Marketing Communications Plan - Essay Example

Marketing Communications Plan This paper aims at performing marketing plan for a new venture creation which involves launching of new range of audio hi-fi products by a company which is new in existence and does not have any previous knowledge on such products. The report contains a justification for selecting the specific market segments, the marketing communication tools and a marketing communications plan. The mission of the proposal is to gain an in-depth understanding and visibility of the marketing concepts. The mission is accomplished and is reflected in the documentation of the report. CONCEPTUAL MARKET ANALYSIS Industry: The rapid growth and consumer acceptance of digital music had led to an tremendous increase in the production of hi-fi audio products. There has been a constant increase in the demand of audio products likes MP3’s, DVDs, CDs and so on and a large number of manufacturers and retailers are enjoying the boom in this market. There are a large number of factors which have resulted in such a success. In stereo systems and other audio products, US and European companies have survived by focusing on skill-intensive and design-intensive products. Environment: Launching the audio products in a market area where consumer awareness exists would prove to be more beneficial as no efforts would be required in monetary and non-monetary terms to make the consumer aware of the products. An internal and external analysis of the environment would prove to be very beneficial in smoothening the process of the launch of new products in a new market. Once the conceptual analysis is done it is required to evaluate the different segments and decide how many and which one to target. While evaluating segments, three factors should be considered. They are segment size and growth, segment structural attractiveness, and our objectives and resources (N. Sangameshwar, 2003). There is no single way to segment a market. It is required to understand the composition of the market in order to provide products and services that meet client needs. Business can be more effective if marketing efforts are directed toward a limited number of well- defined market segments (Dickson & Ginter 1987; Stynes, 1985). Segmentation Profile Market segmentation has been considered as one of the concepts to understand the market efficiently. Market segmentation is the process of partitioning markets into segments of potential customers with similar characteristics (Frank, Massy & Wind 1978; Morrison, 1989; Stynes, 1985). This strategy will adjust a product or service and its price, promotion and distribution to meet the needs and wants of discrete target segments. Segmentation usually results in a more efficient allocation of marketing resources and a more precise setting of marketing objectives. Therefore, market segmentation can offer significant advantages as a competitive strategy and as a guide to market planning and analysis. In general a market can be segmented in many ways with a variety of variables. We have to determine different segmentation variables, alone and in combination to find the best way to view the profitable structure Here the three types of segmentation can be followed:  Demographic segmentation: It indicates dividing the structure based on variables such as age, gender, family size, income, education, religion, race and nationality. Demographic factors are the popular bases for segmenting customer groups largely because consumer needs, wants and usage rates often vary closely with demographic variables and these are easier to measure than most other type of variables.  Psychographic segmentation: It refers to dividing a market into different groups based on social class, life styles or personality characteristics. A large number of personality variables that may be used in psychographic segmentation are: self – image, interests, impulsiveness, sociability, hobbies, self confidence, leisure activities, adventurous and risk taking and health consciousness. Life style descriptors attempts to define a customer segment in terms of the attitudes, interests, and activities of the consumer. This is an attempt to go further than demographic descriptors to really get inside the consumer’s mind.  Behavioral segmentation: It refers to the division based on consumer knowledge, attitude and use or response to a product. It requires determining the major benefits that people look for in the product class like intensive preference. E.g., taste, level of performance, snob appeal, price, reputation etc. the kinds of people who look for each benefit and the major brands that delivers each benefit. It is highly advisable and would prove to be beneficial to the design group if they follow the above discussed segmentation strategies either solely or in combinations so that a clear picture can be withdrawn as of to understand which one would prove to be highly profitable in the long run. It is highly impossible to appeal all the buyers in the same way. Buyers are too numerous and too varied in their needs and consuming practices. The new venture would be opened to attract a large number of masses it is required to follow different strategies to attract a different mass. The following steps must be followed in target marketing: Identify bases for segmenting the market Develop profiles for resulting segments Evaluate the attractiveness of each segment Select the target segment(s) Develop positioning for each target segment Develop marketing mix for each target segment Thus target your market, focus your efforts on that market, and prosper. Besides customer focus forces strategies to succeed. There are two ways to view customer focus. First, adopt your customers (actual or prospective) focus on your product and services. Second, all your efforts would be based on meeting your customer needs. If we target our market effectively; we will have a manageable number of customers who we can learn a great deal about – how they think, why they buy, when they buy, what their preferences might be. We will be able to know what benefits they seek and so we can choose to address those demands. In a wider sense customer focus would help us to make strategically helpful decisions in all aspects. As an example: providing discounts on the new products would prove to be helpful in attracting new customers. The more detail you know about the “ideal” customers, the better you will be able to make them aware about our products and services. Target marketing allows us to reach, create awareness in, and ultimately influence, that group of people most likely to select our products and services as a solution to their needs, while using fewer resources and generating greater returns. Marketing Communications Strategy Positioning and USP - Position is a process of designing an image and value so those consumers within the target segment understand what the company or brand stands for in relation to its competitors. In doing this, the firm is sending a message to consumers and trying to establish a competitive advantage that it hopes will appeal to customers in the target segment. In essence, therefore, the marketing mix can be seen as the tactical details of the organization’s positioning strategy (Bangs, 2002). Multidimensional scaling and correspondence analysis can be used to build perceptual maps. These procedures involve algorithms that start with measure of similarity between pairs of product and try to find a geometric representation of the brands in the product category. These techniques position products that are perceived a similar close to one another and locate