Marketing Analysis of Halewood - Essay Example

?Marketing Case Study (Halewood) Q Macro and Micro Environmental Factors Affecting Marketing Strategy for Halewood There are many challenges that Halewood Company will be facing in their endeavours to Market their new products ‘Faith’ and to eventually cut themselves a niche in the crowded UK market.In order to market their new products in a strategic way. Halewood must be cognizant of the fact that it is very difficult to introduce a new product in the market and this is even worsen if there are alternative product that has been in the market for a long time that will be posing a challenge. It thus needs several strategy measures to ensure that the expectedniche is occupied in the market, among other things that will affect their marketing strategy in this case includes; Competition from Alternative Products In designing their marketing and service delivery strategy, the company should look at the issue of alternative products in terms of prices, availability, and the customer’s loyalty associated with them. This is very important in coming up with a marketing strategy that will counter strong sense of establishment in the market from other products. Prices of the alternative products will play a significant role in affecting Halewood marketing strategy because for them to make a break through, they have to retail at a cost lower than those of the established product. The cost of the alternative products will thus be very critical for Halewood to make informed choice on how best they should sell their products in the market in order to have a competitive edge. The availability of the product is equally important for Halewood to evaluate the strategy that should be used to make the product have sufficient inroads in most of the prospective market zones. In most cases, one will find that products availability are skewed to one zone than others, with this realization, Halewood are able to have different strategies in the different areas based on the intensity of other products in the different areas. In an area with more competitive products, there will be intense marketing than those areas that do not experience business rivalry on the same product. Product’s Strength in the Market Halewood will have to consider their product’s strength that the competitive products are not giving, Like in the case of the new product being introduced, the company came up with this taste to provide a solution for those who want an alternative product to consume other than Alcohol or caffeine. This is the strength of the product the company has come up with that probably most business competitors are not providing; most of the probable competitors provide purely alcohol or soft drinks. In this case, Halewood will be providing an intermediary product that will cater for the needs of those who do not want alcohol and caffeine in the afternoon. In their marketing, this should be boldly captured so that the prospective customers can know the unique taste that is provided by the new product (Lawley, 2007, p.83). The fact that the new product is designed in a way to bring in a new taste in the market should be categorically captured in the marketing strategy so that the customers will develop the urge to have its taste and make choice out of it. Understanding Competition Introduction of every new product in the market meets an existing competition, to effectively compete with those companies that are already established or introduce customers to new products, a lot has to be done in relation to understanding strategies used by other companies. This will involves researching on the marketing strategies of the competitive companies so that a good understanding of their strengths and weaknesses are known. This will help Halewood to devise a marketing strategy that will counter those that are played by the competitors, it is important to understand the strengths and weaknesses of the competitors in deciding which option to consider (Lawley, 2007, p.88). Having known the weakness and the strengths of the competitors, Halewood should then work on bridging the gap by devising a comprehensive marketing strategy that will elbow all the competitors so that they can penetrate the market with the new product. Halewood can also rely on their brand name to market the new product, because this is a product that is being introduced by an existing company, it is most likely to ride on the fame that the company has built over time with the other products. Unfortunately, these can only effectively work if the public has reputed the company for having quality products previously, it will follow then that the new product will be equally good and it will not be taxing to introduce the product in the market for customers taste (Lawley, 2007, p.94). With the factors discussed, if considered, Halewood will have all what it takes to penetrate the market for their new product and stabilize it. Q.2 a) Halewood’s Market Segment Market segmentation is a marketing strategy that is used by companies to ensure that they understand the market variables and ultimately uses the knowledge to make the delivery of their productsbest. Halewood is not exempted in this situation; there need to do a serious market segmentation for the new product so that different strategies can be used to maximize product marketing. There are different market segment that can be considered the case of introducing the brand ‘Faith’, the new product that is supposed to be launched by Halewood. Market segmentation is particularly important in the sense that it realizes that in a market, there are customers and these customers differs in more than one way in terms of taste, wants , and needs. This makes every customer in the market to be unique and has to be attended to individually if the company wants to involve in a working marketing (Mullins and Orville 2013, p.26). They have to ascertain the customers need and be sure that they can be reached though segmentation. Considering segmentation of market, the following criteria are