Joseph and Sons: Pioneer Strategies for the Product - Business Plan Example

Topic: Marketing Management Name: Student Number: Unit: Name of Unit Coordinator: Due date: Word Count: 4186 Executive Summary This paper presents a strategic marketing plan by providing a guide on methods of formulating, implementing and measuring marketing strategies. In addition, it creates an enhancement of understanding of a number of strategies required during new market entries, growth, mature and declining markets for a particular product that an organization needs to market. It also explains a number of strategic choices that need to be implemented by the business in the case study to maintain a competitive advantage in the shakeout, mature and declining markets. It also provides an explanation of the right organizational structure that can result into achieving the marketing plans and proposes competitive strategies that need to be implemented for the business in the case study. A number of marketing metrics are also explained that ensures the business is successful in a competitive market. The focus of creating a marketing management strategy for the company is to ensure the right channel is followed in management of marketing process so that the product remains competitive in the market and profitability from the product is enhanced. The marketing management process proposed by this paper is recommended to be used by any organization that needs to market its products under conditions faced by the product discussed in this paper. TABLE OF CONTENTS 1. Introduction of the Products 4 2. Product Life Cycle 4 3. New Market Entry 5 4. Pioneer Strategies for the product 6 5. Growth Strategies 8 6. Shake-out, mature and declining strategies 9 7. New Economy markets 10 8. Organizational structures 11 9. Marketing plans-SWOT Analysis 12 10. Marketing metrics 13 11. Marketing audit 15 12. Conclusion 16 13. References 18 1. Introduction of the Products Joseph and Sons is a joint venture in which Joseph and his two sons have observed that there is high demand for bakery products such as bread, cakes and in the neighborhood in which they live. They have observed that local shops have to outsource the products from other regions far away from their town of residence. In addition, having worked in a bread producing company, Joseph has observed that the quality of the bread sold in the local shops is low and does not meet the required standards for a bread to be consumed. In addition, there are few shops and the demand is usually higher than the amount supplied. Thus, residents in the suburb have experienced shortage of bakery products such as bread and cakes on regular basis. Consequently, he and his two sons have decided to start a bakery in the suburb where they live to cater for the demand of bakery products in the area. They hope that the products will supplement the bakery products sold in the local shops. However, they do not have the marketing management strategy that they need to follow to ensure the products are marketed successfully to the local consumers and shops. This paper provides a marketing management process that need to be followed in marketing the bread and other bakery products produced by the joint venture of Joseph and Sons for the competitive advantage of their venture over those of their competitors. The main marketing management areas that this paper provides a guide on include product life cycle, market entry procedures, growth strategies, shakeout, mature and declining strategies, organizational structure and marketing metrics and marketing audit procedures. 2. Product Life Cycle There are five stages in a product life cycle. The first stage is the introduction stage where consumers are not aware of the product and the product is still not common in the market (Varese, 2005). The second stage is the growth stage where the popularity of the product increases and the resulting increase in sales of the product is observed. The third stage is the shakeout stage or competitive turbulence where the product has a strong price competition and there is a decreasing rate of growth of the product. The fourth stage is the maturity stage where net adoption rates become constant and finally the fifth stage is the decline stage (Smith, 1992). In this stage, there is s a decline in demand for the product due to innovation from competing products and there is the possibility of disappearance of the product from the market. The bakery products that will be produced by Joseph and sons will be at the introduction stage because there will be moderate demand for the products due to their unfamiliarity to consumers, their technical design will be new to consumers and there will be few market segments for the products (Sharma, 2009). In addition, the sales volumes for the products will be low and there will be a negative profitability. This will result from the fact that consumers will be aware of bakery products that were distributed initially more than those produced by Joseph and Sons bakery consequently, there will be reduced profitability for bakery products at the introductory stage compared with profitability of existing products. 3. New Market Entry During the entry of the products into new markets, production of the bakery products will be done in an area that had been supplied with bakery products. Thus the entry will be made by taking advantage of mistakes that have been made by other suppliers of the bakery products to the advantage of the new bakery venture (Saxena, 2009). The main strategies that will be used by the new venture of Joseph and Sons in production of bakery products will be cost reduction and introduction of new product lines to the market. Cost reduction will be achieved by using simple methods to produce quality bakery products by using less costly methods of production. This will result into reduced labor cost and overall reduction in cost of production. As a result, the charges for the sales of breads and other bakery products will be low and affordable in comparison with the charges of similar products produced by competitor companies (Reid & Bojanic, 2009). This will result into high demand for the products in comparison with the demand for competitive products. As a result, it is anticipated that there will be high profitability from this strategy. New product lines will also be introduced into the market that supplements the existing bread. The joint venture will need to venture into production of additional products such as