Strategy of Resisting Unfair Competitor - Speech or Presentation Example

Marketing Manager’s report Executive summary: Recently our informants have informed us that XYZ Co. , which is our main competitor in the cell phone market, is planning to launch a new product “ X Phone” , which is similar to our product “ I phone” . We are further informed that as XYZ Co. has outsourced its production to China, they would be able to sell the product at a cheaper price than us and hence we can lose our market share in the cell phone industry. X Phone is a replica of our product with exactly the same functions and same design. In addition to the functions which we provide in the I Phone, XYZ has also added a few new functions such as Wi Fi technology and GPRS system which can attract the potential customers. They have also added dedicated keys to music player which would be appealing to the market of customers of the age group between 16 and 22, the segment which is the largest purchaser of our product. A similar product to I phone with additional features and a lower price can be a big threat to the sales of I Phone as we can lose a large market share once this product is launched. Therefore, we need to take considerable steps to maintain the market share of our product and to attract new customers. I brought this issue in the knowledge of our marketing director and asked him to present me a detailed report on the steps which our marketing division can take to cope up with the situation and maintain the market share of I Phone. Yesterday, he presented me with a detailed report with all the proposed marketing strategies which Apple Co. can take to handle the new competition. In the following section, I am presenting the marketing strategies which the marketing director has proposed taking into consideration the 4 P’s of marketing: Marketing director’s proposal: I phone is a cell phone designed for the market segment of age group between 16 and 22, that is, high school and college students and belonging to upper middle and high income group. This segment is found in locations such as schools, colleges, malls, concerts and clubs. The segment also uses media such as the internet on daily basis for long hours and spends time on social networking websites. People in this age group highly rely on peers and social groups before making any buying decisions. Moreover, people in this age group are considered as Generation Y and gather a lot of information before making any purchase such as a cell phone as they seek value for money. In order to market the product to this segment, both ATL and BTL marketing activities play an equally important role. This segment, which is known as Generation Y, are very different from the other market segments as they are well informed and look for value for money. They are not influenced a lot by the brand name. X phone, which is a replica of I phone with additional features and a lower price would be able to gather a large market share if we do not take immediate steps to counter their marketing activities. Following is the proposed marketing mix which Apple Co. can use to market I phone under the new conditions: Product: Although I phone contains many innovative features and functions when it was launched, but now that a similar product is coming in the market, we need to make some product improvements in our existing model in order to make it more appealing to teenagers and young adults, who are our main market. By adding new innovative functions to our product, which are better than what X phone is offering, we can still manage to keep or even increase our market share. In order to find new and attractive functions, we would need to make some extensive research and development. My team’s suggestion is to improve the product design by making it slimmer and light weight. We can also add new touch buttons to I phone dedicated to music listeners. In order to further improve this feature, we can make more improvements in this feature by making these buttons more convenient for joggers and people who like to listen to music while working out. This would help us get an additional market share of customers who are health conscious and like to listen to music while working out. Furthermore, improvements can be made in the interface of the mobile phone by making it more user friendly by adding a feature of custom shortcuts for applications. This feature is different from not only X phone but also other similar products. We can upgrade our operating system to Windows 7 which is the latest operating software launched in the market and is still not available in other cell phones as well as X phone. We can also load new applications such as Windows Live Messenger, Face book, Twitter in I phone which would make it distinct from X phone. Price: We are currently charging three different ranges of prices based on the memory of the phone and our price range is between $100 and $300. Our built-in memory starts from 8 Gb to 32Gb. However, our competitor is launching a phone with only one standard memory card of 32 Gb and the price of that phone is around $150 to $200 according to our sources. Therefore, the customers are getting a similar phone with better specifications than what we charging at the same price. According to the analysis of the marketing department, we have got two options: We can lower or prices for I phone and make them competitive with the prices of X Phone so that we remain competitive with them on the pricing issues. The impact of this change would be the reduction in our profit margins by atleast 25% even if we manage to retain the same number of customers which we already have. The other option is to offer additional features such as excess memory at the similar prices, that is, we offer more specifications and charge the same price which we are charging right now. In this way, if we are able to maintain our market share, we will be able to reduce the penetration of X phone in the market. However, on the negative side, our production costs would also increase with the increase in the features of the phone. Moreover, we would also have to make some investment in research and development if we go for this option. The marketing department has also suggested us to include lower middle income groups as well in our potential market. They