The Tropical Fish Farm: Transitioning from Hobby to business.(Instructor's Note) (2010)

CASE DESCRIPTION The primary purpose of this case concerns the transformation of an interest and skill into a successful entrepreneurial enterprise in a competitive marketplace through effective use of the four Ps of the marketing mix. Secondary issues examined include effective use of essential business-building concepts such as product quality, differentiation, market research on a shoestring, premium pricing strategies, relationship selling, dual channels of distribution, and cost controls. This case has a difficulty level appropriate for college juniors. The case is designed to be taught in one class period and is expected to require two hours of outside preparation by students. CASE SYNOPSIS All too many people with particular skills or talents decide to start their own businesses only to fail because they focus on using those skills in their business rather than on building and developing the business itself. This case traces the transition of one person's leisure interest in tropical fish to the development of a successful business in direct competition with large established domestic producers and international importers. Since many students have had aquariums or known friends that have had them, the case is easy for them to relate to on a personal level. As the case unfolds, the hobbyist expands and progresses through a series of expansion phases that soon involves several retail and wholesale buyers. The decision presented to the students is whether to expand into a major player within the region and, if so, which of three expansion alternatives should be pursued. INSTRUCTORS' NOTES Recommended Teaching Methods One or two class periods prior to discussing this case in class, advise students to set aside two hours to read and prepare answers for the questions. The instructor may suggest that students have a 'study partner' for this preparation step. On the day the case is reviewed in class, ask students to form groups of three or four people to compare answers and to develop group responses to the questions. Have all groups focus on Question #1 for 5-7 minutes. Then call on a few of the groups to report their findings. On a white board or projection screen, prepare a composite list of all the responses provided. Add points from the answer key that no group reported. Ask student groups to focus on Questions #2 and #3 for a total of 5-7 minutes. Call on some of the same and different groups to report their findings on Question #2. On a white board or projection screen, prepare a composite list of all the responses provided. Add points from the answer key that no group reported. Then ask groups to report their responses to Question #3. The point to be made by the instructor here is that basic marketing principles and business development concepts are universal to all types of businesses! The same principles apply whether the business is a fish farm, a cabinetry shop, or a CPA firm--the same basic principles apply! DISCUSSION QUESTIONS I. What did Diane do well as she transformed her hobby into a business? Comment on her research and each of the 4 Ps of the marketing mix. RESEARCH 1) Identified then solved customer problems before expanding 2) Evaluated and established demand before expanding 3) Sought methods to keep expansion costs at a minimum then initiated efficient purchasing and bartering strategies 4) Sought relevant information on the internet and other sources then incorporated that information into her business strategy and operations 5) Test marketed product prototypes (samples) before expanding 6) Sought feedback from existing and potential customers before making decisions PRODUCT 1) Invested in high quality breeding stock 2) Differentiated her product from the competition by offering varieties, colors, and fin types not offered by competitors 3) Fish were raised in local water that easily acclimated to local aquariums 4) Quality genetics and growing environment reduced fish mortality rates and customers' frustrations and expenses 5) Fish were sorted and delivered by size and other characteristics PLACE 1) Located production facilities closer to customers than competitors. …