Finalllllyyyyyyy

8/3/2019 Finalllllyyyyyyy

http://slidepdf.com/reader/full/finalllllyyyyyyy 1/41

SMART CARTS

Convenience, self independency and fast shopping at its PEAK.

0

2011

Group Members:Syed MashkoorHussainZaidi 11554

Muhammad Harris Sadiq 11490

KhushnamJamshedKaranjia 12076

Muhammad Fayyaz 11323

Marketing Plan For Smart Cart



SMART CARTS


1

ACKNOWLEDGMENTS

Firstly, we pay thanks to “ALMIGHTY ALLAH” who helped us to achieve our target.No report is the result of an individual effort only. This report would not have beenpossible without the help of first and foremost our course instructor Mr. FaisalMasoodKazi, thank you for acquainting us with the world of Principles of Marketing.

As on e a scholar said, “ My parents brought me from the skies to the earth, but my teacher put me back on the skies” and so did Mr. Faisal Kazi .



SMART CARTS


2

EXECUTIVE SUMMARY

We are introducing a multifunctional trolley by the name of Smart Cart which will not onlyhave the capacity to store products we want to shop but also prepare a bill on the screen at the same time! We are offering all this functionality with a modern touch at a value addedprice. Our target market comprises of house wives, professionals, students and evencorporate users who want a quicker an easy solution to shop and embrace new technology

in order to make life more efficient. We plan to be the market leaders by obtaining themaximum relative market share with rapid growth period due to no competitors at theintroduction stage. However, there are some potential competitors such as Don Racks,Shanti Metal Industries, Suzhou Jinta Metal working co. ltd etc. But our point of differentiation is unique an automated billing feature on the screen that positions theproduct top of everyone. We have an adequate marketing communications strategy,product strategy and pricing strategy that’ll reap a lot of benefits to us. We’ve priced theSmart Cart to Rs.35, 000 per unit retail price and Rs 33,000 at the wholesale price which iseven more affordable for the customers.

The primary market objective is to achieve first year sales of 1000 units and the financialobjective is to achieve sales revenue of Rs 3 million, keeping first year losses to less than0.5million, and the break even early at the second year.



SMART CARTS


3

ContentsCURRENT MARKET SITUATION...................................................................................................................... 6

NEEDS, WANTS AND MARKET OFFERING FOR CUSTOMERS .................................................................... 6

MARKET DESCRIPTION: ............................................................................................................................. 7MARKET SEGMENTATION ......................................................................................................................... 8

Following are the types of segmentations applicable for Smart carts machine; ......................................... 8

Geographic ............................................................................................................................................ 9

Demographic ......................................................................................................................................... 9

Psychographic ....................................................................................................................................... 9

Behavioral ............................................................................................................................................. 9

MARKET TARGETING ................................................................................................................................. 9

PRODUCT REVIEW: .................................................................................................................................. 10

COMPETITIVE REVIEW: ........................................................................................................................... 10

CHANNELS AND LOGISTIC REVIEW: ........................................................................................................ 11

STRENGTH, WEAKNESSES, OPPORTUNITIES AND THREATS ANALYSIS ................................................... 11

Strengths ............................................................................................................................................. 11

Weaknesses ........................................................................................................................................ 11

Opportunities: ..................................................................................................................................... 11

Threats: ............................................................................................................................................... 11

OBJECTIVES AND ISSUES ............................................................................................................................. 12

First-year Objectives: .............................................................................................................................. 12

Second-year Objectives: ......................................................................................................................... 12

Issues: .......................................................................................................................................................... 12

MARKETING STRATEGY ............................................................................................................................... 13

MARKETING MIX ..................................................................................................................................... 13

POSITIONING ........................................................................................................................................... 14

PRODUCT STRATEGY ............................................................................................................................... 14

LEVELS OF PRODUCTS AND SERVICES ..................................................................................................... 14

BRANDING STRATEGY ............................................................................................................................. 16

PRICING STRATEGY ................................................................................................................................. 17



SMART CARTS


4

CONSIDERATIONS IN SETTING PRICES ................................................................................................ 18

COMPANY AND PRODUCT COST (BREAK EVEN ANALYSIS) ................................................................. 18

Cost as a Function of Product Experience........................................................................................... 19

NEW PRODUCT PRICING STRATEGY: ................................................................................................... 19

PRICE ADJUSTMENT STRATEGIES ........................................................................................................ 19

DISTRIBUTION STRATEGY: ....................................................................................................................... 20

DISTRIBUTION CHANNEL & MARKETING SYSTEM: ............................................................................. 20

MULTICHANNEL DISTRIBUTION SYSTEMS (HYBRID MARKETING CHANNELS) .................................... 20

MARKETING CHANNEL DESIGN ........................................................................................................... 20

MARKETING COMMUNICATIONS STRATEGY .......................................................................................... 20

PROMOTION MIX ................................................................................................................................ 21

INTEGRATED MARKETING COMMUNICATIONS .................................................................................. 22

EFFECTIVE COMMUNICATION/ BUYER READINESS STAGE ..................................................................... 23

NON PERSONAL COMMUNICATION CHANNELS ................................................................................. 23

WORD OF MOUTH INFLUENCE/ BUZZ MARKETING ........................................................................... 23

MARKET RESEARCH ................................................................................................................................. 23

MARKETING MANAGEMENT ORIENTATIONS ......................................................................................... 24

BUDGET ....................................................................................................................................................... 24

TOTAL PROMOTION BUDGET AND MIX .................................................................................................. 25

ACTION PROGRAMS ................................................................................................................................ 25

THE NEW PRODUCT DEVELOPMENT PROCESS ........................................................................................... 26

