Multilateral Perspectives in International Marketing Dynamics - Research Paper Example

Student’s Name Instructor Course Date Table of contents Executive Summary 2 1.1. Objectives 4 1.2 Target Customers and Market Analysis 4 1.3. Positioning, Value Proposition (Benefits) 5 1.4. Features 6 2. Target Customers 6 3. Target Users 7 4. Product Description and Positioning Statement 8 4.2 Key Messages and Main Benefits: 9 4.3 Features, Functions and Benefits 10 5. Market Data, Competitive Products and Analysis 10 5.1 Competitive Products Overview 13 5.2 Competitive Strengths, Weaknesses and Response Statements 13 Conclusion 15 References 16 Executive Summary IdeaForge is an innovative company founded by three young like minded technical graduates. The company’s aim is to solve the problem of over reliance to electric chargers by mobile electronic device users. A major announcement on the introduction of standardized, universal mobile charger by 2012 has been made by mobile manufacturers. The major companies have teamed up to create a universal charger which could be used to charge any mobile battery. According to (Mitti 2) the director of environment and devices at Nokia, support by the companies on the project would contribute in improving the industry's footprint on the environment. This is a thought provoking announcement for IdeaForge. The company has started rethinking on how to position itself in the market before any other entrant enters the market. The company envisions offering an alternate solution for charging small electronic devices through an innovative product –a mechanical charger. The charger does not use electricity to charge batteries but instead it generates its own power through motion by rotating its handle. IdeaForge has a competitive advantage since it’s already in the market ahead of future competitors. The company’s products could have a wider appeal if only a larger market was reached. There is no other producer of mechanical chargers in the market. The chargers are affordable to all, even in rural India, where there is no electricity connection. The major challenge for IdeaForge lies in creating consumer awareness about the mechanical charger. The company has strategized on methods to use to create awareness for its product and attract more customers. This will increase sales volumes which are on a downward trend. Towards achieving this objective, the company has considered engaging a different approach in marketing by incorporating direct selling. 1.1. Objectives IdeaForge Company was formed on a promise to use technology in solving day to day problems. The notion behind the company is to generate new ideas and integrate them with a physical product. The mechanical charger could be a breakthrough for the company. The mechanical charger would focus on the utilization of alternative energy sources. Due to the absence of alternative solutions, there is highly depending on wall mounted plugging answers for electrical charging even for smaller devices such as laptop and cell phones. Although the market for the mechanical charger is still green and continues to grow, the company has not realized the break even status. Mobile phone subscription, in India, has continued to grow Out of between 2 to 3 million secondary market populations, the company targets to make about 10,000 monthly sales at $9 per charger. The sales projection is estimated to grow up to 60,000 units per month in the future. This is a big market which IdeaForge should capitalize on. The objective of the company is to create its own brand which will see its product 1.2 Target Customers and Market Analysis Overall Sales turn over for mechanical charger increased after a year when the conventional products were introduced in the market, and this was hoped to bring in the breakeven point. But the rate of sales growth for mechanical charger decreased between 2008 and 2009. Majorly to blame was the acceptance of mechanical chargers by the user, since other gadgets like car chargers attracted higher sales volumes to supersede that of mechanical chargers. The proposition by Sighn and Bhat was that there was a need for ‘green marketing’ and further research and development respectively. Bhat also opines that the company should focus on modifying the mechanical charger with focus on future market demands. He also proposes that mechanical chargers to be modified to be able to charge larger batteries used in homes. The market and demand for the product will continue to grow due to the following reasons: Mobile penetration continues to grow Electricity shortage is increasing The need for eco- friendly charging devices Need for instant solutions for charging An increase in entrant of mobile phone players in the sector 1.3. Positioning, Value Proposition (Benefits) The charger concept is the production of electricity without the need for fuel. The charger produces electricity, mechanically through rotating the handle or rubbing the device on the surface. It is, therefore, environmentally friendly. Transformation of energy from one source to another is not the key innovation or motivation of IdeaForge according to the company visionary Mehta. Energy transformation has been with us for long and is not a fundamental discovery. The innovative part of the business is to provide customers with a product with a solution to charging smaller electronic gadgets. The solution should be used in everyday life with simplicity. A mobile solution which can be used anywhere. The mechanical charger comes in handy in India since electricity shortage continues to rise every year. The conventional chargers are highly dependent on electricity. This dependency will be eliminated or reduced significantly once the mechanical charger is adopted by the market. The solution offered by IdeaForge is supported internationally by the fact that there is higher advocacy in energy conservation word wide. The green environment phenomenon has begun to be appreciated globally. 