Product Support of Mission Statement
Company G’s initiative to venture into small appliances production goes in line with its mission statement. The company’s decision to produce consumer electronics and telecommunication equipments gives an insight to success. Some of the consumer goods intended for production include televisions, satellites receivers, video players, video cameras, computer game devices, and radios. On the other hand, telecommunication equipments include personal computers, photocopiers, fax machines, video projectors, and scanners. These small electronic appliances are envisioned in the company’s mission to provide innovative electronic solutions. In addition, the company’s decision to produce small electronic appliances compelled its engineers to undertake design processes and tests. By doing this, they identified weaknesses in the current electronic appliances and opted to eradicate them after initiation of production. Thus, it addressed the needs of small electronic appliances in the market. These critical attributes of the company are portrayed in the mission.
Target market for the company’s product
Company G targets small electronic appliances users by providing high quality and innovative electronic solutions. Based on the previous marketing plan for its products, which hindered achievement of desired profit levels, they targeted large-scale electronic users. Most of the electronic users are the small-scale compared to the large-scale. As a result, this new niche will be ventured into before other substantial competitors realise it. Consequently, company G will have acquired a larger market share.
Prior to venturing into the targeted market, the company decided to assess market profitability by designing a feasibility test for the industry. In this regard, company G developed prototypes of small electronic appliances that ensure stakeholders interests are served in the market. Through this process, the market objectives are envisioned under the elements of products, price, distribution, and promotion. The specific objectives are highlighted below:
- To distribute electronic appliances through all the available distribution channels in the most effective, convenient and cheaper means to the users.
- To produce small electronic appliances for small emerging electronic-user markets at a lower production costs, with quality features that are differentiated from their rivals’ products.
- To actively campaign for small electronic products’ market leadership through various sales and promotion techniques like media houses, billboards and internet.
- To supply affordable small electronic appliances to consumers as it maximises shareholders’ wealth in the company.
Competitive Situation Analysis
Analysis of Company G’s products using the three-way classification system
Company G can be classified in a three-way consumer product classification system through elements of convenience, specialty, and the shopping of electronic goods (Boone, 2012). This classification system is important for marketing purposes as it indicates specific points where more technical and marketing efforts can be exerted. As a result, the company can identify a basis on which to rate itself against its competitors in the industry. These crucial elements of the system can be analysed as follows:
The marketing team of Company G has to classify electronic appliances based on consumers’ ability to purchase their desired goods. Good examples are radios, iron boxes and automatic hand driers, which motivates a consumer before acquisition. Such appliances can be purchased when an emergency arises, and require no detailed description of their functionality to the customer. It will be important for the company to lower their marketing expenses to attract this segment of consumers. Consequently, a large customer base will be realised, increasing the total demand for the products.
These are products purchased infrequently, or those which customers take time to make subsequent purchase. Electronic appliances such as home theatre systems require a marketing team to design details of the appliance usage. In this case, the consumers require thorough technical details before making a purchase. As a result, the cost of such appliances tends to be more expensive, and once the purchase has been done, it is difficult for customers to demand a refund in case of defects. However, Company G can cater for such areas by introducing warranty on the specialty products purchased. Consequently, the demand of such products will be high.
These are very expensive products, which are risky when not properly used. Company G can categorise products such as freezers, fridges, and washing machines as shopping products. These products will be distributed with caution, and warranty must be issued to consumers in case of defectives during production.
Porter’s Five Forces model of Competitive Forces
Porter’s model provides a framework that illustrates how a company faces external forces to survive in an industry (Mooradian, 2012). The strategic business manager of company G should consider the following aspects to understand the whole industry and develop a competitive edge:
Risk of New Entrants in the Industry
A potential entrant refers to a firm, which is not currently competing in the electronics industry, but poses a threat if given a chance. This implies that the penetration of newcomers increases competition for customers in the electronic appliance industry. Company G can minimise the entry of new players by having a strong capital base. At the same time, operating on low cost of production restricts new entrants. The marketing team of Company G should engage brand loyalty and use effective modes of product promotion in the electronic appliances market.
Suppliers’ Bargaining Power
These concerns companies that supply inputs to the company. Their bargaining power poses threat to the company by influencing prices of inputs such as raw materials and their services. Based on this fact, suppliers influence the increase in production costs. Through the significant threat posed to the company, the compensation for these costs is passed to consumers. Therefore, these companies are regarded as a threat, and should be handled appropriately. Moreover, the cost managers of Company G should take care of the welfare of its suppliers.
Threat of Substitutes
Availability of substitutes that have the ability to fulfil customers’ needs other than Company G’s products creates a threat to the company. The company must understand the optimum price to charge for their products based on market conditions. It is observed that when the number of substitute products is less, there is high chance for company G to market its electronic appliances. To avoid dire consequences, company G has to differentiate their electronic products in such a way that customers will regard them as the best choice.
The buyers’ bargaining power refers to potential effects that the buyers can have on the prices that the company charges for their products. In essence, strong buyers significantly influence the profits of a firm. To survive in the electronics industry, company G should ensure that their products have high quality standards that correlate with their prices.