MODEL OF BUSINESS BUYER BEHAVIOR ..................................................................................................... 28

CHARACTERISTIC AFFECTING BUSINESS BUYER BEHAVIOR .................................................................... 29

BUYING DECISION BEHAVIOR ..................................................................................................................... 30

PRODUCT/MARKETEXPANSION GRID ..................................................................................................... 31

BUSINESS BUYER PROCESS: ........................................................................................................................ 32

Model of Consumer Behavior: ............................................................................................................ 33

Adoption Process ........................................................................................................................................ 34

Characteristics Affecting Consumer Behavior: ........................................................................................... 35

CUSTOMER RELATIONSHIP GROUPS: .......................................................................................................... 36



SMART CARTS


5

THE BCG MATRIX (The Boston Consulting Group Matrix) .......................................................................... 37

THE PRODUCT LIFE CYCLE ........................................................................................................................... 38

Introduction ............................................................................................................................................ 38

Maturity .................................................................................................................................................. 38

Decline .................................................................................................................................................... 39

CONTROLS ................................................................................................................................................... 39

CONCLUSION ............................................................................................................................................... 39

References .................................................................................................................................................. 40



SMART CARTS


6

CURRENT MARKET SITUATION

Trolleys have become common convenient device for all shoppers use. Research showedthat more than 60% shoppers and super store owners could benefit from our product which is a smart cart that would allow the user to manage their monthly shoppingexpenses and save time by keeping a watch of their expenses on the automated billing LCDscreen and the super store owners as this will reduce their cost of labor.

So far no company has catered to this need and has not been able to cater to these niches at an affordable price. We are therefore providing benefits of Smart Cart valued by each of customer group including professionals, students, corporate users, lay man etc.

Irrespective of the above facts, some of major trolley manufacturers are in the race for

providing the consumers with ultimate convenience. Worldwide, Suzhou Jinta is on top asone of the leading trolley manufacturer. Second is Don Racks with its unique ideas. ShantiMetal Industries is the distant runner up with its products

NEEDS, WANTS AND MARKET OFFERING FOR CUSTOMERS

In today ’s technologically run atmosphere, students, corporate users, entrepreneurs, housewives and lay man need something that will enable them to carry out their monthlyshopping by saving themselves time and effort. This need will exists at the esteem needssection of Maslow’s hierarchy.

The customers want a solution to their technologically produced problem in the shape of atrolley machine that would not only enable them to carry out their shopping more

Figure 1 Maslow's hierarchy of needs



SMART CARTS


7

conveniently but also save them the hassle of standing in long queue’s just to get theirproducts billed and cashed.

The Smart Cart offers its customers an easy solution. By enabling its customers to scan

their products and get automatically billed on the screen with the help of RFID scanner andLCD screen. It prevents all kinds of hindrances to block their creativity and saves time. Theexperience it provides promises NOWASTAGE OF TIME and SELF DEPENDENCY.

Product oriented definition: We sell a trolley that follows your actions to get yourproducts billed and let the consumer operate and become self dependent.

Market oriented definition: Convenience, self independency and fast shopping at itsPEAK.

MARKET DESCRIPTION:

Smart cart market consists of business users who want a device which would provide aneasy solution to reduce long queues in their stores and cost of labor in order to make lifemore convenient. It is basically for those who are engaged in a lot of trading and need easyshopping solutions on the go.

We’ve targeted specific segment for our product and that includes entrepreneurs.

Targeted Segment Customer Needs Corresponding features and effects

Entrepreneurs(Business Market)

Convenience and fast shopping LCD screen RFID Scanner.

Entrepreneurs: Businesses that are demanding, specially super stores that have longqueues and huge amount of customers waiting to get their products billed. Smart cart

provides easy solution to the problems at an affordable price.



SMART CARTS


8

MARKET SEGMENTATION

Following are the types of segmentations applicable for Smart carts machine;

Geographic Country PakistanCities All major cities of PakistanDensity UrbanClimate Hot ,Dry and cold

Demographics Age 16 and aboveGender Male, FemaleFamily size 3-4,5+Family Life Cycle Married, Unmarried, singleIncome 1,000or soEducation

OccupationReligion

Well educated or literate with noformal schoolingFor allFor all

Psychographic Social Class Lower middle class , Middle class,

upper classLife Style Believers, achievers, survivors and

others

Behavioural Benefits Service, convenience, speedLoyalty Status StrongReadiness stage Partly aware, interested



SMART CARTS


9

Geographic

Meanwhile it will only be in the country Pakistan, all the major cities targeted will includeKarachi, and Lahore. Mainstream cities such as the capital of Pakistan, Islamabad will alsobe our target. These places represent urban and suburban densities.

Demographic

Smart cart can be appropriately used by ages 16 and above. The suitable consumer incomebracket is from middle class and above (Aspirers to Global Indians). All individuals that usethis product must be literate or at least have the understanding power.

Psychographic

The targeted social class is from working class to upper uppers.

Behavioral

The benefits of this product provide the consumer with convenience, service and speed. This product will be most useful to the shoppers and superstore people. The attitudetowards the product is enthusiastic and positive.

MARKET TARGETING

We will employ Niche (concentrated) Marketing . We will target this segment and design aproduct which offers one go solution to them. For example, an entrepreneur who is a superstore owner and is dealing with a huge amount of customers who wait in long queues to get their products billed. This need will help us knowing how to captivate the consumer byshowing them how the product is useful to them, separately.



SMART CARTS


10

PRODUCT REVIEW:

Trolley with an RFID Scanner: It scans your product ’s RIFD chips easily and startsbilling.

