Marketing Plan for Product - Essay Example

Marketing Plan Product New product management is one of the most complex and complicated tasks for an entrepreneur. The proposed product is a special mobile phone for aged people with poor eyesight and deafness. The idea is to create a mobile phone device with big screen and special signals which help old people with poor eyesight and deafness to communicate with relatives and use mobile phone in emergency situations (Bearden et al 56). Rational for Product Development Elderly adults represent a separate age segment. Older people comprise a substantial proportion of the population, including the most affluent people. With the attrition in their life space because of retirement, death of their spouses, and cohort members, older adults rely on mass media for information to a greater extent than do their younger counterparts. Yet, with the exception of products that are specifically of interest to the elderly, little marketing attention is devoted to attracting them. Indeed, most marketing plans only include people who are 49 years of age or younger (Bearden et al 64). Mission Statement The mission of the company is to market high-quality mobile phones for elderly and people with poor eyesight and deafness. For a long time, it has been he relatively unexploited sector that the company sees its clearest opportunity for innovation (Bearden et al 63). Goals The main goal of the new business is to get and keep a customer. Also, the product is aimed to achieve competitive advantage and sustainable competitive creating value for consumers, select markets where they can excel and present a moving target to their competitors by continually improving their position. Three of the most important factors are innovation, quality and inventory reduction (Kotler and Armstrong 88). Policies The strategic policies are to meet customers' needs and demands and create and sell a cheap and easy in use product. Companies that differentiate products are faced with the need to instill an image in the minds of customers that distinguishes their products from others and causes the customer to react more favorably toward them. This might be the result of the image of the company itself, its distributors, or the product per se. Be in one of the most highly rated industries for stability and success, the company offers mobile phones with special features to everyone who wants an excellent product. (Kotler and Armstrong 87). Marketing Strategies In general, marketing strategy deals with pricing, selling, and distributing a product. Using a market development strategy for a special mobile phone for aged people, the company will capture a larger share of an existing market for current products through market saturation and market penetration or develop new markets for current products. It is "the combination of choices you make about which tactics you use" ((Kotler and Armstrong 76). Product differentiation will be the main strategy followed by the company. Differentiation will be achieved by unique product image and features, low price and support services proposed fro all customers. The company will follow penetration pricing strategy. Penetration pricing refers to the establishment of price levels low enough to penetrate markets deeply, and to discourage potential competitors from entry. Although prices are set relatively low, expanding markets arc recognized. Pursuit of this policy slows down the recouping of investments and expenses. Which policy to use depends on the total marketing plan and an assessment of cost-revenue market factors (Boone and Kurtz 132). Segmentation Segmentation for a special mobile phone for aged people will be used to understand individual customers in the sports market place and to group them together to form distinct segments which are identifiable, accessible and substantial. In markets, segmentation is often used to make selling more cost effective by prioritizing the companies that require regular face-to-face salespeople and that can be served better by telesales and direct distribution. Market segmentation involves finding out the key drivers that distinguish one group of customers from another (Boone and Kurtz 167). The key drivers of consumer market segmentation in sports market will be: 1. Geo-demographic - who they are: age, gender, class, location 2. Lifestyle - how they live: income, occupation, 3. Attitudinal - why they buy: motivation to buy liner for snow boots, e.g. price, image, application, benefit. 4. Transactional - what, how and how customers buy (Boone and Kurtz 156). Geographically, segmentation will over the USA states only. Gender and class differences will not have a great impact on purchases and marketing strategies. The majority of potential buyers are 60+ consumers with eyesight and deafness problems. Marketing Mix and Budget The budget for marketing campaign is $ 24000. As a low budget advertiser, the company might narrow the target, reduce the variety of vehicles needed to reach a target, and thus allow dominance of the consumers who are targeted. Reducing the geographical scope of advertising and the times during the year when there is an advertising presence are also useful means of achieving dominance. In selecting among these strategies, the goal is to have a strong presence among as large a portion of the target as possible by restricting the playing field to a size that allows for media dominance (Appendixes 1,2,3). Sensitivity analysis. The appraisal of almost any investment project in the real world will involve the making of a great number of estimates. For example, the outlay required to undertake the project, its life, the annual cash inflows and outflows it will generate, the scrap value it will have, and even the correct rate of discount to reduce the cash flows to present values. Estimates will be made for all these factors and the project will then be appraised by calculating an expected net present value (Crawford 66). 