Designing a Marketing Strategy for a New Product over Time - Essay Example

?Designing a Marketing Strategy for a New Product over Time Word count 2035 Best Lady Company Profile Best Lady is a company focused at providing high quality women shoes by the name Aerosoft. Best lady market segment includes executive women, college female students and women working in their homes. Based on its wide market segment, Best lady will increase its sales in the next five years an aspect that will see its profits rise to a high level. Currently, the company controls 45% of the market with its key competitors controlling the remaining part. Our main value is to sell quality outfits that make every woman including celebrities and executives to feel special. In this way, we are focused at giving our customers a red carpet treatment that is only experienced by celebrities and women in the senior political positions. Market Segments Based on the increased demand for our new product, Aerosoft, our focus is to segment the market according to the region in order to easily identify the needs of our customers. In this regard, our market will be segmented demographically, geographically and according to consumer’s behaviors. Demographic Segmentation Based on the high number of women in the local, as well as urban centers, Best Lady Company aims at establishing a number of high-quality outlets with easy access and good location, thus, ensuring that our clients do not waste a lot of time as they travel looking for our products. Based on the extensive promotion and advertisement strategies, Best Lady main objective is to increase the number of female customers from 1,200 to 2,700 per square kilometer especially in urban areas where the customers are densely populated (Aaker, 2008). In the same way, the company is focused at opening retail outlets in rural areas where there is low population density. Such stores will be opened in district headquarters or major shopping centers. Geographic segmentation Geographic segmentation is another strategy that Best Lady will adopt. This is aimed at covering the African and Middle East markets. To cover the two markets, that are characterized by low customer awareness and reduced sales, the company will emulate extensive marketing strategies including advertisements through the use of banners, women magazines and local newspapers. Behavioural segmentation In its endeavour of ensuring that the needs of middle aged women, one of the major market targets are met, Best Lady will emulate behavioural segmentation. For example, the company is aimed at providing products with attractive design to the young female consumers who are in middle level colleges and in the universities. One of the major ways that the company will use to increase product awareness among its young customers is the use of social sites such as face book and twitter. New product development Idea generation To arrive at the idea of the production of Aerosoft, Best Lady undertaken a SWOT analysis that entailed studying the strengths, weaknesses, opportunities and threats that our products will face in the market. Strengths Through offering our products at a personalized level to all our clients, we have a competitive advantage over our competitors who only provide personalized services for celebrities who shop at large and high class outlets. As compared to our rivals in the women ware industry, our prices are lower thus attracting large number of customers. Through undertaking a follow up to identify the level of satisfaction by our customers, we are in a position to notice the marketing aspects that we need to emulate in order to be successful (Smith and Reinertsen, 1991). As compared to other companies, our focus is on women regardless of their career an aspect that is overlooked by other companies in the industry. Weaknesses Despite provision of a new product in the market, we are facing already established firms that have a lot of experiences in the industry. Additionally, we lack effective distribution channels thus making it hard to penetrate our market segments that are loyal towards our competitors. Another notable weakness is lack of adequate financial resources to undertake initial marketing strategies. Opportunities Best Lady has a chance to experience a drastic growth based on its intention to address the issues such as delays in the delivery and poor quality products that are faced with our competitors. Likewise, Aerosoft has an opportunity of entering the unutilized market especially in the developing countries. In this way, it will significantly increase its total revenue thus having the abilities to adopt extensive marketing campaign. Threats One of the major threats is the political instability that is experienced in some of our target markets including Africa and Middle East. This implies that despite our efforts to expand in these markets, our investments including premises and retail outlets are not secured an aspect that may lead to reduced sales. Additionally, as a result of the recent economic recession, the purchasing power for some of our customers has not returned to normal resulting to low sales in our first year of operation. Stiff competition from our rivals is another threat that we are exposed to especially in the developed countries such as US and Britain. Idea screening Through our market and the SWOT analysis, we have noticed that our product will be beneficial to our customers in terms of quality and price. Through our extensive marketing strategies, we are focusing at expanding our market by 25%. Despite the stiff competition in the women wear industry, our excellent post purchase services will significantly attract large number of customers thus increasing the total sales in the long run. After the idea screening process, we have noticed that it is profitable to put our new product in the market. Developing our concepts and testing One of the major techniques that we adopted in ensuring that we meet the needs of our customers was choice modeling. This entailed asking our potential customers through social sites on the features that they need us to incorporate in our new products. Other key information that we searched from our customers included the benefits of our product and their view on the products as compared to our competitor’s products. Planning of strategy In order to ensure that we meet our objectives, we established an estimation process that provided relevant information on the volume of the resources that we needed to produce the new products. This entailed the hiring of market researchers and initiating a quality management department that ensured that our new products were of acceptable standards (Abell, 2009). In the same way, a scheduling department was established thus ensuring that orders from our customers were addressed without unnecessary delays. Test marketing In our marketing testing strategies we conducted a focus group interviews. In this way, all the responses from our clients were