dissimilar products far apart. In this way, positioning is not actually something that is done to the product, rather it is something that marketer does to the minds of customers. It relates to how consumers perceive product in terms of image relative to competing offerings (Smith & Thorpe, 2002). The below figure is a layout of how the positioning is being planned for this new venture. This suggests that the segments of customers labeled “specialist’, ‘price buster’ and so on requires differing degrees of (a) control over the travel/tour buying process and (b) with the degree of specialized or standardized ‘package’ the agency provides. This approach would prove to be significant and worthwhile in determining how a specific customer needs to be treated. Fig: Market positioning plan for Travel Agency A unique selling proposition enables products to stand out from competitors. It is a distinct and appealing idea that sets the products apart. The USP for this firm would be its location – that is being in the central point in the market it has the ability to attract large number of customers. Branding and Packaging – Companies that produce consumer goods spends considerable effort and money on the design of product packaging. Of course packaging is important because it protects the physical product until it is sold. However, the product package is also important because it communicates information to the consumer. Thus it is essential to concentrate on the packaging of the products. A brand in the modern marketing sense offers the consumers relevant added values, a superior proposition that is distinctive form competitors and imparts meaning above and beyond the functional aspects. It is also a total entity developed by the integration of the resources, processes and marketing decision of a firm and much of the effort and input to developing a brand remains invisible to the consumer. A competitive brand is a live-asset, however, not a fixture and its value will depreciate over time if starved of investment and marketing management skill. Push strategies - Push strategy refers to the method by which an organization promotes directly to the intermediaries in the distribution chain, thereby hoping that it promotes the sales. It is essential to boost the morale of the employees or rather “push” them towards achieving the desired results. This could be done by using all the marketing instruments and different motivational techniques – including perks or hikes, incentive cash plans, and as well non-monetary benefits. Pull strategies - The strategy to ‘pull’ customers into buying the new products is based on a series of tactical mail shots. These are sent out to a tightly targeted audience. Based on industry experience an initial response of 2 – 2.5 percent is expected. The first mail shot will have a major selling message, highlighting the benefits of a specific service. Each respondent would be given an option of returning reply-paid coupon or calling the firm on a free hot line number. However, it is highly recommended to use the combination of both push and pull strategies in order attain maximum benefits and effectiveness in the firm. Promotional Communications Mix “Promotion involves two broad aspects – firstly communicating marketing information to consumers, users and resellers and secondly persuading and convincing consumers to use it” (David H Bangs, 2002). The promotional strategy which can be adopted by the design manager to promote the new venture can be through different ways. The best way to promote it in the area is advertising by using print media i.e., brochures, pamphlets, hoardings, personnel and all such direct activities. Creating the awareness among the people about the launch and existence and about the usage and benefits and about the prices though hectic still highly required in order to gain new consumers. Fig: Promotion Plan All the miscellaneous expenditure involved could be recover in the long run. But the main emphasis is on the first six months whereby a good expenditure is likely to be incurred. Thus it is highly essential to provide capital stability in the first six months. Launch success can be enhanced with early, systematic feedback to diagnose performance drivers and identify appropriate course corrections. Selling involves achieving the right balance between the four different elements of what is known as the “marketing mix,” or the “four Ps”.  Product – having a marketable product or service to sell in the first place.  Price – Selling it at a competitive price  Place – ensuring that customers can find it easily  Promotion – presenting it in an attractive way. Advertisement - Advertising is a crucial part of the promotion process, the other elements of which are personal selling, sales promotion (such as special offers, loyalty cards), and the wider business of public relations, which involves encouraging the media to distribute favorable information about a firm and its products or services. Advertisement for goods and services perform a large umber of different functions. Creating customer awareness of a new product or service. Constructing a “brand image” Announcing special offers of one kind or another Building long-term customer loyalty and confidence Combating the negative claims of the competitors Converting the customers of the rival brands. As in this case, the new audio products would be launched in a highly competitive market area and thus effective advertisement is the key to mark a great entry into the market. This could be done by the distribution of pamphlets, pasting the banners, hoardings and the most effective being WOM (Word Of Mouth) communication. Sales Promotion - Sales promotion is an important part of marketing mix. Sales promotion techniques could be used extensively in the marketing programmes to influence consumer behavior. Budget The following financials, budgets and forecasts would be applicable and reliable in launching the new products. The marketing budget for year one of operations would b taken from the start-up investment and is equivalent to approximately 6% of anticipated first year revenues. The marketing budget would be evaluated quarterly, and at the end of the year one, adjustments will be made to advertising schedules, media vehicles, effective frequency, etc. as necessary. A detailed review had been done to forecast the sales. As it is a new venture, sales are not expected to yield good results in the first annual year, however, specific action plans needs to get devised as soon as the first three months gets completed. This would help us in deriving more accurate and reachable targets. In the long-run, sales growth is estimated at 10% annually through year three. This estimation was concluded by reviewing and analysis the sales and profit figures of the competitors located in the same area. References: -> David H Bangs – (2002) -The Market Planning Guide: Creating a Plan to successfully Market your Business, Product or Service -> David Rainey – 2004 – Product Innovation: Leading change through integrated product development -> Dickson. P.R. and. Ginter, J. L. – 1987 - Market Segmentation & Product Differentiation. -> Easterby-Smith, M., Richard Thorpe and Andy Lowe (2002) .Management Research and Introduction -> Kenneth Rolnicki – 1998 – Managing Channels of Distribution -> Lawrence W Toller - Finance for Non Financial Managers. -> Michael V. Marn, Eric V. Roegner, Craig C. Zawada - 2004 – The Price Advantage -> N. Sangameshwar –2003 - Principles of Marketing. -> Tyler, K .and E.Stanley (1999).Financial Services Business Markets: A Critical Review International Journal of Bank Marketing. Read More