Company's Positioning in the Market - Assignment Example

Case 1 – IKEA (page 309) 1. Analyze IKEA’s positioning in the market. Why has it succeeded in achieving global appeal? IKEA is a Swedish based company ranked among the top 100 of the worldwide brands for 2005 according to Business Week magazine listing. IKEA is listed as number one brand in both Africa and Europe according to brand channel ranking. Ways in which it has positioned itself in the market Ensuring that public are aware of the company brand existence, that is they have made their brand awareness greater than the size of the company. IKEA has made sure that their suppliers are located in low-cost nation, where reliable distribution channels are reliable and access are at close proximity in order to cut the overall cost. The company has also ensured that its market is globally integrated allowing the company to design and develop their items in countries where labour supply and materials can be obtained at lower cost. The company has also used market segmentation aspect whereby, market for their products is subdivided into smaller numbers of internally homogeneous units. The company has also positioned itself in a way that it is able to ensure that there is specialization in different factors that affect demand and supply such labour, geographical factors, and location. Why it has succeeded in achieving global appeal Vast experience furniture retail market and the cost leadership Brand awareness throughout the world IKEA sell lifestyle that can be embraced by customers throughout the world Their tastes and values are in line with customer desires The company employs product differentiation due to their vast experience production of various products. Affordable products 2. What are the key features of IKEA’s store atmosphere? What role has atmosphere played in enabling the company to gain a competitive advantage? IKEA stores were built outside urban areas and were isolated from other shops to create a complete and enhanced shopping experience for their customers. Stores were constructed in such a way that they could enthral the customers. IKEA stores had the same visual appearance all over the world. Blue and yellow stores were 300,000 ft squared in size and stoked about 7000 items. At the entrance the company had playing facilities for young children and parent could drop their kids in order to shop leisurely. Stores were circular in shape allowing customers to have a wide view of the store. Their pathways were wide enough giving room for customers to examine different furniture. Role of the atmosphere in enabling the company to gain a competitive advantage Large pathways and aesthetically arranged furniture allowed customer to examine different items. Beautiful and well designed arrangement enticed customers to buy the company products as their arrangement was exactly as they would look in their homes. IKEA provided refreshment where shoppers could refresh themselves instead of conducting their purchases in haste because of hunger. In the warehouse big items were flat-packed allowing customers to carry their items comfortably to their homes. The Aesthetics and beautiful store, nice to look at glance gave the company competitive advantage against their competitors. 3.What role does its physical distribution system play in IKEA’s global success? Physical distribution system has a role of ensuring that company cost are reduced significantly by locating their company in low-cost nation where material are at a close proximity and the channel for distribution is reliable. It distribution channel is also globally integrated for effective combination of product standardization, technology and quality employment and achieved at low cost. Global distributed web in IKEA enable the company design their products in countries where the cost of production is significantly low ensuring that supply of products is cheap and achievement of global success. 3. The level in which IKEA is a victim of its prosperity Though successful in many aspects, the company is faced with overcrowding problems at their outlets and mostly at store opening. Deaths and injuries have been reported in some parts of the world such as Saudi Arabia. In England five people were admitted to hospital after a crush during the opening of England store in Edmonton. Quality of services provided at IKEA stores is also questionable and mostly the long queues at their check out points. People have even walked out after waiting on the queues for long hours. It is thought that the company is understaffed or they are usually unprepared for great customer turn out. Case 2 – Innocent Ltd (page 51) 1. What environmental trends created the opportunity for Innocent to build its dominant position in the smoothie market? Innocent limited is a company that provides fresh, quality products and behaves in an ethical quality manner and has used this to create its brand image in the market. The extent to which company values and beliefs of the founder were reflected created the opportunity for Innocent to build its dominant position in the market. The company aimed to be exceptional and authentic honest to its customers and business partners. Companies ethics and ethos were maintained in decision making and the products were kept natural innovative and simple. The public were included in decision making for example they had a request to the customers if they should give up their jobs to engage in production of the drinks in question. Environmental trends that promoted opportunity for Innocent business The unconventional approach on its developments such using lower case in its name and the text on their packaging. Their products were ideal for all people in all spheres, that is, the rich the poor, and even for the healthy conscious consumers. The company offered relaxed environment by the way they communicate to their customers and is illustrated in the product packaging. 