An LCD Screen: A 7 inch LCD screen is attached with the trolley which enables to knowhow much your current bill is and offers exciting new features.

From basic to the best : From a basic trolley that gets the job done to a high-end trolleythat does it all.

COMPETITIVE REVIEW:

Smart Cart is a unique provider in the market. Its competitors include companies that maketrolleys that aim to make life hassle free and convenient. Names such as Suzhou Jinta, DonRacks, Shanti Metal Industries co. ltd, Pak Zainab traders etc. are all companies that havetechnology that help people from different walks of life making their trolley related work convenient. All these companies have however not been able to produce something similarto the Smart Cart Service Provider.

The market Smart Cart Service Provider therefore is untapped because none of itscompetitors have been able to so far come up with something equally convenient, useful

and affordable! Suzhou Jinta Metal Working co. Ltd: It is currently researching on introducing such

trolley in the market and it is making considerable progress in that and it is the one toreally look for in the future.

Don Racks- tool and Machine tool Engineers Pvt. Ltd: It is also one of the staunchproducers with a huge market share in trolley manufacturing.

Pak Zainab Trader: It is the only trolley manufacturing company in Pakistan. Itsproducts are generally affordable. And it is one company to really look for in the futurebeing the only Trolley manufacturer in Pakistan.



SMART CARTS


11

CHANNELS AND LOGISTIC REVIEW:

We will be distributing Smart Carts through a network of retailers in the top 50 Pakistani

markets. Among the most important channel partners being contacted are: Online retailers: E-Bay etc will carry Smart Cart. Social Networking website: face book, twitter, you-tube etc. Media Sources: TV, radio, magazines etc

STRENGTH, WEAKNESSES, OPPORTUNITIES AND THREATS ANALYSISEvery product has some strength, weakness and threats and same as the case with Smart cart. It is technically a very sound product but nothing is perfect. It has some weaknesses as

well which we have to counter. Similarly it has some opportunities of which we have tomake full use and it has some serious threats as well. Following are briefly explained:

Strengths

Multi-functional; it is a normal trolley with an RFID scanner and LCD screen it is aninnovative product.

Attracts individuals who believe in saving time and efficiency Only trolley that provides billing on the screen.

Weaknesses Lacks cost efficiency; there is a low profit margin. Lacks brand image and awareness. Does not rely on heavy advertising hence attracts a limited audience.

Opportunities :

Demand for innovative products and technology is ever increasing Only manufacturer who has come up with the billing idea

Threats : Competition from established brands. Pricing pressure will exist due to existence of staunch competitors in the market.





SMART CARTS


13

MARKETING STRATEGY

Smart Cart’s marketing strategy is based on a positioning of product differentiation. As ourSmart Cart will be fully new and different from other trolleys so our overall marketingstrategy will be structured on its distinctiveness.Our primary business target is giant super stores in Pakistan like Makro-Habib and Metro.Out secondary Business target is departmental stores like Aghas, all over Pakistan

MARKETING MIX

Product: Smart Cart is a trolley having, an LCD, RFID chips detector which is used forinstant billing in Markets specifically Super markets.

Price: Rs 35,000 only. It offers allowances to wholesalers and other trade discounts forpromotions.

Promotion: We will advertise our product a lot and our promotion would also includedirect marketing and Personal selling.

Place: Available through our specific distributors initially in metro cities like Karachi,Lahore and Islamabad.

Figure 2 Marketing Mix



SMART CARTS


14

POSITIONING

Positioning means the process by which marketers try to create an image or identity in the

minds of their target market for its product, brand, or organization. Using product differentiation, we are positioning Smart Cart as the most less time consuming trolley that is easy to use. Our marketing will surround towards its immediate billing ability.

PRODUCT STRATEGY

Smart Cart, with all its features described in product review section, will be sold with a 7year warranty. We will introduce a more advanced version of the Smart Cart in later stagethat’ll be compatible with more big size and improved billing system by introducingadvanced LCDs.

LEVELS OF PRODUCTS AND SERVICES

Figure 3 Levels of Product



SMART CARTS


15

Core customer value This defines the problem solving benefits of the product such as what will Smart Cart dofor the customer precisely. For example, sinking the cost for operating a huge numberof employee forces for our customers and reducing the time expenditure for ourconsumers.

Actual product - Brand name: is Smart Cart which is a specialty product according to the consumerproduct category- Quality level is latest technology; High quality.-Design: Differentiated from any other type of trolley; distinctive.- Features: It is multi-functional, has an LCD screen that will help the consumers tonavigate the big markets easily, and keep analyzing the bill.

Augmented product - Delivery and credit: Delivery will be made after 2 months of the official order. Andcredit will be allowed for 6 months after the delivery. A quick payment within the next 1 month after delivery will be accounted to a 2.3% discount.- Warranty: This is of the starting 7 years from purchase.- After sale service: A demonstration of how to use Smart Cart.



SMART CARTS


16

BRANDING STRATEGY

Brand Positioning: Our brand will be associated with a desirable benefit e.g. time savingand accurate calculation for the expected bill. Its benefits will persuade the customers toget attracted towards Smart Cart and their values will make them purchase it and will beprofitable for their Markets.

Brand name selection: The concept behind naming our brand ‘ Smart Cart ’ is that it explains the values that our Trolley has in it.

Brand Sponsorship: Our product will be launched initially as a Manufacturer’s Brand. It will also be launched under Co-branding where cooperating with other companies willcater our product in the market. Under the concept of co- branding, we’ll co -brand ourproduct with HP and COMPAQ whose LCD screens will be used.

