LumiCore - Business to Business Market and Business to Customer Market - Essay Example

?THE MARKETING PLAN Executive Summary The present report is mainly an outline that is made up of data used to segment two forms of market ly business to business (B2B) market and business to customer (B2C) market. Noting that each of the two markets has their own characteristics and values, the present report will help the Board of LumiCore in taking the right decision on the market segment as the report outlines marketing plan to target the chosen segment. Through the review, it has been established that indeed the United Kingdom has a lot of potential for he decorative industry and the production of paints. Comparing the characteristics of B2B and B2C however makes B2B the most preferred option for the company. In light of this, the company would have to put in a lot of effort in identifying where its major strengths are so as to take advantage of the potentials. In this regard, a comprehensive research and development program in the short to medium term is recommended. What is more, the company must be poised with the introduction of new strategies and competitive advantages that will not seem too familiar to end users. Once this happens, potential customers would have no justification to trade off their existing companies for the new entrant. 1 Comparison of B2B to B2C B2B has largely been used to stand for business to business marketing whiles B2C has also been used to represent business to customers marketing. A critical understanding of these forms of marketing is very importation in the creation of market of market segments for any identified setting. This is because with an understanding of which of the two works best for a given company, it becomes easier for the company to select one of the two principles in creating the segmentation (quote). Generally, B2C has larger and broader sales prospects than B2B (quote). To this extent, B2C assure larger markets than B2B. In terms of segmentation also, demographic segmentation is more favourable for B2B whiles demographic segmentation is favourable for B2C (quote). This is so because B2C deals directly with customers and so need specific characteristics of customers to undertake business. B2B, which on the other hand deal with businesses needs to target a larger geographic scope in order to achieve successful patronage. Best basis of segmentation for each NEW market As stated earlier, the B2B is more favourable with geographic segmentation whiles B2C is more suitable for demographic segmentation. For each of these new markets therefore, there is a level of basis for the selected segmentation. In the business to business marketing for instance, because the company deals directly with other businesses, it does not really have to have the specific demographic make up of the setting into consideration. Rather, it would rather have to look at the business prospect of the market and strength of competitors in the area. With the business to customer, because the customer is the direct focus, it is always virtually impossible to think of succeeding without knowing the specific demographic qualities of customers. In most instances, the demographic characteristics that are considered for the demographic segmentation include race, nationality, gender, family size, religion, education, occupation, and income. Identify target segment and its estimated value From the discussions so far, the most suitable target segment for LumiCore is the London market. This way, it is clear that business to business (B2B) has been selected over business to business (B2C). This is because business to business makes use of segments such as states, regions, nations, countries, cities and in some cases, zip codes and neighbourhoods. Judging from the fact that London in the United Kingdom is a city, it qualifies and comes under business to business marketing. With London selected as the target segment, there are several estimated values that the company can be assured of having. Because the remaining aspects of the report shall give a closer diagnosis of the London segment, not much shall be said of the estimated value expect for the fact that London is a place where tradition is highly embraced; including traditional building constructions, which make use of a lot of decorations and paints, which are the hallmarks of the company. The company therefore has the value of a ready market. 2 Marketing Audit 2.1 Strategy Audit Indeed for all strategy discussions to go through successfully, Berger (2012) advocates “an audit examining the current situation systematically and in its entirety.” The strategy audit of the company would therefore look into the analysis of the company’s market, customers, market trend, competitors, and products (Berger, 2012). In this regard, it can confidently be said that the company is on the threshold of going beyond its current development stage on the cycle into its maturity stage. This is so as a result of the systematic strategies that have seen the company grow so attractive beyond the borders of Brazil that it is today seeking to enter the United Kingdom market. 2.2 Organisation Audit The organization audit is committed to assessing the effectiveness of the organizational skills and implementation skills of the company (Dessinger, 2007). In this regard, much can be said of the company’s organizational powers, which has seen it grow from a merely one product producer to a multi product producer and seeking to further deepen this growth. Indeed, the organizational powers have ensured that the internal structures for the company for growth have been carefully followed and adhered to according to plans. 2.3 Systems Audit The marketing front of the company has for long operated a multi-dimensional system of operation. The advantage that this has brought is that under no circumstance would operations be cut short because one system is not functioning (Derven, 2008). In other words, alternation of systems has been enhanced greatly. This has also been carried out in a manner of well integrated approach whereby the systems have worked hand in hand with each other and dependent on each other. 