Our client on this assignment was an small international trader that had established wide supply networks across Asia and South America, but without any understanding of the local market in Kenya. He struggled with pricing, profitability and the fact that he had no clear line of business he was in, and that he did not import regularly made it especially difficult for him to predict how any one of his consignments would perform.
This client thought there was opportunity in importing consignments of various products into Africa but had never quite been able to accurately determine product positioning, demand, pricing or develop an optimum distribution strategy. Having already imported a consignment of product the client was always under pressure to recover his investment, from which he obtained a marginal profit each time at best.
The client needed to mitigate various risks arising from the lack of market understanding.
We begun by asking the client to provide us with product samples of the products he wanted to import.
Having obtained product samples, we undertook market analysis and financial modeling to determine the following for the client, on the basis of which the following were determined among others:
1. Compliance requirements for the product in the local market
2. Product cost build up from suppler to consumer
3. Optimum product revenue margins on the distribution channel
4. Product positioning
5. Product pricing
6. Product distribution options
7. Distributor revenue targets
8. Overall profitability of the product
The client was able to improve his trading profitability by over 800% on the first consignment.
He was subsequently able to obtain ready uptake of his products, and to establish reliable distribution channels through which he was able to deliver his products to the market and recover over 75% of his investment within sixty days of docking.