cakes and buns. This will create an additional demand for bakery products and result into high competition for customers (Panda, 2008). In addition, the demand for these products will result into additional income for the joint venture when the demand for bread is low. It will also ensure the demand for bakery products remain higher even during times when demand for bread is low. 4. Pioneer Strategies for the product Since the bread products will be introduced into the market where marketing of bakery products has not been fully exploited, pioneer strategy will be used in promotion of the sales of the products. The strategies will be focused finding marketing methods that have not been used to promote the sales of the products by the existing companies in production of bread and improving in them to the advantage of the new venture (Mukund & Sundari, 2001). The main pioneer strategies that will be used for the bread products will be the niche strategy and withdrawal strategy. Withdrawal strategy refers to the process of increasing the ability to attract new customers in selected high growth areas by focusing offerings and resources in high demand areas and withdrawing from smaller or slow-growing segments for the purpose of conserving resources (Mathur, 2006). It has been observed that the existing bakery companies serve areas that do not have high demand for the bakery products. This has resulted into increased use of resources and increased overall cost of operation. The withdrawal process will ensure only areas of high demand for bread and other bakery products are supplied with these products. In addition, it has been observed that the current facilities used in the production of bakery products by the existing companies are below standard (Kotler, 2009). The new venture intends to avoid using such facilities and develop less labor-intensive facilities in their bakery. The research and development processes have mainly been focused on maintaining the current production standards of production among competitors. The new venture intends to avoid this method and conduct research on methods of improving quality of the bread and other bakery products to ensure competitiveness of their products. Another strategy that will be used by the new venture is the niche strategy. In this strategy, the new venture will determine areas where competitor companies have not reached in their distribution processes and distribute the products in those areas (Kirenz, 2010). In addition, sales promotion will be done by informing consumers in potential locations of high demands regarding the products produced by the company. They will be informed about the edge that the new products have over those produced by competitors to attract them to buy the products. These include quality and price of the new brands of bread and other bakery products. 5. Growth Strategies In the growth strategy, the main strategy that will be used will be that of a follower due to the fact that the product will be introduced into a market where there is an already existing product. Thus, the main growth strategies that will be used to enhance the growth of the product will be gorilla and leapfrog methods (Jayachandran, 2004). In the gorilla method, market growth will be achieved by capturing a modest share of the market and replacement of purchases in a number of market segments and attracting a share of new customers within the existing segments (Holland, 2012). The marketing campaigns will be achieved by use of unconventional, methods that are basically interactive and consumers will be targeted at unexpected locations. This will involve the use of unconventional methods such as intercepts in public places, streets and providing giveaways, creation of public relations regarding the products of the new company and the use of other unconventional means for the purpose of getting maximum results from least resources (Grein, 2004). In the leapfrog method, the company will avoid confrontation with the existing companies by bypassing the enemy or competitive forces. This approach will be appropriate for the new business because it has not been well established compared with its competitors, hence it does not have the right amount of resources to market its products (Graham & Pettinato, 2002). In this method, customers will be induced to develop likeness for the mass market by replacing the existing brands sold in the market with the new products produced by the company. This will be achieved by developing new technologies or creation of new business models such as introduction of new products that are more competitive compared with bread such as cakes and buns. It will also involve anticipating the trends in technology and developing products based on the expected level of technology (Gillingham, 2003). For example, the new venture will conduct research on production methods that are latest and implement them in production of bread products as well as look for methods of improving the quality of bread products produced to ensure the demand for its products is higher than that of its competitors. It will be achieved through brainstorming as well as the use of resources and avoiding constraints. Leapfrog strategy will also be achieved by providing the right environment of the strategy. 6. Shake-out, mature and declining strategies There will be a number of implications of the product life cycle on the bread and other bakery products in the shake-out, mature and declining markets. In the shake-out strategy, there will be market growth but at a declining rate. There will be changes in market and competitive environment (Dayal, Zachariah & Rajpal, 1996). Since the products will be in the introduction stage of the product life cycle, the competitiveness of the products will be low while the demand for the products will be increasing. The changes in the shakeout stage will include existence of excess capacity, difficulty in maintaining product differentiation, high competition and growth pressure on costs and profits. The introduction stage of the product will make differentiation difficult while the product will be less competitive than the existing products in the market, resulting into it reaching the maturity stage at low demand (Cant, 2006). In the mature strategy, the main sets of action of improving the competitiveness of the products will be development of a well-implemented business approach for sustaining a competitive advantage, ensuring customer satisfaction and creation of customer loyalty (Brooks, 2005). The impact of the product life cycle is that at the maturity stage, the product will reach its highest level of competitiveness and it will not be possible to increase the popularity of the product. In the declining market strategy, the main strategies that will be used are harvesting strategy and the niche strategy. In the harvesting strategy, short-term cash will be maximized or margins will be maximized at the expense of decline in market share. The impact is that there will be few competitors at this stage and rivalry will not be intense (Birdsall, 2000). In the niche strategy, competitive advantage will be maintained in specific areas. The overall impact is that there may be a market decline in one or more segments during the process of slow decay. This is focused on avoiding the impact of competitors in the target segment. 