Marketing Issues Exam Analysis - Essay Example

Marketing Qn A Diagnosis of the Situation Facing the Franchise First, the franchise has already identified the market segment that it will serve its products. In this case, the franchise identifies the University of Delaware students as the main target population, which will promptly offer the franchise a ready clientele base. Therefore, the initial marketing strategy should focus on this group of consumers in order to ensure that they become the earlier adopters of the products that the franchise offered. However, focus should not be lost on another segment of the clients, which in this case is the suburban community of Newark, Delaware. In this regard, the 30,000 residents of the suburb will form part of the clientele base, and more during the summer when most students of UD will not be in session. Indeed, Mike has evidence that sales are higher during the summer. For this reason, the resident of this suburb should also be part of the initial marketing strategy. In addition, the franchise should develop future marketing plans with an intention of ensuring that they created customer loyalty with the Delawareans living in this suburb. In effect, Mike will have customers in his Scoop Shop all year round. The area where the franchise plans to locate its operations is undergoing developments and changes. In this case, the franchise will have a few competitors at the introductory stage. However, Mike’s shop will offer more products than those offered by these competitors, which makes his products differentiated. In this case, a marketing strategy that the franchise will design at first must aim at publicizing these differentiated products and creating an impression that customers will experience more value for their money. In addition, the strategy must sustain value to ensure that the franchise had a long-term sustainability advantage due to expected future direct and indirect competition. In effect, the marketing strategy should aim at creating a customer base that was loyal and making it challenging for new competitors to venture into the same market. The franchise has set its grand opening for the months of February, March, and April. During the month of April, Ben & Jerry will hold the Free Cone Day, which is the only promotion it has mandated. During the designing of the marketing strategy, Mike should take advantage of this day and ensure that the grand opening culminated with this day. All along, the franchise should project itself as an organization that operated in an environmental and socially conscious approach, which goes hand-in-hand with the hippy image of Ben & Jerry. The franchise has a potential to grow due to the opportunity it offers in terms of catering services. Although this is not in Mike’s immediate plans, it would be important for Mike to launch the catering services during the promotion period so that he can start acquiring a customer base for this service. In this regard, Mike will establish the service in the initial launch, which will be cheaper than launching it later. Qn. 2 Statement of the Franchise’s Objectives Mike’s franchise is getting into a mix of existing and new market. Consequently, his objective in the first six months of business should aim at maximizing the market share for his franchise, which he will have to capture from the existing direct and indirect competitors. In line with this, it is evident that the franchise’s target population is aware of the products that Mike intends to introduce to the existing market. In this regard, 70% of a random sample of adults in the US between the age of 18 and 64 years old was aware of the ice cream sold by Ben & Jerry. On the other hand, Mike’s other objective in the first six months should not be a revenue-oriented one since he is bringing differentiated products into the market. In this case, he has hot beverages, which most of his potential customers are not aware that a Scoop Shop sells. Hence, the franchise should demonstrate thought leadership about the novelty of selling hot beverages at a Scoop Shop. In effect, the franchise will achieve adopters of this idea who will in turn become reference customers as the franchise seeks to continue gaining more potential customers in later months of operating the franchise and becoming more profit-oriented. In line with its environmental and socially conscious approach towards business, the objective of the franchise should be to project itself as a company that engaged in practices that were socially responsible. First, it is evident that 23% of adults in a random sample conducted in the US, aged between 18 years and 64 years, identified Ben & Jerry as one of the companies that was socially responsible. On the other hand, Mike had carried out research on his target customers and discovered that one in every three customers is more likely to buy a product that had a social mission. Therefore, the objective of the franchise to project itself as environmental and socially responsible company will ensure that it positioned itself to most of its potential customers who would buy products that had a social mission. Qn. 3 Promotional Strategy Associated with the Given Cost/Benefit Projections With an expected response rate of 2%, the expected number of customers visiting the franchise will be 1,000. With each customer expected to spend about $12, the franchise will raise about $12,000 during the first month of its operation. On the other hand, the average amount spent on each customer is $10 while each customer will spend about $12. In effect, the unit margin expected in this case is equivalent to $2. Based on these projections the breakeven quantity will be equivalent to 7,500 units. In order to breakeven, the franchise should serve 7,500 customers in the first month of its operations. However, it is evident that the promotion strategy of the franchise only expects to have 1,000 customers in the first month. In effect, this implies that the franchise will not make profits in the first month due to the amount of units sold. In view of this fact, it is important to point out that the focus of the franchise should be long-term, and the failure to make profits in the first month of business should not hinder the franchise from this promotional strategy. Indeed, most, if not all, innovations will tend to have high initial costs with the long-term benefits seemingly outweighing these initial costs. In effect, the strategy should become a basis of changing the promotional strategy for the second month with the promotion culminating towards the end of April. In the second and third months of the franchise promotion, it will be important for the franchise to implement a promotional strategy that improved the response rate in order for the franchise to breakeven. In line with this, the promotional strategy should first focus on the students at the University of Delaware since they were the intended customers when the franchise started planning its operations. In addition, the strategy should not only dwell on publicizing the Scoop Shop, but it should also focus on promoting the differentiated products the franchise offered in order for more customers to adopt the products within the first three months. Read More