Marketing Strategies Development - Essay Example

Supervisor You have just been appointed as a trainee marketing executive with MoTecH Ltd, which is a new mobile phone Company, which wishes to introduce into the market the Leviathan, This is a new product, and early results from market research show interest from both the commercial and consumer markets By: January, 2009 TABLE OF CONTENTS 1.0 Introduction 1.1 MoTecH Ltd segmenting the market for the Leviathan mobile phone 1.2 Promotion Techniques for the new Leviathan mobile phone 1.2.1 Leviathan Phone and the Price 1.2.2 Leviathan Phone and the Product 1.2.3 Leviathan phone and Promotion 1.2.4 Leviathan phone and the Place 1.3 Building customers Loyalty and brand identity for the new Leviathan phone 2.0 Recommendations and conclusions Executive Summary Strategies of an organization should well be able to detail themselves as per the needs of the environment while planning for the future. Today, business environment has increasingly become more turbulent, chaotic and challenging than ever before. To survive, it is vital that a firm can do something better than its competitors. Globalisation has not only altered the nature and the intensity of competition but has had to dictate and shape organisations in terms of what consumers wants, how and when they want it and what they are prepared to pay for it. This study was initiated to design a competitive and successful marketing strategy for the launching of the new mark of mobile phone Leviathan. Focusing on the marketing communication model and the four Ps a unique line of marketing mix for the product was created. There after the report examined the methods of market segmentation open to the management. Two methods were presented through which the divisions could be segmented. I suggested segmenting the market into geographical, demographical and time segment. This is because through these methods, the company is better placed to meet up with its objectives. The paper calls for, a value adding and marketing strategy for increasing yields to the company for the benefits of the entire business. The company expects to target not only high yielding niche market but low income household as well with the introduction of the new products. Key success factors within the market will be MoTecH Ltd brand of innovative quality furniture and promotional gifts. Individualised customer services – tailor made custom design providing customers with what they want, when and how they want it. One of the market leading full service mobile phone company in the UK. 1.0 Introduction In the last two decades there have been major changes in the broader economic environment resulting from increasing globalization, deregulation, increased competition and specialization of industries (Lovelock & Wright) cited in Kotler (2002). This has lead organisations to form cooperative agreements, such as alliances, resulting in a shift from stand-alone competition to networked rivalry. As stated by Piercy (1995), it is striking that one of the few elements that links many of the otherwise disparate recommendations made to managers over the past several decades has been the need to focus on customer satisfaction as a route to sustained high performance, gain customers loyalty and make customers repeat purchase. The marketing mix has its origin in the marketing of goods for consumer markets and consists of the well known 4P’s: Price, Promotion, Place, and Product. For the greatest communication impact, Kitchen, (1993) argued that the entire marketing mix (promotion, product, price, and place) must be carefully coordinated for greatest success. This is so because, the product designs, the price, the shape and colour of its package and others within the chain communicate something to buyers. Thus, for consistency and uniformity all these aspects of marketing should be integrated. This paper develops marketing strategies for the launching of the new mobile phone leviathan. The second part of the report examines the various ways through which the market could be segmented. The last part of the paper looks at loyalty issues for the new brand. 1.1 MoTecH Ltd segmenting the market for the Leviathan mobile phone For the greatest communication impact, Kotler (2003) argued that the entire marketing mix (promotion, product, price, and place) must be carefully coordinated for greatest success. This is so because, the product designs, the price, the shape and colour of its package and others within the chain communicate something to buyers. Thus, for consistency and uniformity all these aspects of marketing should be integrated. Integration of marketing communication activities can avoid confusion and disaffection in the minds of consumers and buyers, offering a comfortable identity to customers and staff. Agencies who support the marketing communication process can take a more holistic and thus strategic stance to their client’s business, concentrating on strategic development rather than separate agendas to get a strategic fit (Kitchen, 1993).This is the primary function of e-marketing communication in integrated marketing communication. According to Peter (2007), a market segment consists of individuals, groups or organizations with one or more characteristics that cause them to have relatively similar product needs (Sommers & Barnes 2004). Markets are partitioned with respect to potential customers. The management of with MoTecH Ltd can segment it market in any of the following ways; Geographic, Demographic, psychographic and behavioralistic. 