Creative Marketing and Innovative Advertising - Research Paper Example

Introduction: Mo Tech Limited is a new company in the mobile phone industry. Leviathan is the product of Mo Tech which it is planning to introduce in the market. The market research shows that there is wide opportunity for business growth in the market. The product is capable of attaining market share in both commercial and consumer mobile phone market. This project aims at providing suitable marketing strategy for the new product Leviathan. Firms in the mobile phone market have wider opportunity due to the increasing number of subscribers. Mobile phone has emerged as the powerful media reaching vast consumers. Number of subscribers is increasing day by day and it is more than the growth rate in the television or PC market. Competition among service providers and handset manufactures is intense. This is beneficial to the customers as the competition can result in better services to them. In this market condition, Mo Tech Ltd. is required to formulate adequate marketing strategies for successful entry and business growth in the industry. Detailed marketing plan for the product Leviathan is explained below: Market/ Customer segmentation strategy: The segmentation of customer is an effective tool for attaining maximum customer satisfaction. “Customer segmentation is the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests, spending habits, and so on. Using segmentation allows companies to target groups effectively, and allocate marketing resources to best effect.” (Customer Segmentation: Definition. 2009). Market segmentation is essential for the company to differentiate it from the competitors. Good market segmentation offers wider possibilities to the mobile companies. This is essential to reduce customer turnover, increase revenues, attract new customers and increase the customer loyalty. Market segmentation is developed for achieving the present target and will be changed based on the life cycle of the product. It may consist of decisions such as re-branding, repositioning, discontinuing of the product or positioning as a value product or premium product. Market segmentation is the process of dividing a potential market into different subgroups. Segmentation is done with products having common characteristics. It helps to select one or more segments to target with different marketing mix. Market segmentation is the segmentation of market on the basis of sensitivity of price, company’s target, market capturing and so on. It is the division of a market into different homogeneous groups of customers. Market segmentation is "to divide a market by a strategy directed at gaining a major portion of sales to a subgroup in a category, rather than a more limited share of purchases by all category users.” (Lake 2009). The market segmentation process becomes much complicated in the mobile phone market due to the generalization of the device. Due to this, purely technical based market segmentation is not favourable for attaining market acceptance in the mobile phone market. Consumer based market segmentation is helpful for Mo Tech Ltd. for the introduction of Leviathan in the market. The customers for Leviathan can be segmented on the basis of the customer behaviour in usage. They are explained below: 1) Uninvolved: In this category, customers with limited handset usage are included. Their usage of product is merely as a communication tool. Additional benefits from the handset are not expected by them. Hence the price and easiness in usage are considered by them as the criteria for their purchase decision. Most of the customers in this category are old aged people and thus more functionality is not expected by them in the handset. 2) New Life harmony: Customers involved in this category are characterized by limited use of handset even though knowledge about new phones is held with them. They use the handset as a part of their everyday life; hence more fashions in handset are not expected by them. They are younger than the average. 3) Voice as a link: This category of customers is older than the average. Their mobile phone usage is mainly voice centric. Thus the emotional aspects of handset are considered by this category of customers. New functionalities in product do not attract them instantly because they are passive followers of new features. 4) Adopters: In this category, the customers are sensible users who consider the practical applications of mobile phones. They have a strong personal link with the handset and are ready to accept application of new features in the handset quickly. 5) Intense: In this category, customers are much younger than the average. They use mobile phones for creating an indispensable link with their relatives. They are more attracted by the new functions in the mobile phones. 6) Forerunners: In this group, customers are much younger than the average. They are passionate users and the mobile is more than a communication tool for them. It reflects their personality and they are almost addicted to their handset. Thus advanced functionalities in the mobile phone such as multimedia applications and other high tech services are the main criteria for product selection in this category. (Antoine 2003). The young generation should be considered as a core target for the Leviathan while formulating the marketing strategy. The features of the product must be coinciding with the expectations of targeted customer group. Market segmentation is done for promotional measures and is adopted for the targeted customer segments of the product, for example, certain age groups say, 18 to 30. Doing this may be appealing to the specific customer segment. It helps to serve the specific customer segment in best manner as compared to the competitors. The specific features of the targeted market have to be identified in advance for market segmentation. The probable buyers and their preferences must be identified for best results. Product promotion strategy: Good understanding of the market environment is essential for reducing the market risk and attaining success in the competitive market environment. The timing of product entry influences the market success. Advertising is an essential part of product promotion. Mobile phone market is characterized by intense competition among well established firms. In order to get success in this industry, adequate promotional measures are essential. Only the strong will survive in the market. The mobile phone market is a matured market and thus successful entry and existence is a difficult task. In case of mobile phones, the usage benefits are more valued by the customers than technological performance. Changing the handset by new one is very common in mobile phone market. Expectation of improved usage benefits are the main reason behind this. Customers are always expecting improved usage benefits and miniaturization in the product. In case of marketing of Leviathan, Mo Tech should concentrate