Contemporary Strategic Marketing - Case Study Example

Marketing Strategy and Recommendations for Bindle By: Professor: Class: University: City: State: Date of submission: Marketing Strategy and Recommendations for Bindle Background Summary The report focused on the marketing strategy for Bindle, which is an Australian gift selling company, located in Melbourne (Bindle, 2016). With the rising level of competition within the industry, companies are focusing on expanding their operations in other sectors. To compete effectively, the report identified ice cream as a market gap that the company could invest. Therefore, the report aims at developing a marketing strategy for Bindle’s new product, ice cream. Although Australia has many companies offering beverages, none of them offers ice cream products in the form of gifts, which forms the base the market gap. The recommended marketing strategy for the new product is the marketing mix which the report analyzed elements including product, place, price, and promotional mix. Since the company’s consumers cut across the populations, ages, and races, it is important to consider all the elements of the marketing to ensure proper integration of the new product and the market segment. Over the last five years, the ice cream industry has been increasing growth regarding market share and revenue realized by the companies. Products and Services Bindle is an Australian gift selling company based in Melbourne. With the rising competition in the market and businesses diversifying their products and services, Bindle aims to expand its business operations through increasing its market share. As a result, as a new product line, the company should focus on production of ice cream products. Within the Australian context, many gifts providing companies have not been able to explore fully the ice cream gift market which offers potential market gap that Bindle should consider for investment (IBISWorld, 2016). Although there are several beverage companies in Australia, they have not been able to offer ice cream in the form of gifts. Such gap forms an opportunity for the company to focus on powerful branding and packaging strategy for ice cream products. Besides, such investment would assist in the exploration of other market segments and increment in the consumer base. Over the past five years, ice cream industry has been performing positively with an expectation of increased revenue compounding at annual rate of 16.3%. Besides, the manufacturers have benefitted from the increased demand especially within the premium and scoop-and-serve segments which offer an opportunity for Bindle for Investment. Despite the increasing level of consumer consciousness and popularity of the substitute snacks, the demand for ice cream’s traditional home-take tub segment have continued to remain steady. In the ice cream industry, the major feature is the medium barrier to entry considering that the absolute entry cost is relatively affordable. Nonetheless, the new entrants might find it difficult to establish themselves considering the properly entrenched position of the major players which might be a great challenge for Bindle. To achieve the acquired market position, Bindle needs to maintain the contracts with its suppliers and downstream the markets including the supermarkets and grocery while continuing to enjoy the loyalty of the customers and brand (IBISWorld, 2016). Therefore, potential firms such as Bindle might struggle to compete with the existing players to achieve the required objectives. The ice cream industry in Australia is in several ways reflective of the overall distribution of the population. The gift-giving industry which Bindle operates is extremely competitive. Offering ice cream products within the industry would differentiate the company from the competitors. However, it is significant that the business incorporates various factors including affordable prices, quality, and packaging the product properly in a manner that facilitates the prospective consumers to perceive it as an outstanding product. Pricing Bindle enjoys its strength through the provision of stylish and quality products packaged using exotic wrappers. The share price of the company’s ice cream would depend empirically on both industrial and economic performance. While determining the price, it is important to consider the segments that product would serve. The market for ice cream consists of buyers who differ in different ways. The pricing strategy would depend on the prices in the supermarkets and luxury ice cream which are usually expensive. In the marketing mix, pricing is important as it determines revenue generated. In addition, pricing needs to be done for new products to counter the inflationary trends and the bids of the company for industrial customers. Bindle has to consider organizational and marketing objectives, the market share, profit maximization, and pricing objective survival. Since there are various competitors within the industry, at the initial stages, Bindle should consider new product pricing strategy which involves penetration pricing and price skimming. Penetration pricing involves setting low prices to gain the market share then increasing the prices steadily while price skimming which involves high initial price and in the future, the prices come down to parity. Bindle uses a strategy of low-cost pricing (Chand, 2015). The penetrative pricing is vital when there is high level of competition in the market, and the player needs to establish itself through offering prices. During the introduction stage, Bindle had a vision of providing its products to customers and the best affordable rates. However, considering the value for an average Australian consumer, Bindle still prices its products at affordable rates Place To meet the increasing demand for ice cream wrapped as gifts, the company needs to consider different distribution channels to ensure the product reaches the consumers in different market segments. The currently used distribution channels include company stores, international licenses, mail order and the internet, franchisees, and wholesalers such as supermarkets and convenient stores (Van & Van, 2001). To increase its market scope, the company needs to consider selling the ice cream products throughout Australia not only in Melbourne. The used distribution channel needs to sell directly to the end-user through the established retail and wholesale shops which is the trend used in Australia. At the initial stages, the company should provide the product in Melbourne then depending on the outcome; Bindle should consider rolling it to others places. In addition, most competitors use private transportation firms to transport ice cream to the retailers and wholesalers. For Bindle, at the early stages, the company should consider using its trucks in in a bid to remove the cost of transportation and vehicle. There is need for construction of an ice cream parlours to sell the product exclusively to the consumers. However, in large cities, it needs to sell through the ice cream carts which are mobile and flexible in nature. Other places of sales include restaurants that offer lunches and dinners. To some extent, ice cream could as well serve as dessert for the fast food institutions including the McDonalds, Burger Urge, Henny Penny, and Red Roosters where the packaged ice cream could be included in the special menu. Having Bindle’s ice cream