The Present Age of Business Markets - Essay Example

?Case Study Analysis (REPORT) Executive Summary The present age of business markets is largely d to be the age of consumers where they are flooded with numerous options for making a purchase. This largely calls for the need for firms to ensure product differentiation as well as effective communication that can help win over the minds of the customers and help establish the brand in the market. The present study would analyse the business strategies of certain firms which includes analysing their product mix as well as life cycle analysis of the products in question. Further in the next section a comparative analysis of the marketing communications strategy of four businesses along with an analysis into the ethical aspects of marketing communication would be analysed. It would also examine the role of marketing communications towards generating competitive advantage for business organizations and development of trust and confidence among the customers so as to generate long term profitability and sustainability in the business market. Table of Contents Case Study Analysis (REPORT) 1 Executive Summary 2 Introduction 4 Part 1 4 New Product Development Process 4 Idea Generation 5 Idea Screening 5 Concept Development and Testing 5 Analysis of Business 6 Development of Product 6 Market Testing 6 Product Commercialisation 7 Product Life Cycle 7 BCG Matrix 8 Part 2 9 Marketing Communications Mix- Comparative Analysis 9 References 13 Introduction Business organizations are essentially operating in a turbulent business environment. The aspect of globalisation has increased the average number of players in the market which has intensified the competition among the business organizations. This has intensified the need for ensuring business excellence that leads to creation of competitive advantage. The aspect of increased competition in the market has led to marketers and business strategists develop and implement strategies that seek to take the customers as a focal point in the strategy formulation process. This is largely because of the fact that customers are the most important stakeholders for a firm and largely determine the outcome of the business strategies adopted and implemented by the organization. Business organizations are essentially using a different strategy which includes improvements in the product or service mix as well as use of a marketing communications strategy that helps firms to communicate and reach out to their target audience. The heightened levels of competition in the markets has also enhanced the importance of brand image that is largely important as it is widely being used by consumers to differentiate between the products and service offered by the different players in the market. The present study would analyse the aspect of new product development by including a comparative analysis of different brands. Part 1 New Product Development Process New product development is a comprehensive process that encompasses the aspects of idea generation, idea screening, concept development and testing, analysis of business, development of product, testing the market and finally product commercialisation (Havaldar, 2010, p.188). Idea Generation Idea generation involves conceptualisation of new ideas for a product or service. The success of this stage largely involves garnering large number of executable ideas which can be either obtained from employees or from any other source. The idea must be such that it is largely unique in nature and has the ability to make a mark for itself in the market. In case of Denkit the teachers had two business ideas which were largely unique and innovative in nature as no such product was available in the market. In case of Hovis the company developed an idea that served to augment the present product offering of the organization by introducing new ideas for product development. Kit Kat’s new product development ideas mainly include the aspect of modifications in packaging and design. Idea Screening The next stage in the new product development includes idea screening which involves selection of the most feasible idea from the set of ideas generated. In Denkit the owners had two ideas which included a children’s drink and a new toy. The owners after evaluating their internal strengths and weakness and conducting feasibility tests adopted the idea of developing a new toy for kids as the new product. Similarly Hovis adopted the idea of modifying and adding new features rather than going in for a completely new product as their present product was performing well in the market and had good potential. Kit Kat also followed the approach of modifying its product packaging for different markets as a product development strategy. Concept Development and Testing Concept testing involves analysing the product features that are most suited to meet the market demands. Denkit undertook a market analysis after consultation with the retailers as well as suppliers to include a product whose features were largely new to the market. Similar activities were done by Kit Kat and Hovis as they tried to copyright their packaging as well as product features respectively. Analysis of Business This stage involves determining the forecasted demands and formulation of sales targets for the new product. Based on actual market conditions and proper market analysis during the concept testing phase Denkit devised the product costs as well as formulated sales targets so as to make a break even for the product. Hovis analysed the market and based on the demand patterns went n for certain modifications in the product line. Kit Kat’s market study was mainly focussed upon the adaptability of the new designs across diverse markets. Development of Product Product development includes modifying the prototype to include the feedbacks from the concept testing phase. Denkit analysed the market and adopted certain