Pascal Press Crowdfunding A New Coffee Revolution Case Solution

2. Analysis

The two main problems were the pricing and the distribution of the Pascal Press. Chen et al. (2019) discuss the optimal pricing strategy on crowdfunding platforms. The study found that the internet is gaining importance as a decision-making tool for consumers. Reviews and opinions of others on social media help make purchase decisions. Cordova et al. (2015) discuss the factors that determine the success of a crowdfunding venture. The three determinants are project funding goal, project duration and the contribution per day. The study states that a smaller funding goal is likely to be successful than a comparatively bigger goal. Furthermore, the duration of the fundraising should not be short, otherwise, it would fail to generate the money required for the project. Also, the success of the project depends on the contributions made each day. This means that for crowdfunding, the inventor should assure that the project is active in terms of marketing to the public to generate an amount each day. 

Furthermore, appropriately developed business plans were found to be more successful in generating funding on crowdfunding platforms. Also, endorsements from others also helped in generating funding from the public. Also, inadequate marketing was found to be one of the greatest causes for failures of crowdfunding projects (Mollick and Kuppuswamy). 

The decision regarding the distribution channel selected is based on the costs of each distribution channel, the volume of sales, market characteristics, and competitor analysis. An assessment needs to be done on the price point of similar products. This is because retail selling would result in an increase in the price of each unit. However, the cost per unit needs to be determined before retail selling (Anđelković, Barac and Radosavljević). Wang et al. (2003) assessed the profitability of marketing and sales through the internet and compared it with retail sales. The study gathered data from companies that used these channels for distribution and compared their profitability through statistical analysis. The analysis revealed that the internet may be used as additional marketing and sales channel but it cannot be used as the key marketing and sales channel because profitability figures will be low. Wu et al. (2008) agree that internet marketing and retail channel should be used in a complementary manner to maximize sales. This is because, in this era, customers opt for multiple channels to gather product information to make a purchase decision. 

3. Strategic Alternatives

The first alternative is to opt for the internet as an only distribution channel based on the success of the crowdfunding initiative. The second alternative is to sell through the retail channel where the retail stores would charge a profit margin for each sale. The third alternative is to develop a combined approach. 

If the first alternative is selected, it would result in lower profitability as discussed above. This is because the internet as the key distribution channel does not yield a significant amount of sales. The second alternative would also not be the optimal choice for a distribution strategy. This is because using the retail channel only would limit the number of channels that the customers accesses product information from. Since the users nowadays depend on recommendations and reviews by other users, an internet presence is very important to result in a purchase decision.