Companys Market Analysis - Report Example

This report is based on the analysis of market segmentation, application of marketing mixes and the final assessment of the two new products launchedby EKON. EKON is a UK based company and known for its excel in furniture. Sofas, dining furniture, office chairs and desks are some of their popular products that they supply through their high street stores. In order to keep the customers happy and satisfied EKON tries to maintain the quality of its furniture. But then again in order to keep the customers loyalty, an organization has to be innovative and come up with new products to attract more customers. Looking at the demand or need of any certain product can bring innovation. EKON has been lucky enough to find a need for chairs that cater the customers with back problems and also those customers who require sympathetic chairs. With need we even have to see the target market of our new products, apply marketing mixes and assess whether the product would be successful or not. This report would brief us on things to consider before launching the new products. Marketing Research Process Ekon will first have to research on the products that they plan to launch by the help of marketing research process. Through this process we will systematically design, collect, analyze and report on data and findings relevant to our launching of the two new products. We can even outsource this process or form our own marketing research team. The marketing research process takes place in six steps: (see reference list for the source). 1. Define the problem and research objectives: marketing management will inform the research team about the two products being launched, but the management will have to be careful not to define the problem too broadly or narrowly. With the problem defining, decision alternatives and research objectives will have to be made clear. The team would be covering the customers falling under the backache problems or in need of sympathetic chairs. Now what kinds of things do the customers want in the prescribed form of chairs would be found after the process ends. 2. Develop the research plan: after we make clear objectives of our research the team will have to come up with the most efficient plan to gather the information needed. Like data sources (primary and secondary data), research instruments (questionnaires, surveys, behavioral data and experimental research). The EKON team will have to see the feasibility and available budget before forming the plan. The retrieval of data from any source may vary in terms of cost. EKON plans to use 20% of their turnover in market research. Hence it would be better to use questionnaires when collecting the data. 3. Collect the data: once we know our objectives and budget the team will collect the actual data. This phase is the most expensive and most prone to error. Here the team member will actually have to give the questionnaires or observe the customers when they are purchasing the products in other shops. The customers maybe the general public of the class who can afford to buy chairs. High quantity of data may help us form different segments with different needs and also help us in finalizing which segment to cater. 4. Analyze the information: here the findings will be extracted from the collected data. These findings would give us a brief view of the focused group as to what kind of chairs they need, what amount of money would our customers spend on chairs and what do the customers look for when making the final purchase. 5. Present the findings: here the most relevant data will be presented to the EKON management, which would help in making decisions. Decisions as to how to target our market with backaches problems and in need of sympathetic chairs. What is the perceived value of our product? When to launch the product and so on. 6. Make the decision: here the managers who commissioned the research need to weigh the evidence. This evidence would help the management decide upon the final decision. Our final segments and our target market would be finalized here. Major Segmentations Geographic Region UK, Europe Demographic Age 6-90+ Class level middle class and upper levels Gender male, female Nationality British, Europeans Behavioral Occasions back problems, comforting (sympathetic), in offices Business-to-consumer Segment 1: patients with back problems Segment 2: individuals who need sympathetic and comforting chairs Business-to-business Segment 1: software houses (programmers require lumbar chair due to 14 to 20 hours of work in a day) Pricing strategy for the three segments. Segment 1: patients with back problems Strategy used would be "perceived value pricing." Which means you price your customers on the basis of the value of your product perceived by the customer. Segment 2: individuals who need comforting chairs Strategy used would be "going rate pricing." In going rate pricing you price the customers according to the prices of the competitors. Segment 3: software houses Strategy used here would be "mark up pricing." Over here you price the organization after keeping a slight markup from the cost, as the sale here would be in large numbers. Distribution (channel) strategy for the three segments. Segment 1: Manufacturers ->Distributors->Retail Agents -> Consumers Segment 2: Manufacturers ->Distributors->High street stores -> Consumers Segment 3: Manufacturers ->Distributors -> Consumers Communication strategy for the three segments Communication will be an interactive dialogue between EKON and the customer that will take place during preselling, selling, consuming and post consuming stages. We can communicate through traditional media like newspapers, magazines radio, television etc or newer technology media like computers, fax machines, cellular phones and so on. The following are the elements of the communication process that will take place for the EKO N chairs. Sender -> EKON communicating team Encoding -> the message would be encoded within the advertisement Message -> the message itself would be the details that EKON wants to communicate to its customers Decoding -> the customers would see the message within the ad and try to decode what the sender has conveyed Receiver -> after decoding the customers retains the message in the mind Response -> the customers responds by deciding whether to go for the product Feedback -> the customer gives the feedback by actually buying or not buying the products Segment 1:Advertisements on newspapers, TV and magazines Segment 2:Advertisements on newspapers, TV, magazines, websites, billboards. Segment 3:Newspapers, websites etc. Main factors to take into account when marketing in mainland Europe. When marketing in mainland Europe we would again see the statistics of our segments formed earlier. Overcome any mistakes if we did when launching the product in UK. See back related problems in Europe itself that may help us in forming a new segment. Factors to consider when launching the chair for backache problems. 1. In Europe, many people already use and have used for a long time heating textiles like Damart as a therapy for articular and backache problems. EKON should use damart textiles in their chairs. 2. EKON should find the statistics that in which season is the backache issue more prevalent. Normally its in the cold seasons hence the product should be launched before the winter starts so that the customers already know what to buy when the winter comes. Factors to consider when launching the sympathetic chairs. 