Electronic Appliance Marketing

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It is an established fact that our organization Company G is a strong, well-accepted, and respected manufacturer of household electronic appliances. Our team of dedicated engineers has been engaged in the process of entering into the small appliance sector and has developed a food processor that promises to be a new and strong product in our portfolio of electronic appliances. It should be noted that this is our first foray into the small appliance section since our products till now are in the medium and large appliance category. Due to this factor our engineers and researchers had put in long hours and extra effort in developing and fine tuning the product.

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The product is extremely well designed and very attractive in terms of overall appearance and style. Our engineers, through the new product assembly plan have made the product attractive in terms of efficiency, time for manufacture and assembly and price. As per the instruction of our president, it is proposed to create an appropriate marketing plan for the product. The president has specifically stated that it should be done on a clean slate basis.

The words he used were to create the “clean sheet of paper”. So none of the current strategies will be taken into account and any similarities will be purely coincidental. What follows is a very comprehensive marketing plan to market the food processor. Our XG brand of appliances is one of most recognized brand and logo in the market and hence the new product will also be branded the same. A new mission statement is also proposed for the approval of the board

The Product

The XG Brand food processor is an extremely well designed and efficient piece of machinery. Our engineering success will be due to two features, namely the angle of the blades and the powerful motor that operates them. The set of blades are angled in such a way so as to efficiently grind, cut, knead, and powder different food items, fruits and vegetables. A juicer facility is also made available which is quite unique in a food processor combination.

The motor is a miniaturized version of the efficient ones we use in our medium sized appliances. The blades can be sourced from low cost and technically efficient markets in Asia, helping to cut down the costs to a large extent. The motor (the most costly component) can be built in house with minor modification to existing facilities. The company will have to find a new supplier for the body casing. With sufficient talent and capability of suppliers within the country it will not be a problem to find low cost and quality conscious suppliers. It is estimated from preliminary costing that our product will be the cheapest available for this product category.

Till now Company G has been concentrating on the medium and large category household electronic appliances market. The food processor will be our first foray into the small appliances section. It is our vision that we manufacture products in all the three categories. Hence our mission statement can be summarized with regard to this idea.

Mission Statement

To be the market leader in the household electronics appliance by providing customers with the best possible appliances that will be most satisfying for them in terms of money spent, and looks and most satisfying in terms of convenience provided, features and quality that will be a delight for its users.

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Market objectives

Target market

It is pertinent here to define the target market of our customers. A target market can be defined as “The particular segment of a total population on which organizations focus their marketing plan in order to satisfy that submarket and meet an organizations profit or non-profit goals.” (Target market, n.d). The primary target market is the households (especially low and medium income ones) across the country since it is a product that will mostly be used inside the kitchen. The other target market segment will include hotels, restaurants, and fast food outlets. Individual men or women staying alone (primarily those people who are not yet married) can also be potential customer, though this will be small in number. Hence our focus will be on the first two categories. According to the US Census Bureau, middle income group are those whose annual income ranges from $40,000 to $65,000.

Hence the lower income families can include those whose income lies below this. The approximate number of families in the country that can be included as middle income number around 37 million. The number of families whose income is lower ($15,000 to $40,000) comes to 26 million households. (Source of the data and accuracy of the estimates for income, poverty, and health, 2007).

The Census Bureau figures show that median incomes across regions in the country do not vary too much and hovers around the $45,000 figure. Specific target households can be the new immigrant community, newly married or about to be married couples, single mothers and fathers, widowed men and women, since all of them would be receptive to buying the product. They would also have budget constraints and the price would be attractive to them. The lower and middle income families in general should also be targeted.


The market objectives will be based on what is commonly referred to as the four Ps of marketing or the marketing mix. They are product, price, place (or distribution) and promotion. “The term “marketing mix” became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix.” (The marketing mix: The 4ps of marketing, 2007). The concept of the 4 Ps was developed later by Professor Jerome McCarthy of the Harvard Business School.


