Global Gadgets Import Firm’s Direct Marketing and Privacy Issues

Introduction

Global Gadgets Import (GGI) is a company which imports and distributes home décor and gift items. It started operations in 1992. Its imports are from Asia. The company sells its products through an elaborate network of distributors who supply to the retailers and mail order catalogue market. In a bid to capture the high profit margins, the company opened its first retail store in 1995. This effectively eliminated some distributors leading to higher profits. Success in these firms prompted the opening of ten additional stores in three states. Distribution business continued to grow.

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The firm rationalized its operations after ten years in operation. It narrowed down to importing exclusively with one manufacturer. This minimised logistics enabling the firm to concentrate on distribution.

However, last year presented a different picture. Sales to distributors fell. In the outlets there was clearly no improvement. A close analysis showed that the products were still viable but marketing was poorly done.

Strength and Weaknesses analysis

Analysing the strength and weaknesses in the available marketing strategies will be of much help in ensuring only viable strategies are used to enhance sales.

The company has improved efficiency through narrowing down to only one supplier. It helps in bringing down the costs of sales due to the utilisation of economies of scale in the importation of the goods. Payments are also made to only one party meaning less cost of transactions. This has over the years built a strong bond which can be utilised to benefit the firm. Most important is the fact that the supplier also engages in the production of a large variety of products. There is bound to be better understanding between the two companies meaning that the company can take advantage and access goods cheaply.

The presence of an elaborate distribution system incorporating several players in the market means the company already has strong networks which can readily be used to advance business course.

The firm has some major weaknesses. First, it relies on one firm for all its supplies. This increases the risk especially in a case of failed supplies. The company can be overly exposed to the possibility of the supplier company not supplying or even closing down business. Still, not being in touch with other suppliers may make the company pay higher prices even when the prices are down (Medium, 2007 Para 6).

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The decline in sales can be addressed in four main ways.

Expansion of product Lines

Expanding the product line involves diversification. It is the addition of new products into the existing products. New products are usually successful when they leverage a company’s intangible resources. Intangible resources refer to the existing infrastructure whose use can be expanded without increasing costs. It also incorporates the existing administration and logistical processes which already exist and whose costs are negligibly affected by increases in the number of products. The firm already has an elaborate distribution channel which is fully structured and little alterations need to be done to incorporate other products similar to gift items.

The form of diversification befitting to the firm is horizontal diversification. The firm can diversify into dealing with household goods on top of the gift items. The existing customers are loyal hence they are bound to accept the firm’s new goods.

Diversification will extend the available skills and experience from the gift items. This is because both the gift items and the house wares are very similar. Some common features include the target market and handling logistics including transportation and storage. The target market for gift items and house ware is the household. This provides a very convenient platform for selling the two products together. The scenario extends to the retailers to whom the distributors supply. Most of them also deal with household goods thus the wholesale department will also largely grow.

The firm which supplies the gift items for the GGI also produces many other house wares. This means that the firm having established a long running relationship

Is well placed to bargain and access the household goods at the best price. This implies that the firm can resell the goods at market competitive prices hence be able to penetrate into the market with much ease.

Diversification will actually reduce the risk of the company losing business in a case where the gift market shrinks. It could actually expand sales through household goods even when revenues from sale of gift items are shrinking.

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Caution should however be made in diversifying as additional resources have to be applied to support the new inventories and the marketing to be applied. Also the strategy may further expose the firm by increasing its reliance on one segment of the market. Future changes in consumption of the common market segment can seriously hurt the firm.

Repackaging and Rebranding

Repackaging involves the covering of the product. It should be safe, affordable and communicate some message to the customer. The current packaging of gift items is flatly boring. A brown covering on a gift is truly not a pleasing sight. Packaging in the firm has to change from a cost cutting strategy to a strong marketing function.

The packaging used should be an ambassador of the company and the product. Research has to be done on the customers’ lifestyles. The customers should “like” the package as to be able to carry them in their bags, leave them on the table room for guests to see. A person who sees and likes the packaging is a potential customer. The package should elicit “consumer delight” as this builds royalty from the customers. It is a powerful tool for influencing customers. This being the case, wrong packaging influences the customer away from buying the product.

The current brown paper is not functional. Gifts are pleasant and exciting. Brown colour is simply dull. This means the colour of the packaging is not functionally related to the product. In fact, customers often have to purchase gift wrappers to make the gift items more appealing. The extra household items have to be repackaged into pleasing and exiting packages that connect the functionality.

For gifts and other such items research should be focus on combining bright colours such as pink, orange, purple and other similar fades.

Rebranding on the other hand involves getting the potential customers to know and identify the firm as the only credible distributor of superior items. Research should be conducted to come up with a name, a phrase, a term, a symbol or a combination of these to come up with a unique identity which customers can easily use to identify the items sold by the company.

The brand adopted should clearly deliver the intended message of superiority and credibility of the products offered by the firm. It must emotionally connect with the potential customers to be effective. It should be “catchy” and geared towards cementing a long-run relationship between the customers and the firm. Most importantly it should motivate the buyer towards purchasing.

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Having expanded the range of goods available for sale, GGI should consider adopt a brand name which depicts it as a “one stop shop” for all house wares and gifts. Estimates in the US shows that women account for 80% of household spending. This being the case Global Gadgets Imports should focus on the women population. The brand adopted should be most appealing to women for maximum effectiveness.

