be offered.
Pricing will remain similar to what
ENJO has been selling their products
for, to ensure that there is as little
loss of profit possible.
Target Market
The market that we are choosing to focus ENJO’s products towards is based from the PRIZM
segmentation model; they are called the Urbane Villagers. We chose to target the Urban
Villagers for a few reasons. Firstly, they are Canada’s second wealthiest segmentation
group. ENJO’s products are on the higher side for price, so this aspect will appeal to the
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Urban Villagers. Secondly, Urban Villagers are concerned about the environment and living
a sustainable lifestyle. This directly relates with ENJO green cleaning products, as they are
safe for the environment and safe for the final consumer. Lastly, another main reason we
chose to target the Urban Villagers is because of their relationship with advertisement and
marketing. Since ENJO is relatively new to Canada, we are striving to get the brand name out
in the Canadian market. Urban Villagers actively participate in word-of-mouth marketing as
well as social media marketing. These are two aspects that will help ENJO build its brand
recognition and lead to success in the Canadian market.
Listed below are the geographic, demographic, behavioural, and psychographic aspects of
the Urban Villagers.
Geographic: Urban Villagers are located in large Canadian cities. Their households make
$100,000+ per year and 85.62% are homeowners.
Demographic: Urban Villagers are males and females between 22 and 55 years old. They are
university graduates or working professionals. Urban Villagers tend to have wellestablished jobs. We are targeting towards new families with young children and those who
are planning to have a family one day.
Behavioural: Our target market will consist of people who have strong brand loyalty. These
consumers are eco-conscious and are willing to spend more money to contribute to
sustaining the environment.
Psychographic: Urban Villagers actively participate in word-of-mouth marketing but also
rely on traditional advertising, such as newspapers and radio. They also are heavily
involved in the online community.
Market Share
Purchase or use of green products has increased from 38% in 2009 to 41% in 2012.
However, the market share for green cleaning products specifically is at 3% in Canada. This
low percentage may be due to customer perceptions that green cleaning products may be
less effective than traditional cleaning products, in addition to the high price of green
cleaning products (Sprinkle, 2012). That being said, we still feel that there is a market for
green cleaning products. With proper education of the benefits and attributes of green
cleaning products, the market will make a shift.
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SWOT Analysis
The chart below represents our SWOT analysis.
Strengths
 Offers environmentally friendly
household products.
 Maintains a large product line
 Direct sales can create brand loyalty
through the interactions with the
consultants.
 Strong direct sales team enables ENJO
to expand to 26 countries (Hughes, et.al,
2013 p. 2).
 ENJO fibers meet the requirement for
Swan eco-labeling, which is also a
reputable third party organization.
 Eco-labeling should improve brand
equity.
 Perth Murdoch University has tested
and proven ENJO product performance
claims.
 In 2006, ENJO received a Gold Award
for an innovative environmentally
friendly and economical viable product
line (Hughes, et.al, 2013, p. 2).
 In-home sales can create positive
exposure of the brand (Hughes, et.al,
2013, p. 3).
Weaknesses
 Consumers may be hesitant because
other similar companies use
greenwashing (Hughes, et.al, 2013, p. 1).
 ENJO products are currently only
available through direct sales from
consultants (Hughes, et.al, 2013, p. 2).
 Consumers may perceive the company
as using a pyramid scheme business
method which could harm the brand
and its image.
Opportunities
Threats
 Growing demand for environmentally
 Consumers are doubtful when it comes
friendly and/or green products (Arnold,
2010 p. 2).
 People are concerned with green
washing, although ENJO does not
participate with this issue.
 Partnering opportunities other ecofriendly companies.
 People are more educated in today’s
age, which leads to a stronger demand
for environmentally friendly products.
to the performance of environmentally
friendly household products (Dupont,
2012).
 Price may be higher than similar
products.
 There are a considerable amount of
competitors who are producing
environmentally friendly cleaning
products (One Green Planet, 2013).
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Competitive Analysis
ENJO’s main competitors are companies that carry green household cleaning products.
