Tomoco Company and Its Marketing Manager Clive Smith - Research Paper Example

10 January 2007 Marketing Planing For every business, marketing planning is important part of management because it ensures development and growth, profitability and performance of a company. The case of the Econocar shows that many companies have to develop marking plans for non-existed products and predict possible market changes and consumer demands. Green vehicles are one of the innovative products developed by car manufacturers. This innovation is 'a result' of new environmental laws and regulations aimed to protect the Earth from global warming and pollution. In spite of optimistic prognosis, many car manufacturers concern about the demand and customers' loyalty. The advantage of the Econocer is low emission and low cost. One of the main problems for Tomoco Company and its Marketing manager Clive Smith is competition and development of the batteries for the Econocer. The batteries for the Econocer do not exist and it will take to develop this product. The main threat for Tomoco Company is that its direct competitor, Ishimuru Motors, announced the development of the same green car to be launched by late 2009. The proposition made by Sandeep is very attract for Tomoco Company because it will help to clarify marketing plans and objectives, and develop batteries for the Econocer. Thus, this step will damage the reputation and image of Tomoco Company. Ethical decision-making is one of the most important and crucial elements of business. If Clive Smith decides to ''employ" a younger cousin of Sandeep, it will be unethical and can lead to criminal responsibility for Tomoco Company and 'a spy'. Most people acknowledge that they have moral shortcomings, but simply viewing evil as caused by evil people is obviously incomplete and inadequate. A host of mixed motives, many of which are good, usually operate. Acting on narrow loyalties may be one motive (Crawford 64). People may justify their behavior by telling themselves they benefit others, feed their families, increase their companies' profits, and make their stockholders happy. A desire for material gain, prestige, and power may well be operating. Sometimes people are driven by the expediency of getting a job done, of reaching an objective with as little time and effort as possible. Thus, all these situations are unethical and lead to tragic outcomes for the company and people (Crawford 54). Tomoco Company should not accept the proposal made by Sandeep because it can lead to troubles and financial loss instead of expected profits. Litigation and negative publicity will cause Tomoco billions of dollars even before the product is launched. This case shows that people constantly struggle with the tension between rights and responsibilities, and conscientious people seek to balance the tensions in meaningful and fair ways. Also, it is possible to assume that it would be difficult for Tomoco to keep everything in secret and avoid publicity of this deal. Beyond a person's group is the broad political, social, and cultural landscape of society. Social values are another powerful source of guidelines for ethical decision making (Lipe, 54). These cultural values and traditions are not always positive. Although values are sometimes nebulous, they can be articulated with a considerable degree of accuracy and meaning. This case raises a question: what is the obligation to the organization In a commercial context, an employee agrees to give talent, effort, time, cooperation and harmony in relations with colleagues, and loyalty to the organization and its enterprise. According to legal standards, loyalty often involves confidentiality, and for an employee to spread key inside information to an outside audience is a direct violation of the contractual understanding. Organizations have trade secrets that must be kept from competitors, and any revelation of these secrets is a gross violation of contractual expectations. Perhaps a pledge of secrecy is valid when revelations would be unfairly damaging to the organization, to its functioning, its profits, its internal harmony, and its credibility (Crawford 92). Whistle-blowers challenge the assumption that what is good for the organization is good for the larger public. Whistle-blowers have decided that the value of loyalty to the group is superseded by other values, such as the dignity of life, fairness, and efficiency. Nonconformity is a laudable value when the group's norms or activities are of an extremely low ethical quality, but the whistle-blower has to prove this. The best decision for Tomoco is to reject proposal of Sandeep and keep its strong image and reputation as an ethical company (Lipe, 54). Marketing Plan Like every other company, Tomoco needs a successful marketing strategy to compete on the market. This includes number of factors which should be taken into account before a marketing plan will be developed and implemented. Consumer behavior, customer needs and wants play a crucial role for any industry, its products and services. Decisions in marketing generally focus on products and services, their prices, their promotion, and in means through which they are distributed. It is really difficult to develop a comprehensive plan for non-existed product, but it is possible to draw the main steps and tactics followed by Tomoco in 2-3 years. Marketing forecasts and predictions can be used as the main guide to foreshadow changes and market fluctuations. Following Frost and Sullivan (2007) "the annual battery market turnover for powering cars is expected to reach $ 1.5-2 billion". This information