Objective 318.1.06-15 Marketing Plans - Steven · PDF fileMarketing Plans | The 3 Year Marketing Plan for Product “X” 6 v. 201501 2) As the summer quarter ends, the product-line

Running head: Marketing Plans | The 3 Year Marketing Plan for Product “X" 1

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Objective 318.1.06-15

Marketing Plans

Author: Steven Gregerson ID# 000396960

2/05/2015

Mentor: Deborah Ward

Western Governors University

2015 Marketing Plan for a Revolutionary Kitchen Product Line

Marketing Plans | The 3 Year Marketing Plan for Product “X” 2

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Table of Contents Table of Contents ........................................................................................................................................ 1

Introduction ................................................................................................................................................ 4

Mission Statement ...................................................................................................................................... 4

The Product ................................................................................................................................................ 4

Product Line Features ............................................................................................................................. 4

Consumer Product Classification ............................................................................................................. 5

Target Market ............................................................................................................................................. 5

Competitive Situation Analysis ................................................................................................................... 6

Analysis of Competition using Porter’s 5 Forces Model ........................................................................... 6

Supplier Power: ....................................................................................................................................... 6

Buyer Power: .......................................................................................................................................... 6

Competitive Rivalry: ................................................................................................................................ 6

Threat of Substitution: ............................................................................................................................ 6

Threat of New Entry: ............................................................................................................................... 7

SWOT Analysis ............................................................................................................................................ 7

Strengths ................................................................................................................................................. 8

Weaknesses ............................................................................................................................................ 8

Opportunities .......................................................................................................................................... 8

Threats .................................................................................................................................................... 8

Market Objectives....................................................................................................................................... 9

Product Objective .................................................................................................................................... 9

Price Objective ........................................................................................................................................ 9

Place Objective ........................................................................................................................................ 9

Promotion Objective ............................................................................................................................... 9

Marketing Strategies................................................................................................................................... 9

Product Strategies ................................................................................................................................. 10

Price Strategies ..................................................................................................................................... 10

Place Strategies..................................................................................................................................... 11

Promotion Strategies ............................................................................................................................ 11

Tactics and Action Plan ............................................................................................................................. 11

Product Action Plan ............................................................................................................................... 12

Price Action Plan ................................................................................................................................... 12

Place Action Plan................................................................................................................................... 12

Place Action Plan (Continued) ............................................................................................................... 13


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Promotion Action Plan .......................................................................................................................... 13

Monitoring Procedures ............................................................................................................................. 13

Product Monitoring ............................................................................................................................... 14

Price Monitoring ................................................................................................................................... 14

Place Monitoring ................................................................................................................................... 14

Promotion Monitoring .......................................................................................................................... 14

Works Referenced: ................................................................................................................................... 15


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Introduction Space Appliance, a highly regarded and well-established leader in small appliances will embark on its latest product line to enhance the lives of consumers. Thinking out-of-the-box, a clean-sheet approach has been utilized to isolate the full market potential. This unique effort uses innovative and fresh methods to launch a product line that better fits the needs of consumers, while maximizing its full profit potential. This report will focus on only one product from the entire line-up of new space (saving) appliances. The new innovative product will help grow market share over the entrenched appliance giants of the industry; a SWOT analysis was performed.

Mission Statement

“Space Appliance excels in providing consumers fantastic innovations of the future, made

available today!”

The Product Space Appliance engineers ambitiously made an innovative twist on an old tried and true commodity appliance…”the toaster”. With the advent of “smart” devices just beginning to roll out, the engineering department

seized the occasion to integrate some of the latest microchips and smartphone software that will automate the way consumers eat in the morning. We have affectionately called it the i-Toast. To ensure Space Appliance “knock’s this win out of the park”, product management and the marketing department are foregoing the traditional warranty and unveiling something unparalleled in the industry…”a Ten Year Warranty!” Detailed on the next page are three models, detailed features and the new warranty that will differentiate i-Toast from any other appliance in the marketplace.

