Ergomatics Ltd- Product Launch - Essay Example

Ergomatics Ltd- Product Launch Faculty Table of Contents Background Information of Ergonomics Ltd Error: Reference source not found 2. Executive Summary of This Marketing Plan 3 3. Internal and External Analysis to Ergnomics Ltd 4 3.1 The SWOT analysis of Ergnomics Ltd. 4 3.2 The BCG Growth-Share Matrix of Ergonomics Ltd………………………………………6 3.3 Recent situation of Ergnomics Ltd 7 4. The suggestions to Ergnomics Ltd 8 4.1 The BCG Matrix analysis to Ergnomics Ltd’s products 8 4.2 Market Situation Overview 9 4.3 The suggestions to Ergnomics Ltd 9 4.3.1 Introduction 9 4.3.2 Promotion Strategy 10 4.3.3 Advertising of This Project 12 4.3.4 Budget Considerations 13 5. Conclusion 14 Bibliography Error: Reference source not found 1. Background Information of Ergonomics Ltd Ergonomics Ltd is a leading manufacturer of variable height furniture for the educational market. The company has strengths in the design, supply and installation of furniture for education institutions that adheres to strict government guidelines. The company has expertise in the quality and design product to meet specific need of its consumers. It supplies furniture to most of the good schools and educational institutes. The product it supplies is customized according to space need and design needs of consumers. It has been able to provide good quality products at reasonable cost. The deliveries of products are always on time. The customer focused approach; good product and service have created a brand name for Ergonomics Ltd in the market. It supplies the products directly or through the distribution network it has established in last 30 years. Its strong distribution network, good credit policies and distribution channel management have created a strong distribution network. It has strong manufacturing base and supplier’s network that can provide them raw materials at the best prices. Being one of the leaders in the market the company has reached at the stage where it can get best prices of raw materials. It has employee focused approach. It provides best compensation, wages and working conditions to its employees. It is regarded as one of the best employers in the market. Ergonomics Ltd has a turnover of £110,000,000 with operating profits of £7,000,000. Company is planning to diversify in new business. 2. Executive Summary of Marketing Plan This is a paper prepared for the leading furniture manufacturing company Ergonomics Ltd. Company need to diversify. Based on the SWOT analysis, BCG matrix and situation analysis for the company the appropriate segment would be the children furniture market. The new range of product requires appropriate planning at all the levels of the organisation. Detailed marketing plan for the launch of new range of products has been provided in the paper. 3. Internal and External Analysis to Ergonomics Ltd The company is operating in a mixed marketing environment. The company has been operating in the market from last 30 years. It has created its own brand name and trust in the market. The sector it is serving it has strong and loyal customer base. Company is operating in an environment where number of small dealers and manufacturers are providing product and services at low cost. The SWOT analysis of the company provides a picture of the external and internal environment. 3.1 SWOT analysis of Ergonomics Ltd. As internal analysis of Ergonomics Ltd indicates, it is one of the leading furniture companies in the industry. It has various strengths in different aspects of its business operations i.e. brand image, innovation, strong distribution channel, goodwill and others. Weaknesses for Ergonomics Ltd are least as compared to its strengths. The area which it needs to improve is its designing standards and range. In terms of external analysis of Ergonomics Ltd, there are several threats and opportunities for existing in the external environment. The company operates in an environment where the market growth is almost stagnant. There are several competitors and number of competitors is growing. The competition is from local, national and international competitors. The other threats include political, legal, social and economical factors. Increasing prices of labour and raw material is another area of concerns for Ergonomics Ltd. Opportunities lies in diversifying the business. Strength Strength of Ergonomics Ltd lies in the expertise it has gained in the furniture industry. It has established a good distribution network and has a strong base of loyal customers. It has also good brand equity in the industry it is operating within. So far it has been supplying its furniture products to the educational sector to meet variety of their requirements. It has established its image as a quality product provider in the market. It has a strong distribution network and credit policies. It image of being best employer have attracted the talents from the market. It has good human resource base. It adopts new technologies and designs to improve its brand. Weakness Company is not facing any particular weakness as such. In terms of designing company need to strengthen its team of designers for children furniture. The new product will require design for new range of products and variants. So far company has been doing some of the customisation as the requirements of the educational sectors did not require many variants and to a certain extent these requirements were general but in the case of retail market it will require attractive designs and others. Opportunity Company has various opportunities in the market. As a strong player in the furniture with established manufacturing unit and expertise of operations the company can serve various sections General furniture, Office furniture, Children Furniture Kids furniture Age group of 4-7 years Children Furniture Age group of 5-13 years Teen Furniture Age group of 13-18 years Threat The threats of the Ergonomics Ltd include political, social, economical and technological threats. Any change in the current policies, tax structures, and regulatory policy can impact the operations and functions of the company. There are economical threats like slowdown in economy, purchasing power of individuals, rate of inflations and others. The technological change like change in the production procedure, new technologies which have immediate impact on cost and quality used by competitor and are an expensive option will also pose threat to the company. The local manufacturers and suppliers offer their products and services. These suppliers offer the customised service to the customers. Increasing competition in the educational furniture sector. 