Marketing Opportunity of Kralogie Germany - Essay Example

Marketing Opportunity of Kèralogie Germany Kèratolgie in Germany – also known as Kèrastase as its global brand name has a very good marketing opportunity considering the fact that its product line is made with very high quality raw materials that has gone through high technological standard and processes. There is simply no problem when it comes to the quality of the product. However, the marketing manager should focus on widening its sales distribution network. It is reported that out of more than 50,000 coiffeurs, the company is supplying its product line to only 9,000 coiffeurs. This issue alone makes the company loses a lot of potential business opportunity. Aside from expanding its coiffeurs network, the company should consider entering into a contract with its tie-up coiffeurs not to sell other hair care products like Wella and Sebastian. It is also possible for the company to keep its distance closer to the consumers by allowing the product to be sold in hair salons, hyper- and supermarkets, health and beauty outlets, and throughout the different malls in Germany. Also, the price of the product is considered to be very expensive on the part of the consumers. Considering that Wella and Sebastian are very active in selling hair care products, Kèrastase should make the price of its products competitive. Kèralogie’s product advantage over the other hair care brands is the fact that Kèralogie products are known for its ability to tackle hair related problems such as dandruff. This gives the product a medicinal image. Q2 Discuss the ways in which Kèralogie Germany should differentiate itself from its competitors. Since majority of its existing customers are females between the age brackets of 35 to 65 and are earning their own personal income, the company should start using fresh and famous personalities in advertising Kèralogie products. Based on several reports, using famous personalities in advertising hair care and other related products could effectively increase the company’s annual sales. Since the quality of Kèralogie products has been proven effective in treating hair related problems, the company could use sophisticated and good looking individuals with long hair to advertise the medicinal effects of Kèralogie. Q3 The recommended selling price for Kèralogie products is basically the purchase price for the product plus a 100% mark-up. Considering the current competition in the hair care market, do you think it is still possible to apply the same pricing method today? Explain the reasons for your answer. No. I don’t think this type of pricing method is still applicable today considering the tight competition in the hair care market today. Even though the quality of Kèralogie products is very good, the company should still consider the fact that not all people could afford a high-priced hair care products. On the contrary, the company should also not decrease the price up to such point that the consumers may think that the quality of the product will suffer. Instead, the company should carefully study the pricing method use by the competitors considering the quality of the competitors’ products Even though the mark up price for Kèralogie products will no longer be a 100%, if the tie-up coiffeurs could easily sell the products at a lesser price (let’s say 50 – 80% of the manufacturer’s price), it is still not considered bad since the selling of the product will be continuous. June 2004 The questions in this exam are based on the case study ‘Unilever in Brazil – Marketing Strategies for Low Income Consumers’. Q1 Comment on the pricing and positioning of Kèralogie products line in the German market. I believe that the pricing of Kèralogie’s different products line in Germany is the main factor that is causing its annual sales to decrease over time. Instead of applying a mark up of up to 100%, the company should start decreasing it to up to 50%. This will eventually make the product pricing more competitive against the prices of its competitors. The positioning of Kèralogie’s products is not so good considering that the price of the product is too expensive; the company is not able to penetrate and reach out for most of the young individuals. The idea of highlighting the medicinal effects of Kèralogie’s different products is very good in the sense that it could attract more consumers to patronize Kèralogie’s products. Q2 Do you consider the low-income segment of the German market to be attractive market for to Kèralogie enter? Explain the reasons for your answer. Yes. I strongly believe that Kèralogie should not concentrate only in serving the needs of the upper level of the hair care market. The company should produce two types of products: one which will be exclusively sold and used in tied-up coiffeurs and the another set of products which could be readily available in different market outlets such as in hair salons, hyper- and supermarkets, health and beauty outlets, and throughout the different malls in Germany. Q3 Assuming that the company wants to enter the low income hair care segment, evaluate the various branding and pricing options available to Kèralogie in this market. In case the company would decide to enter and penetrate the low income hair care segment, the marketing manager of Kèralogie should carefully study the type of products and pricing method used by Wella High Hair (Wella brand that focused its sales in the low cost segment of the market) and Sebastian is selling in the lower income hair care segment. Knowing the price bracket of these two companies will give the marketing manager the idea regarding the price bracket that the target consumers could afford. When it comes to branding, the company could use a different brand name under Kèralogie in order not to confuse the consumers with the products being sold to the upper and lower income level. Also, using a different brand name for the lower market segment will avoid damaging the reputation of the products being sold to the upper market segment. May / June 2005 This exam is based on the previously issued case study: ‘Samsung: Redefining a Brand.’ Q1 Discuss the important factors that could enable Kèralogie to successfully reposition their brand in Germany. In order for Kèralogie to successfully reposition its brand name in Germany, the use of effective advertising and competitive pricing could enable the marketing manager to reposition Kèralogie products with no sweat. Advertising using effective famous personalities could result to a dramatic increase in the profitability of the company. However, the marketing manager should take note that the choice of using famous personalities could either make or break the brand name of Kèralogie. Therefore, choosing the right endorser based on the target market of the company should be carefully considered. After using an effective advertising, the selling price of the product could either encourage or discourage the consumers to buy the different product line of Kèralogie. Therefore, pricing of the product should not be too expensive since not all individuals could afford an expensive hair care product or too cheap which could cause the consumers to question the quality of the advertised product. Q2 Is innovation important to Kèralogie? Explain fully the reasons for your answer. Yes. I believe that innovation is important to Kèralogie. The company has spent so much in innovating hair care product with the use of technology. In the absence of innovation, the company may not be able to develop a good quality product. Also, innovating a different quality hair care product is necessary in case the company would choose to serve the lower market segment. May / June 2006 The questions in this exam are based on the case study of IKEA: Invincible Key to Excel in America. Q1 Critically assess the positioning of Kèralogie brand in the German hair care market and the factors that contribute to this positioning. The positioning of Kèralogie brand in the German hair care market is not so good considering that the company is selling its product in limited coiffeurs. Aside from the limited coiffeurs, some of the salons are already too old and is no longer that appealing to the consumers. In general, the type of consumers who would enter such salon has a limited fund to spend on hair care products. It is most likely that this type of consumers will never be able to afford the high price of Kèralogie brand. Some of the factors that contribute to this type of product positioning is due to poor market distribution and product positioning. Q2 Discuss the role and importance of Kèralogie’s pricing strategy and the various strategies it uses to achieve its low cost, low price business model. Kèralogie’s pricing strategy is important in the company’s over all sales performance. A competitive pricing strategy could encourage more potential consumers to patronize the company’s product. In case the price is too high, fewer potential consumers would purchase the product. The best strategy to know the accepted market price is to determine the prices of its competitors. In the case of Kèralogie, the marketing manager should study the prices offered by Wella and Sebastian which is two of the biggest seller of hair care products in the German market. Q3 Kèralogie of L’Orèal Germany is already an international brand with a presence in a number of different countries around the world. What problems do you foresee if Kèralogie decides to expand into further international markets and tries to become a global brand? Kèralogie will not have a problem related to brand name in case the company decides to expand into further international markets and tries to become a global brand since the company has already an existing brand name known as Kèrastase. In case Kèrastase would try to become a global brand, the company may face problems concerning its possible competitors that have already gained its hold over Kèrastase’s target consumers. In order to avoid facing such problem, the company may choose to tie up its brand with another existing brand name. Such tie-ups will enable the company to be able to gather as much needed product information concerning the specific needs and wants of its target consumers. Also, it is much cost-effective to tie up with another brand as a marketing strategy instead of starting the marketing procedure right from the scratch. June 2007 The exam was open book and based on the case study, ‘TIVO’. Q1 Discuss the good explanation of the factors that contributed to the disappointing sales of Kèralogie Germany. The major factor that affects or contributed to the disappointing sales of Kèralogie Germany is the fact that the prices of its product are not competitive enough. This leaves the company unable to reach out to the lower income market segment. Also, the company was not able to pay close attention with its selection of its distribution network. Aside from the fact that the company has a very limited market distribution throughout Germany, considering that the company is selling a good quality high price products in a low class coiffeurs is alone very much impractical and irrational. The company’s product positioning in the market is also not good. This can be traced with the kind of market distribution the company have. Q2 This question sought an analysis of the possible opportunities for the company. What are the possible threats that Kèralogie Germany might in the future. What are the possible remedies or preventive action for such threat? In case the company would decide to develop and innovate a different product line in order to capture the middle and lower income earning market segment, the company will have a better business opportunity since the company will be able to capture the rest of the market segment which the company fails to cater. In case the company would expand carefully and develop a better market distribution for Kèralogie products, the company will be able to reach out for more potential consumers who will be able to afford the price of such a good quality hair care product. This will not only increase the profitability of the company but also increase the company’s market share in the hair care business industry throughout Germany. The use of proper advertising and product positioning for the different product lines of Kèralogie will enable the consumers to know more about the good quality and the medication properties of the said products. The threat that Kèralogie Germany might face in the future is the fact that it is possible for its major competitors to develop and innovate similar product that Kèralogie is offering to its consumers at a much affordable price. It is possible for the company to prevent this from happening by continuously innovating equally good product using a less expensive raw materials or develop a new product that has a unique curing properties related to different types of hair related problems. Q3 This question looked for an assessment of the price of Kèralogie Germany at launch – principally, was it too high? – and also a discussion of how its pricing model will have to evolve in the future as the market develops. Although there were some good answers to this question, some were weaker and failed to deal wit all the relevant issues. Yes. I think that the price of Kèralogie Germany products was priced too high. The company’s pricing model should not be fixed at a 100% mark-up. In fact, it should eventually decrease over time up to a certain level which is between 40 – 50% only. Considering the fluctuation in the euro currency, the company should avoid using a fixed pricing method. In case of economic difficulty, the company should immediately adjust the pricing method in such a way that it could lead to a competitive price. This way, the company, the distributors, and other related sellers of the said products would end up benefiting at the end of the process. *** End *** Read More