Produce a marketing strategy for a new or existing product Essay Example

Produce a marketing strategy for a new or existing product Essay In this unit I will need to produce a marketing strategy for a new or existing product. The company that I have chosen is boots. My strategy will need to include evidence and information about: * how the strategy is based on the principles of marketing * How I have used sources of primary and secondary marketing information * How I have analysed the impact of the external environment on your marketing decisions We will write a custom essay sample on Produce a marketing strategy for a new or existing product specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Produce a marketing strategy for a new or existing product specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Produce a marketing strategy for a new or existing product specifically for you FOR ONLY $16.38 $13.9/page Hire Writer * How I analysed the marketing context and decided on an appropriate strategy * How I have developed a coherent mix of strategies to meet consumer needs. I will also need to produce an oral presentation. First I will define what are marketing and its principles. Marketing is a way of advertising something. It is a way of thinking. Market The set of actual of potential users/customers. Market area A geographical area containing the customers/users of a particular firm/library for specific goods or services. Market demand The total volume of a product or service bought/used by specific groups of customers/users in a specified market area during a specified period. Market development Expanding the by present users. Market positioning total market served by 1) entering new segments, 2) converting nonusers, 3) increasing use Positioning refers to the users perceptions of the place a product or brand occupies in a market segment. Or how the company/librarys offering is differentiated from the competitions. Market profile A breakdown of a facilitys market area according to income, demography, and life style Market research The systematic gathering, recording and analysing of data with respect to a particular market, where market refers to a specific user group in a specific geographic area. Market segmentation The process of subdividing a market into distinct subsets of users that behave in the same way or have similar needs. Segments for the library could be demographic (Asian); geographic (branch-level); psychographics (leisure-oriented); customer size (largest user group area); benefits (have children in the home learning to read.) Market share A proportion of the total sales/use in a market obtained by a given facility or chain. Marketing The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals. Marketing channel A set of institutions necessary to transfer the title to goods and to move goods from the point of consumption. (Vendors, publishers, library facilities.) Marketing mix The mix of controllable variables that the firm/library uses to reach desired use/sales level in target market, including price, product, place and promotion- 4 Ps. Marketing opportunity An attractive arena of relevant marketing action in which a particular organization is likely to enjoy a superior and competitive advantage. Marketing plan a document composed of an analysis of the current marketing situation, opportunities and threats, analysis, marketing objectives, marketing strategy, action programs, and projected income statement Marketing is the management process that is responsible for identifying products that would be likely to make a profit when sold and then selling these products to customers. Marketing finds out what consumers want and then attempts to meet those needs, at a profit. It a can also be defined as getting the right product to the right place at the right time. It is not the same as selling- that is making people buy what youve got. Marketing is making people want what youve got. The aim of marketing is to make selling superfluous. The aim is to know and understand the customer so well that the product or service sells itself. When marketing a product you need to consider the 4 ps. Getting the mix right is essential to successfully market your product. The four Ps are: * Product- can be a good or service. In competitive markets, businesses have to be customer driven. They may use types of product differentiation (e.g. package design and/or a brand name) in an attempt to convince potential customers that their good or service is different from competitors products. The four types of products are: 1. Star High share of market in the growth stage of the product life cycle. -Requires significant injections of capital to finance the rapid growth. -May have negative cash flows but seen as having potential for high sales, and profit. 2. Cash Cow -High markets share, bringing in high sales revenue, cash flows and (usually) profit. -No market growth likely. -Product may have a personality/image in the market. -The large amounts of cash bought in can be used to subsidise stars. 3. Problem Child -Low share of a market with high potential for growth. -Relatively large injections of finance needed (as with stars). -Uncertainty about future sales revenue, cash flow and profit. -Decision needed on whether or not to halt production, or (if possible) to sell a brand. 