1.1.1 Geographic Segmentation MoTecH Ltd Here the management of MoTecH Ltd has to choose the countries where it plans to market the new Leviathan mobile phone brand. It will have to segment the European market, by countries, such as the Danish segment, being catered for in Copenhagen, the French market segment being catered for in Paris, while the United Kingdom segment having the head office catering for the English population. Management will also need information such as population size. Because of regional differences in consumer’s preferences, this kind of segmentation will provide the basis for geographic specialization (Sommers & Barnes 2004). The market could also be segmented into north, south, west and East Europe, with others taking care of the rest of the world. How the phone can be differentiated Our new phone brand will be differentiated from other outstanding brands by its brand name, its fancy and flashy colors and its inbuilt aesthetic features to give to give customers an unforgotten experience. The brand will adopt one of Michael Porter’s generic competitive strategies of product differentiation involving creating a product/service that is perceived as unique to the target market. The unique features or benefits should provide superior value for the customer if this strategy is to be successful How Relationship with customers be built up Free message alert from the company website. This will maintain a way of communicating with the cleints. A centre forum to facilitate customer’s communication will be created to enable clients communicate with an operator in case of a problem. Automatic test calls will be carried out from time to time. The brand will offer more money for clients money and will be introduced to target different age groups. Through periodic surveys the management will gauge what consumers think about the brand and new models will be created with aestistic features to fill the gap. 1.1.2 Demographic Segmentation Sommers & Barnes (2004) stated that, some variables needed for demographic segmentation include, age, income, lifestyle, education, occupation, family size and family lifestyle etc. Sommers & Barnes (2004) further show how, family lifecycle often is expressed as bachelor, married with no children (DINKS: Double Income, No Kids), full-nest, empty-nest, or solitary survivor. At MoTech Ltd, this will mean producing different Leviathan phones with different features with fancy features directed towards the youths and teens. Management can also, fit in this into several categories. 1.1.3 Behavioralistic Characteristics Sommers & Barnes (2004) stipulated that, behavioral segmentation is focused on actual customer behavior toward products. Behavioralistic variables include; usage rate, benefits sought, brand loyalty, user status, readiness to buy. This method of market segmentation has been largely applauded because of its advantage of using variables that are closely related to the product itself. In addition, it is a fairly direct starting point for market segmentation. Thus, within each of the existing Leviathan line of product customers and would be customers could be classified within these characteristics. In the current phase of fierce competition, managers are constantly seeking for various ways to classify their customers and get their products easily to them. Today, cultures have moved together due to increase travel, better communication and more efficient transportation opportunities. MoTech Ltd should try and anticipate these changes through the offering standardized products to a global audience. Peter (2007) states that, even within a single country, there are many different types of consumers, who need to be treated differently. Through Market segmentation all marketing activities are carefully designed and directed within particular segments. The Leviathan products could be segmented using two of the marketing segmentation strategies discussed above. The new mobile phone could be position to compete on both style and functional design, product quality and price. Besides in-house sources they use external subcontractors and suppliers. These attributes call for the division to be segmented using behavioralistic and Psychographic Segmentation. Segmenting customers into behavioralistic market will require classifying customers in terms of the benefit sought, brand loyalty and lifestyle. This will give enough room for the division to take advantage of its many design awards and compete effectively on style and fashion. By using this method, variables closely related to the division brand will be emphasize, and customers classified into benefits sought, style, firs time buyers, regular, brand loyalty. Spill over of this segmentation method can be consequently extended through distribution segmentation. 2.1 Promotion Techniques for the new Leviathan mobile phone Positioning products in people’s minds and making them attractive to market segments requires careful formulation of the marketing mix. Getting the right blend of the product, promotion price and distribution is essential to put the carefully carried out analysis into operation. The aim is to portray an image for the product or service that will match with how one wants the product to be visualized in people’s mine. 2.1.1Leviathan Phone and the Price Basically, all the other three Ps are cost. Price is revenue. This is the nightmare on the head of the management of any big organisation. Are we charging the right price? What will be the effect should a loophole be created on our prices? How and who are our prospective customers and customers. MoTech Ltd, one of the market leader, and a key market player in the electronic market should segment the market so well with it product line pricing techniques were successful new products should provide additional benefits and priced at a higher price. Price skimming should be used when launching a new product. Being a market leader this strategy is employed once a new product is launch, with the price set very high and gradually being adjusted with other competitors stepping in. This is the premium and over charging strategy. 