Product Line Features

i-Toast will come in 3 models. The primary difference between models will be the ability to toast more at a time and allotted bread thickness. The “smart” features will be the same in all three. The model summaries are as follows: i-Toast Duo – a two slot unit with smart sensors to isolate toast darkness and blue-tooth/wi-fi transponder to notify you when your toast is done.


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i-Toast Quad – a four slot unit with all the same features above, in addition;

large troughs for bagels and thicker breads. i-Toast Indy – a ten slot “industrial” unit with all the same features above, in addition; even larger troughs for thicker artisan breads, faster cooking times for restaurants and cafeterias. Toast’s Up – the smart feature found in all three units sends a notice to your wi-fi or blue-tooth connected smart phone with a “count-down” icon, notifying the toast will be ready in 10, 9, 8, etc…”Your toast is ready”. It will also chime the phone every minute (time can be adjusted) that the toast has not been removed. Keep it Warm – this feature is used to keep the toast warm (in tandem with the

Toast’s Up feature), without overcooking it. It can be started from the smart phone if the recipient is delayed and will automatically shut off and send a final notice after 15 minutes. Ten Year Warranty – In an unparalleled effort, and with extensive reliability testing, Space Appliance will be offering its first ever Ten Year Warranty. Normal industry standard has been 1 year. Space Appliance has been a leader with a 5 year warranty. As a result we have seen great customer retention and increased cross-sales between product categories. The new Ten Year Warranty will only increase customer satisfaction and cross-sales opportunities.

Consumer Product Classification This product line may share some aspects from the “convenience classification” e.g. customers now buy toasters (with little thought) for $14 at big-box retailers. However, with i-Toasts unique features, warranty and packaging design; these key add-value components require a majority mix of marketing factors for specific catering to a “shopping classification”. The ability to compare price and quality at many boutiques and upper-end retailers (both online and brick-and-mortar), coupled with introductory and seasonal promotions, should capture those consumers looking for best-in-class and price range.

Target Market

Space Appliance will initially unveil i-Toast in high-tech luxury oriented metropolises like San Francisco, New York, Tokyo and London. Using local high-end retailers to perform on-site product demonstrations. These boutiques cater to clientele with an average income of $90K+. Expansion of the target markets from these centers includes a two-fold approach.

1) Online e-tailers will launch social-media campaigns via today’s hot and active sites. They will have embedded HTML-5 based product demonstration that will give a virtual experience comparable to seeing it first-hand with click-through features.


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2) As the summer quarter ends, the product-line hits major brick-and-mortar stores to take advantage of the Holiday buzz, capturing the comparison shopper looking for high-quality with a justifiable discount.

Further online and media campaigns will expand brand and product awareness to capture new expanding demographics of unmarried Millennials that are tech-oriented consumers and have increasing disposable incomes.

Note: A separate campaign launch for the i-Toast Indy will focus completely on the commercial use and be maintained through our B2B (business-to-business) direct sales channel.

Competitive Situation Analysis

Analysis of Competition using Porter’s 5 Forces Model

As with all highly successful products…the clones with come! Though at this current time there are no other brands with a feature set like i-Toast, the technology is readily available to competitors. Therefore speed-to-market is critical.

Supplier Power: Cost for various technology components may actually fall thereby increasing profit margins, however, certain raw materials have fluctuated in global markets and increases may be passed through to the “bill-of-materials” anticipated for i-Toast. No direct threats of our suppliers entering the same market are expected, however, as success is expected, low-quality diluted feature imports could become available.

Buyer Power: As i-Toast is a unique product release, it is anticipated that potential Buyers seeking the best product will naturally gravitate to it. Only an economic down-turn may change spending patterns of the lower income demographics, however those buyers were not factored into the original earnings forecasts. It has been anticipated to be the company’s best “gross profit margin” product line in years.

Competitive Rivalry: The i-Toast’s unique features are not found on any toaster appliance. With the success of the product line it is anticipated that competitors will seize the chance to make a comparable product. The profit margin projected in the first year of revenue is expected to cover all costs, allowing for discounting even before competitors enter the market; which may discourage the number of competitors.

