Enviro Golf Tees - Case Study Example

OUTLINE REPORT FOR ENVIRO GOLF TEES, A NEW COMPANY MANUFACTURING BIODEGRADABLE GOLF TEES Introduction This is a comprehensive, written ofa new company – ENVIRO GOLF TEES. The company manufactures biodegradable golf tees. The report will lead us into an integrated view of the company, help us identify better the target clients, outline the market segment, shape pricing strategy and define the competitive conditions. With these conditions, the business is ensured of a consistent and harmonized operation. The company should be able to discover a competitive advantage or new opportunities, or identify problems along the way. The following process in making a business plan for Enviro Golf Tees is being implemented: 1. Assessing the situation 2. Developing a mission 3. Getting ready 4. Setting goals 5. Working out the business plan 6. Setting employee objectives 7. Monitoring the process (Unctad, 2002, p. 9) The meaning and importance of the company being marketing-oriented As the name suggests, this is a company with environmental concerns placed ahead of profits. Biodegradable materials are what we need these days, not garbage that destroy our environment. Global warming is a real threat. In conducting business, it must be in accordance with nature’s cycle of destroy-and-replace-itself. We cannot just ignore nature and conduct our own business no matter what happens. This product is revolutionary. Biodegradable golf tees are a rare product. Golf enthusiasts know what happens out there in the field. They play and throw away those things afterward, replacing the tees with new ones. So producing these “toys” and discriminately throwing them after use is tantamount to worsening global warming. We have to help the “green movement” by minimizing production of non-biodegradable materials, producing biodegradable ones and helping reduce surplus inventory of goods in plants and industries. Concerned people and blocs will commend what we will be doing business. Enviro Golf Tees is going forward. And there’s no turning back. Marketing defined “Marketing consists of individual and organisational activities that facilitate and expedite satisfying exchange relationships in a dynamic environment through the creation, distribution, promotion and pricing of goods, service and ideas.” (Dibb, et al, cited in Zairi, 1996, p. 5) Activities of Enviro Golf Tees in the immediate future will revolve around this concept: creation, distribution, promotion and pricing of a state-of-the art environment-friendly golf tees. Marketing a product with an objective of helping preserve the environment is the primary goal. However, the company will go through the process of regular marketing, surveying the psychology and culture of consumers and people, and making moves that will lead the company to a determined future. “Marketers must constantly assess their customers’ requirements and be prepared to modify their marketing activity accordingly. An assessment of marketing opportunities is an ever evolving process requiring regular revision and up-dating.” (Zairi, 1996, p. 5) Objectives and goals of Enviro Golf Tees are currently based on this. Core ingredients of our priorites Focus and thrust of the company’s business will bear the “core ingredients of the various definitions that collectively indicate the basic priorities of marketing: satisfying customers Marketing of the product will be primarily based on a wholesale basis, not piece-by-piece. For as long as customers, in this case golf courses, tournament organizers, etc. – buy golf balls, golf tees will be simultaneously sold along with it. identifying/maximizing marketing opportunities This may be an easy way because marketing opportunities will always be there in the field of the countless golf courses in the country. targeting the right customers As has been said, the customers are not one or a few players of golf, but the thousands of golf courses and owners in the United States. facilitating exchange relationships Customer relationship marketing will be a basic knowledge of employees and staff. staying ahead in dynamic environments The company will be competitive, employees full of vigor to sell the products. endeavoring to beat or pre-empt competitors Pre-empting competitors is ahead of priorities because the product is not ordinary. utilizing resources/assets effectively This can be attained through proper training in handling of supplies and resources. increasing market share enhancing profitability”. (Zairi, 1996, p. 5) The marketing environment Golf tees are a necessity in playing golf, we all know that. We can not just play out there without this gadget. They are like golf balls; if there’s great demand for golf balls, so do with golf tees. And they are also expendable. This is the reason why the company’s objective of producing bio-degradable tees is a priority. The product alone is beneficial to the environment. Prices for the product should be consistent with the Enviro Golf Tees’ goals and mission. Pricing decision should be set in accordance with organization’s objectives, costs