Brand Development: As development of Smart Cart is concerned, our goal is to executeLine extension and once our brand name is established, we will further introduce newmodels of Smart Cart , thus filling the product line and increasing the Line extension.

Brandpositioninig

Brand nameselection

Brandsponsorship

Branddevelopment

Figure 4 Branding Strategy



SMART CARTS


17

Figure 5 Brand Development

This product comes under new product category and new brand name that is; it is a ‘newbrand.’ Our future goal is to execute line extension i.e. bringing new colors, sizes etc in themarket. We will further introduce new different and exciting features of the smart cartsfilling the line extension to keep the competitors out of the market.

When there are competitors then we will do multibranding, we will introduce different models of the trolley, controlling trolleys with remote etc.

PRICING STRATEGY

The Smart Cart will be introduced at Rs. 35,000 only. We expect to lower the price by theintroduction of our new Smart Cart model and extension of our product line in the comingstages of the product.



SMART CARTS


18

CONSIDERATIONS IN SETTING PRICES

Figure 6 Value based Pricing

Price of our product is Rs. 35,000/- only. It’s a user friendly product so while setting priceour main focus was on providing maximum value to the consumer in minimal price. Weused value based strategy in setting the price of the product with good value pricing in

which we’ll provide right combination of quality and excellent service at a f air price.

COMPANY AND PRODUCT COST (BREAK EVEN ANALYSIS)

The total cost of Smart Cart in production will be around Rs.29,000 to Rs 32,000 .Total first year sales revenue for Smart Cart is projected Rs. 5 million, with an average whole-saleprice of Rs 35,000 per unit and a variable cost of Rs 31,000 per unit for unit sales volume of 500. We anticipate a first year loss up to Rs. 3 million on the Smart Cart model. Break evencalculation indicate that the Smart Cart will become profitable after sales volume exceeds600 early in the products second year. Our break-even analysis of Smart Cart product

assumes per unit wholesale revenue of Rs35, 000 per unit, variable cost of Rs 31000 perunit and estimated first year fixed cost of Rs. 2 million. Based on these assumptions, thebreak-even calculation is:

2000000 = 500 units

Rs 35000 –Rs 31000

Assess customerneeds and value

perceptions

Set Target price

to matchcustomerpercieved value

Determine coststhat can be

incurred

Design product to

deliver desiredvalue at targetprice



SMART CARTS


19

Cost as a Function of Product Experience

As we get older and older in the market of manufacturing Smart Cart , the more we’ll learneffective means of production. For instance, in the first 2 years or so, we’ll learn sometechnological expertise, in the upcoming year, the operation of machines more efficientlywill reduce cost of electricity; in the third year, the effective use of raw materials and so onand so forth. In this way, we’ll gain a production experience and this will help lowering ourcosts and increase our profits by increasing the production and reducing per unit variablecost.

NEW PRODUCT PRICING STRATEGY:

Our product in completely new in the market for that reason we’ll adopt Market

SkimmingPricing Strategy in which we’ll set high price in the start in order to attract large number of buyers and skim larger profits at the start. Later on, with the introductionof our new Smart Cart model , we’ll reduce the price from 35,000 to 33 ,000.

PRICE ADJUSTMENT STRATEGIES

Discount and Allowance Pricing:

We will give 10% discount to buyers who will buy in large quantities i.e. above 70 trolleys.

Later, functional discount will be given to distributors for providing a warehouse to us.Segmented pricing:

Big super stores will enjoy location pricing since they will be dealing in large volumes.

Promotional pricing:

Assuming that the launch of our product is successful and we are able to cover our costsadequately we would also offer promotional pricing in the near future where buyers will beentitled to high price cuts. Prices will be set below the list prices to create high demand.

Geographical Pricing:

Our manufacturing unit is based in Karachi, so the transportation costs within the city of Karachi as well as to other cities in Sindh will be much lower as compared to the cities of



SMART CARTS


20

other provinces, which eventually means that the trolley will be available at relativelycheaper prices in the province of Sindh as compared to other places in the country.

DISTRIBUTION STRATEGY:

Our strategy is to use selective distribution at an introduction stage of the product bysupplying 50 Smart Cart to mainly large store giants such as Makro and Metro in Karachi,Lahore, Islamabad and Faisalabad. And after some period of its introduction, we’ll sell ourSmart Cart all across the huge departmental stores all over Pakistan as per demand.

DISTRIBUTION CHANNEL & MARKETING SYSTEM:

The distribution channel that we are going to use is Indirect Marketing channel whichincludes sales through our distributors and dealers (Indirectly) to the business markets.

We’ll also use the Horizontal Marketing System as well. By working with organizationslike DELL, HP, and we’ll promote out product. We’ll sell our Smart Cart which will be havingtheir company’s LCDs.

MULTICHANNEL DISTRIBUTION SYSTEMS (HYBRID MARKETING CHANNELS)

Multichannel distribution can also be used in distribution and marketing of the Smart Cart.In this aspect, we can sell our Smart Cart through direct methods such as online andpersonal selling and indirect method can also be used which will involve our sales through

our Business distributors and dealers.

MARKETING CHANNEL DESIGN

Our marketing channel design is going to be Selective at the start. Then we’ll go Intensiveafter the brand image has been created.

MARKETING COMMUNICATIONS STRATEGY

Initially we will create awareness about the product. As our product; Smart Cart involveshuge technology, so our main target regarding awareness would be to make people learnhow to use it as a conveniently. We will use the concept of integrated marketingcommunications to promote our product. We will use majority of the tools of thepromotion mix which are: advertising, personal selling, and Direct marketing tools to



SMART CARTS


21

persuasively communicate customer value and build customer relationships. We will alsouse the popular social networking websites like Facebook, Twitter and a user-generatedvideo on YouTube as its promotion.

