Company G is a firm which is planning to enter into the small appliance market; the target market of Company G is the household customers mainly whereas small restaurants and other such businesses can also utilize its product in their functions. The name of the product which is being offered to the market by company G is “Super Mix mixer”. This is a multi-purpose product which is being designed to chop, blend, and mix the food ingredients; hence it makes the work of the user easier as he does not require using different machines as all the work can be done by one single offering of Company G. The price of the Super Mix mixer is such that the target household customers can buy it with ease; it is inexpensive yet has got convenience.
Company G’s mission is to provide the customers ease and comfort in the process of food making. “We exist in the market for the procurement of comfort to our customers, and we vow to improvise and innovate our products for the betterment of our customers”
The marketing strategies are to be formulated in such a way that all the duly devised plans act in a coordinated manner, in addition to this the market standing of the firm has to be kept in mind as this has to play a key role in the future prospects of the firm.
The target market of Company G is basically the middle and lower middle class of the American consumer household segment. The reason for this is that they cannot afford highly priced mixers, choppers, blenders, etc, so to attract them Company G is coming up with a Super Mix mixer which is a multi tasking machine and on the other hand it is relatively cheaper than the other available products in the market.
Making the product cheaper for the end-users, without compromising on the quality of the product itself is the basic objective in this regard. Taking the product to the next level by constant improvisation is the target as far as product is concerned
Increasing the sales volume is the objective in the beginning and once this has been done increment in then existing market share will be the objective of the firm. The reason for this being is that first the customers need to be attracted and then only the firm can capitalize on the consumer base. For the accomplishment of this pricing objective at the beginning the firm will implement a penetration strategy in which the prices will be set lower than the existing tag prices of the market.
The objective in this regard is to make the product available in the city of New York, this is from where the firm will capitalize and assess which places to market in. The areas in which the target buyers are residing will certainly be targeted more than the other areas of NY.
The first and the foremost objective of the firm in this regard will be to attract the consumers toward itself and to make them buy the product. This will be done by initiating advertising in the media and at the local shopping malls as this will surely help the firm to grow in this aspect (Schnaars, 1997).
Competitive Situation Analysis
Consumer Product Classification
Consumer product classification has to be done in a diligent three way manner as this is an essential part when it comes to analyzing the competition in the market. Super Mix mixer no doubt is a good offering but analyzing it from the consumer’s perspective is essential.
Analysis of Competition using Porter’s 5 Forces Model
Competitive Rivalry The firm is new in the market so this is one thing which is not easy to handle, as many big fishes are already catering to the market and so to earn profits in such fierce conditions is an arduous task; due to the increased intensity of the global competition performing well will become tougher.
Threat from New Entrants As Company G itself is a new firm in the market so this is one thing which will not bother it much; in the beginning the firm has to concentrate on its own performance and later if the business flourishes then the firm can apply strategies to raise the entry bar in the market.
Threat from Buyers The buyers are not a threat at least in the first year of the business as they will not ask for discounts in a collective manner. The reason behind this is that it will take some time for the customers to switch collectively to the new brand as the psychological cost of buying is pretty much high in the early stage of the brand development (Schnaars, 1997)..
Threat from Suppliers This is one thing which should be looked carefully and diligently by the managers at the firm, the reason being that the suppliers tend to pressurize the newer firms, in order to avoid such situation the firm must take supplies from multiple suppliers rather than opting for one supplier, this will restrain the supplier’s monopoly from setting in.
Threat from Substitutes This is one area which requires complete concentration of the managers the reason behind this is that still there are some products which can well be used as substitute to the Super Mix mixer so keeping an eye on them is necessary in order to make sure that they do not take away the market share of Company G’s Super Mix mixer.
