Current Marketing Mix of Natures Organics - Case Study Example

Marketing 100 Table of Contents Marketing 100 Table of Contents 2 0 Situation Analysis/Current Marketing Mix 3 1 Current Product 3 2 Current Pricing 4 1.3 Current Distribution 5 5 1.4 Current Promotion 7 2.0 Segmentation Theory 8 2.1 Define and Explain Segmentation 8 2.1.1 Stages of Segmentation 8 2.1.2 Methods of segmentation 9 2.2 Benefits to Your Brand from Using Segmentation 10 3.0 Target Market Identification 10 4.0 Target Market Collage 14 6.0 References 20 1.0 Situation Analysis/Current Marketing Mix Natures Organics creates products which have lesser impact on the environment and offer best quality with lowest possible prices. The products of Natures Organics range from biodegradable laundry, dishwashing detergents, house holds surface cleaners to cautiously prepared hair and skincare products. The products are available through major supermarket chains in markets all around the world (Natures Organics n.d) 1.1 Current Product For making any product a company has to decide first regarding who will be the end users of the product, what benefit will customers get by purchasing the product, and what is the main differentiation which makes the product special than other competitive products. The Organic care products are consumable products and majority of its products are for young customers. The main differentiation of Organic Care products is its contents which distinguishes it from other products. Organic Care is a hair care product of ‘Natures Organics’. Organic Care is made from natural elements, instead of commonly used synthetic ingredients. This product helps to cleanse the hair and provide much nourishment. General perspective says that other shampoo brands contain chemicals which can damage the hair of the user. But Organic Care from Natures Organics provides best alternatives to chemical based shampoos. The regular chemical based shampoo is harm for hair and can cause damage to the shine. Organic Care provides good substitutes for other chemical shampoo. Organic Care provides wide range of products which provide customer the freedom to choose. The herbs and natural hair oil in organic products made them special and it can lock the soft smell and shine. Moreover, to provide more efficient customer service, the organisation uses the formula titled ‘natural miracle’ which balances the moisturizer and nourishes the health of the users’ hairs. The consumer can feel their hair soft and manageable, by using these products everyday (Buzzle 2011). 1.2 Current Pricing Price is a vital issue in marketing. The pricing of product affects the product sales and distribution. Many factors have to be considered before deciding the pricing strategy of products. At first the cost of making the product is to be identified. The price must be set in a way that it covers the cost of production and the service cost. The cost of operating the business such as variable cost also needs to be considered for example the salaries of employees, financing cost, inventory cost and others. The market research must be conducted before setting the price of product. The price of the competitors must be observed and then the optimum price has to be decided. The cost of Organic Care Normal Balance Conditioner 400 ml pack is 3.45 Dollar in Australia. The other hair care products of Organic Care are Normal Conditioner, Nourish Shampoo, Nourish Conditioner, Heat Protect Conditioner, Colour Shampoo, and Colour Conditioner which costs 3.45 AUD on an average (Natures Organics n.d.). Compared to other similar products, Organic Care is much cheaper. For example, the cost of Nature’s Gate Organics Shampoo is 4.8 AUD for 12 fl oz (340 ml) bottles (Organic Shampoo and Conditioner 2011); Chamomile Lemon Shampoo costs 8.07 AUD for 12 Ounce (355 ml) bottles (Vegan Essentials n.d). Avalon Organics Refreshing Shampoo costs 9.59 AUD for 11 Ounce bottles (325 ml) (Avalon Organics 2011). Desert Essence Organics Thickening Shampoo costs 9.12 AUD of 8 fl oz (237 ml). So it can be seen that Organic Care products are very cheap compared to other competitive products (Desert Essence 2010). 1.3 Current Distribution Distribution is an important aspect of marketing which refers to distribution of product from one place to another. Every company must decide that how the product will be sold i.e. through distributor or through retailer. The company also needs to understand the purchasing pattern of the product such as how the customer prefers to buy the product, whether they want to purchase from retailer or through internet or perhaps by mail order. The company must understand that which distribution channel is best for providing customer required information about the particular product. The product factors also need to be considered in distribution. In case of large complex product the company frequently delivers directly to customers and for consumable products company prefers to use short distribution channel such as retailers. Organic care products are consumable product, so the company supplies their products through various retailers. The company also provides option for customers to order their desired products through internet. There are many websites through which Organic care products are sold in reasonable prices. Over the years, Natures Organics’ product range has continued to evolve and expand to an ever changing marketplace. Over 40 ranges of Organic Care products are available through chief supermarket chains internationally. It is available both in the retail shops and other convenience stores in Australia along with other major cities where it operates. They can also buy online through online shopping website. Consumer can view all the information needed to buy various Organic Care products at lowest possible price (Natures Organics n.d). 