Listed below are Green Works, Method, and Nature Clean; three companies that we find are
main competitors.
Green Works is a line of eco-friendly cleaning products launched by Clorox. Green Works
products are acknowledged by the Environmental Protection Agency. This certification
gives their company credibility. The company uses biodegradable ingredients from plants
and mineral. Green Works is well established and their line of products can be purchased in
most stores that carry cleaning supplies, as well as online retailers. The average retail price
for any Green Works product is $3.29. However, the brand has recently been associated
with greenwashing and has been forced to change their product claims in their
advertisements. Due to the negative exposure of the brand, Green Works’ market share is
decreasing. In 2008, Green Works’ sales were reported at $100 million. In 2011, their sales
had fallen to $60 million that year (Clifford, 2013).
Another mentionable line of home care product is Method. Method is one of the fastest
growing private companies in America. Their products are characterized as being “more
powerful than a bottle of sodium hypochlorite” and “Gentler than a thousand puppy licks”
(Method, 2013). The company has a large product line depth. Their average retail price is $4
to $7. Method’s product can be purchase in large Canadian retailers, such as Safeway.
Method also provides their consumers with the convenience of online purchasing through
their company website. Also, customers have the ability to order Method products on
Well.ca. Having their product sold on another website is a competitive advantage because it
allows visibility and credibility. According to Bernstein Research, the market share of
independent brands like Method is increasing in relation with the share of traditional green
product brands (Clifford, 2013).
Nature Clean, founded in 1963, is a Canadian company that offers healthier and non-toxic
household cleaning products. Every product in their 5 product lines is identified with a
specific logo to highlight and educate the consumer about important information. Ensuring
product safety for consumers is one of their mission statements. Nature Clean labeling
policy is very strict and they obtain a third party certification, which provides a competitive
advantage. As for distribution, Nature Clean products are available in most major Canadian
general stores and online retailers.
Alternative Strategies
We have determined three alternative strategies that could potentially solve ENJO’s
problem. Listed below are the alternatives along with advantages and disadvantages that
come with each of the alternatives.
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Our first alternative is online retailing and television home shopping. Both of these
alternatives are direct distribution. ENJO would directly distribute to the end consumer.
Online retailing and television home shopping would be intensive.
Advantages:
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Ability to reach millions of Canadian households.
Customers are able to simultaneously shop and chat with others about the products
online.
Word-of-mouth marketing through online testimonials.
Completely convenient for the customers; ability to have 24 hour access out of the
comfort and privacy of their own homes.
Online services allow a vast variety and customization option.
Disadvantages:
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Lack of buyer-seller interaction; takes the social aspect out of shopping.
Inability for customers to see and test the product before they buy it.
Ninety percent of Canadian retailers sell their products online (Crane, Kerin,
Hartley, & Rudelius, 2011, p. 408).
Our second alternative is to go through a retailer and sell ENJO’s cleaning products at a mall
kiosk stand. This method would use direct distribution, as ENJO would sell their products
directly to the end consumer. A mall kiosk stand would be exclusive.
Advantages:
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Offers personalized service to each potential consumer.
Ability to allow customers the opportunity to see, touch, and test out the products
before purchase will help reduce buyer’s remorse.
Increases product exposure as consumers will inevitably walk pass the kiosk while
shopping in the mall.
Disadvantages:
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Customers may have a negative connotation with people who work at kiosk stands;
may perceive them as being too persistent and pushy with their sales technique.
Customers may not perceive companies who sell through kiosk stands as
“legitimate” companies or products.
Renting out a large amount of kiosk stands could be expensive.
Having to train each salesperson so they provide a consistent customer service
standard could be timely and costly.
Our third alternative is to go through a retailer such as Safeway. Safeway is a company that
many Canadians relate with and consider prestige. This method would use indirect
distribution. ENJO would distribute its cleaning products to Safeway and then Safeway
would sell the products to the end consumer. This would provide selective intensity as we
would only chose one grocery store to distribute out of.
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Advantages:
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Builds brand recognition.