With regard to product, the objective is to successfully market the new food processor developed by our company. It is intended that in order to gain market share the product will have additional features (like a juicer) that is not present in the lower cost models made by competitors. It will be marketed as an independent product along with our existing large and medium appliances. More new small appliances are also in the pipeline and will be ready for marketing soon. As mentioned earlier, the price of the processor (apart from quality and design) will be the most distinguishing features.


It is our objective to be the lowest priced player in the category of small appliances. This will be attractive to the price conscious low and middle income group households in the country. An average low cost processor costs around $200 to $250. We can price our product at say $199 per piece with a profit margin of 5%. This should be later increased (by bringing down costs or increasing price) say after a period of three to five years.

Distribution (place)

This aspect is planned through normal channels followed by other manufacturers. Our objective is to use stand alone retail shops, retail chains, and supermarkets as a distribution channel. Our current distribution channel can also be utilized because costs can be minimized. For example delivery trucks leaving our factory can now include the new product also. This will enable delivery costs to be distributed across more products bringing down the average.

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With regard to promotion, the objective is to inform existing and potential new customers about the introduction of the product. This should be done in such a way that the maximum number of people will become aware of our entry into this new segment. It is intended that we gain market share of 0.5% in the first year, 1% by year two, 4% by year three and 5 to 7% by year five. The price difference of 5 to 20% should be enough to achieve it coupled with other promotion strategies.

The strategy to be followed for attaining the objectives mentioned here will be explained in another section. It should be noted that the 4 Ps are now extended to include three other parameters and is referred to as the 7 Ps. They are people, process, and physical evidence.

Analysis of competition

The appliance industry in the country is highly competitive and price sensitive. There are a large number of manufactures of different sizes, capabilities, and nationalities active in the market. Some of our major competitors (national and multinational) include GE, LG, Samsung, Phillips, Kyocera, Electrolux, Haier, Miele, Salton, and Hamilton Beach. It is to our advantage that our brand is well known and accepted in the medium and large size category of household appliances. This will help us a lot in capturing a share of the market even at the time of introduction. An analysis of the situation by using the three-way consumer product classification system and Porters five forces model will be followed here.

The three-way consumer product classification system

There are a plethora of consumer products and appliances available in the market and each category has its uses and consumer needs. Consumer choices are classified by market experts and theorists based on the way consumers behave and perceive each of these categories and the product within them. In the three-way consumer product classification system, products are classified into convenience, shopping, and specialty. Convenience products are “consumer products that the customer generally purchases frequently, with a minimum of time and effort, and that are usually relatively inexpensive.” (Govoni, 2003). Examples include, staple food items, bread, gas, milk etc.

Shopping products are those products “purchased only after the consumer has made comparisons of competing products in competing stores on bases such as, price, quality, style color” etc. (Life cycle: Shopping products). There are two further classifications in this category. Consumers often view certain shopping products as having special features, uses, and options from brand to brand and hence classified into heterogeneous shopping products.

Choice will be made depending on the importance or need for these special features. Exercising equipment is an example due to the sheer variety, uses, and options available. Certain items will be viewed as having similar uses and features and these are referred to homogeneous shopping products. Clothing, electronic appliances, and furniture are examples. On the basis of this description, our product is a homogenous shopping product since most of the features found in one are commonly available in all food processors. Specialty products will have features that stand out like design and style. Designer clothes, watches, expensive cars are examples.

Analysis using Porter’s Five Forces model

An extremely useful and relevant analysis of a marketing situation can be done using the Porter’s five forces model developed by the management expert and author Michael Porter. The five forces are supplier power, buyer power, threat of new entrants, threat of substitutes, and the level of competition. (Ehmke, et al. 2004). These are relatively straightforward parameters and an analysis of the product with each of them will be done.