for the manufacturing, other marketing mix variables, channel member expectations, buyers’ perceptions, competition, and the legal and regulatory issues. (Dibb et al, 1997, p. 567-568) Perceived or “real” differences in competitors’ products: Some competitive products are identical product. Price is therefore the only consideration. Marketing Mix Variables According to Dibb et al (1997, p. 576), “Price is the value placed on what is exchanged. The buyer exchanges buying power – which depends on the buyer’s income, credit and wealth – for satisfaction or utility. Price is a key element in the marketing mix because it relates directly to the generation of total revenue.” While we depend on the price of golf tees for the generation of revenues, pricing has to consider many factors so that the company can proceed smoothly in the operation and gain momentum in the process. Pricing can be determined on a wholesale basis. “Pricing objectives are overall goals that describe the role of price in a firm’s long range plans. The must fundamental pricing, objective is the organisation’s revival. Price can be easily adjusted to increase sales volume or to combat competition so that organisation can stay alive.” (576) Pricing can be determined on a wholesale basis. Golf tees are small gadgets that can be sold in coordination with golf ball sales. “All marketing mix variables are closely interrelated. Pricing decisions can influence decisions and activities associated with product, distribution, promotion and customer service variables.” (Dibb et al, 1997, p. 569) This means that in pricing golf tees, the price is associated with many aspects surrounding the production, promotion or advertizing, up to the time the product reaches the consumer. Deciding on the price of golf tees is associated with many factors that may also involve a process of trial-and-error because the company is introducing a new product, i.e., a biodegradable material. It must not be too low or too high. The cost of production, however, should be closely considered because the materials might not be too easy to obtain. Production process in this aspect must be the first thing to be given preference. “A product’s price frequently affects the demand for the item. A high price, for instance, may result in low unit sales, which in turn may lead to higher production costs per unit. Conversely, lower per unit product costs may result from a low price. For many products, buyers associate better product quality with a high price and poorer product quality with a low price.” (569) As stated earlier, trial-and-error for pricing could be one of the options. The psychological aspect of product introduction to the consumers should also be considered. Quality is associated with high price, and low price with poorer product. But we can not just place a high price on a product just to make it appear of high quality; and if we lower the price, also take into consideration, the cost of production, promotion, distribution, etc. Costs must be an issue when establishing price. The company may temporarily sell products below cost to match the competition, to generate cash flow or even to increase market share; but in the long run it cannot survive by selling its products below cost. This to say that Enviro Golf Tees can not survive if each item is sold slightly below what it costs to product and market. The company should be careful to analyze all costs so that they can be included in the total costing associated with a product. The Management Team There should be a usual understanding team, and this is very important. This team recommends as many managers as practically possible in the operation of the business. The team will determine the amount, type and sources of financing and when it is required. It will also get an approval from board of directors/shareholders. Recruiting and introducing new members of the management staff is one of the considerations. Some other functions are deriving objectives for employees. Return on Investment Trial and error is applied for purposes of determining return on investment (ROI). This means it is difficult to determine the ROI when setting prices. “Pricing to attain a specified rate of return on the company’s investment is a profit related pricing objective.” (Dibb et al, 1997, p. 566) Market segmentation Market segment for biodegradable golf tees will have to be organizations or people managing golf courses, and not just individual players of the game. These organizations have similar characteristics. They purchase golf balls by the bulk, and so with golf tees. Marketers of golf balls may also be a part of this segment. As defined, a market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. A true market segment meets all of the following criteria: it is distinct from other segments; it is homogeneous within the segment (exhibits common attributes); it responds similarly to a market stimulus, and it can be reached by a market intervention. In market segmentation, the adult, gender and age following have to be taken into consideration. In addition, following