1.4. Features The following are the key features of the mechanical charger; Not dependent on electricity energy Ease of use- no learning required The mobility which makes it usable anywhere Multipurpose use, can charge even other mobile devices Echo friendliness, has environmental conservation aspect 2. Target Customers The market segment in this industry is diverse and classification of customers is required in order to identify their specific needs and requirements. Some of the challenges IdeaForge may experience are on how to segment their customers as it seems from the narrative that the marketing strategy for the company is not strong and the company is at crossroads on which marketing strategy to adopt. Primary Customers The primary customers in this market are the mobile users who subscribe to the telecoms companies. This is generally the people with mobile handsets and need alternative sources of charging their phones when the power drains. This is key customers to the company and the company should focus on how to attract are large base of these customers since they are the key drivers for the company products. Primary customers are interested in a solution which will solve their problems instantly rather than use of the conventional means of charging their phones. Secondary Customers These are customers who will need the gadget for other purposes other than charging their phones. The mechanical charger comes in handy for other energy utilization tasks like charging laptops and tablets. Although this market is not as huge as that of primary customers, it should be tapped through aggressive advocacy and campaigns on the echo friendliness and energy conservation. 3. Target Users The customers for IdeaForge Company can be described in terms of the primary users and secondary users. Primary users The primary users of the company products are the people who own two phones but they have problems with charging them especially when there is an urgency to communicate. These are people who spend more time communicating over their phones. The phone batteries easily drain and if they do not have electricity source it could be a problem. The mechanical charger needs only to be rotated by its handle for a few minutes, which the battery is charged and allows some minutes of talk time. This is a revolutionary solution since there long hours of lost communication due to flat phone batteries will be eliminated. Secondary users The other key users of the product are the secondary users. These are customers who will be using the charger to charge other devices. An example is the long distance travelers using their laptops. They will not only enjoy the benefit of having their laptops charged, but also the continuity of their tasks or duties while still on travel. 4. Product Description and Positioning Statement Target customers: Portable electronic gadgets for users who are over dependent on electricity chargers IdeaForge is a company offering innovative products which offer customers a better alternative than the existing traditional methods The products on offer are efficient , echo friendly and reliable charging devices The company differentiates itself from the rest through offering technology driven solutions 4.1 Business Problem, Product Concept and History IdeaForge is a company driven by innovation. Since the inception of the company, it was envisaged that the company would deal in a number of products utilizing technology to solve the common day to day problems. The company was inspired by the need to provide a solution to small electronic gadget users who relied on electricity to charge their phones. Mehta witnessed this when he observed many people especially who made long calls left without any means of communication when their phone batteries run dry. The same problems affected his fellow students. There has been an increase in mobile phone penetration in villages. Since most parts in the village are not connected electricity, these are key markets for mechanical chargers. The company has been undergoing through challenges which the founders have highlighted during the meeting. Some of the challenges include product pricing, uncoordinated marketing strategy and lack of customer awareness about the product. To counter these challenges, the company has sourced funds to improve on innovation and diversify to other products. Although the company may introduce other products like peddle chargers and chargers for domestic use, there is fear that it may lose direction and waste three year effort in the mechanical charger venture. IdeaForge is also considering adapting a new method of marketing through direct selling and product branding. Reception of mechanical charger in the market has been positive, but some suggestions from customers like charger mobility, compactness and long backup periods were introduced. 