1.4 Current Promotion Promotion is needed to communicate and provide information about any product to the customers. It provides required information which is needed for purchasing the product. Before making the promotion a company must consider that whether the promotion will reach the target customer and meet the real objectives. Company must decide and understand about customers regarding the way they make purchasing decision and through considering the customers’ state of mind the company must undertake the promotion method. A proper message must be created for promotion which can influence the customers and also promote the benefit about using the particular product. For promoting the product company can use various systems, formal and informal. Company can use various formal systems or media for delivering the information about the product such as television, newspaper and catalogue or through websites. Organic Care promotes their product through website and television advertisements. Customer can view information about the products of Organic Care through their company website. In regard to television promotion, the company has created TV commercial for their products with the title, ‘Earth Choice’. It also includes a dedication to animal welfare. The company has organized advertisement campaigns for its organic care products in the audio-visual media with an aim to attract customers towards their products. The promotional message of this advertisement was “Organic Care – Does your hair care?”. Through this commercial promotion the company wanted to reveal that most of the shampoos are derived from crude oil rather than plants, thus it can keep hair beautiful as save the environment (Instablogs Network 2007). 2.0 Segmentation Theory 2.1 Define and Explain Segmentation A market segment consists of a set of consumers who share similar needs and preferences. Segmenting the market offers major benefits to the company over that of mass marketing. Company can provide superior product design, price, and distribution to satisfy the consumer demand. Company also can establish a good marketing program and activities to better reflect competitor’s marketing. Market segment can be described in many different ways. (Ryerson University 2011) 2.1.1 Stages of Segmentation 1. The first stage of market segmentation involves the selection of suitable variables. In this stage, the company considers the potential customers and categorizes those customers who possess characteristics according to the company’s expectations (Ryerson University 2011). 2. Targeting is the next step in the segmentation process. It intends to assist the company in making choices about segments on which resources are to be focused (Kolb 2006). 3. Positioning follows logically after targeting. Customers’ perception about company’s product has to be determined in relation to competitor’s offering. The product or service which the company will offer has to satisfy customer requirements and should be clearly communicated to customers in this stage (Oxford University Press 2011). 4. After analysis and evaluation of potential for each segment, one segment must be selected as the main target market for the company. The rest of the segment can be selected as secondary or tertiary markets (Ryerson University 2011). 2.1.2 Methods of segmentation There are three ways of segmenting a market. Various companies use these methods for segmenting purposes. Every method has its own advantages and disadvantages. However, the methods are elaborated in the discussion below: 1. Research–Based Segmentation: In this method, the customers are screened to ensure that they are the members of the market under study. The company surveys the customer to determine their preferences, drives, attitudes, behaviors, etc. 2. Existing Segmentation Services: In this approach, the company uses an obtainable segmentation to recognize market segments which can be assessed for making decisions for targeting. 3. Managerial Judgment: In this method, company uses its market knowledge and industry knowledge for indentifying the target market segments. (Loudon, Stevens, and Wrenn 2004). 2.2 Benefits to Your Brand from Using Segmentation Market segmentation improves the market position of the brand, Organic Care by determining how well the product can meet the needs of its targeted customers. It also assists in comparing the efficiency of the competitors’ products to satisfy the customers’ demand. Thus, the more the company improves marketing strategies derived from market segmentation, the more it will convert target market into potential customers. Market segmentation can make the brand Organic Care more competitive. If Natures Organics understand target market better compared to other competitors then its market position will be improved. It will increase the sales of Organic Care brand as well as other products of the company and the business will achieve higher growth (Morton and Linda 2008). Natures Organics can use market segmentation as a way of differentiating their products from competitors. The company can add value to its products by offering something extra to the customers (Carefair 2006). 