Simbrand Company Marketing Analysis - Report Example

Simbrand Company Marketing Analysis

Introduction

The simulation process in the mobile phone industry is being used to decide on the marketing strategy for the mobile phone company against its competitors. The firm is being considered for recommendation with a strategy for pricing its products and services through simulation. The response is based on the company to counter the adoption of aggressive pricing by most of its competitors in the same industry hence leading to the need of this business to enhance its approach to pricing in this increasingly competitive market (Faraqui and Eakin 2000).

The determination of the market outlook for these products is being formulated using the simulation method that was planned in an interval of two years. The competition in the mobile phone industry has become so immense that a company wants to compete favorably with the other companies that offer the same services. The formulation has to factor in all the matrices that are required for an accurate determination of prices and pricing policy.

The pricing decision will include the matrices that cut across pricing framework discuss and analyze them before the final decisions could be made. The report will assess the annual revenue for the industry and for this specific company, the company’s and the competitors’ market share, the unit cost of providing the service and the related products and services, the net income of the company and the new markets it tries to cover (Smith, 2011).

Initial Plan Implemented (Trial 1 and trial 2)

The strategy is based on the Europe and Asia market outlook. There is a general growth in the market for both the European and Asia market for the past six years. This conclusion is based on the analysis of the market outlook outcome for the six year simulation for the six products. My team realized an increase in the market household consumption which thus led to the increase in the number of distributors.

The growth in the market initiated increase in the competition as more companies that deal with the same products increased in number. The elements of the market mix were successful because it used the raw market data which was thoroughly analyzed against the available conditions. It also used the industry data and analysis from the other leading experts in the market. The elements of market mix were introduced after the first simulation since this is when the team was able to identify the actual market behavior.

The household buyers may have contributed less to the sales revenue; however, it had the potential for growth and expansion. This group had some potential for growth as its percentage continued to climb with time. The large buyers had showed a slight decline in the first quarter, but this was anticipated to change in the second quarter because of the measures put in place by the company to retain them. The number of the high-end home consumers had decreased but remained higher than the household buyers. The decline in the proportion of the large buyers had affected the profit margin negatively. The profit margin of the business organization had exhibited gradual incline.

The marketing plan had four ideas that it sought to implement and to improve the situation of the company. The first purpose is to raise the consumer awareness of the products in a bid to grow the market share. The team planned to achieve this objective by organizing road shows and exhibitions to the rural areas, sponsoring some of the popular users in the stated regions, increasing the editorial coverage of the company to both the consumers.

The company also plans to increase the distribution channel for its products around the world. Making entries into new markets and creating awareness in the areas that the company had not Ventures is one of the strategies. To achieve this, it will promote programs that popularize new smart phone trends in these localities (Chaston, 1999).

Analyzing the Market, Consumer and Competitor Situation

The research done by this group established an increase in the number of mobile phone firms in the European and Asian market. This increased competition in the mobile phone production in the two markets. Other than these phone brands Company brand, there are also several different brands that are operating in the market. The majorities of these items are sold in specialty stores and departmental stores. The household appliance stores were also not left behind because of their wide reach into the consumer population and large market share they command.

The rising costs of factors of production have made it hard for the company to transfer the benefits of lower prices to the customers. The shift by many of the larger companies to the offshore production has given them an economic advantage over smaller firms. They can sell their products at cheaper prices.

Emerging economies are sending on their trade regulations. They also enact policies to attract more companies to shift their production bases in their localities. The Chinese and Indian governments have set out on a mission to attract the US and European manufacturing firms. Smaller companies like are disadvantaged in this case. Asia has the highest number of emerging economies and it is using policies to attract larger companies.

All the manufacturers of these products have to comply with the international safety standards and other safety rules and guidelines set by the governments. These are the only legal considerations the firm needs to be keen on other than minimizing potential lawsuits arising from poorly assembled products that could lead to bodily harm (Cohen and Peterson, 1995).

The manufacture of phones requires the use of materials that are light, durable and environmentally friendly. New research in material science and many has assisted companies in achieving these targets. As the research progresses more and more into these materials, the cost of production increases as the prices of acquiring them also increases.

The products are made with cultural and social considerations. The European market is glamorous and takes in more expensive products than the Asian market. The latter however has a growing middle class population that is competing for the glamour of the West. They however form a smaller percentage of the overall population. Thus, it uses materials that are environment conscious (Winston and Wimsatt, 2013). The change in the Asian culture with the growing middle class population has thus increased the demand for high-end products in this market.

Current Marketing Objectives and Performances

The consumers have diverse behavior and preferences when it comes to the consumption of electronic products like phones and tablets. They spend on any product as long as it satisfies their needs for trendy phones. The branding strategies use logos, pathos and ethos to attract the clients. The positioning statement and the marketing strategies increase the visibility of the company and position statement enable it to beat competition.

