Marketing Mix Strategy Nuematic Shoppe - Essay Example

Marketing Mix Strategy – Nuematic Shoppe The changing scenario in the world of business mandates business organizations, small and big, to formulate their strategy every now and then, so as to remain in the industry and compete with its rivals. Recent trends in the business world show that many new companies have come into foray making it difficult for the already existing companies to be complacent. The basic reason for such turn of events in businesses is attributed to effective strategic planning and management. According to Hitt et al (2009:4), strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.1 Today most of the industries are service oriented which means customer satisfaction is their top priority. Therefore it is necessary that the products or services delivered by any company must satisfy the needs of customer. Lehmann and Carpenter (1985:318) stated that designing successful marketing strategies requires an understanding of the structure of product markets and patterns of competition within markets.2 The business entity has to produce and market its product according to its targeted location and customers. Marketing Mix strategy integrated with erstwhile 4Ps was the main tool for most of the academicians and strategy formulators to develop a strategy for a particular product. The 4Ps of marketing mix were product, price, place and promotion. But due to changing scenario in the business operations and competitiveness, it is inevitable that old strategy would survive in time of turbulence. Therefore, most of the organizations are focusing on aspects which are important to achieve the desired output by including people (employee), process (operation) and physical evidence (giving a hand on experience to the customers before they make a decision). The importance of 7Ps in the business organization and its significance on the budget requirements is shown in the present paper by analyzing the business operations of Nuematic Shoppe which manufactures pneumatics, filters, and other automobile parts catering to the needs of national and international customers. Objectives The objectives of the present study are to: 1) Analyze the strategy of company to deliver products and services to its customers 2) Use of marketing mix strategy, if any, and its impact on the business 3) Find whether integration of any other P’s of marketing mix will benefit the company 4) Budgetary allocations if any Ps are added to improve the performance of company Section A: Nuematic Shoppe – Problems Nuematic Shoppe is an Indian company dealing in distribution of pneumatics, hydraulics, LPG/CNG Gas Kits, Multivalves, Filters, Sealing elements, fittings, anti-vibration mounts. The company is a well known entity among the Indian industries with an international reputation as the only professional distributors of exclusive pneumatics and other products. Apart from the above mentioned products, the company is also representing hosts of Indian and international brands like “Shubhnorg”, “Stetters”, “Zeroil Hunter” and “Haag Zeissler” (www.neumaticshoppe.com)3. As the company has good number of customers who place their requirements well in advance, the company is able to cater to the needs in time of emergency as it has stocks readily available. The company is powered with over 40 employees in the factory and 20 administrative staff handling the customer orders, queries, requisition and distribution. Though the company was doing well in the market, there were few complaints arising from the customers about the quality of products which resulted in withdrawal of some orders by them. In order to identify the problem as per the marketing mix strategy, all the 7P’s of company are detailed below: 1) Product: The prodcut or the service is the element which satisfies the client’s needs generating two types of relationships with the prospect: a functional and a linking one which in turn relates to the products usefulness. The product manufactured by any company has to be in demand by the consumer (Belohlavek, 2008:15)4. Neumatic Shoppe manufactures products like pneumatics, hydraulics, filters, etc. catering to the need of national and international customers. The company manufactures at least one new product every month resulting in good business and customers. The company don’t need to depend on any single product to make profit, as it manufactures thousands of products every month. 2) Pricing: According to Belohlavek (2008:15), price is the conditioning element to the purchase which determines, if the the product is chosen, as first choice, is the one desired by the customer. It is an element bearing a priority relationship with the value but on the other hand primoridially relates to opportunity. The fact that there are no major competitors to the company, the issue of deciding upon pricing the products on par with its competitors did not arise. The costing for each and every product is prepared with detailed analysis of each material used in the preparation of the product and their cost along with cost of manpower and amount of infrastructure used in the manufacturing process, after which final sale price is fixed for the product. So depending on the amount of competition and market reputation, pricing strategy is not much of concern for the company as it boasts itself as maintaining the best price in the industry. 