3.0 Target Market Identification In a highly complex market environment, no company can possibly afford to use only one basis for segmenting the market. Due to this reason, many companies concentrate on multidimensional approach of segmentation for targeting customers. This segmentation approach offers in depth knowledge into the market place’s structure (Lodato 2006) Geographic Segmentation: In this method, a company divides market into homogeneous groups on the base of specific geographic locations. This segmentation is used when customers’ tastes vary from region to region. Variables for conducting this type of segmentation can be climate, region, area, political boundaries, density and ZIP codes. Notably, the climatic conditions in Australia tend to be hot and dry for most of the year. Heat, UVA and UVB rays constantly damage the hair. So, customers can use the ‘Organic Care Heat Protect Shampoo & Conditioner’ of Natures Organics which can protect their hair from hazardous heat exposure. By using this product, consumers can get sleek and healthier hair with every wash. Australian deserts cover almost 2.3 million square kilometer i.e. 44% of entire continental area. 3% total population live in that desert area. So, dust and excessive heat of desert area also damages hair and make them dry. Therefore, customers in that particular area can use the ‘Organic Care Dry Nourish Shampoo & Conditioner’. This product restores the moisture to dry hair and reduce the split ends and damage (Australia on Net 2007). Demographic Segmentation: In this method, the company divides the inhabitants into homogeneous cluster based on age, gender, education, occupation, income, race, nationality and family life cycle. Organic Care products can be used by every gender. Its products are mainly used by people of 15 – 35 years. Besides other products of Organic Care, the ‘Organic Care 3 in 1 Conditioning Shampoo & Bodywash for Girls’ is targeted towards young female consumers, ‘Organic Care 3 in 1 Conditioning Shampoo & Bodywash for Boys’ and ‘Organic Care Hard Styling Gel’ are mainly targeted towards young male customers and Organic Care Detangling Conditioned Spray is targeted towards children (Natures Organics n.d) It is worth mentioning in this context that the demographical environment of the economy also favors the marketing strategies of the company. For instance, in the year 2010 the highest number of people with an average age of 25 years was 340,000. In the year 2010 the number of children was also recorded to increase by 44,600 compared to that of 2009. Thus, the demography of Australia provides great opportunities for Organic Care to increase its sales in Australia (Australian Bureau of Statistics 2010). Psychographic Segmentation: Organizations use this segmentation to divide inhabitants into homogeneous cluster on the basis of customer’s behavior, lifestyle, activities, interests, self – orientation, attitudes, personality, perceptions and opinions. Organic Care product also targeted towards interests of male, female and children customers with due consideration to the aspect of psychographic factors. To be illustrated, as many female customers prefer to color their hair the Organic Care Color Shield Shampoo & Conditioner helps to protect hair color and also enhances and preserves the shine of hair. The consumer can get silky, smooth and glowing hair after using it. Behavioral Segmentation: In this segmentation, the company divides inhabitants into homogeneous cluster on the basis of customer’s response to a particular product. Variables for conducting this segmentation are occasion, customer status, usage rate, approach towards the product, customer loyalty, time of purchase, frequency of purchase, and readiness stage. As Organic Care has various ranges of products with affordable cost, compared to other homogeneous products, people tend to buy this brand over and over gain. In 2007 – 2008, average disposable income of persons living in Australia was recorded as 811AUD per week. Therefore, with a reasonable price the Organic Care products become affordable by majority of customers (Australian Bureau of Statistics 2009). 4.0 Target Market Collage 1 City 2 Density 5 Age 6 Income Level 7 Gender 3 Climate 8 Family 4. Region 13 Loyalty 9 Interest 14 Purchase Occasion 10 Values 11 Lifestyle 15 Frequency of purchase 16 Benefit 12 Activities 5.0 Rationale of the Target Market Collage Images Chosen Table Characteristics of target market Image used in collage to illustrate characteristics Describe how the image chosen illustrates the characteristics – include rationale for words used as well. Justify your selection of images for each trait. Geographic City 1 The product demand is more in the cities of Australia. Density 2 Where the density of population is high the market for Organic Care will be intense. Climate 3 The climate of Australia affects the sales of Product. Organic Care products are suitable for Australian climate. Region 4 Organic care products can be used in any region of Australia which will