Company G Assignment, Marketing Plan Example
Words: 2097Marketing Plan
Enjoying a history of success and customer’s loyalty with our electronics, Company G introduces a new line of small appliances and strives to realize the product’s great marketing potential explained by its smart design and low cost to the enjoyment and satisfaction of our customers.
Demographically, our target market comprises people between the ages of 22 and 60 whose household income is more than $20.000 annually. They are both urban and rural dwellers, both single and family members, both professionals and unskilled workers. It is estimated that an average household in the United States owns 37 small electrical appliances.
In addition, we rely greatly on our regular customers or people who at least once tried our products and were satisfied with them. We expect their loyalty and satisfaction to extend to interest in our new line of production. We aim at making our products available in specialized electronic appliances stores as well as supermarkets.
Our market objectives are as follows:
- Make our potential customers aware of the features and benefits of our product within 1 year and establish a brand name for Company G’s small appliances within 3 years.
- Increase the market share and achieve greater market penetration within 3 years
- Make our product highly affordable and a good value for money. Adopt flexible discount and bonus schemes.
- Facilitate the introduction of our new line of product into the market through extensive advertising which will boost sales throughout the first 3 years.
Competitive Situation Analysis
According to the three-way consumer products classification, our small appliances fall in the category of shopping products. With regard to consumer factors, it should be said that the planning time for buying a household appliance may be considerable. People hardly buy it on impulse. They either buy because the appliance they had has been broken and they cannot do without it or because it is a pre-planned household upgrade. In the latter case the planning time may be longer. The purchase frequency is not high. Household appliances are not something bought on daily basis. Although customers are not very likely to travel far (to another city, for instance) to buy a household appliance, they tend to choose an outlet within their city and we can describe the importance of convenient location as quite important but not as critical as in the case of food or hygiene products. The market of household appliances is highly competitive and consumers have a chance to perform a serious comparison of price and quality.
With regard to marketing mix factors, we should view the price as relatively high. The seller’s image is of real importance. In fact, it is its brand name that Company G counts on in launching a new line of products. The distribution channel is relatively short. The number of sales outlets is quite high, which relates our product to those of convenience type. Promotion is performed by both manufacturer and retailer.
According to Porter’s five forces analysis scheme, our competitive situation is quite favorable. Although there are a number of brand name companies generally controlling the market and the buyer propensity to substitute appears quite high, Company G is also a recognized and trusted name and can expect customers to switch to its products if they are effectively priced and promoted. With its new line of small appliances, Company G is a new competitor entering the market itself and can present considerable threat to its rivals due to its brand name, the availability of distribution channel, and the quality, design and price of the product. Company G has all the necessary patents and rights and, therefore, hardly any barriers to entry. Due to being the lowest-cost manufacturer, Company G wins an absolute cost advantage. At first we plan to boost the bargaining power of customers offering samples of our product as bonuses to customers buying our old products, but this is to raise buyer’s awareness of the product. A the early stage of introducing our new product to the market, we largely count on our existing customers’ interest in our new product since the switching costs for them are expected to be lower than for other customers. Despite the fact that we need to contract with new suppliers of both raw materials and ready elements, we are generally viewed by suppliers as a respectable client with clean record and steady profit.
- Top quality and design of the product
- Efficient production
- Company G’s brand name and access to distribution channels
Top quality and smart design account for the product’s attractiveness to customers. Efficient manufacturing means an opportunity to adopt an effective pricing system and to invest more in promotion. The brand name and a history of participation on the market are expected to win us both consumers and contractors (suppliers and distributors).
Strengths 1 and 2 can be described as our core competencies because both present consumer benefits, are not easily imitated by our rivals, and can be leveraged to many markets.
- Switching costs connected with new material requirements
- Two component parts bought ready and not manufactured
- Dependence of the success of the marketing plan on winning the target market
Our need for new material suppliers means we have to bear the switching costs of changing a supplier and finding new reliable partners, which can be expensive and time-consuming. Weaknesses 2 means not only a need to contract with new suppliers but also dependence on their performance for two ready component parts whose quality it may be not as easy to control as the quality of raw material. Winning the target market is the key issue which the whole project depends on. Unless we cope with buyer’s resistance and help customers alleviate their switching costs, we will not reach our target market. We are sure of the quality and adequate pricing of our product and should not fail to show its benefits to customers.
- A firm position at the market of electronics
- A firm legal position and favorable governmental regulations for entering the market
- New distribution channels
Opportunity 1 implies that Company G does not enter the market but already successfully participates in it, which means that Company G is unlikely to be squeezed out of the market by its rivals and that it already has a market share that it now has to penetrate deeper and increase.
Opportunity 2 means that we have all the necessary patents and rights and are at advantage in comparison to companies which still have to undergo legal procedures and state product quality assessment.
