LUNA App for Intelligent Mattresses - Case Study Example

Marketing Report for LUNA App for Intelligent Mattresses Executive Summary This report is based on the approaches that are to be used to market a new app for intelligent mattresses. The new product is being introduced in the Australian market. The target market for the new product is composed of individuals who are above 30 years of age. These individuals are either professional knowledge workers or sportspeople. Individuals who have retired are also included in this market segment. The defining need of these individuals is that they are struggling to overcome pain and that the use of intelligent mattresses is a solution to their problem. The LUNA app will sell on the proposition that it will be the first mobile app to help individuals manage their intelligent mattresses in a more effective manner. Three important conclusions are made in the report. The conclusions are based on the following three key issues related to the marketing activities of the new app: effects of the macro environment factors, the product life cycle (PLC) of the product and the marketing communication tools that will used. It can be seen that the following factors of the macro-environment will have a positive effect on the company and the new app: political, economic, social factors. The likelihood of new technologies emerging will have a negative effect on the app. Environmental and legal factors will have a neutral effect on the product. The PLC of the app will go through the four key stages of development, growth, maturity and decline. The company will seek to increase the level of awareness of the product during the development stage. It will also seek to take advantage of the growing market for the app during the growth and maturity stages. Lastly, by minimising expenditure on marketing activities for the product during the decline stage, the company will be preparing the commercial and catalogue death of the app. Two communication tools will be used to communicate the positioning of the new app in its target market: advertising and personal selling. The success of the use of these tools will be determined using the returns obtained from sales of the new app after resources would have been spent on the marketing activities. Introduction This report is divided into three parts. The first part is based on the impact that the different factors of the macro environment will have on the app as well as the company. The second part contains information about the product’s life cycle. The different overall marketing goals and activities that will be used during the different stages of the cycle are discussed in this part of the report. Lastly, the report contains information about the specific marketing communication tools that will be used for the app. Part A: The Macro Environment There are several macro environmental factors that affect the environment in which the company operates. More importantly, these factors of the macro environment have varying degrees of impact on the marketing initiatives that the company will use for the new intelligent mattress application. These issues are discussed in this section of the report. Haberberg and Rieple (2008, p. 104) note that analysing the macro environment of a company and its products is usually carried out by considering how the key factors which are political, economic, social, technological, legal and environmental, affect the company in question. Further, Havaldar (2005, p. 272) notes that when analysing the effect of the macro environment on a company, emphasis is laid on how the factors affect the company as a whole and its specific products in the market. Thus, companies have to respond to the effect of the macro environmental factors on their overall operations as well as in relation to their specific products. This response is usually in the form of taking steps to address threats and opportunities that have been identified. First, the political environment that is currently prevailing in Australia is an important factor that will affect the company and its product. In theory, the marketing decisions that are made by companies in relation to their products are based on responding appropriately to changes in legislation and other policy issues (Vashisht 2005, p. 19). In this case, it can be seen that in general, the Australian political environment is relatively stable (McKee, Kemp & Spence 2012, p. 154). The current and even historical state of political stability that the country is associated with will have a positive impact on the company as well as the product. This will emerge in several ways. First, the political stability will make it possible for the company to plan its marketing activities for the Australian market in the long-term. Secondly, the relatively stable political environment in Australia will make it possible for the company to plan its marketing activities for the new product with a degree of certainty. Second, the economic environment in Australia is another important factor that will shape the marketing activities of the product. Currently, the economic environment in the country is characterised by several factors. According to a report by the Office of the Chief Economist (2015, p. 20), the economy of Australia has been experiencing a relatively slow rate of growth over the recent past. The slow rate of growth is attributed to multiple factors, the most important of them being that the global economy has been growing slowly over the recent past and that the slow rate of recovery of the Australian economy is simply a reflection of what is happening in other developed economies in the world (Office of the Chief Economist 2015, p. 20). However, it is observed that relatively faster growth is being experienced in the following sectors: retail and those that are related to science and technology (Office of the Chief Economist 2015, p. 38). These trends in the economy of Australia have important implications on the company and the product. To start with, the growth in retail and science and technology sectors means that the company is set to take advantage of this growth because it will be largely dependent on the trends that emerge in these two sectors. As well, the growth in the aforementioned sectors is likely to provide an opportunity for the new product to successfully enter into the Australian market. Another point is that the company and the marketing activities that will be used for the product will be affected by the social changes taking in place in Australia. One of the most