3) Promotion: Promoting the products is an important factor in order to affect sales and profit. Promotion includes all the ways to spread the word about the product to the customer. Companies, large and small, in every industry continually experiment with different ways of advertising, promoting, and selling their products. However it is important to mention that innovative advertising is the key to promote your products so as to make it noticeable by your targeted audience (Tracy, 2004).5 Neumatic Shoppe does not makes any major effort to market its product as it deals only with certain limited products used only by automobile dealers, garage owners and other companies involved in making similar kind of products. However, company promotes the brand by distributing brochures and pamphlets at exhibitions, workshops, business meetings and through networking. 4) Place: The fourth P in marketing refers to place where the sales of the product takes place or the place where the goods are actually delivered to the customers. According to Tracy (2004), entrepreneurs must make the right choice about the location or place for the customer to receive essential buying information on the product. Further Behera (n.d)6 mentions that it is the place where customers can buy the product and the process how product reaches to them which is done through different channels, online and offline. Neumatic Shoppe has a sales office making most of the sales for the company. Further company also makes sales from the factory as the location of factory is an industrial area who also require such products. Further the factory is situated on the national highway where many automobile workshops, service centres are located who constantly require products for various services, who are potential customers to the company making bulk of the sales. However, it is important to mention that company does have a website but does not indulge in online sales which is a drawback. 5) People: This referes to the employees, customers, management and all other involved in the process of making sales for the organization. It is important to recruit right staff and train them appropriately to deliver the service and product to customer. Further after recruiting it is important to see that staff is retained in the organization. Nowadays employee retention is a hot topic in various industries because when an employee leaves the organization, along with him goes his experience, skills and lawful customers gained through him. Thus it is necessary to retain the employees which will in turn help to maintain the customer base. Neumatic Shoppe has over 40 employees working in the factory and 20 administrative staff. Though the employees working in the company are experienced, there is an eminent danger of employees leaving the company due to working conditions, pay package and employee-manager relations which is an area of concern. 6) Process: It refers to the systems used to assist the organization in delivering the service. According to Behera (n.d.), it is the method and process of providing a service and is essential to have a thorough knowledge on whether the services are helpful to the customers. It is an essential tool to the customers to know the process of manufacturing and stages invovled in the production of the product. Additional information is always an added advantage to the customers in their decisions regarding a particular product, which may also result in effective sale of the product. Neumatic Shoppe does provide reasonable information regarding the product’s size, variations, etc. on its website (www.neumaticshoppe.com) assisting the customer to place their orders basing on the products listed. However, this factor is not implemented by the company as it does not shows any additional information regarding the process of manufacturing because such products do not require processing information. It is percieved that product details like size, structure, dimensions, flow rates, etc. are only of importance to the customers which are already mentioned on the website. 7) Physical Evidence: It is the element of the service mix allowing the consumer to make judgements on the organization. Physical evidence is an essential ingredient of the service mix wherein consumers will make perceptions based on their sight of their service provision which will have an impact on the organizations perceptual plan of the service (www.learnmarketing.com)7. Nuematic Shoppe does give an opportunity to the customer to have a look at the product. The customers gets a chance to physicall examine the product, its quality and other features. Section B: Analysis The main problem for the company lies in people and promotion. As mentioned above, people are an integral part of company’s success and they should be given greater recognition for their work. At Nuematic Shoppe, though there are experienced people working in the factory, new employees entering the company find it hard to cope with the management. This shows that employee-manager relation is not cordial leading to employee turnover which is a matter of concern. It is important to mention that staff turnover is associated with costs because when an employee leaves, the company has to bear the costs of recruiting a new employee, interview process which is also time consuming. Apart from that, the company has to provide training to the newly recruited employee which adds to the burden on the company. The constant events of employee turnover is costly for any organizations and it is one of the major areas that needs to be addressed at Nuematic Shoppe. Promotion