2. Evaluate Innocent’s marketing mix. What are its strengths and weaknesses? Marketing mix is term used in marketing and has elements such as price, promotion, product, place, people, physical evidence and process. Marketing decision based on these concepts is used to integrate ideas, mixture elements and attributes in marketing. Example of marketing mix Table 1 Marketing mix and their strategies Marketing mix strategy 1. Product Innocent has ensured that their products are natural, simple and innovative. Packaging of their products is in a very relaxed and in non-corporate style. The packages were colourful and bright with text that was designed in a way that could make someone smile. The message in the pack was communicated in non-preachy, humorous and non-corporate way. Their products were 100 % pure fruit. 2. Price Due to the fact that the company products were 100 % pure fruit, Innocent commanded premium price for its product ranges in the market. The prices were accompanied by clever potential criticism that if they make them cheaper but its value and taste would be reduced. 3. Promotion The company promote their product in humorous and innovative way for example when someone bought one he was given another free and for every purchase done on carton smoothie a tree was planted. The kind of the writing on the package also made it enticing to many. Their promotion highlighted that their focus was ensuring that products were right which made branding easier. The company has set various adverts portraying the importance of the product. This aims to attract more customers 4. Place The company distributed its product widely in convenience stores, supermarkets, delicatessens and cafes. The company used wholesalers intermediaries to ensure that their products were availed at the place they were required. 5. People People are a major source in a business enterprise. People make the company feel its strengths. And thus the company aims at giving people excellent and exciting services. Innocent limited aimed at interacting and building relationship with the customers. The company achieved this through village’s fetes and distinctive company vehicles 6. Process Customers most of time focuses on how fast services are and some are even ready to pay more based on urgency. A banana hot number was provided by the company for communication with the head office or they could visit the company whenever they wished. If consumer had bad innocent experience, they were requested submit their grievances. 7. Physical evidence This provides a place where customers can interact with the seller, discuss about the product and try in building trust. The company also used packaging facilities, phones and websites to communicate with the customers. They could also visit the company when they felt like it. The company also used social sites like facebook and YouTube to communicate with the customers. Visitors to innocent limited sites were invited to receive emails, invitation to free drinks and invitation to village fetes Strengths Beliefs and values of the company Authentic products Honest with customers and business partners Good communication with the customers Increased sales making customers willing to pay for the product. Strong advertisement to attract more customers. Ready market. Variety of packaging strategies. Weaknesses Its Advertisements are often criticized. Cost of advertisement is often costly There is stiff competition from upcoming companies that offer cheaper prices. 3. Analyze Innocent’s relationships with its customers. How have these relationships assisted with the development of the brand? Innocent’s relationships with its customers Innocent Limited regards their customer with utmost importance. The customer opinion was highly regarded. The company also appreciated the support from their customers, this can be seen when they held a music festival for them. On the other hand the customer have received innocent products well, this can be seen due growth of this company from a smaller company to a large company. The company has gone to a point of using website and social sites to interact with their customers which in return they are able to obtain useful marketing information. How the relationships assisted with the development of the brand Relationship between innocent and customers was a good source of marketing information that helped the company to develop its brand based on customers’ needs. 4. Critique the claim that Innocent is an ethical company. There is evidence that innocent is an ethical company according to its core value. The company products are of high quality as they claim. To avoid making mistakes the company involves their customers in making strategic decisions. In line with it value of responsibility and generosity, the company was responsible to their customers and the society at large. Innocent limited gives 10% of its revenue to charity for building sustainable futures for the poor. The company also collaborates with other organizations in starting small businesses for the poor. This proves that innocent limited upholds ethical behaviours. Case 3 – Paddy Power (page 188) 1. Analyze the ways in which advances in technology have changed the betting business. Technology has significantly evolved the betting business. Retail part of this business is now dominated by different chains that have brighter, bigger and well designed