important social changes taking place in Australia is related to changes in demographics. This refers to changes that are occurring in terms of the age, number and composition of the population of the country. It is observed that one key demographic trend in the country is a relative increase in the number of elderly people (Ferrell et al. 2014, p. 51). This is said to occur regardless of the fact that the rate of new births in the country is relatively high when compared to the rates of other developed countries in the world (Ferrell et al. 2014, p. 51). These trends are beneficial to the company and the product. On one hand, a steady increase in the overall population means that the retail sector in the country is set to grow over the years. On the other hand, a relative increase in the proportion of older consumers means that the target population of the new product, which is individuals over the age of 30, is set to grow over the years. Additionally, the new product being a mobile application means that it is likely to be threatened by the possible development of new products that are designed to do functions that are done by the Luna intelligent mattress application. Results of research carried out indicate that 90% of the individuals who were interviewed are concerned with physical pain. Moreover, 80% of the respondents indicated that they would benefit from the app and that they were willing to use it. As much as readiness of the market to embrace new technology in the form of apps will have a positive impact on the product, rapid changes in technology and development of new competitor apps may have a negative impact on the future commercial success of the LUNA app. Further, the legal environment in Australia may not have a negative effect on the company. Currently, no legislation has been passed which may have a negative or even positive effect on either the company or the product. However, one issue that the company will have to grapple with is the high costs of doing business in Australia. It has been pointed out that one of the main contributors of high business costs in Australia is taxation and labour costs (Office of the Chief Economist 2015, p. 23). Hence the company will have to take this into consideration when marketing its product. As well, the environmental factor of the macro environment within the Australian market may not have any impact on the activities of the company. Similarly, the way that the company is going to market its new product in the market is unlikely to be affected by the factors that are related to the environment. References Ferrell, OC, Niininen, O, Lukas, B, Schembri, S & Pride, WM 2014, Marketing principles, Cengage, Sydney. Haberberg, A & Rieple, A 2008, Strategic management: theory and application, OUP, Oxon. Havaldar, KK 2005, Industrial marketing: texts and cases, Tata-McGraw-Hill, New Delhi. McKee, A, Kemp, T & Spence, G 2012, Management: a focus on leaders, Pearson Higher Education, Sydney. Office of the Chief Economist 2015, Australian industry report 2015, viewed 12 May 2016, via . Vashisht, K 2005, A practical approach to marketing management, Atlantic Publishers, New Delhi. Part C: Product Life Cycle The following is a depiction of the product life cycle (PLC) of the app. The PLC is followed by a detailed description of the different marketing objectives and marketing mix actions that the company will have to undertake during the different phases of the cycle of the new product. It can be seen that the need to undertake different activities during the different stages of the PLC of the product arises from the relationship between the PLC and marketing activities. In general, the life cycle of products is usually limited. As well, when products pass through the different stages of the cycle over the course of time, they present different opportunities and threats. These two points mean that marketers are obliged to respond to the PLC using specific strategies (Needle 2010, p. 435). Further, Richardson and Gosnay (2010, p. 110) observe that the product life cycle is getting shorter over the course of time. This means that it will be necessary to implement the different strategies first to ensure that the app succeeds in the market. It is also important to note that the PLC of LUNA app will not be different from the typical PLC of consumer products. However, there are two important things that should be noted. The first one is related to current trends in the global market for mobile apps. According to Inukollu et al. (2014, p. 16), the market for mobile applications has been growing rapidly since the time when the use of smartphones started to increase. It is also observed that the growth in mobile apps is set to increase steadily over the coming years (Inukollu et. al. 2014, p. 17). This increase is to be experienced in all the types of apps, paid, free and those that are supported by advertisements. Further, it is observed that the life cycle of mobile apps goes through the following stages: app catalogue birth, commercial birth, peak, commercial death and catalogue death (Inukollu et. al. 2014, p. 18). The stages of catalogue birth and catalogue death, which represent the periods when the app is officially listed and delisted by the developer respectively, correspond to the overall birth and death stages of the developed PLC. First, during the development stage, the app will be completely new in the market. Therefore, it will be necessary for the company to create a high sense of awareness of the product within the market. Hence, the overall objective of the marketing efforts that will be employed by the company will be to trigger awareness of the new product within the market. In order to attain this objective, the company will have to carry out a range of activities. For example, the company will have to use a pricing strategy that helps the product to penetrate into the market. What this means is that the LUNA app will have to be sold at a relatively low price as a way of helping the brand to gain initial popularity within the market. Secondly, the company will seek to roll out the app in a systematic and gradual manner. Since the app will be available to clients who buy the mattress and have smartphones, it will be necessary to ensure that the app is fully available to cater for the demand of the clients. It will also be important to ensure that the app works in all the common smartphone platforms in the world. Moreover, for the marketing objective of a high level of brand awareness to be achieved, it will be necessary for the