supposed to be considered in the process of segmentation demographic, psychographic, and behavioural profiles. In the demographic segmentation, the company will be considering such factors like the population density in the area and age (Mullins and Orville 2013, p.27). This is particularly important in the fact that the product that is to be released into the market is meant for adult. It is thus imperative to do a market segmentation that will inform the company of the possible number that are expected for marketing. That is why the population consideration will be important for the company, within this population, they have also to consider the other factor of age, because the product is supposed to be sold for the adults only, it is important they also do a research regarding the age of the prospective consumers so that they have an estimate number. This is not only important for production of the product but also for planning marketing and deciding the most effective way to pursue. Psychographic segmentation that will be dividing the consumers into social class, values, personality, and lifestyle is also important to consider because it will be used to make a projection of the possible trend of sales that the new product will take (Mullins and Orville 2013, p.29). For instance, if the life style of a population in a certain region is rated low class, it will definitely mean that such products will not have the best sales such areas because the population will have to satisfies other basic needs first before opting for other luxurious products. Psychographic segmentation is important in determining the economic strength of the population so that appropriate steps are taken in marketing the product in the area depending on potential to purchase the product. Lastly, behavioural segmentation should be considered for better understanding of the market. In this system, the company will be dividing the consumers into groups based on knowledge of the product, attitude toward the product, and response to the product.The factors discussed above are fundamental in helping on how to design an effective marketing for a new product. b) Competition for Halewood Considering the product that Halewood is bringing into the market, it will not be facing competition from those companies that are producing products of the same use or those that gives customers the same satisfaction. The competition that they will be facing includes those from other companies that are producing certain products that can be taken in place of their product. In this regard, it is expected that some of the companies that will pose a great challenge in competition to the company are Pernod Ricard SA, Diageo plc, and Red Bull GmbH; these companies are producing alternative products and have been in the market for a long time. Ordinarily, customers are not always receptive to new products in the market, the biggest task for the company (Halewood) then are making sure that their product makes a breakthrough in the market, there is the problem of inability to change, most of the customers as studies have shown demonstrates reasonable degree to resist change and are thus reluctant to change. The only cause for change then will be if the product makes a real satisfaction for the customers, the satisfaction that has not been given by any of the companies that existed before. As the company has proposed, they want to produce a product that willprovide for those who do not want to go for pure alcohol or caffeine late in the evening. This coupled with proper marketing; Halewood is capable of making a break through and having their new product hitting the market as well. Q.3 Marketing Channel and Distribution The success of a company in making more sales of its products depend on how the company’s products are distributed, mode of distribution is fundamental because it is the lifeline of a business. In making choice of a proper distribution channel, it is important to consider product that is to be delivered and the knowledge of potential buyers regarding the product being introduced. In this case, Halewood wants to produce a new product that is not known in the market, it thus have to choose a proper channel that will ensure that the product is sufficiently supplied to the market with the smallest distributor possible involved in the channel of distribution (Rolnicki 2008, p.72). In this situation the company still wants to know the peoples reaction on the product, they have to engage as many as possible distributors so that they are able to collect as many information as possible from the people to help them make a decision based on the reception that is given to the product by the customers. The choice of suitable channel of distribution in this case would be that which is scaling down from the producer, Halewood to the final retailer in the remotest parts of the catchment area. The proposed channel of distribution in this case will be; the company will give the products to independent distributors who will then take them to independent wholesalers. The wholesalers will also take them to the retailers who will be used as the final level before the products reaches the ultimate consumer, in this channel, the company should demarcate the entire are of interest into region with specific peculiar independent distributors. The separation of the regions can be considered in terms of such demarcation like; Western part, Northern part, and Central zone, the beauty of this distribution channel is that it enables every region to report their own market assessment and report appropriately to the company. The information flow will also be established given that the retailer on the ground will take customers reaction to the wholesaler who will also pass it over until it reaches the management in the company for action. The information that always comes from this channel of distribution is accurate and can be helpful to the business in the sense that it will bring at a glance a response from all the regions in the entire area of interest. Such