Marketing Strategy for Tefal Store Inn Food Processors - Report Example

Marketing of Food Processors Table of Contents Introduction 3 Analysis of the Marketing Environment 3 Competitor Analysis 5 Relevant Theories 6 New Product Development (NPD) 6 New Product Adoption Theory 7 New Product Diffusion theory 10 Product Life Cycle 11 Customer Buying Behaviour 11 Segmentation Targeting and Positioning (STP) 12 Marketing Mix Recommendations 15 Conclusions 16 References 17 Introduction This report aims at analysing the UK domestic business scenario with the intention to market the Tefal Store Inn food processors. Currently, this particular product is mostly available in silver and black variants. The entire marketing process will be evaluated through a series of steps, which will accordingly include effective understanding of marketing environment followed by proper analysis of the theories, concepts, models & frameworks along with attaining effective understanding of the customer’s buying behaviour. The report will also be focusing towards the concepts of Segmentation, Targeting and Positioning (STP) along with some noteworthy marketing mix recommendations, which will be necessary for successful marketing of the Tefal Store Inn food processors. Analysis of the Marketing Environment Political Analysis Concerning the currently persisting political environment in the UK, scenario considerable degree of instability can be observed. The most challenging issue that the current government is facing in the UK is the continuous migration of foreign workers from abroad countries into the nation, which has in turn affected the employment scenario in the country (Politics.co.uk, 2014). Apparently, with the worsening employment scenario, it is likely that the future consumer purchase behaviour shall become more inclined towards low-priced products, affecting the pricing structure of the food processor to a substantial extent. Moreover, from a generalised perspective, political stability is quite necessary to avoid unwanted risks of conservative policy measures that are often termed to restrict the smooth functioning of any organisation domestically. Economic Analysis Current projections describe the UK economy to be undergoing a slow and steady recovery post the recent economic turmoil phase. Although this particular factor shall have no apparent short-term effect on the marketing prospects of the food processor, this may lay down positive impacts in the long run owing to better stability and protection from international economic fluctuations. Since the economy is expecting an improvement in the business investment levels between the periods of 2014 to 2015, the company’s investments in terms of promoting this food processor is expected to benefit the company in the long run. However, the recovering economy is yet to show improvements in terms of productivity and labour wages rates. Moreover, the current economic scenario is still projecting a decrease in the real household incomes rates, which is expected to increase in the upcoming years, but currently, it implies limitations on the product’s pricing limits (PwC, 2014). Socio-Cultural Analysis In terms of social ranking, the UK is often described as an advanced and growing economy. This describes the niche attitude of the UK population towards products and/or services. Thus, for the food processor to survive in the current domestic market scenario of the UK, focus should be laid more on the product design and quality with due significance to the pricing limits as mentioned in the above sections when describing the political and social influences. Moreover, due to the decline in the standard of living of the UK people since 2010, they will be likely to spend lesser in case the product is priced high and rather will be more focussed towards savings. In addition, all three levels of household income scale were significantly affected during the economic recession phase of 2010 and are currently in a recovery stage. Along with these, the continuous pay cuts in wages and salaries of regular employees have further deteriorated their purchasing power. This particular element might further increase negative impacts on the entire marketing process of the food processor (Inman, 2014). Technological Analysis The technological environment of this nation is quite advanced. This includes the power sector, advanced supply chain management and many more utilities that can prove to be of great benefits to the organisation in gaining cost efficiency in its product marketing operations. To be precise, a strong Supply Chain Management (SCM) system will be necessary for quick and effective distribution of its food processor within the domestic markets of the UK. The nation also possesses surprisingly advanced engineering capabilities and thus, can provide a second benefit to this company in terms of quality production (Kolios & Read, 2013). Additionally, the availability of clean and cost effective power sources are also quite likely to help in cutting down the production cost of these food processors. As a result, the company can invest more towards the promotional activities along with ensuring the supply of the selected product at lower prices to the buyers, increasing both marketing and sales activities subsequently. Thus, in terms of technological analysis, the conditions for effectively marketing this food processor in the UK markets seem to be favourable (Kolios & Read, 2013). Competitor Analysis Competitor analysis is necessary in case of marketing the food