Degree of Rivalry
Rivalry refers to the competition for customers and inputs between firms. Extreme rivalry among the established firms will influence profitability of Company G. This fact is attributed to factors like demand conditions, growth rates and presence of a large customer base. In this regard, Company G can minimise the effects by engaging in dialogue with other firms to establish a market structure for electronic appliances.
Company G enjoys the following strengths in marketing their electronic appliances:
- Electronic appliances have been tested for reliability compared to others. Before the appliances are released to the market, a team of engineers is supposed to test them to ensure that they conform to the established standards.
- The design features of the electronic appliances are very appealing and have an aesthetic appearance.
- Company G’s products cost less when compared to others. Thus, the company can add any profit margin on the costs and still be a cost leader in the small electronic appliances
Core competencies are competitive advantages that a company has over its competitor. The following are the core competencies available to Company G.
- Product differentiation- The innovative design features of electronic appliances give them a unique position where customers can differentiate them from those of competitors.
- Cost leadership- Company G’s electronic appliances are relatively cheaper.
Weaknesses that marketing teams in company G have in marketing the small electronic appliances are:
- Poor advertising has the effect of reducing market size and the company may have significantly low market share compared to other electronics manufacturers.
- Uncoordinated product distribution should not be encouraged as it may sway away the customers when the products are not delivered on time.
- Undefined and incorrect product labelling may result to incorrect electronic appliance usage. Consequently, customers are likely to go for those appliances having clear and precise product specifications.
Company G has viable opportunities in the small electronic appliances industry. The following are the possible opportunities:
- Today’s business world requires all people to have a communication gadget. If the company ventures into production of sophisticated cell phones at cheaper prices, it is likely to win over the market in the telecommunication industry.
- The production of energy saving bulbs is justified as their returns are significantly higher for small scale users
- Many home theatre systems have been designed for the wealthy people whose needs are more than the needs of poor people.
In any business environment, many firms face threats to their survival. Company G is likely to face the following threats in the electronic industry:
- Raw material shortage- During the times of intense electronics production, suppliers may not have adequate materials to supply the manufacturers.
- Dumping of electronic products by giant manufacturers- Some manufactures who dictate the market directions are likely to sell their products at lower prices.
- Fake goods in the market- Fake goods usually have lower prices than genuine goods. They automatically lower the firm’s revenue
The above threats pose a challenge to the survival of a firm in the electronics markets. They can be further described below:
- When there is a shortage of raw materials, firms may have idle capacities during the times of operations. Persistent shortage may render the electronic business an expensive venture.
- Goods dumped in the market deny genuine manufacturers revenue from sale of electronic goods. Therefore, firms may eventually close the business.
- If fakes good floods the market, manufacturers may not realise the true meaning of their existence in business while others will close as fake electronic appliances are bought instead of the genuine ones.
Marketing strategies that can be applied in the market mix by the company ranging from the small-scale to large-scale initiatives depending on the objectives of the firm (Boone, 2012). It can be described as follows.
The product strategic decisions include aspects such as;
- The appearance of the product is fundamental for the customer to decide whether or not to buy or not. A product with compelling features lures customers to buy it.
- Warranty- A manufacturer should ensure that products are sold with warranties so that in case of any defects, the customer can have it replaced or repaired.
- Proper product packaging ensures that the product is protected from dirt and that it is guaranteed for external damages.
The decisions on pricing incorporate desired profit margins and competitors’ reaction towards ones action. Pricing strategies include the following;
- Financing- Financing product purchase should be considered when electronic appliances are significantly costly, thus, the manufacturer has to arrange for the customers’ financing strategies.
- Discounts- When selling a product, it is important to include discounts on them to encourage more customers to make purchases, unlike when such discounts are not available.
- Leasing- When it comes to electronics users who wish to use the products for a short period and then return them, leasing of the products to them may be possible. The manufacturer should be in a position to grant leases to customers.
This refers to the approaches that are taken by the company to ensure that their products are delivered to consumers. Some of the distribution strategies are;
- The selection of appropriate channel of distribution
- The penetration strength in the market
- Distribution mechanism
This refers to decisions related to means of informing and influencing potential consumers to purchase the products. Some of the promotion decisions involve the following;
- Public relations- A manufacturer of electronic goods should ensure that perceptions created about the goods are positive.
- Advertising- Product advertising should be made through channels that have a wider coverage.
- Media types-The media house chosen should have a wider coverage.
The best mix can help a firm achieve its objective as customers do not go for the price only, but they go for quality, easily delivered goods, and those of which they have a wide knowledge about through advertising.
Tactics and Action Plan
The ideal tactical plan for marketing is placement of adverts in the internet. In this case, most users will be able to access the internet and get updates for the products in form of banners, pop ups and search engine ads (Mooradian, 2012).
The appropriate monitoring mechanism is the benchmarking technique. In this case, evaluation will be made based on accomplishments. In the event that the plan does not conform to the objectives of the company, adjustments will be made.
Boone, L. E. (2012). Contemporary marketing, 2013 update. s.l.: Cengage learning custom p.
Mooradian, T. A., Matzler, K., & Ring, L. J. (2012). Strategic marketing. Boston, MA: Pearson Prentice Hall.