enable the organization to have large target consumer segment. Demographic Age 5 Organic care products are targeted to all age group. Income Level 6 Average incomes of Australian people are quite high. So, the cost of Organic Care products is affordable by majority of people. Gender 7 Though Organic Care products can be used by both genders, there are some products which are specially made for young female and male. Family Life Cycle 8 Organic Care products can be used by whole family. It has many products for men, women and children. Psychographic Interest 9 Customer are interested in Organic Care because it is unique than other chemical products. Value 10 An organization has to take into account the consumer tastes and preferences while launching a product, which in turn enhances the value of the product among the consumers. Life Style 11 People prefer to color their hair which sometimes damages the hair. Organic Care products are made keeping in mind of people’s lifestyle. It can preserve the color of hair and its shine also. Activities 12 As Organic Care products can be used as shampoo and conditioner, also it can be used by all customers. Behavioral Loyalty 13 When customers used to prefer Organic Care products and make habit of it, the product can make them loyal to the brand. Purchase Occasion 14 The Organic Care products are seen as a product which can be purchased on any occasion. Thus, it can aid in increasing the sales of the product in Australia. Frequency of purchase 15 Frequency of purchase can be determined by how many times in a particular month or year; the consumers are purchasing Organic Care products. Benefit 16 Organic Care products provide many benefits to the customer and environment. It costs low so can be affordable by any customer and it is made of plants rather than crude oil which keep the environment clean. Purchase 12 It can help to measure the popularity of the product. Benefit 13 Organic Care products provide many benefits to the customer and environment. It costs low so can be affordable by any customer and it is made of plants rather than crude oil which keep the environment clean. Purchase 12 It can help to measure the popularity of the product. Benefit 13 Organic Care products provide many benefits to the customers and environment. It costs low so can be affordable by any customer and it is made of plants rather than crude oil which keeps the environment clean. 6.0 References Australian Bureau of Statistics. 2009. Household Income and Income Distribution, Australia, 2007-08. http://www.abs.gov.au/ausstats/abs@.nsf/7d12b0f6763c78caca257061001cc588/5f4bb49c975c64c9ca256d6b00827adb!opendocument (Assessed 2011/03/18). Australian Bureau of Statistics. 2010. Population by Age and Sex, Australian States and Territories, Jun 2010. http://www.abs.gov.au/Ausstats/abs@.nsf/mf/3201.0 (Assessed 2011/03/18). Australia on Net. 2007. Australia Desert. http://www.australiaonnet.com/tourism/deserts.html (Assessed 2011/03/18). Avalon Organics. 2011. Grapefruit & Geranium Smoothing Shampoo. http://www.avalonorganics.com/?id=88&pid=659 (Assessed 2011/03/18). Buzzle. 2011. Organic Shampoo Reviews. http://www.buzzle.com/articles/organic-shampoo-reviews.html (Assessed 2011/03/18). Carefair. 2006. Micro-Segmentation: The Future of Cosmetics. http://www.carefair.com/Skincare/Treatments/Micro_Segmentation_1892.html (Assessed 2011/03/18). Desert Essence. 2010. Organic Green and Apple Ginger Shampoo. http://www.desertessence.com/hair-care/green-apple-ginger-shampoo (Assessed 2011/03/18). Instablogs Network. 2007. Natures Organics: Organic Care. Does your hair care? http://www.adpunch.org/entry/natures-organics-organic-care-does-your-hair-care/ (Assessed 2011/03/18). Kolb, Bonita. M 2006. Undifferentiated, Concentrated, and Differentiated Targeting Strategies. Elsevier New York. Loudon, David, L., Stevens, Robert, E., and Wrenn Bruce 2004. Marketing Management: Text and Cases. Routledge United Kingdom. Lodato, Michael W. 2006. Market Definition is a Multi-Dimensional Process. http://www.bptrends.com/publicationfiles/06-06-ART-MarketDefinition-Lodato.pdf (Assessed 2011/03/18). Morton, Linda P. 2008. Four Benefits of Market Segmentation. http://www.strategicmarketsegmentation.com/four-benefits-of-market-segmentation-benefit-1-improving-products/ (Assessed 2011/03/18). Natures Organics No. Date. Product Availability. http://www.naturesorganics.com.au/product-availability (Assessed 2011/03/18). Natures Organics. No. Date. About Us. http://www.naturesorganics.com.au/about-us/our-philosophy (Assessed 2011/03/18). Oxford University Press 2011. Market Segmentation. http://www.oup.com/uk/orc/bin/9780198775768/freelecturer/manual/imchap16.pdf (Assessed 2011/03/18). Organic Shampoo and Conditioner. 2011. Nature’s Gate Organics Organic Herbal Blends Lavender and Aloe Shampoo. http://www.organicshampooandconditioner.com/natures-gate-organics-organic-herbal-blends-lavender-and-aloe-shampoo-for-normal-to-dry-hair-12-fl (Assessed 2011/03/18). Ryerson University. 2011. Marketing Strategy For Small Business: Conceptual Foundations. http://www.ryerson.ca/~kjensen/marketing/chapter3.pdf (Assessed 2011/03/18). Veganessentials. No.Date. Natures Gate Organics Shampoos and Conditioners. http://store.veganessentials.com/natures-gate-organics-shampoos-and-conditioners-p134.aspx (Assessed 2011/03/18). Read More