Free Marketing Essays - A Satellite Navigation System for Car or Van Drivers
Mission
Our mission is to exploit technologically advanced products and deliver professional customer services in order to satisfy our customers’ demands better than our competitors and in turn to maintain our corporate growth over the long term.
Corporate objectives
1. Produce technologically advanced products by utilising high quality R&D processes.
2. Create and maintain corporate growth in terms of profits, branding and public relations within a long term strategy.
3. To focus on strategic human resource management, providing professional customer services through utilising a skilled workforce and management team in the company.
4. Meet stakeholders’ expectations in terms of financial objectives and continuous corporate development in both the short and long term.
5. Obtain a competitive leading position in the industry through advanced information technology within 5 years.
Marketing audit
The R&D process dealing with a new satellite navigation system which was carried out by a specialist technology team has provided an advanced new product designed for use in cars and vans that enables customers to be aware of the precise location of their vehicle, to plan and map their routes to destinations as well as including a voice-activated cellular communication system. Additionally through using the device customers are able to retrieve personal data online in the form of email, news and road condition reports.
The marketing team will be responsible for marketing planning, identification of target customers individual and organisational and research of possible markets for the new product through the use and implementation of a 4P strategy in the first positioning of the product. Furthermore the advertising plan will be supported by the R&D team by assisting with the provision of full and relevant information and services in introducing the system to consumers. Due to the specific characteristics of using a B2B model an exhibition was held during the initial stages of the product development and launch with invitations being made to already existing customers as well as those who had expressed an interest in order to develop potential markets.
The starting investment in this program was supported by the financial management team and allowed for subsequent stages of the marketing plan to be informed by customer impressions and financially relevant data on the potential markets for the product.
It is obvious that human resource functions contribute to overall levels of business processes from R&D through to marketing to financial. This in itself reflects and points towards the need for a corporate strategy in maximising the use of human resource and leveraging it as the most important strategic resource in the company.
SWOT Analysis
The PESTEL analysis model outlined by Johnson and Scholes (2002) provides a useful framework in considering a company’s external environment and the conditions in which it operates. First of all technological development generates opportunities for companies in terms of improving product quality and delivering better customer services. A key issue here is that technological information based development enables companies to exploit IT in creating competitive positions and sustaining competitive advantages. Also of consideration are trends relating to changing social lives for people such as a growth in personal ownership of cars, demands for relevant information to be met quickly and familiarity with the use of new technological devices. However the power of customers has continuously grown so whilst on the one hand there may be a variety of opportunities for companies in marketing technologically advanced products to meet their demand marketplaces can become quickly saturated with customers showing poor brand loyalty in selecting products they wish to purchase, (Solomon et al, 2002). Similarly the impacts of poor economic performance nationally can also generate threats to companies as well as for customers with the effect being that demand for advanced technological goods which might be perceived as luxuries would suffer significant drops. Also environmental concerns may be an issue which can be both positive and negative, positive in the sense of assisting drivers to avoid traffic congestion and negative in the sense that customers may seek to use alternative modes of transport and hence not need the system.
Johnson and Scholes (2002) argue that the environment of concern a corporate organisation is involved includes both external and internal elements. Thus it is useful to define the major strengths and weaknesses for a company in considering its competitive position. The most important strength in this case is technology in terms of the product and in turn the technologically advanced R&D process responsible for the development of the product. From this point of view the new system is able to provide and create significant competitive advantages in terms of its quality and focus on customer required services. However due to the new characteristics related to the product there is low brand awareness for the system. Linked to this the lack of a large or developed existing consumer base can be seen as a potential weakness for the company marketing as it is a new product and service. It is reasonable to believe that developing further the brand name of the company in terms of a brand image related to supplying high tech high quality products along with superb customer services will be a factor and strength which is able to assist in marketing the product to customers. In addition it is vital to mention that the strong financial support available is also a key strength factor for the company particularly for R&D and marketing processes.
SWOT
SWOT Analysis Strengths
1. technologically advanced products
2. corporate brand name
3. strong financial support
4. highly skilled workforce
5. previous successes
6. professional management team Weaknesses
1. low brand awareness of new product
2. lack of customer base in the new marketplace
3. lack of previous experience in marketing the new system
4. high initial investment
Opportunities
1. technological development
2. government support in the development process
3. socially driven consumer demands
Differentiation Strategy
Branding
Strategy
Threats
1. rising customer power
2. decline in national economic performance
3. environmental concerns
Assumptions
Segmentation, targeting and positioning
According to Jobber (2001) it is critical that efforts by any organisation be directed towards understanding customers in order to identify the relevant segmentations or namely the targeted customers that the organisation will concentrate its marketing strategies on. Consumers in this case are usually those which are groups and significantly buyer behaviour here relates to consumers closely in terms of preferences and demands. In terms of satellite navigation systems the information searching process plays vital role before the final purchasing decision due to customers seeking information of the functionality of the product and familiarising themselves with its uses and applications. Consumers arguably who will be principally interested in this system are mainly high tech related car and van companies whom are both technique and price concerned. The purchasing involvement is high for this group of consumers since there are considerations of high expenditure and business risks due to large financial investments in equipping fleets of vehicles with the system. Therefore the new system is targeted as a high tech product which is able to help consumers create competitive advantages in controlling business processes as well as costs. Due to the features of the new product detailed here it is expected that the targeted consumers will be mainly government and high tech related car or van companies involved in transportation and distribution processes at national and regional levels.
