How to Run a Simulation Company - Essay Example

How to run a simulation company Simventure marketing strategies Simventure is establishing a new SME called Jingo which will offer computing products and services. The company wishes to make their approach customer-based so that they can become the leaders in the computing industry. Simventure has taken much consideration for planning the launching of Jingo. The stages in the planning process include devising corporate objectives, marketing audit, SWOT analysis, marketing objectives, marketing strategies, marketing programmes, budgets and control and evaluation. This will help the company establish a market position and maintain it to be the best in the industry. 1. Marketing objectives Fundamental areas within which marketing objectives may be theoretically defined include; Achieving marketing share growth or maintenance, the maintenance or important of profitability; establishing an opening market position and maximizing cash flow, harvesting. a) Achieving marketing share growth or maintenance The most important marketing objective of starting a business is to achieve marketing share growth and be able to maintain it. Where the business is entering into a market where there are already established businesses, it is difficult to penetrate the market and worse to be the market leader. As such, the business should establish market strategies which will allow it to enter into the market and tactfully compete with other established companies without being ousted out of the market. Market expansion strategies should be aggressive and should include high levels of defense for the acquired market while expanding into the target market. b) Establishing an opening market position The business objects to establish an opening market position by providing services and products which are highly perceived by the customers. This includes; identifying the departing point between the products of a company and other brands of the industry. The brands should not only be different but also be attractive and distinct from those of the rivals companies. The company should also determine the target market which they should be able to serve the best. This is done by analyzing their strengths and weaknesses. A market position is aided by conducting consumer analysis so as to identify what the consumer expect different what is being offered by the rival companies. Establishing a market position enables the business to survive despite stiff competition in the market. 2. Marketing objectives for the organization in Simventure a) Increase market/ brand share. Simventure should object to increase their market share on the new products. The most effective way is providing high quality products at an affordable price which should be able to compete with the rival companies. Advertisement should also be used as a marketing tool to ensure that the company creates awareness on the existence of the product in the market. With the improvement of technology, the company should use diverse means to get the products closer to the consumers such as using online marketing. b) Sales forecast Sales forecasts enables a business to project the sales which they expect to make at the end of a specified period of time. Simventure should forecast their sales and demand for their products so as to be able to measure their performance against their projected performance with an aim of making relevant changes should the forecasts performance not be in alignment with the outcomes. This will be helpful in future allocation of resources and actions which will help the business make the relevant changes to achieve their objectives. 3. Marketing strategy: Competitor strategies Analyzing competitor strategies enables a firm to formulate effective policies and the best way to execute them in order to remain economically relevant in the industry. Competitor strategies will help stimulate the sales and increase the market share of Simventure. Before making any decisions concerning the launch of Jingo or the target customers, Simventure should analyze their competitor’s activities in the industry in order to establish their competitive position. They should analyze their relationship between the competitors to identify the market leader, the followers, and their strengths and weaknesses in the delivery of services in the industry. In alignment with the competitor analysis, Simventure should carry out market analysis to identify the gap that is left by the competitors in the market. This will help them provide the ideal products to the market. This will make the more ideal than their competitors which will increase their market share. This will include adding unique features in the brands and services which will satisfy the desire of the target market more than the products which are already established. The competitors are classified in terms of brand, form, generic and brand their offer in the industry. It is important to conduct a competitor analysis since their presence can inhibit nay entry or maintenance of a business in the market since they are already established and they have the economies of scale to oust any new entrants. The competitor analysis indicate that there are six competitors for the new simventure SME Jingo; Ping Computers, Compuland, Everyday IT, Datastore, Gearing Brothers and Perry Systems. All the competitors here have their strengths and weaknesses. They are diversified in their products and the only direct competitor offering the same service as Jingo, database has weak both quality and performance which implies that simventure will be able to compete favourably in this industry. The industry has a promising growth capacity due to the tremendous growth which is currently being experienced in the UK and which database has not been able to satisfy (Giles, 2014). Jingo has strategically positioned itself in the market by targeting production of high quality services and products of up to 65%. This is because it is backed by technology to achieve a forecast performance index of approximately 75%. The service industry will be able to provide cheap but high quality services to the customers increasing their competiveness in the industry. In order to compete effectively in the market, Simventure should provide quality computing products and services to the customers that what the customers perceive from other firms. They should discourage competition by providing products with a wide range of prices so as to offer customers with a choice and variety of products and services. By identifying the features of the services and products offered by competitors in the market and their market share percentage, Simventure will be able to identify decisions which are used by the target customers in making purchase decisions. The products and their features should also be ranked according to their importance in relation to their uniqueness in the market so as to identify their unique selling points with a purpose to outwit them. 4. Marketing programs: Planned marketing actions a) Reposition the product This involves establishing a place in the customers ‘minds where the Simventure’s computing products and services will occupy. Reposition emphasizes perception of the products and services to the consumers to increase their competitive advantage. Repositioning can be achieved by ordering unique features and communication to the larger market through advertising in order to deliver the intended product perception. The higher the degree of uniqueness and advertisements, the more the customers remember and perceive the produces and services which will motivates them to buy from Simventure as opposed to their