shows that there will be a demand for green cars like the Econocer. The industry under analysis represents a promising market for Tomoco (Lipe, 54). The mission of Tomoco is to produce and market low cost and low emission green cars for a wide target audience. It is in the relatively unexploited sector that Tomoco sees its clearest opportunity for innovation. Tomoco sets out to create a range of high-quality innovative products that are distinctive in type (McDonald 92). The main goals and strategic objectives are to get and keep a customer. Also, Tomoco is aimed to achieve competitive advantage and sustainable competitive creating value for their customers, select markets where they can excel and present a moving target to their competitors by continually improving their position (McDonald 49). The challenge of Tomoco is unique product design and innovative technology. The strategic goals are to penetrate the European market and expend its activities in other regions. Peculiarity of new model is that the product design is its own form of positioning. The customers will be able to modify color and main design characteristics according to their needs and desires. The strengths of the product are unique design and technology, innovative approach and 'green technology' solutions. The main weakness is competition (McDonald 92). Customer Analysis In business markets, customers' behavior patterns analysis is often used to make selling more cost effective by prioritizing customers groups. Behavior segmentation of the Econocer involves finding out the key drivers that distinguish one group of customers from another. The key drivers of consumer market behavior will be: psychographic, demographic, lifestyle and transactional. Customers will buy the product because of its low price, unique brand image and technological benefit (low emissions). Segmenting decisions can be complicated by the fact that national income figures, such as those cited for Europe are averages. Age segmentation will involve young people between the ages of 18 - 28. These young people by virtue of their shared interest in fashion, music, and a youthful lifestyle, exhibit consumption behavior that is remarkably consistent across borders. Young consumers may not yet have conformed to cultural norms. Psychographic segmentation will help to group people in terms of their attitudes, values, and lifestyles (McDonald 86). The majority of the target audience is stylish young people who admire fashionable cars and lifestyle. They will feel the new model is tailored according to their needs and wants. Income segmentation: the car market consists of those who are willing and able to buy. The buyers belong to middle and low class families. Taking into account standards of living, they will offer 0% interest for five years or the option of getting $2500 of the price of the vehicle. Population -60 million sons and daughters of America's Baby Boomers. It is expected that there will not be great differences in gender and occupation of buyers, but this product will be popular among young population who value new designs and innovative technology (McDonald and Christopher 82). Targeting Potential buyers are diverse in character. They represent $175 billion in annual buying power. These customers expect to find unique products, regardless of what the price and proposition. This target group can be characterized as the skeptical consumers who are health and environment conscious. Most of them are looking for a toy chest of automotive accessories including interior lighting, taillight dress-up kits, carbon-fiber shift knobs, and sports mufflers (McDonald 42). Positioning The new model will be positioned as a unique car which promises mobility and social freedom. Personalization, innovation, and technology will be the core of positioning strategy. The buyer perception of benefit-generating attribute will be based on unique design and stylish image appealing to a wide target audience. Social mobility and personalization will be the main attributes of positioning strategy. A unique image of the car and a sense of belonging to new generation will appeal to potential consumes (McDonald 73). Promotional strategy: advertising and promotion On this stage, it is difficult to define and select magazines and TV channels for marketing campaign, but it possible to plan the main steps in advertising strategy. Advertisements will be placed in local and national press, radio and TV, off-the-page advertising, direct mail, a catalogue selling, posters, billboards, signs and free gifts. Internet advertising: web banners and web site. It will help to control product perceptions and feelings toward the brand in real time (Smith and Taylor, 12). Promotion will involve TV programs and press clubs, newsletters, press releases. Press conferences will help to inform potential clients about recent developments and innovations, about future directions and strategy of the company. Newsletters will inform all clients about recent changes and innovations applied by the company. This information will help to create an image as a unique brand. Online promotion: on-line community (Smith and Taylor, 22). Pricing - flexible cost-plus pricing. This approach is effective because it will result in severe price escalation. To ensure stable market position and stable prices, the company will need to use estimated future cost method to establish the future cost for all car elements. This strategy will ensure that the selling price they set enables the company to cover all costs (Smith and Taylor, 16). Pricing and promotion strategies are used as strategies