Qualitative Presentation of the Marketing Simulation That Was Undertaken for Pirateeye - Term Paper Example

?MARKETING SIMULATION REPORT Executive Summary The report is the qualitative presentation of the marketing simulation that was undertaken for PirateEye, which is a security surveillance device for marine transportation. A six year marketing plan was developed to be used in entering into the marine transportation industry as a new entrant. Among other things, the plan has a goal of possessing 37% of market size by the sixth year. This will be preceded by a 30% entry share with estimated sale strength of 600 units per year. The report identifies two major segments of consumers on the market, who are larger boat owners and smaller boat owners. The target is however with the smaller boat owners, who form close to 35% of the entire market strength. A consumer behavior analysis undertaken shows that the consumer base are in high demand for high quality technology based system that can actually track pirates even before they get on board boats. This sets the basis for the marketing mix, whereby high quality products that are not too expensive are supposed to be produced for the market. The introduction of PirateEye to small boats would also serve as a very fertile breeding ground for owners of marine transport to test and comprehend the quality and value of the system. With this opportunity, it would be easier to switch to competitive marketing for larger boats and ships in the medium to long term basis. Still on the application of the STP, it will be emphasized that the business to business segmentation criteria, commonly referred to as B2B shall be used. This is because this segmentation criterion gives the marketer the opportunity to assessing most aspects and areas of market including demographics, psychographic, behavioral, and environmental. This means that the B2B is a multi-dimensional approach that would help in meeting all the marketing goals set out by the company. Introduction Market penetration in the marine transport industry has never been an easy venture for new competitors. This is because of the existing competitors have already established solid brand equity and are thus very found with the consumer base. Commonly these competitors engage in the trade of boat and ship accessories, which generally helps in making the activities of boat owners easier. Not much attention has however gone to the area of transport security in terms of the activities of pirates. It is not surprising therefore that there is currently only one key competitor in the manufacture and installation of surveillance security systems for boat owners (Knill, and Tosun, 2008). This brief background gives credence to why the aim of introducing PirateEye as a market security product option for boat owners is a viable venture. The present report looks at why and how attention was given to the smaller boat market as against other segments of the market. One interesting dynamic of the target market is that there is enough research that suggests that frontrunners in the theatre industry, which form the majority of the target market, have an urgent quest and need for an immediate and coordinated technology that will address the problem of piracy in their industry. In other words, there is a ready market (Katel, 2011). Evaluation of the Targeted Market Ideally, the targeted market for the PirateEye product is the many industry players in the marine transport business. This is made up of all stakeholders who are concerned in one way or the other with the transportation of people and raw material from one place to the other. Most ideally however, owners of smaller boats shall form the core customer base of the product. A brief demographic analysis on these groups of persons suggests a very interesting trend that favors the fortunes of the company in a great deal. For example it is on record that there are over 140,000 commercial boat owners all across the globe (Billitteri, 2007). These are collectively used by more than 10,000,000 travelers on an annual basis. Reports of incidence of piracy among the general number of trips made by smaller boats however amount to 500 (Jost, 2003). What this means is that there are close of 4,000,000 travelers that need to be protected against piracy in each year. Interesting, this number is spread all across the five major continents of the world but with most numbers in America, Europe and Asia. The significance of this is that the target market has a universal dynamic that makes the creation of a global market possible. Market entry goals and objectives Entry the piracy protection market without clear and concise goals and objectives would be like walking in the dark in an unknown land. This is because the goals and objectives give clearest indication of what is expected to be achieved and how these are going to be achieved. Indeed, the following goals and objectives have been set after several days of primary research on the marketing simulation to find out the actual potentials in the target market identified above and how best the market can be penetrated. In the first year for instance, there is a goal of increasing the awareness of the target market on the product and how best the product comes as an option in controlling and solving the problem of piracy in the theatre industry. This introductory stage is set to yield a market share of 30% when the Boston Consulting Group