competitors since customers tent to align themselves more with the services and products in the market which they perceive to be more ideal than others. For example, BMW Company repositioned its products in order to increase their market share by reducing their costs while improving the safety of their clientele. b) Improve product packaging Packaging is very vital in marketing a product because it shapes the perception the customers have about the products. With an enticing packaging, Simventure will be able to attract more customers to their products. The packaging is worth approximately 10% of the selling value of the product and therefore, it should be made in such a way that it should affect the purchasing decisions of the customers to purchase their products as opposed to those of the other competitors. The improved packaging should meet the environmental and customer’s needs such as disposal, transport, storage. c) Alter prices Prices of products and services is a crucial determiner of the market share to be occupied by the Simventure products and services. The company should be able to alter it prices depending on the market environment such as cost to serve, value of the product, demand and changes in the service prices of the rival companies. Price discrimination and segmentation should be considered in order to deal with different capacities in the market. Products should be customized in such a way as to serve high cots and moderate customers. Price altering can be done in areas such as negotiation, discounts, time pricing, product bundling and product line pricing. d) Improve The objective of Jingo is to be the best, in terms of customer service and provide the customers with affordable affordable prices that will be unmatched in quality and service. As such, the company needs to improve their quality while at the same time keeping the costs of production down in order to increase the profitability of the products. e) Standardize Standardization of products and services should be done in alignment with the market. The prices and quality should not be very low or very high when compared to other service providers in the market. This will allow the business to make enough profit while at the same time maintaining the market share. f) Change sales or customers mix The company should be able to adjust their sales and marketing mix in order to achieve their goals and compete effectively in the market. This done to realign the products and services with the changing customer’s needs attitudes and preferences. This can also involve modifying the products so as to compete favorably in the market. 5. Marketing strategies: A case for Mark and Spencer in the UK Mark and Spencer Company has employed many marketing strategies to grow from a small MSE to a big company with outlets globally. According to the annual report of 2013, the sales of the company grew tremendously to expand the market share by 16.6%. This was prompted by various such as, improving their popular Shop Your Way selection of products, creation of more styles, improvement of choices, free delivery services to loyal clients, interdiction of new in store technology such as transactional iPhone app which helps it keep in touch with the changing technology. This has increased the company’s group profits to £10.0 bn which translates to profits after tax of £564.3 m in the retail stores. Mark and Spencer has gone through a series of marketing strategies an advertisement to emerge the market leader considering the increase in the number of retailers in the fashion industry. Strategic marketing has enabled Mark and Spencer to control about 15% of the total market share even with the intense competition from other stores. According to Andrew (1998), Mark and Spencer was able to survive the intense competition due to their differentiated and efficient products without having to lower their prices unfavorably. By comparing the real evidence and costs of the Mark and Spencer Company and those of the simulation, it is evident that the Simventure is making losses instead of profits. This is because its total income is less than the expenditure. On the other hand, mark and spencer has been able to make a profit of £564.3 m after tax. Simventure may be facing stiff competition from the rival companies in the industry which forces it to lower their prices more than the cost of production thus leading to losses. Other multimedia marketing actions could be included in the simulation include; Rebranding of products and services to achieve differentiation, Segmentation of products and services to cater for a wider market. 6. Control & Evaluation Importance of control and evaluation in the marketing planning process Control and evaluation are important concepts in marketing planning. They deal with tracing information and in other instances, changing and modifying the information in order to ensure that the performance of the business if not curtailed. Evaluation is also concerned with identification of potential and future threats to the performance for the business. Control and evaluation serves as a connecting link between different strategies in the planning process. They also help the business to understand their customers better. Other functions of control and evaluation include; Ensuring activities carry on as planned Ensuring the required job is done To ensure the business is generating return on capital Ensuring their right tools are used Making sure that the set objectives are met without failure. Sales forecast The business has not achieved its sales forecasts for the year. It was forecast that the company will achieve an estimated performance of 62% similar to the performance of their competitors but they did not make any profits since their expenditure was more than their incomes. This can be attributed to over ambitious forecasts considering that Jingo is a new SME in the industry. Due to intense competition from their already established rivals, it is possible that Jingo lost the market to them and tried competing while reducing the profits without a considerable reduction in costs of production. Some of the expenses incurred by the business are production expenses, rent, research, sales and marketing, finance expenses and miscellaneous expenses. The expenses require to be controlled so to balance the income and expenditure in such a way that the incomes are more than the expenses to prevent the business from making losses and instead make profits. The business lost a lot of money in operating costs. The income received from the sale of the computing products and services are only slightly higher than the costs of producing them which is cancelled by the other administrative expenses such as rent and miscellaneous expenses. The business has no sales and advertisement costs which mean that they did not invest much in the advertisement of the products and services. Being a new product in the market, advertisement is important in creating products awareness. To make the business more successful, the business should consider revising their marketing strategies and competitor analysis in order to be able to devise new ways of producing their products and services cheaply. Other ways that can be done is to increase the profitability of the business is rebranding of their product, altering the prices to increase the market coverage and improve the packaging of the products so as to attract more customers. Advertisement should also be emphasized in order to increase the sales of their products and services. Bibliography Gurau,C. & Ashok Ranchhod, A., 2007. Marketing Strategies: A Contemporary Approach. Financial Times, Prentice Hall; 2 edition. Read More