Executive summary
The marketing plan relates to the operation of Triumph Spares Limited, a firm that deals with spare parts. It illustrates the various marketing strategies that have been incorporated into the operation. It also depicts the various plans that the management has devised to enable cope with the increased competition from the large conglomerate firms. This will help the firm deal with the decline in the level of revenue that it has experienced for the last five years.
Company analysis
Triumph Spares Limited is a family with its owners being Mr. and Mrs. Brian Smith and is located in Coventry. The operation of the firm deals with spare parts of motor vehicles. It was established in 1980 upon the closure of Standard-Triumph Limited which had a factory dealing with the production of spare parts. It operates in two sites which include a factory that deals with assembling spare parts from subcontracted components. It also has a shop that has got good car parking facilities and passing trade. The factory also supplies to other commercial firms that deal with car spare parts in bulk. The shop also acts as a distribution point to the general public and also small commercial dealers.
Goals
Financial goal
The firm has the objective of improving its operation by expanding its assembling factory. This will enable the factory to increase its scale of spare distribution.
About the revenue, the firm’s management has the objective of reversing the trend by increasing revenue by 50% each year.
Non-financial goal
Since its inception, the firm has been committed to maintaining a good relationship with the customers that had been established by Standards Triumph Limited.
The proprietors intend to expand the firm’s scale of operation by opening branches in different geographical locations.
Core competences
The firm has already established its core competence through maintaining high-quality spare parts. This has enabled the firm’s spare parts to be widely recognized amongst consumers.
In its operation, the firm has already developed a good business-to-business relationship with the small and the large commercial firms that deal with spare parts. This is by ensuring that the supply of spare parts is always available leading to the smooth running of the small commercial firms that deal with the spare parts. It also ensures that the delivery of the spare parts is in line with the schedule.
Through developing a good relationship with the customers, the management thinks that it will be able to develop a higher competitive advantage relative to its customers.
Customer analysis
Triumph Spares Limited serves diverse customers. These include the institutional and the individual customers. The institutional customers buy the spares in bulk from the firm’s factory while the individual customers buy in small amounts from the firm’s shop. To effectively market its product, the firm has formulated a strategy that is aimed at influencing its decision-making process.
Competitor analysis
The Motor spare parts industry has got a large number of competitors. Some of the competitors deal with a wide range of spare parts products while others deal with specialized products. Despite the cutthroat competition especially from the large firms, the management has a perception that the industry has a brighter future considering the growth in the motor industry. Due to the quality of its product, the firm has managed to gain a significant market share of 20% in the region.
Firm’s SWOT analysis
Strengths
The firm strength lies in the quality of the product that it deals with. The firm enjoys the goodwill that had already been developed by Standard-Triumph Limited by ensuring that the firm’s factory produces spare parts that are of high quality. The firm’s strength also lies from its incorporation of the mail-order business as its promotional strategy which enables the firm to establish a closer relationship with the customers. The relationship is also enhanced by the development of a good customer relationship database. The integration of the electronic commerce concept in conducting its marketing enables it to reach a wide range of customers. The founders of the firm are also very committed and are aware of the customer’s products needs.
Weakness
Because the firm is a family business, the management techniques of the firm are limited. This is because it is entirely managed by Mr. and Mrs. Smith. This makes it difficult to tap the benefits of superior human resources related to the motor industry. The decline in the firm’s level of cash flow for the last five years has resulted in the firm’s financial difficulties. This culminates in difficulties in the process of the firm financing its capital projects related to expanding the firm’s factory. The single factory of the firm cannot be able to meet the entire spare parts market demand.
Opportunities
The motor industry presents a wide range of opportunities. This is because the technological environment is very dynamic which increases the opportunities for innovation. The firm can also institute research and development that will be involved in devising innovative strategies aimed at adding value to the spare parts.
The firm can also venture into producing spare parts of diverse vehicles which would increase the level of revenue. There is also an increased possibility of the firm venturing into foreign direct investment.
Threats
The operation of the firm is threatened by the dynamic nature of the technological environment. For it to be able to cope with the changes the firm has to invest heavily in its factory. It also has to update its electronic commerce systems continuously to incorporate technological changes.
The competitive environment also poses a threat to the firm. This is because it there are large conglomerate firms that deal with the firm
Market analysis
The market environment presents a wide range of opportunities as well as challenges. Over the past five years, the firm has witnessed a steady decline in the level of revenue. Several firms have gone into receivership while other small firms are becoming a part of the larger firms in the same industry. The management believes that the trend can be reversed.
Target market
In its operation, Triumph Spares Limited has targeted the market for car spare parts. This is due to the lucrative nature that is presented by the motor industry and hence the need to constantly service the vehicles due to wear and tear.
Marketing MIX
To increase the sales revenue, the firm has devised a comprehensive marketing strategy focusing on various marketing mix variables which include price, product, promotion, and distribution.
Product strategy
The management has a strategy that is aimed at ensuring there is a value addition to the spare part products. This is aimed at reversing the slump in sales revenue that the firm has experienced. This is by ensuring that the spare part components received from the subcontractors are not sold in their original form. Value addition to the customers will ensure that their level of satisfaction is high. This will motivate them to conduct repetitive purchases from the firm’s factory and shop to service the wear and tear. This will contribute to increased product and store loyalty.
The management has a plan of increasing the spare parts product line by dealing with diverse spare parts.
Distributional strategy
The firm undertakes direct distribution of the spare parts to its customers. This is done from the firm’s factory and the shop. To ensure that the firm’s products are available in the entire market; the management has devised a strategy that will integrate the use of agents who will be selected by the firm. It will also establish more retail specialty outlet shops that will be distributed in different cities.
Promotional strategy
To create awareness of its product, the firm has developed a promotional strategy that serves different customers. This involves the customization of the firm’s product through the incorporation of the mail-order business. This enables the firm to maintain a personal contact relationship with retailers. This enables them to continue stocking the factory’s spare parts. The firm also has incorporated the concept of electronic commerce. This enables the firm to conduct online marketing. The management has developed a good public relations strategy. This is by establishing a customer relationship database.
To ensure that the firm’s commercial customers are conversant with the changes in the spare parts, the management has developed a strategy that entails training of the retailers constantly. The promotion budget for the firm has been minimal for the past five years. The management intends to increase this amount to increase the firm’s product awareness.
Pricing strategy
In the pricing, the spare part products, the firm’s management has integrated the cost-plus pricing strategy. This pricing strategy applies to the various categories of customers. For the commercial car restoration customers who buy from the firms’ factories in bulk for resale purposes, the firm has incorporated the cost-plus pricing strategy. This is where the price of the spare parts is inclusive of the intended profit margin. The retail price for these customers is set with a margin of 50%. About the small commercial purchasers and the general public, the price is set with a margin of 100%. This strategy has given the firm a competitive edge against its competitors who fix a constant profit margin of 100% without differentiating their different customer categories.
Evaluation and control
For the plan to be effective, the firm’s management will continuously evaluate the marketing strategies adopted. This will enable the determination of the effectiveness of the plan. Amongst the barometers that the firm will use to determine the effectiveness of the plan is the revenue generated. It will also conduct continuous market research about various market variables such as the customers’ level of satisfaction from consuming its products. This will aid in the identification of the changes that will be incorporated in the operation of the firm.
References
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- The chartered institute of marketing. 2009. “Communication channels”.