Marketing Simulation by Thorr Company - Research Paper Example

The perceptual maps in marketing simulation involved a company called Thorr dedicated to the manufacturer of motorcycles. The company’s target marketis the high end market composed of customer between the ages of 35-50 years old. Some of the key strategies the company has utilized to market its product is focusing on lifestyle and the quality of the product to provide a superior motorcycle for its clientele. The company currently controls 40% of this oligopoly marketplace. In an oligopoly market structure there are a limited number of competitors (Varian, 2003). The purpose of this report is to describe the actions taken by the student during three phases of the simulation and to discuss important marketing concepts such as differentiation, positioning and product lifecycle. The purpose of the simulation is to develop a positioning strategy for the company. The first phase of the perceptual map simulation involves selecting the parameters related to the motorcycle industry that aligned with the product the company is offering. The simulation taught me that the optimum amount of parameters that should be chosen for a particular product is four. Choosing more than four does not allow the marketer to highlight the product’s strengths in order to create effective marketing campaigns. The nine parameters I had to choose from were: lifestyle image, product design, cool, product uniqueness, service offering, price, engine capacity safety, and quality engineering. Based on the company’s status as a provider to motorcycle in the high-end of the marketplace I choose these four parameters: lifestyle image, product design and styling, price and product uniqueness. The result of my selection was that I ended up choosing three of the four optimum parameters for this particular product. The parameter that I should not have selected was product uniqueness. In this case quality engineering covers the important aspects of product uniqueness. An important parameter that I failed to choose was service offering. Service offerings are utilized to ensure loyalty among customers and distribution channels which include club memberships, maintenance training, and financial services (Perceptual Maps in Marketing Simulation, 2008). The second phase of the simulation involved making a decision about the company future positioning in the marketplace. Tough economic times along with an aging focus group of customer were endangering the company solid 40% market share. The two primary choices were repositioning the CruiserThorr model or introducing a new model, the RRoth, to achieve penetration among younger customers. Based on the current trends and the fact that the company’s main product seemed to be entering into the maturing stage of its lifecycle I decided that repositioning was not the best option and the company needed a new product to expand its customer based. In the maturing stage of a product’s lifecycle companies have trouble differentiating their product and opportunities for growth are limited since the customer base is capped (Netmba, 2008). My decision for the second phase of the simulation was to introduce the RRoth model to capitalize on the marketplace for younger customers. Once I decided on the strategy of introducing the RRoth the next step of this simulation phase was choosing the marketing mix for the product. The marketing mix was popularized by Neil Borden in 1965 in his article The Concept of the Marketing Mix (Marketingteacher, 2008). The four components of the marketing mix are known as the 4Ps which are price, promotion, place and place. The decisions I made regarding the marketing mix for the RRoth are summarized in the table below. Price Place Promotion Services $13,000-$15,000 Dealers Distributors Internet * Sponsor events such as the Daytona * Utilize Hollywood film s to showcase the product * Giveaway merchandise * Offer insurance and protection plans Customization Training to dealers Financial services Choosing the low $13,000-$15000 price range was critical to ensure the company was able to attract the younger customers. The place mix included the internet as a major distribution channel. Younger people depend as means to evaluate products prior to make a purchasing decision. The promotion strategies included campaigns such as showcasing the RRoth in a Hollywood film in order to increase the product appeal and attractiveness. Customization is service that will allow the firm to increase its revenue stream by providing added functionality to the basic RRoth model. The overall budget for the marketing strategic plan was $13 million. I spend $10.76 million achieving savings of over $2 million dollars for the company. The third stage of the simulation involved choosing the parameters for the RRoth positioning strategy and evaluating both sets of parameters the two products. The simulation included a marketing research study that provided insight into the customer’s preferences. The parameters chosen for the RRoth and the score I gave to each based on 1-10 scale were Lifestyle image (9), cool (8), price (10) and service offerings (8.5). The scores for the optimum parameters for the CruiserThorr product were 10,8,8,7 for lifestyle, price, quality and service respectively. Differentiation is an element that allows a firm to form a strategy to separate its products within a marketplace. The original strategy of the company was having the industry’s best premier motorcycle. This was a brand model that allowed for greater exclusivity and the formation of a high-end market. The company needed to lower its prices in order to retain its market share and attract new customers. The solution was the creation of new motorcycle model to use a differentiation marketing strategy that allowed the firm to have two different motorcycle lines. When a company utilizes differentiation marketing a firm operates in several market segments and designs different products for each segment (Kotler, 2002). The product life cycle was an important marketing concept that influenced the decision in the simulation study. The four phases of the product life cycle are introduction, growth, maturing and declining. Thorr had a product that was very profitable, but had entered the maturing stage of its life cycle. It was in the best interest of the company to prolong the life of its product. Changing its position parameters would not enhance the products profitability so it was better to add another product line to the company’s offering. The new product changed the product life composition of the firm because the RRoth arrival mean that the firm had a new product in the introduction phase to compliment a product in the maturing stage. The RRoth would greatly benefit from the brand power and reputation of the CruiserThorr motorcycle. References Kotler, P. (2002). Marketing Management (11th ed.). New Jersey: Prentice Hall. Marketingteacher.com (2008). What is the Marketing Mix? Retrieved October 29, 2008 from http://www.marketingteacher.com/Lessons/lesson_marketing_mix.htm Netmba.com (2008). The product life cycle. Retrieved October 29, 2008 from http://www.netmba.com/marketing/product/lifecycle/ Perceptual Maps in Marketing Simulation (2008). Legend of the Cruiser Thorr. University of Phoenix. Retrieved October 25, 2008 from rEsource database. Varian, H. (2003). Principles of Intermediate Economics: A Modern Approach (6th ed.). New York: W.W. Norton & Companies. Read More