4. Dog -Not going anywhere- no growth potential. -Any profit has to be reinvested just to maintain market share. -Identify and remove from the product portfolio. * Price- setting the right price for a product is a crucial aspect of marketing. There are short-and long-term objectives to be considered when pricing goods or services e.g. survival may become the priority in a recession, and imply low prices to maintain some sales and cash flow. Economic theory assumes that a price will be determined by market forces reaching equilibrium. The economic environment. A business may simply have to try and match the market price/going-rate for its products, or may have some control over its prices. * Place- Making goods available to users/consumers involves two main decisions: 1. Method of Transport-Depends on the type of goods. There will be several factors, e.g. most rail journeys also involving road transport, and whether a business should have its own fleet of road vehicles. 2. Channel Of Distribution-The procedure, or channel management required getting a product to the customers. The traditional channel includes using the wholesaler, but there are other possible channels. * Promotion-The overall objective of promotion is ensuring the survival and the growth of a business through an increase in long-term demand for its product(s). Selling will be the outcome of successful promotion. Market research is the collecting of data, the aim of which is to understand better what is happening in the marketing place, as the marketing department of a firm needs to know about consumers views and economic trends. Primary data is data you have gathered yourself, whereas secondary data is somebody elses data you use. Market research involves doing market research on customers, analysing their needs, and then making strategic decisions about product design, pricing, promotion and distribution. The purpose of market research is to provide information on particular market to those managers responsible for the firms marketing strategy, about what people want-a particular group of potential customers will need to be targeted. Data can be: * Primary- i.e. collected for a specific purpose. It will involve either a census (of every person in an area) or sampling (of a subset of the population). or * Secondary-i.e. Used for another purpose besides the original one. It could be internal data (from within the organisation, e.g. employee details or costings), or external data (e.g. from a government department, a newspaper, the TUC or the CBI). And. * Quantitative- i.e. in the form of numbers, e.g. showing the market share of different businesses, or the number of adults who will have seen a particular advertisement on television. Or * Qualitative- i.e. without, e.g. giving the motives for customers buying, or not buying, a particular product. In most cases market research will involve choosing a sample to represent the whole target group. The larger the sample, the more accurate the results will be, but costs will also be greater- a full national census costs millions of pounds, e.g. Random sampling is where every member of the target group/population has an equal chance of being chosen to provide responses. Computers might do the random selection. Systematic sampling involves selecting, for example, every 10th item or person from a list of the target group. Stratified sampling identifies distinguishable subgroups in the total group, then a certain number of members of each subgroup are chosen (at random). Cluster sampling involves selecting a geographical area, and then all the members of that local group/population are sampled, e.g. a sample of small retailers in a particular town. Field or primary research is when new data is obtained for a specific purpose, this can be provided by the marketing department of a firm. Data is usually gathered by surveys, (face-to-face, telephone, or by post). An advantage of field research is that the firm can have control over the whole process, and it can be more effective, but it does take longer and will cost the firm more. Desk or secondary research is the use of existing, already collected data. This could be anything from department of trade and industry reports to a companys sale statistics. Also company reports, government statistics, and surveys published by research organisations can be used as secondary sources of information. Desk research is quicker and cheaper than field research, but findings are not necessarily accurate or always relevant to your product. Marketing principles, there are many priorities within an organisation, but if it is truly marketing oriented, many of the following principles will be high on its agenda. Market research must establish whether current products or services satisfy customers expectations. Anticipating the future and forecasting tomorrows customer needs and expectations is the task of marketing research. This is very vital. Generating income or profit clearly states that the need of the organisation is either to be profitable or to generate as much income as possible e.g. likes a charity. Satisfactory growth can be achieved by entering new markets or creating a new product or both. Having a clear plan is essential for an organisation. The whole emphasis of the planning process is for the organisation to think customer and think marketing. The PEST analysis examines changes in a market place caused by political, economic, technological factors. Any organisation unaware of what is going on in the business world