Strategies for Marketing of a New Product - Coursework Example

Executive Summary This report addresses marketing and promotional strategies that are going to be employed in introducing a new product into the market. Gravity lights is a new product, its uniqueness is the fact that it uses weight to product light; it is cost effective and portable. This report addresses how well to position the product in the market in order to get it right the first time. Table of Contents Executive Summary 1 Introduction 3 The selected product 3 Relevance of mission 3 SMART objectives 3 Business industry 4 Bargaining power of consumers 4 Bargaining power of suppliers 5 Threat of new entrants 5 Threat of substitute products 6 Competitive rivalry within the industry 6 The appropriate conditions for the strategic fit 6 Macro level analysis for Market and industry attractiveness 7 Micro level analysis for Market and industry attractiveness 7 Relevance market research for strategic decision making Influences of product, pricing, distribution and promotion policies on marketing decisions 8 The significance of the overall segmentation, targeting, differentiation and positioning strategies for the business 9 Conclusion 10 References 11 Introduction Marketing of a new product is always a challenge and a demanding task that requires every effort and strategy. The aim of this analysis is to demonstrate how a new product will be introduced into the market, the challenges and the marketing strategies that will be employed in order to ensure that the product is successfully. The selected product The product is gravity lights uniquely designed to generate energy by lifting a small weight hence converting the mechanical energy to electrical energy for productive usage, especially lighting in an area with limited commercial power connection such as camping sites. Relevance of mission The rationale for this product is mainly its usability, cost and convenience. The product is a cheap alternative source of power and it is convenience as it does not demand additional resources for it to function effectively. SMART objectives Specific- The product is unique and specifically made as an alternative source of light to clients in remote places or in camping sites that have limited connection to commercial power. Gravity lights are also resourceful to energy saving sensitive clients. Measurable- The product will be measured in terms of its progress in the market; this will be completed by ensuring that there is a mechanism that measures the performance of the product in the market. Performance measures will include the demand for the product, the intensity of the demand which can be measured by the amount of products sold in the market. Attainable- Gravity lights goals are attainable and realistic; this is because the product is unique and likely to attract a large customer base. Relevant- The chosen product is relevant in this case because it is unique and there is an available market for it. Time-bound- The time for the marketing of the new products is expected to be one month after the start of the business. Business industry The business industry is energy. The five porter’s forces are discussed below. Bargaining power of consumers In the energy sector, the power of consumers is always an important factor, this is mainly because of the impact that the customers have on the energy key stakeholders. Some of the recent issues include the need for green energy considering the health issues as a result of coal energy. This has been the reason behind the development of cleaner energy sources which have minimal impact on the atmosphere. In this case, gravity lights will be a better option for consumers hoping to help in energy conservation and production of cleaner energy. The bargaining power of consumers in the energy sector has been the main motivational factor behind the invention of new and cleaner sources of energy such as the nuclear energy and even the proposed gravity lights (Randall, Karl, & Jonathan, 2003, p.13). Bargaining power of suppliers Suppliers in the energy sector have a large bargaining power because of the energy sector is a lucrative sector. Supplies of main components such as the batteries and power codes among others are necessary in any power production firm. Transmission cables and other components are also needed in the energy sector. Notably, there are many suppliers of all the raw materials needed in the energy sector. This is important because it significantly reduces their bargaining power. In this case, the suppliers of the needed raw materials will not have significant bargaining power as there are a number of them. This is a main advantage in this case because the manufacturing materials will be acquired more easily and hence making the selling price friendlier to the end consumer (Zirpoli, 2008, p.20). Threat of new entrants In the energy sector, there are many competitors as well as new entrants to the market; the demand on the other hand is also high and hence balancing the industry. In this case, with innovation around the world and possibilities of new entrants cannot be ignored. More so, similar products from different manufactures can be injected into the existing market (Knowles, 2011, p. 16). This is a real possibility and hence the need to move faster in the market in order to get a significant niche before new entrants starts to fight for their market share. This can be achieved through a thorough marketing strategy which targets the main customer base such as camping sites and disaster prone areas that may need power when the mains are disconnected. Threat of substitute products In the energy sector, there are many substitute products, in this case the substitute products includes kerosene lambs, rechargeable lambs, remote power connection, wind energy and solar energy among others. All these sources of power are effective and can provide remote power connection when tapped effectively. It is therefore necessary to study the merits and demerits of these alternative products in order to bridge the gap by providing unique product (Hatten, 2011, p. 263). Gravity lights are unique in the sense that they provide power without incurring costs that other alternative products need like connection to mains or needing kerosene as lambs will require. This unique quality of gravity lights will provide competitive advantage. Competitive rivalry within the industry Competition in the energy industry sector is significant, with this consideration better promotional and marketing strategies are required in order to acquire sizable market niche. Competition from other innovative products such as solar and wind energy in remote areas can destabilize the industry and hence the need for unique products (Griffin, & Moorhead, 2011, p. 70). Gravity lights are unique and cheap; they provide a cheaper alternative to the traditional sources such as solar energy and wind energy which demand favorable climate condition. Gravity lights do not demand anything; a small weight can make the product work for a considerable time before another lift is needed. The appropriate conditions for the strategic fit The appropriate fit strategy for this case is the prospector strategy; this is because it will