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Supplier power indicates the strength of the suppliers in determining the price of the product and its availability. Supplier power is relatively low in the case of our product. There are many suppliers who can make components to our specification. Moreover major components like the motor are manufactured by the company itself. Buyer power is relatively high due to the number of manufacturers in the market. Buyers have the option to choose and hence a product’s acceptance will depend of price (main factor), quality, feature etc. Threat of new entrants is also high since the US market is a free one. But the relative level of high competition may deter new entrants even though existing players can enter the small appliance category. This is exactly what we have done here and the possibility of other to diversify into this segment is high.

On the whole threat of new entrants is moderate. Due to the inherent nature of the food processor and its features, threat of substitutes is quite low. Only another food processor can be considered a substitute. Otherwise a customer will have to independently buy appliances that individually offer the features. No reasonable customer will do so. Competition is very high with small, medium, and large players in the market. Being a free market, cheap imports and other reputed manufacturers also exist. On the whole, the reputation of our company and the price offered will negate many of the threats mentioned above. The company can go ahead with the marketing plans for the new product.

SWOT Analysis

Conducting a SWOT analysis entails analyzing the strengths, weaknesses, opportunities, and threats faced by Company G.


There are many strengths of Company G which can be effectively used to market its product. The three main strengths are its price, the reputation of the company, its production process, and the brand recognition power of XG. Cost and production process are closely related because the innovative production process (and the suppliers of certain components) have resulted in a high quality low priced product. The process has helped the company to save time in manufacture and also minimize the holding of stocks and spares. Company G is already a name to reckon with in the market for medium and large electronic home appliances.

Without doubt, the production process is the core competency in terms of strength and this should be maintained and improved if possible. The production process should also be effectively adapted to those used in the manufacture of other products made by the company.

Being a new entrant into the small appliance segment is the biggest weakness faced by the company. Another weakness is the lack of a huge advertising and promotion budget since the company does not have the resources that are available with huge multinational competitors. Company G though famous within the country does not have an international presence.

This is a weakness because the only way to expand the current market is by becoming a multinational. If the company is unable to grow in the domestic market, it might face problems and will have to expand across national boundaries.

One opportunity that can be exploited is the inclusion of a juicer into the options available in the product. No other company currently has this option wherein this option (with the same power of a standalone juicer) is provided. Another opportunity is to try and capture the huge market created by immigrant workers. Most of them will have to buy household products that include home appliances. The third opportunity is to cash in on the brand name XG and market the processor under this brand. The major threat faced by the company is the competition from the many players in the market. Nothing can be done about it and the only option is to remain competitive in terms of price, features, and quality.

Threat of cheap imports and new entrants (minor threat) also exists. Here again the company is helpless to do anything about it and have the same option (for competition) mentioned above. Relatively speaking, the company has a small advertising and promotion budget when compared to other multinational and large national corporations. If they step up their own advertising budget in response to the launch of our product, it will pose a threat to our marketing success.

Marketing Strategy

A marketing strategy with focus on the four Ps mentioned earlier will be laid out here.


The best strategy here would be to brand the new processor under our existing brand XG. This is a very well-known and accepted brand in the country and the customer will have no difficulty in identifying the brand with quality, and value for money. The price factor due to efficient production process and cheap suppliers is also another strategy that will be beneficial to us.


As mentioned, the advertising budget will be relatively small when compared to some of the competitors. But innovative advertising and promotion strategies should be developed. Road shows and product demonstrations in public places, hotels, restaurants, and homes can be conducted. Another option, at least in the early stages would be to bring in promotions and schemes in the retail shops. For example, customers can be given a discount of 30 to 50% on the product if they buy our medium or large appliances. Word of mouth publicity will be effective if we can make a large number of customers to use our product.


Our strategy is to be the cheapest or one among the cheapest in the market for food processors. This has already been achieved through our production process and supplier of components.

