Marketing Plan for Triumph Spares Limited - Essay Example

“Marketing Plan for TSL” Module: Marketing Plan for Triumph Spares Limited I. Executive Summary: Triumph Spares Limited (TSL) is a family owned business organization that develops Triumph Spare parts. If we look at the financial data of the company, we will see that the revenue and profits of the company are declining from the year 2003 onwards. However, it is believed that the company can rescue its position by developing an effective marketing plan. The company currently sells its product to both the final consumers and other businesses, which are also competitors to Triumph Spares Limited (TSL). In order to develop the effective market plan, customer repurchase cycle and factors in the marketing plans are taken into account along with the situational analysis and other information which is useful in making appropriate business decision. At the end of this plan, we will be able to clearly identify the company’s marketing strategy that it should pursue in order to elevate its market share. In this market plan, market segments will also be selected, and all the important marketing decisions that are useful for the success of the business will be identified and highlighted in order to draw out a thorough marketing plan necessary for the success of the Triumph Spares Limited (TSL). II. Current Situation- Macroeconomic Environment A. Economy: One of the reasons for the decline in the company’s profit can be due to overall plummeting demand in the economy. The period discussed in the case is the year 2007. This was the beginning of the global financial crisis, and hence we can associate the plummeting demand in the economy as one of the reasons why the company’s revenues and profits are falling. B. Legal: There are strong legal requirements for business operating in the UK. Hence, we face stringent laws that govern are business environment. As a result, we need to make sure that all our activities comply with these laws in order to make sure that our business reputation is good and more and more consumers purchase from Triumph Spares Limited (TSL). C. Government: There is a good government control over the business and we need to make sure that we do not indulge in any activity that may lead us into problem. Our marketing strategies should be fair and should not violate any consumer interests. D. Technology: Technology is one of the major factors that this market sector is pervaded with competition. Technology has made it possible for new entrants to enter the market. However, TSL can also use technology in order to widen its customer base. E. Socio-Cultural: If appropriate marketing techniques are followed, we can expect that our business will increase, as the society is becoming more and more spendthrift. This will increase the overall demand in the economy and our profits will also rise. F. Supply-Chain: Since we manufacture the spare parts ourselves, the supply chain is not a problem and we enjoy consistency in the production process without having to worry about any supply problems, except for the raw materials. III. Current Situation- Market Analysis Our market consist of both the final consumers and the b2b (business-to-business) selling. However, it is noted that bulk of our sales are done through b2b channel, and only 20% of our sales is made to small customers through the shop. Therefore, we need to plan a strategy that will help us widen the both sectors and will lead to increase in the profits and revenues. The market consists of five direct competitors and hence Triumph Spares Limited needs to devise a clever marketing strategy to sustain and grow its market share. Currently, the market share of the firm is around 20% in terms of revenue. The company has divided its market into two segments: Business Buyers: Here the deals are made with the other business and the company keeps a margin of 50%. This is the segment where the company earns the maximum revenue and almost 80% of its sales are made through this segment. Hence, we need to understand that this segment is most important to us in terms of its size and contribution to the profit. Hence, we need to devise a policy that sustains and grows the revenues earned from this segment. In other words, we can conclude that this is a priority segment for us. We need to look after this segment and need to give it much more importance and attention than the other sector. The sales made in this sector are in bulk and hence we can exploit on economies of scale if we continue to give importance to this sector given the size of this sector. General Public: This is the other market segment; we are currently selling our products to. Here the profit margins are high but the sales volume is very low, so we cannot rely just on this segment. We need to make sure that both the segments are sustained are served together if we need to maximize our profits. The current situation is ideal, but if we increase the size of this segment we will be better off, given the large profits margins that we reap from this sector. Hence, a clever marketing strategy and marketing plan is required for Triumph Spares Limited in order to achieve our desired aims and to make sure that we increase our profits and revenue in the future and at least sustain our current market position. The industry structure is very competitive given the competing firms that pose threat to Triumph Spares Limited. However, more competition exists in retailing these spare parts than the manufacturing of these spare parts. Hence, the firm needs to be really careful in devising its pricing and positioning policies. If we analyze the industry from porter’s five