The firm should also consider a change of name. A name incorporating the new role of dealing in house ware would be more effective in building the brand. The change of name would lead to higher publicity.

A key element to the success of the repackaging and rebranding exercises is the awareness. A great campaign involving media advertising should be undertaken to popularise the new brand and packaging.

Additional Stores

It is true that outlets enhance the relationship between the customer and the firm. Casting the net wider in the retail business will definitely help the firm understand the customer better and thus be well placed to strengthen the relationship.

The current number of outlets is ten. They are mainly concentrated in three states. This is an impressive foothold but more can be done to improve the firm’s presence and visibility in the market.

Expanding the sales outlets will not only improve visibility of the firm but it will also enable the firm earn even higher profits due to further elimination of intermediaries. In fact, the firm should focus more on expanding its retail business rather than the wholesale business. This way the firm can avail its products at the lowest market price thus beating competition while at the same time remaining profitable (Paul,1997, p6).

The long-term goal of the firm should be to open outlets across all the states but in the short term the company can open extra outlets in states not already covered as a product development strategy. The number of outlets to be opened immediately will depend largely on the finances available.

The opening of any additional outlet should be done in ceremony. Lots of awareness should be done especially within the immediate neighbourhood. Involvement of the locals should be maximized. An elaborate reward program should be developed to motivate the local community towards visiting the stores.

A new brand for the outlets which portrays them as the cheapest shops which eliminates intermediaries can be very helpful in reaffirming the fact that the company offers the best quality but best priced products in the market.

Marketing Campaign

This involves an integrated communication process by the firm towards the customer. The aim is to persuade the customer that the company’s products are able to fulfil their needs.

Direct Marketing

The success of all the above marketing strategies is hinged mainly on the level of awareness of the customers. A wide campaign popularising the brand is critical. In the case of Global Gadget International, a media campaign should be used to push the agenda of “super Quality “at “Cheapest Price”. The Internet should be most utilised as its effectiveness in reaching a large audience is high. Online campaigns should largely target websites most accessed by women. However, micro-campaigns especially at each of the outlets can also be very effective in establishing customer royalty.

Direct marketing is probably the most successful form of marketing. It seeks to send direct messages to customers through established communication routes such as e-mails, telemarketing and direct mail. A very distinguishing feature is that it involves influencing the customers to take specific action which can later be evaluated and measured. Direct marketing is considered an almost perfect way of eliciting positive response from customers (Peppers & Rogers, 1993, Para 5).

However, the major demerit of the direct marketing strategy is that consumers often consider it to be a nuisance. Direct e-mails are seen as junk and spammed. This erodes their effectiveness.

For Global Gadgets Import, a comprehensive plan of action should be developed targeting mainly women. Promises of discounts and other rewards can be very effective in ensuring that the customers actually come out to visit the stores and buy the products. This direct marketing campaign should be sustained over a period of about three months for best results (Peppers, & Rogers, 1993 Para 7).

Personalized Marketing

This is an extreme form of product diversification strategy employed by firms. It involves incorporating the interest and views of the customer in developing a product. The end result is that the products are unique to each customer. This strategy has become even more popular with the help of the modern day media which allows maximum interaction between the customer and the media. In the internet, certain websites have been developed to track the behaviours of customers and thus organise and prioritize information available to the customer based on individual preferences (Peppers, & Rogers, 1993 Para 10).

Through such websites, a person who regularly accesses websites that deal with gifts and household goods can have emails relating to the promotions and the products available in Global Gadgets Imports sent to his e-mail box. This can be very helpful in getting the right people for the adverts.

However, the issue of privacy has lately triggered a heated debate. Customers consider direct emails or even direct calls made to them without their authorisation an intrusion to their privacy. This implies that a direct mail sent to a potential customer may elicit a totally different emotion from the intended one. Also, the idea of tracking all the websites accessed by a customer in a bid to identify his behaviour and preferences has been viewed by many as a form of intrusion to privacy (Robert, 2006, Para 8).

The best way to use direct marketing and personalized marketing without intrusion to privacy is by allowing the people to voluntarily grant access to their e-mail accounts prior to sending the mails. This way the customer’s privacy will not be intruded. However, the effectiveness of the strategy may be compromised as many potential customers may deny access to their mail boxes.

Conclusion

Global Gadgets Imports is already a strong firm with strong elaborate mechanisms for business. Boosting sales is however critical as the firm has experienced decline over the past year. The above stipulated measures if properly implemented have the potential to more than double the sales volumes of the firm thus drastically improve the profitability.

Of critical importance is the continuous evaluation of the success in marketing. The goal is mainly to improve the market share of the firm. Assessments of the firm’s improvement should continually be made even during and after the campaign in a bid to ensure that the efforts employed pay.

Indeed, employing the 4Ps marketing strategy (Product, Price, Promotion and Product distribution) will be the best answer to boosting business for Global Gadgets Imports. The management has to be cautious about the cost implications in implementing the above strategies. Some can be so expensive as to compromise the financial position of the firm.

Reference

Medium B. (2007). All is Well? Small businesses guide to Marketing. 2009. Web.

Paul, H., (1997). Sales Process Engineering: A Personal Workshop. Milwaukee, WI: ASQ Quality Press.

Peppers, D., & Rogers, M., (1993). The one to one future: Building relationships one customer at a time, New York, Doubleday.

Robert J., (2006). Current Privacy Issues Facing Marketers. The PRIVACY & DATA SECURITY LAW JOURNAL. 2009. Web.

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