SWOT analysis is done to analyze the market standing of a firm, with respect to the environment around it. The strengths, weaknesses, threats and opportunities of a firm are delved keeping in mind all those factors which exist in the market setting especially the competitors (Schnaars, 1997). This provides a broader view of the persisting situation of the market, and then further strategies can be formulated on the findings of the SWOT analysis. SWOT analysis is of basic importance in the making of a business plan, especially for the firms which are entering into the market as they can get a clear cut vision of what has to be done and what not, in order to succeed in the market. The target of every firm is to maintain and grow its core strengths, as these are the ones which act as a source of differentiation for the consumers. On the other side the firms need to work harder to overcome their weaknesses in order to build a strong position in the market. Efforts are to be done on the weak links as these are the grey areas which are being targeted by the competitors and so getting hold of these points is essential for any firm. Converting the weaknesses into strengths is an art which needs to be mastered by the managers of the firm if the firm is to succeed in a longer run. The opportunities specify the areas on which the firm should concentrate in order to grow further; competitive edge can be enjoyed by the firms which make the most of the opportunities which come to their way (Kotler & Kohn, 1980). Monitoring the changing variables and trends in the market is one fundamental thing in this regard; the more a person is adept in forecasting the future behavior of the market the more he can evaluate the opportunities for his firm in a better manner. Threats are actually the areas of the market or those existing competitive forces in the market which can take the business away from the firm and can dent the future prospects of the company. In sum, threats are the external factors which have the potential to deteriorate a business’s performance.
Company G is a firm which is serving the domestic or the household segment of the market in the USA. The price obviously has been set by keeping in mind the pocket depth of the buyer, as known that this is one segment which is considered to be a price sensitive one so to attract the buyers Company G has set a competitive price, and value-pricing strategy is implemented by the managers at the firm. A comprehensive SWOT analysis of Company G has been done in this part of the report by keeping under consideration all the major factors.
The strengths of Company G are as follow:
- The basic strength of Company G is the ability of Super Mix mixer to perform three different chores of chopping, blending and mixing. This is the fundamental strength for the firm because this restrains the consumer from buying three different products of three different brands as he can perform all the needed tasks just by opting for Super Mix mixer. This obviously attracts the consumer as he can save a handsome amount which he would have spent in buying three different machines, in addition to this the psychological cost of the buying also decreases as a result of this, as he do not have to select three different products after evaluating each one of them.
- As mentioned above, the price of the Super Mix mixer is set by keeping in mind the buying strength of the consumers. If the consumer is to buy three different machines for chopping, blending and mixing then the cumulative cost which will be incurred by him would be much higher than the tag price of the Super Mix mixer. The difference in price is one core competency for Company G and this is one thing which will pull the customers towards its offering. One more reason which is behind setting the prices lower to such an extent is that because Company G is a new firm so it want s to penetrate in the market with the new offering and one way to gain the attention of the target market is by setting the price to a lower level (Kotler & Kohn, 1980).
- Super Mix mixer is a medium sized product hence it provides convenience in usage to the household consumers, whereas the other such products which are available in the market have huge structure which makes the usage a difficult task. This also serves as a core competency for the firm.
- Company G assures that Super Mix mixer is completely shockproof and hence it is safe to be used by all the members of the family; this also serves as a strength because the health conscious customers will opt for this one over any other available machine.
- Another strength Super Mix mixer is that it saves the electricity to up to 20% hence providing another cost cut to the customers.
- Super Mix mixer comes with a 30 days money back guarantee so if the consumers are not satisfied with its performance then they can return it back and can take their money back; this is one factor which strengthens the buying behavior of the customers and hence they do not feel any hesitance in trying out this new multi-tasking machine.
The weaknesses of Company G are mentioned as follow:
- One weakness which I have observed is that Company G does not have an ample sales force, which means that the consumer to sales personnel ratio is not suitable; sales persons are the touch points of any company and it is an unavoidable aspect of any business (Kotler & Kohn, 1980). In order to grow in the market Company G has to work harder on this very aspect of their business.
- Even though the Super Mix mixer is a multi tasking machine, one feature which could have been added to it would be juicer. If this option would also be provided by the firm then even the youngsters could have been targeted, as they like to drink fresh juices more. Comprehensive research has to be conducted in order to understand such minute details regarding the buyers’ black box (Schnaars, 1997).
The opportunities on which the firm should concentrate are described below:
- Company G can come up with more combinations of new designs and low prices in order to increase its customer base; because introducing more designs to the market will surely attract more customers and hence this certainly will increase the sales amount for the firm.
- Offering more variety in terms of size will increase the sales of the firm as well because then Super Mix mixer could also be used in restaurants; the hotels require a big sized machine then what has been offered by Company G.
