Cost Analysis
This product would initially be expensive to a Nepalese farmer, but it is an investment that will last for up to five years. Each 2000-pound unit of rubber mulch is priced at $899 CDN, and will cover approximately 450 square feet of area. The shipping cost will also be a large factor in the cost for consumers. The final product is heavy, bulky and must be transported a far distance to reach Nepal from Canada which causes a high cost for shipping. The mulch is packaged in 2000 pound units, that will take up a large amount of space and require a large amount of energy to move. Shipping by cargo ship adds an additional $1,100 CDN alone. Excluding the cost of transporting the product by truck, the total cost of the product once it reaches the distributors in Nepal is $1900 CDN, or $155,800 Nepali rupees per 2000-pound unit of rubber mulch. The cost to the farmers would be even greater than this because of the additional retail cost. The total cost to the farmer would also depend on the size of the farm they own, as they may not require such a large quantity.
The rubber mulch produced by Rymar is supposed to be maintenance free for approximately five years, as it does not decompose like wood, or other organic mulches. Rymar also states their product can save consumers up to 65% compared to wood mulch because of the long-lasting quality of their product.
The rubber mulch produced by Rymar is supposed to be maintenance free for approximately five years, as it does not decompose like wood, or other organic mulches. Rymar also states their product can save consumers up to 65% compared to wood mulch because of the long-lasting quality of their product.
Marketing Strategy
The main marketing strategy is to convince farms that they would greatly benefit from the use of rubber mulch. Positives, such as increased yield potential in root crops, reduced weed growth and reduced use of irrigation would be the main selling points for targeting Nepalese farmers. Also, promoting the fact that the product is made from recycled material and is helping the environment would be important. The fact that rubber mulch would save the farmer more money compared to using organic mulch would be greatly emphasised. Rubber mulch is not widely used in agriculture in any country, so initial sales could be difficult, as results are not guaranteed. Once a few farmers had success with the product, sales would increase due to word-of-mouth promotions.
Grant Programs
The International Fund for Agricultural Development (IFAD) has given the Nepalese government $39 million USD to enhance sustainable agricultural growth (IFAD, 2012). The previous funding focused on getting quality seeds and breeding programs to farmers(IFAD, 2012). Nepal could apply for additional funding to be allocated for importing rubber mulch and other products to help improve soil health.
The Bill and Melinda Gates Foundation has also donated to Nepal in the past to help alleviate the poverty farmers are in, and to help farmers produce more food to feed the country (BMGF, 2012). Nepal could appeal to the foundation for another donation to help cover the costs of importing the rubber mulch.
The Bill and Melinda Gates Foundation has also donated to Nepal in the past to help alleviate the poverty farmers are in, and to help farmers produce more food to feed the country (BMGF, 2012). Nepal could appeal to the foundation for another donation to help cover the costs of importing the rubber mulch.
Global Competition
Currently, rubber mulch is not being used in the agricultural industry, so the first company to expand into this market will have a first-to-the-gate advantage, but will also have the difficult task of promoting the product effectively. There is a lot of global competition, as there are a lot of tires being used around the world. The United States produces a large number of used tires, has the means to produce rubber mulch, but is in a similar situation as Canada, as they also would have to ship across the ocean. China, India, and other large Asian countries are at an advantage compared to Canada and the United States of America. China had 279 million registered cars in 2015 (Xinhau, 2016), so they will have more then enough used tires being produced to meet the demands of rubber mulch.