3.2 The BCG Growth-Share Matrix of Ergonomics Ltd The BCG-Growth Share matrix had come into the practice of business world in 1970’s. It was an effort of Boston Consultancy Group which provided a simple tool of analysing overall business of an organisation operating in several areas. This is an effective tool of understanding the matrix of business. It is easy to compare and helps in decision making process. Ergonomics Ltd. has been manufacturing and supplying furniture products to education sector. This area of its business has been a cash cow from long time. The relative market share in this business is high for Ergonomics Ltd. The growth in this sector is very limited. It has attracted many competitors and the overall demand in the market is not growing as compared to the competition. Due to the reason company need to invest n the other areas of the business. The replacement market is there for the Ergonomics Ltd but the volume is not high. Company needs new sectors to create new stars for its business. 3.3 Recent situation of Ergonomics Ltd In the present scenario Ergonomics Ltd has been able to generate profits from the educational sector which it can use for investing in other areas of business. The market condition is good. Economy is stable. The purchasing power of individual is growing. People are spending more in the areas like lifestyle products, leisure activities and several other things. According to census 2001 every one in four children live in a lone-parent family. The growing number of single parents puts a pressure on them to take care of their child well and express the same thing to the children. Increasing household income encourages parents to spend on the comfort of their little ones. The population of children is growing and birth rates have improved. According to census 2001 the number of children of all age group in England and Wales is 11.7 million. On an average there have been more than 6,00,000 live births every year registered since 2001 census. This means in today’s scenario the number of children of age group of 4-y years should be more than 4,200,000 in UK. 25% of these children live with lone parents which mean 1,050,000 children live with lone parent. Even if 10-25% of the total children population of the target user group are willing to spend on the children furniture it offers a huge market potential. 4. Suggestions to Ergonomics Ltd 4.1 BCG Matrix analysis to Ergonomics Ltd’s products According to BCG analysis of Ergonomics Ltd the growth in the educational sector is limited and company needs to look for new opportunity, markets or products. Company has its own expertise in the area of furniture business especially in children furniture. The second best sector for the company can be the household sector. The growing population, purchasing power parity, stable economy, well established distribution sector and production and marketing expertise of the company encourages it to invest in the children furniture sector as well. Company can look at this sector. This is a promising and growing sector. It will be good for the company if the company invest the earliest in this business as it will get the early mover advantage. It can utilise its own brand image of serving for last 30 years for its brand promotion. The product launch and planning should be backed by proper promotions strategies. 4.2 Market Situation Overview The market today for the children furniture is scattered. There is not a single brand serving the customers of this market segment. Majority of leading furniture brands have some variants in this category but none of these exclusively offers solutions to meet the furniture needs of kids of age group of 4-7years. This offers an excellent opportunity to Ergonomics Ltd to create a separate brand for children furniture. It can focus on this particular market segment and establish a brand with good product and promotional strategies. Ergonomics Ltd can target the children furniture market and get first movers advantage in this particular market segment. 4.3 Suggestions to Ergonomics Ltd 4.3.1 Introduction As indicated in the previous sections, there is indeed market potential for the furniture for kids of age group of 4-7 years. Ergonomics Ltd can serve needs of this market with its quality products, established network and new range of products. It needs to have a quality designing department to handle the designing for the household’s requirements. The designs should be such that range of variants could be made available in that. The range of products like bedding, baby mattresses, childrens bedding, childrens bedroom furniture, childrens beds, childrens bunk beds, childrens chairs, children study table, childrens theme beds, children beanbags and all the room furniture. The organisation needs to change its operations and organisation structure according to the demands of new product department. This requires a proper change management in the organisation. Organisation need to launch the product in the market which should be backed by excellent promotional and distribution strategies. 