Threat of Substitution: This will take competitors sufficient time, and Space Appliance engineers are already working on the next generation to keep the brand well ahead of competitors. Initial ROI captured in the first years release will allow for price reductions with sufficient profit margins to possibly dissuade interest in higher-end toaster


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substitution. However, substitution by competitors own set of new and unique features may cause consumer confusion and some loss of revenue.

Threat of New Entry: New entry threat is considered minimal as the market share of standard toaster units is already saturated and manufacturers unfamiliar to the mechanics and supply resources may find margins insufficient in comparison to other appliances.

SWOT Analysis The summary of the i-Toast analysis that follows will illustrate that strengths and opportunities clearly out-weight the threats and weaknesses, therefore signaling a green-light to the product line.

Positive Negative Strengths Weakness

Inte

rnal

Very innovative engineers and design

teams Cash positive with additional reserves

to outlast new entries History of successful product releases

maintaining its market lead or share Growing high-quality brand awareness

amongst high-end consumers Both in-house prototyping and out-

sourced ready to ship manufacturing

Companies entire product offerings

cater almost exclusively to high-end consumers – as such, even they can buy lower end models in hard-times

Allowing entry into big-box stores has a tendency to dilute associated brand quality and over-inflates price perception due to staff’s inability to educate consumer on high-end features

Introduction of software will require separate tech department

Opportunities Threats

Exte

rnal

Being first to release for the brave new

“smart appliances” marketplace will build initial brand allegiance

Leverage proven technology into other product lines

Cross-sell opportunities

Feature sets are unique, but not

impossible to replicate (cannot be patented)

Larger appliance manufacturers may throw in i-Toast’s feature set just to differentiate their product lines, their supplier buyer power is greater; they can produce a cheaper product


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Strengths The first strength to mention is also a core competency; that is its high quality product

lines. These components have allowed the company additional leverage over competitors and even some suppliers

The second strength and core is the company’s strong financial position, having a low debt-to-equity ratio and high credit rating provides the ability to self-fund R&D and prototypes in-house continues to grow product line offerings year-over-year

Finally, the strength of a rapid prototype to release cycle places the company in a strategic advantage among companies in its class

Weaknesses The company’s almost exclusive focus on high quality product lines can leave it

vulnerable to losses in economic downturns where consumers switch to lower-cost competing products

A possible weakness is the entry into big box retailers, although revenues may increase, the boutique channel may opt out of ordering the new line as they associate big-box with products of inferior quality and design

Adding software and automation to the technology can cause unforeseen tech support problems and possibly negative press

Opportunities First-to-market in new technology usually increases brand awareness and loyalty. Also

allows for longer historical data and improved future iterations for new product line development

Leveraging proven technology by incorporation into existing older product lines, thereby refreshing their revenue

Cross-Selling via discount vouchers included in catalogs and within the online registration process will encourage additional revenues from other product lines

Threats Competition is a possibility, should a larger manufacturer decide that their market share

has eroded and given the i-Toast’s features are not impossible to replicate – causing consumer confusion

Slowing Economy, recent economic events have stalled the economy – consumers may opt to hold on to their older toasters or opt for lower-cost no-feature alternatives

Increasing Inflation may further increase costs of i-Toasts high-end chip-sets (used in a myriad of other consumer electronics) and further erode profits


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Market Objectives

Product Objective

Space Appliance, like some of the most successful product innovation companies, will continue to strive for high product quality and rich feature sets to stand out from the competition. It is also the expectation that such strategic factors will increase brand awareness and profit margins. However with new features comes new support unknowns, therefore we will increase support tracking with the latest CRM solutions to assure speed of corrections and customer satisfaction.

Price Objective

Catering to the higher-end market cannot presume that “price is not a factor”. Perceived value must directly correlate to price expectations. Efforts to continually survey consumers (without irritation) will be used to understand strengths, weaknesses and opportunities. During the initial roll-out, if customers hesitate when evaluating i-Toast “price-to-feature” points, new marketing discount vouchers and bundling opportunities to increase perceived value will be implemented.

