“Truck Safety Company”, based out of Darwin, has developed a new safety product that monitors Long haul truck drivers Fatigue. This state of the art product has been developed with “truckies” safety in mind. Major trends related to Economic, Cultural, Demographic, Natural, and Technological marketing environments.
The economic environment
The economic situation in the world is improving from the resent downfall and therefore all businesses work hard to make profits and avoid loses.at the same time people work to get money to be able to fulfil their needs. In a bid to get more money some employees may want to work extra hours and even when they are tired they still want to work. This causes lots of accidents due to accidents caused by fatigue on the part of the truck drivers.
The cultural factors that affect firms involve the beliefs, values, attitudes, opinions and lifestyles of the external environment. There is a lot of cultural change in the business sector that now believes in the innovation and technological change. Therefore the innovation will be welcomed by the companies that own trucks.
These are the characteristics of the environment in terms of the age of the potential customers, the distribution of the potential customers, and income of the potential customers. The transport companies are well developed companies with good income.
The technological environment is very dynamic and everyday something new is developed. People are embracing the change very well and therefore the more advanced the technology the better it is.
William Pride notes that a target market is a group of individuals or organisations or both for which a firm develops and maintains a market mix suitable for the specific needs and preferences of that group. 1
For the truck safety company, its target market is transport companies that use trucks, suppliers who need trucks and organisations who transport their own materials or products.
The customers for this product have the following characteristics:
The consumers are organisations that deal in the transportation business.
According to the income variable, these customers are businesses that have a steady income, and which can afford to spend a good amount of money on the safety of their trucks since these are their main tools of trade.
In this characteristic we look at the motives of the consumers as the variable. In our environment, the motive of the consumers is to make profit by transporting goods for their customers. This leads to a conclusion that their primary motive is to make profit.
The market density being a variable in this characteristic, we look at the market density. The market has very many members, this is because every business, even a non – profit organisation needs transport services to get supplies to the business and also to get their products to the consumers. Therefore the market is densely populated.
The end use is one of the variables in this characteristic; the end use of this product is to ensure safety of the truck and the truck driver by monitoring how tired the driver is, with the aim of avoiding accidents.
From this characteristic it is clear that the consumers are businesses with the aim of making profit and ensuring safety of their trucks and truck drivers. They also try to be efficient by not entertaining tired drivers who will slow down the process. They look for drivers who are competent and alert.
We are a company whose aim is to provide safety for the truck drivers and owners and therefore when introducing this new product our objectives are:
- To gain eighty five percent of the market share by the end of two years. This is because we are the pioneers in this kind of business, and we believe we have the best product, price, distribution and distribution channels to enable us to reach our potential customers without any obstacles.
- Being a new product we are also setting out to create awareness about the product to the consumers and we aim at having gone to ninety percent of the transport industries in the country by the end of this year. This way we will be able to make them know about the product and also be able to build a relationship so that they become our loyal customers.
- To be able to maximize our profits so as to be high level performers. This means that we are striving to achieve a return on investments that is above thirty percent. We will achieve this goal by using a pricing strategy that will suit our goal.
- We also want to create an eighty five percent customer loyalty. This means that eighty five percent of the customers we sell our products to shall remain our customers, even when other businesses come with the same products. We should be able to give them good customer service and quality products that will ensure that they will always be happy to do business with us.
Carl McDaniel & Roger Gates note that marketing mix is the unique blend of product, price, promotion (place) distribution designed to meet the customer’s needs. 2
Peter Belohlack notes that the main objective of marketing mix is to establish the successive and simultaneous action to influence the consumers’ or users’ purchasing decision. 3
A product is the element which satisfies the customer. It is what a business has to offer its customers, that is, what the business is selling. A product has three components:
The core benefit of a product is what the consumer gets from the product. The core benefit of our gadget is testing the tiredness of the truck driver. It shows the level of tiredness of the driver.
