Strategies for Performing OnTyme - Research Proposal Example

"OnTyme" Assuming that one of your first task is to advise Scott on the type of marketing information that he requires to run his business, make a list of the marketing information that you believe would be useful for marketing decision making, indicating how it would be useful. Briefly indicate what research methods you would use to collect the information. "OnTyme" has been in business for the last twenty years and has built a reputation of being innovative and reliable. But, its sales need to be improved and to do this, sustained marketing will build it the product visibility it is sorely lacking in the customer' eyes. To succeed, it needs to attract and retain a growing base of satisfied customers. Marketing is the tool to bring in customers to a business and has two important principles. All company policies and activities should be tailored towards customer needs and profitable sales volume is more important than maximum sales volume. An appropriate marketing plan will aim at trying to get visibility for its existing brand of "OnTyme" watches as well as the new teenage brand of watches named "Wotch" it. To achieve this target, "OnTyme" needs to garner information on the following: Conduct a market research and find out the consumer needs. Competitors' strategies need to be analyzed Identify the target market Formulating a marketing mix Market Research It is common knowledge that no one product will satisfy all kinds of consumers. Therefore, information about the market is invaluable and timely relevant information needs to be obtained. It is impossible to sell products or services that customers do not want. Learning what customers want, and how to present it attractively, drives the need for marketing research. Market research will also demonstrate trends that may show the necessity to enhance an existing product or create a new one. Demographics, Population shifts, legislation passed, and the economic conditions of a market often determine the purchasing power of the buyer in the market place. Market research may also be employed to ascertain the value of a competitor's product and its associated value so that a comparative perceived value could be created for "OnTyme"s product as well. Research methodologies Most business owners do market research every day. Analyzing returned items, asking former customers for their feedback, and looking at competitor's prices are all examples of such research. Formal marketing research provides a framework to organize market information. Conducting survey of a sample population to determine their views on the "OnTyme" and competitor brands, Collecting primary data through mail surveys and email questionnaires Personal surveys in high traffic areas like malls, supermarkets etc Probability sampling that identifies who will be interested in purchase of wristwatches, the teen targeted "wotch" brand and the watch with the built in pager based on age, income and gender preferences. Identifying the target segment The target segment for the "OnTyme" might be adults purchasing a watch for their own use, buying it as a gift for someone else, for the "Wotch It" it would be the teenagers and youth, or adults purchasing it for the younger group as a gift. The watch with the built in pager may look at a different segment that is employed and needs to be on call and reachable at all times or parents of teenagers and youth, because the teenagers are now locatable, thanks to their pagers and is a great relief for the adults. Marketing Strategy Once a wider customer base is identified, "OnTyme" needs to formulate a marketing strategy to serve its customers better and align the product to the identified needs of the customer. Ideally, the strategy should address niche needs of the customer especially if there are gaps that need to be filled. This would ensure potential profitability. A good strategy helps a business focus on the target markets it can serve best. Target Marketing Target Marketing helps the concentration of the efforts in the key market segment. Segmentation can be done in two ways: Geographical segmentation: Catering to customers in a geographical area; Customer segmentation: People who are most to likely to buy the product or service and targeting those groups to widen these segments. The four basic components would be, Products and Services - Product strategies may include concentrating on the already performing brand "OnTyme", pushing the teen brand "Wotch It" or the newer watch with the paging device to be launched. Each of these products is targeted at a different kind of customer and needs to be niche marketed emphasizing its area of specialty. Promotion - Promotion strategies definitely need to be hyped up to offer awareness and product visibility. "OnTyme" needs to go all out and advertise for the market penetration it is looking for. Price - The right price is crucial for maximizing sales and profitability. Prices set need to ensure the survival of the business. Pricing may be aggressive initially to draw a better percentage of the customers. "OnTyme" is in the medium price range and the teen "Wotch It" needs to be affordably priced so that it appeals to the teens that may not have a very large base to spend. Distribution - A low-cost, low-traffic location means spending more on advertising to build traffic. If purchases are based largely on impulse, then high traffic and visibility are critical. On the other hand, location is less a concern for products or services that customers are willing to go out of their way to find. Wristwatches can be a premeditated or an impulse purchase. Utilizing popular niche stores catering to the target segment other than the current retailers will help build newer channels for distribution. Marketing Performance Evaluation Once marketing information about target market, competition and environment is collected and analyzed, a marketing plan is drawn. This is then implemented and evaluated on a constant basis. If the plan fails to perform to required levels, then it is fine-tuned and implemented again until the desired result is achieved. In "OnTyme" scenario, this would include benchmarks like interest in the product, a perceptible upward trend in the product sales, as well as repeat purchases. Write a report advising Scott how an understanding of market segmentation might help him improve his business prospects. Your report should include a discussion of appropriate segmentation criteria and provide an example of how they might be used in the wristwatch market. Not all