considered and after making some adjustments in our prices and sizes we participated in a trade show. In this way, we realized that our product has a potential market based on the high number of customers who were attracted to our new products that were displayed during the trade show. Marketing strategies Products Best Lady is focused at providing high quality Aerosoft shoes that have a personalized touch that leaves our clients satisfied. Through provision of Aerosoft in sizes 4 and 5, we are going to package our new products in red and blue cartons thus making them to be easily identifiable from our competitor’s products. One of the key aspects that we adopted to enhance customer awareness was the use of simple brand name Aerosoft. In this way, our customers will easily remember our brand name without much assistance from sales executives. Price To remain competitive and effectively face off its competitors in the new markets, Best Lady will emulate penetrative pricing. During the initial launching, Best Lady will price its product at US$25.99 per pair of Aerosoft. Through the reduced prices, we anticipate our sales to significantly increase based on the high number of clients who will be willing to purchase our new brand. To ensure that retailers attain a reasonable profit, Best Lady will sell it products to our retailers at a reduced price of US $23.99 for year 1 and US$ 34.99 for year 2-5. This implies that for every pair of Aerosoft, retailers will be making a profit of US $2. It is worth to note that as Best Lady continues to market its products in the new market, the costs of operations will increase an aspect that the company will use to adjust its prices (Cooper, 1988). Even though the company will raise its price to US $39.99 in order to increase its annual sales in the second year to fifth year, the quality and the quantity of our new brand will not be jeopardized. Table 1 Aerosoft Year 1 prices Product   Retail packaging Retail price in US$ Percentage discount given Consumer price per pair Percentage discount given Aerosoft Size 4 Dozen in a box 287.88 10 25.99 Retailer decides Aerosoft Size 5 Dozen in a box 287.88 8 25.99 Retailer decides Table 2 Aerosoft Year 2-5 prices Year Retail price per pair (US$) Consumer price per pair (US$) 2 34.99 39.99 3 34.99 39.99 4 34.99 39.99 5 34.99 39.99 Table 3 Forecasted monthly Aerosoft sales for the 1st year of operation Month Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Sales ($000) 50 105 145 160 185 210 240 280 300 350 380 450 Table 4 Forecasted Aerosoft total sales for the 1st year-5th year Year 1st 2nd 3rd 4th 5th Sales ($000) 2,855 2,955 3,500 2,915 2,455 Place In our efforts of ensuring effective distribution of our products, Best Lady will employ one level distribution channel. This entails use of retailers who will then sell to our consumers. One of the major advantages of this distribution technique is that it will eliminate delays during transporting of our new brand to the consumers. Additionally, the use of such a distribution channel will reduce the cost of transportation and storage especially in the first year of operations. The diagram below depicts the distribution channel that Best Lady will employ. Best Lady Retailers Consumers Based on the fact that our aim is to open more retail outlets in the developing markets, Best Lady will hire trucks during its second year of operation to ensure that any shortage of our new products is avoided. Promotion One of the major techniques that will be used in our promotion strategies is competition. This entails giving our loyal and regular consumers a free pair of shoes every month. As a result, our customers will use word of mouth marketing that will entail passing information regarding our unique products to other potential customers. In this way, the number of our customers is deemed to increase at a high rate. In addition, the company will hold road side shows that will involve undertaking dancing competitions where winners will be rewarded with free pairs of Aerosoft while losers will be given free t-shirts with Aerosoft logos. Consequently, the company will create a strong customer awareness resulting to high sales (Baker, 2008). Establishment of face book groups is another strategy that Best Lady will adopt to ensure sharing of information among our customers. Other methods of promotion will include use of billboard in highways and sporting fields, women magazines, newspapers and fashion magazines. The table below indicates the promotion tools that Best Lady will use in the Aerosoft product life cycle. Table 5 Promotion tool Product lifecycle Promotion tools Introduction Road side shows and face book groups Growth Competitions and billboards Maturity Women, fashion magazines Decline Newspapers Conclusion Based on the above discussion, it is clear that for a new product to succeed in the market, it is vital for a company to undertake a SWOT analysis to determine its viability. In this way, firms would ensure that they do not incur unnecessary costs only for the product to fail in the introduction stage of the product lifecycle. Other key aspects that should be undertaken during the product development stage include idea screening, developing concepts and testing, planning of strategy and market testing. By emulating an effective marketing mix that entails product, pricing, promotion and place, companies that are focused at introducing a new product such as Aerosoft in the market have a high chance of attaining high sales and sustainable profits. References Aaker, D., 2008. Strategic market management. London: Sage. Abell, K., 2009. Defining the business: The starting point of strategic planning. New York: Oxford University Press. Baker, M., 2008.The strategic marketing plan audit. Cambridge: Cambridge Strategy Publications. Cooper, G., 1988. Predevelopment activities determine new product success. Industrial Marketing Management, Vol.17 (2) 27-48. Smith, G. and Reinertsen, G., 1991. Developing products in half the time. New York: Van Nostrand Reinhold. Appendix Table 1 Aerosoft Year 1 prices Product   Retail packaging Retail price in US$ Percentage discount given Consumer price per pair Percentage discount given Aerosoft Size 4 Dozen in a box 287.88 10 25.99 Retailer decides Aerosoft Size 5 Dozen in a box 287.88 8 25.99 Retailer decides Table 2 Aerosoft Year 2-5 prices Year Retail price per pair (US$) Consumer price per pair (US$) 2 34.99 39.99 3 34.99 39.99 4 34.99 39.99 5 34.99 39.99 Table 3 Forecasted monthly Aerosoft sales for the 1st year of operation Month Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Sales ($000) 50 105 145 160 185 210 240 280 300 350 380 450 Table 4 Forecasted Aerosoft total sales for the 1st year-5th year Year 1st 2nd 3rd 4th 5th Sales ($000) 2,855 2,955 3,500 2,915 2,455 Table 5 Promotion tool Product lifecycle Promotion tools Introduction Road side shows and face book groups Growth Competitions and billboards Maturity Women, fashion magazines Decline Newspapers Read More