matrix on advertisement is used to promote the product on the market. In the second year, the strategic objective will be to create differentiation of the project whereby emphasis will be laid on technical and quality development. This strategy is subsequently expected to yield a total of 35% market shares with 700 units of sales. In the third year, the company has an objective of reaching the growth stage of its developmental cycle. At this stage, the market share is aimed to come to 35%. Once this percentage is achieved, the sales unit is expected to come to 1312. The fourth year would be committed to more internal development and growth mechanisms rather than external ones. By this, reference is being made to the fact that there will the internal strengthening of the human capital and resource of the company to take off a giant medium term growth strategic plan. Subsequently, the market share is expected to remain the same in the fourth year. The fifth year would be time to consolidate the foundations and market strength of the company so that it would not loss its market place to new entrants. There will therefore be the lowering of company expenses with much focus on shelf design. This is to lead up to the sixth year where there is expected to be the maximization of market share with a minimum of 40% market share. Theoretical application of the Segmentation Targeting Positioning Principle The goals and objectives set above may be very colorful and attractive but without an effective segmentation, targeting and positioning of the market that has been found above, there is no way that the said goals and objectives are going to be achieved. To this end, a comprehensive STP theoretical application is given to the market in this section to capitalize on the potentials of the market. Modern theorists advocate a 2-tier approach to segmentation of market. These are the definition of generic and product market, and segmentation of the identified into specific target markets (Kesselman, et al, 2012). In relation to naming the broad product market, the market is identified as a group of sailors and owners of shipping vessels who have need to protection against the activities of pirates. Within this market however, specific target markets can be found. For instance sailors and travelers making oceanic trips in boats and ships to localized destinations are identified. In addition to this group, the long distance trip markers are also identified. These are mainly oil marketing companies who often travel across oceans and continents to deposit barrels of oil. As indicated earlier, long distance oceanic trip makers form the larger quantum of ship and boat owners (Lautenbacher and Stidham, 2009) and so they remain the very first point of call as far as target market is concerned. Despite the fact that many of these companies have access to large ships and boats, the positioning of the current market places premium on small boats owned by these marine transport operators. The reason behind this STP application is that the larger boats and ships have largely been taken over by the only existing competitor, which is Hendrics Mobile. Consumer Behavior Analysis Luckily, the consumer being dealt with is a highly visible one, who can be seen and accessed easily. This is because there are not much fragments of users of marine transport products as there are for other products like groceries and clothes (Kelton, et al. 2004). Subsequently, dimensions of consumer behavior analysis like demographics and psychographics do not become very effect in the analysis. To this end, a theoretical approach, that focuses on which has come to ‘what’ customer wants, requirements ‘to meet’, ‘who’ to serve, and ‘where’ to deliver products is used. In terms of ‘what’, the question of what product type the consumer wants is asked. Both primary and secondary research point to the fact that with high rates and incidence of piracy recorded in our marine transport system each year (Koch, 2000), consumers want a product that promises to solve the problem of piracy by rendering them high tech pirate detection mechanism. Currently, it is on record that pirate activities result in 500 worldwide attacks in a year. With the break of dawn on technology, technological advancement is the only prototype product that consumers are looking to, to be a solution to their problem. On the need ‘to meet’, the responsibility that comes to the customer is the need to meet customer needs (Kelton, et al. 2004). In this perspective, the company identifies the solution of customer’s problem from two major dimensions. First, a technology based motion sensor that acts as a preventive mechanism is presented to meet the customer’s need. This motion sensor, unlike other failed sensors on the market informs the boat owner early enough on the presence of a pirate. This sensor functions mainly through the detection of certain devices and accoutrements that are commonly associated with pirates. On the question of ‘who’, reference is made to the customer segments, which has already been identified as owners of smaller boats. Indeed, these are the same people who own the larger boats and their commercial behavioral trend analysis shows that they would rather prefer to try new products on smaller boats than on larger ones (Gallego and VanRyzin, 2004). This trend analysis makes the whole idea of targeting smaller boats a positive one. The last aspect of the approach, which