JIMMY POSSUM Furniture Pty Ltd Companys Marketing Strategy - Case Study Example

Marketing plan Table of Contents References: 16 Marketing plan 1.0 Executive Summary JIMMY POSSUM Furniture Pty Ltd Company is a leading furniture manufacturer in Australia. It was established by Jimmy Possum. It is categorized under Wood Household Furn-Ex Upholstered Manufacturers. It is located in Bendigo, VIC Australia. It is expanding at a high rate especially in regional Victoria (Bendigo); hence, having a pride future. It offers modern wooden furniture, Rock Wood Furniture, rustic wooden furniture, outdoor wooden furniture, and hand crafted wood furniture (Cohen, 2006, p. 42). The purpose is to evaluate the performance and recommend what is important to the JIMMY POSSUM Furniture Pty Ltd Company. This is to find out what the company offers and how it has gained competitive advantage. In addition, it is one of the reputed furniture producing company because of its extensive production of range of products (furniture) from both recycled, De Niro Barstool, Mekka Bed, Chest Of Drawers, Massimo Sofa - 1.5 Chair, Martti, Occasional Chair, Winni Occasional Chair, and new Australian Hardwood timbers (Cyril, 1971, p. 21). The management team consists of Margot and Alan Spalding are among five of the children are involved in day to day running and operations of the company. The other three are cousin, aunt, and one son-in-law (Westwood, 2002, p. 56). Margot is the co-director and co-owner of Jimmy Possum Furniture Pty Ltd. This is a furniture production, design, and retail company (Australian Bureau of Statistics Australian and New Zealand Standard Industrial Classification, 2006, p. 4). These are the top managers who make decisions and formulate strategies to propel the company forward (Montgomery, 2008, p. 123). Originality, creativity, and quality set JIMMY POSSUM Furniture Pty Ltd Company apart from the rest in the industry. In addition, the company has employed more than one hundred and fifty employees both on permanent and contractual basis. Employees are committed, hardworking, determined, experienced, and work with professionalism and due diligent (Reed, 2006, p. 30). There are several trucks and vans that distribute the products to its stores in local Bendigo store, Melbourne, Sydney, Adelaide, and Brisbane. It has more than 66 stores in Australia but, those mentioned above are the major ones (Cohen, 2006, p. 43). 1.1 Mission statement The mission statement of the company is to produce high quality products, maintain customer’s satisfaction, enhance creativity, and productivity (Cyril, 1971, p. 22). 1.2 Company’s objectives JIMMY POSSUM Furniture Pty Ltd Company has several objectives that have helped it gain competitive advantage and retain its customers for long. These objectives include: To produce and distribute a high quality products to all stores in time in order to avoid shortages (Montgomery, 2008, p. 125). To maintain a good customer relations with other stakeholders especially the employees, and government (Reed, 2006, p. 32). To increase its profit margins by 12% within the financial year 2011/2012. To increase the market share by 4% monthly that will translate to 15% increased sales within the financial year an Australian Bureau of Statistics Australian and New Zealand Standard Industrial Classification, 2006, p. 7). To expand its stores to other towns and cities within the country for easy access by customers. It aims at opening between 2 and 4 stores in major towns monthly; so that at the end of the year, it will have opened new stores in all towns. To reduce the expenses by 12% at the end of the year by maximally utilizing the used materials by recycling (Cyril, 1971, p. 23). To employee experienced but, qualified, committed, dedicated, hard working, and self-driven employees so that they can serve the customers and perform their duties diligently. To conduct market research and analysis so that we find out what the customers want in terms of the quality, quantity, and price (Cohen, 2006, p. 44). To promote and advertise company’s products using all media and channels of communication such as radio, TV, and magazines so that it can reach all the customers and potential customers in all the markets (Montgomery, 2008, p. 126). To introduce more than 20 new produces by the end of the year so that it can compete favorably and penetrate into new markets than its competitors. To participate in social responsibilities by helping the needy but, bright students from poor background. Others are those who cannot meet their medical bills. This is expected to retain and attract more than 2000 customers in the new markets identified. To open one branch or subsidiary in United States of America by December 2011 (Reed, 2006, p. 34). 2.0 Current situation The company’s head office and factory are located in Bendigo, VIC Australia and it has branches and stores at local Bendigo store, Melbourne, Sydney, Adelaide, and Brisbane. It is planning to open more stores in all major cities and towns in Australia. The location is strategic because it is near the forest where hardwoods are grown; there are rivers that supply water, and electricity to support all the operations (Montgomery, 2008, p. 128). The company is targeting all people in the country irrespective of their economic status. The company manufactures over 1000 products because it wants to serve all the people in the country. In addition, it is targeting the high income earners in United States of America because it is planning to open a new branch or subsidiary before the end of the year (Westwood, 2002, p. 57). The target customers in Australia will be based on their income. There are products made specifically for low, middle, and high income earners in the country. There is no discrimination in the market because everybody has to benefit with our high quality products. The customers are allowed to come and