4.3.2 Promotion Strategy There are various sales promotion strategies which can be used for the business like furniture for children. In the first phase for the organisation should communicate about the product. This will be the introduction phase of the product. Company needs to adopt appropriate strategies to reach its target audience. The promotional strategy will be focused on the buyers. The buyers or decision makers for the product will be targeted in the communication strategy of the product. Product Launch The product launch will be in the festival season when people want to spend on various household things and renovate their houses. The communication strategy for product launch will be such that it will create interest and desire among parents and children. The communication strategy will include messages which communicate benefits of having the furniture collection in their houses. It will be followed by good product launch strategy in which company can involve some celebrity or famous child artist. The designs of the furniture will be exclusive and the consumer will be given flexibility to choose the colour and materials of the cover etc. The product launch will be covered by all the children magazine, parental informative magazines, lifestyle sections of leading news papers and electronic media channel. Company will also launch the website for the same at the same time. This website will not only be informative but also will provide the e-commerce facility. This e-commerce facility will enable the buyer to buy the gift for the children of their family and friends and the product will directly be delivered at their place or desired address, irrespective of where buyer and receiver is situated. Free Gifts Company can offer free gifts to the buyers for the specific period of time followed by the product launch. These things will be communicated well through various channels of media to inform people about the scheme. Scholarship Scheme The company can offer one year scholarship to one child or 2-3 children based on the draw. The buyer will be required to fill up a form while purchasing in which s/he will fill all the information regarding the child and will get a unique number. In the lucky draw the child winning the draw will get a year of scholarship in which company will cover his/her tuition fees. Fun Camps: Company can offer 2 days fun camp in some particular markets where these little ones will be invited and will be involved in some creative activities like drawing, painting, sports and others. The aim of these activities will be helping children to develop their interpersonal skills with each other, enjoy and entertain themselves and learn about good posture and behaviour. The area where these activities will be conducted will be full of Ergonomics Ltd furniture range where children can experience the furniture. 4.3.3 Advertising of This Project There are various advertising channels available for the project. Company can use an appropriate mix of the channels to reach its target audience. These channels can be print media like newspapers and magazines, electronic media like television and internet and radio. Company can decide on the mix based on its budget and objectives of advertising. Print Media: Newspaper and magazines National and local newspapers can be used for the advertising purposes. The advertising message at the initial phase should be informative. The information can be about the product, its quality, comfort and learning opportunity to the children. The newspaper is a household thing and mostly all the parents will be reading it. The decision makers for the children products are their parents and elders. There are various parental magazines like Insight, Practical Parenting and women magazines can be chosen to reach the target audience. Electronic Media The electronic media will cover internet and television advertising. There are various parenting websites which are usually visited by the professional parents or lone parents. These websites offer them a source of information and at the same time can serve as good advertising options. The television advertising channels can be family or general channels and children channels like Cartoon Network, Disney Channel and others. Radio Radio and FM channels can be another good option to create awareness about such brand and product ranges. The repeated messages will create impact and interest among the target buyers. 4.3.4 Budget Considerations Ergonomics Ltd has a turnover of £110,000,000. The budget estimated is 4 million for this project. This budget includes costs of establishing different designing unit for the household product, website construction, promotion costs, media advertising costs and so on. 5. Conclusion Ergonomics Ltd is one of the leaders in the market of supplying furniture to educational institutes. It has the industry experience of 30 years and expertise of production. It has high reputation, excellent brand value and competitive advantage. It has certain weakness and threats which it is able to cope with its excellent business strategies. However company need to expand its business from the educational sector so that it can ensure the long term sustainability in the market. This will happen when company invests in new business, diversifies itself or look for new market. The company in this project have decided to diversify and serve new market of house hold requirements of children furniture. There is demand for the products in the household division. It is catered by several big and small competitors but there is no specific brand for the children furniture in the market. Company can create a brand name in the market with its products and heavy promotional strategies. This will help the company to promote its new brand and attract the attention of buyers to new look and type of furniture which will provide comfort, better posture and learning opportunities to their children. The marketing communication should have a common message and should utilised appropriate marketing tools. Bibliography Outwiththe Kids; Specially Designed Furniture Encourages Playtime Outdoors. Newspaper Title: The Mail on Sunday. Publication Date: February 19, 2006. Page Number: 26. The Growth Share Matrix retrieved on 6th November 2006 from Jobber, D. (2005) Principles and Practice of Marketing. Berkshire: McGraw-Hill. P. 44 Kotler, Philip, Marketing Management, Prentice-Hall Inc. New Jersy, 10th Edition, 2000 Market Analysis retrieved on 6th November 2006 from http://www.bplans.com/spv/3284/4.cfm Live Births retrieved on 6th November 2006 from Joseph, H. & Jimmie, T. 2002, The Guru Guide to Marketing: Aconcise Guide to the Best Ideas form the Today’ Top Marketers, Wiley. Steven Miles. Consumerism-as a way of life. London: Sage Publications Ltd. 1998. The BCG-Growth Share Matrix retrieved on 6th November 2006 from Children’s Furniture retrieved on 6th November 2006 from Piercy, Nigel F, Market Led Strategic Change, Butterworth Heinemann, 3 e, Charted Institute of Marketing Schmitt and Simonson: 1997, “Marketing Aesthetics” The Strategic Management of Brands, Identity, and Image. New York: The Free Press Read More