'Marketing mix' means the strategies adopted and implemented by the firm including product, price, promotion and distribution issues. The company should take into account the fact that even when advertising features older people, the appeal often does not reflect an understanding of the elderly consumer (Hollensen, 43). They are treated as if there is one elderly segment. This practice is not consistent with the data suggesting that the knowledge and lifestyles of those under 75 years of age are quite different from their older counterparts. The elderly people under 75 typically view themselves as being healthier and younger than younger people view them. The typical elderly's self-perception is that they are 10 to 15 years younger than their chronological age. One implication of this observation is that in developing advertising targeted to say a 70-year-old, it is more effective to show a 55-year-old rather than a 70-year-old person. The conventional wisdom that elderly people's ability to recall information is diminished with age is not supported by evidence. The findings are that older people retain proficiency in previously learned tasks and suffer deficits primarily when the tasks are ones that require skills that have not been learned earlier in life. For example, today's elderly have a difficult time when television advertising employs quick cuts-rapid movement from one scene to another. In addition, limitations in learning that do occur (Hollensen, 43). Marketing mix will involve telemarketing and direct sales, promotion through medical institutions and mobile stores outside the country. And telephone selling and ordering is reserved for the sale of replacement items to already-established customers. In each channel, the cost of serving the customer is matched to the value of the transaction, so that each type of sale is possible to transact profitably (Hollensen, 31). Direct mail will involve the posting (mailing via the normal postal service) of promotional literature, designed to sell a product or service direct to a potential customer's home. Direct mail may involve posting through letter boxes, handing promotion literature out in the streets, or placing advertisements at hospitals. Direct mail will help the company to reach a widely dispersed target market. Consumers may treat it as something specially selected for them or for their needs (Crawford, 65). Advertisements will be placed in the local and national Press, on TV and radio, and consumers will be encouraged to order directly by telephoning or writing to the supplier of the goods or by filling in a coupon which may be incorporated in a Press advertisement. 'Off-the-page' purchasing of this nature relies on impulse, and there is a need to present an attractive proposition. The advertisement must be informative enough to enable potential customers to make a decision to purchase. The use of demographic descriptors can be helpful in identifying commonalities. For consumer markets, these will include age, sex, education, stage in the family, life-cycle, and socio-economic group. The Choice of Press issues should be based on readership. It refers to the total number of people who probably will read the publication. For example, Sunday newspapers and color supplements are invariably passed around the family for reading. The outlet for communicating and selling in this case is a producer's own catalogue of the products and after- sale services. Catalogues have to be kept exciting and they should be able to appeal to highly diversified audiences with ever changing needs. They may sometimes be added to by simply sending pages with additional products for sale to the customers who have already received the initial catalogue (Hollensen, 77). Implementation of the first campaign Send Direct mail - twice on September and October and one on November; Cinema ad - 7 times a day starting from the 20th of September to end of November; Radio ad - 10 times a day from the 5th of September to end of November; Advertising in local Press - once a week from the 5th of September to end of November; TV ad - 3 times in the evening starting from the 5th of September to end of November; Posters in transport; Display stands; Calendars and wallcharts. Controls will be the final stage of the marketing campaign. Planning and control are intertwined and interdependent. The planning process will be divided into two related phases, strategic planning and controls. The market place of the twenty-first century is much more volatile than hitherto and is characterized by a greater willingness on the part of customers to switch brands or suppliers. Hence, the need to develop explicit planning to improve customer retention has become a business imperative. The average rate of customer retention that results from implementing the process represents the organization's customer retention level. The customer retention improvement process can be viewed as working from the top of the figure downwards, with the output of early warning and remedial action feeding back into customer retention level measurement (Crawford, 83). Works Cited 1. Bearden, W. O., Ingram, Th. N., LaForge, L.W. Marketing, Prentice Hall, 2004. 2. Hollensen, S. Global Marketing: A Decision-Oriented Approach. Financial Times/ Prentice Hall; 4 edition, 2007. 3. Kotler, Ph., Armstrong, G. Principles of Marketing. Prentice Hall; 11th edition, 2005. 4. Boone, L.E., Kurtz, D.L., Management, McGraw-Hill, New York, 2002. 5. Crawford C. Merle. New Products Management. Irwin-McGraw Hill. 7th edition, 2003. Appendix 1.Monthly forecast for 1st year: Month, 1 2 3 4 5 6 7 8 9 10 11 12 Total Receipts from sales 5.000 5,000 6,000 6,000 6,000 6,000 7,666 7,666 7,666 7,666 7,666 7,666 80,000 Payments to suppliers etc. 4.000 4.000 4.200 4.200 4.200 4.200 6,323.5 6,323.5 6,323.5 6,323.5 6,323.5 6,323.5 61,941 Net cash flow ($000) 1,000 1,000 1,800 1,800 1,800 1,800 1,121.5 1,121.5 1,121.5 1,121.5 1,121.5 1,121.5 18,059 Cumulative net cash flow ($000) 700 700 800 800 800 800 800 800 1,000 1,000 1,000 1,000 10,200 __________________________________________________________________________________ 2. P&L account for the 1st year. $, a year Sales 80,000 Cost of sales 48,000 Gross profit 32,000 Net Operating Expenses 14,290 Profit on ordinary activities before taxation 5,710 Taxation 1,941 Profit for the financial year 3,769 3. Financial Statements Read More