This is the product, whether a good or a service that is being offered to the customer by the organization. Our actual product is the gadget. The gadget is a small, portable item that is used to detect the level of tiredness.
These are mainly extra services that provide additional value to any customer who buys the product. Our augmented product is the one year warranty that we will include for our customers.We will also give them the guarantee that the product is efficient and will not have any faults. We will also give them all the customer service they need like delivering the product to their warehouse.
Products are classified according to the consumers who use them.
There are two types:
These are products that are bought by consumers for their own personal use.
These are those products that are purchased by manufacturers of other products as raw material for further processing, or by other business people for use in the course of their business.
Consumer products are further classified as:
These are products that are necessities, and consumers have to buy them almost daily. The consumer does not take much time to compare the various brands in the market and the prices before buying such products. They are products which the consumers need daily in their life. Examples of convenience products are as milk and bread.
These are consumer products that are necessary, but are purchased after a long duration. Consumers normally take their time to compare of various alternatives that are available in the market before selecting the one to buy. Examples of shopping products are furniture and electronics.
These are consumer products that have unique features that consumers are willing to go an extra mile in order to acquire.
Our product is unique to the transport industry because it is an innovation that has not been made before and it will help to increase their efficiency.
These are products that the consumer does not care about their existence.
Positioning is how the market views a particular company, product or service in relation to their views of the competitors. It happens even without any weakness on the company’s management. A company can however influence the perceptions in its favour by acting strategically.
Our market positioning will be done among the transport industry and being that the product is new we will have the task of identifying how the customers feel about the product and what they like and what they don’t like. This will also help us to know and identify if there are substitute products for our product so we can know how to counter the competition.
Packaging refers to the design and production of the container or outer cover of a product. A good packaging should protect the product from damage, make it easy to use, or make it appear of higher quality.
Labelling can be simple like a tag or it can also complex with graphics.it helps to identify the product, state the price, promote the product and describe the product.
Product branding is another important factor.
It is the label that separates the manufacturer of a particular product from its competitors, and differentiates the product from the competitors’ products. The above three points are equally important when marketing the product and must be taken into account.
Gordon Mills notes that pricing strategy is about setting the right price for a given product by analysing some factors which include:
- Internal factors
- External factors. 4
The internal factors are factors that the manufacturer of the product has direct control over, that is, they are factors which the manufacturer has the power to determine, without the interference of any external forces. These internal factors include the organization’s marketing objective which states why the organisation has launched the product; the organization’s market mix strategy, the costs incurred by the organization in of producing the product, and the amount of mark up that organisation wishes to add to the cost of production in order to arrive at the selling price.
The external factors are factors that the manufacturer of the product has no control over, that is, they are factors that are purely determined by external forces, and the manufacturer has no power to determine such factors. These external factors include estimated demand, type of market, competitors cost, and economic conditions.
Price strategies often change as a product passes through different stages. For a new product like ours there are two commonly adopted:
Market skimming strategies
This is the setting of high price for a new product to skim maximum revenues layer by layer from the segment that is willing to pay a high price.
This has to be under given conditions and not just any product:
The product quality and image must support its high price. Our product being a rare innovation with unique capability it will easily fit the price.
Enough buyers must want the product at its price
The transportation industry has many members and so they will be willing this new innovation with good promotion and distribution we will get the needed number of buyers to break even.
The cost of producing the few units must not exceed the target revenue.
Competitors must not be able to enter the market easily, this will be hard for the competitors before they learn to make the gadget we will have secured the market share.
Market penetration strategies
We will use the market skimming strategy and this is because our product is one that is special to a group of customers and they will be willing to pay the price for it. Since our product is an innovation and there has been no other, we will work on building our brand name so that when others decide to produce the same product we will already have a big market share.
There are also other strategies like dynamic pricing strategy where the price is quoted according to the consumer so it keeps changing.