modifications including lowering the price as well as modifying the packaging aspects. Hovis also made certain changes in the prototype to make it more attractive to the customers. Kit Kat also made certain modifications in its packaging parts as well as the diversified products to suit the demands of the target market. Market Testing Market testing gives organizations to analyse the product in the market before its actual launch. This includes prototype testing and evaluation. Denkit before making an actual launch of the product made a prototype and put it up before the customers in the retail outlet. They received a feedback that it was largely overpriced and the product packaging also required a considerable change. This enabled the owners to identify the areas that need to be modified so that the final product is a success. Hovis and Kit Kat also adopted this strategy which is evident from the fact that Hovis initially launched the modified new product in few selected markets and then undertook proper modifications. Kit Kat also launches new products as a prototype following which the firm launches its product in the market. Product Commercialisation This stage involves determining the final price of the product as well as selection of distributors as well as suppliers for the new product. In case of Denkit the marketers after prototype testing and analysing the business process including the suppliers fixed a price for the product based on the customer’s expectations. They also finalised a Philippines based supplier who can provide raw materials at sustainable rates. Hovis also finalised its pricing and other strategies which included the strategy of inducing marketing communication with television advertisements. Kit Kat undertook the decision of launching diversified products like ice creams in an attractive packaging. The firm finalised the product packaging for specific regions so as to ensure sustainability of the new product. This paved the way for the commercial launch of the new products in the market. Product Life Cycle Product life cycle analysis involves analysing the growth potential of a product with the passage of time. The concept of product life cycle proposes four different stages namely initiation, growth, maturity and decline. Marketers take a different strategic approach towards a product based on the present stage of the product in the product life cycle (Pride, Hughes & Kapoor, 2009, p.366-367). The analysis of the products of Denkit, Hovis and Kit Kat reveals that each of the firm tried to introduce a product/modification that helped it to be in the introduction, or growth phase as those stages signify the best possible profits for the firm and also ensure greater sustainability of the products in the markets. In case of Denkit the firm had two strategic product concepts that included a new drink for children and a new toy. Considering the fact that drinks were largely in their maturity stage, the firm decided to go ahead with the toy as a new product as it is largely believed that the product even though in its maturity stage had a good chance of coming back to the growth stage with a proper repositioning. The strategies undertook modification in design and product features to ensure a good sustainability of the product in the market. Repositioning strategies was also adopted by Hovis as it was making business out of a product that had large scale growth potential as was largely in the growth phase. The company realised that with certain modifications the product could have a prolonged growth period thus ensuring a steady business for the organization. Kit Kat’s conventional products i.e., chocolates were largely in their maturity stage, the company hence embarked upon a repositioning strategy by incorporating new features like combining biscuits with chocolates. With modifications in product designs that included customised product packaging for different regions and products, the company generated a renewed interest among the customers for the product as it combined the essence of chocolate with biscuits that was largely different from other related products. This led to pushing the product into the introduction phase with a good market potential in the future years. BCG Matrix The BCG matrix was formulated by the Boston Consulting group to segregate the different business units of an organization based on the market attractiveness and growth potential. The matrix divides business units into four group’s namely star, question mark, cash cows and dogs (Griffin, 2005, p.258). The product of Denkit is primarily in the introductory phase with retailers questioning the viability and sustainability of the product and hence it can be largely termed to be a question mark. However with robust demand forecasts and an attractive product mix and good sustainability in the market Hovis’s products can largely be placed under the star category with as it has good market potential as well as growth. Finally with Kit Kat’s repositioning strategy and considering the popularity of chocolates and biscuits as a product the business unit for chocolates is largely in the cash cow stage whereas ice creams would fall under the question mark stage considering the fact that the product strategy represents a diversified strategy that may have questions on the long term sustainability, however considering the evergreen demand for the product category the business unit for ice creams can well be stated to be in the question mark stage. Part 2 Marketing Communications Mix- Comparative Analysis Marketing communications strategy involves a medium in which firms interact with the customers and communicate them with regards to information about the product and service. The importance of marketing communication lies in the fact that it acts as a channel for communication and has profound effects on the brand image and positioning of a product or service in the minds of