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Marketing of Vacuum Cleaners - Coursework Example

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The coursework "Marketing of Vacuum Cleaners" marketing strategy of the product. This paper outlines The Importance of the marketing environment, critical analysis of the buyer’s behavior, segmentation, targeting, and positioning, relevant theories, concepts, models…
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Extract of sample "Marketing of Vacuum Cleaners"

Marketing of Hoover DM6220 Dust Manager Upright Bagless Vacuum Cleaner - Red & Cream Table of Contents Introduction 3 2. The Importance of the Marketing Environment 4 2.1 PEST Analysis 4 2.2 Competitor Analysis (Porter’s Five Forces) 6 3. Relevant Theories, Concepts, Models & Frameworks 8 3.1 Product Adoption Process (PAP) 8 3.2 Product Lifecycle (PLC) 10 3.3 New Product Development (NPD) 11 4. Critical Analysis of the Buyer’s Behaviour 16 5. Segmentation, Targeting and Positioning (STP) 17 5.1 Segmentation 18 5.2 Targeting 18 5.3 Positioning 19 6. Marketing Mix Recommendations 19 7. Conclusion 20 References 21 1. Introduction A marketing plan is often regarded as a crucial step for an entrepreneur intending to inaugurate a new business venture or expand an existing business unit at a newly located marketplace (Kotler & Keller, 2006). In order to demonstrate a viable structure, an effective marketing plan reflects a clear depiction of the business including strategies associated with marketing mix, segmentation, positioning and targeting that the organisations require to be taken into concern while launching a product in a particular market (Kotler, 2000; GRANT finder Ltd., n.d.). With regard to the notion of a well-built marketing plan, the primary objective of this study is to prepare an effective marketing structure for Hoover Company concerning the marketing of Dust Manager Upright Bag-less Vacuum Cleaner - Red & Cream (R&C) for domestic use in the UK. In order to build an effective marketing structure, the proposed marketing plan would critically explain the importance of marketing environment, competition along with the key issues affecting the marketing procedure of vacuum cleaners in the UK business market. Moreover, the report will also critically analyse relevant theories, concepts, models and frameworks associated with marketing strategies in response to the selected product in the respective business market. In addition, the study also tends to analyse buyers’ behaviours along with strategies associated with segmentation, targeting and positioning in response to the aforesaid product in the competitive UK business market. 2. The Importance of the Marketing Environment Marketing environment generally refers to the different external and internal factors that are likely to influence organisations while perform business in a particular marketplace (Jones & et. al, 2005). According to the observation made by Palmer (2012), marketing generally comprise two types of environments i.e. macro and microenvironment. The macro-environmental factors that impose major impact on the marketing activities include demographic, political, economic, technological and socio-cultural aspects. On the other hand, the micro-environmental factors associated with the marketing activities encompass marketing intermediaries, suppliers, customers, employees and stakeholder groups (Kotler & Keller, 2006; Kotler, 2000). In order to identify the current marketing environment of the vacuum cleaner product in the UK business market, it is quite essential to conduct a critical analysis of different competitive factors affecting the product in the respective marketplace. With this regard, the following discussion would focus on considering PEST and competitors’ analysis that can effectively demonstrate the current marketing environment of the aforementioned product in the competitive UK business market. 2.1 PEST Analysis Political Factor Based on the political conditions prevailing in the UK, it can be apparently observed that the country comprises stabilised democracy with its well-established institutional and political system. The representative democratic structure of the political system significantly enables in making easy entry of the global marketers to extend their trade facilities into the country. It can be affirmed that the deregulatory process of governmental policies towards providing trade opportunity for the foreign entrepreneurs would also be a major factor for Hoover to successfully enter into the vacuum cleaner market of the UK (Barbaresco & et. al, 2001). Economic Factor The continuous emergence of commercialisation and increasing amount of Foreign Direct Investment (FDI) enables the UK to be recognised as one of the major countries to achieve significant economic growth as compared to other European territories (Price Waterhouse Ltd, 2014). The current GDP growth of the nation has been observed to achieve a growth of 0.7% during the 4th quarter of the year 2013, which signifies a positive sign for Hoover to successfully market its unique range of vacuum cleaners (Oxford Economics Ltd, 2014). Socio-Cultural Factor The socio-cultural factors tend to influence the organisational process due to the difficulties arising from cultural differences amid the customers. With regards to the current scenario of the UK, the extensively growing demand towards the highly effective household product segment i.e. vacuum cleaner can be a major opportunity for Hoover while performing marketing activities in the competitive UK market (Cooper, 1998). According to the social context, the increasing demand of innovative vacuum cleaners by people from different demographics has been apparently observed to be a current trend in the UK household product market, enabling Hoover to build a strong market in the UK (Thornton & et. al, 2011). Technological Factor In relation to the UK, the country is often viewed to incorporate sophisticated technological infrastructure. Therefore, the unabated development of technology would also be a key factor for R&C to successfully target a large segment of UK customers while marketing its R&C product (Nickell & Reenen, 2001). 2.2 Competitor Analysis (Porter’s Five Forces) Bargaining Power of Buyers According to the present competitive scenario in the UK household product business industry, the offering of cutting-edge brands by the dominant marketers have been recognised to provide extensive facilities to the target customers. The continuous adoption of competitive measures by the organisations eventually raised the customers’ bargaining power across the UK’s consumer electronic and household product market (Allen, 2001). In this context, it can be stated that the bargaining power of the buyers is considerable high as the industry involves numbers of key leaders with range of consumer electronic goods in accordance with the changing customers’ trends (Barbaresco & et. al, 2001). Bargaining Power of Suppliers The demand associated with household manufacturing equipment is raised extensively due to the deployment of full-service businesses by the key dominant marketers in the UK business market segment. The scenario significantly lowers the suppliers’ bargaining power and generates major opportunities for the marketers. In addition, the presence of a limited number of key players in the vacuum cleaning product segment can also be duly considered as a beneficial aspect for R&C to easily switch its preferred suppliers to produce quality based products in a more convenient and cost-effective manner (Barbaresco & et. al., 2001). Threat of New Entrants Although the current vacuum cleaner market of the UK is recognised to be ruled by a few of the key market players, the lower suppliers bargaining power and increasing buyers’ power have significantly enabled the global marketers to extend their business subsidiaries into different emerging UK markets. Therefore, the increasing number of new entrants would eventually impose greater threats to R&C in establishing its strong and competitive position in the UK’s household business segment (Barbaresco & et. al, 2001). Threats of Substitute Products This particular aspect is minimum or less for R&C as the company tends to enter into the UK’s competitive vacuum cleaner business segment. In relation to the present trend of the business environment, the key players such as Dyson can be widely observed to maintain significant homogeneity of its range of vacuum cleaner products. In relation to Hoover, as the company intends to enter into the respective UK business market, it can be assumed that a minimum or less risk would be faced by the company while marketing its innovative and exceptional R&C product in the said market (Barbaresco & et. al, 2001). Competitive Rivalry According to the current business performance prevailing in the UK’s vacuum cleaner market, the dominant performance of the domestic competitors has been apparently observed to create a major threat for R&C. In this similar context, the current business performance of the key competitors such as Dyson and foreign marketers such as LG can be duly considered as the major threats for Hoover. Specially mentioning, the competitive environment in this particular business industry might impose negative impact on R&C to build its long-term sustainable position due to the accessibility of wide range of substitute products of the key players (Barbaresco & et. al, 2001). 3. Relevant Theories, Concepts, Models & Frameworks 3.1 Product Adoption Process (PAP) The concept of product adoption process (PAP) tends to deliver an apparent view to the marketers regarding the allocation of organisational resources between mass marketing and personal selling communication. The process has been apparently observed to enable the marketers in successfully introducing a particular product in a specific marketplace. In relation to the conventional marketing approach, the PAP comprises five major stages that require to be taken into concern for successful presentation of a product or service in a particular target market. The stages involved in the PAP approach include ‘awareness’, ‘interest’, ‘evaluation’, ‘trial’ and ‘adoption/diffusion’ (Rogers, 