The European Market Outlook Products

Product 1

Selling Price

280

Household

Sales Forecast

1162

Advertising

4000

High-end Households

Sales Forecast

134

Advertising

800

Companies

Sales Forecast

525

Advertising

2000

High-end Companies

Sales Forecast

93

Advertising

600

Channel Investments

Specialty Stores

1500

Household Appliance Stores

2000

Departmental Stores

1350

Analysis

The results of the input metrics give a pricing strategy that is the correlation between the unit cost of production including the cost of advertising vs. the selling price. The market share for the company is also factored in the pricing formula for the services offered against the competition that is attempting to use pricing as a means to generate more revenue and grow their market shares.

The results of the first simulation produced an observation of the results with the price kept constant for one year at 280. The sales forecast was highest at the household segment followed by the high-end household. This meant that is would have a high allocation for the sake of marketing to reach out to as many of the consumers in this segment as possible. Form the simulation; it is clear that the household appliance stores acted as the greatest point of sale for this segment because of its wide reach to the household consumers.

Product 3

Selling Price

280

Household

Sales Forecast

484

Advertising

3500

High-end Households

Sales Forecast

134

Advertising

800

Companies

Sales Forecast

675

Advertising

5000

High-end Companies

Sales Forecast

93

Advertising

600

Channel Investments

Specialty Stores

2000

Household Appliance Stores

800

Departmental Stores

500

Analysis

The results for the input metrics have the same correlation between the cost and price for the one year period like in the first simulation. The market share for the company is part of the formula for the services offered by the company against the competitors. The aggressive nature of the competition as observed informed the decision to combine this metrics and produce results that would form the pricing decision.

The results for the second simulation produced an observation of result with the set price of $ 280 being kept constant. The direct unit cost for the company during this period was significant in the advertising. For this round, the group set aside more money for the company advertising unlike the household segment which has more population. This product targeted the company because of the value of large scale buying that would amount to significant income as compared to household purchases.

The Asian Market Outlook Products

Product 2

Selling Price

275

Household

Sales Forecast

1867

Advertising

5500

High-end Households

Sales Forecast

103

Advertising

700

Companies

Sales Forecast

467

Advertising

4000

High-end Companies

Sales Forecast

132

Advertising

800

Channel Investments

Specialty Stores

2000

Household Appliance Stores

2000

Departmental Stores

2000

Analysis

The results of the third simulation produced an observation of the results with the price kept for one year at $ 275, a value slightly lower than the European market. This pricing strategy is dependent on the observed consumption pattern and price elasticity in the two markets. The cost of advertising was set as values higher than the European market. The analysis of the net sales forecast and the advertising cost showed an increasing pattern as a result of the metrics that were injected to activate change in the performance.

Product 4

Selling Price

275

Household

Sales Forecast

1401

Advertising

4000

High-end Households

Sales Forecast

103

Advertising

700

Companies

Sales Forecast

865

Advertising

5500

High-end Companies

Sales Forecast

132

Advertising

600

Channel Investments

Specialty Stores

2000

Household Appliance Stores

800

Departmental Stores

500

Analysis

The results of the first simulation produced an observation of the results with the price kept at $275. The direct cost of marketing for the household was set at $4000 which is lesser in value as compared to the marketing budget for the company was also increases to $5500. The company still enjoyed significant marketing allocation Most of this product units move through the specialty stores which represent a larger proportion of the market. Departmental stores ranked least at $500 which is slightly lower than the household stores at $800. The results of the net income and the company’s total revenue showed an increasing pattern as a result of the metrics that were injected to activate change in the performance.

The 4Ps (Product Positioning)

The aim is to ensure that the products are placed in the right place, at the right time and in the right price. The firm hence attempts to set a price range that would transfer the benefits of lower costs to the consumers while giving good returns for the company. The characteristic of this market that makes it advantageous to the company is the fact that it prioritizes quality and performance ahead of prices. For the entry period, the firm will offer attractive pricing package for the products to attract the consumers.

• Pricing Strategy

The prices set during this time will be experimental and shall be adjustable to determine the response of the buyers to the price changes when the quality and other sales services are left constant. The firm will also collect the market data from the competitors including their marketing strategies (Chaston, 1999).

The information gathered from competition and the determination of price elasticity of the new products will be used to determine the pricing formula for the products past the promotion period. The promotion period will also have pricing packages like offering two different brands at subsidized prices to invite the consumers to try our range of products.

This is the process will determine the effectiveness by which the goods will reach the market. The company will use the distributors and direct dealing with the buyers. This will be achieved through the company stores opened all over the globe. Other buyers who may not be near the stores will us the company website to place orders. The products will then be delivered to them by the company agents through courier services.

• Product Mix Strategy

The decision made increased is to increase the product range in the market. The result of the decision was the increase in the number of small buyers and large scale buyers in the firm. However, since most of the deliverables of the marketing plan were designed for the household consumers, this group had the most substantial growth in the market share. The programs put in place also attempted to lure the small buyers who are equally important for the business.

The simulation first year results had revealed that the customers who placed large orders had the most significant contribution to the income of the company. The product mix for the second quarter would, therefore, target this section of the consumers by redesigning the interaction between the firm and the clients. The business identified these large scale buyers with the aim of creating a mutual relationship that would help boost the customer loyalty.