4.2 Key Messages and Main Benefits: The mechanical charger has a competitive edge than other chargers in currently in the market. The major benefit is that the charger does not rely on electricity. Therefore, it can be used anywhere as long as it’s functional. This is because it utilizes motion to generate its own electricity. The conventional chargers have to be plugged in to the source of electricity to function. This is a big impediment, especially to locations without electricity. Another benefit is that the charger is echo- friendly and comes with environment conservation features. This might be a hard sell but once customers appreciate the idea, higher sales can be realized. The mechanical charger is a multipurpose gadget and can be used to charge other electronic devices such as laptops and tablets. This could be appealing to customers who may not like the idea of carrying too many dissimilar chargers. The concept of the charger is very simple. Only rotation of its handle is required to charge the battery. As indicate by the company, one minute rotation is enough to boost the battery for the next three minutes talk time. Although this feature is faced with challenges due to customer inertia, it may prove efficient and cost effective in the long run. IdeaForge products have other benefits other than the unbranded chargers offered in the market without any warranty. These types of chargers are commonly used by the lower end market. Branding and offering warranty to IdeaForge chargers will draw many such customers to their products. The chargers have also undergone through research and the company has mechanisms in place to ensure continuous product development. This is evident by having a portfolio for the same in the company structure. 4.3 Features, Functions and Benefits Feature Function Benefits and Proof Ease of use It operate through rotating its handle The charger is not complicated to use, hence anybody can use it Portability The charger is easy to carry Can be carried anywhere at ease since they are not bulky Environmentally friendly Environment conservation element Help in conserving energy and the environment in general. No fuel used Do not require electricity Generate its own energy The charger is not dependent on electricity Multiple functionality The charger has multiple purposes It can be used to charge a number of electronic gadgets 5. Market Data, Competitive Products and Analysis IdeaForge idea of innovative charger is to target customers who either do not have access to electricity, or those who may opt to use the charger as a temporal measure for charging their phones. Telecom industry growth The telecom industry has undergone a transformation since late 1990s to reach about 200million subscribers by 2008. This growth has led to an increase in mobile phones and phones related accessories in the market. Some of these industry players sell products of low quality without branding or warranty. The majority of lower end customers are the main market for such inferior products. IdeaForge has plans to brand and offer warranty to their products. This will be a big win for the company since the lower end clients will shift to the company’s product. Electricity shortage in India There has also been an increase in electricity shortage, in India in consecutive years. When majority of customers don’t access electricity power, it means more demand for mechanical charger. Research indicates that there has been about 11% of electricity shortage per the required amount by 2009 Tech savvy urban population Another niche market is the urban population, especially the youthful technologically savvy customers. This specific group uses phones for more than one purpose. They use their mobile gadgets to download content on the internet or any other purposes. Hence the batteries tend to drain faster. That will require a charger to boost their phone batteries back to live. Therefore, this is a niche market which should be focused on the creation of awareness about the mechanical chargers. IdeaForge has reduced the prices of its chargers to compete with other market players. This decision was carried out after a pilot study which identified that the pricing of the company products was not competitive. The company had been facing the challenge of product pricing for a while, but it has identified methods of lowering production the costs. The rural customers in India Many rural areas in India are not connected to electricity. As a result, many mobile phone users are left with no other option to charge their phones since they cannot use the conventional chargers without electricity. This problem is what IdeaForge has tried to address through the introduction of mechanical charger. This charger will be a necessity also to areas with high power outages Echo- friendly chargers Mechanical chargers are environmentally friendly since they do not use fuel to generate electricity. The aspect of conservation of the environment was one of the driving forces for inception of IdeaForge. The founders had an idea of green product marketing. Environmental conservation ids a concept which is being positively embraced the world over. Due to the publicity the concept is gaining, IdeaForge has a winning edge due to integrating the green concept in their products. Product pricing IdeaForge has reduced its prices on the products on offer. Since most customers