2001; Theler & Lehman, 1998). In response to Hoover, the following assessment of these stages would enable the company to gain an in-depth understanding about the feasibility of the product i.e. dust manager upright bagless vacuum cleaner - red & cream in accordance with the needs and desires of the UK customers. Awareness: The stage signifies to educate customers or draw an attention on the customers’ mind about the product. In this stage, the communication channels selected for the specific vacuum cleaner have major responsibility to draw an exceptional image in front of the customers. The media channels should highly focus on the exceptional technological features that can provide unique experience to the customers on behalf of R&C (Wang & et. al, 2008). Interest: In this stage, the customers seek to obtain more information about the product i.e. R&C. The company, in this stage should deliver a transparent view regarding features, effectiveness along with price and other promotional related information to draw an increasing interest about the product on the customers’ mind (Wang & et. al, 2008; Wright & Charlett, 1995). Evaluation: In this stage, the customers are likely to evaluate the product in response to their need(s) and seek beneficial aspects from the same. In this regard, the company i.e. Hoover should focus on providing adequate information about the performance of each component associated with R&C, providing greater convenience to the customers (Wang & et. al, 2008; Wright & Charlett, 1995).. Trial: In this stage, the customers make their first purchasing decision in order to ascertain the usefulness of the product and it’s worthiness in response to its market price. In this process, the strategy of building effective distribution channels or networks might establish a strong market for R&C (1Wang & et. al, 2008). Adoption/Diffusion: The customers in this stage decide to adopt and often change their purchasing decisions towards any product. This could be regarded as an essential stage for R&C wherein Hoover must highly focus on representing real demonstration about the usefulness and convenience of the vacuum cleaner. Moreover, the personal selling strategy adopted by the company must also provide adequate value to each individual or group of customers, ensuring that the product successfully meets the needs and desires of the targeted UK customers (Wright & Charlett, 1995; Theler & Lehman, 1998). 3.2 Product Lifecycle (PLC) Product Lifecycle (PLC) is generally used with the aim of mapping entire lifespan of a product. In relation to the theoretical concept, PLC comprises four major stages that entail ‘introduction stage’, ‘growth stage’, ‘maturity stage’ and ‘decline stage’ of a particular product (Stark, 2011; Grieves, 2006). With this regard, the following discussion analyses the PLC of R&C while operating in the vacuum cleaner market in the UK. Fig.1: Product Life Cycle (PLC) (Stark, 2011; Grieves, 2006) Introduction Stage: In order to accumulate strong group of target consumers, the introduction stage should focus on developing a penetration strategy. In this process, the pricing of each unit of R&C would be set moderately high at the initial phase and gradually lower through different stage of its PLC. Growth Stage: In this stage, it is essential for the company i.e. Hoover to increase investments on advertising product through different direct and indirect media channels. The strategy of advertising product in this stage would enable the organisation to stabilise its sales and increase potential number of customers across the UK. Maturity Stage: In order to extend the growth level of R&C, Hoover should also need to focus on differentiating the brand in response to the similar products offered by the rivals in the respective marketplace. Moreover, it would be also beneficial for the company through promoting additional value and innovative features along with the product. Decline Stage: In the declining stage of R&C, Hoover must highly focus on making an effective promotional decision to extend the PLC of the brand. In this process, the decision of providing discounts or any other similar means would certainly keep the interests of the target consumers towards the product. Moreover, the strategy of minimising costs associated with the brand can also play a major role for the company to reduce the risk of potential loss at the decline stage of R&C in the UK’s vacuum cleaner market. 