tools in order to respond to the changing environment and customers needs. Taking into account the costs and benefits, it is possible to say that Tomaco considers the selling price from several points of view. The first is the highest price at which the number of units sold will not be significantly reduced. This pricing strategy results in optimum revenue and the greatest unit profitability. Planning the selling price is a direct responsibility of the marketing channel manager. Channels of distribution: marketing organizations and direct agents. Agents will be representatives who act on behalf of the exporter. The agents will be paid on the basis of commission. It is expected that in two years the company will create its own distribution system (Smith and Taylor, 16). Modes of entry will influence the price that consumers will pay. Policies concerning channels are related to production decisions. In the first place, location of production base (or sourcing) is the first channel decision that has to be made. Second, fluctuations in production may be reduced by proper selection of such channels. Greater production stability tends to eliminate or reduce problems of inventory control that face all the channel members. Modes of entry will be based on a marketing organization as the main representative in great Britain, Germany, France, Spain and Italy. This company will have a sole right for this brand in its national market (Crawford 2003). Marketing Budget The budget will be used as checks on the actual results of a business. Deviations from predetermined plans are seen by comparing actual and budgeted performances and costs. The subsequent analysis of the differences or variances and the action taken will be a vital part of the control mechanism. The budget will include: production; stocks; costs - broken down into production, administration, selling and distribution; capital expenditure, including research and development; cash; credit - debtors and creditors; purchasing, master forecast, incorporating forecast of profit and loss and balance sheet. An integral part of the budgetary control will be the recognition that performances and costs can be traced to the people concerned (Smith and Taylor, 19). Monitoring is important for such product as green car, because it will help the company to make changes in marketing campaign and respond effectively to competitors' actions. More narrowly, the function of research within a company is to provide the informational and analytical inputs necessary for effective planning of future foreign market marketing activity, control of international marketing operations in the present, and evaluation of results. Three programs will be involved: "(1) customer feedback input, (2) customer satisfaction surveys, and (3) total quality control. So-called worldwide relationship surveys are run about every 12 months" (McDonald and Christopher 24). These surveys include some product questions but ask how satisfied the customer is with the company as a whole and how Hewlett-Packard rates against its competition. Also, the company will monitor the revenues verses the costs of manufacturing and exporting of the vehicles (McDonald 2003). Monthly reviews will be used as an indication of the future growth. Sales reviews in each geographical region: will help to review sales patterns and buyers behaviors. National reviews of over all sales and the budget will indicate whether or not the company is on track (Smith and Taylor 56). Short term projections are that the company will penetrate European market and increase its annual sales in 5%. In 2 years, the company will be able to create a strong brand image as a green car producer. The proposed market entry strategy will help to enter the Asian and African markets and create a core of loyal consumers who value quality and brand image. Therefore, the use of information gathered needs to be treated with great sensitivity and considered in the light of cultural norms and acceptance. For the Econocer, flexibility is the most important marketing requirement, which is essential for the expansion of opportunities, and plays an important role in making and breaking the competitive positioning on the foreign market. Thus the standards aim to give customers an assurance that the quality of goods and services supplied to them meets their requirements, by specifying and regulating all the procedures which contribute to or affect quality. In sum, Clive Smith and Tomaco have great opportunities to become first movers in this sector and obtain a strong market position in Europe. It is difficult to develop a detailed marketing plan for non-existed product, but it is possible to use forecasts and market projections of reputable economists to develop a marking plan. It will be difficult to enter this competitive segment, but strong brand image and quality of products, marketing development and unique advertising message will help Tomaco to enter this new market environment. To remain competitive, Tomaco should take into account buyers preferences and demands and cultural differences which affect both a product image and advertising appeal. Bibliography 1. Case Study: The Econocar. 2. Crawford C. Merle. New Products Management. Irwin-McGraw Hill. 7th edition, 2003. 3. Lipe, J. B. The Marketing Toolkit for Growing Businesses: Tips, Techniques and Tools to Improve your Marketing. Chammerson Press, LLC, 2002. 4. McDonald M., Christopher M. Marketing: A complete Guide. Palgrave Macmillan, 2003. 5. Smith, P.R., Taylor, J. Marketing Communications: An Integrated Approach. Kogan Page Ltd; 4Rev Ed edition, 2004. Read More