1. Soccer, rugby and cricket are one of the most popular sports in Europe. Hence before the tournaments are said to start these chairs should be launched, as these hours consuming games require a comfortable chair to sit and watch. Target marketing. The target market is the market at which you aim to target all your marketing efforts. The reason for target market is to reach people with common characteristics that set them apart as a group. The more we know about a target market, the more precisely we can develop our marketing strategy. Over here in the case of EKON furniture there are two types of products, the cane based and the lumbar ones. We plan to target our caned chairs to the people with backache problems and those who would like to have comfortable chairs. The lumbar chairs are aimed to target the furniture used for office. Components of marketing mix The marketing mix consists of four components, namely Product, Price, Place and Promotion. These are the variables that marketing managers have to control in order to satisfy the needs of the customers. Segmentation criterion to be used for two products in different markets The segmentation criterion used for cane-based chairs should be those people with back problems and the segmentation criterion used for lumbar chairs should be software houses where the job schedules are very tiring. How products are chosen and developed to meet customers and organsation needs Companies who are not producing new products are putting themselves at a great risk. The needs of the customers are continuously changing and in order to cater the needs of the customers, companies need to come up with new products to satisfy them. The new products are chosen after knowing the needs of the customer through a research in the market. Once the researchers are sure of the needs they pass on the results to the developers. The developers then develop the product by combining the needs and the available resources. How distribution is arranged to provide customer convenience Distribution, also known as Supply Chain Managements, starts at the factory level where the raw materials are used as inputs and converted into finished goods and then the final delivery is done to the customers. The distribution is arranged in four steps (see reference list for the source). Firstly it is decided about the companys value proposition to its customers like what on time delivery standard should be offered, secondly, deciding on the best channel design and network strategy for reaching the customers for example should the company serve customers directly or through some intermediaries, thirdly, developing operational excellence in sales forecasting, warehouse management, transportation management and materials management, and lastly, implementing the solution with the best information systems, equipment, policies and procedures. How prices are set to reflect organizations objectives market condition Prices are normally set when the new product is developed. The setting of price follows a six-step procedure. (See reference list for the source). 1. Selecting the price objective: Like deciding where to position its market offering. The clearer the objectives we have the easier to set the price. 2. Determining demand (price sensitivity, estimating demand curves and price elasticity or demand): Like each price will have a different level of demand and therefore have a different impact on a companys marketing objectives. 3. Estimating costs: The company charges the price that covers the cost. Cost sets the floor and then the price is decided upon. 4. Analyzing competitors costs, prices and offers. The firm should first consider the nearest competitors price and if the firm offers positive differentiation in the product than the value of that differentiation should be added to the competitors price. 5. Selecting the pricing method: Given the three cs the customers demand, the cost and the competitors cost the company is ready to select its pricing method. 6. Selecting the final price. In selecting the price the company should consider additional factors like psychological pricing and gain and risk sharing pricing. How promotional activity is chosen to achieve its aims for the target market Promotional activity is chosen after a series of eight steps: (see reference list for the source). 1. Identifying target audience. When deciding about the communication process we firstly have to check who are our target audience and the potential buyers of our products. 2. Determine the objectives like what do you want to put in the consumers mind concerning the product. Here the marketer must be seeing a cognitive, affective or behavioral response. 3. Design the message, which would help in gaining attention, holding interest arousing desire and eliciting action. Formulation of message would solve four problems concerning message content, message structure, message format and message source. 4. Select channels which could be either personal or non personal. 5. Establish budget to decide how much to spend on promotion. 6. Decide on media mix by allocating the budget on different promotion or communication tools like advertisement, sales promotion, public relations and publicity, sales force and direct marketing. 7. Measure results by knowing the outcomes and revenues resulting from their communication investments. 8. Manage integrated marketing communication. Marketing mixes for two different segments in consumer markets Segment 1: computer users at home Product: Lumbar chair, Price: perceived value pricing, Place: High street stores, Promotion: TV ads, website ads, newspapers etc. Segment 2: cane-based chairs for house wives Product: Cane-based chairs, Price: mark up pricing, Place: High street stores, Promotion: TV ads, newspapers, magazines etc. Marketing products and services to organizations rather than consumers. Marketing products and services to organizations rather than consumers means that the product is being catered, not to individuals, but to the organizations as a whole. Here the purchase of product, such as the chairs in our case, would be not one or two but in hundreds or thousands. Conclusion The demand for furniture would remain inevitable and therefore the more innovation we show the more demand of our products increases thus I would like to conclude that the two new products developed by EKON seem to have a great market demand. The segmentation data tells us about different segments that we can cater with our new products. Our marketing mixes give us an optimistic view before the launch. Hence introducing these products in the market would surely be a good idea. One thing we can look at is that in which season is the back problem more prevalent if its in winter then we should launch the back problem chair in winter or else accordingly. REFERENCES 1. Philip Kotler, 11th Edition. (2003). Marketing Management. India: Prentice Hall Marketing research process (129) Distribution process taken from pages (551) Pricing steps taken from pages (473) Promotion steps taken from: (566) 2. Market Segmentation. (n.d.) Retrieved January 2nd, 2006 from http://www.quickmba.com/marketing/market-segmentation/ 3. Marketing. (n.d.) Retrieved January 2nd, 2006 from http://www.smallbusinessnotes.com/operating/marketing.html Read More