products will satisfy all customers. Market segmentation is the selection of groups of people who will be most receptive to a product. If market segmentation is not undertaken, there will be loads of wasted efforts and lack of any knowledge of trends or risks, resulting in scant profitability for the firm. Market segmentation is one of the most powerful tools of marketing. This separates people by their distinct needs to determine what types of consumers will be most receptive to a particular product or marketing message. These groups form a consumer model. Looking at the various market segments into the product needs to be introduced, will be the determinant of figuring out what type of buyer is most likely to purchase it. Now this target segment needs to be detailed in terms of demographics: age, sex, family composition, earnings, geographical location, lifestyle, purchasing patterns, buying objections, and parameters that are more similar. The presence of large percentage of consumers aligned to the target segment will show the presence of potential increase in sales in that area. The most frequent methods of consumer market segmentation are Geographic segmentation is based on regional variables such as region, climate, population density, and population growth rate Demographic segmentation based on variables such as age, sex, race, income, occupation, education, household status Psychographic segmentation uses variables such as life-style, activities, interests, and opinions Behavioural segmentation depending on product use patterns; and product benefits However, in real life situations, most of the segmentation is not unique and generally involves combinations of these methods. No matter how segments are defined, or how careful the collected data is analyzed, market segments continue to change over time substantially. The following points should be kept in mind about market segmentation. It should be measurable, accessible by distribution channels, stable for a sufficient period, large enough for efforts to be directed there and turn in a profit, and be different in its response to a marketing mix. Once the market segment has been identified, the segments are summarized using customer profiles that define the segment. From these, the attractiveness of a segment can be evaluated and therefore, can be utilized for target marketing. A wristwatch is not a new product nor is telling the time, a new concept. Eventually what makes or breaks a sale is the perceived value associated with the product that urges the customer to conclude the purchase at the price set by the company. The target consumers on a large level would ideally include anybody who wears a wristwatch, or anybody intending to purchase one. In real life situations, for a large number of people, a watch is just an instrument that tells the time, and is worn only for its utilitarian purposes. These consumers would put the emphasis on price rather that quality or style. Therefore, "OnTyme" will need to associate a value to its products that allows the customer to relate to the differentiation and choose these watches over that of their competitors. "OnTyme": Its "OnTyme" brand may be considered a brand that may appeal to a more grown and mature target segment. It has been in the market for a while and is known to be reliable and innovatively stylish. But, since "OnTyme" brand is medium priced, 40-120 pounds, as per the case study, it may appeal to slightly mature adults with a moderate to high income levels, and those who attribute aesthetics and a sense of style, as a part of a wrist watch purchase rather than just utility. "OnTyme" currently is retailed at more specialty and niche outlet and consumers frequenting these areas will belong to a moderate annual income criterion. Therefore, the marketing activity will need to focus on areas with consumers who match this kind of economic profile. This should be easy since, the profiling is not very rigid and lot of consumers will ease into it. Urban and busy centres with people who are employed and are more conscious of their appearances and being presentable, and those who associate a sense of prestige in owning and wearing a brand, and have sufficient disposable income willing to pay a little extra for the niceties will be worth marketing to. In addition, since the purchase may be more premeditated than impulsive, inducing and retaining brand awareness will be essential. Hence the positioning of the brand will be as stylish, qualitative and adding a sense of innovation, luring current customers for a repeat purchase or new customers moving up a level with the purchase of a reputable brand such as "OnTyme". "wotchit" : This watch is a teen brand and needs to be positioned slightly differently. In the case of teens, market research has shown that teens' buy watches based on brand, image, design, colour, price and peer group credibility. Some teenagers have more than one watch to cater to different occasions. It is now quite clear that this target segment will obviously include teens and people in their early twenties. This brand has to be positioned as trendy and cool and in close alignment with the current fashions and styles. Its aesthetic appeal needs to be emphasized upon and owning it must be positioned as an "in thing" for the teens. The availability of different colours and designs to match the mood and occasion may be employed instigating an ownership of more that one watch by the consumer. However, this segment will also include an adult consumer who may be parents, and family who may purchase a watch as a gift for the teens. For these profiles, quality and reliability may be an added prerequisite. For these consumers the purchase may be predetermined while for the teens it may be more impulsive, like when a product catches the eye. This gives a large consumer base and any demographic centres with a high youth concentration like schools, universities, etc will be an apt marketing area to cater to the required consumers. Since the watch is aimed towards the teens, it may need to be slightly lower priced, say between 15-30 pounds depending on its features. This group may not have much disposing income, due to allowances received from parents or part time jobs not paying as much as full time ones and adults may not believe it proportioning a large amount in a casual teen wristwatch. Bearing in mind that the company has previously relied on building sales through good trade relationships, discuss that what measures you would consider in order to promote sales more actively. Write a report discussing