2.4 Productivity Audit The rate of productivity is directly proportional to the revenue generation levels for the company. What this means is that a low rate of productivity would give off a poor revenue generating consequence. The present company has however strived to rise above this odd by ensuring that there is a productivity evaluation or audit system that measures the effectiveness and efficiency of the productivity rate. For example given a quantum of raw materials, it should be possible to produce at the highest rate possible so that all forms of wastes and lapses will be curtailed. 2.5 Function Audit Experts say that the allocation of functions to employees or staff goes a long way to determine the output of work that will be done. This is because when round pegs are put into square holes, there is no way they will fit. The function audit of the company therefore starts right from the recruitment stage whereby the company ensures that it is only the most competent people who occupy available vacancies. Whiles at post also, there is a system that ensures that there is as often in-service training as possible to ensure that each member functions efficiently. 2.6 Value Chain Audit Riley (2012), notes that a comprehensive value chain audit certainly “describes the activities that take place in the business and relates them to an analysis of the competitive strength of the business.” Invariably, the company’s business must match up with the business strength of competitors as a way of ensuring that the company stays in the competition. In this regard, the company has adapted as part of its strategies, a comprehensive review mechanism, which is dedicated to an external research and development program whereby the company’s business strength is compared to that of its competitors. As this goes on, there is an alternating system, which also ensures that where the company is weak; there are match-up strategies to bring them back into the race. 3 Situation Analysis 3.1 Environmental Review The business environment for the company is one that can be described using a number of qualities. This means that the company finds itself in a multi-variance environment whereby there are a number of factors that could account for both its growth and defeat. For example, with the aim of penetrating the European market and specifically the United Kingdom market, there is the risk of the Europe zone Debt Crisis, which is making the government draw back on most of its financial aids that were otherwise given to investors (Ritchie, et al, 2005). On the other hand, the general stability of the global economy and its recovery from the meltdown has made money holders very active on the market, especially those in the construction sector, where the company’s strength lies. 3.2 Market Overview In an overview, the existing market for the company is one that can be described as very active and promising. This is because today, there is much spending by holders of money than it was four years ago when the world was battling an economic crisis. In the wake of this however, the most important asset that the company has in terms of the existing market is that the markets; both those in Brazil and the United Kingdom are made up of several fragments and segments, who all have different needs of the kind of products that are produced by the company. A comprehensive market analysis that identifies the right spots on the market is what remains to be done then and now. 3.3 Market Segmentation Review Already, it has been said that there is a diversity of market patrons, which has brought about market segmentation. For a quick review of this segment, mention can be made of two key aspects of the market including descriptive and behavioral segments. Within the descriptive segment, mention can be made of the geographic description, where the demographics of customers and potential customers come in. There is also what is known as the psychographic description, which would look at aspects like activities, interest and opinions. The behavioral segment also has aspects like the attitude, occasions and user status of consumers. 3.4 Competition Analysis The United Kingdom and Brazil alike are described as highly traditional countries that have a lot of love and passion for traditions that has to do with the way they undertake construction, design their clothing, undertakes paintings, and exhibits art (Hefley and Miller, 2002). Due to this, there exists a well defined market within these two areas, especially in the United Kingdom. Consequently, there is a strong competition for any new entrant. Presently, competitors are using all forms of competitive advantages that make them preferred choices over other competitors. LumiCore will thus be entering the United Kingdom as a new entrant with so much competition to surmount. 3.5 Distribution Analysis The advent of the new shop and ship system of commerce has created a situation whereby most companies in the United Kingdom rely on third party distribution companies to get goods and services delivered to consumers at their door step after they make purchases online. Consequently, there are to options for the company to either rely on these third party distributors or use its own distribution mechanisms. But there is always an argument that for new entrants, they need the services of existing third party distributors who have already won the hearts of existing consumers in their way of doing business (Richardson, 2009). 3.6 Competitive Advantage Review As indicated already, there is a well fitted competition base and once this happens, there is the automatic creation of competitive advantage for each competitor as a way of ensuring that it becomes the preferred choice over others. In the wake of this, different strategies are used by different competitors in terms of competitive advantage. Whiles most of these competitive advantages revolve around the pegging of prices, there are uses who use the power of customer satisfaction and yet, others who rely on quality of products. 3.7 Critical Success Factor Review From the selection of marketing strategy to the creation of a competitive advantage, the company must be in a position to offer the existing and potential client, core alternatives that they are not familiar with from other competitors. This is because for the external environment where the company will be going to compete, there is a constant battle of who brings in a new innovation day in and day out and the new innovators always win the market front (Smith, 2005). 