There are three well-known distributors of the strip cup in Canada including Conestogo Agri Systems, Delaval Canada and SPECTRUM Nasco. Delaval Canada would be the most convenient and reasonable company to ship the product to Nepal. Delaval has the most reasonable cost for the product with $13.95 per cup. The blue strip cups are manufactured in the United States and contribute to Canada, as Delaval is also a Canadian company (Healey, 2016). The product is also more reasonable than the cup from SPECTRUM Nasco since it is plastic instead of aluminum.
Manufacturers/Suppliers in Canada
Marketing Opportunity of Product
Delaval Canada
150B Jameson Drive
Peterborough, Ontario
Canada, K9J 0B9
Phone: 705-741-3100
Website: http://www.delaval.ca
Delaval Canada is a North American dairy company that helps with milking and feeding of cattle in over 100 countries (Delaval, 2013). The company distributes strip cups to farmers in Canada (About Delaval, 2013). These cups are manufactured with plastic in the United States and are distributed throughout Canada (About Delaval, 2013). Delaval has over 125 years of experience in innovation and the dairy industry and meets with over 10,000 milk producers on their farm (About Delaval, 2013).
Benefits of Shipping Canadian Strip Cups
Improved Economy
Although the Nepal dairy industry is not as developed as Canada’s industry, exporting blue strip cups would increase revenue for Delaval Canada. Selling the product to a small market would not lead to building a new company location for Delaval (Healey, 2016). The new business opportunity would lower the fixed costs per product as it would involve selling to a larger market (Healey, 2016). This would decrease costs per product and increase the total net profit (Healey, 2016).
More Canadian Jobs
Delaval Strip cups are manufactured in a factory that is located in the United States (About Delaval, 2013). The product is then shipped from the factory to the distributing company in Peterborough, Ontario (About Delaval, 2013). These cups are already distributed to other smaller companies, and farmers all over Canada (About Delaval, 2013). Delaval also distributes products to over 100 countries (About Delaval, 2013). Shipping this product to Nepal would involve a higher shipment from the manufacturing company (Healey, 2016). The product would then be loaded onto a truck and loaded onto a freight ship overseas to Nepal (Healey, 2016). The process of shipping this product would require manual labour and the increased demand for the product means that more Canadians would be employed.
“First to Market” Benefits
There are currently no strip cups being used in Nepal on dairy farms and Canada would be the first country to ship blue strip cups to Nepal (Healey, 2016). Canada would have an opportunity to be the main importer and distributer of this product in Nepal (Healey, 2016). There is no permanent infrastructure to help with mastitis detection and treatment in Nepal (FAO, 2003). The use of the product would require some training in order for Nepalese farmers. They would learn how to use the strip cup in order to detect mastitis. Delaval or a vet clinic distributor in Nepal would be able to help install this infrastructure in the dairy industry. This would prove Delaval to be a leader company that wants to help the Nepalese people improve their dairy industry.
Longer Product Lifecycle
All products have a life-cycle (Aitken et al, 2003). When the product is first released, it is a novelty and is in high demand (Aitken et al, 2003). The sales will increase dramatically, then start to level off and finally start to decrease (Aitken et al, 2003). This happens as the people who need the product have already bought it (Aitken et al, 2003). There are still sales of the product as people who decide they need it buy it, and as people who already have the product have to replace it (Aitken et al, 2003). The product that has entered its decline stage may find a market in a different country (Aitken et al, 2003). This will help to extend the sale market and lower the price of units (Aitken et al, 2003). The blue strip cup was in high demand in North America when it first came out (Aitken et al, 2003). This was when many farmers were first adopting the use of strip cups in their pre-milking routine (Aitken et al, 2003).
Transportation of Product from Canada to Nepal
The most reasonable and convenient way to ship this product to Nepal would be using Fedex Secure Ship. The plastic strip cup weighs approximately 226 grams, which is equivalent to ½ a pound. The product would be shipped using Fedex International Freight which is a time-definite, high priority freight service that will ship packages of all weights and sizes (Fedex, n.d.). This product would be shipped in packaging that is already provided by the Delaval distributor company. Each strip cup would take up approximately 1,000 cm3. The most cost effective way to ship the product would be with 512 units, a box size of 512,000 cm3, units stacked 8x8x8, $9.81 cost per unit and $5,023.17 in total.
The skid of 512 strip cups would start its journey from the Delaval location in Peterborough, Ontario. The skid would travel by train on the Trans-Canada Highway from Peterborough to the eastern side of Nova Scotia. The skid would be loaded onto a freight ship and be shipped to Southern India. The skid would travel the rest of the way on a truck to Kathmandu, Nepal. The products would be distributed from this location to other places in Nepal, including dairy companies and veterinarian clinics.
Potential Distributor Companies in Nepal
Trade Barriers
Canada established professional trade relations with Nepal in 1965 and has since kept strong bilateral relations (GC, 2013). In Nepal, there is a High Commission of Canada located in New Delhi that represents Canada (GC, 2013). Nepal also has an embassy that was established in 2009 in Canada, with locations in Toronto and Victoria (GC, 2013). Nepal is very open and dependent on trades in relation to other Asian countries (World Bank, 2013). Nepal has opened up more trade opportunities since the country joined the World Trade Organization in 2004 (World Bank, 2013).