Following the development of a new line of small electrical appliances by our engineers, G Company Limited is obliged to present this new marketing plan that will operate for three years. The company’s previous marketing plan does not favor the new electrical appliances since it does not cover the expected target market. Our mission is to ensure that the juice blenders (our new appliances) are recognized by most people and used since they are faster, energy-saving, and of better quality. Through advertisements, offer sales, repair services, after-sale services, safe packaging, credit facilities, and advising customers on the most appropriate appliance to use depending on the number of people in their homes, our company will be able to abide in its mission statement that states, “We enable consumers to improve the quality and convenience of their lives by providing high-quality, innovative electronic solutions.”
A target market is a set of buyers sharing common needs or characteristics that the company decides to serve (Kotler and Armstrong, 2008). The current target groups for our new appliances are both males and females of twelve years and above. They should be of both male and female gender, especially of the middle class and low-class families since they form the majority of the population in the country. The targeted group should be having electricity in their homes and it does not matter whether they are living in urban areas or very remote areas. The company shall organize an efficient means of transport to access the market in remote areas. The company also targets hotels and restaurants located anywhere in the country since hotels and restaurants are the highest users of juice blenders for business purposes. The Company aims to achieve 80% customer database of our juice blenders after two years in the market.
Secondly, the product must be distributed all over the country in our distributional channels and we expect a 5% increase in the market share after 8 months. Thirdly, the company expects a return on investments of at least 25% of the total amount of money invested. Finally, we aim to ensure increased customer awareness of our brand through sales promotion, advertisements, and sale offers.
Competitive Situation analysis
Currently, the company deals with shopping goods and specialty goods but not convenience goods. The shopping goods include our juice blenders which are durable and effective and affordable. The company also deals with specialty goods such as television sets, refrigerators, and, Hi-fi systems. The market consists of many plays producing substitute goods, hence making the market satiation very competitive (Kaynak, 1993).
The business competitive advantage is a fundamental principle that prevails within the business environment. In addition, knowing the business environment can help the business strategy makers in understanding the competitive position held by the competitors. Porter’s 5 forces model is a very important tool that can be used to analyze the business environment. It consists of forces such as buyer power, supplier power, competitive rivalry, threat on new entry, and substitution threat (Hill and Jones, 2007). A sample of Porter’s 5 forces power model is shown in Appendix 1.
In assessing supplier power the company needs to identify the ease with which suppliers drive up prices. There is also the need to analyze the difference in the product and its uniqueness. It is important to know the number of suppliers per input and the advantage they will have over others because of differences in material requirements. Company G will need new suppliers for two parts that will be purchased ready for assembly into some of the small appliances. Due to the limited number of suppliers in the new products, there would be difficulty in choosing suppliers which may increase their power. Suppliers will charge higher supply prices.
The Company’s team of engineers and designers has developed a line of top-quality small appliances, and through concept and prototype testing, they have shown that the visual design features are very appealing to potential buyers and give a distinct impression associated with quality and artistic elegance. Extensive testing has demonstrated that the new appliances may be the most reliable line of appliances in the small-appliance industry. The goods being more superior to our competitor’s goods, we need a person who will always check prices in the market to determine how easily a buyer may shift to buy a substitute or similar product elsewhere. The existence of a few potential buyers to our product will enable them to dictate terms to the company.
The Company has designed a production process that is very efficient in terms of labor and a production-line time that will result in very little wastage of raw materials. The combination of these efficiencies and the relatively small front-end investment for this line will result in the company’s ability to produce each of the appliances in the line at a cost that will make us the lowest-cost producers in the small-appliance industry. Prototype testing also affirms that we provide better quality appliances outdoing any substantial threat from our competitors.
The threat in substitution
The threat in substitution may affect market prices since the customer can prefer a different substitute to our goods or services. This may weaken the company’s bargaining power considerably. This threat may affect the company’s marketing power.
The threat of new entry
According to Porter’s 5 Forces power model, as new products are introduced in the market the old products start losing their bargaining power. This will happen especially if the new products are similar to that of the Companies. The fact that the Company incurs a low cost of production will encourage other companies to try producing similar goods. If they succeed. This will weaken the company’s bargaining power (Kaynak, 1993).
The manufacturing of better quality appliances and designs will attract customers leading to more sales since the customer’s expectations on the product will be met. The company enjoys good business relationship with current suppliers therefore they will not have problems in trying to convince them to help supply the raw materials for their appliances. Low Cost of Production will lead to sale of goods in fair prices which will attract many customers enabling the company to increase its profits and afterwards enjoying economies of scale. The company has a low debt-equity ratio and a high credit rating. This means that the company has enough money to loan others and still maintain debts lower than the total assets. The company can therefore redirect the money they have been lending to others in marketing the product. The Company has also established a strong business empire. Marketing research has shown that the company’s XG brand and logo are readily recognized by most categories of electronics product consumers. This will push customers to buy the appliances as they have familiarized themselves with the company’s other appliances which may lead to customer loyalty. Customer loyalty will arise when the customers decide to buy only our electrical appliances in the market.