forces model, we will see that competitive rivalry among the firms is high. Many firms including Triumph Spares Limited are retailing the spare parts and hence the treat of rivalry is really high in this industry. However, threat of substitute products is low given that no other product can replace these spare parts. Therefore, these spare parts are essential and cannot be replaced by any other product. Threat of new entrants is low in the manufacturing part of the business, as the setting up of machinery and other sunk costs is high. However, threat of new entrants is high in the retailing of these spare parts. Bargaining power of customers is really and we have exploited them by charging a profit margin of 100%. This is made possible because the bargaining power of customers is really low. Bargaining power of supplier is also low because there are only five firms in the industry selling Triumph Spare Parts. Hence, all of these are large purchasers and suppliers cannot exploit them. IV. Consumer Analysis: The buying decision for the purchase of Triumph Spare Parts is Limited Decision making. These products are highly complex and specialized products. These are bought on the recommendation of the retailer or other more experienced people. In this case, these products will be bought on the advice of the car mechanic. The participant in the buying process will either people with no knowledge or people with very in-depth knowledge about the product. In other words, these purchases will be made either by the ordinary consumers, or the car mechanics. Psychographics that should be considered is what type of people buy the product. Since our product will be mainly bought by people both rich and poor depending on their needs, we need to make pricing and promotion decisions in a way that is beneficial for both the customers and the company itself. Buyer’s motivation here will definitely be price and promotional activities. Hence, we need to tempt them into buying the product via effective pricing and promotional policies. We also need to build loyal customer base by offering them incentives such as a discount on their next purchase etc. This will make sure that our customers won’t be tempted to buy from any competitor and will keep making purchases from us. For B2B segment, the biggest motivation for them will be the price of the product they are buying. So, in order to increase our customer base in the B2B segment, we can offer discounts and we can squeeze our profit margin. This segment contributes heavily to our revenues and we need to make sure that we sustain this segment. V. Situational Analysis – SWOT Strengths: Our biggest strength is the goodwill that our old brand name is carrying. We need to educate people about our brand name more and should tell them that they can associate this name with quality. Since, we are an old profitable business; we have enough reserves to carry out our chosen marketing plan without having to worry about the finance. Our main market segment is B2B sales which will not be interested in promotional activities but in reduced price. Weaknesses: Our profits are continually declining for last 4 years. We need to investigate the problem which will require time and money. Hence, this can increase the level of expenditure of the company. Another weakness is too much reliance on one market segment. This can be dangerous as the firm has all its eggs in one basket Opportunities: It is forecasted the aggregate demand in the future will rise and the entire industry is going to benefit from it. Threats: Recession has reduced the demand for spares part and as result profits for all the firms in the industry is declining. There are also a lot of stringent rules and regulations over the industry. VI. Marketing Strategy: Product: Our product appeals to both the finals consumers and B2B buyers. We can also try to enhance the quality of product to through R&D. This will enable us to raise our price and if our product is of highest quality we can gain more market share. The product is of utmost important because it our USP (UNIQUE SELLING POINT) and we need to enhance its quality in order distinguish it from the competition. Pricing: We can provide promotional pricing for a short period of time by squeezing our profit margins which are very high at the moment. This will help us raise our profits and prices in the future and to kill the competition. Thus, until we enhance our product quality, we need to lower our prices. Promotional: The promotional policies should be devised in such a way so that it appeals to both consumers and businesses. In fact, we can devise a separate promotional strategy for our different segments. We can offer after sale and advisory services for the consumers who have little knowledge about the spare parts. We can also increase our reputation by providing free advice for making the right purchase. For our B2B customers, we can offer them large discounts on bulk purchasing and we can also offer them incentives on large purchases. This will help us building loyal customer bases and sustain and increase the market share. Packaging: Packaging is not really important for the kind of product we are selling. Probably a convenient carry bag or carton is all we need. For our B2B buyers, we can offer them easy-to-carry cartons, which will ensure the safety of the product and will enable them to store the product. For consumers, we can provide them free fitting of the parts on purchasing from our retail shop. This will not only build loyalty, but it will also increase our market share. References Phillip Kotler and Gary Armstrong. (2004). Principles of Marketing. Prentice Hall Read More