Marketing Plan for Hypothetical Product-Based Company Essay Sample
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Marketing Plan for Hypothetical Product-Based Company Essay Sample
This report contains a marketing plan for a new and affordable repair shop in the San Antonio market. The new shop will be launched in the market and will tend to all types of customer’s needs, such as; tune-ups, engine diagnostic (free), oil change, engine cleaning, will be an exclusive high end smart watch. The gold and platinum watch with marble dial will be launched. The use of innovative technique with unique styling is an important feature of the high end smart watch market. The unique feature of the watch is the possibility of customization as well as personalization of the watch.
Company’s strategy is to serve the upscale niche markets of the watch industry. It will capitalize on the German engineering and manufacturing used to build the watches. There are many untapped potential markets within this industry that desire high-quality, stylish goods, but do not think they can afford them or do not know where to purchase them.
It is the firm’s intention to build and export its products to the United States and to make Essex watches the number one selling watch in U.S. To do this the company’s long-term goals are to achieve a 3% market share in the U.S, build brand image and brand equity through marketing, achieve a sustainable 55% profit margin, and eventually produce luxury watches in addition to the initial, moderately-priced line. The Company
Essex Watches is a privately-held international corporation. Production takes place in Unites States- New York and sales and marketing are focused throughout United States. Ownership of the company is divided among three principal individuals who are putting up the initial investment. These include: Todd Goodwin – head of production department, Josephine Abiog – head of sales and marketing division, and Elizabeth Zelster – vice president of organization.
The factory is located at 215 Wessey Street, US. The factory is 1,000 square meters and should be large enough for the first three years of the company’s growth. The watches are sold though upscale watch stores in Unites States. Company has strong management team with significant experience in watch industry.
Company believes that developing new and enhanced services and technology is necessary to remain competitive. The company intends to continue to make investments in research and development, including developing, licensing and acquiring new technologies. The company expects that its continued growth and profitability will depend on its ability to increase its brand awareness. Additionally, the company intends to use technology to deliver an outstanding service offering. Objective
To capture 3% market share in U.S by building brand image and brand equity through marketing Situation Analysis Most of the buyers of branded watches are between 18 and 34 years of age. The primary market segments are the youngsters which purchases more watches per capita than older people. The watch purchasing is impulsive in nature. The purchase requires strong point of purchase support. Watch purchases are more likely by consumers in the northeast and Midwest. Seventy five percent of the market has strong competition from Swatch, Espirit, Fossil, and Guess. We have vast experience for manufacture of innovative, high quality products permitting us to offer the consumer value in a branded fashion watch. The seventy percent of the branded watches are being distributed through branded outlets. The market plan is based on providing consumers with a high quality, innovative watch. The smart watches will be offered in a variety of unisex styles. The high end smart watch is one of several projects with the potential to improve Essex’s growth rate. Market Analysis
The Essex watch will compete directly with several other branded fashion watches. The market size for branded fashion watches is forecast to be $524 million retail dollars in 1998, growing to $721 million by 2002 (as cited in Kotler & Keller 2011). Annual market growth is expected to exceed six percent through 2002, exceeding our current annual sales growth. Company Analysis
Essex currently distributes its products through direct channels such as through Retail outlets accounting for 75 percent of watch sales. Branded innovative watch sales are growing faster than our current product lines. Essex’s innovative product range, strong manufacturing skills, product design skills, and vast experience in distributing consumer watches provide an opportunity for entry and growth in this market. Environmental Analysis
The concentration of the competitors in the watch industry is increasing day by day. Swatch, Fossil, Guess, and Espirit are strong competitors, holding 75 percent of the market share. Guess and Espirit have less extensive distribution networks but strong brand recognition in market, while Fossil and swatch have strong manufacturing and distribution skills. Fossil and Swatch are strong at the lower price lines. Smart watches are relatively new product category in the market. The market is mainly taken up by Swatch, but there is considerable opportunity for new entrants in the market. Economic Forces
In the current economy a large part of the income of people is spent on the basic needs. The purchase of watch is considered as want rather than need. The income level of the people is low, and the population of middle class is decreasing. The wealth distribution among people is unequal and saving rate is low. The people are either very rich or very poor, and their consumption behavior varies accordingly. Legal Forces
There are no restrictions for the new entrants. Government is supporting the watch industry by providing sales tax exemption for 2 years ( as cited in Kotler & Keller 2011). The exemption is given to companies to show their commitment towards the new investment made. Technological Forces
The technological advancement is taking a sharp turn in the watch industry. So the companies must do vast research and also take up customer feedback for bringing up innovative products with latest technology. Keeping in view the target market, our company has to look for opportunities rather than wait for the competitors to come up the product with latest technology. Social cultural Forces
