Market Definition and Segmentation - Case Study Example

Business Plan (Watch Phone) Summary The current changing world calls for a modern and more improved technology. With this in mind, most companies including mobile firms have come with new improved phones that are meant to improve people’s way of life. Wrist phones, which are the latest in mobile phone industry, are facing competition from the cellular phones such as nokia and Motorola. The former are said to lack internet, have a tiny screen and are a bit bulky. This business plan therefore, seeks to market the watch phone, which is a modern and unique cell phone technology in the market of telecommunications and mobile phones. This type of phone is worn like an ordinary watch, but contains features like the normal mobile phone. The problems this company intends to solve by introducing this phone in the market include phone theft, portability and phone call accessibility. The company believes that the watch phones will be able to tackle these problems. However, consumers have built their loyalty to the cellular phone making it hard for them to shift to wrist phones. Nevertheless, the fact is that watch phones are very portable and secure as they are fastened on the wrist. The essay has also focused on marketing plan, which has explained the product pricing, the target customers, market segmentation, promotion and expense budget. The W phones targets the young generation and office workers and such methods, as advertising through the media will be used to reach these customers (Robert 2005). Problem definition The watch phone is one of the modern innovative cell phone technologies, which combines the touch screen features with the ordinary phone functionality to produce its unique design. It is strapped around the wrist like the ordinary watch, but consists of all features of a normal phone. The models we intend to sell in this company are slim and waterproof, with other devices such as camera and voice and stereo Bluetooth. They also have the capacity to support SD cards for mass storage, basic handwriting recognition and FM radio. Watch phones are advantageous because they cannot be easily stolen, reduced danger of falling down, calls can be answered anywhere and it is difficult for one to forget or lose them (Howard, 2006). They are also small in size, a feature that makes it portable. This makes it suitable for office workers and athletes who have a dynamic and active life. Its price is also affordable to consumers. Therefore, this company intends to sell watch phones to help solve issues of phone theft as well as enabling people access phone calls wherever they, and especially those who have dynamic and active lifestyles. The business environment (competitor analyses) In order to be thriving today, a company has to become competitor oriented. Company leaders must practice the correct competitive strategies, avoid competitor’s strengths, seek for their weak points, and thereafter, commence marketing attacks against those weak points. Competitor analysis is the evaluation of the weaknesses and strengths of potential and current competitors which may encompass companies both in the own sectors and other sectors (Craig and Babette 2007). It is a driver of a company’s strategy either directly or indirectly and affects how a company reacts in their own sectors and gives a company a strong understanding of the market. This enables a firm to formulate a strategy through formal strategic planning, strategic thinking, or opportunistic planned decision-making. In the mobile phone market, competition is very high so every company must come up with new marketing strategies and improve its products in order to prevail in the market (Craig and Babette 2003). Wrist phones are facing a major competition from other cellular phones such as Nokia and Motorola. Most customers have built their loyalty to these cellular phones and as a result, it is hard for them to shift to wrist phones. As compared to cell phones, a wrist phone has tiny screen size making it difficult to use. These devices also are a bit bulky and this is a major limitation over the cell phones, which you just keep them in your pocket. Nevertheless, wrist phones are more secure compared to cell phones as they are fastened on the wrist therefore one does not have to keep them in pockets and worry loosing them in the bus or other public places. Through formal strategic planning and strategic thinking, wrist phones developers can be able to overcome these weaknesses and make their brand more competitive in the market (Michael 2008). The product The watch phone or wrist phone is a modern type of cell phone that is worn on the wrist, and has the same features as the ordinary watch, but changes its screen when a call appears. Alongside the ordinary phone features, the watch phone also contains the features of a normal cell phone. It is small and rotates the wrist like an ordinary watch. The user answers by raising the hand towards the mouth and presses the answer key and talk into the watch phone. It contains a digital clock and a single touch displays a menu, which includes phone icons such as address book, calendar and messages. It even contains a camera that can both record videos as well as taking photos. There are various important features