the customer. The present business markets with a large number of competitors also makes it necessary for firms to have a good brand positioning as it is largely used by customers to segregate between the products and services of different firms. A good marketing communications strategy is very important as it helps showcase a firm’s product or service offering before the customers. As evident from the case of Juju, a fashion retail outlet where the firm was largely losing out on the customers due to its ageing ambience and looks. The product offering of the fashion retailer was also not up to the standards and the demands of the customers. This made the store highly unpopular which almost led to the closure of the retail outlet. However the company went on to analyse the market demands and design a product and service mix that tried to create a favourable positioning of the store. In order to communicate this change to the customers the owners took an effective strategy of marketing communications. The company owners went on to the streets wearing the newly designed apparels that had all the features to attract the young customer audience to its store. In order to attract the customers they danced around in their new outfits to showcase the change in their retail outlet. This helped in communicating the aspect of change in their service mix which was largely welcomed by the customers as they again began to flock the stores and the store returned back to profitability. This case largely shows how an organization can use marketing communication to revive and organization back to profitability. It also shows the importance of marketing communication to generate profitability and sustainability. The case of NBS Hydropool represents a case of directly interacting with customers to make them aware of the product offering and converting the prospects into actual customers. In this case there were a number of sales persons who were engaged in direct marketing involving personal selling. The case study shows that one sales person named Anna Marie used different social platforms to make contacts with new and prospective customers. The sales person through effective public relations skills and good communication helped in building a relationship with the customer which helped her to communicate the product offering to the client. Development of a personal relationship helped in better promotion of the products to the customers as well as helped in development of trust and confidence in the customer. In contrast some other sales persons who did not promote their products among the clients failed to achieve their targets. This case largely highlights the broad aspect of the importance of communications in direct selling where development of trust using proper communications and networking helped in achievement of the sales targets for an individual which ensured growth and sustainability of the organization as a whole. The case of Candin highlights another aspect of marketing communication and their role in shaping the profitability of a business venture. In this case the owners namely Paul and Jerry embarked upon a business venture of selling shirts that were designed and printed by the two above named individuals. They realised that since their product category was among those that had a fierce level of competition hence it was necessary to directly promote their products and convey their product to the customers so that they can differentiate the product offering from the rest of its kind in the market and also generate interest among the customers and also to promote the innovativeness of the product. As a part of the marketing communication plan they went ahead and participated in different festivals as their target market largely comprised of tourists. Participating in the festivals would give the firm an option to showcase their product and its uniqueness among the target market audience that would largely help in identification of the products by the customers. This case also highlights a strong case where marketing communications can actually reap long term benefits for a business venture. The cases shown above largely highlights the strong correlation between a firm’s prosperity and the role played by marketing communications towards the same context. However this also calls for the need to ensure ethical considerations in the marketing communications strategy. The case of BBC highlighting the increased use of hyper sexuality in promotional campaigns of business organizations and its negative impacts on the overall society largely shows that adopting such unethical means may hamper the long term positioning of the brand in the minds of the customers. It also sends a wrong message to the customers who generally perceive such brands a morally unethical leading to considerable negative impact on the brand image and positioning of such organizations. The case calls for business organizations to largely exercise caution while designing the contents of advertisements especially those firms that have children and teenagers as their targeted customer segments (BBC, 2010). The analysis of the above instances largely shows the importance of marketing communication towards beating the market competition and to ensure trust and confidence among the customers. An innovative marketing communication mix coupled with ethical considerations can largely help in generating long term sustainable competitive advantage to the business organizations in the turbulent business market. References BBC. (2010). Children 'over-exposed to sexual imagery'. [Online]. Available at: http://news.bbc.co.uk/2/hi/uk_news/8537734.stm [Accessed on May 12, 2011]. Griffin, R. (2005). Management (8Th Ed.). Dreamtech Press. Havaldar, K.K. (2010). Business Marketing: Text & Cases, 3E. Business Marketing: Text & Cases, 3E. Pride, W.M., Hughes, R.J., & Kapoor, J.R. (2009). Business. Cengage Learning. Read More