Marketing objectives and strategies
During the introductory process of entering the market of the new system a differentiation strategy will be adopted by the company. A key focus on the innovatory nature of the product will play a vital role in the strategic decision process because innovation only occurs when the invention of new technology and method is able to be commercialised within the marketplace, (Jobber, 2001). In these terms then differentiation as corporate strategy will be used in primary stages of product launch in order to capitalise on the innovatory aspects of the product. For the product outlined here differentiation occurs through the quality of the product offered, particularly in terms of the technology it represents. Additionally benefiting from the technological developments this system will be able to satisfy customers better in terms of their need and demands for information during the transportation process or used for security purpose by governments or financial institutions such as banks in terms of tracking employees and transport assets. However due to the high price of this system the corporate strategy falls into the high value and high price focused differentiation strategy option.
The Strategic Clock: Competitive Strategy Options
High
Perceived
Added
Value
Low Hyrid
Low
Price
‘No Frills’
Failure
Failure
Strategies destined for Ultimate Failure
Focused
Differentiation
Differentiation
The
Strategy
Clock
Low Price High
Source: Bowman, C. (1995) The Essence of Competitive Strategy, Harlow UK, Prentice Hall.
Marketing tactics
The focused differentiation strategy adopted by the company seeks to provide and create high perceived value in connection with the higher price premium of the product. In this case the use of a branding strategy will be useful at the business level allowing the build up of a strong brand image for the company in producing and supplying high value products. The higher perceived value at a substantially higher price than that found in the lower price marketplace will enable the new product to be introduced into the market successfully based on linking value with the high quality and reliability of the product. Based on consumer behaviour research, customers often use price as an indicator for product quality thus higher price for the new system is sometimes able to enhance the development of a sophisticated brand image during product launch process where customer expectations are met subsequent to use of the product, (Torrington et al, 2002).
Secondly the human resource strategies are able to enable the implementation of strategies at all levels of business. The skilled workforce plays vital role in the introduction stage particularly due to direct communication with customers. Also of consequence is the observation that initial investment in the R&D process has generated pressure on profit margins in such a way as that the human resource in terms of management team will contribute in a key way to the control process.
Contingency plans
Risk management as such is an important concern in the marketing planning stages due to the uncertainties in terms of product, business and financial management, (Hooley et al, 2004). In particular the burden of the start-up investment has and will continue to generate pressure on the financial situation and operation control during this process. The full understanding of customers and their needs and demands also seems to be vital and in the pilot testing stage for the new system effective communication with customers should be established along with plans to build up a strong and robust brand image before and during the product launch. The expenses to be incurred during marketing especially in the payment for advertising seems to be limited at certain levels because of the other expenses suffered in the operational process in prior stages.
Budgets
The new operation is estimated to have overdraft facilities available of up to £50,000. However the parent company wants to plan the form of cash needs required. The budget of forecasted sales can be made as follows.
Month Total Sales Standard Grade Special Grade
January 40,000 30,000 10,000
February 80,000 60,000 20,000
March 120,000 100,000 20,000
April 160,000 120,000 40,000
May 120,000 90,000 30,000
June 120,000 90,000 30,000
July 100,000 70,000 30,000
The Gross Profit on the sales is estimated as being, Standard Grade 10% and Special Grade 20%.
Cash Budget Statement
Budgeted Jan Feb Mar Apr May Jun
Receipts ‘000 ‘000 ‘000 ‘000 ‘000 ‘000
From Sales 30 70 110 150 130
Budgeted
Payments:
Purchases 24 105 113 105 101
Wages & Sal 4 4 4 4 4
Other 2 2 2 2
Net Cash -28 -81 -49 -28 39 23
Balance b/fwd -28 -109 -158 -186 -147
Balance c/fwd -28 -109 -158 -186 -147 -124
Evaluation and control
The major control process will be the responsibility of the management team which includes representatives from marketing, R&D, financial as well as human resource departments. The evaluation committee will meet after three months subsequent to the introduction of the new product. A further annual evaluation meeting will be after this and evaluation of the new system will be discussed with the board and management team at these review meetings.
References
Hooley, G., Saunders, J. and Piercy, N. (2004) Marketing Strategy and Competitive Positioning, 3rd Ed., Harlow UK, FT Prentice Hall
Jobber, D. (2001), Principles and Practice of Marketing, 3rd Ed., London UK, McGraw Hill
Johnson, G. & Scholes, K. (2002) Exploring Corporate Strategy: Text and Cases 6th edition, Harlow UK, FT Prentice Hall.
Solomon, M., Bamossy, G. and Askegaard, S. (2002) Consumer Behaviour: A European Perspective, Harlow UK, FT Prentice Hall
Torrington, D., Hall, L. & Taylor, S. (2002) Human Resource Management 5th edition, Harlow UK, FT Prentice Hall.