3.3 New Product Development (NPD) New Product Development (NPD) is one of the major strategies for the marketers to achieve a greater significance on their respective annual sales of a particular product. In relation to R&C, the research and development (R&D) division of the company should be more concentrated on NPD initiatives rather than up-grading its existing products. In this similar context, the following factors provide an effective NPD plan for R&C to sustain in the competitive UK’s vacuum cleaner market. Fig.2: New Product Development (NPD) Strategy The above depicted factors have beemn discussed in detail in the following. Idea Generation and Screening: Conducting systematic search for innovative product idea Involving different sources including internal sources, suppliers, customers and competitors Screening to promote competitive idea and avoid poor ones Source: (Thomas, 1993) Developing Concept and Testing: Developing the product ideas into an effective set of alternatives to build a strong position of R&C in the UK business market Testing concepts in line with target customers and products offered by the existing competitors Selecting best product concept(s) to accomplish competitive advantage Source: (Thomas, 1993) Developing Market Strategy: Formulating effective marketing strategy by encompassing most essential factors such as target market, product segmentation as well as positioning, sales along with profit goals and market share Planning short-term objectives associated with price and distribution process along with marketing budget of the newly developed product concept(s) Establishing effective goals relating to sales and profit along with competitive marketing mix strategy for the newly chosen product concept(s) Source: (Annacchino, 2011) Business Analysis: Review of product in response to meet the needs and desires of the customers Analysing the competitive factors by comparing features with the products and/or services offered by the existing rivals Reviewing and evaluating costs, sales and profits in accordance with the company’s business objectives Source: (Annacchino, 2011) Product Development: Conducting quick response to the changes required in the product and performing adequate measures in response to meet the expectations of the target users Ensuring that the process meets compliances and policies associated with quality and durability while developing product Delivering product in a short time period and make it available to each group of customers located within a respective business market Source: (Annacchino, 2011; Thomas, 1993) Test Marketing and Commercialisation: Conducting exclusive marketing campaigns by targeting a moderate number of representative markets Developing effective process of distribution channels by incorporating direct sale, distribution network and online retailing Testing sample of consumers within a particular stimulated business environment Source: (Annacchino, 2011; Thomas, 1993) 4. Critical Analysis of the Buyer’s Behaviour According to the modern day context, the organisations generally focus towards identifying various behavioural issues of their customers. The behavioural issue may comprise purchasing or acquiring decisions for a specific product or service (Baines & et. al., 2011; Foxall, 2002). In order to critically identify the buyer’s behaviour, it is essential for Hoover to analyse a few of the major factors that determine the key characteristics of the buyers. In this regard, the following figure depicts the factors that need to be taken into concern by the company to critically understand and analyse the buying behaviour of the customers. Fig.3: Key Characteristics of Buyer’s Behaviour These aspects have been explained in detail hereunder. Psychological Factors: Understanding motivational and perceptual factors that influence customers to buy the product Comprehending beliefs and attitudes of each individual customer to assess their buying decisional procedures Source (McKenchnie, 1992) Personal or Demographic Factors: Critical assessment of individual income levels of the target group of customers Analysing lifestyle and personality of the UK customers Source (Krishnan, J., 2011; McKenchnie, 1992) Social Factors: Critical assessment of the purchasing decisions of the customers who are influenced by different reference groups such as family members, peers or friends Understanding social status of different groups of target customers Source: (Krishnan, 2011) Socio-Cultural Factors: Critical assessment of customers from diverse cultural backgrounds including, race, colour and linguistic characteristics Source (Krishnan, J., 2011; McKenchnie, 1992) 5. Segmentation, Targeting and Positioning (STP) Developing effective segmentation, targeting and positioning (STP) is one of the major aspects for the marketers while introducing new products in a specific target business market. The strategy facilitates to draw strong brand image on the consumers’ minds and improve their perception towards the usefulness of the particular product (Strydom, 2005; Havaldar, 2005). In order to develop a well-built STP strategy, the following section discusses key characteristics of each dimension (segmentation, targeting and positioning), which can help Hoover to effectively market its dust manager upright bagless vacuum cleaner - red & cream in the UK business market. 