Quality Mini Computer (Product X), Essay Example

This memorandum sets out the marketing implications for our new innovative Quality Mini Computer (Product X).  (Quick MBA, 2010)

Product

Our new product is the size of a steno pad (5×7) and represents a market innovation in new technology for mini computers. Preliminary research indicates that the product will appeal to young and middle age adults. We can target selling to lower-middle class income groups. At the moment sales are targeted at the San Francisco area but we are in a position to expand sales beyond this border and could increase sales by 50% in the first year alone.  We already have a successful brand image for reliability, quality and innovation in our products.  We are now ready to expand our sales horizons.

Pricing

We are proposing a two tier pricing strategy.  The first relates to our online customers that purchase via our website.  In the first 2 months of launch we will offer a 20% purchase discount to our existing customers and a 10% discount to new customers purchasing via the web. This is based upon overhead reduction by direct selling on the web.  The second tier will be our store sales.  We will offer a 10% discount on all products sold within the first week of our launch and then the stores will revert to our normal RSP.  Margins are lower on store sales than online because of the overheads we carry.  “Pricing will need to take into account the competitive and legal environment in which the company operates” (NetMBA, 2010)

Place

It is our longer term intention to change our marketing distribution to 70% online and 30% retail stores. Stores being in San Francisco and Philadelphia. Support and Maintenance will be continued from our main distribution centre in San Francisco.  We will also establish a smaller support function on the East Coast to service our clients in that region. We will look to find suppliers that can service both locations, thereby seeking economies of scale.  We feel it is important to maintain a small retail store presence for demonstration, promotion and marketing purposes. “Make sure that the location feels right to you.” (Smith, 2010)

Promotion

We have combined a discount structure that favours our existing client base, thereby enabling them to take advantage of our new technology offering. It equally remains attractive to new customers and is aimed at driving the bulk of our clients to online purchasing, thereby reducing our overheads and increasing profit margin.  The retail stores also have promotional prices but ultimately will revert to normal Retail Selling Prices because of the overheads they carry.  The retail stores will also be equipped with computer terminals for placing online orders providing optimum choice for the customers.  The stores will only maintain a limited stock of the product for those customers that have a more urgent need. The web site has been search engine optimized to promote the selling and distribution of the product online. We will be adopting a ‘push strategy’ – “A “push” promotional strategy makes use of a company’s sales force and trade promotion activities to create consumer demand for a product. (Tutor2u, 2010)

Works Cited

NetMBA. (2010). Pricing Strategy. Retrieved 8 20, 2010, from NetMBA: http://www.netmba.com/marketing/pricing/

Quick MBA. (2010). The Marketing Mix. Retrieved 8 20, 2010, from Quick MBA: http://www.quickmba.com/marketing/mix/

Smith, C. (2010). Importance of Location. Retrieved 8 20, 2010, from Ezine: http://ezinearticles.com/?Importance-of-Location&id=1344799

Tutor2u. (2010). Promotion – push and pull satrategies. Retrieved 9 20, 2010, from Tutor2u: http://tutor2u.net/business/marketing/promotion_pushpull.asp