company to invest in advertising and other promotional activities. Advertising will be relied upon as a means of creating awareness about the product in the market. The company will also seek to increase the market share of the app. To achieve this, the company will seek to get new customers from the original target market segment for the app. In addition to this, the company will seek to exploit any new market segments for the app that emerge over the course of time. Therefore, the overall marketing objective of the company for the app at this stage of the PLC will be to increase the market share of the app. One of the strategies that will be used to achieve this objective will entail introducing any new features in the app. The new features would be as a result of getting the feedback from the clients about their experiences when using the app at the previous stage of the PLC. Another strategy will entail maintaining the prices to those of the competition. This will be necessary because it is highly likely that many other competing apps would have been introduced into the market at this stage of the cycle. Third, the advertising at this stage will seek to maintain the clients who are already using the app while encouraging those who are using competing apps to switch brands and start using LUNA. This will be complemented by ensuring that the app is fully available to clients at all times and that clients do not experience technical difficulties when they are downloading the app from the different platforms in which it will be available. The overall marketing goal of the app during the maturity stage of its PLC will be to maximise profitability by aggressively defending its market share. At this stage, the average price of similar apps will be falling as competition would have reached its peak. Hence, it will be necessary for the advertising of the app to be focused on emphasising the unique features of the app. This approach will help to portray the app as the best in the market because of its long history in the market. Based on this promotion strategy, it will be necessary to ensure that the price of the product is relatively higher than that of the competition. This will help the company to further maximise profits from the app. The overall objective of the marketing activities for the product during the decline stage of its PLC will be to reduce the amount of resources that are spent in marketing the app. At this stage, the app will be getting into its commercial and catalogue death stages. It will be practical for the company to maintain the availability of the app but do away with promotional activities. References Inukollu, VN, Keshamoni, DD, Kang, T, Inukollu, M 2014, ‘Factors influencing quality of mobile apps: role of mobile app development life cycle’, International Journal of Software Engineering & Applications, vol. 5, no. 5, pp. 15-34. Needle, D 2010, Business in context: an introduction to business and its environment, Cengage, Mason. Richardson, N & Gosnay, RM 2010, Develop your marketing skills, Kogan Page, London. Part D: Communication Tools There are various communication tools that the company might use in communicating the desired positioning of the LUNA intelligent mattress app to the target market. Further, the efficacy of these tools varies widely. Information about some of these tools and the manner in which they will be used during the marketing activities for the new product is presented as follows. One of the tools the tools that will be used to communicate the desired positioning of the new app in its target market is advertising. In theory, there are two forms of advertising; below the line and above the line (Avlonitis & Papastathopoulou 2006, p. 139). Whereas below the line advertising uses pamphlets and leaflets to communicate with potential clients, above the line advertising uses mainstream media such as television and the Internet to reach the audience (Avlonitis & Papastathopoulou 2006, p. 139). In this case, both forms of advertising will be used. Above the line advertising will be used in the form of creating advertisements that will be carried on various social networking platforms on the Internet. The use of the Internet as the primary medium of marketing communication for this app will be informed by the knowledge that the Internet is emerging as one of the main media of marketing communication. Shimp (2008, p. 394) states the rise of the use of the Internet has created a situation in which new online communication tools are being utilised by marketers to communicate to the market. Hence, the Internet will be used as an important medium for advertising the new app. Above the line advertising will be complemented by below the line advertising. Here, specially prepared pamphlets will be distributed to individuals who are within the target market for the new app. The distribution of the pamphlets will be carried out in such a manner that only individuals above 30 years old and who have a disposable amount of income by virtue of the fact that they are professionals or retirees will be targeted. Thus, the distribution will be carried out within selected malls in the major cities of the country. The second marketing communication tool that will be used to communicate the positioning of the new app within its target market is personal selling. In general, personal selling is a tool that entails representatives of an organisation seeking to build personal relationships with the potential clients through interpersonal engagement (Egan 2007, p. 19). By virtue of its nature, this tool will be effective during the early stage of the product life cycle. This tool will be used to enhance the overall level of awareness of the product within the target market. Lastly, the aforementioned these tools will be used because they are the most suitable ones in relation to the target market. Basing on the demographics of the target market, using the Internet to advertise as well as using personal selling will be an effective way of communicating the positioning of the new product. It should be noted that the efficacy of the tools will be determined by considering the return on investment obtained from the resources spent during the marketing efforts and the returns in the form of an increase in sales. References Avlonitis, G & Papastathopoulou, P 2006, Product and services management, SAGE, London. Egan, J 2007, Marketing communications, Cengage, Mason. Shimp, TA 2008, Advertising promotion and other aspects of integrated marketing communications, Cengage, Mason. Read More