3.8 Power Structure Analysis The power structure analysis of the existing market could easily be discussed using the Porter’s 5 Forces. For example in terms of supplier power, there are more supplier choices in the decorative industry. To this end, suppliers do not have much power to drive up prices. On buyer power, there also exists several buyers, which creates an opposite scenario whereby buyers have so much power to drive prices up. In terms of competitive rivalry, it has already been established that competitors are highly capable and effective in giving stiff competition. As long as the decorative industry is concerned, there is no denying the fact that apart from the use of paint, which is being offered by the present company, there are several substitutes and so there is the threat of substitution. However LumiCore produces other substitute products also. Finally, new entrants who can boast of new strategies and competitive advantage are those who could pose a threat to existing competitors. 4 SWOT Analysis 4.1 Strengths & Weaknesses LumiCore can boast of two major strengths and these are their current financial base and their current product range. With their current revenue base, they stand at a position to entering into any European market, including the United Kingdom market. What is more, they have a very wide product base. The advantage of this is that in the case of threat of substitution, they can fall on several other products that meet the market rhythm in strengthening their market base. This not withstanding, there is a weakness in terms of management capacity whereby the existing management size of the company may not be large and proactive enough to match up the new entrant needs of the United Kingdom market. 4.2 Opportunities & Threats There is a prevailing global economic stability, which has caused most consumers to spend more. Especially on the fact that the decorative industry is largely described as a miscellaneous industry which does not rank as one of the topmost needs of consumers (Somers and Whitmore, 2007), it takes only a stable global economy to get consumers patronizing decorative products and services. As this opportunity of a stable global economy exists, there is also the threat of existing competitors, who have at least secured a lot of brand equity. 5 Objectives and Issues 5.1 Financial Objectives The company has two major financial objectives that it seeks to achieve with its new entry. The first has to do with the objective of becoming self sufficient in its capital base. Secondly, there is a financial objective of raising enough start up funds to further expand the product alternatives that the company deals in. if possible, this start up fund can lead to the acquisition of new companies whose business dealing comprehend what LumiCore does. 5.2 Marketing Objectives Indeed, existing consumers have other company options that they can fall on but there is that strong convection that this new company comes with several innovative offers that any potential consumer who hears and knows about would want to do business with this new company. There is also a long term marketing objective to dominant the United Kingdom market, especially in the segmented areas of business. 5.2.1 Existing Markets - Penetration & Development Though there are several options, the company also has alternative of gaining part of competitors’ customer through the introduction of new product choices. By this, the company must be in a position to justifying why its new line of decorative products is the best money can buy. To do this, much advertisement and publicity will be needed by using the new social media (Sternberg and Grigorenko, 2003). 5.2.2 New Markets - Entry & Development The company should be in a position to raising its brand image even before introducing its product (Spencer and Spencer, 1993). One of the easiest ways to do this would be to sponsor a national awareness program in the country. The company could also start a corporate social responsibility project with its brand name even before the introduction of its product. 5.3 Sales Objectives The company has one basic sales objective for seeking to enter a new market and that is to double its current sales strength. 6 Marketing Strategies 6.1 Target Market(s) Definition There is a suitable market but within the market, the target market is going to be the real estate agency, who are made up of contractors and patrons of construction property (Tobin and Pettingell, 2008). Using painting as the major product, it is expected that these real estate agencies will patronize the paints for undertaking traditional decorations on their buildings. 6.2 Value Proposition The company proponents as part of its mission statement to produce high quality decorative paints to customers that can be trusted as real value for their monies. Customers are going to be the basis for the value proposition and their needs are what the company is going to meet as a way of matching up to their quest for value, quality and grade. 6.3 Positioning Strategy Bhasin (2012) emphasizes the point that positioning strategy can be carried out in a lot of ways and that “it can be derived from the object attributes, competition, application, the types of consumers involved, or the characteristics of the product class.” But in all of these, the ultimate goal has always been to create a favorable image of the company in the eyes and minds of customers (The Economist Intelligence Unit, 2009). Specifically for LumiCore, the positioning strategy to be used would be using product characteristics or customer benefits. 6.4 Marketing Research As part of the larger marketing strategy, the marketing research shall be carried through the eight major marketing research process outlined by QuickMBA (2012) as “Define the problem; Determine research design; Identify data types and sources; Design data collection forms and questionnaires; Determine sample plan and size; Collect the data; Analyze and interpret the data; and Prepare the research report.” 6.5 Marketing Mix Strategies 6.5.1 Product Strategies There shall be two major product strategies under the larger marketing mix strategies and these shall be the strategy to ensuring that product satisfy needs and that product delivers. In the first instance, the company shall ensure that its paint products for the decorative industry satisfy the needs of customers of getting their decorative buildings and structures painted. In the second place, the marketer and for that matter the company shall ensure that it delivers at the level of quality and value expected by consumers. 