The group designed product mix that would meet the need of the company and the consumers. One of the most useful tools adopted by the company is to use derived demand of the related products and partners as a means of boosting demand for the company products. To attract more of the large-scale buyers, the business increased the value of the discount for bulk buying.

• Placing Strategy

The strategy required an effective process by which the goods will reach the market. The company is using the distributors and direct dealing with the buyers. This will be achieved through the company stores opened all over the globe.

The strategy to collaborate with other strategic partners in the marketing of the products of this company gave favorable outcomes. Because of the approach it was possible to identify the products that would do well in any particular market in Europe or Asia. (Kay, 1993).

The result of this strategic partnership could be seen in the favorable change in the outcome of the product mix. There showed an increase in the large orders that translated to increased sale of the good produced by this firm. This was used as a plan to sell the business brand. Useful partnerships helped spread the fame of this organization. The firm had injected more efforts and resources into its customer relations department to act as the company ambassadors and give the clients excellent and convenient experience. It used such platforms to receive views on the client needs and used this information to create products that bring the satisfaction to the users.

The results of the simulation showed the difference in revenue from one round to another. The second quarter had generated more revenue than the first. This is because of the multiple changes that were effected with the new product mix (Harvard Business School, 2012).

The large buyers may have contributed the bulk of the revenue, but the decline of its proportion showed an urgent need for a working marketing strategy. The sales volumes had slightly increased though some slight variations accompanied it. The segment share of the small buyers had also grown. The result showed success in the first quarter though some changes needed to be incorporated into the marketing strategy to boost the numbers of the large buyers whom the company was losing.

• Promotion Strategy

Marketing is about communication to the customers. Businesses attempt to sell the value of their services and products to the consumers and the prospective clients. Marketing helps to promote goods and services and to create or promote the brand. It is the origin of the creation of a long-standing relationship between the business organizations and their clients.

Marketing is the process of creating and maintain the relationship between the company and other shareholders. It is the means by which the product of the company reaches the target audience. The functions of marketing include promotion, selling, pricing and distribution. All the functions of the marketing are integrated to meet the marketing needs of the firm (Fifield, 2012).

The marketing needs for this company include creation of an effective relationship between the company, its customers and the other strategic partners. The most important partners would be the distributors and suppliers for the raw materials used in the production process the must promote an effective relationship with these two groups due to their strategic involvement in the company’s production process.

Strategy to Take on in the Next Five Years

Marketing will capture the areas such as advertising, direct selling, sales promotion and public relations. The purpose of advertising is to inform, remind, persuade or to reinforce the marking goals of the business organization. Promotion will help the firm grow its market share and effectively compete with the other companies in the same industry.

The company will develop a customer oriented website where the clients will share information, success stories and interact with the others. Social media is increasingly becoming a popular platform for advertising and public relations. The company presence in the Facebook and twitter is an advantage. The firm will used these two avenues to interact with the consumers and respond to their queries, concerns, complaints and input (Doole and Lowe, 2001).

Marketing is not complete until the product ends in the hands of the final users. The company has to develop a selling strategy that would be convenient to the buyers and cost-effective to the firm. Selling is the point at which the company will exchange the products with cash from the buyers.

The website of the company will be designed in a manner that offers convenience in the buying of the products. The customers will be able to use the site to order for the skates online and pay for them after which the product will be shipped to them. This is mostly for the bulk resellers overseas. The company will also have a list of its resellers in its website to direct the buyers to avoid the shipment charges.

The spending to attract new customers was increased in the subsequent simulation runs. This included spending to retain the existing consumers. This is because the firm had realized that this segment was vital for the profitability of the business organization thus the need to concentrate more resources on its retention and to increase its share in the number of customers in this category. The unit price was slightly reduced to attract the small buyers. A significant amount of cash was also allocated to this portion of the workers to grow their numbers. Every group of clients is important for the company that is why every effort was made to take care of them.

Conclusion

The highly aggressive pricing strategies used by the competitors had adverse effects on the performance of the company. The profitability of the firm depended on the result of the pricing methods adopted by the competition in the industry. The company revenues fell down as it struggled to generate income against other aggressive companies. As a result, this company lost some market share due to intense competition that was based on pricing. The cost to the consumers was also high for this case (Philip, 2005).

The newly hired management ought to take the pricing strategy serious if he or she would keep up with the competition. From the results of the simulation the management should adopt the marketing plan that works around pricing, direct unit cost and the revenue for improvement. The average net cost for the consumers should not get higher but should instead work downwards if the company wants to grow its market share and improve on its revenue.

The management should consider setting the price that is ideal for all the players in the different market segments. The unit direct cost is also a very important component of the company performance results. From the six year simulations results where it was kept constant at $ 280 for European market and $ 275 for the Asian market, it is clear that it has a direct bearing on the outcome. It should therefore be watched closely. If the management can find a way to work it down without affecting the unit price and the net cost to the consumers, the business organization will be able to make profits and grow the market share at the same time.