Assignment 2. Part B. Marketing plan Pots and Pans
MsSweet
assignment_1_revised.docxMARKETING PLAN
Assignment 1. Part A. Marketing plan
Cornelia Nelson
Marketing 500- Marketing Management
May 4, 2014
Dr. Scruggs
Assignment 1. Part A. Your marketing plan
Introduction
The following assignment is aimed at creating a comprehensive marketing plan for a hypothetical organization. The “Pot and pan” company has been producing cookware at Prince Edwards Islands in Canada since 1979. The manufacturing plant of the company in North America is specifically designed to produce cookware for North American market. The company offers pots, pans and different and a variety of Cookware for both individual and corporate clients, emphasizing orientation on luxury products.
Executive Summary
The “Pot and pan” company is one of leading companies at the luxury segment of cookware in the U.S. and Canada. The company’s positioning strategy is based on emphasizing exceptional quality of its products, while the prices for “Pot and pan” products are the highest among comparable items.
Narrowness of existing target market and the willingness to future expand to other segments of the cookware market, as well as economic pressures determine the need for a comprehensive re-assessment of the company’s goals for the future. This new 5-year strategic plan suggests including one more target group, extending the product line to meet the needs of middle-class consumers, and concentrating on improving promotion strategy. Successful implementation of the plan will have positive influence on profitability of the business, and, therefore, shareholders’ return and return on investments.
Environmental Analysis
Competitive forces. The products by wide variety of cookware manufacturing companies are available in the U.S. and Canada. Within that group, there are 216 brands that are available at retail through Cookware manufacturers association (Cookware manufacturers association, 2014). Vast majority of companies operate at several segments of the market simultaneously.
Economic forces. The kitchen and cookware stores industry has faced significant declines due to recession that called forth the decrease in disposable incomes of customers, who purchased fewer products as they were estimated to purchase earlier. However, over the period from 2014 to 2018, revenue is expected to grow as consumers tend to increase their spending on luxury industry products (IBIS World, 2013).
Political forces. The increase in export-import operations due to the changes of trade regulations between the USA and world’s biggest manufacturers of cookware (such as China) places cookware, manufactured in the USA and Canada at competitive disadvantage with respect to the ones, manufactured overseas. However, luxury segment of the market is estimated to be far less vulnerable to this trend as other segments.
Legal and regulatory forces. The products fully comply with the U.S. and Canadian safety guidelines. Tort liability of the company is ensured.
Technological forces. The products are manufactured with regard to latest technological advancements in the field of cookware manufacturing, and the company is thoroughly monitoring the development of industry-related technologies.
Socio-cultural forces. The company is responsive to the target’s commitment to high-quality products and “made in Canada” label. Green manufacturing techniques are used.
The Target Market
The company’s primary target market is female, aged 40-60, who are not officially employed and dedicate significant amount of their time to housework. They value quality and reliability of products, and consider buying a product by the “Pot and pan” as an investment. Another group of customers that is included into the company’s primary target market and corporate clients (restaurants, hotels). Secondary market includes women, aged 20-70, who are either employed or busy with housework and trend toward premium brands.
Branding Strategy
One of most developed product line by “Pot and pan” includes variety of different products. One of most popular cookware is steamer with a cover. The brand name for it can be “Super-steamer”. The logo will depict a steamer with cartoon-like face (eyes, nose and smile). The slogan is to be a brief message, emphasizing the peculiarities of the product. I think that best slogan will be “Super steamer for super dishes”. Apart from offering single products, the company under study also offers cookware sets. Different variations of super steamers form an integral part of vast majority of the sets. So, the branding strategy can be extended to the cookware sets. The name for the set can be “Super steamer family”, and thus the slogan can be formulated as “Super steamer family for super dishes”.
Performance Analysis
In the context of the formulation of the assignment performance analysis is similar to return-on-investment (ROI) that is calculated as follows: (gain from the investment-cost of investment)/cost of investment.
Knowing the benchmarking percentage, we can transfer to the analysis of each of the metrics in order to compare performance of the company to the performance of its closest competitor, namely Paderno.
Customer engagement is the metrics that is characterized through several other metrics, namely activity time and visit frequency (with regard to websites). The average number of visitors of the website of our company during a day is 1.500 people, while the average number of visitors of Paderno website is 4000 people.
1500/4000=0.375. The number of Paderno website visitors exceeds the number of our unique visitors by 72.5 per cent.
