Marketing Strategy for a New Product - Essay Example

New product “Laundry reloaded” Marketing Strategy The laundry industry plays a very crucial role in the lives of people. Therefore, the launching a new in the laundry industry requires a comprehensive marketing strategy. Coming up with a product marketing strategy is one of the most challenging aspects of marketing and launching a new product. The marketing strategy for the product “laundry reloaded’ will involve marketing mix and 4ps (product, placement, pricing, and promotion). Laermer and Simmons (15) assert that the process of the placement of the four P’s is considered as one of the ways of marketing products in the market. This marketing strategy will help gain an understanding of how to position a product in the market. It will show how laundry reloaded will be the right product in the right place, price and time. 1. The general market and specific target markets Washing clothes and maintaining good hygiene is undertaken by most people. Majority of people in the 21st century are spending much of their time in the laundry. This means that most people are valuing laundry services and products in equal measure (Homburg, Sabine & Harley 27). With the current advancements in technology, there is a growing demand for sophisticated laundry products by the consumers. The market is also changing thus making manufacturers to come up with products that exceed both the industry and customer expectations. Innovation in the laundry products is often driven by the consumer’s demand for pursuit of an improved consumption experience. Most of the laundry customers often want new products with new features. The target markets for the laundry products are middle class and a portion of high-end consumers who want to have value for the money they spend. Specifically, these people look for laundry machines on the market that are admired are characterized by their improved functionality, uses the latest technology, energy efficient, cost effective, and aesthetic. 2. The Purchase behavior for the typical laundry customer Majority of the laundry customers often want their clothes to dry faster, have a tendency to use a particular type of machine, have busy lifestyles, and often demand for convenient products that offer quicker and better results while supporting the environment and saving money, energy, and time.  Considering that the product will be sold to middle-class as well as a spatial population of the high-end consumers, this target market is characterized with preference for quality irrespective of the price. These consumers also often use technology thus a technologically advanced product will be most preferred for them. 3. Product Strategy Majority of washing machines just eliminate significant water amounts from the laundry at the end of the wash cycle, but they do not completely dry it. Considering the fact that most customers need dried apparel, the new machine would go a step a further and dry the clothing something which “laundry reloaded provides.” By using this product, customers will be relieved from worrying about transferring their washed clothes to the dryer. From the customer’s perspective, this laundry-reloaded product is highly convenient because it is compact, easy to use, and has the additional benefit of the laundry view text option. Additionally, the product is stylish and has a great design. The laundry reloaded machine will be small so that it can fit into an average size laundry room. It will be available in multiple colors such as white, silver, black, red, blue, and pink. The product has more appeal to sustainable consumers who want to save on their energy costs. This product is different from competitors because no other laundry appliance company is offering this two in one technology. Another competitive feature of the “laundry reloaded” is the presence of the laundry view. The laundry view allows the user to check the status of machines in laundry room without ever having to be in the laundry room. This laundry view gives text alerts when the dryer is complete. Considering that the most common problem for most laundry machines is shrinkage of garments, the developed machine would have a feature for preshrinking the clothes in order to avoid this problem. Another common problem that has been alleviated by this new product is color bleeding. Although most of the machines wash clothes with same color to avoid this problem, in this case, ‘laundry reloaded would lessen this problem by adding cold water and providing repeated washings in a shorter time. 4. Distribution Strategy The product will be placed in areas where the footfall of the target audience is maximum including hypermarkets, malls, and supermarkets in the appliances section. In order to gain competitive advantage, the product will be made available for big box stores. 5. Price Strategy Since the target market is mainly the Baby-Boomers and Generation X who want to have value for their money by purchasing quality products, the pricing strategy to be used will be skimming. This strategy is aimed at targeting the early adopters of the product. These categories of consumers are easier to persuade to trade up to higher price points because they have more disposable income. Pricing is one of the main factors associated with the process of generation of revenue from a particular product. On average, a dryer lasts about 11 years if it is run once a day. The average washing machine costs about US$700. The average clothes dryer is about US$600. In total, the average cost for a washer and dryer is US$1300. The laundry reloaded product would be approximately US$1150 because we want to keep the prices competitive with the other laundry machines on the market. 