are keen on the prices they buy goods and services, it’s important to carry out proper market research in order to price products and services at affordable levels to the consumers. Pricing is critical in winning customers (Belk 4). IdeaForge should offer best prices for quality products. The company has been at the middle level in terms of pricing. The competitors offer higher prices for the high end market and lower prices in the lower end markets respectively. IdeaForge should identify these gaps and come up with affordable and superior quality products. Marketing strategy IdeaForge marketing strategy is not efficient, but through direct selling, the company may capture more customers. This is evident from the pilot study which indicates that most consumers prefer buying from knowledgeable sales people than high class outlets. On the same note, the company had incorporated dealers, but this never worked well. Introduction of a direct sales team is important for the company at this point. The small retail outlets are also disorganized and this would not be the best option for the company to focus on. Generally the IdeaForge has a competitive edge if only tangible strategies to win the market are implemented. 5.1 Competitive Products Overview IdeaForge has a competitive advantage since it’s already in the market ahead of future competitors. The company’s products could have a wider appeal if only a larger market was reached. There is no other producer of mechanical chargers in the market. The chargers are affordable to all, even in rural India, where there is no electricity connection. 5.2 Competitive Strengths, Weaknesses and Response Statements Market dynamics will always affect the direction in which the company takes (George 34). A market in which the company is operating has various players. Some are conventional while unconventional. They deal in branded and unbranded products. Other players engage in underhand business operation methods by selling inferior goods while others sell quality goods with a warranty. Products reach the market through organized dealerships or unconventional retail markets. All these are determining factors on how IdeaForge should target and position itself in the market. The pricing of products is dependent on the costs of production and other business operation costs. Since IdeaForge is not financially strong at this particular time, it should focus on penetrating the market through cost effective strategies. Introduction of other products to supplement the sales for mechanical charger might not help much in terms of increasing sales for mechanical chargers. This has been witnessed before. To win the market, concerted focus towards a product is required (Keller 21). At some point, IdeaForge has thought of remodeling mechanical charger. This would see the charger able to handle even domestic charging needs. The company is also thinking of patenting their innovation to cushion themselves from any competitor from copying their works. This is a good strategy since it will ensure that the company products retain their uniqueness in the market and hence easily identifiable. According to (Leuthesser 20) customers always identify themselves with particular brands. The company also needs to address the problem of lack of consumers’ awareness through aggressive marketing. Established brands are very aggressive in their marketing strategies and thus larger markets. IdeaForge is facing stiff competition in the market from the following competitors who can be summarized in to three; I. Premium brands market II. Small brands market III. Unbranded chargers market Premium brands market Strengths High market penetration in the country with strong distribution networks Quality products Warranty on their products Higher consumer acceptance Weaknesses Pricing of the product is perceived to be high Average quality Small brands market Strengths These companies have medium level penetration in the market Wider markets for middle level clientele Weaknesses Un popularity with the brands Lower perception by consumers Unbranded chargers market Strengths Target lower end segment consumers for their products Have a wider market base due to affordability Weaknesses The products are of normally of low quality Products don’t have any warranty Retail markets are not properly regulated Conclusion IdeaForge has a noble cause by inventing the mechanical charger. The charger is aimed at utilizing technology to change people’s lives. The company has the potential to capture the market due to the fact it’s an early entrant in the market. However, the company must address the underlying challenges for in order to progress to another level. References Belk,R. W., Bahn, K. D., and Mayer, R. N., ‘Developmental recognition of consumption symbolism’, Journal of Consumer Research,9 (June), 4–17. George Korey, "Multilateral Perspectives in International Marketing Dynamics", European Journal of Marketing, Vol. 20 Iss: 7, pp.34 - 42. Keller, K., Conceptualizing, Measuring, and Managing Customer-Based Brand Equity. Journal of Marketing, 57(1), pp.21-22. Leuthesser, L., "Defining, measuring and managing brand equity: A conference summary, " Cambridge, MA: Marketing Science Institute,(52),(2). Pp.20-23 Mitt, S., 'Universal charger for phones plan', BBC News, February 17 2009, http://news.bbc.co.ku/2/hi/technology/7894763.stm,accessed February 20, 2009.p.2 Read More