involve active programs needed in order to expand into the new market. This strategy is also effective in stimulating new opportunities in the market. More so, using this strategy to introduce gravity lights into the market will ensure quick reaction to signs of market opportunities as well as take advantage of the available market research to ensure successful product entrance into the market (Hellriegel, & Slocum, 2007, p.34). Macro level analysis for Market and industry attractiveness The energy industry is a competitive industry, in micro marketing; the focus is on the entire consumer base. Essentially the customer base is wide in the energy sector and hence making macro marketing more economical given the number of advertising channels that are at the disposal of the company (Hollenbeck, John, 2006, p. 523 & Hielkema, 2012, p.534). Gravity lights has a potential of attracting a large market base, in this sense, using common and cheap communicational channels such as TV, internet and radio to put across the promotional message will reach a large audience. The challenge with macro marketing is the lack of focus, a factor critical in ensuring the success of the product in the market. Micro level analysis for Market and industry attractiveness Micro marketing is more focused to specific groups of people. This method is specifically imperative for the new product, gravity lights. According to Kapferer (2002, p.45) the rationale for this is because means of reaching to camping areas and remote areas in need of cheap are available. More so, focusing on small groups enhances the chances of making the product popular and also increasing the customer base. The main advantage of the gravity lights is the fact that they are cheap to acquire and also consume no energy like other sources of energy which demand more resources. Trade shows in camping areas in Australia will thus be an imperative micro marketing channel for the new product (Keller, 2001, p.14). The challenge with this method is the cost associated with focusing on a particular customer base. It is however more effective if a unique customer base is required; it also saves on the advertising cost as it will yield more results as compared to macro marketing strategy which focuses on a wider customer base that may not necessarily transform into sales (Keller, 2003, p.67). Relevance market research for strategic decision making Influences of product, pricing, distribution and promotion policies on marketing decisions Market research is an imperative consideration; this is because an effective market research enhances the identification of the market niche or the target group. Market research is also an essential decision making tool. This is mainly because it focuses on the behavior of the potential customers and hence giving the business an edge on how to deal with the customer in terms of pricing and promotional strategies (Agarwal, & Rao, 2000, p.1). Product, pricing, distribution and promotional strategies are essential market mix elements that determine the success or the failure of the product. In essence, the product introduced to the market must be unique and focused on a particular group of consumers; the pricing of the product must reflect is perceived value or what the customers get from the product. The product must also be availed to the right place at the right time and effective and relevant promotional strategies employed to market the product to the right people (Malhotra, 2006, p.34). In this case, the product is gravity lights, gravity lights can be used in areas with minimal access to commercial power. The target customers are individuals who like camping or work in remote places that have limited access to commercial power. Other individuals being targeted are this living in areas prone to natural disasters ( I-Fei Liao, 2009, p.23 & Egal, 2012, p.23). The pricing of the product will range from $5 to $10 depending on the power that is produced. Placement of this product will therefore target camping sites in Australia such as Lane Poole Reserve, Perth Hills Centre, and Cape Le Grand National Park. Direct distribution will be used in order to reduce the cost of marketing. Trade shows and internet promotional strategies will be employed in order to pass the message to the intended consumers (Walker, O et al. 2011, p.34). The significance of the overall segmentation, targeting, differentiation and positioning strategies for the business In order for the business venture to succeed it is necessary to ensure product segmentation, positioning, targeting and differentiation. All these marketing aspects are imperative as they will play an important role in ensuring that the product is targeted to the relevant market niche. Segmentation essentially helps in dividing the market in order to target the relevant group of consumers (Robbins, & Judge, 2008, p.45 & Wefald, 2011, p. 521 ). In this case, the criteria that will be used for segmentation will focus on the expected returns from the target group, stability of the target market, possibility of reaching the target market via available communication channels and expected response of the group. In essence, the target groups are individuals in camping sites and others who spend most of their time in remote areas with limited source of power (Walker, O et al. 2011, and p.35). Product differentiation goes hand in hand with segmentation as differentiation ensures that the product is different from others in the market, uniqueness is essential because it increases  attractiveness of the product to the target market and hence increasing its competitive advantage. By segmenting and differentiating gravity lights, the market value as well as demand will increase (Tanzi, 2011, p.121). Market positioning is also another significant consideration; in this case, the key goal of market positioning will be to create an impression in the customers mind about the value of the product. Positioning will be achieved by clearly defining the brand and taking advantage of the market mix concepts to clearly realign gravity lights into the market. In essence, the overall significance of segmentation, positioning and differentiation is to increase the market niche as well as the product life cycle. Notably, an effective segmentation increases the chances of successful market entry which is an important factor (Wang, 2005, p.23). Conclusion Marketing involves a number of stages, as identified; there are market forces that should be analyzed, market mix that should be ensured and product differentiation, positioning and segmentation. It is necessary to get it right the first time especially when introducing a product into the market. By ensuring that all essential factors are met in the first place increases the chances of success in the market. Gravity lights are unique and provide a cost effective alternative to the target group. References Agarwal, M.K., & Rao, V.R. (2000). ‘An Empirical Comparison of Consumer based Measures of Brand Equity’, Marketing letters, 67 (9)4, pp. 1. Egal, A. (2012). Stakeholder Management and Organizational Behavior: Project Human Resource Management: The Case of Water, Sanitation and Hygiene Project (WASH). 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