Place (distribution)

Distribution can be done through the usual channels of the company. These include stand alone shops, retail chains, and supermarkets. Our marketing team has already had preliminary talks and demonstrations and our distributors appear enthusiastic about the processor.

The attractive pricing will be instantly noticed through our advertising and demonstrations. The price element can also be effectively displayed in our retail marketing space. Marketing the product under the XG Brand will also be an advantage for us. The promotions and discounts will effectively help us to reach a relatively larger number of users and their word of mouth publicity will further drive up the demand.

Action plan

The product will be launched under the XG brand, and suppliers have already been identified. The motor which is the major component in terms of cost will be manufactured by the company itself and the necessary changes in the production assembly is under way. Talks are under way with our advertisers and an effective campaign is being developed. Meetings between the marketing and finance department are also taking place to finalize the discount plan. Marketing terms have to be finalized with distributors even though they have agreed in principle to lend shelf space to us. It is proposed that advertising and promotion through print and media ads and through discounts and schemes continue for a period of at least three years. Only the frequency can be reduced depending on the response of the public to the product.

Monitoring the marketing plan

The whole marketing plan has to be monitored for it to be effective. It is proposed that a committee be set up with the marketing manager as its head to monitor and audit the plan. The steps to be followed are given here. The completion of tasks as per date (and cost) as mentioned in the action plan has to be done. Any delays and cost overruns have to be corrected immediately. The personnel required for each task have to be allotted and monitored to see whether they are performing their duties as planned.

The tasks that were properly done and poorly done should be identified and necessary corrections and improvements made. Many of the activities are measurable both in terms of time and costs involved. An appropriate measuring and accounting procedure should be in place for the same. A bi-weekly progress report will be sent to the board of directors which will continue during the period of the marketing plan.


The product will be ready to hit the market within the next three months and hence a practical timeline has to be chalked out and maintained. This will be done by using a Gantt chart given below. The timeline for the next five months is given below.


Timeline according to the 4 Ps as on 10th January 2008. (All dates pertain to the year 2008 unless specified otherwise)

Activity/Task Completion Date Current status
Development 30thJune Completed
Production (infrastructure) 30thNovember Completed
Distribution (infrastructure) 20thJanuary 2009 36 days left
Test marketing 25 December Completed
Launch 1st April 2009 70 days left
Analysing competitor price 30 March and 30thNovember Completed
Costing of product 30thOctober Completed
Fixing price 5thDecember Completed
Planning strategy 15thOctober Completed
Finding/finalising advertisers 15thDecember Completed
Starting promotion campaign 15thFebruary 36 days left
Identifying/finalising 30thDecember Completed
Strategy planning 20thNovember Completed
Finalising channels/logistics 30thNovember Completed

Monitoring success

Product Criteria Remarks
Design Survey High appreciation
Features Trial use More than expected
Ease of use Trail use Very easy
Price of product Comparison with competitors Highly competitive
Value for money
Advertising Following competitor strategy Satisfactory in terms of budget
Actual campaign not started
Discount/Schemes Developed in-house Very innovative
Actual campaign not started
Channel Existing channels Satisfactory
Logistics Existing channels
Explore new ones later


The marketing plan for the new food processor manufactured by Company G has been provided here. It will take some time and resources for the product to be successful in a highly competitive market. But I am optimistic about the whole process and our company can become an established player in the small appliance market as well. A long term plan to become a market leader in home appliances as a whole should also be envisioned based on our mission statement.


Ehmke, Cole., et al. (2004). Industry Analysis: The Five Forces. Purdue University. Web.

Govoni, Norman. A. P. (2003). Consumer deal. Dictionary of Marketing Communications. Web.

Life cycle: Shopping products. (n.d.). Web.

Source of the data and accuracy of the estimates for income, poverty, and health. (2007). US Census bureau. Web.

Target market. (n.d). Web.

The marketing mix: The 4ps of marketing. (2007). NetMBA: Business Knowledge Center. Web.

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