Traditionally youngsters have more interest in using the innovative watches. This signifies that most of the watch consumption is by youngsters rather than the old ones. Marketing Mix
The high end smart watches will be introduced in market in 20-30 different designs in the first year when the new range will be launched. The watches will be waterproof with the digitalized touch display. The watch will have features such as inbuilt memory for saving the data, MP3 Player, Voice Recorder etc. We will design a range with modern look for the target market segment of students, professionals, executives with different occupation degree and education levels. Price
The smart watch will be sold for a suggested retail price of $50. We believe that we manufacture product with high quality and provide feature advantages to customer. So the customers are willing to pay price higher than that of the competitors. This pricing strategy, coupled with our efficient production methods, helps in achieving our relatively high market share for a new product entry. Place
We will introduce smart watches in the northeast but within the first year of launch the product will be available to be sold in the national market. With our current strong distribution channels nationwide covering 75 percent of watch sales; we will limit our potential if we restrict our distribution to specific regional markets. The product will be sold in almost 70 percent of locations in the United States. The existing normal distributor markups will be used for selling the new product. Promotion
The product will be promoted by using both push and pull strategy. The push promotion strategy will be implemented by hiring six new sales representatives to assist in the development of new distribution outlets. A sales trainer will be hired to train the sales force in the new product. The promotion of the new product will be done through advertisements on media, social networking sites and through different websites. Consumers will not know our brand therefore; we will have to advertise more aggressively to achieve brand awareness. The budget for advertisement should be more than the competitors so that the advertisement can be done on a broad scale. Media will be targeted to our major market segments; men and women between 18 and 24 and between 25 and 34. Smaller amounts will be directed to other target segments. SWOT Analysis
Loyal customer base.
Innovative methods of production provide high potential for new designs. Experience in distribution channels for timepieces.
Maintain Quality standards.
Prices for everybody, so rich people could want to go in a shop only for them. No experience in marketing the high end expensive product.
No experience in distribution to the jewelry stores.
After sales service slow.
Expand by developing the brand in a new market.
Open new stand alone stores in cities centre.
Consumer demand for innovative products creates a demand for the high end smart products. Capture the competitor’s market share.
Strong competition with concentrated market shares of competitors. Possibility of new market entrants
New Brand better than our brand with lower prices
Copies of our brands (Forgery)
Essex will introduce a new product, the innovative Spear watch, using penetration pricing, extensive advertising, and expanded distribution in order to increase our revenues and growth rate. Segmentation
The purchase behavior for watches is expected to differ among age segments and by gender. Young males and females in the 18 to 24 age group are expected to be intense purchasers. This group is considered to be style conscious. Women and men in the 25 to 34 age group will be our second significant segment, expected to buy more watches than any other age segment. The watches will be designed as per the segmentation criteria. Target Market
The watch industry, particularly the upscale markets, is growing faster than ever. Potential watch buyers are willing to spend moderate to high amounts on watches because they can make the customer look good and hence feel good about them. The target market for the new product will be students, professionals, executives with different occupation degree and education levels. The watches will be designed differently for the different target population. Positioning
Before writing a rollout plan for launch, begin creating positioning and messaging statements for the product, or execute planned launch activities, it is important to create a clear target customer definition(Mastan,1990) .The product will be positioned by company as providing quality product with the innovative design and latest technology. The new product will be positioned in the mind of customers as high end product. The product will also be positioned on the basis of the additional features such as memory space, MP3 Player, voice recorder and stylish designs. 5Cs of Marketing
Customers are very design oriented when buying branded watches. Watch attributes that we consider most important for customers include watch and brand design, packaging, price, and durability (as cited in Kotler & Keller 2011). Customers are attuned to fast brand switching for watches. The
purchase of watches by customers is impulsive is nature. The designs and the features of the watch compared with the offering from competitors. Company
The Spear watch has strong product benefits compared to current market offerings. To achieve our objectives we will offer our unique watch in a variety of designs. Company will focus more on advertisement as compared to competitors to create an image in the minds of the customer. Strong advertisement will increase the sales of the company. Competition
The concentration of the competitors in the watch industry is increasing day by day. Swatch, Fossil, Guess, and Espirit are strong competitors, holding 75 percent of the market share. To beat the competition the product will be targeted in the market with its USPs. The USP of the product are inbuilt memory, MP3 Player and voice recorder. Collaborators
The Company can collaborate with the jewelers for selling their high end product. The watch is gold and platinum plated so it can be sold along with the ornaments in the stores. Essex has to set up linkages for the sale of their product. Context