We will create brand awareness and portray a solid brand image using different sources of media for advertising that includes radio, television, newspaper, magazines, websites, etc.We will place banners and billboards around the city and distribute pamphlets as well.

Websites will be the most important segmented to be targeted as our product reflectsinnovation and technology at its best. We will also launch the official website of Smart Cart to offer products for sale as soon as the brand is established completely in the market.

PROMOTION MIX

Building good customer relationship calls for more than just developing a good product.Pricing it attractively and making it available to target customers. Promotion mix alsoknown as marketing communication mix is another important factor in the promotion andawareness of a product. We’ll promote our product through Advertisement, SalesPromotion, Public Relations and Personal Selling.

These all imply on our product as well. We will use all of these tools to promote ourproduct.

Advertisement: We will create awareness about our product through advertising on

electronic media such as TVs, Websites, and Radio. We will also advertise it on print media like newspapers, popular computer magazines like SPIDER and regularmagazines like FORTUNE , etc. Billboards will also be used for the advertisement

Personal Selling: Personal presentation by the sales force will be done in Super Marketsin major cities.

Public Relations: Public relations will be maintained with giants in that industry inorder to promote goodwill for the product and to enjoy good relations for the sake of ourproduct.

Online Marketing: We’ll also use online marketing by placing our products on offer for

sale renowned online retailers like E-Bay etc.



SMART CARTS


22

Advertising

PersonalSelling

PublicRelations

OnlineMarketing

SalesPromotion

INTEGRATED MARKETING COMMUNICATIONS

Integrated Marketing Communications can be used in promotion and marketing of theproduct, for instance advertisements on television, newspapers, billboards, pamphlets andmany others. We can also promote it on the social websites as well. Integrated marketingcommunications would be really helpful for reaching the target customers. Nowadaysmany companies are using it as it as a major tool of promotion and awareness for theirproducts.

We’ll design our advertisements in such a way that it leaves an impact on the minds of thecustome r for example in our advertisement we’ll emphasize more and more on how to useour Smart Cart since it is related to technology and people in Pakistan are not so familiarwith products that involve complex technology in them.

Consistent, clearand compellingcompany andbrand messa es

Figure 7 Integrated Marketing Communications



SMART CARTS


23

EFFECTIVE COMMUNICATION/ BUYER READINESS STAGE

Figure 8 Buyer Readiness Stages

Developing effective Communication with consumers is necessary for the marketer. Wewill first identify the target audience of Smart Cart that is all the people who go forshopping in big stores like Makro-Habib and Metro. Initially, creating awareness about theproduct is important in which we’ll focus more and more on promotions in all types of media. Then, giving proper knowledge about the product, we’ll do that throughadvertisements on televisions, magazines, billboards, newspapers, social networkingwebsites, radio and others. The message would be positive and attractive and it will createliking for the product in the mind of the consumer. Our product features are completelynew and it will surely attract the customers and they’ll try to buy our product because of itscatchy and innovative features and that’ll lead them to the purchase behavior.

NON PERSONAL COMMUNICATION CHANNELS

We will prefer non-personal communication channels rather than personal ones becausewe will target masses.

WORD OF MOUTH INFLUENCE/ BUZZ MARKETING

Mostly people in Pakistan go to super markets for shopping, so gradually they will discussabout our product with their friends, neighbors, families and associates. This is word of mouth influence.

Since our product is technology based, so we’ll also use buzz marketing in which peoplewill share their good experience with our Smart Cart.

MARKET RESEARCH

Using market research, we’ll identify what features our customers have preferred the most in our product. Feedback from market surveys, market tests, focus groups, polls on thewebsites will help us to develop our new version of Smart Cart . Similarly, we’l l alsomeasure the consumer’s psychology for competing brands and products. Lastly, Brand

Awareness Knowledge Liking Preference Conviction Purchase



SMART CARTS


24

awareness research will help us to observe how effectively our messages have beendelivered through different media to the consumers and how they’ve adapted to it.

MARKETING MANAGEMENT ORIENTATIONSThe Smart Cart follows the following:

Production concept: First we will give 50 trolleys each to the super stores and if our product works then according to the demand of the buyer our trolleys will beavailable within 6 months at their place

Product concept: The Smart Cart has an innovative feature that no other trolleyoffers making it attractive to its potential buyers.

Marketing concept: The Smart Cart delivers satisfaction to all consumers who want to save time and do their shopping and bill payment easily and efficiently.

BUDGET The total cost of Smart Cart in production will be around Rs.29,000 to Rs 32,000 .Total first year sales revenue for Smart Cart is projected Rs. 5 million, with an average whole-saleprice of Rs 35,000 per unit and a variable cost of Rs 31,000 per unit for unit sales volume of 500. We anticipate a first year loss up to Rs. 3 million on the Smart Cart model. Break evencalculation indicate that the Smart Cart will become profitable after sales volume exceeds600 early in the products second year. Our break-even analysis of Smart Cart product assumes per unit wholesale revenue of Rs35, 000 per unit, variable cost of Rs 31000 perunit and estimated first year fixed cost of Rs. 2 million. Based on these assumptions, thebreak-even calculation is:

2000000 = 500 units

Rs 35000 –Rs 31000



SMART CARTS


25

TOTAL PROMOTION BUDGET AND MIXWe will use Objective and Task Method of total promotion budget and mix because it’s anew product and we will do advertising properly keeping in mind each and everything.When the product will reach at the growth stage, we’ll use Percent of Sales Method , andthen in the maturity stage, Comparative Parity Method will be used. Last of all, in the declinestage, Affordable Method shall be adopted.