asks the question of ‘where’, looks at the geographic region of the consumer and how that affects his behavior. Presently, a localized marketing approach is going to be used to target consumers found within the Americas. This is because these form part of the worse victims of cases of pirate attacks all over the world (Mair, 2008). Competitive Analysis to existing Competitors Presently, there exists only one competitor, which is Hendrics Model. Hypothetically, this competitor owns 100% of market shares. To this end, the existing competitor can be said to be a very strong market force. In a brief SWOT analysis, the major strength of the competitor can be identified to include the fact that it has established formidable brand equity. This is to say that the brand name of the competitor is more found with consumers and in this case, consumers may not be willing to change their winning team unless the team begins to loss. Another strength is the fact that Hendrics is known to be an aggressive marketer (Lautenbacher and Stidham, 2009). There is however a weakness in the sense that the competitor focuses much attention on larger boats and ships, making less provisions for smaller boats. This is however an advantage for PirateEye to at least have an untargeted market segment. The opportunity available for the competitor is the possibility for it to use its existing market revenues as capital in starting a new market competition in the smaller boats segment of the market. Once this happens, the competition is going to be tougher for any new entrant (Billitteri, 2007). The presence of well researched option in the shape of new entrant like PirateEye would remain the most significant threat to the existing competitor. The Marketing Mix The marketing mix presented is comprehensively based on the outcome of the simulation and in correspondence with existing literature on how well to market PirateEye to its target segment. In the first place, pricing are going to differ from year to year. In the first year for instance, it is estimated that each installation would cost $3000. This will be maintained till the forth year when the price will be reviewed downward to $2,800. The logic behind the reduction with years is that at the beginning, the company would need much revenue to carry out its competitive objectives. What is more, with the years going by, the company would make more sales and thus have enough revenue accumulation and can therefore reduce prices (Kelton, et al. 2004). On promotion, a comprehensive adverting approach is going to be used to communicate the product to the consumer, and for that matter, customers. Radio advertisements would be one of the traditional ways of advertising whiles a lot of the new media shall be employed for advertising as well. All in all, an estimated $80,000 is going to be spent on advertisement for each year from the first year to the third year. The consistency would be due to the need to justify the consistent faith of the product owner to the consumer. From the forth to the sixth years, the amounts spent on advertisement would even be increased to $100,000 a year. The other aspect of promotion shall be use of extrinsic promotional strategies to attract customers. These shall include, among other thing, the sale of discount coupons and reduction sales for registered customers. The place and product components of the marketing mix are integrated into distribution channel as the single ideological space between the product and place of sale is the distributor (quote). VeslEx shall not sell directly to boat owners and so there is the definite need to have the presence of distributors. To this end, there shall be a strategy to use existing distributors who are more found with the consumers as far as the distribution of boat products are concerned. The idea here would be to continue the trade culture that exists between the owners and the distributors. To this end, sales representatives shall be employed from existing boat product companies to distribute PirateEye directly to boat owners. REFERENCE LIST Billitteri, T. J. 2007. Marine Transport Outlook: Congressional Quarterly Research, 17(31), 721-744. Gallego, G and VanRyzin, G. A. Multiproduct Dynamic Pricing Problem using Its Applications to Network Yield Management. Operations Research, Vol. 45, No 1, 2007. Jost, K. 2003. Traveler’s Safety Rights and Security Issues Congressional Quarterly Research, 3(15). Retrieved from http://library.cqpress.com.ezproxy1.lib.asu.edu/cqresearcher/document.php?id=cqresrre1993042300&type=hitlist&num=13 Katel, P. 2011. Marine Transport: Are Threats of Pirates surmountable? Congressional Quarterly Research, 21(38), 901-928. Kelton, D, Sadowski, R and Sadowski, D. 2004, Simulation with Arena. New York, NY: McGraw-Hill, Kesselman, M., Krieger, J., & Joseph, W. A. 2012. Introduction to comparative politics (2nd ed.). Boston, MA: Wadsworth. Knill, C., & Tosun, J. 2008. Policy Making. In D. Caramani (Ed.), Comparative politics (pp. 495-519). Oxford, UK: Oxford University Press. Koch, K. 2000. Child poverty: Did welfare reform help poor children? Congressional Quarterly Research, 10(13), 281-304. Lautenbacher, C and Stidham, S. The Underlying Markov Decision Process in the Single-Leg Airline Yield Management Problem. Transportation Science, Vol. 33, No 2, 2009. Mair, P. 2008. Democracies. In D. Caramani (Ed.), Comparative politics (pp. 108-132). Oxford, UK: Oxford University Press. Read More