information like the brand that is most liked by the customers and that demand level are very critical for the business, the company needs to know this statistics so that they can make informed choices when making the product. They will also be able to know the demand in every region as well as the competitors in every region; therefore, in this case, the company will not only be able to reach the maximum number of customers in the market using little resource but also receive the most crucial information in the most accurate way. There are also cost reductions in affecting the market with the new product, consider the case of the company opening their own chain stores to market the product, first, they will in insufficient to penetrate the whole market effectively (Rolnicki 2008, p.74). This company will also incur extra expenses in acquiring the premises and the wage bill for the employees, the choice of the channel of distribution is helpful in the sense that it reduces cost for marketing anew product before it establishes in the market. The proposed choice of distribution comes will overwhelming advantages for the company considering that there is a new product to be introduced by the company. It needs organized distribution to spread in the market, sometimes just making consumers aware of the product is advantageous, this is because there is always the curiosity of making a single attempt of using the product. Consumers will have to notice the product in one way or the other, out of the numberthat will fell the presence of the product, quite a number will have first time test and if the product appeals to them, it will substitute others. Given that benefits, the company stands to realize faster growth in capturing consumer’s need with their new product and in the shortest time, it will be picking at a productive and sustainable pace. Q.4 Different Pricing Strategies Used by Organizations Pricing Strategy is a very important tool in making mores sales or profit from a product, Most of the businesses do look for the best strategy method to adopt so that they can cut themselves a niche in the market. In the pricing strategy, there has to be a better understanding of the forces that are controlling the market price and the capability of the customers, it is always normal to find that the same product will be retailing differently in different locations. Some of the international companies that are known for employing pricing strategies to maximize sales and profit is Apple Inc Company. The following are the pricing strategies that are used by most of the organizations Skimming or Screaming In this pricing model, the sales of the product are normally made to be abnormally high so that only few sales can be made to break even. In this strategy, it is important to note that the company is not targeting every customer it only targets those customers that are stable economically and are not sensitive to the price of the product. In this case, targeted customers considers possessing the product much more important than just the initial cost, they do not pay attention to the cost of the product (Zhang 2005, p.35), The initial high cost of the product is always expected to reimburse the company of the money that was used to research in coming up with the product. The initial adaptors of the product are made to pay this amount; usually there is a predetermined number of the product that is set to be considered for skimming after which the price may always fall to normal. This kind of pricing is always seen in electronic products, one of the companies that are known to be using the strategy is Apple Inc. Company, this can be noted during the lunch of the ipad 5, the prices were hiked and after a short period of time when the stock was cleared, the price of the product was normalized. It is very important to be mindful of this strategy and be sure that there are potential customers for the product at the set prices otherwise competitors may outshine you in the very strategy if the product has no unique feature that may compel them to opt for it. Limit Pricing This strategy is used by the firms that are monopolistic in nature and do not want to face competition in the market by other firms that are producing alternative products. Even though this is a pricing strategy, in most countries it has been rendered illegal since it does not allow for healthy competition, the limit price is set such that the entrant would want to set so that they can make profit given the cost of production involved in the product. The limit price set by the incumbent still allows them to retail lower than that of the entrant hence making them to be hesitant and the market remains dominated by the incumbent. This is because the new entrant in the market cannot be possible given the limits of the price that are set by the established firm in the market to deter competitors (Zhang 2005, p.47). Price Discrimination In price discrimination of a product, the price is set differently for the different groups of people, for a company to adopt this strategy; they have to be certain that some groups of people have a strong sense of a product than others. It will thus follow that for those with strong need for the product, the price will be set higher than for those who are not much attracted for the same product (Zhang 2005, p.55). Example through which discrimination can be considered includes consideration of age and class, for instance, the sale of products in an area will be determined by the capability of the people economically, the same product ill retail lower in areas that are not strong economically. Premium Pricing There is a perception amongst the public that those products that retails relatively higher in the market are of great quality, they are reliable, and are desirable in one way or the other. In this regard, the manufactures have taken the advantage to set the price higher than normal so that they can encourage more customers based on the assumption that they will take it to be more reputed than the competitors in the