also form a large portion of the market and can offer a large market segment. We can either sell our current I phone at a lower price for this market segment or we can reduce the overall price of the new I phone. Promotion: I phone is well known in the market because of the extensive promotional strategies we used at the time of the launch of the product. However, now the situation had changed, at that time we were in the market with an innovative product but not the market dynamics would change with the launch of X phone. Therefore, we will have to now make aggressive promotional activities in the market in order to compete with X phone. We should not only rely on electronic media, but rather launch BTL activities as well to attract customers. The marketing department has suggested that along with our ATL activities such as television ads, internet ads etc, we must also launch a new campaign of personal selling and promotion of I phone at malls, universities, colleges, clubs, concerts etc so that potential customers, who have not used I phone before, can have a direct feel of the I phone which would help us in generating sales. Our sales and promotion team must visit places where our target market is found in large quantity and promote I phone. We must use both push and pull strategies, we must approach retailers to display our phone in a visible location. Secondly, we must also offer discounts and offer free accessories along with the phone such as air pieces, phone pouch etc which would appeal to the customers. Place: As mentioned before as well, our target market belongs to the age groups of between 16 and 22 and mostly this market segment is found in localities such as colleges, universities, clubs etc and that is the place where we should concentrate our marketing efforts, besides the cell phone markets. The suggestion which the marketing department made to us was that rather than focusing only on a few countries to market our product, we should now look towards market niches and areas which are still left to exploit. Our sources informed us that XYZ Co. has a limited budget; hence they are mostly focusing their marketing activities in selected countries such as USA and few countries of Europe while depending on internet as the only medium to market their products in other countries and then exporting the products based on the demand from a particular country. We have a big advantage here as we can plan to launch I phone in Asian countries specially the Middle East. The marketing department has also suggested opening up more outlets for the sales of I phone in locations near schools and colleges, in malls and to put stalls on regular basis in events such as concerts, sports games etc. The wider the market area we cover, the more customers we would be able to capture. According to my analysis of the marketing team’s report in the current scenario, Apple Co. needs to make some changes in the current model of I phone and make it up to or more than the standards of X phone. We will also have to launch an aggressive marketing campaign in order to attract potential and new customers and maintain the market share we currently hold. We will also have to find new markets for our product and will have to make extensive research and development in order to come up with new better technology which we can introduce in I phone and which is difficult to copy by XYZ Co. In order to carry out our proposed marketing program, we will need the assistance of other departments as well. There are three main departments which would play an important role in helping us with the relaunch of the new I phone with new and better technology. These departments are the production department, finance department and the HR department. In the following section, I will explain the changes which concerned departments would need to make in order to fulfill our requirements: Production department: The production department would be responsible to carry out research and development into adding new features in our existing I phone model. We need a design which is slimmer than the current model and which incorporates all the additional features which we plan to add in I phone. They would also need to increase their number of units produced if we plan to launch the new I phone in new markets. According to our marketing analysts, our sales campaign would increase our sales by 10% irrespective of the launching of X phone and if we enter new markets, the sales are expected to increase by 25%. In order to cater to the demand of I phone, we would need to produce additional units and this is where we would require the assistance of the production department to provide us the required number of units at the right time. We can also move our production department to China, where the unit cost of production is lower than our current location. This would help us achieve economies of scale and would enable us to lower our prices without losing profits. We would also need to put extra production units in order to meet the demand if our sales go up. We will also have to upgrade our production department so that we can add new functions and features in the I phone. For a better quality design, the production department will have to make the efforts to procure the best quality raw materials available and at a cheaper price. With the new approach towards heading on with the competition, we will have to move towards achieving economies of scale and the production department plays a pivotal role in our aim to achieve that goal. We expect the production department to provide us with the following improvements/ amendments in order to achieve economies of scale which is a necessary requirement, not only to compete with X Phone but to sustain the position of marketing leader in this type of cell phones: Become more productive by increasing number of units produced. This would require a complete reengineering of our whole organization and improving all the resources of the business. By being more productive, we will not only be able to manufacture a greater number of and a better quality product, but at the same time, we will be able to reduce our costs of production. Negotiate with current suppliers of raw materials or look for new ones in order to procure the top quality raw materials for the