Let us suggest that while the retention rate of the visitors of our company’s website was 30 per cent on January, the first, 2014, and on January, the fifteenth it was 50 per cent, while retention rate at Paderno company website was 50 per cent and 70 per cent respectively.
(50%-30%)/30%=0.6=60% - increase in retention rate
(70%-50%)/50%=0.4=40% - increase in retention rate
The number of website visitors can to great extent determine the revenue of the company due to the fact that all the products by both companies can be purchased on line through their official websites.
The market share is classical metrics, used in performance analysis. Paderno is still the leader of the market, enjoying the market share of 22%. In 2013 its market share increased by 1 per cent (from 22 to 32 per cent), while the market share of the “Pot and pan” increased from 11 to 15 per cent.
(23-22)/22=0.0045=4.5%
(15-11)/11=0.36=36%
The fact of growth can be explained by the introduction of several new distribution channels into the operation of the company last year, while, being confident in its leading position at the market, Paderno preferred not introduce any changes to its strategies.
The rate of adoption can be defined as the relative speed that characterizes the process of social system’s members’ adopting an innovation. The factors that influence adoption rate include relative advantage (the degree of innovation’s improvement as compared with the previous generation) compatibility, complexity, trial-ability, as well as observability. In 2013 Paderno and the “Pot and pan” introduced similar new products. They were cookware sets, consisting of several cooking pans, steamers and covers. The adoption rate of Paderno new product was estimated to be up to 10 per cent higher than the one of the cookware set, introduced by the “Pot and pan”. The difference can be explained by the fact that Paderno aims at establishing long-term contractual relations with corporate clients, and offers new products to them as soon as they get to the market, while the “Pot and pan” still concentrates on communicating non-corporate clients.
Analysis of such metrics as the number of web site's visitors, their engagement (via retention rate), the market share and the level of new product’s adoption rates shows that the performance of the “Pot and pan” is in considerable need of improvement that will help the company maintain its market share without introducing so large-scale changes as the introduction of new distribution channels.
Four quantitative goals for the next stage of company’s development are as follows:
a. Increase the number of unique visitors of the company from 3.5. million people to 5 million
b. Increase the number of repeated visits to the website from 20 to 50%
c. Maintain the market share at the level of 15%
d. Expand to 2-4 new markets in Europe and North America
Four qualitative goals may include:
a. Strengthen communication between the brand and consumers, and among consumers through the website of the company
b. Create more attractive and customers’ needs-based design of the website
c. Elaborate on the program, aimed at promoting the establishment of long-term contractual relationships between the company and the “Pot and pan”.
d. Increase trial-ability and observability of the company’s new products, so that they get higher rate of adoption
Product’s SWOT Analysis
SWOT analysis represents a type of extensive needs analysis, and is aimed at singling out strengths, weaknesses, threats and opportunities related to the product (in our case: to the cookware)
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Strengths: High quality Being produced with the help of green manufacturing methods Providing 25+ years warranty to reaffirm the company’s confidence in the quality Meeting needs of both individual and corporate clients |
Weakness: Narrow market segment (orientation on luxury segment only) The lack of product-related communication The lack of long-term relations with corporate clients High prices that do not become subjected to any types of discounts |
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Opportunities: Entering new segments of the market Creating different types of cookware sets Orientation on corporate clients Improving product-related communication |
Threats: Significant level of competitive rivalry among the U.S. and Canadian cookware manufacturers. Increase in import of cookware from China Decrease in consumers’ spending on cookware. High costs of developing new products that will have considerable advantages as compared with previous generation of products |
SWOT analysis shows that despite the company’s products’ high quality and the usage of green manufacturing techniques, product’s marketing mix is characterized with considerable range of weaknesses related to pricing and promotion. The observation of both weaknesses and threats makes it necessary to reconsider the market segment the company is currently operating within with respect to current state of competition at the market and the opportunities related to starting multi segment approach. Furthermore, promotion- and pricing-related challenges need to be addressed in the light of the need of improving communication with current segment of operation and the opportunity to enter a new one.
Completive SWOT analysis gives us similar result, testifying to the urgent need of reconsidering almost all aspects of marketing strategy, namely the target, product, price and communications.