7. New Economy markets There are many new market economy conditions such as increased availability of information, ease of interacting and the possibility of comparing information about products and services. The process of marketing the bakery products by the company can be facilitated by using new market economy in a number of ways (Bhaumik, 2009). These include the use of the latest technologies in the process of production, distribution and advertising the bakery products of the company. Joseph and Sons bakery needs to apply new economy strategies of changes in customer service and proliferation of internet applications in a number of ways. Changes in customer service can be enhanced by using the new market economy strategies of building brands through performance and use of digital facilitates that fasten the process of providing customer service (Varese, 2005). Customer service employees will be trained to use the latest technologies in managing customer service activities as well as maintaining good relations with customers. The teams will also be trained to deliver performance and value that customers are willing to pay. It also involves focusing on customer acquisition and focusing on customer retention. Proliferation of internet applications can be achieved by using digital facilities such as the internet to market the bakery products of the company or use of new market economy strategies to deliver digital products to customers (Smith, 1992). By using internet in a number of ways, the company will have an advantage in accessing customers in various locations in comparison to its competitors. The products can be posted on popular web sites such as amazon.com; Google and newegg.com to enable customers access them and get awareness about them. 8. Organizational structures This refers to an administrative structure that will ensure the activities of the business are properly managed and functional programs are shared effectively with other business units. The organizational management structure recommended for the new venture would be the middle management structure. In this organizational structure, management will be divided into group product management involved in managing the process of manufacturing bread and other baked products, marketing research department involved in conducting research on the right marketing strategies for the products (Sharma, 2009). Other departments will be sales department involved in distribution of the products to the outlets. The advertising department will also be included in the management structure as well as sales promotion department. In designing the organizational structure, matrix organization will be applied to ensure bureaucracy is avoided and more specialists are brought within the participative coordination structure. The use of recent trends in management will also be used. These include the use of business process management rather than functional areas (Saxena, 2009). Process management will involve the use of external resources and people with a range of skills will be grouped to accomplish the processes of the company. Their functions will be achieved through collaboration and simultaneous operations. This will ensure management of the new product developments are achieved within analyzer. 9. Marketing plans-SWOT Analysis The main strength of the new venture is that the business owners have the skills and competence of operation the business at a competitive level similar to its competitors. The business operators also have a number of competitive advantages over their current competitors because they have learnt a number of mistakes that have been made by their competitors thus would capitalize on these mistakes to make them more successful (Reid & Bojanic, 2009). These include making bread of higher quality than those of their competitors to attract customers away from their competitors. The weakness is that there are already similar products in the market and it will be difficult to attract loyal customers who buy the competitor’s products. In addition, there will be increased competition among producers for customers and it will be difficult to market their products efficiently under such conditions (Panda, 2008). The opportunity is that the business is able to find other areas that have not been reached by distributors of competitor products. This will ensure the product is promoted in less penetrated areas. The business is also able to develop more competitive facilities for production of bread such as production equipment that ensures human labor is considerably reduced and workers are allowed to work comfortably (Mukund & Sundari, 2001). The threat to the process of expanding the business is that there are already existing businesses that have distributed similar products to customers in the area Thus, the process of advertising the product to customers will not be smooth due to unwillingness of customers to shift from using the initial products and start using the newly introduced products. In addition, high cost will be incurred in using ingredients that result into production of high quality bread. This will have an impact on the amount of profit earned by the company. The cost analysis will involve determining the costs of buying raw materials, cost of production and comparing them with the amounts of sales. The resulting income from the sales of bread and other bakery products will also be determined by specialists in managing sales processes (McDonald & Mouncey, 2011). A comparison will be made between the amount of income and costs to determine whether the business is profitable or at loss. When the amount of sales is higher, it will be concluded the business is more profitable. Contingency plans refer to methods that will be used to control any emergency situations in the company to ensure they do not result into stoppage of activities of the company and reduce the profitability of the company (Mathur, 2006). Contingency plan will involve ensuring there is enough stocks of raw materials to enable maximum production even during times of low availability of raw materials. Workers will also be provided with emergency room where they can get immediate treatment in case of accidents at the workplace so that they can resume their duties in time and ensure production time is not lost (Kotler, 2009). It will also involve providing additional financial resources for maintaining equipment used in production so that any equipment that breaks down during operation can be corrected. 