2.2 Leviathan Phone and the Product Packaging should be most important component of the product as a communicating device. As shoppers wander the aisles and scan shelves looking for that benefit, image, or value communicated by each products design, packaging, price, and place, products which are not on the shelves, or are shelved inadequately, or priced too high or low, or is unclearly packaged or labeled are put off the shopping basket of the client. Here, the management of MoTech Ltd should bear this in mind when designing the Leviathan phone. The physical attributes and quality should communicate different benefit to the customers. 2.3 Leviathan phone and Promotion "For customers to entertain a purchase, you must first entertain them." Thats a fair deal (Soares J.E 1991). A promotional feat is a feat only because it entertains. The entertainment aspect is causally instrumental in persuading a prospect to try or buy your product. The trick making the product so appealing that people goes out of their way to watch, and exchange their cash for this product. Thus, these processes should be followed closely through the promotional mix. Specific media tools to be used used by MoTech Ltd, include print (magazines, newspapers, direct mail), broadcast (television, radio), and display (billboards, signs, posters) and in some countries special channels are reserved for marketing Sony products. In addition the internet should be used as an effective tool for communicating with customers. In addition to enhancing the content of its website, which include product related news and frequently asked questions, the websites should offer download of manuals and provide prompt information about product and services. Operator’s advice to personal computer users. 2.4 Leviathan phone and the Place Place includes all MoTech Ltd company activities involved in making the product available to target consumers.  It includes: MoTech Ltd channels of distribution, the extent of its market coverage, managing discrepancies of quantity and assortment, its retail locations, and the management of inventory, its transportation, and its logistics. For example, offices could be located in North America, Latin America, Africa, Europe, Asia, Oceania etc. With it head office coordination, these locations have wholesales stores, retail outlet, a packaging or manufacturing facility, distributors, retailers and a team of experts and technician to follow up customers query. These networks of middlemen along the way are, in essence, in partnership with the company products and services to the end-user. 3.0 Building customers Loyalty and brand identity for the new Leviathan phone Brands help customers interpret and process information about a product and are primary for customers purchase decision1. At the level of the firm, brands improve the firm’s efficiency by reducing marketing costs and improving prices and margin, serve as an important point of differentiation for firms, assisting customers in their evaluation and choice processes2. In the remaining part of the paper, while using the brand “Jaguar” as case study, I will discuss each question and on the last section, I will draw a conclusion. The CBBE model suggests that four sequential steps are necessary in building a strong brand. As outlined in the model, these steps start from given an identity to the brand (who are you?), to marking a difference between the brand and other related brands. Keller (2003) cautions that, each step is contingent of the other. This is what the management of most companies fails to do. However, using Sony as a case study, this is a history. The CBBE model is built by “sequentially establishing six brand building blocks with customers and assembled within the brand pyramid”3. Keller (2003) argues that, for a brand to be significant, it must get to the top of CBBE. No wonder, Sony is rated as a top brand. Thus, in building customers loyalty and a strong brand the management of MoTech should follow this model. 3.0 Conclusion and Recommendation Creative marketing people will come up with events and techniques that will leave lasting impressions. The marketing mix, the 4 P’s is the marketing “mix” of every brand and company. MoTech Ltd should strive at controlling the 4P’s known to be the “independent” variables. The dependent variable is sales volume. Thus the right mix should give the best sales volume. This can be possible through “Product Space Map”. The management of MoTech Ltd however needs to consider using techniques such as above the line activity. Like integrated marketing communication, this kind of activity include broadcast and print advertising where an agency is paid on commission based on the media space bought. By using the technique, it is easy for the company to breakthrough competitors existing customers (Attitude). What consumers think about Leviathan Phone? How the consumers feel about Leviathan How consumers have been reacting towards the Leviathan’s products and who are those competitors. By using such a technique, Sony with its current strategy markets of attacking virgin markets will be able to address consumer’s negative perception about some of its products. Such an action also, will help counter early post purchase dissatisfaction experience by customers may be done through television advertising. Changing the way customers think and feel about a product requires emotional messages to appeal to consumers and increase their likeability for the brand. Their integration marketing strategy should be redesign to ensure that both trust and commitment can be developed and maintained and that there is a level of interdependence between the channel members, which means that an action by MoTech will impact all the channel members. Integration of a company’s marketing communication activities can avoid confusion and disaffection in the minds of consumers and buyers, offering a comfortable identity to customers and staff and give the brand a positive image. (Kotler. 