Managing in Organisations Essay Sample

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Executive Summary

This report is a marketing plan for a new toaster created by Future Appliances, the CustomToast. The report starts off by analysing various approaches to segmenting the market. Such variables as geographic, demographic, behavioural and psychographic customer characteristics are used to size up the target market. Psychographic, being the variable of choice is thoroughly investigated and assessed to gain a better understanding of the potential customers. Next the report moves onto competitors. It outlines who are the main ones and what they offer. Further on careful positioning tactics are discussed and how they will aid to give the CustomToast a competitive advantage. This section explains how the CustomToast will be portrayed to the public and how this will be achieved. The last section of the report contains information on pricing. It explains how with pricing, different sections of the market will be targeted.


Future Appliances is proud to announce a new innovative toaster to hit the market, the CustomToast. If there is ever an easier or more practical way to do something, people will do it. The CustomToast takes toasting bread to the next level by introducing a programmable toaster. The toaster will be able to store up to 10 different toast settings, including toast time and heat strength. The reason behind this idea came up by observing that different types of bread (crumpets, muffins, white, wholemeal, rye, soy and linseed, sour dough, multi grain etc) and different thickness (sandwich and toast) take a different amount of time to achieve a perfect toast. The need for this is especially seen in families. Each individual person likes their toast done differently. By being able to save up to 10 toast settings, perfect toasting every time is achieved, eliminating that horrible charcoal coated toast which results from the slightest bit too much heat. The CustomToast features a LED screen to keep costs relatively low. The LED screen displays all the information needed such as total toast time, time left, setting number and heat strength. Alongside the screen are a few buttons to easily navigate through the settings and edit them. The CustomToast is a simple, attractive, practical and easy way to toast bread.

Market Segmentation for Toasters

One of the first steps in marketing a new product is segmenting the market. This is because ‘it is necessary to balance diverse customer needs with the capabilities and resources of competing organizations in the marketplace’ (Simkin & Dibb 1997, p. 52). A thorough understanding of diverse customer needs enables the product to be better targeted at potential customers. Market segmentation ‘is the process of dividing a market into two or more parts, each having unique needs, and then developing products and related marketing programs to meet the needs of one of more of these segments’ (Allvine 1987, p. 153). The first step is to identify bases for segmentation which can be categorized as four customer characteristics:

* Geographic

* Demographic

* Behavioralistic

* Psychographic

Geographic Analysis

The toaster is a fairly common small household appliance which can be found in almost every Australian home. It can be used in almost any part of the world providing there is a power outlet. There are some people that do not reside in the vicinity of electricity but the amount of people who fall into this category is so minute that it does not need to be considered into segmentation. The decision to purchase a toaster is not affected by where a person lives so geographic segmentation will be of no benefit.

Demographic Analysis

Demographic variables such as age, gender, income, occupation and religion do not play much of a role in the purchase of toasters because it is a fairly general product and is only used for one purpose, usually to toast bread for breakfast. Toast is enjoyed by any age group, any gender and all religions. There are no religions or groups which forbid the toasting of bread and it does not offend any certain nationality to toast bread that I am aware of. Family size may help in determining who would be most likely to purchase a better, bigger toaster as the larger the family size, more food is consumed. Further analysis is needed as this is still too broad.

Behavioralistic Analysis

Behavioural segmentation can be taken into account to an extent. Almost the only time a nice toaster might be purchased on occasion would be for a wedding gift. Other than that toasters are usually bought once and are expected to last a long time. Buyer readiness can’t really be considered because there is no way of predicting when someone might want to buy a toaster. Benefit segmentation can be taken into account because when people see that there is a new toaster that is better than their current one with good features, providing they have enough money at the time they will go ahead and buy the new one. Loyalty status isn’t much of a factor because new brands will always attract customers.

Psychographic Analysis

Psychographic analysis is the strongest characteristic which can be applied to the market for toasters. By assessing variables such as personality, life style, value and attitudes we can get a ‘better understanding of customers’ needs and wants’ (Dibb 1998, p. 394). First of all there is life style. Some people eat breakfast and some people don’t, not saying that the toaster is never used at any other time. Toast is not the only option for breakfast so therefore it comes down to personal preference too. Being a kitchen appliance, some people like to have all their appliances looking similar to give the kitchen a certain style. To accommodate this the toaster comes in different colours. ‘Socioeconomic status has a strong effect on preference in … home furnishings. Many companies design products or services for specific socioeconomic classes’ (Kotler, Adam, Brown & Armstrong 2006, p. 221).

According to Roy Morgan Research there are a number of different segments which help to ‘gain a better understanding of what are the prime motivations of choice and change’ (, August 2006). The segments which can be used in this analysis are:

* Visible Achievement

* Conventional Family Life

* Socially Aware

The main group which will be targeted is Conventional Family Life. Mainly because both this groups would most likely utilize the features of the CustomToast and take advantage of its affordable price. Good, solid and reliable products are important to this group. The Conventional Family Life segment struggles to improve their basic living standards and give their families better opportunities than they had in their own childhood, so developing a toaster which is both affordable and has a luxury feature added on top will definitely appeal to this group.

The next groups to be analyzed are the Visible Achievement and Socially Aware.

Both groups seek innovation and new products while keeping in mind quality and value for money. Family is very important to ‘Visible Achievement’ so they place great emphasis on providing their families with a high quality environment. A new facility or something to make life better or easier for the kids would no doubt appeal to them. The Socially Aware segment is continually searching for something new and different. Their attraction to new innovations is so high that they will jump in and purchase it regardless of the cost.