We will use Push Strategy in promotion of the product; firstly we’ll use communicationtools like personal selling followed y advertising, public relations and sales promotion.Through this we’ll push our product in the market.

ACTION PROGRAMSSmart Cart will be launched in January 2012. Following is the action plan for the fewintroductory months prior to Smart Cart ’s launch that’ll help us achi eve our objectives.

January: Firstly, we’ll be starting our promotional campaign in which we’ll use media typeslike Television Internet and outdoor type will also be used through Billboards.

February: In the second month, we’ll focus our campaign of promotion largely onadvertising where we’ll be using advertising in such a way that will create a demand forour product.

March: Then we’ll launch our trolleys (Smart Carts) for its testing in the standard test markets. We’ll give 5 -10 trolleys to each of the stores in big sities like Khi, Lhr, Isl and Fsd.

April: After the testing of our product, since the demand will be at maximum so we’ll thenlaunch our Smart Carts in Makro and Metro all across the metro cities like Khi, Lhr, Isl andFsd.

May : Now, since our product Smart Carts will be in the growth stage so we’ll heavily relyupon the distribution as well as the promotion of our product. And on the other hand, we’llstart working on the product and the market development.



SMART CARTS


26

THE NEW PRODUCT DEVELOPMENT PROCESS

Idea Generation: The idea of Smart Cart came up amongst the many ideas given byinternal idea sources. It was a mix of ideas that the employees gave through writing theirindividual ideas on small pieces of paper that were collected and then sorted through.

Idea Screening: After choosing and finalizing about 5 to 6 ideas, they were all screenedthrough the R-W-W concept whether the idea was real enough to be made into a product or whether there was demand for it or desire for it in the market. After that it was assessedif the product could win it whether the product could offer a sustainable competitiveadvantage. Lastly whether would the production of this product be worth it, would it incurgrowth or offer sufficient profits. The ideas that passed this criterion were moved on andcombined into one.

Concept Development and Testing: “An Instant Bill Maker trolley that fasten theshopping and effective bill payment system”

Marketing Strategy Development: The target market is the entrepreneurs (BusinessMarket). Work will be done faster and more conveniently. We will aim to sell around400,000 units in the first year, with a sale of at least Rs.900, 000 for the second year. This

Indea Generation

Idea Screening

Conceptdevelopment and

TestingProduct

Development

Business Analysis

Marketing strategydevelopment Test Marketing

Commercialization

Figure 9 New Product Development



SMART CARTS


27

keyboard will be provided in two colors, black and silver. The retail price initially will beRs. 999. Shop outlets that sell more than 40 units per month will receive a 5% discount oneach unit sold that month. We intend to capture at least a 5% long run share of the market.Product quality will be high and keep improving over time. Gradually price will bedecreased to Rs.900 once the profit layers have been skimmed from the top of the market and new model in the second year has been introduced.

Business Analysis: A review of the sales, costs, and profit projections were made for thenew product which showed feasibility of the product in the market once launched. Alsothese factors satisfied the company’s objectives.

Product Development: All the ideas that were combined into one from the idea screeningstage will now be turned into a physical product Convenient, self-independency and fast

shopping at its Peak.

Test Marketing: This is carried out through standard test markets. That is a small numberof super stores in each main city will keep the product for a fee and promote it in order tocheck the effectiveness of the product; Smart Cart.

Commercialization: This is the introduction phase of the product life cycle that will sooncome for our product.



SMART CARTS


28

The Environment

The Buying Organization

Buyers Responses

MODEL OF BUSINESS BUYER BEHAVIOR

The environment consists of Marketing Stimuli and other stimuli. Both are discussedbriefly keeping in mind the Smart Cart . Marketing Stimuli consists of the marketing mixthat is already discussed briefly in the report and that remains the same for the BusinessBuyer Behavior. However, other stimuli affecting the Business Buyer Behavior areeconomic, technological, political, cultural and competitive. In economic stimuli, weconsider the recession that has caused purchasing power to go down and has affected thepurchase. When the technological stimulus will be taken into account, we will justify that our product is the most recent, up-to-date technology. Therefore, it is not obsolete at thepresent time; whereas our product; Smart Cart cannot be against or offensive to theparticular culture it is serving. It cannot break the social norms of the society. But thecompetitive stimulus will be a consideration for the Business Buyer Behavior.

After considering the environment, the buying organization is the one that makespurchases. It consists of a buying centre in which those people are involved who willcontribute to the purchase. The buying centre consists of:

Users, the people in the organization that have to use the Smart Cart i.e. employeeswho often go for shopping in big stores like Makro and Metro.

Figure 10 Business Buyer Behaviors



SMART CARTS


29

Influencers, people in the buying center who will define the specifications of ourproduct, along with all the alternatives to weight out which one the best is suited fortheir need.

Buyers, the people in the buying center that have their part in selecting the vendorsand communicating with them.

Deciders; The people in the buying center that have the power (formal or informal)to choose the final supplier.

Gatekeepers: After considering all these factors, the buyer responses for Smart Cart will take place. They may be dependent on product choice, supplier choice, orderquantities, delivery and service terms, and payment terms and Smart Cart willprovide ease of access in every aspect of the business.

CHARACTERISTIC AFFECTING BUSINESS BUYER BEHAVIOR

Environmental: Business buyers are heavily influenced when buying our product especially in the economic environment such as the level of primary demand, theeconomic outlook and the cost of money. To ensure adequate supply of our product wewill hold larger inventories of scarce resources. Business buyers are also affected bytechnological, political and competitive developments in the environment.