market will (Zhang 2005, p.60). Penetration Prices Those companies that are new in the market always manifest this kind of strategy, they want to make a cut into the market, and this explains why they retail lower than the competitors in the market do, later after penetrating the market, the costs of the same products always get to be increased with time after stabilizing in the market. Market Oriented Pricing Companies do determine the prices of their products depending on the analysis and research that has been done regarding the market targeted by the producers. Setting of the price for the product will be largely dependent on the research results and it will be upon the company to set their price above or below depending on what the company is up to achieving. High-Low Pricing This strategy is used by companies that ordinarily havetheir prices set higher than those of the competitors do and to ensure that they compete favourably with their competitors, they will be organizing for advertisements, promotions and coupons upon which the prices of their product will be set lower. The need for the promotions is to bring customers closer to the company’s products whiles still maintaining their high prices (Zhang 2005, p.61). There is also the value based pricing that is set according the perceived value of the product to the different customers, it also seeks to set the prices differently depending on the role of the product to the customer, technology companies mostly employ this type of pricing strategy. Q.5 Different Types of Integrated Market Communication The products that are made by companies needs to be given attention by the prospective customers, in order to achieve this, there has to be certain method that are employed by the company to ensure that the brand message is sent to the public using both traditional and contemporary channels of distribution. It also encompasses the use of different promotional methods for reinforcement purposes in sending the message to the relevant people. In this regard, there are different methods that are used for this communication but are distinct from one another as discussed below; Advertising This form of communication uses different media outlets to persuade, encourage and manipulate the audience so that they can continue taking certain action or new ones by enumerating reasons why that is important. Advertisement is aimed at swaying customers towards a particular product that is in the market, the sole aim of commercial advertisement is to increase the consumption level of a product or services through branding. All about advertisement is ensuring that the image of the product or its name is associated with certain desirable qualities that are in the minds of the people (Clow and Donald, 2006, p.68). Advertisements are also meant to create more awareness to the public who may not be aware of its existence in the market, through advertisement, the minds of the public are turned toward the product and the prospective buyers develop a strong sense of belief on the effectiveness of the product. An example of advertisement is that of coca cola in the 1980 that depicted it as the most refreshing soft drink, it appeals to the public by citing the strengths and the advantages of a product, which is the role of advertisement. Public Relation There is a very thin line separating advertisement and public relation exercise, public relation is the act of managing the spread of information that relates an individual, or an organization to the public. The aim of public relation is to ensure that in sending information to the public, it is designed in such a way that they will find themselves accepting the information and be fully engrossed into it that it cannot be avoided. It is more of psychological; it manages the psychology of the public so that they will have no option but to accept as true the information that is given to them. Public relation looks into the aspect of packaging the information that is to reach the public, it looks into the best approach that the information delivery should take and correct any fault that may be associated with it (Clow and Donald, 2006, p.73). An example of public relation is using one of the celebrity that is having unrivalled fan to be associated with a product, in the advert, the celebrity may say something like ‘I have used the product, it is wonderful, give it a trial too’. The celebrity fans will all have to do what is said in the advert because they believe him/ her. Direct Marketing Direct marketing is a form of advertisement that allows the business to have a direct communication with its prospective customers; it can take different forms that include using cell phones to send text messages, sending mails, outdoor adverts and online interactions as well as display ads and fliers (Clow and Donald, 2006, p.68). The smallest companies in the market as well as those that are in the fortune 500 list can use direct marketing as a way of interacting with their customers. Direct marketing makes the company to have the data of the customers and for accountability purposes, it enables the company to have a direct feedback from the customers example of companies that have direct marketing and features in the fortune 500 is MacDonald fast food restaurant. Through their several outlets around the world, they serve their own customers and improve on their services following the data and complains they receive from the customers. References Clow, K.E. and Donald, B. 2006. Integrated advertising, promotion & market communications. 2nd ed. Upper Saddle River, NJ: Pearson Prentice Hall. Lawley, B.,2007. Expert product management advanced techniques, tips & strategies for product management & product marketing. Cupertino, CA: HappyAbout.info. Mullins, J.W., and Orville, C.W., 2013.Marketing management: a strategic decision-making approach. 8th ed. New York: McGraw-Hill. Rolnicki, K., 2008. Managing channels of distribution. New York: AMACOM. Zhang, Z.J. 2005. Pricing strategies. Boston: McGraw-Hill Custom Publishing. Read More