6.5.2 Pricing Strategies As the company comes to terms on the need to improve quality, it can reliably focus on under pricing strategies for its short term entry so that as many consumers as possible who believe in both the principles of quality and price can be won. But this will not be said without a caution that this strategy will slow down on the revenue generation for some time (Vinyard, 2008). 6.5.3 Promotion Strategies Due to the type of pricing strategy adapted, which will generally give low prices to products, the promotion strategy will be in such a way that it will encourage multiple and group purchases. For example, there shall be promotions targeted at customers who make bulk purchases and long serving loyal customers. Some of the promotions shall include free deliveries, discounts, among others. 6.5.4 Distribution Strategies As part of the distribution strategy, the company is admonished to use a third party distribution company that has built its brand equity with the population of the market segmentation. Once this happens, the third party company will have a better knowledge of the market segment. 6.5.5 People Strategies As part of modern marketing theoretical provisions, the integrated people strategy shall be used for the people strategy of the company as it enters the United Kingdom market afresh. The reason for this selection is that it has already been identified that management capacity could act as one of the worse weaknesses of the company (Tyssen, 2001). 6.5.6 Process Strategies The process strategy to be used shall be made of a 4-dimensional cycle whereby the use of software development shall play a central role. The axes of the 4-dimension shall be in order of usage, plan, improve, monitor, and appraise. This means that the process strategy shall be an unending one but a cycle, which ensures that as much as possible, there is the achievement of quality through the use of constant adjustment of existing processes. The 4-dimensional process strategy can be represented in the diagram below. 6.5.7 Physical Evidence Strategies There exists several physical evidence to make tangible, the intangible services that marketers of the company would offer to the customer (Gardener, 2012). Internet web pages have been selected because of the need to take advantage of electronic commerce as part of the larger marketing strategy of the company. Both packaging and web pages are going to be catchy, attractive and outstanding in their accessibility. 7 Implementation and Control 7.1 Action Programme / Schedules It has already been indicated that the company should have a corporate social responsibility within the targeted market area and this is what the pre-launch will be all about. A major national awareness programme or campaign shall be sponsored in the name of the company. After the company has won the trust of the people and branded its name on their minds, the company will then formally be launched and operations formally began. 7.2 Budgets 7.2.1 Finance Required What this means is that the company will not be expecting so much revenue at the short term basis (Mustapha, 2012). To this end, there is the need for much capital injection and action. Finance will be required to start up new offices, promote the brand, undertake corporate social responsibility, undertake marketing and also produce goods. For all of these, the parent company is expected to be the major financier. 7.2.2 Expected Revenues The theoretic concept of using internally generated funds instead of external borrowing would constitute the major driving force for seeking revenue for the company. This would indeed ensure and guarantee that liabilities are reduced. To this end, revenues are expected to come mainly from the parent company in Brazil, sales from early sales, shareholder equity as well as some little borrowing from banks and other financial institutions. 7.2.3 Expected Expenses This report and platform may not give the opportunity to give a major breakdown of the use of all funds needed to carry out this project. However, a summarized version of the distribution of funds according to their order of importance and allocation has been done in terms of percentages using the chart below. 7.3 Marketing Information System A well coordinated marketing information system shall be used. The marketing information shall fit the description of a system because it shall be made up of different components, which shall all be joined together to produce one jointed information bank. As much as possible, information shall come from the results of the research and development program that will be initiated as well as the use of primary and secondary sources of information (Encyclopedia of Labor Market, 2011). What is more, the information shall be controlled by an expert of information systems managers who have professional control over the use of technology in sourcing information. 7.4 Evaluation & Controls Evaluation and control are going to be two of the central fulcrums of the entire market segmentation strategy. This is because they hold the core values and virtues that determine the success rate of the various strategies and action plans that are put on paper. The implementation shall therefore be carried out from a coordinated perspective whereby the inputs of all stakeholders shall be brought on board. There shall also be a control mechanism to ensure that the implemented policies serve the very policies for which they are brought. REFERENCE LIST Encyclopaedia of Labour Market. “Labor Laws and Clarifications.” Hoboken: Wiley, 2000. ebrary Reference. 12 June. 2010. Web. 13 Apr. 2011. Gardener, J. “Global Labour Relationships.” The International Laws on Labor (2008). Ebrary Reference. Web. 13 Apr. 2012. Mustapha, A. “Corporate Social Responsibilities."Washington Writers League 29 Oct. 2008. Academic OneFile. Web. 13 Apr. 2012. Vinyard, J 2008, Organization diagnosis, design, and transformation, Third Edition, Wiley Tyssen, T. G 2001, The first-time sales manager, Management Books 2000 Tobin, D. R. & Pettingell, M. 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[Online] http://www.rolandberger.com/expertise/functional_issues/strategy_and_corporate_excellence/strategy_audit/ [November 28, 2012] Read More