Global Gadgets Imports Firm’s Marketing Strategy

Historical Background

Global Gadgets Imports (GGI) commenced its operations in 1992 as an importer of home products that were mainly décor and gift items. Originally, it sourced its imports from various Asian manufacturers and sold its inventory through a network of distributors and other intermediaries who supplied to the retail and mail order catalog market. GGI opened its first retail store in 1995, a decision informed by a desire to move closer to the market to minimize distribution costs. This was an instant success that led us to opening 10 more stores in 3 state regions.

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Current Situation

GGI is currently dealing almost exclusively with one manufacturer to optimize import and distribution functions. Over the past one year, revenues from the entire business have been declining while store sales have remained flat. Marketing has been pointed out as the major cause of this dismal performance. The current marketing practices have been rendered ineffective due to failure to reinvent them to reflect the prevailing trends.

Our greatest strength however lies in our long experience in business giving us wide knowledge of the market. Our past successful forays in the market give us a higher leverage over our competitors. In addition, we have high skilled management and staff that are dedicated to the well being of the company. Besides, our wide capital base is a huge strength to the company. On the other side, our weakness lies in our slow response to the needs of the market particularly on the side of product branding and packaging. On the same front, our marketing approaches have remained redundant over a long time dealing a cropper to our business operations. Despite these few handicaps, opportunities are still rife for GGI in the large and growing industry of house ware. Our large capital base and experienced staff will also serve as a great opportunity in our bid to stamp back our authority in the market. However our main threat remains the growing economic recession which is expected to shrink consumer spending across the board. A survey conducted by the NPD group in October 2008 indicated that 50% of the population sampled was planning to spend less on house ware in the following months.

Market Analysis

Industry size and growth

The house ware industry is big and is growing at a very fast rate. Its full potential is still largely untapped. The venture is thus very viable given support and relevant input in terms of the right market strategies. House wares have re-emerged as a major money-minting business for home product based retailers. The total U.S. consumer expenditures on house wares in 2004 grossed $65.2 billion according to the International Housewares Association (IHA), much of what was spent in hardware stores, home centers and lumber yards.

During these tough economic times where the world is grappling with economic recession, the green concept has gained considerable prominence. Consumers are quite receptive to products that guarantee reasonable cuts in energy cost without harming the environment. These house wares range from kitchen utensils to cutting boards. Thus any commodity that goes along this concept will be welcome news to the consumer. Manam (2009) observes that money saving, personally operated products, and home entertainment are the current trends in the market. People tend to place their biggest investment on home according to Goldman (2008). They spend more time at their homes and search for products that help them either with projects to improve their investment, or for home entertainment. People are looking for products that are useful and will last, including home-cleaning products for projects that previously might have been handled by companies or cleaning services. Stern (2009) observes that due to the biting recession many consumers are spending more of their time at home and going out less, a trend the $300 billion industry is set to rely upon to boost sales of kitchen ware and cleaning tools.

Market Segmentation

Baby boomers are the driving force behind the higher-end price points and are responsible for purchase of most high end appliances, for example, higher-end coffee makers and cookware. This behavior is mainly as a result of the higher disposable income of the boomer generation. Next after the baby boomers is the generation between mid-20s to early 40s. This is the group that is starting family later in life and is in huge demand of house ware items to start up. Their major occupation is to find unique but affordable items. The current trends in house ware products are largely driven by demand for functionality and convenience, according to NPD Group.

Core Strategies

The major strength of GGI is its long experience in the retail industry which translates to good knowledge of the prevailing market. With an already established market for its goods, what remains are strategies that will move these commodities to the next level.

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Product diversification

One of the marketing strategies proposed to boost sales and profitability of GGI is product diversification. This will be achieved through introduction of house wares goods as part in addition to the existing product line of GGI. Bearing in mind that supplier has a full range of quality house ware products; this will be great strength to the business as it takes advantage of the existing relationship to enjoy discount pricing offered by the supplier. This proposition will enable the business to offer a varied range of products hence plugging a gap in market supply. The strategy will also go a long way towards pushing the sales volumes upwards and also increase the business profitability.