Place Objective

The i-Toast product line will initially be released at high-end boutiques in strategic cities with tech-savvy high-wage demographics. This strategy creates a sex appeal of exclusivity and helps marketing to gather quality survey data for phase two and three distribution launches. The distribution expansion will commence one quarter later to wide-spread on-line e-tailer markets. Final stages will have the product line entering the big-box retailers just in time for the holidays.

Promotion Objective

Phase one of distribution will test to confirm product and marketing management’s price point. Rapid reaction testing with on-site discount/value-add voucher printing will be made available to either maintain the initial price or adjust it downward to consumer reactions. Phase two will include mass social marketing, again with the product listed at retail price points, however with promo codes easily found and accessible for those consumers that do even a small amount of research. Phase three coincides with standard holiday marketing and week-long/one-day only events. Final year-end blow-outs make way for i-Toast Version 2.0 in 2016.

Marketing Strategies

Space Appliance strives to grow the existing product line and market share, while also seeking to expand into new territories. The marketing strategies outlined below utilize the necessary marketing mix to achieve this. Some of this will be achieved through data gathered from product satisfaction surveys assessing consumer response that compares i-Toast with rival products at the time of purchase. Customer follow up after the purchase date and throughout a 90-day use period will also be collected. Finally, surveys


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regarding service and support will be reviewed bi-weekly to ensure that company standards are being met. The goal is continued improvement of product, price points and the customer buying/service experience.

Product Strategies

o Boutique vs Online/Retail – In order to keep the same feature set, some cost cutting

will be implemented. These will include use of lower cost plastic parts vs aluminum

and economy packaging which utilizes a smaller footprint for both shipping and retail

shelves. This achieves two benefits, Boutique “superior exclusivity” is maintained;

and re-increasing product margins due to lower Online/Retail pricing.

o Competitor Assessment Surveys – These will be assessed from a random sample

group of potential customers. If competitor product features distracted customers

during product comparisons, then steps to improve i-Toasts feature set will be folded

into future iterations. This is important to add profit increasing features that maintain

the industry perception of Space Appliance’s superior products and best value.

o Post-Purchase Satisfaction Surveys – A follow-up satisfaction survey will be mailed

for each registered warranty. To ensure customer survey participation, a voucher to

receive an “add-value” product will be granted at the end of 90-days (customers only

need to pay shipping and handling); solidifying brand awareness and customer service.

o RMA & Warranty Surveys – To ensure customer loyalty and satisfaction, surveys will

be conducted to ensure both consumers and retailers issues are handled with 1st

class care. Questions regarding timeliness of replacements, courtesy of warranty

operators and sales channel personnel will be conducted bi-weekly to continue the

superior service customers expect and reviewers write about.

Price Strategies

o Initial Boutique Pricing – As the initial roll out of i-Toast is exclusively their domain,

the $99 price point will lend a “snob appeal” that will allow the highest margin sales;

re-claiming almost 80% of R&D costs in the 1st and 2nd quarters!

o Initial Online & Big Box Retailer Pricing – The second release phase that provides

mass distribution of the products will lower the barrier of entry to middle income

consumers. At $59, the intent is to capture the widest possible audience (the same

functionality is present – however, lower cost parts and packaging are used).

o Live Store & Online Chat Surveys – These methods of rapid data collection will

increase the vendor’s ability to react quickly and meet consumer’s price-to-value

expectation. It will also assist in conversion, if there is confusion during product

comparisons.