Opportunity 3 means that our new line of product gives us a chance to distribute at a greater number of places due to the increased target market. Since we need to reach as many customers as possible, we plan to sell in more supermarkets.
- High competition at the market
- Buyer’s resistance to trying a new product and switching costs
- Possible problems with suppliers
The market of small household appliances is controlled by a number of big manufacturers. They already have distribution channels and customers’ trust. Although we have all the potential to compete in terms of quality and price, we should never underestimate our rivals. The more so since small household appliances tend to be bought from old and trusted producers and buyers may find themselves disinclined to try anything new.
We may also have problems as clients with the reliability and performance of our suppliers. The problems can be connected with the quality of supplied materials, delivery period, price etc. We have to be especially careful when drawing up new contracts with suppliers.
In order for the product and the target market to meet, we need to inform our customers about the features and benefits of our small household appliances such as the highest quality which ensures infallible and enduring service. The elegant and ergonomic design must attract customer’s attention when a product is displayed in the supermarket or electronics store. Once a product is bought, its performance speaks for itself and the customer is likely to try some other product of Company G. Several other ways of familiarizing customers with the benefits of our product are discussed in the Promotion section. Altogether design and quality should win a brand name for our product within the next 3 years.
In terms of distribution, our strategy is to win wider distribution support and make our new product available at 500 supermarkets and electronic appliances stores which never distributed our products before nationwide within the next 3 years by explaining the selling potential of our appliances to distributors and contracting with them. We also seek greater market penetration by presenting our new product in places where we have already been selling successfully. In six months we will create an online store to expand our target market to people who chose online shopping. We can also encourage valuable feedback via the Internet.
Thanks to the efficiency of our production, we keep the cost of manufacturing low, which allows us to adopt a highly competitive pricing strategy. We plan to sell our small appliances at the minimum of $20 and maximum of $500 depending on the size and complexity of a particular item. We should make our new line of products eligible for the discounts that apply to other products of company G and organize a system of bonuses. For example, our customers will get a free item of our new product if they buy any other of our products for more than $ 500. This is intended to encourage purchasing of old products and to put customers in the know about new ones. A potential customer who contemplates buying our product should not be discouraged by the cost. On buying, one is to see that the performance of our small appliances is infallible, which makes them a real bargain, and probably chose our next product when needing another appliance.
We need a team of professional sales consultants working at distribution places who would turn customer’s attention to new products in the highly competitive sphere of small appliances where people may tend to stick to the familiar and trusted. Our promotion campaign is to include advertisement on TV, in local press and via the Internet where the emphasis will be on the old and trusted brand offering a new line of products that will make a household more efficient.
The suggested strategies are designed to raise customer’s awareness of the new product (displaying the product in supermarkets and electronics stores, introducing teams of sales consultants, extensive advertising, presenting particular items as bonuses). The increase in the market share and greater market penetration is achieved by contracting with our existing as well as new distributors. Both product and pricing strategies are expected to ensure that our product represents modestly priced high quality and is, therefore, a good value for money.
|Task 1. Developing and manufacturing the product||Done|
|Task 2. Testing||Done|
|Task 3. Raising awareness of our product, winning customers||2010-2013|
|Task 1. Introducing our product to existing distribution places||Summer 2010 – winter 2011|
|Task 2. Contracting with 500 more supermarkets for distributing our product||2010-2013|
|Task 3. Creating an online store||Summer 2010 – winter 2011|
|Task 1. Developing a price list for particular products||Summer 2010|
|Task 2. Organizing a discount system||Summer – fall 2010|
|Task 3. Organizing a bonus system||Summer – fall 2010|
|Task 1. Enrolling teams of sales consultants||Summer 2010 – winter 2011|
|Task 2. Advertising on TV and in local press||2010-2013|
|Task 3. Advertising via the Internet||2010-2013|
Throughout 2010-2013 our monitoring procedures will include regular sales measurement (monthly) as well as the estimation of our current position at the market with our new product (every three months) and checking our objectives for future development (every three months, simultaneously with the estimation of our current position).
For measuring sales performance, we plan to apply sales metrics. We will measure the number of items sold in each distribution place. It will help us specify the most effective retailers and see which of our small appliances sell better. In case there are appliances that sell poorly, we can answer with intensified advertising or reconsidering the concept of the particular appliance after collecting the necessary feedback. We can answer the problem of unprofitable distribution places with the introduction of our sales consultants to them or changing the terms of a contract if necessary.
To estimate our position at the market we will have to consider the number of our places of distribution and to analyze the competition using Porter’s five forces model and benchmarking. Overall, the analysis of sales, distribution and competition will help us update our immediate objectives especially in terms of quantitative aspect and make them more realistic and effective.
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