on the additional usage benefits supplied by them. It will be helpful for getting maximum market share in the industry. For obtaining the targeted revenue and long term market control, a market penetration strategy is to be selected. The company can reduce cost of production with advanced production strategy together with effective cost control management. Pricing should be done to maintain profit. Advertising strategy should be appealing to the customers and should reflect product features. Adverting is helpful for promoting the sale of the products and is helpful to the retailers and distributors. Advertising can be done in different media such as newspaper, internet, TV, etc. Market entry strategy should be based on the analysis of the market environment. The competitor analysis is very important for identifying their product portfolio and positioning strategies. As a latecomer in the market, Mo Tech Ltd. can adopt penetrating pricing to attract the customers. But in electronic industry a lower price is often regarded as lower in quality also. Thus in order to get entry in the market and acquire market share, promotional measures must be based on informing the customers about the enhanced version of the existing products with economy pricing. It will be helpful for competing directly with the existing products. It will also be capable of attracting new customers to the market. Intensive promotional measures must be taken at the initial stage of market entry. The promotional measures of the product should be based on the push strategy and all available mediums should be used for informing the customers. By offering generous discounts and incentives for promoting the offers of the company to the customers, the efficiency of promotional mediums should be ensured. This is also helpful for reducing the advertising cost. Product Differentiation Strategy: The discrete choice theory of product differentiation developed by Simon P. Anderson and others states that “product differentiation –in quality, packaging, design, colour and style- has an important impact on consumer choice.” (Anderson, Palma and Thisse 2009). The Economic Theory of Product Differentiation developed by John Beath and Yanis states that, firms in a particular group producing differentiated products, have the potential to act as a monopolist in relation to their own product. Thus differentiation enables a firm to protect its own market to some degree from the actions of its competitive rivals. (Beath and Katsoulacos 1991, p.6). Product differentiation aims at building brand image among the targeted customer segments with appropriate advertising strategies. It can be employed in the market with regard to supply of superior quality and unique design products at lower cost. For the realization of customer acceptance, new usage benefits are necessary rather than technological performance. In order to attract and sustain customers, supply of product with improved features should be done at reduced price. Along with technological capabilities, attitude of customers is also very important. As a matured product, the possibility of product differentiation is combined with the reduction in price of products along with advanced product features. Presentation of advanced technology must be supported with reduced cost. (Antoine 2003). In order to introduce product differentiation in case of Leviathan, Mo Tech should concentrate on improved product features along with unique usage benefits. The product should be occupying ability to browse the internet. This feature can be differentiated by introducing maximum soft keys, larger screens and specific scrolling experience for the users better than the existing similar featured products of competitors. “Later entrant should differentiate itself substantially in the minds of the consumers. Such positioning should be accomplished through substantial changes in either the product or promotion strategies.” (Kalyanaram and Gurumurthy 1998, p.7). Product differentiation is essential for a later entrant product in the matured market for getting market share. In the intense competitive and matured market of mobile phone and as a late comer product, Leviathan also requires product differentiation. Measurement of Customer Perceptions: Customer perceptions measurement is mainly related to the following two functions: (a)Perceived quality measures: It is the measurement of customer perception with regard to the overall quality and perceived reliability of the product and service to meet their needs. (b)Perceived value measures: Perceived value is related to the quality of the product which is related to its price. Perceived value of product or service can be measured by evaluation of the product or service and customers’ expected price for the product. (Smith 2007). Customers’ buying decision is often based on evaluation of the benefits compared with its costs. Emotional values related to the product such as social status, exclusivity etc are also considered by the customers while selection process. The perceived benefits of the products and its perceived costs will be compared by the customers with another similar product to make the right choice. Thus in order to influence the customers the competitive cost benefit strategy should be adopted by firms. To build relationship with customers, customer perceptions have to be identified and considered while forming business policies. (Kalyanaram and Gurumurthy1998). In the mobile phone market, customer perceptions are dynamic in nature. With the developing relationship between customer and company, customers’ perceptions about the company and its products or services will change. Thus Mo Tech has to identify its customers’ perceptions for taking steps to meet these perceptions. Customer perceptions can be measured through identifying the factors influencing buying behaviour in the market. In the mobile phone market, there are mainly two types of customers i.e. business users and trendy users. In the first category, the buying decisions of customers are mainly based on the improved user benefits. Thus while selecting the marketing process in this category, explanation about the improved advantages should be considered as essential rather than description about the technical advancement. In case of the second category, the technical advancement is more important rather than the advanced user benefits. Customers involved in this category are approaching the product as a status symbol and thus they will be ready to buy the latest model in the market. So, in order to attract these types of customers, Mo Tech has to concentrate on the advanced technology occupying the system while designing the marketing process. Establishment of customer relationship: In the intense competitive market conditions, customers are expecting much care from the companies together with maximum return for their value. Thus along with product differentiation related to the quality, price and functional