Jakki Mohr notes that this is the strategy used to ensure that the product reaches the customer at the right place and at the right time. 5
There are 4 Channels of distribution:
Producer to consumer
This is where the producer does not engage any middlemen in the process of getting the product to the final consumer. The producer sells the product directly to the final consumer. This is the distribution channel used by network marketing companies.
Producer to retailer to final consumer
Here the producer does not engage several middlemen in the process of getting the product to the final consumer, but only engages a retailer, to whom he sells the product, and who then sells the product to the final consumer.
Producer to wholesaler to retailer and to final consumer
Here the producer engages two middlemen in the process of getting the product to the final consumer. In addition to the retailer, engages a wholesaler, to whom he sells the product, and who then sells the product to retailer. The retailer refers to the retail outlets from which the consumer finally gets the product.
Producer to Distributor to Wholesaler to Retailer and finally to consumer
Here the producer engages three middlemen in the process of getting the product to the final consumer. In addition to the wholesaler and retailer, the manufacturer engages a distributor, to whom he sells the product, and who then sells the product to wholesaler and the retailer gets the product from the wholesaler. The consumer then gets the product from the retailer.
For our product we would like to use the direct marketing channel that takes our product directly to the consumer. This helps to avoid imitations and any kind of inconvenience that may be caused in the middle. This will help to interact with our customers directly and build customer loyalty through good after sales services. We will also be able to offer the product to the customer at a cheaper price than would be possible if we engaged middlemen.
This is the strategy that includes advertising the product. It aims at making the consumer aware of the product. According to Charles (Integrated marketing Communication (IMC) these refers to the various ways in which a firm communicates a marketing idea to induce influence on the target market and develop effective demand to their benefits and the benefits of the organisation – it involves, traditional advertising, direct marketing, interactive, public relations ,sales promotion ,personal selling event marketing and other communications In advertising, we will use television, newspapers and magazines. The internets will also medium for our advertising. The method of advertising will be information advertising because our product is anew product and we will want our consumers to know about it.
We will also use personal selling in order to develop relations with our customers. Our product is one of high price and therefore it needs a face to face interaction to convince the buyers.
Under the push strategy, the middlemen such as the wholesaler or retailer are convinced by the manufacturer to stock the manufacturer’s product. The manufacturer directs all marketing efforts towards the middlemen, without bothering about the consumer.
Under the pull strategy, the manufacturer directs all marketing efforts towards the consumer, without bothering about the middlemen. It is the consumer who then puts pressure on the middlemen to stock the product by asking for it at the retail outlets.
Our product is a new product and therefore it is still in the introduction stage. Our selling strategy will therefore be to sell to those ready buyers and as we have described our target is made up of people in the transport industry and the product being a unique one they will be ready and willing to buy it. We will also make sure that we promote the product through all the communication channels like the TV, the internet, the radio and even the magazines. We will also use the direct channel of distribution in order to be able to interact with our customers and be able to create customer loyalty. This given market mix will be enable us to meet our objectives which are to have eighty five percent market share, to gain customer loyalty, to maximize our profits and to make all the transport companies aware of our products.
Belohlack, P, Unicist Marketing Mix, Blue Eagle group, California, 2008.
Jakki, M, Marketing of High Technology products and Innovations, Pearson Prentice Hall, New York, 2010.
McDaniel, C, & R Gates, Marketing research Essentials, Wiley, New Jersey, 2010.
Mills, G, Pricing strategies and Market power, Melbourne University press, Australia, 2002.
Pride, W, Business, South western, United States, 2010.
- W, Pride, Business, South western, United States, 2010.
- C, McDaniel, & R Gates, Marketing research Essentials, 2010.
- P, Belohlack, Unicist Marketing Mix, Blue Eagle group, California, 2008.
- G, Mills, Pricing strategies and Market power, Melbourne University press, Australia, 2002.
- J, Mohr, Marketing of High Technology products and Innovations, Pearson Prentice Hall, New York, 2010.