5.1 Segmentation Implementation of both demographic and psychographic approach while segmenting customers Analysis of the demographic factors such as age, gender, cultural background along with income level of the consumers Source: (Strydom, 2005) 5.2 Targeting A concentrate targeting strategy would be more effective for Hoover than adopting undifferentiated or multi-segment targeting approaches while marketing R&C in the UK business market Source: (Havaldar, 2010) 5.3 Positioning Improving customers’ perceptions along with their buying behaviours would be a major set of objectives of the positioning strategy for R&C Source: (Havaldar, 2010) 6. Marketing Mix Recommendations With reference to the aforesaid STP models and their different characteristics, it can be stated that Hoover can have major opportunity to build a strong and sustainable market for its unique brand of vacuum cleaner product i.e. R&C. Therefore, the following recommended marketing mix strategy would be effective for the company to effectively attain its predetermined business goals and build a competitive position for R&C in the vacuum cleaner market of the UK. 7. Conclusion Developing an effective marketing plan has long been observed to play an imperative role especially while an organisation tends to introduce new products in a particular target market. In relation to the current trend in the UK’s vacuum cleaner market segment, it has been often recognised that a few number of marketers highly perform with their different brands. According to the observation of the present business market environment, UK provides extensive opportunities and scope for the global entrepreneurs particularly in the household consumer electronic business industry. Thus, there lies the opportunity for Hoover to build its strong position in the highly competitive vacuum cleaner market in the UK. It is worth mentioning that the consideration of the above discussed marketing theories along with models would certainly enable Hoover to market its R&C product effectively in the business market of the UK. Moreover, sympathetic view of the current competitive environment in the respective business industry might provide range of beneficial aspects to the company. The higher bargaining power of the UK customers and moderate level of competition prevailing in the vacuum cleaner market would certainly ensure offering major advantages to R&C in building its strong brand position in the UK. References Allen, M., 2001. Analysing the Organisational Environment. Select Knowledge Limited. Annacchino, M. A., 2011. The Pursuit of New Product Development: The Business Development Process. Butterworth-Heinemann. Barbaresco, G. & et. al, 2001. Dust to Dust the Vacuum Wars. Strategies and Activities of Dyson and Hoover. [Online] Available at: http://faculty.insead.edu/adner/projects/The%20Vacuum%20Wars%20FINAL.pdf [Accessed April 28, 2014]. Baines, P. & et. al., 2011. Marketing. Oxford University Press. Cooper, R., 1998. Socio-Cultural and Within-School Factors that Affect the Quality of Implementation of School-Wide Programs. Tech Report. [Online] Available at: http://www.csos.jhu.edu/crespar/techReports/report28.pdf [Accessed April 28, 2014]. Foxall, G. R., 2002. Consumer Behaviour Analysis: The Behavioural Basis of Consumer Choice, Volume 1. Taylor & Francis. GRANT finder Ltd., No Date. Writing a Successful Business Plan. Business Plan. 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International Journal of Bank Marketing, Vol. 10, No. 5, pp. 4-12. Nickell, S. & Reenen, J. V., 2001. Technological Innovation and Economic Performance in the United Kingdom. Publications. [Online] Available at: http://cep.lse.ac.uk/pubs/download/dp0488.pdf [Accessed April 28, 2014]. Oxford Economics Ltd, 2014. UK Economics Services. UK Special Reports. [Online] Available at: http://web.oxfordeconomics.com/OE_FA_Display_Frm.asp?Pg=UKSpec&Txt=UK%20Economics%20Services [Accessed April 28, 2014]. Price Waterhouse Ltd,, 2014. UK Economic Outlook. March 2014. [Online] Available at: http://www.pwc.co.uk/the-economy/publications/uk-economic-outlook/ [Accessed April 28, 2014]. Palmer, A., 2012. Introduction to Marketing: Theory and Practice. Oxford University Press. Rogers, E. M., 2001. New Product Adoption and Diffusion. Journbal of Consumer Research, Vol. 2, pp. 290-301. Stark, J., 2011. Product Lifecycle Management: 21st Century Paradigm for Product Realisation. Springer. Strydom, J., 2005. Introduction to Marketing. Juta and Company Ltd. Theler, C. & Lehman, B., 1998. The Adoption and Diffusion Process of a Regional Marketing Projectin Swiss Mountain Agriculture. Etud. Rech. Syst. Agraires Dev., Vol. 31, pp. 277-296. Thomas, R. J., 1993. New product development: Managing and Forecasting for Strategic Success. J. Wiley. Thornton, P. H. & et. al, 2011. Socio-cultural Factors and Entrepreneurial Activity: An Overview. International Small Business Journal, Vol. 29, No. 2, pp. 105-118. Wang, G. & et. al., 2008. Consumption Attitudes and Adoption of New Consumer Products: A Contingency Approach. European Journal of Marketing, Vol. 42, No. ½, pp. 238-254. 1Wang, Q. & et. al., 2008. Factors Influencing Consumers’ Evaluation and Adoption Intention of Really-New Products or Services: Prior Knowledge, Innovativeness and Timing of Product Evaluation. Advances in Consumer Research, Vol. 35, pp. 416-422. Wright, M. & Charlett, D., 1995. New Product Diffusion Models in Marketing: An Assessment of Two Approaches. Marketing Bulletin, Vol. 6, pp. 32-41. Read More

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