in such important chains would assist in increasing its presence within the market, awareness, and visibility of the brand. the consumers of the company often cut across all the populations, ages, and races which make it easier to define the place of establishing the business (Vinay, 2015). From the analysis of company’s performance, it is clear that most of the customers are satisfied with the quality of the products, packaging, and overall services that the company offers. If the company reflects such attributes, then it is likely to thrive within the ice cream industry. Based on such, the company is based properly to expand its market share considering the level of confidence the customers have with its services. Since Bindle customers are primarily female, literate, and income earning that range from $50,000 to $80,000. Those aged between 25 and 60 years, and influenced by the style, uniqueness, quality, and product brands, it would be important to consider selling the ice cream products in both rural and urban regions. Promotional Mix To ensure that the products meet the demands of all the segments, the company should consider various elements of promotional mix including personal selling, sales promotion, online advertising, street marketing, outdoor advertising, direct mail, and trade fairs and exhibitions. Through focusing on sales promotion, the company would be providing added value or incentive to the consumers, retailers, and wholesalers with the aim of stimulating the immediate sales. Usually, cost of promotion often represents the sizeable proportion of the overall production cost. Nonetheless, successful promotion often assists in building long term relationships (Van & Van 2001). In Bindle, the promotional mix depends on the product nature of the market, budget of promotion, availability, and cost of methods of promotion, and the product life stage. Since the ice cream is a new organizational product, the company should consider using both push and pull promotional strategy. The push strategy involves using both the sales force and trade promotion activities of the company with the aim of creating the demand for the product. Moreover, it involves promoting the product to the wholesales who in turn promote the product to the retailers before it reaches the consumers (Brennan & Brennan, 2008). On the other hand, the pull strategy involves high spending on the consumer promotion through advertising while building up the demand for the product. Even though increment in the activities associated with promotion usually reflect the sign of response to the problem such as competitive activity, it could allow the company to develop and build up a succession of messages. To some extent, such activities could extremely cost-effective. In such case, Bindle needs to follow an Integrated Marketing Communication (IMC) which involves using the promotional mix in a coordinated manner in sending a consistent message. While promoting the product, the company is engaging in a persuasive communication with the aim of convincing the consumers to buy from them (Brennan & Brennan, 2008). Therefore, the selected promotional strategy needs to capture the attention of the potential customers in a credible manner, educate the buyers on the new product, and influence their consumption behaviours. The manner in which the company integrates various elements of promotional mix depends on the product in promotion, biases, and preferences of the potential customers, and overall market condition. Without an appropriate promotional mix, Bindle might squander its limited resources through focusing on the scattershot approach. The organizational, promotional approach needs to advance its overall marketing plan and reinforcing the dialogue that it wishes to establish with segments of the market. Since the target segment include both men and women with different age limits, it would be easier to establish the appropriate promotional mix. Determination of the target market would assist the company in understanding the attitudes and purchase behaviours of the consumers which in turn assists in designing the best message and selecting the appropriate means of reaching the target. The next step involves determining the required objectives which involve the responses that it desires to elicit from the target market which includes motivating them through the web ads and signing up for free trials of the product. In some cases, the businesses often fail in defining the objectives precisely. Even though its obvious that the company needs to increases its sales and market share, it is vital to decide on the best way of building such relationship with the consumers. Conclusion and Implications for Marketing Strategy The marketing strategy focused on Bindle which is gift selling company located in Melbourne, Australia. The company aims to increase its market share; however, with the high level of competition within the industry, it is vital to consider investing in new product in line with its business operations. It is from such background that the report recommended investment in ice cream in a bid to expand the company’s business operations. From the analysis, it is clear that the ice cream business shows good prospects for the company’s investment. As a new line of production, the company ice cream would stiff competition from well-established firms within the Australian market. Most businesses have not been able to explore the ice cream gift market. Although there are several beverage companies existing in Australia, they do not offer ice cream products in the form of gifts or specialties. The report focused on various elements of marketing mix product, price, place, and promotion. Investing in the ice cream industry would assist in exploring different untapped market potentials, increase the company’s market share, and profitability. While defining the price of the product, Bindle needs to focus on institutional marketing objectives, its market share, profit maximization, marketing mix variable such as improvement in product and production cost, and the interpretation and response of customers. For pricing strategy, the report recommended new product pricing strategy which involves penetration pricing and price skimming. Place involves ensuring availability of the product in the market; hence, Bindle needs to focus on different channels to ensure that the ice creams reach every market segment. References Bindle. (2016). Melbourne Corporate Gifts & Hampers | Bindle. Retrieved September 15, 2016, from http://bindle.com.au/pages/corporate Brennan, R., & Brennan, R. (2008). Contemporary strategic marketing. Houndmills, Basingstoke: Palgrave Macmillan. Chand, S. (2015). Marketing Mix: Product, Price, Place, and Promotion (4Ps). Retrieved September 15, 2016, from http://www.yourarticlelibrary.com/marketing/marketing-mix-product-price-place-and-promotion-4ps/5395/ IBISWorld. (2016, April). Ice Cream Manufacturing in Australia Market Research. Retrieved September 15, 2016, from http://www.ibisworld.com.au/industry/default.aspx?indid=95 Van W., & Van M. (2001). The marketing mix. Observatory, South Africa: Future Managers. Vinay, R. R. (2015). A Study on Promotional Strategies of Ice-cream Industry with Reference to Ernakulum District. International Journal of Management and Social Sciences Research (IJMSSR), 4(5), 72-75. Retrieved from http://www.irjcjournals.org/ijmssr/May2015/13.pdf Read More