The key to successful product implementation in today’s national enterprise system is the effective marketing of a new product with the company’s line of existing products. As stated by Lacobucci (2012), marketing is defined as an exchange between a company and its customers. The customer wants something from the company or firm and vice versa. In previous times, a company would manufacture a product they thought the customer would want or need. The customer purchased that product because of a pending need, which basically meant that marketing used to be product oriented.
However, marketing today is more that an advertisement for goods and services in an attempt to attract new business. We live in a customer orientated and empowered marketing environment. We realize the importance and ramifications of having an exchange with our customers and developing a relationship with them. It is this exchange of information between our company and our existing as well as future customers that secures our position in our target market. Our company is a regional tool distributor located in the northeastern section of the United States.
Our customer base consists of several major retailers, nationally known in the retail and wholesale tool industry. We used the brand label Blue Steel Tools for marketing and distribution of our products to discuss the implementation of an effective plan to market a new product line, the Illuminated Power Wrench. This paper will analyze market, identify our market segment for sales distribution and discuss the reasoning for the segment. Discussing the target market and why the targeted customers were specifically selected.
We will do the SWOT analysis; describe the unique market position and the expected service provided in meeting the needs of the target audience. 1. Identify the marketing segment for the product and provide a rationale for this segment. The definition of a market segment as stated by Lacobucci (2012) is a group of customers that shares similar inclinations towards our brand. To define market segment further for our needs, it is an identifiable group of individuals, professionals or organizations that share one or more characteristics or needs in an otherwise homogenous market.
In our case, our product will have a very wide market of consumers and small business owners and employees. Therefore we will need to reduce the market segments to larger chunks. Market segments generally respond in a predictable manner to a marketing or promotion offer. The market segment for the new product will vary widely due to the versatility of our product usage. Our main segment approach will focus on the wholesale distribution to retail repair supply stores who carry lines of tools for resale to the private and business consumer.
These market segments will include businesses such as Lowes and Home Depot, retail tool distributors such as Harbor Freight Tools, automobile parts stores such as Advance Auto Parts and tool catalogue companies such as great Northern to name a few. As we analyze this segment we ask the question if this segment is viable and can we profit from using it. Other considerations are accessibility and measurability. This segment is small enough to manage our sales and distribution, but large enough to reach the ultimate user of our product.
This market segment possesses the potential and versatility to sell and distribute our product to the target consumer market with a widely diversified audience in the retail industry. The bases for this segmentation include similar demographics, geographical locations, and psychological make-up of customers and behaviors of users/purchasers. In other words, the customer base for our segments meets the desired user of our end product. Anyone who builds or repairs something whether they are a novice or professional is a potential customer.
Therefore, by using this method of market segmentation for product distribution, we will successfully sub-divide a large homogenous market into clear identifiable and manageable segments that have similar needs, wants or demand characteristics indicated by Lacobucci (2012). 2. Discuss the target market and provide rationale for this target market. The target market defined is the particular market segment at which a marketing campaign is focused. As stated earlier, this product has been designed for the retail tool industry.
We have targeted segments in the industry that will be the most successful in reaching the consumer and generating a demand for our product through steady sales. Lacobucci stated the first perspective in assessing segments target is to have a view of the segments themselves and the primary concern is the segment be profitable. This in turn will become a profitability issue for our company as we continue to hold a place in the small tool market and generate profits with continued sales.
The second perspective examined was if the market or segment fit with who we are. In this case the answer is yes. The ultimate target for this product is the consumer. The greater exposure we have, the higher propensity for sales growth. The illuminated ratchet screw driver is a quality tool for use by not only the novice home self repair person; it will also meet the needs of the professional repair person, no matter what the industry.
The illumination system in the handle of the wrench will appeal to the vehicle mechanic working in the close quarters of an engine compartment, the electrician repairing the circuit breaker box, the computer repair technician working in between electronic circuitry as well as to the basic consumer performing handy maintenance projects. This tool will come with the standard wrench lugs and have availability to accessories such as wrench tips to enhance its versatility to meet the needs of a wider target audience.