outlet. Internet technology has greatly evolved the betting business. Online betting has allowed customers who feel uncomfortable being in traditional betting shop to use these services. There has been creation of brighter and well designed hops making this business more attractive. Advance in technology has also made it difficult for government to control the business because mostly it is done through internet. What are the implications for betting firms? Great returns due to growth in this business Encouraged new entrants Led to intense competition How did Paddy Power go about building its service brand? What are the unique attributes of the brand? Paddy power has built its brand image by redefining its marketing strategy and mission. This includes Creating brand awareness to new and the existing customers Recruiting active and loyal users of their services Raising the profile of its activities by making them fun, fair and friendly. Unique attributes of the brand Unique attribute of the company has enabled them to grow. This are Games which and services which, are Fair, and Friendly Designs which are attractive, modern and air-conditioned. Top quality video, audio and innovative facilities like interactive information terminals. Efficient and friendly services 2. Evaluate the services marketing mix used by Paddy Power. What are its strengths and weaknesses? Some of the marketing mix used by Paddy power includes place, price, promotion and product. Table 2 marketing mix and their strategies Marketing mix Strategy 1. Promotion The company mostly focused on outdoor media due to restriction on radio and television gambling. It also uses websites to advertise such as paddypowerbingotrading.com Promotion were creates in such a way that they brought out fun. It also organised different events. 2. Place The company is located in such a way that it can be accessed by its customers. The company also ensure that its product are known and understood not matter the restriction. The company sponsors well known players and fans of the leading teams to ensure that its product is known widely. 3. Price Their prices are fair and they even refund if a bet is forfeited. The company also ensure that registration fee is minimized as much as possible 4. Product Their products are presented as fun, fair and friendly. Their retail outlets are fun and friendly. Place The company has retail outlet distributed throughout. The shop are designed in an attractive and modern way People People are a major source in a business enterprise. And thus the company aims at giving people excellent and exciting services. Customer experiences are improved and enhanced through video and audio facilities. It staff are trained to provide efficient services Process Process is very significant when there is a need to impress the customer. The company aim at ensuring that its process are efficient as possible Physical evidence This provides a place the customers interact with the seller and discusses about the product. The company has its website through which it can communicate with its customers Strengths Fan, fair and friendly services. Well designed and attractive shops. Expanded market Firm positioning Brand Competitive advantage Weaknesses Fraudulent betting Legal issues Controversial advertising Restricted advertising Analyse Paddy Power’s customer relationship development initiatives. How successful have they been? Customer relationship is aimed at creating a strong relationship between the seller and the customer. Paddy power established a friendly image with the customers as can be seen when the company refunded bets undertaken on Pakistan cricket team. This initiative is based on fairness. They also use their retail outlet to communicate with their customers by providing user friendly equipments. Their website is interactive and full of fun. Their shops are well designed and attractive with interactive terminal to ensure that customer contact with the company is always maintained. The analyzed strategies have significantly increased the number of customers. It has made the company to be quoted as one of the successful entertainment company, the largest betting company in Ireland and fifth biggest operator in United Kingdom. Paddy Power? Are there ethical issues to be considered? In any business ethical standards are paramount in ensuring that the company name and reputation is maintained. A business should portray great sense of honesty, integrity and services quality. In the case of Paddy power techniques, their advertisement raises some questions. The company does not care about the legal implication if there is an opportunity to expand and to reach its customer. The manager need to review their articles of association to ensure that the company name is not tainted. Raised ethical concerns It is not legal to advertise gambling through radios and Television, The posters used were demeaning to some groups of people and the company should be innovative enough to come with other means of advertisement. Case 9- Adidas v/s Nike ( page 245) Positioning strategies being used by Adidas and Nike, are this strategy different? Adidas Adidas is a German brand, which was created by Adi Dassler in 1949. The company is positioned on three principles Protecting athletes from injuries Production of the best sport shoes Ensuring that the product provided is durable. multi program approach The company is focused on customers need and work in improving the quality, the outlook, the image and the feel of the product. Nike Nike was started by Bill Bowerman and Phil Knight in 1964 to provide quality shoes. The company is positioned on provision of quality