Managerial Approach to Marketing Kick Cover - Assignment Example

Managerial Approach to Marketing Kick Cover of Affiliation: This paper discusses the marketing and positional objectivesin the marketing of Kick Covers; a product developed to protect all types of shoes while keeping the feet dry and thus preventing infections like colds and athlete’s foot. Secondly, it discusses the Company’s strategic plan including the mission statement, which explains the Company’s overall purpose and aim, aspirations and future. Introduction In setting up a Company, it is important to consider a number of key factors among these being the marketing and positioning of the product (Deshpande, 2001). To effectively market and sell any product, market research to determine consumer needs, attitudes and preferences is imperative. Barney and Hesterly (2006), explain that various strategies can be used to achieve competitive advantage in a market. Kick Covers will utilize the pricing strategy to achieve competitive advantage. Mission Statement Kick Cover is a Company that is devoted to the development of the ultimate skid-free cover attachable onto shoes. The Mission of the Company is to develop and provide ultimate protection to shoes and dry feet solutions for people (Abrahams, 2007). The Company is equally devoted to create a market niche and work to sustain this niche through excellent customer relations, the provision of high quality products while adhering to consumer tastes and preferences (Deshpande, 2001). The Company aims to become a widely recognized brand name while capitalizing on the uniqueness of the product. Our goal is to rapidly grow, achieve annual profitability while maintaining the safety and happiness of customers. Objectives The marketing and positioning objectives for the Company are as follows: 1. To provide all of the resources that our Employees may need to remain as productive as possible. This includes employee training, management of equipment and production supplies. 2. To ensure that customers are kept happy. This is the primary goal of the Company. The rationale is that good customer service will enable the Company to retain customers and generate more revenue. 3. To achieve effectiveness through the Company working to understand the trends in consumer-buying, anticipating distribution needs and developing partnerships to help improve the Company’s market share. 4. To achieve effectiveness in product positioning through triangle- model; this provides for the three distinct strategic options. 5. To focus on both production and operations while maintaining sustainable profit margins on products that is sold. This is to ensure that the revenues exceed the costs of doing business. Customer Targets The target market for Kick Covers is limitless but the middle and low-income earners will be targeted. Other targets will include children of all ages, people working in factories as well as individual’s whose occupation involve their shoes being exposed to abrasion. It is very expensive to purchase a pair of shoes and with this in mind, it is important that their integrity is preserved. Kick Covers are designed to improve the durability of ordinary workers’ shoes as well as those of playful children by as much as two times. This is to ensure that children can play and grow healthy while workers can become more productive. The number of low-income earners is significantly higher than that of high-income earners in most populations (Cottle, 2000). It is this difference in demographics that form the selection criteria for the target market. Given the characteristics and nature of this market, prices were set significantly lower to ensure that no consumer is left out. Kick Cover slip ups cost $6.99; Kick Cover attachable cost $9.99 while the Kick Cover spray (the newest innovation) costs $12.99. All these products will be made available in supermarkets, grocery stores, convenience stores and drug stores where Johnson and Johnson products are sold. It is important to mention that Kick Cover partnered with Johnson and Johnson because this partnership would provide an advantage for mass marketing; the strategy chosen by Kick Cover to market the product. The Company gained television, radio, magazine and billboard advertisement time (Belch & Belch, 2012). The product is currently marketed as an environmentally friendly option made from Copenhagen enzyme, which is based on an antifouling agent as opposed to perfluorooctanesulphate (a toxic substance) that was previously used by Scotchguard Company in the manufacture of the same product (Pickton, 2000). Competitor Targets The main competitors to the product are mostly external and those Companies making similar products (Cottle, 2000). These include companies based in India; Alibaba and Amkey; while the competitor in the United States is Medicaux Healthcare (Gordon, 2002). Kick Cover’s competitive edge is in its pricing (Barney & Hesterly, 2006). While other Companies prices start at $17.99, Kick Cover’s price starts at $6.99. Additionally, Kick Cover can be worn throughout, as they are both colorless and durable. According to Cottle (2000), the threat of copycats or similar products emerging is real and as such, the product will be patented and trademarked to ensure that consumers are not tricked into buying counterfeits. Product Features The brand name for this product is Kick Cover; a shoe cover that is designed to cater for the needs of all demographic groups. This product protects the shoe from damage by water, abrasion and other factors that decrease the life of the shoe. Kick Covers are clear, disposable and impermeable to fluids protecting the wearer from injuries caused by skidding. It is simple to use this product as one simply slips it onto their shoe ensuring the shoe remains