advantages, establishment of strong customer relationship is a competitive advantage of the firm in the industry. The relationship should be free from product features such as price and quality. This can be created through better customer service and strong interaction with the customers. In order to achieve loyal customership, the feelings and perceptions of the customers with regard to product and service have to be identified and provided by the company. (Recklies 2006). Fastest growing consumer market of mobile phone necessitated the establishment of long term customer relationship. Mo Tech can establish good customer relationship with the customers by following appropriate strategies in the product distribution and customer servicing areas. Product must be available to the customers easily and effective distribution strategy has to be adopted for customer attraction. Sales personnel should be properly trained and inspired to promote the product sales. Better customer service is effective for creating strong customer relationship and attaining sustainable competitive advantage in the market. Loyalty Schemes: Loyalty schemes are the strategies introduced for maintaining good customer relationship. Loyalty programs should be used more effectively and efficiently to suit the needs of the customers. Loyalty schemes can be introduced by studying feedback from customers. Majority of the customers’ problems can be solved through loyalty programs. Loyalty schemes offered must be changed or modified according to the market situation and customers’ tastes or preferences. Loyalty programs must be rewarded to target group and need to be communicated to the groups differently based on customer values. It is essential to make high rewarding packages to long term customers and high valued customers. Loyalty program is introduced for adding new customers and retaining existing customers through the satisfaction of customers. Loyalty program is sometimes costly, but it is essential to introduce it, at least for a short duration for making customers feel that they are cared by the company. In the concept of Scott M. Smith there are mainly six types of customer performance expectations that influence their satisfaction level. Those are explicit expectations, implicit expectations, static performance expectations, dynamic performance expectations, technological expectations and interpersonal expectations. In the explicit expectations, certain performance standards are targeted by the customers for a particular product. In implicit expectations, generally accepted standards for product performance in the market are expected by the customers. In static performance expectations, performance and quality for a specific product defined in the market are considered while measuring the performance of a particular product. The dynamic performance expectations involve the needed changes in the performance enhancement of product or service to attain future business or use environments. It indicates how the product or service advances over time. Technological expectations relate to the continuous improvement in the product category. In case of mobile phones, continuous improvement in technology and product design is necessary to sustain the customer satisfaction continuously. The interpersonal expectations relate to the relationship between the customer and provider of product or service. It is important in case of product requiring service support of the providers. Customer satisfaction is the result of the fulfilment of these entire expectations of the consumers through the product and service of providers. In order to attain customer loyalty, the quality and value of the product is also very important. (Smith 2007). Suitable loyalty schemes should be followed by Mo Tech, for the promotion of the Leviathan. It should be capable of reaching almost every category of the targeted customers. The customers of the new product can be provided with cash credit for buying certain products and services. It will be appealing to all ages, especially teenagers. The cost of granting the rewards can be shared between brand owners and retailers on certain percentage basis. The loyalty program always suffers copycat competition from rival firms. To gauge the degree of appealing of loyalty program to the customers, an in-store trial of its service can be followed. (Schenker 2004).) Customers’ needs and preferences are influenced by the changes in the circumstances. Good corporate relationship should be created for sustaining the customers for a long term. In the concept of Stephen A. Butscher, growing competition in the mobile phone market necessitated customer loyalty program to sustain the customers with the company for a long term. In order to get considerable growth in the market share, ousting the competitors is an essential task and through customer loyalty program, firm can achieve this goal. (Butscher 2002). Loyalty schemes can be used with the phones to encourage the buying trend among customers. Offer suggestions for possible loyalty schemes and promotions: An understanding of the dynamics in the market is very important for formulating proper marketing strategy. The strategies of competitors, the size and growth of the potential market, competitive profile, and competitive assessment should be done by conducting extensive secondary research on key players. Latecomer firms in the industry need to evaluate and develop non-product related sources of differentiation such as customer service and innovative ways to access end users. (Kalyanaram and Gurumurthy 1998). Mo Tech should develop and implement creative ways to increase the product trial. Sample product trial is an appropriate mechanism for new entrants. New channels of distribution such as direct marketing can be adopted for the firm. As a later entrant in the market, it should focus on a suitable target. Appropriate pricing tactics and innovative marketing tactics such as aggressive advertising, and creative service bundling will help the firm to get credible place in the market. Creative marketing and innovative advertising, good distribution networks, new service packages and superior customer service etc should be followed for the product promotion of Leviathan and this will help the firm to get the customer acceptance and targeted business growth in the market Bibliography ANDERSON, Simon P., PALMA, Andre De., and THISSE, Jacques. (2009). Discrete Choice Theory of Product Differentiation. [online]. The MIT Press. Last accessed 12 January 2009 at: http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=5869 ANTOINE, Pierre. (2003).Understanding the Mobile Phone Market Drivers. [online]. Alcatel. Last accessed 12 January 2009 at: http://www.privateline.com/archive/alcaatel.pdf BEATH, John., and KATSOULACOS, Yannis. (1991). The Incentive to Differentiate. [online]. The Economic Theory of Product Differentiation. 6. 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