shoes Promotion of its product. The strategy used by Adidas and Nike are the same though there is some differences in the way the two companies approach them, for example, Nike invest so much in promotion while Adidas does not. How Adidas and Nike have redefined sports good business. Initially both companies were practitioner of sports, but due to stiff competition the situation has changed progressively. More and more people are buying their products as daily fashion clothing. Products that were initially used for sports become fashion accessories for other people who are not players. Comparison and contrast of promotion campaign used by Nike and Adidas, evaluation of promotional objectives, budget, media used and creative treatment in both cases Comparison Expenditure on promotional campaign for two companies increased. Both companies sponsored different teams as part of their promotional campaigns Promotions for the two companies paid off. Contrast Promotional expenditure for Nike was far much higher than that of Adidas Nike was much aggressive in promotion that Adidas, that is, in 2006b world cup Adidas only sponsored six teams whereas Nike had eight. Unlike Adidas, Nike shuttered all norms in its promotional by using a lot of marketing communication. Nike strategies were more profitable than those of Adidas. Evaluation of promotional objectives, budget, Budget The total turnover for Nike in 2006-2007 was much higher than Adidas. Nike also registered high profit compared to Adidas. Nike total expenditure on promotion were much higher than those of Adidas Media used and creative treatment in both cases Nike was creative in media use than Adidas. The company used famous people like Zinedine Zidane to increase its market base. Posters and TV advertisement were used to show players promoting the company products. Strength and weakness of both firm Adidas Evaluating strengths and weakness of Adidas and Nike Adidas Strength Weakness Quality product Competition Good outlook, Not well conversant with promotional activities Great image and feel of the product Lack of innovation Nike Strength Weaknesses Quality product Stiff competition that kept them on toes Innovative promotional activities Criticism from other manufacture who feel the company does not fall the marketing norm Dominant in competition Problem of turning the sport business into lifestyle oriented one. Case 5- changing face in the luxury fashion: Beckham, Burberry, and Big Brother.(Page 129) Identifying and describing some key segments in luxury fashion business. In luxury fashion the market was segmented into two distinct groups. These are affluent and non- affluent. Today luxury fashion has been segmented based on buying habits and consumer attitudes. These include segmentation based on quality and services. In this segment authenticity have an important role in the process of making decision. There is also another market segmentation, which is based on the company and product image. In this segment luxury brand show the kind of the seller and the image they wish to portray. Brands are bought based on style. Third segment deals with fashion followers. This concerns self-stylish people who mix and matches attires from high-street retailers. The extent to which teen segment represent a segment that is viable in the market Teen segment represent a high-growth part with a significant market potential. In US teen market is about 15% of all purchases. Teens are becoming confident and independent as they begin experimenting in the fashionable luxury. Their main concern is mostly image rather than quality. They get this information from blogs and websites. The teens are also known to be technology savvy and would be informed on the latest product that has been released in the market. Strengths weaknesses High number of teen who purchase the product They tend to be costly at long run due to the nature in which they are made to have an appealing appearance Fast tracking in internet technology that enhances internet marketing that enable them to reach a wide market Insurgence by the fake designs Flexibility in design that favour both the traditional trends and the modernised trends Competition from potential retailers who offer the same product at a much lower price. . Market target strategy that has been pursued by luxury fashion brand until today, does it need some changes Market strategy that has not changed until to-date is the image presented by the product. This is why there are many fake items that look like originals. They have to Focus on the consumers attitude and believes These are individuals who greatly follow the newest fashions that are unleashed in the market. They spend on a particular good so as to satisfy their aspirations. Focus on appearance rather than quality. Most highlife consumers would follow the fashion appearance rather than the actual quality of a given good. This makes the luxury company to come up with sophisticated ways that would attract more customers. Focusing on the correct niche market This has been attributed by the fact that, most consumers who value the luxury are young people. These company have to make their commodities that suite the younger generations since the form much of the consumers (Kerin, Steven and Hartley, 2009. This need to change and customers should go for quality rather than image. Though image is important, customers should understand that appearance is deceptive and quality of fake items is significantly low. The product may end up being expensive at long run due to poor quality. References Kerin, A., Steven W., and Hartley, and W., 2009. Rudelius. Marketing. Boston: McGraw-Hill/Irwin. Read More