Marketing to Hispanics, Essay Example

Q1. Based on the segmentation variable, construct a profile for the Vanilla Bicycle’s probable target market.

A1.  Vanilla Bicycle’s probably target market is customers that seek bicycles not only for their transportation utility but also for their artistic elements. These middle class customers want to send message that they have exclusive, custom made product which is a reflection of their economic success. Vanilla Bicycle’s target market could be called niche luxury market because Vanilla Bicycle’s owner Sasha White intentionally restricts production in order to maintain brand’s exclusivity and protect brand’s desirability by the market. This also helps protect the resale value of Vanilla Bicycle’s products as well as tilt pricing power in favor of the company.

Q2. Given that most luxury products suffer in an economic downturn, why has Vanilla still succeeded?

A2. Vanilla has still succeeded because the company restricted its supply by a huge margin as compared to the demand of its products which helps explain five-years waiting list. Customers are aware of the long waiting lists thus, they would prefer staying in the line rather than starting all over. Unlike some luxury brands, Vanilla never sought to fully exploit the market thus, it had a greater safety net than mass-luxury producers. It can afford market deterioration by a higher degree than mass-luxury producers who may run into over-supply problems, a concept quite alien to Vanilla Bicycles.

Q3. Based on derived demand principles – as in the nature of demand for Batteries Plus’s market offering – what other businesses should do well in a weak economy?

A3. Other businesses that should do well in a weak economy may be beer because people will always demand alcohol. Sometimes alcohol, cigarettes, and similar addictive products see a surge in demand in weak economies due to higher stress levels on the average. In a weak economy, people who might have avoided beer in favor of wine and other more expensive alcoholic drinks at other times, may turn to beer due to more affordable price points.

Q4. If Batteries Plus does nothing, it still does well in an economic downturn. What recommendations would you make to Batteries Plus to take even better advantage of such conditions and position itself for an economic upturn?

A4. Battery plus may introduce new marketing initiatives at enhancing customer loyalty such as cash back for older batteries as well as an option to order batteries online. The company could make a friendly website where the customer could easily search information based on the model of their specific electronic gadget. Zappos.com is a good example of company that has built loyal following despite charging premium prices because of the quality of its customer service. Even though the customers can go to retail stores to purchase shoes, Zappos wins customers’ business by ensuring them hassle free returns so the customer doesn’t have to worry about wrong sizes. The customers value the convenience enough to be willing to pay premium prices.Battery plus would also find it easy to strike deals with major electronic companies because it already has an established presence thus, the deal would be a win-win position for both Battery Plus and its partner companies.

Q5. Explain how a $260 purse can be viewed as a good value in the context of the Coach brand.

A5. A $260 purse can be viewed as a good value in the context of the Coach brand because the company was able to build a reputation similar to competitors whose products are quite expensive. Even though $260 is still expensive but the customer compares the new price with Coach’s older prices as well as with Coach’s competitors and perceive a $260 product to be cheaper while still being a luxury product. $260 is not too low where it may be perceived of low quality yet not too high where it will fall out of the comfort zone of most customers in slowing economy. Coach seems to have found a delicate balance between value and price.

Q6. Is Coach safe or will the new “normal” still catch up with the company’s financial performance?

A6. Coach may be safe if the economy has already bottomed out but if the downward spiral continues, Coach may still face financial disappointments. In addition, if the competitors also bring down their prices, Coach will have to reformulate its competitive strategy. It is also possible that the new price points hurt the brand’s image as well as the pricing power enjoyed by the company. If the brand’s image suffers, Coach may have to further bring down prices which will hurt its profit margins.

Q7. What suggestions would you make to Coach management for future product development?

A7. Coach may work on doing a better job of economic forecasting so that it maintains a good balance between the production levels and expected demand. The company may also expand trend research so that its products and designs are always ‘in’ and enjoy pricing power. The company can also create multiple product lines, each targeted at different price points so that the value of mainstream products doesn’t suffer.

Q8. Does the success of Colgate-Palmolive’s price increase have anything to do with the economy?

A8. The success of Colgate-Palmolive’s prices has nothing to do with the economy and everything with the nature of its products many of which are basic necessities as well as strong customer loyalty the company enjoys. Customers have come to trust the consistent quality maintained by Colgate-Palmolive thus, they are hesitant to switch to competitors even for lower prices. Colgate-Palmolive products have become part of customers’ everyday lives and thus, enjoy strong pricing power due to established consumers’ habits.

Q9. In the longer term, as the economy recovers, what should Colgate-Palmolive anticipate in the wake of its price increases?

A9. In the longer term, as the economy recovers, Colgate-Palmolive can expect competitors to try to build strong brand loyalty to counter Colgate-Palmolive’s advantage. Thus, Colgate-Palmolive will have to continue convincing the customers of the value of its products as compared to competitors. Colgate-Palmolive can also increase its research activities to further improve its understanding of the consumers’ lifestyles and introduce new products on regular basis to remain ahead of the competition.