processor, since the company is mostly focussing towards the domestic market of the UK. This will help the company in getting a glimpse of the type and level of competition, which it is about to face in terms of marketing this food processor. However, the market scenario for the food processor seems be in a stable position currently (Euromonitor, 2014). The recovering stage of the economy has forced the inhabitants of the UK to make a cut short in their external food purchasing behaviour. Moreover, due to the increasing popularity of the television cooking shows, more and more UK inhabitants have become conscious and are likely to prefer cooking rather than external food, which is again expected to increase demands for advanced food processors (Euromonitor, 2014). This factor have resulted in a stable growth in the kitchen appliance manufacturing industry and thus, might appear as an opportunity for this company in terms of marketing this food processor through effective advertisements. The current preferences of the UK customers are observed to be more inclined towards quality of the product rather than their price. This also contributes to the competitive advantage for this company with the opportunity to sell its food processors at a higher price. The only concern of this company might be in terms of the competition faced from ‘De’Longhi UK Ltd’ and similar other companies, which till date has been the leading food appliance manufacturer and holds up a domestic market share of about 34% (Euromonitor, 2014). Relevant Theories New Product Development (NPD) The process of New Product Development mainly comprises of two sub sections or phases, viz. the new product adoption and the new product diffusion phase. These two phases play a major role towards determining the life cycle of the product. For this food processor, to sustain in the domestic markets of the UK, it is vital to determine about the type of market response, which this product will be attaining. Thus, understanding the adoption process of this new product by the UK customers and its diffusion within UK’s social structure shall be a time consuming process. A brief of these two sub theories in context to the marketing of this food processor is provided below (Degeneffe, 2012). New Product Adoption Theory This theory can be described as a process in which the customers will be introduced to the product to help them prepare their mental state gaining adequate awareness about the existence of this food processor. This further provides an opportunity to the marketer to stimulate customer likeness along with assisting them in making a decision of adopting or rejecting it. The entire process comprises of five steps as listed and described below (Rogers, 2001). Awareness In this step of marketing, the UK customers will primarily be offered with preliminary information about the existence of the TEFAL DO250D40 Store Inn Food Processor in two colour variants of silver and black. This step will mainly be depending on the level of advertisement, marketing communication programs and product sales boosting activities, which the company will undertake when promoting the product to inform the customers and raise their level of awareness (Rogers, 2001). Interest Once this food processor gains customer’s attention and is able to attract their likeness, the next step will emphasise establishing a link between their perceptions and the product benefits. Once such a link gets successfully established, the consumers will be looking forward towards attaining more information about this food processor through various contemporary and traditional sources (Rogers, 2001). Evaluation In the evaluation step, the UK consumers will be encouraged to measure the extent to which, this food processor will be capable of satisfying their needs. This step will be forming the vital part of a customer’s decision-making process towards this food processor. In case of this food processor, the sales team can also play a significant role as effective information providers to customers, which shall further facilitate a proper product evaluation process (Rogers, 2001). Trial The trial phase comes after the effective evaluation of the product by customers. In this trial phase, it is likely that the customers will be more likely towards observing the product functionality in the real scenario. For instance, in case of this food processor, the company should conduct live demonstrations about the quality and the functionality of this product. This will significantly provide the company with an opportunity in terms of demonstrating the superiority of the offered food processor over other similar products and thus, will help in contributing to customer attraction assuring continuous sales growth (Rogers, 2001). Adoption This is the final stage of the new product adoption theory. In this step, the UK customers, after gaining satisfaction from all the four above-described steps when judging the competencies of the food processor on offer will successfully adopt this product and add it to their daily life activities (Rogers, 2001). This further necessitates that the previous steps be quite effective and fruitful to ensure ultimate adopt of the product on offer by the targeted customers. New Product Diffusion theory This theory is all about the rate in which different customers accept new products. This theory will be playing an effective role towards marketing of this food processor. Different customer projects varied rates of product, which further influences their adoption/acceptance. This