Ability to use the push strategy to attract our target market to come to Safeway and
buy the cleaning products.
Even though we would chose Safeway as our only retailer, there are many Safeway
outlets which provides convenience for the consumers.
Disadvantages:
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Grocery stores provide customers with limited service; the customers are in charge
of finding what they need with little emphasis on salespeople to help.
Safeway employees may not be well-informed about ENJO’s product attributes and
benefits.
Aggressive competition for shelf space.
Buying shelf space is expensive.
Solution
After analyzing the three alternatives mentioned above, as a team we decided to implement
the third alternative of using a retailer as our distribution channel. We chose to distribute
through Safeway. Safeway targets individuals who are in the higher income bracket and
care about social status. Also, a lot of Canadians relate with Safeway and perceive it as a
more prestigious grocery store. ENJO cleaning products fits well with these standards.
Distributing through Safeway will provide recognition for ENJO’s brand name and products.
Since ENJO’s products are priced on the higher side, we felt Safeway was the optimal
grocery store choice. People who shop at Safeway expect to pay equivalent prices for
cleaning products. Also, there are currently 214 Safeway stores in Canada; this means ENJO
will be able to reach most of the Canadian market.
If distributing through Safeway doesn’t work out, our back up plan is to implement online
retailing and television home shopping. This strategy would allow ENJO to reach most of the
Canadian market and provide consumers with the convenience of shopping out of the
comfort of their own homes.
We declined online retailing and television home shopping as our first strategy for a few
reasons. Firstly, to only use these two distribution methods as their only methods would not
get ENJO’s name out into the market. Secondly, both of these as methods lack buyer and
seller interaction. Consumers like to have the ability to ask questions and learn more about
the products in a social setting. Lastly, customers may not commit because of the inability to
see and test the product before they actually purchase it.
We also rejected distributing through a retailer such as a mall kiosk. The main reason is the
negative connotations that come with mall kiosk stands. We want people to perceive ENJO
as being environmentally friendly, prestigious, and legitimate. Renting mall kiosk stands are
also very costly. With a $50,000 budget we would not be able to reach the entire Canadian
market.
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Another aspect to mention; we chose not to use franchising as a distribution alternative
because it would be unattainable with a $50,000 budget, especially if ENJO wants to reach
all or most of the Canadian market.
Implementation Plan
Let’s take a look at how we are going to put our distribution strategy, retailing through
Safeway, into action.
January 1, 2014
We will contact Safeway to buy shelf space. We would ideally like ENJO products to be
located eye level in the cleaning products section. We also want ENJO products to be located
in every Safeway across Canada.
January 15, 2014
Even though online retailing was not our distribution strategy, we are determined to
produce a new website which allows online retailing. Out of our $50,000 budget, we set
$4,000 aside to make this happen. Having the option for people to purchase via online, will
please many individuals. Since ENJO has such a developed product depth, we would not be
able to distribute all of our products through Safeway. But we will provide all of the
products and ENJO’s signature bundles online.
February 1, 2014
The products will be delivered to each distribution Safeway warehouse in Canada. During
the month of February we will also focus on advertising. We put aside $6,000 for startup
advertising plans. We want ads in the Safeway flyers announcing ENJO’s arrival to Safeway.
We also plan to focus on social media marketing. Since our target market is heavily involved
with social media, we will set up a Twitter, Facebook, and Instagram account where
consumers can follow us and learn more about ENJO’s products.
February 14, 2014
Today is the day that we launch ENJO’s product line at Safeway. An event will be held at
each Safeway to help consumers gain exposure and learn about ENJO’s benefits.
March-May, 2014
Since Saturday is the day when shoppers go to grocery stores, testers and demos will take
place on the first Saturday of March, April, and May in order to further educate the
customers about the product (Goodman, 2013). We are hoping to be able to do this in every
Safeway store; but if we don’t have the budget for it, we will promote through the top 30
busiest stores.