is one more area where the company has to think about while formulating strategy for its product promotion. As mentioned above, company gets engaged in promotional activities like organizing and participating in a workshop, participating in exhibitions, word of mouth advertisement, brochure, and business meetings. In the age of internet, where every other industry is using online media as a source of advertising because of its credibility of reaching large number of audiences quickly, Nuematic Shoppe does not make any effort to advertise online except hosting a website that presents details and specifications about the products manufactured by them. Budgets will be dearly affected, if the employee turnover is not stopped because experience cannot be valued which has been gained by working over years. Pay and perks is also a area where most of the employees tend to leave the company. Though there are not many problems with the administrative staff, the turnover of factory workers is high at Nuematic Shoppe. Dicker (2004)8 states that interpersonal relationships and communication within a workplace need to be high on the priority list of all supervisors and managers. Further it is important to develop a climate of association and a duty of care between management and employees and between the workers themselves. Management at Nuematic Shoppe should conduct meetings at regular intervals at appropriate time with employees at the factory to eliminate any differences between them and sort out the administrative and managerial problems for smooth functioning of the company. However, if their pay particulars are modified, it may entice them to work at the company coupled with interpersonal communication with the managerial staff and better working conditions and facilities. The costs associated with increasing pay and perks may seem minimal when compared to losing employees with loads of experience behind them who can deliver quality products. In regard to promotion, one more element of marketing mix strategy, there will be high costs associated with internet marketing initially, but over a period of time, the costs associated with online advertising will diminish when compared with the online sales. Section C: Conclusions People’s element of marketing mix is not purely strategic at Nuematic Shoppe because there is huge turnover of employee due to managerial issues and other pay benefits. This could be sorted out if a cordial relationship exists between managers and employees through continous meetings and discussions at regular intervals. The pay benefits could also be modified benefiting the employees thus reducing the employee turnover in the company. Promotion, another element of marketing mix, is another area where the company has to address the issue of online advertising. As the company already owns a website, it is not at all an issue for the company to promote its website through SEO and online directories which is almost free. Apart from this, the company may promote its product through online advertising on other sites which may result in creating awareness about the product and brand ultimately resulting in increased sales. Section D: SMART Recommendations Specific: People and Promotion are the two areas which needs to be addressed by the company management. The problem at Nuematic Shoppe is the employee turnover which is rampant and online advertising is not practiced. Measurable: Meetings between employees and managers should happen at regular intervals. Improvement in the pay and perks of the employee may also help in retaining the employees. Online advertising is effective as it creates awareness about the product. Accountable: HR Manager will be the person responsible for dealing the matters with employees regarding company issues and pay benefits while System Administrator along with Manager (Promotions) will be in-charge of online promotional activities. Reasonable: The strategy to overcome the issues pertaining to people and promotion elements of marketing is reasonable as the company will be benefited in terms of experience, quality and improved awareness among the target audience. Timely: Immediately, meeting should take place between employees and managers to sort out the issues while advertising can wait for some time. Promotional activities can take place later but employee satisfaction has to be the top priority which leads to increased customer satisfaction through quality of products which is in turn attached to employee skills. References 1. Behera, M (n.d.) The 7Ps of Marketing Mix, Ezine Articles, http://ezinearticles.com/ 2. Belohlavek, P (2008) Market Cybernetics:Unicist Marketing Mix, Ed 2., The Unicist Research Institute, Blue Eagle Group. 3. Dicker, L (2004) Employee Relations: How to build strong relationships with your employees, Making it happen, Allen & Unwin, Australia 4. Hitt. M.A. Ireland D.R., Hoskisson, R.E (2009) Strategic management: competitiveness and globalization : concepts & cases, Ed.8, Cengage Learning, USA 5. Lehmann D.R and Carpenter G.S. (1985) A Model of Marketing Mix, Brand Switching, and Competition, Journal of Marketing Research, Vol. XXII, p. 318-329 6. Nuematic Shoppe, http://www.neumaticshoppe.com/ 7. Service Marketing Mix/ Extended Marketing Mix, Learn Marketing.net, http://www.learnmarketing.net/ 8. Tracy, B, (2004) The 7 Ps of Marketing: Take charge of your marketing efforts and beat the competition with this simple formula, Entrepreneur, http://www.entrepreneur.com Read More