will be vital for the company to identify and understand the characteristics of such customer types and formulate promotional strategies accordingly, in order to speed up the diffusion of this food processor. Based on this theory, customers can be divided into four categories (Wright & Charlett, 1995). These categories mainly include the ‘innovators’, which refers to those customer groups who can be counted in the higher socio-economic ladder. These customers have high knowledge level and are financially stable. Thus, they can be treated as capable of taking risks in terms of purchasing new products and adopting them. The second category is the ‘early adopters’, referring mostly of opinion leaders who will be playing a significant role towards substantially influencing the adoption of this food processor in the social group. The third category is the ‘early and late majority’, which includes the starting and the last sizable segments of customers who will adopt this new product. This customer population is stated to form about 35% of the buyer population in the food processor marketing industry. The fourth category is the ‘laggards’ who can be considered as new product resistors. Accordingly, convincing the fourth customer category seems to be quite difficult in terms of selling this food processor (Wright & Charlett, 1995). Suggestively, the company should strongly focus towards the ‘early adopters’ and ‘early and late majority’ population type as the main purpose of this marketing campaign is to increase sales rather than spreading innovation information related to this product. Product Life Cycle Source: (Komninos, 2002) Product life cycle describes the possible fluctuations in the customers’ demand. The product life cycle mainly comprises of five stages. This includes the product development stage, market entry stage (Intro stage), market growth stage, maturity stage and declining stage (Komninos, 2002). When concerning the market positioning of this food product, it can be currently ranked in the growth stage since it has already been introduced in the market by other competitors, wherein the customers have adequate awareness of the product features. It is highly important that in the growth phase, the company focus on its differentiation strategies based on the innovation characteristics, to avoid complete maturity and decline in the long run. Customer Buying Behaviour As per the report suggestions, the UK customers are displaying change in their current buying behaviour post recovery from the financial crisis stage. The customers, in the current UK market scenario, are observed to mostly prefer for lower priced but good quality products. This might be mainly due to the lowering of the disposable income levels (Felsted, 2012). This might appear as an opportunity for this company if it is willing to market the food processor maintaining an economic price level along with a good quality and after sale service assurance, which will also be helpful in differentiating the product from its close rivals. However, creating a balance between the product manufacturing cost and its market price will be essential, when dispensing this food processor at a lower price (Felsted, 2012). It is worth mentioning that this particular strategy might help the company in gaining substantial customer attention in the domestic markets of the UK. Segmentation Targeting and Positioning (STP) Segmentation Based on the above-mentioned facts, it can be stated that since the UK economy is currently in a recovery state and the level of disposable income has gradually minimised, owing to which the targeted customers are likely to be more inclined towards low or economically priced products. A market as a whole can be segmented into four basic categories namely geographic, demographic, physiographic and behavioural (Gillikin, 2014). In this case of marketing the food processor, since the company is mainly identified as focusing towards making of a single product, it is suggestible that the company delivered due significance to the demographic, physiographic and behavioural segmentations when deciding upon its marketing strategies (Weaver, n.d.). Notably, geographic segmentation will have a limited role to play when marketing the intended food processor. In terms of demographic segmentation, the company should take the income and the social class factors into consideration, which in turn will determine the customer buying decision more effectively. In addition, the current state of the UK economy, both these factors can be observed to persist unfavourably for the food processor industry, owing to which it is suggestible that the company should aim at offering the product at a lower price as well as focusing on aggressive advertisement. In terms of physiographic segmentation, the company should further attempt to link the food processor with the healthy lifestyle factor along with the rising external food price to persuade the targeted customers (Weaver, n.d.). Since more and more UK inhabitants are currently focussing towards home cooked food, the company can consider this factor for advertising this food processor. In terms of behavioural segmentation, it can be easily predicted that due to the minimization of the disposable income levels, the consumers will be focussing towards good quality products, which are economically priced. The company can deliver due significance to this particular factor when determining their product advertising and pricing strategies (Weaver, n.d.). Targeting Customers