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Place Strategies

o Boutique Placement – The initial roll out of i-Toast at boutiques and other high-end

retailers conforms to Space Appliance’s ten year old strategy to support smaller

retailers and higher-end pricing first. Other benefits of this allow for a more

controlled test and feedback period of consumers; thereby allowing for any

adjustments in all target markets

o Online Distribution – After corrections to the processes of assembly, pricing,

packaging and promotions are implemented in the first two quarters, it will prep 3rd

and 4th quarter distribution models. The online channel will target those consumers

that value time and forgo fancy packaging to save money. The increasing consumer

shift to online purchasing makes it vital to the distribution strategy.

o Retail Distribution – Just in time for the holidays, this last target market looks for

those “deep-discounted” gifts to fit their tightening budgets. Margins become razor

thin at this level, however, wider volume will usually offset this. The benefits of retail

are capturing that last-minute impulse buyer and re-asserting brand awareness.

Promotion Strategies

o Phase 1 Boutique Prestige Campaign – Boutiques will not require too much in

discounting; instead live demonstration events with add-values and complimenting

up-sell items will cater to consumers who “Just gotta have the latest and greatest”;

thereby satisfying the target market while meeting higher margin requirements

o Phase 2 Mass Online Campaign – Commencing online campaigns with summer

discounts and social marketing to the casual online shopper performing early holiday

shopping. It is the initial test bed for a lower price point (not as low as big box) and

the only way to capture this growing market of buyers.

o Phase 3 Mass Media Retail Holiday Campaign – Back-to-school and finally the year-

end holiday promotions and discounts begin. The i-Toast street price will fall to

almost 50% of its initial boutique retail, and surplus upsell items are now bundled for

free; deemed crucial to move remaining inventory before the 2016 release of i-Toast

2.0.

Tactics and Action Plan

For maximum success, every action in this marketing plan has to execute with “all cylinders firing in unison”. Below are the specific tasks and their assigned teams or project leads with expected milestones to ensure success.


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Product Action Plan Tactic Start Date Due Date Responsible Party

Assign Product Manager - monitors production process of plan

N/A 1/15/2015 C-Level Mgmt

Assign Q/A Manager - monitors production quality aspects and reports to PM


Defines and Manages Detailed Action plan e.g. Hardware & Software design teams - interfaces with Q/A manager

1/16/2015 12/31/2015 (EOL 2018)

(end-of-life)

Product Manager

Defines and Manager Detailed Q/A plan e.g. test matrix, bill of materials, assembly team

1/16/2015 12/31/2015 (EOL 2018)

Q/A Manager

Price Action Plan

Tactic Start Date Due Date Responsible Party Assign Marketing Manager – will analyze market price and define price strategy


Assign Sales Manager - monitors sales and distribution channel process of plan


Defines and Manages Detailed Action plan e.g. competing comps, cost vs. profit matrix, forecast overall sales (based on Sales projections), defines Ad pricing discounts/dates - reports marketing analytics to C-Level mgmt

1/30/2015 12/31/2015 (EOL 2018)

Marketing Manager

Defines and Manager Detailed Action plan e.g. retail and distributor channel co-op advertising, projection of inventory demand, deployment of marketing materials to sales team, defines distributor/reseller discounted tiered pricing - reports sales to C-Level mgmt.

1/30/2015 12/31/2015 (EOL 2018)

Sales Manager

Place Action Plan Tactic Start Date Due Date Responsible Party

Assign Sales Channel Manager to define and manage all aspects of the ‘place plan’ e.g. Wholesaler/Vendor distribution and B2C (business to consumer) online sourcing, marcom materials, shipping services

N/A 1/15/2015 Sales & Marketing Managers

Monitors Detailed Action plan e.g. Assuring deliverables, marcom materials (both tangible and online), spiff promotions, online fulfillment and web response analytics - reports to Sales Manager

1/30/2015 12/31/2015 (EOL 2018)

Sales Channel Manager


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Place Action Plan (Continued)

Tactic Start Date Due Date Responsible Party Channel Performance Evaluation and Adjustments: Reviewing and removing lower performing resellers/distributors from the channel, while evaluating new channel members and sales areas base on analytics

3/1/2015 12/31/2015 (EOL 2018)

C-Level Mgmt, Sales/Marketing and


Promotion Action Plan Tactic Start Date Due Date Responsible Party

Manage and monitor Marketing Promotion Action Plan

1/30/2015 12/31/2015 (EOL 2018)