Organizational: The business marketer must understand all factors involving thebuying company’s objectives, policies, procedures, s tructure, and systems. This willestablish the amount of people in the buying decision center and analyze as to what istheir evaluative criteria and what are the company’s policies and limits on its buyers.

Interpersonal: The buying center usually involves many participants who influenceeach other. Such factors are often very slight. Whenever possible we must try tounderstand these factors and design strategies that take them into account.

Individual: Each participant in the business buying decision process brings in personalmotives, perceptive, and preferences. It is our company’s job to assess these factors toour best, and counter check with our product idea if it is in fact what the customers orindividuals would prefer or want. Even if they want it, will be affordable by them? Willthey prefer it compared to other trolleys? Will they see a personal benefit to them byusing it?





SMART CARTS


31

PRODUCT/MARKETEXPANSION GRID

Applying the Ansoff Matrix to Smart Cart, the concepts of Market Penetration, Product development and Market development may be applied.

For market penetration we’ll increase the sales of the Smart Cart in super stores which willbe using our product initially, in order penetrate into the market and capture the major of the Market share.

Under the heading of product development we plan on modifying our product enhancing it with new technological enhancements in LCDs. By adding such type of values in it we look forward to benefit our customers and the consumers with the most we can,

Market development is also an applicable concept because after launching the Smart Cart inbig cities like Karachi, Lahore, and Islamabad, we plan on exploring new markets for it. We

plan on going nationwide in tenure of 5 years or so.

Figure 12Ansoff Matrix



SMART CARTS


32

ProblemRecognition

General needdescription

ProductionSpecification

Supplierselection

Proposalsolicitation

Supplier search Order-routinespecification

Performancereview

BUSINESS BUYER PROCESS:

Problem recognition: A problem recognized by the buying company that they useinadequate, old traditional trolleys that need to be replaced with more suitable up-to-date Smart carts.

General need description: This stage, the company describes the generalcharacteristics i.e. convenient shopping for customers and low manpower for thecompany and quantity required i.e. only for specific positions or for all consumers in thesuper market whether it’ll be 50 or more than 100.

Product specification: This has the specific technical details of a product, including thesoftware it operates on, the compatibility of the trolley etc.

Supplier search : The Company will then seek all suppliers that provide products that fit the product specification.

Proposal solicitation: The suppliers are asked to submit proposals that include detailsof their product and the terms of doing business with the organization.

Supplier selection: The organization will evaluate all the proposals and select thesupplier that meets their trolley’s need most accurately and has the most reasonablebusiness terms that are compatible with them.

Figure 13 Business Buyer Process



SMART CARTS


33

The Environment

Buyers Black Box

Buyers Responses

Order-routine specification: The organization will tell the buyer the final order, listingall the specifications, quantity required, expected time of delivery, return policies andwarranties.

Performance review: The organization will assess the suppliers performance anddecide whether they have met their end of the deal or not, and so continue, modify ordrop the arrangement.

Model of Consumer Behavior:

The purpose of purchasing the product is stimulus. Stimulus basically generates attraction.The marketing stimuli in case of Smart Carts are its price, product features, place andpromotion. Non marketing stimuli in this case are Economic and Technological, since theidea of such trolley is new and there hasn’t been anything like this before in the market.

. The marketing stimuli are planned and processed by the companies where asenvironmental stimulus are given by economical technological social and culturalcircumstances of the society. After the marketing stimuli comes the Buyer’s Black Box. It consists of buyer characteristics and decision process which determine the buyer’sresponse. Buyer’s characteristics are basically what characteristics the custo mers arelooking for in our product. Smart Cart is likely to attract those buyers who buy in bulk fortheir family or for them because it saves time no one has to wait in long queues just to get their grocery or items scanned. They can just put the item in the trolley and it will be

Figure 14 Model of Consumer Behavior





SMART CARTS


35

Characteristics Affecting Consumer Behavior:

Following are the characteristics which might affect consumer’s behavior:

Cultural Social Personal Psychological

The cultural shift towards advancement of technology and convenience has created a hugemarket for “Smart Carts” because we firmly believe in “all in one” kind of technology.

Social factors play a limited role as reference groups and families may impact the buyerdecision. Word of mouth and preferences may be created due to the opinions andjudgments of those that are close to the users. Statements of people will serve astestimonials in building confidence in our product.

Personal factors also play a role as age, occupation; lifestyle and economic situation allimpact the buyer’s decision making process in the case of Smart Cart.

Psychological characteristics such as perception beliefs and attitudes play a part too as they

let the user take a step ahead and try out something new and innovative like the Smart carts.



SMART CARTS


36

Butterflies True Friends

Strangers Barnacles

CUSTOMERRELATIONSHIP

GROUPS

CUSTOMER RELATIONSHIP GROUPS:

The Smart Cart customers include: Butterflies, True friends, Strangers and Barnacles.Butterflies as these are the customers that are highly profitable as they fit the company’soffering well, their needs match what the Electronic trolley offers, and however since it’sjust a onetime buy, these customers are short term customers. Strangers are also short term customers who may not be looking for something like the Smart carts. Barnaclesmight be the major chunk of customers for Smart carts who will make purchase and thenthey can be converted to True Friends by providing them the ultimate experience that theywere really looking for.