dry and protected. These covers can be worn anywhere at any time without the wearer worrying about it being spotted as it is clear or transparent. Two types of the product have been developed so far; attachable covers which last up to 5 days and slip ups which are recycled every 2 days. The company plans to introduce a new product called the Kick Spray, which is a biodegradable hydraulic spray applied on shoes. This product is also invisible to the naked eye and lasts up to 24hrs. Market Mix (Communication and Promotion) According to Mihart (March 30, 2012), integrated marketing communication includes personal selling, sales promotion, direct marketing and personal relations. Personal selling involves marketing the product directly to the consumer and involves 6 steps; prospecting, pre-approach, approach, presenting, overcoming objections and closing the sale (Mihart, March 30, 2012). According to Pickton & Broderick (2001), a sales person prospects by developing a list of potential customers. Pre approach is the analysis of information based on specific product needs, consumer feelings about the available product brands and personal characteristics (Rajput & Vasishth, 2008). The method of approaching the prospective consumer is important. According to Hackley & Hackley (2010), the sales representative then makes a presentation to attract, convince and hold the prospects attention. Then the sales representative seeks out the consumer’s objection (if any) and closes the deal by selling the product (Clow & Baack, 2004). According to Belch & Belch (2012), sales promotion is crucial for product sale. According to Stafford & Faber (2005), promotion aims to help the potential consumer to decide on the most suitable product through promotion channels like the media and magazines. Promotions are also the opportunities for marketers to persuade consumers to purchase the product (Fill & McKee, 2011). According to Semenik (2002), promotions range from giving out free products to cutting on the costs of the product to the final consumer. Sale promotions attract consumers to buy products. However, Fill & McKee (2011) explain that there are disadvantages associated with sale promotions are that products sold through promotions are expensive; promotions also involve the use of advertising which can be costly; and lastly sale promotions involve selling products cheaply which has an impact on product being promoted as well as the promoting Company. The sale of Kick Covers will involve sales promotions done through the sale of shoelaces to attract customers to also buy Kick Covers. Pricing Strategy From the Company’s mission statement, the Company endeavors to create a market niche and work towards sustaining the same through excellent customer relations, fair pricing, the provision of quality products and adherence to customers’ tastes and preferences (Casabona & Traficanti, 2002). This follows the objectives of the pricing strategy that should be focused on general profitability welfare of the Company, continued growth and customer satisfaction (Shy, 2008). Casabona & Traficanti (2002), explain that the use of the profitable pricing strategy whereby the three components; consumer, competitor and costs interact. Kick Cover Inc management focuses on clear-cut interactions among its competitors’ costs such as those for Johnson and Johnson products (Sullivan, Ogden, Quelch, Quisic (Firm), Public Broadcasting Service (U.S.), Insight Media (Firm), & ACT, Inc., (2005). This is projected to facilitate comprehensive pricing trends in the market and with its market positioning, establish the best prices for the product (Mayer, Melitz, Ottaviano & National Bureau of Economic Research, 2011). According to Casabona & Traficanti (2002), this pricing strategy is most suitable as it enables businesses to recover their sunk costs rapidly before the competition stiffens and consequently, the market price decreases. The pricing matrix used assumes that each tier includes a 30% on sale. The 30% includes 20% cost for marketing and promotion; Tier 1: 5.32 (Raw cost of goods plus packaging) Tier 1: 5.32 X 1.30= 6.92 (FOB) Tier 1: 6.92 X 1.30= 9.00 (Wholesale to distribution) Tier1: 9.00 X 1.30= 11.7 (Distribution to retailer) Tier 1: 11.7 X 1.30- 15.21 (SRP to consumer) Channel of Distribution According to Dent (2011), a distributor is the middle person who bridges the gap between intermediaries. Dent further explains that distribution channels refer to the methods selling products as well as the locations where these products are sold in. In direct sales, the company sells directly to the consumer without using the middleman (2011). When using a wholesaler in distribution, the product is put on a number of channels that may be difficult to reach. According to Samli (2004) when using retailers, the company may sell to shops and stores, which slightly hike the price to reach their profits. Belch & Belch (2012) explains that distribution channels include advertisements on company websites, through catalogues, through sales persons and in retail stores. Distribution channels serve to increase the number of sales and it is important to identify methods that may help boost sales volumes (Dent, 2011). It is important to consider the cost implications of the distribution channel(s). For example, direct sales may be more costly as they require processes like shipping products, software for processing credit cards, transaction fees, costs associated with promotions and order processing. Therefore, it is important to note that not all distribution channels, which achieve high sales volume, offer high profit margins (Dent, 2011). It is important to identify the expected sales from a distribution channel to be considered. According to Dent (2011), the cost of the sales as well as