Primex Marketing, Inc., formed in 1982, is an international niche marketer of Roleez® wheels and a limited line of products using the wheels. The patented wheels use very low pressure, soft, wide, and pliable tires mounted on flanged hubs to disperse the weight of a load over a wide surface area. This permits carts, dollies and wheelchairs equipped with the wheels to be moved easily over sandy beaches and soft soil where regular wheels sink into the ground. The wheels also offer a level of protection to muddy turf and environmentally sensitive terrain.

Most of Primex’s wheels are sold to other manufacturers for use in making sports, recreation, industrial, construction, and health assistance equipment. In addition to the Roleez® wheels Primex manufactures and markets a limited line of products using its wheels. These include push carts, sports caddies, four- and six-wheel dollies for moving jet skis, and two-wheel carts and totes for canoes and kayaks using its wheels. The company also sells winch kits, hitch kits, and low-pressure tire gauges.

Resorts, and companies that supply products to them, are an important market for Primex. The resorts use large numbers of carts and dollies that must be operated over beaches and rough terrain in providing services to guests.

Wheelchair manufacturers are another growing market, and additional uses in the industrial and construction sectors offer great potential.

In addition to continuing to provide quality products and service, on time and economically, the company has four additional marketing objectives. In order to continue to grow and to increase profitability, it is working to:

(1) locate additional customers for its present products in current types of use;

(2) find additional applications for its products; 

(3) develop modifications and innovations of present products for existing and new customers; and

(4) extend its line of end products.

Mr Peter J. U. Reich, the president of Primex and the related company, Roleez® Wheels, Inc., is an entrepreneur with a global view of all functions including marketing, manufacturing and distribution. Brought up and educated in what was then East Germany, he moved to West Germany. Working for companies there, then in Canada, and finally in the United States, he developed personal contacts in a number of countries. He also began to explore new business opportunities.

In the mid-1980s Mr Reich became interested in windsurfing and recognized a business opportunity. Becoming increasingly involved in the sport, he eventually served on the board of the US Windsurfing Association. In addition to the demand for masts, booms and sails, the Association recognized the need for two additional products for surfers: helmets, and carts to make the transport of surf boards and other gear easier. These products did not bring the anticipated sales among surfers................

Questions

1. Do the methods used to locate, contact, and work with prospective customers appear to be appropriate? What other actions might be undertaken?

2. What are the advantages and disadvantages in Primex’s requirement for having payment in advance, and for having a bank handle incoming payments?

3. What are the advantages and disadvantages of contracting out services such as payroll (including handing of required taxes) and web page updating?

4. What are the advantages and disadvantages of having others make international shipping arrangements?

5. What problems can the companies expect to face as they grow in size and expand product lines?