the promotional objectives the company might set and how these might be achieved in terms of choice of targets, messages and promotional methods, when launching a new product, such as a new watch that incorporates a paging device. Provide reasons for your suggestions. However great the product, the product will be sold only when awareness about the existence of the product and high visibility for the product is generated. Promotion refers to marketing activities that create awareness of the business and/or product. These activities get the word out so potential customers know what is available and will include advertising primarily. While advertising directly promotes the product, other activities like community involvement, sponsorship of special events and giving away complementary items will allow the subtle promotion of the product or company because the focus is on the event or specialty item. It is often sensible to look at what the competitors are doing to promote their products and based on their experience try to improve upon the processes to get more from a limited budget. Knowing what works is critical. A successful promotional activity is an undisputable aid in the potential selling of the product. Promotional campaigns are often a mix of various activities and should not be concentrated to particular media. Good planning and a clear vision of what the objectives are will help achieve the right 'promotional mix' of advertising, direct marketing and public relations. Although past campaigns are good to gain experience, being a little innovative and bold may definitely help succeed. A promotional campaign when well devised and executed will serve the following benefits Create awareness to the existence of the product. Establish the product presence as a great option Enhance brand reputation Encourage existing customers to make repeat purchases Attract new customers and replace lost ones Slowly build sales to boost your bottom line Promotional activities when sustained over a period will definitely create positive outcomes. Nevertheless, they will take that range of time to show results. It cannot create an instant customer base, an immediate sharp increase in sales nor solve cash flow issues instantaneously. Inexorably, no amount of promotional activity will help if the product or service is not of good quality, is an unwanted product or service that is not accepted or needed in the market. Advertising is major tool of the promotional activity and its major benefit is that it offers great control about where, when and how often your message will appear, how it will look, and what it will say. Audiences can be targeted and aimed at specific segments. Consistency is the key serving to ingrain the brand and its uniqueness in the mind of the audience. The media for advertising may be Electronic including television, radio, e-mail, web sites, sourcing databases, e.g. government databases and Print including business cards, newspapers, magazines, yellow pages, pamphlets, brochures, billboards, telemarketing, direct mail, facsimile Other options include imprinting product or company name on consumables and complementary gift items. Advertising on public transportation, on vehicle and building signs, on point-of-sale displays and shopping bags is an often-employed methodology. The number of promotional tools used to deliver the message and repeat the name is limited only by imagination and the budget. The budget is definitely a constraint and therefore will affect the methodology used and the longevity of the campaign. Usually introducing the product will call for a more sustained aggressive campaign and then toning it down and little once sales have stabilised and interspersing with jolts of visibility which keeps the momentum going. OnTyme is an established brand but has less visibility among the public eye due to a low profile promotional activity based on the relationship with the retail buyers. Hence, it needs to generate more awareness of its products aggressively. In addition, since it focuses its sales in the southern part of the country, it can now plan to diversify in the north and target a wider audience for its sales. An all-out campaign in the print media, using national and local newspapers and magazines the consumer profiling points to, can be a good starting point. Tying the brand to popular used products like beverages and other brand name products and offering a discount on the purchase of the watch will be great. This ties the brand image to a highly respected product thereby bringing the branding of the product to a higher notch and better-perceived retention in the customer's mind. The television is an able aid in the campaign and featuring ads associated with the OnTyme brand slotting in the prime time popular television programs will determine target consumer reach. These slots should be correlated to the audience viewing patterns especially if they are an employed population. In addition, the ads should carry a theme of class and sophistication by the models complimented by the OnTyme watches they wear. Malls, music stores, and popular boutiques and salons frequented by the teenagers may be considered as new distribution channels. The intent of the campaign is that when the teen wants a watch, the "wotch it" brand is available for him to make an impulsive purchase. The "wotch it" brand needs to be portrayed in teen oriented print media, magazines popular among the teens, and local campus newspapers. Popular teen television programmes can be used for featuring ads that portray the brand as cool and trendy and the craze among the current teens. Using celebrities popular among the teenagers to endorse the brand will give it a lot of branding and image due to the association and better-perceived value. The newer watch incorporating a pager will be mostly geared towards professional personnel engaged in medicine, technical support services or emergency services and who need to be on call and locatable quickly or senior citizens who can call for help by paging in case of dire need. So the target segment is a very differentiated from the other brands and the promotional campaign will be in more specific sources like medical journals and official communication newsletters and magazines preferred by the senior citizens. The purchasing power needs to be high and may include corporate purchases that want to keep in touch with their employees. The tone of the promotion will be serious and focussed and serve to keep with the image of the product. 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