subjects have to be addressed properly in the course of the normal operation of the company: How many of the young and old play golf? How do these competitors market their product? Competitors or manufacturers of golf balls and tees – data and survey have to be gathered. The appropriate market segment can be determined by answering questions, like: Who are they, what do they believe and how do these beliefs differ across each segment? We are targeting golf clubs and courses across the United States. One golf club can deliver much premium to the company. A state of the United States has enormous golf clubs and courses. What is the main product benefit message that carries across all target segments? This a biodegradable material. You can leave it as it is, the product will merge with the elements, you don’t need to worry of the environment. What are the most compelling support points to stand behind the overall benefit claim? Offer and promotion: By target segment, what are the offers most likely to induce the desired purchase behavior? Geographic considerations: How do these align by target group or shape the message potential even further? How can these be customized by target segment or geography? The use of marketing info and research One of the primary challenges and activities in the initial operation is how to penetrate the market. This may not be a problem for as long as appropriate marketing info and research is done with regards to the real picture. This will focus on the kind or make of the product. Enough research should be done on marketable golf tees. What similar products are now in the market? Who are the competitors? Research and Development should also be the primary activity of the company since this is a relatively new kind of product. The use of television advertizing is important because this has the ability to deliver large scale audiences. The internet and Internet Protocol Television (IPTV) can also be major methods of advertizing. “Research firm eMarketer estimates that advertisers will spend at least $1.5 billion on online video ads by the end of the decade—up from an estimated $225 million in 2006 (eMarketer, 2005). It is safe to assume that over time, a growing portion of Internet video ads will be increasingly targeted and customized.” (Marcus & Walpert, 2007) The role that marketing communication should play in future plans “Marketing communications is primarily concerned with demand generation, product/produce/service positioning while corporate communications deal with issue management, mergers and acquisitions, and litigation, etc.” (Wikimedia Foundation, Inc. 2008) Enviro Golf Tees should have the necessary infrastructure for marketing communications. These will need people with expertise and the necessary resources to conduct proper and effective marketing, advertising, branding, direct marketing, graphic design, packaging, promotion, publicity, sponsorship, public relations, sales, sales promotion and online marketing. These items need managers and planners, and action men who will materialize everything that was planned. Big portion of advertising budget should go to television advertising and the internet, printed materials and flyers. Much competition is delivered through the internet and the Internet Protocol Television (IPTV). Advertizing Environ Golf Tees on these forms of media are a must. Marketing communication will be focused on the creation and execution of printed materials, the television, newspapers and other forms of media. This will also be aided with customer service and customer relations. The general behavior of the organization that will be promoted to stakeholders will play a key role. This will also be focused on product and service and demand generation of golf tees. Other issues on marketing communication will deal issues on management, mergers and acquisitions, etc. Enviro Golf Tees will conform and abide with the American Marketing Association’s Code of Ethics. CONCLUSION: Planning in the operation of the company has already been properly done, all that is now in question is the implementation. Issues on marketing have also been ironed out, finances are sourced from the owners and stakeholders, this is systems on the go. References Books Aaker, D., Kumar, V. and Day, G. S. (1998) Marketing Research, New York, John Wiley & Sons Inc. Bendell, T. & Boulter, L. & Goodstadt, P. (1998) Benchmarking for Competitive Advantage. Pearson Professional Limited, London. Dibb, S. & Simkin, L. & Pride, W.M. & Ferrell, O.C. (1997) Marketing Concepts and Strategies. 3rd Edition. Houghton Mifflin, New York. Zairi, M. (1996) Benchmarking for Best Practice: Continuous learning through sustainable innovation. Reed Educational and Professional Publishing Ltd, Oxford. Websites Marcus, C. & Walpert, T. (2007). Emerging Applications and Challenges of Addressable Television Advertising: Turning the challenge of audience fragmentation into a powerful opportunity. Journal of Integrated Marketing Communications. (p. 14) Available from: UNCTAD (2002). How to prepare your business plan. Available from: Read More