provide the details of the type of products he or she wants (Cyril, 1971, p. 24). Products are made depending on the customer’s specification and the amount he or she can afford. Targeting all people in the market is a strategy that will ensure all people get our products to avoid discrimination of people based on their incomes. Those who can afford to buy expensive products are given the same chances with those who ear low incomes. Even those who earn low incomes can get our product but, we do not compromise our quality because of someone’s income. All our target markets in the country have stores, distribution channels, and marketing officers who ensure the products meet the customer’s needs at all times in the market (Cohen, 2006, p. 45). There are some competitors in the markets but the major competitor is Furniture Manufacturing Company of Australia (FMCA). The company manufactures almost the same products but it only targets high income earners. In the recent years, it has manufactured products that appeal to all customers; hence, a threat to the company. Furniture Manufacturing Company of Australia (FMCA) is currently opening new branches and stores in the areas JIMMY POSSUM Furniture Pty Ltd Company have its own (Reed, 2006, p. 36). With this competition, JIMMY POSSUM Furniture Pty Ltd Company is formulating strategies to counter these competitors by outperforming and dominating the market. Competition is health but, if the company does not make decisions that will ensure the customers are satisfied with the products; then, it may be outperformed in the market (Montgomery, 2008, p. 129). The company’s strengths are the pillars especially the hard wood trees used to manufacture the beds, chairs, cupboards, tables, cabinets, ward ropes, and many others have sustain the company in the market for many years. The competitors have been using the trade marks of the company so that they can attract and appeal to our customers. This is one of the challenges or issues facing the company. The competitors can manufacture poor quality products and use our logo or trademark to sell products (Westwood, 2002, p. 58). This will adversely affect the image and reputation of the company because it has been known for manufacturing and selling high quality products. However, this has been reduced because the customers have been advised to buy products from our agents and stores only to avoid conmen who pretend to be selling the products of JIMMY POSSUM Furniture Pty Ltd Company (Cyril, 1971, p. 25). Strengths Our product’s quality, Pricing, and advertisement strategy have made the company lead in the market. It is the quality and durability of the products that the company has maintained. The company manufactures over 1000 products because it wants to serve all the people in the country. JIMMY POSSUM Furniture Pty Ltd Company is formulating strategies to counter these competitors by outperforming and dominating the market. It has been leading the market with over 40% market share and more than one million customers. Weaknesses The competitors have been using the trade marks of the company so that they can attract and appeal to our customers. The company does not have a large truck of land to plant trees, which means it has to buy. Opportunities The location is strategic because it is near the forest where hardwoods are grown; there are rivers that supply water, and electricity to support all the operations (Montgomery, 2008, p. 128). Targeting all people in the market is a strategy that will ensure all people get our products to avoid discrimination of people based on their incomes. The new technology is an opportunity because it will improve efficiency. Threats Competition is a major threat facing the company especially from Furniture Manufacturing Company of Australia (FMCA). Furniture Manufacturing Company of Australia (FMCA) is currently opening new branches and stores in the areas JIMMY POSSUM Furniture Pty Ltd Company have its own (Reed, 2006, p. 36). 3.0 Competitor and issues analysis There are many competitors in the industry because it has many customers; hence, high profit margins. Competition is a major challenge facing the company especially from Furniture Manufacturing Company of Australia (FMCA). Even though, there is stiff competition in the market, JIMMY POSSUM Furniture Pty Ltd Company has been able to gain competitive advantage. It has been leading the market with over 40% market share and more than one million customers. There are increased sales and profit margins every year. Our product’s quality, Pricing, and advertisement strategy have made the company lead in the market. The competitors have been trying to mislead the customers that we are using the recycled materials to manufacture the products. However, the customers have been loyal to us because they have been increasing every year. It is the quality and durability of the products that customers want. The company has been able to satisfy the customers (Cohen, 2006, p. 46). There are key business issues affecting the company that need to be addressed or else it will affect the performance of the company adversely. Technological advancement in Australia is rapidly changing; hence, costly and it can lead to the closure of the company. This is the greatest challenge that is affecting the industry especially JIMMY POSSUM Furniture Pty Ltd Company. Though technology is inevitable, it should be changed after sometime and not after every 4 months. This is a challenge, because the company will not expand its operations to other regions and countries; because it will be spending a lot of financial resources in installing new technology (Montgomery, 2008, p. 130). Though technology is essential, it will affect the growth and development in the industry. Many people will lose their jobs because most of the work will be done by machines and new equipment. With the new technologies, employees need to