Company G is recognized the world over for the service it provides in the electronic market by producing high-quality electronics to its customers. With the help of the company’s workforce, the engineers at the firm can develop high-end products with the help of its designers. The team came up with a new model named ‘Fire 5’ which bore the need for a new marketing plan to integrate model Fire 5 into the market.
Product description and support of the mission
Model Fire 5 is based on the highest efficiency the appliance could replicate. This is in line with the company’s mission statement to enable consumers to improve the convenience and quality of life by providing high-quality, innovative electronics solutions. It can cook foods at relatively faster speeds than previous models (Elenkov, 2014). It saves both time and money and is easy to operate. In addition to this, the product has a new slick design that appeals to the eye.
Consumer product classification
The model Fire 5 is a shopping product as there are other microwave models from competitor firms in the market as well as replacement products such as ovens which a consumer has to compare with when making a purchase. It is also a product that a customer will not buy frequently, and they need to review product information before deciding to purchase. A consumer’s choice can be easily influenced by marketing so that they choose to buy Model Fire 5 over others.
Given the current times, the market for model Fire 5 depends on the varied needs of different consumers. Demographically the product targets those with a steady livelihood and stable income. On the geographical sense, the urban and suburban regions portray an increased likelihood to accept the product. The model can serve both light and heavy users as it has a convenient small and large size respectively for either. Apart from usage, the model will also be available to people of all ages (Yousefi, 2016).The models will cover the family range, from the young single person, the newlyweds, families and senior citizens.
Competition situation analysis
For the successful launch of model Fire 5, the critical analysis of the competitive environment is paramount in determining the attractiveness of the model and its competition intensity. The analysis was done about the following forces;
Bargaining power of suppliers
The Company G has an excellent relationship with its current suppliers. This can be attributed to the fact that it bears a small debt to equity ratio and thus has a high rating of credit. However, due to the difference in material requirement, the company will need the services of new suppliers for raw materials to support the appliance line. The two components parts ready for assembly will be purchased from new suppliers.
Potential new entrants
High returns from the model Fire 5 microwave will attract new many entrants hence its profitability will fall. Company G will counter this with brand equity. With a secured base of loyal customers, the company brand will enthrall the new competitors with the help of product differentiation through sleek design.
As earlier noted the Company G had gained the right to become a regarded firm in the electronics market. However other brands such as Ramtons are popular in the same area of operation so competition from them is a major determinant. Company G will counter the competition by more advertising and powerful strategies to deliver product at reasonable price.
With the presence of other firms comes existence of outside products. Company G has to consider the buyer’s propensity to substitute the microwave with ovens. The number of products in the market will be a watch out sign as it enables easy substitution and makes other products more available to potential buyers at proximity. Given the brand of Company G, the consumers will switch to the new model with relative ease.
Bargaining power of buyers
The fact that a large number of customers can reduce the buying power and ask for lower prices is considered a potential factor. The uniqueness of the product will ensure the differential advantage is captured. With other options in the market, the buyer affects customers’ sensitivity, and buyer power is high.
The company logo and brand together with innovation team of designers and engineers are the core competencies of the enterprise. Company’s logo and brand are essential in the marketing of the product because of the high exposure rate and preference by customers. Low-cost production is enabled by the design of an efficient manufacturing process aiming at cutting production time and cost by merging efficiencies from the team (Armstrong et al. 2015). The excellent relationship that Company G enjoys with the suppliers ensures that production materials are guaranteed with the best prices to offer.
The company’s relationships with its intermediaries in the distribution chain are typical and thus do not offer any incentive to distribute Company G’s products over those of competitors. The new product may not get the extra attention needed to stand out, and this will affect sales. High dependence on new supply relationships to acquire key parts of the new product’s design which vendors may exploit and raise prices which would increase the production cost. The company has a specialized target market which means that sales for a product can only rise as high as the capacity of the market, after which they stop rising.
With the relatively reduced cost of production of model Fire 5, the company can reap benefits from the sales. With the switching to new suppliers, it may result in the switching of costs to the interest of the company (Armstrong et al. 2015). Better prices reduce costs on the production costs as well. With the leading team of engineers and designers Company G can acquire the competitive advantage by constant innovation and enhanced visual design features.
Other established firms pose a threat to Company G by disrupting the market share resulting in weak sales. Pricing is a challenge because other firms could offer better prices for replacement products thus limiting the sale of model Fire 5 into the market. Consumer needs keep changing hence the company may be unable to keep track of all of them and make improvements on the product before competitors to avoid losing customers.
For Company G to achieve the marketing activities, the goals set in promoting the product to increase sales and grow market share to 30% in 15 months from commencing of sales (Elenkov, 2014).
Product objective; to have the model Fire 5 developed and constant improvement on it within the first 15 months of production and to also include new applications on customers’ desires.
Price objective; for maximum profit, the price for model Fire 5will be set at USD 150 for the large size and USD100 for the small one. A 5% trade discount for the first year and 4year warranty will attract and increase sales in subsequent years. This is expected to make 25% profit per unit sale.
Place objective; In the first year of production and launch of model Fire 5 into the market, Company G will use its 1500 outlets to test the consumers. This will be in addition to the 1700 distributors who will be engaged in putting the product, into the market.
Promotion objective; to increase exposure of the product, media advertisement will increase by 20%, and coupons will be distributed where a 5% discount will be given to customers who produce them to our stores and distributors. This is expected to boost product awareness by 30% within the first 6 months of distribution.
To enter the emerging markets, Company G should position itself tactically to attract customers. ( Elenkov, 2014) To maximize on huge consumer bases, the company should adopt the following strategies;
• Availability of service centers for users to visit the physical centers for service.
• Distribution and retailing channels to ensure products penetrate into the market.
• Chain stores in the suburban areas.
• Ensure product is robust and resilient to cater for power ranges and outages.
• The product should be easy to operate, and consumers provided with a guidance manual.
• Tailor make the microwave for both light and heavy users.
• Use television and cable penetration to promote the product.
• Pitch outdoor camps for advertising and avail coupons of the products
• Promote the product by using sports personalities and movie stars.
• Seasonal pricing and discounts to cater for customers during festive seasons
• Introduce price ranges for the different models in the market to target each segment.
• Use differential pricing for the product to capture large consumer base.
Explanation of strategies
In attempting to enter the market in microwaves, it is important to integrate the strategies at all levels to capture as much consumer base as possible. The product should be tailored to the specifics of the customer while watching out for the prices as different customers have different income and preferences (Yousefi, 2016). Product awareness is essential in increasing sales after which the product should be readily available to consumers. These strategies will help Company G to differentiate its product, be flexible to arising consumer needs to improve the product and stay ahead of competition.
In the constantly changing business environment it is important to consider all parts in ensuring sales of new products to the market (Armstrong et al. 2015). Focus can be aimed at promotion and advertising to capture new market for the new model. It is important to keep with current times to maximize on sales of new products.
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction. Pearson Education.
Yousefi, R. (2016). An Integration of MCDM Methods for Marketing Strategy Selection. Global Journal of Management Studies and Researches, 3(3), 96-101.
Elenkov, D. (2014). Experiential Exercise with Multinational Student Teams: Researching Together a Multinational Corporation and Developing Jointly a Strategic Marketing Plan for IT Using Blackboard. Developments in Business Simulation and Experiential Learning, 41.