to highlight about the watch phone. This type of phone is small in size, which makes it easier to handle and carry. Its price is also affordable and has a unique design that incorporates the gender factor, as there are different designs for the male and female as well. It is also produced in two different versions, the touch screen version and the ordinary version, which gives the consumers a variety to choose on. Marketing plan Executive summary Mobile companies develop mobile phones relating to the changing world (Paul, 2001). This marketing plan demonstrates the market segments and the strategies they are using to attain customers and generate revenues. Developing wrist phones gives firms an advantage over their competitors as they are afford able, secure and portable. This expands their reach to individuals who could generally not use mobile phones such as the athletes. Target customers The ideal customers for wrist phones are both males and females, and include the office workers, bankers and people with white collar jobs, athletes who have a dynamic and an active life, and today’s younger generation. This is based on the fact that, wrist phones are very portable and is fastened on the wrist so one can use them concurrently while carrying out their duties (Stephen, and Mark, 2004). Pricing strategy The price of the wrist phone is very affordable and its design is very different from that of its competitors. There are two types of wrist phones that are projected to be in the market both of which will have both male and female versions. These are touch screen for 93.59 GBP and an ordinary for 74.87 GBP. Market definition and segmentation The wristwatch company targets two segments: the young generation and office workers and the organizations that want to reach such people. Customers are anticipated to be mobile phone savvy in both of these segments. The young generation in this case include the teens and the young adults aged 18 years and above. These wrist phones have many features such as games at very low prices, Bluetooth, mp3 among other factors, which are considered very attracting to the young generation. The chief marketing officers from different organizations may also purchase the wristwatch for advertising purposes. Their intention is to promote their products and brand to the population that overlaps with wrist phone users. The company will use various strategies to attract these two segments (Gupta and Lehmann 2005). Promotion and expense budget summary Such methods as advertising through the media, and promotional programs will be used for promotional purposes. Most of the marketing expenses will be for the marketing staff with an exception of forums and email marketing. The financial plan This is a comprehensive evaluation of the company’s current and future financial situation using the currently available variables to calculate future asset values, cash flows and withdrawal plans (James, 2000). The financial plan outlines the amount of capital required to start up the business, expected funding for the next few years, how these funds shall be used, and a timeline for funding. The financial plan is also comprised of the start up budget and the budget for business operations. This includes costs such as insurance, salaries, equipment, taxes, wages, cost of goods sold, promotional and advertising expenses as well as accounting costs (Julie, . 2009). This company intends to open its operations with an estimate of 1000 watch phones. The value of one watch phone in the market today is approximately 124.79 GBP. The table below shows the financial plan of the company Expected costs Amount required in GBP Phone purchase 124.791 Insurance 62.390 Salaries and wages 62.390 Promotions and advertising 49.913 Taxes 31,195.61 Accounting costs 31,195.61 Equipment 43,675.30 Rent and other bills 62,393.28 Total expenditure 468,006.07 The company therefore requires an estimate of 468,006.07 GBP as its initial capital. These funds will be sourced from the government lending institutions such as banks, as well as private financial institutions. References Michael, B., 2008. The Strategic Marketing Plan Audit. Cambridge: Cambridge Strategy Publications Limited. Gupta, S., and Lehmann, R., 2005. Managing Customers as Investments: The Strategic Value of Customers in the Long Run, Upper Saddle River, NJ: Pearson Education/Wharton School Publishing. Craig, F., and Babette, B., 2007. "Business and Competitive Analysis: Effective Application of New and Classic Methods." London: FT Press. Craig, F., and Babette, B., 2003."Strategic and Competitive Analysis: Methods and Techniques for Analyzing Business Competition." London:Prentice Hall. Robert, M., 2005. Contemporary strategy analysis; 5th ed. New York: Wiley-Blackwell. Howard, W. 2006. Ancestry magazine. Vol. 24, No. 5, New York: Ancestry Inc James G. 2000. Faster: the acceleration of just about everything. New York: Vintage books. Paul, B. 2001. Wireless crash course. New York: McGraw-Hill Proffessional. Stephen, B and Mark D. 2004. Mobile human-computer interaction -- MobileHCI 2004: 6th International Symposium, proceeding. London: Springer Publishers Julie, A. 2009. Human-Computer Interaction. Novel Interaction Methods and Techniques: 13th International Conference. New York: Wiley-Blackwell. Read More