Marketing & Sales Managers

Company Website: Public Product Description Landing Page – e.g. product demonstration videos, competitor matrix, FAQ

2/1/2015 2/28/2015 Marketing Manager

Online Campaigns: Banner ads, SEO/SEM optimization, blogs, affiliate lead generation

2/1/2015 3/5/2015 (ongoing updates)

Marketing & Sales Managers

Company Website: Channel Support Portal – Upload marcom materials, product sales guide, white paper, 25-50-100 word promo descript, demonstration videos, activate lead generation socket

2/15/2015 3/12/2015 Sales Channel Manager

Co-op Channel Promotions: Contact boutique resellers for initial promo orders, sign up Retailers for on-site product demonstrations, allocate marketing materials, define consumer sweepstakes and awards program, define sales spiffs program

3/15/2015 4/01/2015 Sales Channel Manager

Monitor consumer response, quantity of dealer/distributor returns, statistics on best channel sales to re-allocate marketing efforts

5/01/2015 12/31/2015 (ongoing updates)

(EOL 2018)

Marketing & Sales & Channel Managers

Initiate Big-Box retailer orders and marketing Promotions: Nationwide e-mail, Search-ads, online video sites and social network marketing campaigns. Pop-up displays delivered. Initiate television commercials and late-night infomercials

7/01/2015 12/31/2015. (EOL 2018)


Monitoring Procedures Assuring the successful execution of the plan will be governed by a series of checks and balances throughout each milestone. Channel Sales Manager will report monthly to Sales and Marketing Managers; which consolidate all data and analytics and reporting monthly and quarterly to C-Level management.


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Monitoring Activity Due Date/Frequency Responsible Party

Product Monitoring

Q/A Manager in tandem with the Product Manager will perform surveys of both consumers and online/brick retailers monthly to isolate areas of concern and needs for improvements

Track frequency of returns and repairs

03/01/15 - then monthly until 12/31/15 (thereafter transferred to 2nd team until EOL 2018)

Q/A & Product Managers

Price Monitoring

Product & Sales Manager are to isolate areas of increasing costs and competitor discounting to maintain sufficient ROI for the product line.

Product manager will continue to find new suppliers to lower costs of i-Toasts Bill of Materials

Marketing and Sales Managers will isolate add-values before discounting price


Product, Sales and Marketing Managers

Place Monitoring

Channel Sales Manager will report RMA frequency from boutique resellers and distributors and other metrics.

Sales Manager will monitor sales metrics from online and traditional channels and report to marketing to review for advertising allocation


Sales and Channel Managers

Promotion Monitoring

Channel Sales Manager will monitor success as reported by boutique and big box retailers. Marketing supplies and pop-up displays will be reviewed for quality and effectiveness

Sales Manager will monitor success of PPC/PPV advertising models via online retailers. Isolate effective banners and Social Networking click- through.

Marketing Manager will monitor and report overall promotion success to C-Level and improve


Channel Sales, Sales and Marketing Managers


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Works Referenced: Corp, Odessa. "Management-swot-analysis." ConceptDraw. Odessa Corp, 1 Jan. 2015. Web. 6 Jan. 2015. http://www.bing.com/images/search?q=swot analysis example&FORM=IQFRBA&id=EE6CB8210FB0FDE611EE5B97CF1D9FB02AE3E3A1&selectedIndex=0#view=detail&id=0DB7E45BD84A271974CEC4FB8C4DCC806CC068B5&selectedIndex=62

http://www.bing.com/images/search?q=swot%20analysis%20example&FORM=IQFRBA&id=EE6CB8210FB0FDE611EE5B97CF1D9FB02AE3E3A1&selectedIndex=0#view=detail&id=0DB7E45BD84A271974CEC4FB8C4DCC806CC068B5&selectedIndex=62



Documents

Objective 318.1.06-15 Marketing Plans - Steven · PDF fileMarketing Plans | The 3 Year Marketing Plan for Product “X” 6 v. 201501 2) As the summer quarter ends, the product-line