production process. If we want to achieve total quality management in our organization, we will have to improve our raw materials along with other resources. Upgrade equipment in order to cater to the changes in the current model of I phone which the marketing team, along with R&D team has proposed. Finance department: Our plan would definitely require a large pool of money as there are so many improvements, additions, research and development, campaigns etc involved in the proposed plan. Therefore, the finance department must plan to provide us with the financial resources required in the plan. The budget from the marketing, production and HR departments will be provided to the finance team in a week. All the specifications and the requirements are mentioned in the report. The finance department must see our financial requirements and must formulate a budget for the resources and activities which we will need and performing. It must meet the concerned suppliers of resources and negotiate with them and finally must arrange the needed amount to carry out the proposed plan. The finance department must look in the ways to arrange the needed capital. It must make the decision of taking the money from the reserves of the company which are allocated for future expansion or if it should take the money from net income, thus reducing the dividends for shareholders for this year. Before making any decision, it must make sure not to lose the confidence of any stakeholder, especially the shareholders of the company. I expect the finance department to create a report with pro forma income statement and cashflow statement for the proposed plan within a week’s time. In short, the finance department will need to allocate financial resources for the following activities: Increase in salaries and bonuses as we would require hiring additional employees for marketing purpose. Purchase of additional plant and machinery to fulfill the increase in demand as expected by the marketing department. Increase in cost of raw materials as we would be looking for new suppliers who provide us with a better quality raw material whose costs can be higher than our current cost of raw materials. The budget for carrying out research and development in order to improve the I phone. The cost of searching, hiring, recruiting and training new employees. Human Resources department: The proposed plan would require additional number of workforce in the marketing, sales, research and production departments. We would require a combination of skilled and semi skilled workforce in the particular departments. All the concerned departments would submit a report of the number of employees they would require and the level of skills required to fulfill the job position. Furthermore, we are also interested in increasing the productivity of our current employees by increasing their motivation by offering them monetary and non monetary rewards. Therefore, the HR department would be given the responsibility to recruit, hire and train new employees and formulate benefits scheme for our current employees in order to motivate them. The HR department has been given the following tasks to accomplish: Recruitment, hiring and training of employees: the HR department must search and hire the employees who possess the skills required for the departments to carry out the proposed plan. It must look through the database of past resumes of employees to search for the suitable candidates for the jobs and must also give advertisements in newspapers, internet, magazines etc to search for the candidates. Then, they must arrange interviews for the potential employees and after co-ordination with the managers of the concerned departments; they must hire the employees who fulfill the requirements for the job. Once the employees are hired, they must be oriented with the organization and the HR department must train the employees for the jobs they would be performing. Benefits for current employees: As the mission of the organization also includes achieving economies of scale and total quality management, the HR department must formulate an appropriate benefit program for its current employees in order to increase their motivation. Remaining under the budget limits, it must form appropriate monetary benefits such as raises and bonuses for employees who are most productive. Similarly, the department also has the added task to formulate appropriate non monetary benefits for employees as it is also a necessary requirement for boosting up the morale of our current employees. Following is a list of tasks the HR department would need to undertake in order to provide the concerned departments with their required human resources: Sales agents on contractual basis who would visit universities, colleges and shopping malls to promote and sell the new I phone. These people would be semi skilled and must have some past experience in sales and promotion of products such as cell phones. Skilled technicians and engineers who would help in researching and developing new functions and features for the new Iphone. The production department requires additional workforce on contractual terms that would be required to assemble and package the final product. The workforce must be experienced in packaging and assembling cell phones. Marketing agents who would be required to search and identify new market opportunities in other parts of the world. We would need a diverse workforce in this department who belong to different countries. References Ward, Susan. "The Financial Plan Section of the Business Plan." Writing the Business Plan (2010): n. pag. Web. 19 Apr 2010. "Internal and External Analysis." My strategic plan (2008): n. pag. Web. 19 Apr 2010. . Chaudron, David. (2008). Begin at the beginning in organizational change. Organized Changed Consultancy, Retrieved from http://www.organizedchange.com/decide.htm Mc Namara, Carter. (2010). Organizational change and development (includes field of organization development). Free Management Library, Retrieved from http://managementhelp.org/org_chng/org_chng.htm Cummings, Thomas G., & Worley, Cristopher. (2005). Organization development and change. South-Western. Werther, William B., & Davis, Keith. (1996). Human resources and personnel management . 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