10. Marketing metrics Marketing metrics will be used for a number of reasons. For instance, the information will be used during sales analysis to breakdown the aggregate sales into a number of categories, making a decision regarding sales analysis by territory and making a decision regarding the products that need to be abandoned and determining the percentage of customers that contribute towards a considerable percentage of sales (Kotler, 2009). The selected market metric selected will be sales volume. Market metrics that will be applied in determining whether the right sales volume can be achieved include determination of brand perception, determination of return on investments and determination of percentage sales. For instance, brand perception will be measured by determining the overall perceptions regarding the product when they are delivered to retailers and shops (Kirenz, 2010). For instance, factors that will be used to shape brand perception will include speed, quality, reliability and ease of use. Brand perception will also be achieved through interaction with sales people, interaction with customers and distributors to determine their perception of the bread and other bakery products of the company in comparison with those of competitors. This will assist in improvement of the product so that the demands of customers are considered during production process. Return on investment will be determined by finding the ratio of the difference between gains from investment and cost of investment divided by the cost of investment (Jayachandran, 2004). This metric is significant because it will assist in determining the proceeds from the sales of bread products by the company and will enable determination of versatility and simplicity of the business. For instance, if the return on investment is not positive, or if there exist other opportunities with a higher ROI, it will enable the proprietors of the business decide whether to take the investment or not (Holland, 2012). Market metrics will be designed by assessing item category by weekly performance, monthly analysis of performance of industrial activities and strategic control of indicators that can be measured and reported frequently. The metrics will then be aligned with the strategy and elements will be identified in an informational dashboard, market performance of the sales of bread will be assessed and methods of controlling the market will be identified. 11. Marketing audit This refers to the process of appraising the existing marketing activities (Grein, 2004). This creates the opportunity for reviewing and appraising the whole marketing activity and assessment of present performance in addition to creating a basis for evaluation of subsequent courses of action. Market environment audit will be achieved by estimating the total market demand in terms of the possible number of customers who are willing to get the products produced by the new venture. It will also involve determining similar products that are sold in the existing market and comparing prices with the set prices of the company, determination of customers, consumers and industry practices, for instance, the weight of bread recommended by the bakery industry in the region (Graham & Pettinato, 2002). Organization audit will be done by putting the company under the assessment and evaluation. For instance, it will involve estimation of profit margins, costs, conducting marketing research and determining the effectiveness of marketing mix (Gillingham, 2003). These include determining whether the existing company is applying setting the right price for the products, whether there is promotion activity for the products or whether the company is producing the product with qualities that match the standards that are recommended. Sales audit will be done by determining the total sales eat a particular time and splitting the sales based on region, industry, customers and products. 12. Conclusion This paper presents a marketing management proposal that needs to be implemented by the new venture of Joseph and Sons to ensure the company is successful in the existing market. The main course of action required to achieve the process of marketing include studying the market conditions that exist and determine any mistakes made by the current companies in similar businesses. This should be followed by determining methods of reducing cost of production and improving the quality of the product and diversification of production to include production of other products. During the introduction process for the product, it has been proposed that pioneer strategies of withdrawal and niche should be used. By using these strategies, it is believed that the company will be competitive in new areas that have not been discovered by existing companies. The guerilla method of growth will be significant in ensuring the products of the company are promoted at reduced costs while profitability of attained. Another growth strategy of leapfrog will be useful in ensuring activities that have not been discovered by existing companies are used to the advantage of the newly formed company. It has also been observed that product life cycle will have an impact on the shake-out, mature and decline stages of the products. For instance, at the shake-out stage, there will be less competitive in comparison with other products because most customers are not aware of the product. In the new economy markets, the main areas of improvement recommended include improvement of customer service and proliferation of internet access to the activities of the company. 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