2005). Schultz et al. (1993, 1998) postulated that any model of marketing communication should analyse what happens with the customer rather than starting with the marketer. By doing so, the communication mix is developed on the basis of (actual, ‘natural’) customer activity in relation to the brand and not (necessary) marketer activity in relation to the brand. This is the secret behind Nike, McDonalds marketing mix and other leading brands. The company and suppliers can jointly invest in a common database which is more appealing and supporting to more support functions. Electronic commerce could boost sales, as it is a convenient way of purchasing and could also provide the ambiance of providing all the services and goods under one roof. Such a step towards technology could improve customer satisfaction and bring about additional revenues from satisfied clients. Competing in the right way in the right arena can be extremely profitable, but only for a limited time. The core competencies of the corporation, which are the basis of competition, provide the foundation of a sustainable competitive advantage and long term performance. Unless there is an advantage over competitors that is not easily duplicated or countered, long term performance is likely to be elusive (Aaker, 1989, p. 91). I will highly recommend MoTech Ltd to continuously take the lead in new product development, innovation, technology and collaborate with other partners and competitors when entering new markets. Managing a company’s brand is a complex and complicated issue that needs to be thought of in terms of how feasible and applicable is it in relation to the resources and capability of the organisation All too often, Kortler (2003) further argued that, companies fail to integrate their various communication channels. The result is a hodgepodge of catastrophe to consumers. “Mass advertisement says one thing, price promotion sends a different signal, and a product label creates still another message. Company’s sales literature says another thing all together, with the webpage at the other end”. Marketers should be alert, and present this in one shot to the consumers. How can the company gauge the perceptions of customers, and use  this to identify gaps in the market  Strategic advantages are not always achieved by competition alone. Collaboration between potential buyers and sellers and some other dealers turn to be very beneficial and advantageous when negotiation and contracting costs reduces (Johnson et al. 2005:261). Here, to gauge the perceptions of customers, I believe the company should develop and capitalize on its service minded employees and reliable service. Here the company stands a better chance to sail through the five forces framework (Johnson & Scholes 2007). Here, if Leviathan realizes that a competitor is operating following the BCG growth matrix, the company should capitalize on it core values. These values are defined with regard to quality, time and cost tied down to innovation. The higher the accessibility to technology and cost leadership the higher will be the customer base and thus the competitive advantage of the firm. Here, communication should be at the forefront of new product development. Effective communication plays an important role in that it explains the product as well as it positions the company and the product (Storey and Easing wood 1998: p. 344-). Staff/customer interaction is a measure of service quality as opposed to product quality. This will mean assessing the quality of the service products as customers also tend to evaluate how the service was delivered by the staff. Customers look in particular at the welcoming nature of the staff, their physical appearance or outlook, consciousness, promptness and efficiency. Attention could be shifted to these taken for granted assumptions. Leviathan phone should cut down on the number of question marks. These could be easily turned in to stars and cash cows with excesses from cash cows. For any business, customers are the main strengths and means of success. Leviathan has gained advantage from this fact. Thus, it can be stated that the SWOT is surely compatible with its success factors. This could also be capitalized upon. Leviathan as a company should use clear values to underpin what they do. Their core purpose is based on customers’ valuecreation. In all, cost-leadership has become part of the organization’s culture through symbols and effective processes being respected. Our caution to the company’s management is that, such a strategy will only work effectively in situation where the organization can provide products or services at a lower cost than competitors. It is not a try and error exercise. It is a commitment and a culture. Here I have also recommended that, to react to competitors actions with respect to the growth matrix, the company should remain keen to its core values and cost leadership and differentiation strategy. This should become part of the company’s culture. According to Johnson & Scholes (2007), organisational culture is a tool in management strategic armory which appears to be invisible yet it influences “why” “how” “what” and “when” things are done in an organisation or “it is the way things are being done here” (Johnson & Scholes 2007:66). In all, we recommend Leviathan to gauge customer’s perception should see such an action from the marketing concept which lay on the premise that, achieving organizational goals depend on determining the needs and wants of the market target and delivering the desired satisfaction more effectively than competitors (Kortler 2002). On the other hand, should competitors get to know the company’s position has been consolidated due to its use of the BCG Matrix; competitors will start benchmarking its activities. 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International Journal of Production Economics special issue on ‘‘Building Core-competence through Operational Excellence’. Read More