Marketing Analysis - Don Martin Limited - Case Study Example

Marketing Analysis: The Case of Don Martin Limited Introduction Don Martin Limited was started about twenty three years ago as an auto supplier. The company has grown both in size and in the products offered and currently it operates in a large store with a total area of 910 meters (Grasby et al 379). The products stocked by the store include auto supplies, house-wares, motorcycles, sports equipment, TVs, radios, appliances and photographic equipments. Don Martin is strategically located at the heart of the blue-collar district where people come since they can get whatever they need for the area. Despite the fact that parking in the street is usually a problem, there is a metered parking behind the store although most customers do not seem to be aware of these parking lot. Throughout its existence, the expansion has brought positive gains but the last expansion did not bring additional sales. This paper will carry out a marketing analysis of Don Martin and this will be organized into three sections. The sections include problems and analysis, alternative analysis and a recommendations section. Problems and Analysis Don Martin Limited has always strived to expand thereby increase sales which would eventually translate to high profitability. To achieve this, the company has made several acquisitions given that initially it only had a total area of 45 meters squared (Grasby et al 379). The expansion has always produced an increase in the sales volumes but about three ago, a store that neighbored that of Don Martin Limited was floated for sales and the company bought it. After the acquisition, Don Martin Limited brought down the wall separating the two companies and ended up with a large store. However, instead of increased sales; the new acquisition eventually led to losses. The expansion has necessitated the need for more staff members who are now currently twenty six and this has increased the expenditure by the company. In addition, the increased workforce makes it hard for the company to monitor the staff and the business in general thereby leading to loss of some goods. The proprietor of asserts that he is afraid that the company staff may be stealing. Things are further complicated for Don Martin given that he has approximately 500 suppliers which means that he has to spend about seventy five percent of his time. The company buys directly from manufacturers in small quantities which mean that the company cannot advantage economies of scale (Grasby et al 380). The customers coming to Don Martin Limited are trying to cut down on expenses given that they are cash strapped. The services offered to customers no longer lead to higher customer satisfaction and most of them are ready to do without such services in order to save some money. For instance, previously whenever a customer came to the store of a sport’s equipment; there was a salesperson to help them but currently customer no longer seem to like this service. Despite the low reception of the company’s services by customers, Don Martin believes that such services have always attracted customers to the store. The company is incurring high expenses in maintaining these services where for instance the company has to pay $1,000 for gas not forgetting the pay to truck drivers (Grasby et al 381). Consumer Analysis Segment 1 Segment 2 Segment 3 Who Customers having low income Customers having cars External customers (Customers not living within the city) What These customers are cutting spending given that they low income. These customers require parking when doing their shopping These are customers who are not in close proximity to the business. When The company is losing these customers since the last expansion undertaken three years ago. Following the last expansion three years ago, Don Martin has a parking lot The company has been attracting this kind of customers since inception Where The company is facing competition for these customers from nearby stores. The parking lot for the Don Martin is behind the store although most customers squeeze to park in the street This customers mostly come from within the country Why The customers are experiencing competition given that the competing stores are giving discounts to their customers. Don Martin has not raised awareness to its customers about presence of parking behind the store. The company has been able to attract such customers given that it uses national-wide newspapers and radios to promote its products How This segment of customers are avoiding the extra pay they have been paying for services to cut down on costs and this denies Don Martin Limited customers as it has been charging for this services This segment of customers may fail to do their purchases from Don Martin in case they do not get parking space thereby denying the company customers Advertising of company products allows customers who are living away from the business get to know of the business Market size This segment forms the largest chunk market for the company and therefore is the most critical segment. The market size of the driving customers is expected to be high considering that most of the products sold in the stores are bulky. The market size for customers in this segment is not quantifiable although it is a potential large market. Implications Segment 1 Segment 2 Segment 3 Product Customers in this segment can buy diverse products These customers also require diverse products Customers within this segment would want diverse products Price These customers require low priced products given that they are economically strapped and have to operate on a tight budget. Such customers would demand for competitive prices compared to those charged by competitors The prices must be competitive Place This customers get their products close to them as they mostly live close to business The customers in this segment need parking space when shopping for different products. Moreover, the location should be convenient to them. The customers in the segment require goods near them. Promotion Don Martin designs his own marketing advertisements which are carried on radios and newspapers The marketing advertisements used are designed by Don Martin and are carried on radios and newspapers The segment is reached through advertisement designed by Don Martin and carried on radio and newspapers Trade Analysis Once the customers buy products, they may be delivered to them via the company’s trucks as a sales service which increases the company’s expenses. Additionally, customers could come to the store and carry away his/her product. On the other hand, the company has many product lines and therefore has equally a large number of suppliers. This means that the company cannot form long term relationship and is not able to enjoy economies of scale. The main competitors to Don Martin Limited are other stores in the vicinity who offer discount to their customers. These competitors deny Don Martin some of its customers. The external environment within which Don Martin operates has most of the customers economically constrained. This means that they have fixed budgets and therefore increasing prices would make the company loss customers. Don Martin does not have a clearly organized corporate system where the proprietor is involved in human resources affairs, marketing campaigns where he designs advertisements and also oversees the operation of the overall company. This means that he lacks time to run the company effectively. Alternative Analysis The company sells diverse products and in order to avoid the losses and give it a chance to break even, it needs to streamline its distribution process. The company can do this by reducing the number of its supplies as this would give it a chance to form long term relationship with just a few suppliers. By having a few suppliers, the company would also be able to gain from economies of scale when purchasing and this can be passed down to customers making their prices competitive. Moreover, by reducing the number suppliers, the company will have ability to negotiate credit facilities and allowing it to have a large selection for its customers. In streamlining the supply chain, Don Martin will also need to focus on concentrating a few product lines. The specialization will give it a chance to concentrate on quality and have a chance to buy in bulk. The promotion adopted by the company may not be effective given that such advertisements are designed by the proprietor. However, the company should embark on seeking the services of professional in marketing. Recommendations The company should use services of professionals in marketing. Moreover, the company should do away with some product lines which are not very profitable. Furthermore, Don Martin Limited should reduce the number of suppliers so that it has a chance in enjoying the benefits accruing from buying goods in mass. In addition, the store should be sub-divided and heads of different sections selected. This will deal with the problem of lack of control over all employees as is the case currently and reduce cases of theft and loss of products. Action plan Activity Period Engaging of professional services in marketing Within the next six months Reducing the number of suppliers This should be done over a period of three years Sub-dividing the store space This can be carried over a period of two years to ensure that the company does not face financial crises Works Cited Grasby, Elizabeth et al. ‘‘Business Decision Making: Text and Cases, Seventh Edition’’ Nelson College Indigenous (2004) Read More