There are no legal and political issues linked to the new product being launched in the market. Performance Analysis
The last step in the Marketing plan includes evaluation of the strategy results and implementation program using marketing metrics. Metrics are used to project the future and explain why things happened. The firm can determine why it achieved or did not achieve its performance goals with the help of these metrics. Understanding the causes of the performance, regardless of whether that performance exceeded, met, or fell below the firm’s goals, enables firms to make appropriate adjustments(as cited in Grewal & Levy 3rd Edition) . Tracking download of website content
Creating and uploading the content on website is a critical step. You can’t just send sales a new PowerPoint deck when you launch. Buyers want to learn about your product before they talk to Sales (Burnes, 2013). The product is launched the no of visitors downloading the product details must be tracked. The data will help to evaluate the awareness among the customers. The number of downloads will help to evaluate the number of customers that might the ‘Spear’ watch. Website visitors
The footfall on the website will help to evaluate the number of people which might buy the product in near future. For the spear watches if the website visitors are approximately 500 in a day then the likely hood of product being accepted by customers is high. Increase in market share
The Essex market share will increase with the launch of the new product. The company must try to capture the competitors market as well as new customers. Customer engagement
The new product launched will engage customers more by offering features not offered by competitors in the watch industry. Qualitative Objective:
The intangible qualitative aspects of the launch process can make or break a launch, and are important to a successful launch (Mastan, 1990) Increase the Perceived value of product
Maintain the quality standards of product
To gauge whether customers are aware of new product in the marketplace. Business’ non-operational activities such as whether it fairly embraces competition Quantitative Objective
To create a strong social media presence by building and maintaining a LinkedIn presence, creating a Facebook page or establishing a Twitter account To capture 3% of market share in first year of product launch To track the visitors on website during first year
Sales of $8.5 million in first year
Financial analysis and Expected results
We expect to achieve a market share of three percent and sales of $8.5 million in the first year. The Spear watches project will break-even in the first year. We do not expect any watch technology breakthroughs during this period. Competition is expected to be based on design, price, and achieving widespread distribution, areas in which we expect to be very competitive. In conclusion, we will invest one million dollars in the Spear watch project. We can achieve sufficient market share to achieve our financial and marketing objectives. During the next five years the market is expected to grow and our costs are expected to decline with experience increasing unit contribution. Our greatest challenge will be tracking the market tastes in watch design and meeting and leading these with creative and innovative designs. Pro-forma Income statement at $50 Price
It is not expected that there will be increased price competition due to the entry of the Spear watch. Increased advertising, however, might lead to an increase in industry advertising. A sensitivity analysis of the effect of increased advertising on our break-even year and cumulative profits appears in Table below. Increase in advertising in steps of an additional $500,000 dollars up to $4 million, assuming no additional gains in market shares; have fairly limited effect on our performance. Therefore, in the event that there is increased industry advertising, we are prepared to increase our advertising by as much as $1,500,000 annually. Our increase advertising also will allow us to react to lower than expected consumer awareness, fewer distribution outlets than planned, or less than expected consumer acceptance of Spear watch Impact of Advertising Levels on Financial Results
Feasibility study is done to into the possibility of success for an idea or venture. The study is done to analyze whether the launch will be successful or not. The quantitative survey will be done to quantify whether the launch of the product will be successful or not. The study will be done by targeting the population as per the target segment and the segmentation criteria. For Survey a random sample of 100 respondents will be chosen from Young males and females in the 18 to 24 age group those are expected to be intense purchasers and other segment from 25 to 34 age group. The below mentioned questions will help to clarify the buying habits of the product for specific audience segment. Questions
How much will you pay for the smart watches in the market?
How do you take decision while buying watches?
How much internal memory space you want in the watch?
How many watches you will buy in single purchase?
Will you recommend watch to friends/colleagues if your experience is good? Now, after following up with several audience segments in different regions, the subsequent data shows that, somewhat surprisingly, 25-34 years age group are more interested in purchasing the smart watches being offered by Essex. This data will provide more accurate predictions of earnings as well margins within the feasibility study. Now we can provide better design of the
product, packaging, and advertising to reach that segment.
Kotler, P. & Keller, K., (Feb 2011), Marketing Management, 14th Edition Grewal, D. & Levy, M., Marketing, 3rd edition retrieved from https://www.inkling.com/read/marketing-dhruv-grewal-michael-levy-3rd/chapter-2/the-marketing-plan Burnes, R., 14 Essential Elements of a Flawless Product Launch (Sept, 2013) retrieved from http://blog.hubspot.com/marketing/elements-flawless-product-launch-li Mastan, J., Effective Marketing & Product Launch Best Practices (1990) retrieved from http://www.rossla.org/article.html?aid=141