Some of the threats faced by the firm are as follow:
- Other local manufacturers of choppers, blenders and mixers remain a threat for the firm as they too provide machines at pretty inexpensive rates; Company G needs to monitor these forces closely in order to maintain its competitive advantage in this regard
- The huge multinationals are offering pretty much the same what Company G is offering to the target market; the only major difference between their products and Super Mix mixer is of price; therefore the firm should keep a strong check on the moves made by these giants (Schnaars, 1997).
The strategies of the four P’s decide the fate of any product and its performance in the market, there are many such strategies which can be implemented but all this has to be done very diligently by keeping in mind all the market variables. After delving into the marketing environment of Company G thoroughly in my opinion the following strategies are needed to be implemented in order to accomplish the desired targets.
Branding has to be done in an intensive manner if the firm wants to sell the product in the longer run, because this is one aspect which keeps the product alive for years and develops a unique identity of the offering. Focusing equally on both core and augmented products is necessary, as people are equally concerned about both the aspects of the offering (Kotler & Kohn, 1980).
Penetration is the strategy which must be implemented by the firm in the beginning as it has to sell more volumes in order to register some sort of market share, enforcing this plan will also attract the customers as this segment is highly price sensitive. After sometime if the performance proofs to be good then the company can implement competition pricing and bundle pricing strategies. Even implementing psychological pricing strategy in the beginning can also be beneficial for the company (Kotler & Kohn, 1980).
Selective Distribution is the strategy which should be adapted for the distribution of Super Mix mixers. The reason behind this selection is that the product belongs from such a category in which its overall availability is of no use, rather making the offering available at selected places will be beneficial for the firm in the longer run. If the managers need to go to other cities in the future then they should go for an extensive distribution strategy in which credible and diligent distributors must be selected for distributing the product.
Mass advertising has to be done in order to make the presence of the product felt to the buyers; television, newspapers and internet are the main media through which advertising must be done. The strategies like personal selling and direct marketing can also be implemented as they can turn good in the beginning; but before implementing these strategies the managers must have to make sure that the sales force is capable enough to cope up with the task. Promotion has to be done in an intensive manner at the start because this is one thing which will really influence the buying behavior of the customers.
Tactics and Action Plan
The tactics and action plan is devised in this part of the report keeping in mind the entire necessary variables which exist in the current market situations (Kotler & Kohn, 1980). If this plan is followed accordingly and in the right spirit then it is expected the firm will perform good in the coming days. The support and the supervision of the mangers is an inevitable aspect in this regard and lot will depend on how they handle this complete situation.
Product Action Plan
|Tactic||Due Date||Responsible Party|
|Research||15thNovember 2009||Research and Development Dept.|
Price Action Plan
|Tactic||Due Date||Responsible Party|
|Nominal Decrease in the Price||22ndDecember 2009||Sales Department|
Place Action Plan
|Tactic||Due Date||Responsible Party|
|Selective Distribution||14thOctober 2009||Sales and Distribution Department|
|Intensive Distribution||30thApril 2010|
Promotion Action Plan
|Tactic||Due Date||Responsible Party|
|Advertising Campaign||20thOctober 2009||Marketing Department|
|Sales Promotion||22nd-30thDecember 2009||Marketing and Sales Department|
The monitoring procedures will surely help the firm in getting better and better in the future, this is one thing which must be practiced constantly in order to improve.
|Monitoring Activity||Due Date/Frequency||Responsible Party|
|Distribution of the Product||20thOctober 2009/ Twice a Week||Sales Department|
|CRM at the retailers||20thOctober 2009/ Daily||Marketing Department|
In sum, if the above stated marketing plan is followed in its true context by the managers Company G then it is likely that the firm will perform well in the coming years. Necessary amendments can be made in this plan according to the changing situations in the market.
- Geoffrey Lancaster, P. R. (2005). Management of marketing. Butterworth-Heinemann.
- Philip Kotler, K. K. (1980). Marketing management and strategy (Revised ed.). Prentice-Hall.
- Schnaars, S. P. (1997). Marketing strategy: customers and competition (Revised ed.). Free Press.