Repackaging and branding

Attractive design and packaging are going to feature prominently and will inspire most of the future designs in house wares especially cookware according to the NPD Group (2008). The kitchen has been gaining increased prominence as the focal point of the home hence fueling consumers’ attention to design aspects of their house wares and appliance products. Product performance and functionality will however not be given the back seat. To reap maximum benefits from the global and dynamic trend towards home entertaining and multicultural cookery, manufacturers are bound to give ethnic products coupled with originality. This then inspires us to follow suit in pursuit of attractive and creative ways of packaging our products.

Competitor Analysis

Due to its ability to create and bring in business, retailers in all types of markets are moving towards the house wares business. The major competition here includes other businesses that deal with similar commodities only differentiated by packaging, branding and pricing. Others include a few retail giants like Walmart that can be dealt with by stocking goods that are not sold by them. Of worthy mentioning is also several online marketers who offer various products. These operate cyber shops where customers can view their products, place orders and make purchases at the convenience of their homes. Some of these competitors offer free deliveries to their customers on specific days and also give gifts, a service that attracts quite a number of customers.

Expansionary Strategies

Apart from expanding the product line to include house wares, the company also seeks to open additional stores with new brand name. The reason for using a new brand name is not an indication of a shift from the core business of GGI but will be part of a rebranding exercise to re energize our product line and to introduce our new line of business. These new stores are aimed at increasing our market share and are in line with the company objective of reducing the distribution cost to optimize revenue. They will also go a long way towards enhancing poor market penetration. The greatest advantage here is that our goods will be available at consumers’ doorsteps. Along these expansionary measures will be stringent cost cutting measures that will be put in place to reduce access time of our stock from our supplier while at the same time improving the effective rate. Distribution and communication channels will be streamlined using the latest technology in order to ensure smooth mobilization of stock from one point to another and also to facilitate decision making.

Growth and Development Strategies

Part of our strategies to ensure that we regain our foothold in the market and that we establish a notable niche is through aggressive branding and packaging measures. In a market full of competition, product branding and packaging are of great importance. Hines (2009), points out that innovation in packaging can transform a product from a commodity driven product to premium product category. Our current mode of packaging consists of a plain brown wrapper. As much as it serves its intended purpose, it doesn’t resonate so well with customers who pay very little attention to it thus sounding a big blow to our reputation as a market force.

Thus in order to stamp our authority in the market and also as part of our product differentiation strategies, we will have to introduce a new aspect of revolutionary packaging of our products. Our package should be able to capture the customer’s attention and persuade them to pick the product while at the same time informing them about the product. This need not come at an additional cost to the business as its effect will be cancelled by additional sales volumes that will result in the long run hence eclipsing the actual cost of the exercise. Additionally, the most cost effective methods of packaging will be employed to minimize wastage and also the cost of packaging.

Market Promotions

Part of our marketing efforts will be dedicated towards improving our customer care center. Customers are one of the most powerful tools of customer retention and also attracting new ones; we will embark in enhancing customer service to ensure quick response to customer’s requests and enquiries. This will move customer satisfaction to another level and also increase flexibility in delivery of service. Staff will be trained on public relations in a program that will be rolled over the next one year. The sales staff will also be trained to cross sell products especially when customers inquire for those whose production might have been discontinued or newer ones have been produced. This will amount to increased sales volumes and customer loyalty through establishing GGI as a one stop center for houseware goods.

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We will also establish a division to deal with after sale services to our customers. This will offer among others installation of home appliances and also carrying out minor repairs for customers to ensure their loyalty. Well trained personnel on call will be available to answer to customer’s requests and inquiries. Technical advice and demonstration will be available to them on request especially for new products. Aggressive advertising and sales promotions using posters, banners, activations and media houses will come in handy to compliment our rebranding efforts and also to boost the sales volumes and to enhance brand awareness. This will ensure that we reclaim our niche in the market as a market leader. As I said earlier, these efforts will have to be guided by a cost minimizing framework while ensuring that the accruing benefits are optimized. These promotions will call for concerted efforts by the management and staff to coordinate their operations to ensure tangible results are realized.

Reference

Goldman, P. (2008). Striking a Balance in an Unbalanced Market. 2009.

Hines, J. (2009). Staying ahead of the curve. Web.

Manam, W. (2003). New trends in the house wares go green, save green: full House. 2009. Web.

Stern, A. (2009). House wares industry views recession as opportunity. Web.

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