will risk being outmanoeuvred. Changes in the law will add to uncertainties. Statue law like the consumer protection law, and the voluntary agreements like the moni toring of advertising standards authority. Clearly understanding who the competition is and what benefits they are offering are essential for an organisation. Principles can be arranged into three categories: * Needs of the customer * Needs of the organisation * Influence of the market Businesses use the abbreviation SMART to shape their objectives. SMART stands for Specific, Measurable, Achievable, Realistic Time constrained. There are many types of business objectives in the private sector, depending on the business situation and their general direction in the market, they are as follows: 1) Survival When a business is in its early stages then it will want to survive, it will shape its objectives to make trading easier and maximise profits. Another threat to a business survival is corporate takeover; to prevent this a business would have to reshape their objectives. 2) Profit Maximisation This is exactly as it sounds, for many reasons a business will need to maximise profits and to do this suitable objectives will have to be drawn up. Some business may choose to go for long-term profit maximisation to ensure that they make lots of money and can therefore expand. 3) Satisfying This is an objective that maximises profit to the owners; it might not give the maximum profit that is possible to achieve. 4) Growth These objectives increase the growth of the business so that the workers, managers and directors can benefit. 5) Promotion of image Relationships with customers and employees is key in a modern business and so a company is ever vigilant of how it appears to these people. For a company o is better that the competition it is important that they have the correct image and a better one than the competition. Objectives can be shaped to develop good relations and treat employees well. Boots is a public limited company; they are included in the FTSE 100 stock exchange. Boots main business activity is retailing also they provide many other services such as: à ¯Ã‚ ¿Ã‚ ½ Boots Opticians à ¯Ã‚ ¿Ã‚ ½ Boots Dental care à ¯Ã‚ ¿Ã‚ ½ Boots Foot care à ¯Ã‚ ¿Ã‚ ½ Health Beauty Services à ¯Ã‚ ¿Ã‚ ½ Boots Hearing care à ¯Ã‚ ¿Ã‚ ½ Insurance Services ADVANTAGES AND DISADVANTAGES OF LIMITED LIABILITY COMPANIES 1. Liability is, in the vast majority of cases, strictly limited to the investments made by the shareholders. 2. Company Officers are not personally liable for their actions unless, in most instances, there is a clear and serious breach of their fiduciary duty. 3. Ironically, despite the limited liability, such entities often benefit from greater prestige than their sole proprietorship or partnership counterparts. The reason is probably because such an enterprise normally requires more planning and thus is deemed more credible. 4. They often benefit from significant tax advantages. In fact, many countries around the world give exclusive tax incentives to this type of entity. 5. The rights of shareholders are normally clearly defined and protected. 6. Corporate taxes only become payable after the end of the financial year. This means that money that would otherwise be taxed on a monthly or quarterly basis is available to earn further money before the final payment of tax. DISADVANTAGES 1. In larger companies shareholders often lose direct control over their investment. 2. Limited liability companies generally require the appointment of accountants, auditors and professional company secretaries. This means that such a structure is often more expensive to maintain than simple sole proprietorships or partnerships. 3. Certain professional bodies, especially those representing the legal and medical fields, do not allow members to register a limited liability company. In many instances, this denial has resulted in very high indemnity insurance. Aims Objectives The Boots Company intends to become the leader in wellbeing products and services in the UK and overseas. Simplify the business to focus on what we are best at. We should be a market leader, in health care, beauty care, and general fitness. We need to create more wellbeing related brands. Keep building our international health care and retail business. The objectives above mean that, first of all the Boots Company the leader in wellbeing products and services in the UK and overseas this means that they want to be the market leaders from their competitors who are Super drug, and for their retail range, GAP. They want to simplify the business to focus what they are best at, health and beauty; this means that they want to focus more on their beauty products such as No7. Also the want to be a market leader in, health care, beauty care, and general fitness, this is because Boots believes that wellbeing products are starting to focus now on health care and related areas. Also they want to create more wellbeing products because they want to be market leaders in wellbeing, this will not be cheap for them, but they well have to protect profits by relentlessly cutting costs. Also they want to keep building their international health care because the want to be market leaders around the world. The Boots Company have simplified the business organisational structure; during the year they have integrated their business as Boots Retail, with Boots Retail International as its overseas