be trained on how to use them. Training them is time consuming and costly to the company. New legislations are a major challenge to the company. The government wants to increase the legal fees and taxation will be increased as from June 2011. This means the company’s profits will reduce or lead to losses; hence, collapse of the company (Cyril, 1971, p. 26). The new legislations too require the company not to use trees planted by the government or those in the government or public land. This is a major challenge because it will require the company to plant its own trees. Hardwood takes more than 30 years to mature; hence, the company can close its premises for thirty years waiting for trees to mature because it will take effect from June 2011(Reed, 2006, p. 38). In addition, the company does not have a large truck of land to plant trees, which means it has to buy. Buying it is costly and the company cannot afford to buy it because it had not planned for it. This is a major issue that the company is facing presently. In addition, it has been negotiating with the government together with other players in the market to lift such restrictions and legislations (Montgomery, 2008, p. 131). Increased taxation is an issue that will affect the company. The governments through the revenues authority want all the furniture manufacturing companies to pay 40% of taxes to the government from its revenues. This will affect the company’s performance adversely because profits will be reduced and employee’s salaries, wages, and allowances will be reduced. 4.0 Marketing Objectives The company depends on the marketing objectives for its success because it will determine the revenues to be earned and markets to be penetrated into (Cohen, 2006, p. 47). • To increase the market share by 4% monthly that will translate to 15% increased sales within the financial year the Australian Bureau of Statistics Australian and New Zealand Standard Industrial Classification, 2006, p. 14). • To maintain a good customer relations with other stakeholders especially the employees, and government (Montgomery, 2008, p. 132). • To conduct market research and analysis so that we find out what the customers want in terms of the quality, quantity, and price after every 4 months. • To promote and advertise company’s products using all media and channels of communication such as radio, TV, and magazines so that it can reach all the customers and potential customers in all the markets (Malcolm, 2007, p. 444). • To introduce more than 20 new produces by the end of the year so that it can compete favorably and penetrate into new markets than its competitors (Cyril, 1971, p. 27). • To increase awareness in all markets by regularly advertising the products in all target markets (Reed, 2006, p. 39). 5.0 Marketing Strategy To achieve the objectives and goals of the company it uses the 4p’s because it will determine whether the objectives will be achieved or not. 5.1 Product The products of the company are of high quality because they are made by the experts. They are durable or long lasting because they are made of the hardwoods. They are appealing to customers because of its features that are eye-touching (Australian Bureau of Statistics Australian and New Zealand Standard Industrial Classification, 2006, p. 09). The variety of products are provided such as tables, chairs, cabinets, beds, cupboards, drawers, tables, ward ropes, and many others attract many customers because they will get what they want in our stores in all major cities and towns (Immo, 20l0, p. 94). Due to the market research and analysis conducted regularly, the products are made depending on what the customer want. The products are customized to meet their needs (Montgomery, 2008, p. 133). The product features are important because it should be appealing to many customers in many markets. 5.2 Price Pricing is essential in the company because most customers are sensitive to the price. The prices of the products are affordable because it considers all the customers especially the low, middle, and high income earners. The company determines the prices of products by detecting all the expenses and then adding the profit margin it wants to gain. The prices are lower than those of the competitors so that the sales of the company increase leading to high turnover rate (Reed, 2006, p. 40). The profit margins will increase if the prices are favorable and can appeal to many customers in the market. Selling price that is lower than those of the competitors will attract more customers given the quality of the products is very high compared to the competitors. Pricing may not be easy but, it should be based on profits and costs incurred by the company. The customers who will buy products in large quantities are allowed a discount of between 5% and 10% (Cohen, 2006, p. 48). Discount is important because it will encourage customers to buy in bulky because they will pay less. When customers buy in large quantities, it increases sales volumes; hence, profits margins. Prices should be set having market expectations and what competitors offers so that it does not charge high or low prices in the market (Immo, 20l0, p. 96). 5.3 Promotion Promotion and advertising will create awareness of products to customers and potential customers in all target markets. The company will use radio, TV, and magazines to advertise or promote the products of the company in all target markets. Promotion is essential because customers can know the new products in the markets (Immo, 20l0, p. 97). The use of all media available in Australia is to ensure those who cannot get access to TV can get the same information through magazines, and radios (Reed, 2006, p. 43). Explaining the features, the use, and its availability is important because they will understand about the products of the company. To enhance the promotion of the products, it can be done by the sales and marketing officers who go round the towns and cities explaining the products to the potential customers. In addition, road shows can be organized so that people who cannot get access to TVs and radios can know about the existence of the products. Promotion will attract more customers; hence, increased sales and profit margins (Montgomery, 2008, p. 134). 