The Company being a new player in selling small electrical appliances may not be conversant with the current marketing strategies as old companies; therefore, there will be need for the company to spend a lot of money in conducting market research in order to familiarize itself with the business environment. The company is also known to be typical in offering credit intermediaries. This will affect the company negatively if the amount lent to others is redirected to marketing the product and looking for suppliers for the new raw materials required to make the product. The company shall lose some customers who depended on our company for this service. The suppliers of the new electrical appliances are limited in number and this will affect stocking and distribution of the appliance. The appliances in the market may have a high demand than what the company can supply. Limited supply will cause escalation of the prices of new appliances making customers to settle for subsidiary goods or other goods of low quality. This will seriously affect the Company’s financial position.
Vacuum cleaners, electric shavers and iron boxes are the small electrical appliances that are highly demanded by the customers. This is because they are used frequently in people live becoming necessities rather than secondary want or luxuries. Research and statistics have proven that the above three electrical appliances have recorded the best sales in the recent past. as such, the company has a very expansive market potential.
The problems threatening the collapse of the industry majorly lies with selling fake similar products. China is known for making counterfeit electrical appliances which have the same qualities as the original but cheaper. What happens is that the customers then rush to buy the cheaper Chinese appliances. This is a threat to the small electrical appliances industry that cannot be ignored. Lack of consumer confidence in the economy and a disposable income has also resulted to decrease in demand. Maintaining one home for a long period of time also affects sales since new appliances are normally bought when getting into new homes.
Integrated market strategies should always be used by the company to create awareness of its appliances to the customers, as this will be met by the distribution of our appliances through sales agents who shall ferry them next to the company’s target group. Four-wheel Drive vehicles shall also be used in the distribution of the product in remote areas. Creating customer confidence by projecting an image of dependability and reliability to a customer is very important in promoting the company’s brand. Customer confidence in most cases would result in customer loyalty. Issuing attractive sale offers to customers is also an efficient way of promoting the company. Sales offers are expected to attract many customers. (Kaynak, 1993)
Tactics and Action Plan
The Company should choose a competitive edge that would be impossible to be executed by superior competitors. The Company should also give encouraging remarks to its workers to strive for quality services in all departments to ensure that they are not overtaken by their competitors. A market-driven track record should be maintained and encouraged throughout the organization to enhance competence. The Company should take part in constant market research to know the location of the targeted buyers, the tastes and preferences of their buyers, the moves made by their competitors, the relevant modes of transporting the appliance, and the buyers purchasing power. The Company should also check whether there is a target mark at its disposal which remains unexploited by its competitors. Finally, the company should keep confidential information on manufacturing products, for instance, the technique used by its engineers and designers (Hill & Jones, 2007).
In achieving the above, the company should utilize both formal and informal market research to stop the possibility of segregation. The company should also give motivational talks and offer training to achieve complete dedication to their work by their employees. The company must organize different personnel with different duties to form a strategy team to look into marketing opportunities. The company should also watch and analyze the buyer’s and competitors’ behavior to determine the sales potential and know the appropriate target market. This should be achieved fully in the next two years.
The company will monitor the above Tasks through consultations, speaking, seminar training, hiring other professional services, and coaching (Shiques 2007). Consultations and speaking will take place as frequently as possible in case of any technicalities arising from the sale of the appliances. Seminar training will be held in training sales agents in marketing the new to the target group. This will continue for three days immediately after releasing the product to the market. The hiring of promoters is vital to the company and this is to take place immediately. Coaching customers and new employees on how the new appliance operates may be necessary. The employees will be given one coaching on how to use the new appliances while the customers will receive day-to-day coaching whenever they want a demonstration on the use of the new appliances. Coaching of customers will be done by our sales agent whereas coaching of employees will be demonstrated by the company’s engineers and designers. The marketing manager of the company will be in charge of these operations (Hill & Jones, 2007).
Armstrong, G and Kotler, P (2008). Principles of Marketing. University of California: Pearson/Perentice Hall
Hill L.W.C and Jones R. G (2007). Strategic Management an integrated approach. New York: Cengage learning
Kaynak, E (1993). The Global Business: four key marketing strategies. London: Routledge
Shiques (2007) Marketing Strategies & Solutions. Web.