the cost for every unit of product can be used to calculate the profit margin. This is important in the selection of the most suitable distribution channel based its ability to pay for sales and manufacture the product. The effect of selling a product in a certain location should be considered when deciding which distribution channel to use. A good distribution channel should have a wide coverage and able to grow the business nationally (Dent, 2011). It is important to compare the costs of the different channels before deciding on which to use. For example, a comparison between an indirect distribution and direct sales distribution would reveal that indirect distribution would be more costly as there are costs associated order processing, delivery and customer service. According to (Mayer, Melitz, Ottaviano & National Bureau of Economic Research (2011), this can be compared with discounting distributors to distribute the same level of product, training as well as the marketing involved. According to Dent (2011), the use of a distribution channel provides a means of delivering the product to consumers and also enables the company to reach more consumers. The company will use retail networks, which sell similar or complementary product to kick covers. Sales incentives will be given to these retailers and distributors to enable the company to reach the retailers’ customer base and expand their own customer base (Dent, 2011). The rationale for this choice is that these retailers or distributors have a better understanding of the market in which they operate and therefore, an association with a company like Johnsons and Johnsons would ensure that Kick Covers reaches a wider customer base (Samli, 2004). Another possible approach would be the use of skilled sales representatives. These sales persons should be knowledgeable and able to establish relationships with potential consumers. With the business expanding to other regions of the country, the identification of a suitable distribution channel retailing similar or complementary products would be important. This is because these distributors are likely to be skilled in selling kick covers. However, it is important that the sales teams from these distributors are adequately trained to sell the product. The rationale behind this choice is that skilled and knowledgeable sales representatives are likely to be motivated enough to ensure that the sale volumes are always on the rise. Customer Relationship Management According to Cunningham (2002), the purpose of Customer Relationship Management is to assist the business to utilize the available technology and the human resource to understand consumer behavior, attitude and preferences as well as the value of these consumers. Cunningham (2002) further explains that when the Customer Relationship Management is effective, it helps increase profits by enabling the seller provide the customers with products that they want. An effective Customer Relationship management will enable the company to offer better customer services; help sales persons to sell the product and close deals faster; will make it possible for the company to better retain existing customers as well as attracting new ones; and it simplifies the processes used in marketing and making sales (Cunningham, 2002). According to Cunningham (2002), the process of Customer Relationship Management will be used in the identification and effective targeting of potential customers, generation of sales contracts and deals as well as the implementation of marketing campaigns with clear goals and measurable objectives. Customer Relationship Management processes will help the company form customer specific relationships (Cunningham, 2002). These relationships will be individualized to improve customer satisfaction and provide the best level of customer service. These processes serve to provide company employees with information that they may require in order to understand their customer needs and in doing so build lasting relationships between the company and the consumers. Customer Relationship Management will be integrated into the plan through; Management of Sales Campaigns The sales people will talk to prospective consumers with the hope of gaining new business. The sales team will target specific consumers based on a criteria that is set beforehand. These selected customers will receive targeted marketing materials and in some cases lowered prices and free goods as incentives. The Customer Relationship Management software records these campaigns, the responses of the consumers and an analysis of the campaign (Cunningham, 2002). Automation of the Sales Force In marketing, the sales department is always looking for new sales opportunities from both the existing and potentially new consumers. According to Cunningham (2002), the sales force automation functionality of the software enables the team to record every contact with customers including their contact details and any follow up. This enables the sales team to operate efficiently and this data can be used by other employees to ensure that they maintain up to date contact with existing consumers ensuring that they get the best level of customer service (Cunningham, 2002). Customer Service This is the front office function of the Customer Relationship Management that enables the company to interact with new customers (Cunningham, 2002). Customer services are processes that make it possible for a company to sell products, communicate and offer services after making sales to consumers. Each interaction between the company and consumer is recorded and stored in the software and can be retrieved when needed (Cunningham, 2002). Conclusion Kick Covers is a shoe cover designed for all demographics. 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