The styles and features of the CustomToast have been kept rather simple because if it was too complex or innovative it would be hard to target a number of segments at once. ‘The more innovative the product the less possible it becomes to pre-identify specific submarkets’ (Baker 1998, p. 134)

Now that a target mix, (‘A group of persons or organizations for whom a firm creates and maintains a marketing mix that is designed to meet the specific needs and preferences of that group’ {Baker 1998, p. 135}) has been identified further analysis of the toaster market can be carried out.

Analysis of Competitors

The market for toasters is not a huge one with millions of brand names. The main competitors are Sunbeam, Breville and Tefal. The competitors seem to have a varied price range appealing to all sorts of income earners, ranging from $16-$300. Sunbeam features products with a sleek and modern design catering for those who like to have stylish appliances. They also feature many different colours to suit personal preferences. They do offer some additional features to ensure crumpets are cooked perfectly all around but nothing as innovative as the programmable CustomToast. Sunbeam itself incorporates an interesting marketing strategy, they have obviously done extensive research and developed a line of products to suit many types of customers. They range from normal every day toasters to ‘caf�’ style chrome toasters. Sunbeam have been in the industry since 1921 so they have most likely developed a sound reputation and attracted some customers to be loyal to their brand. Refer to appendix 1 for more prices and competitor listings.

Positioning the Product

Next the product position must be determined in the segments mentioned previously. ‘Product position is the way the product is defined by consumers on important attributes-the place the product occupies in consumers’ minds relative to competing products’ (Kotler et al 2006, p. 233). The CustomToast aims to offer a better quality toaster than its competitors at only a fraction higher price. It also offers far more advanced features which have not been seen before on a toaster. It is vital that the CustomToast be positioned correctly both in the marketplace and in the perceptions of consumers.

By promoting the main feature, the CustomToast will gain a competitive advantage. It is important to avoid increasing ‘the number of claims…as it may risk disbelief and loss of clear positioning’ (Kotler et al 2006. p. 241). That is why CustomToasts’ marketing strategy is to keep it sweet and simple. The toaster will be portrayed as a stirling piece of equipment with a smart memory to store various toast times and heat strengths, meaning that no matter which type of bread you use it will be toasted to perfection every time. By offering this feature the CustomToast gains superiority over competitors because they simply do not offer such a thing. The most noticeable visible distinction is the LED screen on the side of the toaster, which will come in various colours to accommodate diverse customers’ preferences. So by promoting the CustomToast as an innovative, stylish and long lasting product it will occupy the right position both in the market place and in customers minds.


After the market has been segmented and the product positioned, a price must be selected. According to (Birt, I 2005, p. 63) there are a ‘few main factors that must be considered when pricing decisions are made’

1. Target Customers – the target customers are willing to spend a little bit extra than the average product in order to obtain a new innovation.

2. Competitors Prices – the closest product to the CustomToast retails far more than what the CustomToast will so this leaves a nice broad price range to be decided upon.

3. Demand/trends – The purchase of toasters is not an everyday purchase, they are only really purchased if the old one breaks down or for a gift (rare). This means that a stable price can be established.

4. Product life cycle phase – Toasters are in the maturity stage so it is important to be efficient with costing.

Two variations of the CustomToast have been developed. The CustomToast Deluxe and the Standard. The Deluxe, which features various chrome parts and elegant styling options will retail at $105.00. The standard version, which will feature cheaper materials such as plastic, aluminium etc. while still looking decent will retail for $34.95.

Using two different models like this enables a greater chance at capturing the market. The deluxe model might appeal to Socially Aware interior designers or Visible Achievers who have the extra dollar to spend. The standard model will appeal to Conventional Family Life and more so people who don’t mind compromising a bit of top notch style in order to save some money. ‘Many companies…bundling additional products and services into their core offering to “sweeten the deal” and make the sale. By giving away services, these firms drove up their costs and taught customers their services were not highly valuable…taught customers to focus on price and ignore value’ (Hogan & Lucke 2006, p. 54). One main goal is to help customers focus on the actual value and advantages of the CustomToast, unlike some other products which are focused on just making that one extra sale. By focusing on value Future Appliances hopes to increase the CustomToast’s reputation and position in the market and build a stable price which will make consistent sales time and again.

List of References

Kotler, P, Adam, S, Brown L & Armstrong, G 2006, Principles of Marketing, 3rd edn, Pearson Education Australia, Prentice Hall.

Alllvine, FC 1987, Marketing Principles and Practices, Harcout Brace Jovanovich, Orlando, Florida.

Birt, I 2005, Marketing and Promoting Your Business, Pearson Education Australia, Frenchs Forest NSW.

Baker, MJ 1998, The Marketing Manual, Butterworth-Heinemann, Linacre House.

Dibb, S 1998, ‘Market Segmentation: strategies for success’, Marketing Intelligence & Planning, vol. 16, no. 7, pp. 394 – 406.

Simkin, L & Dibb, S 1997, ‘A program for implementing market segmentation’, Journal of Business & Industrial Marketing, vol. 12, no. 1, pp. 51 – 65

Benjamin, C 1997, Roy Morgan Values Segments, viewed August 2006


Hogan, J & Lucke, T 2006, ‘Driving growth with new products: common pricing traps to avoid’, Journal of Business Strategy, vol. 27, no .1, pp. 54 – 58

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