5.4 Place Place is an essential element in marketing because distribution will ensure products reach the market on time. Distribution will reduce inconveniences or shortages of products in the market. The company has trucks and vans to distribute the products to all the stores of the company (Malcolm, 2007, p. 445). Customers may shy away from buying the products of the company if they do no get the products on good time because of the delays that may be experienced. To counter this challenge, orders are made in advanced so that it can reach all the markets on time. The distribution channels are reliable, efficient, and effective; hence, able to retain the customers (Cyril, 1971, p. 28). The company has ensured the stores are opened in areas where the infrastructure has been improved. The roads should be passable or tarmac so that products cannot delay in reaching the market. Safety and mode of communication has been considered because it is essential for easy conveyance of information (Immo, 20l0, p. 99). 6.0 Action Programs Promotion will start from June 2011 until June 2012 when the financial year will end. Promotion and marketing of the company’s products will be done by the head of sales and marketing department and other staffs. The opening of new branches will be done by the Chief Financial Officer together with the marketing manager. The marketing manager will determine the market with more customers. However, the CFO will allocate the funds required. In addition, CFO will borrow the funds incase the profits generated will not be sufficient to carry out all activities that have been planned (Cohen, 2006, p. 49). The CEO and the General Manager will be in charge of the new branch to be opened in United States of America before December 2011. They will negotiate all the terms and conditions of operations. On research, research and development manager will be obligated to conduct research and development of the new products in the market. He will have to develop the 20 new products before the end of 2011/2012 financial year (Reed, 2006, p. 44). Development of adverts and other promotional features to be used in radio, TV, and magazine will be done by the marketing and promotion manager continuously until the products have been known by all customers and potential customers in the market. In addition, he will find what the customers want about the products especially on the price, features, and branding of the products (Cyril, 1971, p. 35). 7.0 Budget The budget of the company is expected to be AUD 1,000,000 and it will spent within the financial year 2011/2012. The company’s CFO will borrow AUD 600000 so that AUD 400000 will be extracted from the profits generated in the previous financial year (Australian Bureau of Statistics Australian and New Zealand Standard Industrial Classification, 2006, p. 10). Items Amount (AUD) Opening a new branch in USA 400000 Advertising and promotion 50000 Research and development 50000 Opening new stores 300000 Development of new products 50000 Distribution and branding 50000 Purchasing of new funds 90000 Miscellaneous expenses 10000 TOTALS 1000000 8.0 Measurements The 15% increase in sales will be achieved if all the new stores and twenty new products are introduced in the market within the financial year. With increased sales by 15%, the profit margins will too increase by 12% percent because 3% will be deducted as part of the expenses (Malcolm, 2007, p. 446). Expenses are expected to reduce because some employees will be retrenched and it will utilize the waste materials by recycling. The achievement of these goals and objectives will be evaluated and controlled after 3 months sop that if there are any deviations, can be corrected before continuing with other activities so that the goals and objectives can be achieved within the time frame (Cohen, 2006, p. 53). Recommendations I recommend to the company to conduct comprehensive market research and analysis so that it can understand what the customers want. The marketing team of the company is should be determined and dedicated in service delivery and marketing the products of the company in Australia (Westwood, 2002, p. 59). The marketing strategies set are essential because they determine the success or failure of the company. The positioning strategy is important because it helps to identify what the customers want and outperform the competitors in the industry (Montgomery, 2008, p. 124). The top management should focus on improving the quality of the products so that it can gain competitive advantage in the market. References: Australian Bureau of Statistics Australian and New Zealand Standard Industrial Classification. 2006. Furnishing manufacturing industry in Australia. Manufacturing Skills Australia. Pp. 1-14 Cohen, W. 2006. The Marketing Plan. New Jersey: John Wiley & Sons Inc. pp. 42-53. Cyril, R. 1971. The Market for the New Zealand furniture industry in Australia. New York: Furniture Field Survey Group, Dept. of Industries and Commerce. Pp. 21-35. Immo, P. 20l0. Applicability of Mobile Marketing in the Marketing Mix of Trade Fair Organizers. New York: GRIN Verlag, pp. 94-98. Malcolm, M. 2007. Marketing plans: how to prepare them, how to use them. Oxford: Butterworth- Heinemann, pp. 445-446. Montgomery, M. 2008. Possum and Other Receipts for the Recovery of "Southern" Being. Georgia: University of Georgia Press, pp. 123-134 Reed, P. 2006. Strategic Marketing Planning. Melbourne: Thomson. Pp. 30-44. Westwood, J. 2002. The marketing plan: a step-by-step guide. New York: Kogan Page Publishers, pp. 56-59. Read More