High Profitability

Low Profitability

Short-term customers Long-term customers

Projected Loyalty

P r o j e c t e d

p r o

f i t a

b i l i t y

Figure 16 CUSTOMER RELATIONSHIP GROUPS



SMART CARTS


37

THE BCG MATRIX (The Boston Consulting Group Matrix)

The BCG Matrix also known as Growth-Share Matrix is a handy tool for measuring themarket share of your product and to monitor where your product stands in the market. Ourproduct is new in the market and it is an innovation. As yet, we’ve no competitors thereforeour growth rate is high but due to the presence of established brands our Relative Market Share is low. It means our product is a Question Mark at this stage. However, it’ll capturethe market share in a very short time as we’re the only ones to produce Smart ca rts and itskind. After reaching to the Star stage, we’ll develop our product, modify it, and launch newones to make it reach to the Cash Cow stage.

Figure 17 THE BCG MATRIX



SMART CARTS


38

THE PRODUCT LIFE CYCLE

The product is in the ‘Product Development’ stage. At this point sales are zero andinvestment in the production is high.

Introduction

This is when Smart carts will be launched into the market for consumers to buy. Initiallysales will be low and due to high costs from the development stage as well as from theintroduction stage, profits will be negative and the number of competitors will be few.At this point, we will be offering a basic electronic trolley only supplying it to one or twosuper markets. The advertising undertaken will aim to build product awareness amongearly adopters and dealers along with heavy sales promotion. Also, they have all been givenone Electronic trolley to use in the shop, so that they can demonstrate the usage of theproduct to the clients.Growth

In this stage, sales of our product will rapidly rise. The higher sales will enable us to start covering our costs and losses and turn them into rising profits. By this point, competitorswill enter in the market as they had enough time to copy off the concept of our trolleys. Ourmarketing objective will be to maximize our market share (to 5% at least). Once in thisstage, we will offer product warranty (for the first one year after purchase). Price will bekept competitive so that we can penetrate the market. We will increase the number of

dealers that will keep our product. Since product awareness has been created, salespromotion will be reduced to take advantage of the demand.

Maturity By this time, our product will hit its peak of sales, costs will be low since all the initialcapital and investment has be recovered and demand is high and profits are higher. Therewill be a stable number of competitors in the market, some may already be declining. Themarketing objective at this point will be to maximize profits but still keep our market shareof 5% and defend it. The product will be developed. We will take out a new model withadditional value, since we will be making Smart carts, along with navigation and with fewmore advanced features. Those features will be addition of the price will be such that willmatch or beat competitors with increased number of retail shops that keep Smart carts.The advertising will stress on our brand differences and benefits and sales promotion willencourage brand switching.



SMART CARTS


39

Decline

In this stage, our sales will start falling but costs will not increase. Even so, because of thefalling sales, profits will also decline and so will the competitors. The marketing objective at this point will be to reduce expenditure. We will phase out the weak versions of Smart cartsand cut the price. Unprofitable outlets will be cut out, with only selective shops kept.Advertising will only be done enough to keep reminding the consumers of this product as aviable choice when buying a trolley. Sales promotion will be done on a minimum level. At this our marketing objective will be to reduce as much expenditure as we can and milk thebrand to its very best.

CONTROLS

We are planning tight control measures to closely monitor quality and customer servicesatisfaction. This will enable us to react very quickly in correcting any problems that mayoccur. Other early warning signals that will be monitored for signs of deviation from theplan include monthly sales (by segment and channel) and monthly expenses. Given themarket’s volatility, we are developing contingency plans to address fast-movingenvironmental changes such as new technology and new competition.

CONCLUSION

Conclusively, Smart Cart is strategically a very strong product but there are some weaknesstoo which will be covered as the time passes by. Apart from all the hiccups in launching theSmart Cart, we have finally managed to inculcate that it is the product for the customers,the ultimate effort releaser that they were looking for. Instead of waiting in long queueswasting valuable time, our customers can save a lot of time and energy plus super marketscan save a handsome amount of resources which are invested in hiring and trainingmanpower. Moreover, the introduction of Smart carts in the coming year will increase theefficiency by providing the support of navigation and juke box. All-in-all, Smart Cart is theproduct the consumers will be looking forward to buy due to its time saving and effort releasing quality.



SMART CARTS

References

http://taydeaburto.com/ansoff-matrix-for-marketing-objective/

http://gmx.xmu.edu.cn/ews/business/pmarketing/chapter14.htm

http://www.stylecom.com.au/blog/?p=279

http://damon-comments-opinions-casualchat.blogspot.com/2009/09/what-is-marketing-mix.html

http://www.google.com.pk/imgres?q=brand+development+process+brand+extension+line+extension&

um=1&hl=en&biw=1024&bih=605&tbm=isch&tbnid=FhRnGjfKQKMHZM:&imgrefurl=http://mgt2413.blogspot.com/2011/03/produk-perkhidmatan-dan- jenama.html&docid=lfWAdL_ny5Vg8M&w=867&h=426&ei=D7FQTrbbCIKqrAee_YCtAg&zoom=1&iact=rc&dur=537&page=1&tbnh=100&tbnw=203&start=0&ndsp=12&ved=1t:429,r:5,s:0&tx=127&ty=33

http://www.designboom.com/weblog/cat/16/view/15902/smart-shopping-cart-by-sk-telecom.html









http://www.google.com.pk/imgres?q=brand+development+process+brand+extension+line+extension&um=1&hl=en&biw=1024&bih=605&tbm=isch&tbnid=FhRnGjfKQKMHZM:&imgrefurl=http://mgt2413.blogspot.com/2011/03/produk-perkhidmatan-dan-jenama.html&docid=lfWAdL_ny5Vg8M&w=867&h=426&ei=D7FQTrbbCIKqrAee_YCtAg&zoom=1&iact=rc&dur=537&page=1&tbnh=100&tbnw=203&start=0&ndsp=12&ved=1t:429,r:5,s:0&tx=127&ty=33


















Documents

Finalllllyyyyyyy