Customer targeting mainly refers to the process in which the company targets the three dimensions of customers. This includes the high-end segment of customers who mostly go for high priced, quality and niche products. The middle segment customers commonly seek for quality products at economic rates, while the lower segment customers are stated to pay more attention towards low price rather than the product quality (McLeod, 2004). Based on this three dimensional framework, the companies design their products and price them accordingly. In the case of this food processor and the current state of UK economy, targeting the middle and the lower segment customers will be beneficial. It is fundamentally owing to the fact that according to the current state of the UK economy, the customers will be focussing more towards quality products at lower prices due to their incapability of spending on niche priced products (McLeod, 2004). Product Positioning Product positioning is all about how a company differentiates its products from the competitor products. This concept is also about providing the product a specific rank in the mind-sets of the customers. This process is completely dependent on the type of aggressive promotional strategies undertaken by the company along with the level of product awareness within customers (OnTheMark, 2005). In terms of marketing this food processor, the company needs to position this product based on three necessary categories. The first category implies to product differentiation. In this category, the company will have to demonstrate to the customers about in what ways this food processor is different and better from similar other competitive products in the US domestic kitchen appliance market. This may be in terms of quality, pricing, functionality or after sale service (OnTheMark, 2005). The second category implies addressing the customer buying behaviour. When focusing on this particular attribute, the company should focus on the buying behaviour of the customers. For instance, in this given case scenario of marketing food processors, the company should keep in mind of the current economic and customer buying capability of the UK. Therefore, in this case, since the customers is observed to be price sensitive, the company will have to address this product as economically beneficial for its purchasers. The third category indicates towards articulating, according to which, either the company can advertise this food processor separately or it can advertise itself as a brand (OnTheMark, 2005). Suggestively, the company should strongly focus towards positioning this food processor as a quality and economically priced product. Marketing Mix Recommendations Marketing Mix Product: The product on offer, i.e. the food processor will be available to the purchasers in two colour variants; black and silver. Accordingly, as mentioned above, because the current market trends are observed to exhibit high competitive forces, it is suggestible that the organisation focuses on differentiating its product from the available competitors. This can be done through competitive product pricing and quality assurance provided to the customers (The National Agency for Innovation and Research, 2008). Price: When concerning its pricing strategies, the company will have to provide this product at economically beneficial price rates in order to cope with the current economic conditions of the UK markets, due to the lower product purchasing power of the customers and their inclination towards cheaper by quality assured products (The National Agency for Innovation and Research, 2008). Place: When placing its food processor, the company should be focusing towards the urban areas as well as the suburban markets of the domestic environment in the UK. Although the company might face competitive problems when aiming at these market places, quality assurance along with competitive pricing will help the company to attract a substantial proportion of customers during its penetration (The National Agency for Innovation and Research, 2008). Promotion: Accordingly, it is suggestible that the company aims at promoting the food processor through various mass media channels such as television commercials, online advertisements, newspapers, email broadcasting, public banners and many more. Additionally, offering discounts and other promotional advantages to the customers may also prove beneficial for the organisation to attract a sustainable degree of customer likeness for its product (The National Agency for Innovation and Research, 2008). Conclusions Through effective evaluation of the above mentioned facts, it can be observed that the company will be having a good marketing opportunity in the recovering UK economy provided it focuses on differentiating its food processor from that of its rivals and maintaining a balance between its manufacturing costs and pricing strategies. As there might be chances of facing tough competition, the company should focus on strengthening its market foothold and increasing brand loyalty amid the customers at the initial phase, which might require the company to compromise its profit margin to an extent. References Boundless, No Date. Environmental Scanning is One Technique Used by Organizations to Monitor the Environment. Scanning and Analysis. [Online] Available at: https://www.boundless.com/marketing/the-marketing-environment/the-marketing-environment/scanning-and-analysis/ [Accessed March 22, 2014]. Businesszone, 2013. 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