extension. This is saving Boots costs and them more a swift organisation. For example they have moved from three separate property departments to one; from 100 construction suppliers to seven; and from 14 internal IT groups to one. The have accelerated the transformation of their UK presence. They are positioning Boots as the leader in wellbeing services, as well as products. By the year-end of 2001 they had 297 Boots optician stores, 54 Dental care practices, 44 Foot care practices, 47 Hearing care centres, 22 Laser hair removal clinics, ten Health Beauty Services centres offering a wide range of therapies and treatments. This is telling us that Boots is very serious to becoming the leader in wellbeing services and products. Sales à ¯Ã‚ ¿Ã‚ ½M231.0Operating loss (33.1) Boots have stepped-up the pace at Boots Healthcare International. Clearasil, acquired in December 2000 was the driving force behind BHIs 12.5% sales growth last year. They also integrated the brand smoothly, turned its sales from decline to growth, and used it to open the door for local businesses to the huge US over-the-counter markets. South Asia, in Thailand, like for like their sales grew by 2.2%, focusing the offer much more on Boots brands and therefore driving up the margin, generated an even strong like for like gross profit growth. Europe, in Netherlands, sales of No7, grew in line with expectations as gained national distribution. This tells us that in the two continents where Boots is located they are making profits and they are successful, and they are keeping building their International business. This tells us that in the two continents where Boots is located they are making profits and they are successful, and they are keeping building their International business. Boots Retail International Sales à ¯Ã‚ ¿Ã‚ ½M40.3Decrease % (4.3) Loss à ¯Ã‚ ¿Ã‚ ½M (before expectations)(24.Increase %44.5 To develop an appropriate marketing strategy would involve creating a link between the external environment and the internal strengths of Boots. SWOT analysis is the focus upon the strengths, weaknesses, opportunities and threats facing a business internally and externally. To enable a SWOT analysis to be carried out, research into Boots current and future positions need to be completed. This would result in building upon its strengths, minimise its weaknesses, seized its opportunities and cancel out the threats. STRENGTHS à ¯Ã‚ ¿Ã‚ ½ Large established business à ¯Ã‚ ¿Ã‚ ½ Good reputation à ¯Ã‚ ¿Ã‚ ½ Wide portfolio of products à ¯Ã‚ ¿Ã‚ ½ Good advertising (Coronation St) à ¯Ã‚ ¿Ã‚ ½ Large target market OPPORTUNITIES à ¯Ã‚ ¿Ã‚ ½ Sponsorship for sporting events à ¯Ã‚ ¿Ã‚ ½ Diversify into a different market à ¯Ã‚ ¿Ã‚ ½ Expand Nationally à ¯Ã‚ ¿Ã‚ ½ Promote using large marketing strategies THREATS à ¯Ã‚ ¿Ã‚ ½ Cadburys main competitor launching a new product à ¯Ã‚ ¿Ã‚ ½ More companies diversifying into the cosmetics market à ¯Ã‚ ¿Ã‚ ½ A large price war, taking Boots off the market WEAKNESSES à ¯Ã‚ ¿Ã‚ ½ Unmotivated staff in the work place à ¯Ã‚ ¿Ã‚ ½ Too big a demand for a particular product PEST is split into four categories, political, economic, social and technological influences, which are all external factors. A PEST analysis identifies what external factors are going to affect Boots in the coming months and years. POLITICAL business decisions which are influenced by political and legal decisions. à ¯Ã‚ ¿Ã‚ ½ Political decisions can affect Boots for the good and the bad, because if taxes increase, therefore consumers decrease and sales of stock decrease. However if taxes decrease the likelihood is consumers will buy more. à ¯Ã‚ ¿Ã‚ ½ Laws can also change Boots income because if a law was brought out, that you could only work 9.00am 5.00pm. ECONOMIC influenced by domestic economic policies and world economic trends. à ¯Ã‚ ¿Ã‚ ½ The interest rates can affect Boots because if the interest rates were high then Boots would not want to borrow as much money for expansion. Also if consumers had loans they would again have less disposable income to but luxury items. à ¯Ã‚ ¿Ã‚ ½ If the minimum wage was brought down, this would mean more money for Boots but would also result in low sales from the consumers. à ¯Ã‚ ¿Ã‚ ½ The government can also raise taxes, which would bring a stand still to the sales of cosmetics. SOCIAL -close analysis of society à ¯Ã‚ ¿Ã‚ ½ If Boots do not control their pollution levels or have big buildings destroying the landscape with noise and traffic congestion, then the local residents would complain to their local council resulting to possible incentives for bringing in jobs for the community being stopped. à ¯Ã‚ ¿Ã‚ ½ On the other hand local residents with small businesses near to Boots would benefit due to the money being brought in by tourists. TECHNOLOGICAL developments in manufacturing and business processes. à ¯Ã‚ ¿Ã‚ ½ Cost of machinery. à ¯Ã‚ ¿Ã‚ ½ New machinery à ¯Ã‚ ¿Ã‚ ½ Maintenance à ¯Ã‚ ¿Ã‚ ½ Training for advancing IT à ¯Ã‚ ¿Ã‚ ½ Upgrading old machines to improve the company à ¯Ã‚ ¿Ã‚ ½ Advances of transport of goods/cost/lorries Boots Mission Statement is: Our mission is to grow our business profitably so that we are: A leading player in our chosen markets by size, ranking, regard or influence. A natural choice for customers and intermediaries- positively regarded, attractive and competitive. A challenge to our competitors creditable, effective and respected. Mohammed Shaqeeb 13ADO