December 31, 2014
We want to assess our strategy by the end of the year 2014. We will evaluate by assessing
how much of the stock has been sold and how many products have been requested to be
restocked. We will also assess how many sales have been made through online retailing. If
the results are positive we will continue with the previous distribution strategies. If the
results are negative we will have to reassess and come up with a strategy to maximize our
sales and reputation.
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Course Concepts
This case focused on us determining what distribution strategy ENJO should choose. When
determining the distribution strategy, we had to determine the distribution channel,
intermediaries, and intensity of distribution. We used these concepts to determine our
three alternatives, which lead to our solution.
Word-of-mouth marketing is where people influence others through conversations and
social interactions. This can be both positive and negative for a company. Our target market
focuses on word-of-mouth marketing, which could be very beneficial for ENJO as it is one of
the cheapest and most influential marketing methods.
Our target market also relies on social media marketing. Social media marketing is an
online-marketing method that attracts customers. In today’s age, large amounts of people
rely on the Internet and this method reaches a vast amount of people without having to
spend a large amount of money.
Greenwashing is where companies misinform individuals about their environmental efforts.
Most people are aware of this but are not completely aware of which companies commit it.
We want to make it known that ENJO does not participate in greenwashing.
For our third alternative we used a retailer as an intermediary between ENJO and the final
consumer. This is an example of indirect channel distribution.
Franchise is an example of a contractual system. The franchisee pays the franchisor a fee to
set-up a business, one of the main advantages is that the operations of the business is
already in place and most of the times it had been proven to work.
As our first alternative we decided to use online retailing. This is an example of intensive
and direct marketing. The consumer deals with ENJO directly, without the need of an
intermediary. Online retailing provides consumers with convenience, variety, and in-home
privacy.
When performing a push strategy, personal sales and promotion sales play a major role.
Sales people call wholesalers to increase the orders and provides assistance if questions
arise. Sales promotions such as coupons are offered in order to increase the sales. Safeway
could use a push strategy to attract potential customers toward ENJO products.
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References
Arnold, M., D. R. (2010). Green products: Using sustainable attributes to drive growth and
value. Delaware: PWC.
method: our story. (2013, November 15). Retrieved from Method home:
http://methodhome.com/mobile/our-story/
Clifford, S. (2013, November 14). As Consumers Cut Spending, ‘Green’ Products Lose Allure.
Retrieved from The New York Times:
http://www.nytimes.com/2011/04/22/business/energyenvironment/22green.html?_r=2&hp&
CleaningGreen. (2012). New Study Reveals State of Green Cleaner Sales.
Crane, F., Kerin, R., Hartley, S., & Rudelius, W. (2011). Marketing Eighth Canadian Edition.
GlobeScan. (2012). Worldwide, Consumers Who Feel Most Guilty About Their Environmental
Impact Are Least to Blame. Retrieved from Globe Scan:
http://www.globescan.com/news-and-analysis/press-releases/press-releases2012/84-press-releases-2012/241-canadian-consumers-among-the-least-greenand-least-guilty-about-their-environmental-impact.html
Sarnoff, R. L. (2012). Are Green Cleaners Safe? New Data May Surprise You. Retrieved from
The Blog: http://www.huffingtonpost.com/rachel-lincoln-sarnoff/cleaningproducts_b_1894684.html
DUPONT. (2012). Sustainability Survey Results. Dupont.
Goodman, J. (2013, November 15). Grocery Shopping: Who, Where and When. Retrieved from
The Time Use Institute:
http://timeuseinstitute.org/Grocery%20White%20Paper%202008.pdf
Sprinkle, D. (2012, September 10). Cleaning "Green": Sustainable Lifestyles Expand Reach of
Eco-Friendly Cleaning Products. Retrieved from Yahoo Finance:
http://ca.finance.yahoo.com/news/cleaning-green-sustainable-lifestyles-expand184646654.html
Webb-Hughes, A. M. (2013, November 16). Case #3: ENJO Canada Cleaning. BCIT.
One Green Planet (2013, November 15):
http://www.onegreenplanet.org/news/environmental-concern-on-the-rise-butgreenwashing-is-confusing-people/
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