The wider target audience is customers of our targeted market segments. Therefore the target market is our pathway to the ultimate user of the product is consumer sales. The strategic sales objective of these retail establishments coincides with our strategic vision of reaching the ultimate user of our products, satisfying their needs and increasing the likelihood of additional product sales. 3. Perform a SWOT (strengths, weakness, opportunities and treats) for the company.
As we move forward in the marketing of our product, we need to our own corporate strengths. Lacobucci (2012) suggests the use of a SWOT analysis in identifying our strengths, weaknesses, opportunities and threats. The strengths and weaknesses characterize our company in relation to competitors where the opportunities and threats characterize the broader environment such as the tool industry, suppliers, the government and etc. Our strengths are in our track record in t he tool industry. We have provided quality products at competitive prices.
Another perceived strength is in the management of our company. The senior management of Steel City Tools has provided a strategic vision with clearly defined attainable goals for market position and sales. However a perceived threat is in the foreign market. A number of tool company’s efforts have been over shadowed with a cheaper duplication of products from foreign markets. The US has been plagued with a reduction in the manufacturing industry due to globalized markets, elimination of trade barriers and outsourcing.
The end result is our market segment (distributor) could purchase a similar product cheaper and increase their gross margin and not purchase our product for resale. Another threat we are not prepared to react to is loss of a major distributing customer. With more and more businesses merging, we could lose a distribution source with no warning. One of our weaknesses is we have focused on sales east of the Mississippi, thus limiting market expansion. However, this could be turned around as a future opportunity for market expansion.
An easy way to expand our market is to establish a retail division and use infomercials through the cable television network to accept mail order/telephone order select product sales such as our new illuminated power wrench. However, a marketing effort of this nature would require careful consideration must be given to the geographical area so as not to alienate our primary segment customers. A move of this nature would require additional capital investment and careful analysis of this type of expansion would be necessary to minimize risk of project failure.
The SWOT is useful in clarifying our marketing questions. The key is to address our shortcomings so as not to give the competition an upper hand and not raise concerns with our customers and capitalize on our strengths for continued success. 4. Create the market position for your product and service. Explain your rationale. Product positioning, according to the Encyclopedia of Business, involves the tailoring the entire marketing program to include product features, distribution, price, quality and service to meet the needs of the consumer within the specific market segment.
In this manner, the product positioning is part of the overall market segmentation. Product position takes place in our distributors store, or target market segment and tells us how we can strive most effectively in that market segment against our competition which are also present on display. The key is to understand the consumer perceptions of the product and the marketing behind it. Quality, reliability, affordability, unique features, benefits to the customer is just a few attributes of product positioning.
According to Lacobucci (2012) positioning is often about modifying the four P’s of marketing (position, price, place and promotion). In the case of our company, our reputation is a reflection of the position to provide a quality product at a competitive price while leading the market in innovation. Our company performance is attributed to the quality of our employment staff. Our employees are at the core to our success. We have established core values for our company’s work force by creating a positive work culture with recognition of the whole person concept.
The strategic leadership from the top on down to the employee fosters productivity with reward and recognition to enhance their performance in support of the company operations to include our marketing efforts. Thus the positive and proactive personality of our company in meeting its marketing objectives is a direct reflection of the quality of every member of the Blue Steel Tool Team. As we continue to grow and develop products for sale, we position our products at a distribution sales point or market segment with the greatest customer exposure for maximum market penetration.
We will service our product to the satisfaction and benefit of the customer so as not to jeopardize customer confidence as well as the business relationship with our market segment. The product we create and the service we provide are a direct reflection of not only our company, but that of our distributors. Our products are designed to meet the working needs of our professional as well as consumer clientele with a level of quality that meet or exceed expectations at the best value. References Lacobucci, D. (2012) Marketing Management: 2012 custom edition.
Mason OH Market Segment Defined Retrieved from http://www. businessdictionary. com/definition/market-segment. html Morley R. (2006), Trumpet Print Edition: The Death of American Manufacturing, February 2006 Retrieved from http://www. thetrumpet. com/index. php? page=article&id=1955 Reference for Business Product Positioning: Encyclopedia of Business, 2nd ed. Retrieved from http://www. referenceforbusiness. com/small/Op-Qu/Product-Positioning. html Target Market Defined retrieved from http://www. businessdictionary. com/definition/target-market. html