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Strengthen: Firm’s brand name High quality of products Green technologies and social responsibility |
Weakness: Narrow market segment (orientation on luxury segment only) Lower prices for substitutes Poor awareness about the product due to communications issues |
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Opportunities: Entering new segments of the market Improving product-related communications Lowering prices |
Threats: Economic recession Competitors
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Marketing Strategy
A. Target markets
Target market 1: females, aged 40-60, who are unemployed and busy with housework and value quality
Target market 2: females, aged 30-60, who are employed and dedicate less time to housework than the target market 1 and strive for premium brands
Target market 3: prestigious restaurants and hotels that value quality and are interested in buying cookware sets
Target market 4: middle class females aged 30-60, who value quality and are highly interested in buying quality cookware at lowest prices possible
B. Marketing mix
Product. Luxury cookware and cookware sets for those, striving for premium brands and high-quality traditional cookware and cookware sets for the people, who would like to get high quality products at affordable prices. Key products’ attributes are quality, being manufactured with the help of green technologies, long period of warranty and speed to market. Product line extension will include several pans and steamers options for target market 4. New products will be characterized by all the key attributes, mentioned above, but be offered at lower prices.
Price. All the products, currently offered by the company, are at the top of the price scale for the products of these categories. The pricing strategy for the products that are designed for the luxury-oriented segment will not be reconsidered, while the new products will be offered at lower prices.
Distribution. The company distributed its products with the help of several distribution channels, namely its own cookware stores, retail stores, annual fairs and the website. It is planned to maintain the functioning of all available distribution channels and promote effectiveness of the company’s own stores and its website to secure the control over distribution and not be dependent on the influence of retailers.
Promotion. The company is of great need of quality promotion strategy that will include further development of its website, launching different types of sales (especially with regard to product line extension for middle-class customers), as well as facilitating relations with corporate consumers, so that they allow having the company’s advertising its products in restaurants and hotels.
The plan can be executed during 5 years as considerable amount of time is needed to work out new products and develop the implementation plan for promotion and distribution, as well as align these plans with company’s financial state.
Positioning Statement
As a socially responsible enterprise “Pot and pan” produces high-quality cookware on the basis of safe green technologies that is affordable for all the consumers, who value quality and take care about health and environment. The positioning statement can be executed no earlier than in 10 years, because it is based on the commitment to develop products for diverse target markets. If in 5 years it becomes possible to include middle-class consumers, in next 5 years the possibilities of broadening the target can be observed.
Customer Behavior for a Product
Consumer decision-making process consists of such stages as need recognition and problem awareness, information search, evaluation of alternatives, purchase and post-purchase evaluation.
Before buying the product, consumers get to know its functional characteristics, the ways they can use it and the level of its quality. Consumers can be also interested in the information about product’s manufacturer, its reputation, the materials, which are used in manufacturing, relevant technologies and warranty. The data on pricing, sales promotions and locations, where they can get the product is also highly important for customers. When planning to buy expensive cookware, customers tend to compare quality and prices by different manufacturers. The main source of data is the information, presented online (the Internet). Consumers also use forums and social media to get acquainted with first-hand experience of product-users. In terms of evaluation alternatives people compare specific goods by different manufacturers, and then make a decision.
Feasibility of a product
Feasibility study is part of a conception stage for the product in order to justify the idea and get financing (Nicholas, 2004, p.97). The questions that are to be raised concern real nature of the idea, competitiveness of the product and company, as well as acceptability of risk and the amount of return (Stevens&Sherwood, 1982, p.70). To determine the feasibility of extending the product line, so that the needs of middle-class consumers are met, can be conducted with the help of concept test that will include demonstration of product to the target and tracing the reaction (Baron&Shane, 2007, p.105). Both narrative and pictorial types of concept tests need to be used, and the assessment should be conducted with the help of sociological methods (Kahn, 2011, p.91). Before concept testing is taken, it may be assumed that the initiative of the product line extension is feasible due to the fact that it provides the company with the access to broader market segment and does not require the development of an innovative product.
References
Baron. R., Shane, S. (2007). Entrepreneurship: a process perspective. Mason: Cengage Learing
Kahn, K. (2011). Product planning essentials. NY: M.E.Sharpe
IBIS World (2013). Kitchen&cookware stores in the U.S.: market research report. Retrieved 3 May 2014 from http://www.ibisworld.com/industry/kitchen-cookware-stores.html
Nicholas, J.M. (2004). Project management for business and engineering: principles and practice. Oxford: Elsevier
Stevens, R.E., Sherwood, P.K. (1982). How to prepare a quality feasibility study: a step-by-step guide. NY: Prentice Hall