6. Promotion Strategy In the case of laundry reloaded, the purpose of promotion is targeted at people who do much of laundry. Therefore, the target audience will both be the physical store shoppers and online consumers. The product will be advertised in both electronic and print media. This will offer the customers a wider chance of coming across the product. Shaw (31) argues that online marketing has proven to be the most successful as a result of its convenience and flexibility. Online networking sites will be used in the promotion of this product, such as social media networks, like, Facebook, LinkedIn, MySpace, and Twitter, as well as through online forums and blogs. Internet marketing is flexible and a wider-customer base is reached. This enables the firm to gain competitive advantage. Internet marketing will be used by the sales persons so as to convince the customer to buy the product. In the same way, some of personal selling devices that will be used include phones and e-mails. Moreover, posters will be put in magazines and newspapers. 7. Technological Issues With the development of technology, most people prefer using electronic appliances that have unique features, cost effective, better functionality, and appealing to the eye. Considering the stiff competition in the electronic market, the machine works as a two in one machine serving bother as a washer and dryer. This makes it a one step laundry unit. “Laundry reloaded” also has a laundry view that allows the user to check the status of machines in laundry room without necessarily being in the laundry room and also gives text alerts when the dryer is complete. The machine also comes in various sizes and colors according to customer needs. Since the target market has preference for unique electronic appliances, ‘laundry reloaded’ has numerous functionalities which have simplified the washing process. The clothes dry faster, no shrinkage, and color bleeding. Therefore, “laundry reloaded” would be providing services in the most efficient and cost effective way. 8. Financials The price at which the “laundry reloaded” product would be preliminary launched in the market is US$1150 for the 2 in 2 unit. The price has been decided in view of the prices of other appliances that are similar to it competitive in the market. Assuming that it sells around 1500 units its first year and 2000 in its second year, the company is likely to get gross sales of about US$2 million in its first year of operation. We will assume that laundry reloaded sales will rise at a rate of 8% starting from the second year onwards. We would also assume that the cost of goods sold is approximately 40%, operating expenses 20%, and fixed expenses 35% of the total revenue, thus resulting to profit margins of 60% of the total revenue. Since most people are looking for energy efficient and convenient appliances, and it is expected the company would sell a large number of laundry reloaded units in its first year than the competitors. 9. Positive and Negative points Recommendations or course of actions. The firm needs to use SWOT analysis so as to evaluate the strengths, weaknesses, opportunities and threats that are involved in a business venture or project (Hill and Westbrook 47). It specifies the purpose, aims of the business venture and identifies the external and internal factors favourable and unfavourable to attain that objective. There are many factors to be considered that are outside the 4 P’s in the open world environment of business and risks. The PEST (political, economic, social, technological) analysis will help to evaluate the influence of macro structures on doing business (Boddy and Paton 112). Politically, the product will be sold to nations with stable environment for doing business nations in compliance with energy efficiency requirements in the respective nations. Moreover, a Porter’s five forces framework will be used to identify the attractiveness of the laundry industry in terms five competitive forces including the threat of entry, threat of substitutes, the bargaining power of buyers, the bargaining power of suppliers, and the degree of rivalry between the competitors. Besides that, the firm could use Porter’s generic strategies to evaluate how it will pursue competitive advantage across the laundry appliances market. These strategies comprise of lower cost, focus, and differentiated (Porter, 23-27). Considering that laundry machines make use high-pressure steam as well as hazardous chemicals, the firm needs to provide initial training to the users in order to avoid injuries such as severe burns and exposure to chemicals. However, the economic and social factors favors the sale of the ‘laundry reloaded’ since an estimated 300 million out of the 317 Americans belong to the middle with high affinity for quality products; the high prices of the product will not affect the market share. Works Cited Boddy, D., and Paton, S. Management: An introduction. Harlow: Financial Times Prentice Hall, 2011. Print. Boone, L. Contemporary Marketing. New Delhi: MacMillan Publishers, 2012. Print. Hill, T. and Westbrook, R. "SWOT Analysis: It’s Time for a Product Recall". Long Range Planning 30. 1, (2007): 46–52. Porter, Michael. Competitive Strategy: Techniques for analyzing industries and competitors, New York: The Free Press, 1980. Print. Laermer, R., & Simmons, M. Punk Marketing, New York: Harper Collins, 2007. Print. Homburg, C., Sabine, K., and Harley, K. Marketing Management: A Contemporary Perspective, London: Sage Publishers, 2009. Shaw, E. "Marketing strategy: From the origin of the concept to the development of a conceptual framework." Journal of Historical Research in Marketing, 4.1(2012): 30–55. Read More