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A marketing plan can be defined as a written document that summarizes what the marketer has learned about the marketplace and indicates how a firm expects to reach its marketing objectives. It contains tactical guidelines for the commercialization programs and financial allocations over the planning period (Kotler et al., 2012). This document can be considered one of the most important outputs from the marketing process as it provides direction and focus for a brand, product, or company (Kotler et al., 2012). Typically, the marketing plan includes the following elements: Executive summary, situational analysis, marketing strategy, financial projections, and implementation controls.
Executive summary
Founded in 2014, Luxury-Pedic is a start-up manufacturer of luxury mattresses offering a product line that is focused on creating a lull the senses into a deep, relaxing, and peaceful night's sleep.
With other competitive offerings like Tempur-Pedic, Icomfort, and Sealy Optimum, the Luxury-Pedic product line will focus heavily on being different. By providing a quality product at competitive price levels, excellent warranty, and service experience, Luxury-Pedic will stand out.
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Luxury-Pedic will realize vital market penetration by utilizing a market challenger strategy and attacking the market leader on the basis of competitive pricing. Additionally, Luxury-Pedic will thrive based on the following operating principles: hiring a top-notch management team with extensive industry experience; a solid business model and long-term planning; and careful evaluation and response to competitive opportunities.
Situational analysis
Luxury-Pedic is entering into its first year of operation. Thus far, its products have been well acknowledged with the intention of further and rapider expansion to come based on the marketing efforts soon to be implemented.
Luxury-Pedic offers memory foam mattresses in three varieties of firmness and a several varieties of types of memory foam.
Market Summary
Luxury-Pedic understands the existing market and has done extensive research to understand the common attributes of the target market. This research will be used better to understand the consumers, their needs, and how to communicate best with the market. According to Business Journal for the Sleep Products Industry (2015), the target market for the mattress industry includes the following:
Mattress Involved
Sleep Sufferers
Healthy and Content
Brand Selectors
Apathetics
There is no set geographic target area for mattress sales. By utilizing in-store sales, Internet sales and delivery services, Luxury-Pedic intends to serve both domestic and International customers. The market can also be narrowed down to the adult demographic, ages 18 and up. Behavioral factors will include the working class, the sleep deprived or fatigued population looking for a good night's rest.
Market Growth Potential
The mattress industry is a steadily growing, altering, and evolving. As the mattress industry has changed, the consumer demographics have changed as well. Baby Boomer's no longer are wanting to deal with horrible sleep conditions as it saved money in exchange for a better nights sleep that allows consumers to be more energized and feel younger. This changing of consumer wants to consumer needs has enabled the mattress industry to become more prosperous than ever. There is an unlimited market growth potential as consumers are becoming more educated on the benefits of a better nights sleep as well as more educated on the advantages and disadvantages of the different types of mattress products. According to Wise (2012), "The mattress trade group recently revised its estimate and expects the value of mattress shipments to rise 10.5 percent and the number of units to grow 6.5
percent" (p. 3). This increased consumer knowledge base has changed the mattress market potential from being a small market with potential immediate rewards into a market where long-term growth and increase opportunity has become to the key to market success.
Competitive Analysis
The Luxury-Pedic 100% memory foam mattress line will move into a highly competitive space. Outside of the 100% memory foam mattress line, there is the independent wrapped pocketed coil line and the interlocking coil or traditional coil lines of a mattress. These lines are built and designed by mattress companies that have been selling mattresses for 65 to 140 years by brands such as Sterns & Foster, Simmons, Sealy, and Hampton & Rhodes just to start. When it comes to the 100% memory foam mattresses, Sealy, Tempur-Pedic, Hampton & Rhodes, & Serta are the most popular companies today. All four of these businesses produce memory foam mattresses that range in price from $698 to $9,000 for a queen set. The none memory foam mattresses range from $198 to $4,800 for a queen mattress set.
Competitor Product & Price Summary
When it comes to the prices of the 100% mattress foam lines, Luxury-Pedic is unable to compete with the prices of Hampton & Rhodes and the introductory lines from both Sealy and Serta. The quality differences between the Luxury-Pedic mattress lines and the lower end lines of Sealy, Serta, & Hampton & Rhodes are the differences between night and day. For their price point, none of their mattresses are 100% memory foam. They contain mostly low-grade heat conductive standard foam that sleep hot by giving back all of the heat put into the mattresses. Additionally, they do not have proper edge support or prevent body impressions.
When it comes to the higher priced 100% memory foam mattresses from the other competitive brands, Luxury-Pedic mattresses will stand out due to same high quality of material, temperature regulation, comfort, and edge support at a price point that undercuts all other competing mattresses. Tempur-Pedic mattresses are the only mattresses in the entire industry that are price locked at a that is almost double of what any other memory foam mattress costs. Tempur-Pedic owns SealyTempur-Pedic, and so the focus of the Sealy 100% memory foam mattress line is to be only two steps above the Serta memory foam line. Out of all of the memory foam mattress lines, the Serta collection is the worst at temperature regulation and has no pillow top product offering. Sealy is better at temperature regulation but is the softest of all memory foam mattresses. The prices of these two lines are very similar. They range from $1,299 to $2,499.
Segmentation, Target Market, & Strategy
The Luxury-Pedic mattress lines will focus on three different areas of the consumer market. The first will be focused on consumer medical needs. The medical benefits of the Luxury-Pedic mattress lines range from increased circulation, increased recovery times, decreased: aches, pains, and soreness, and an increase in an overall comfort allowing for a better nights sleep. The second area will focus on consumer comfort. The Luxury-Pedic line will come in 3 different comforts from firm, plush, and pillow top allowing a customer to be able to identify the mattress that best suits their comfort needs.
The third and final focus will be on consumer value as the Luxury-Pedic line will be more cost effective than Tempur-Pedic but will provide all of the same advantages and benefits of Tempur-Pedic. According to Perry (2010), "The mattress industry must sell dreams if it wants to elevate its image, boost its sale price and give consumers a better shopping experience" (p. 34). With the implementation of using these three different market strategies focusing on consumer segmentation and target marketing, Luxury-Pedic will be able to establish a stronghold in the 100% memory foam market.
Pricing
The Luxury-Pedic line will consist of three different mattresses firmness levels. There will be a firm, plush, and pillow top. When it comes a firm mattress, Tempur-Pedic queen price set is at $4,199, Serta is at $1,699, and Sealy has not actual firm 100% memory foam mattress. The price for a Luxury-Pedic firm mattress will be $1,899 as the Serta mattress has poor temperature regulation and it out prices the Tempur-Pedic significantly. When it comes to a plush mattress, Sealy is priced at $1,799, Serta $1,999, and Tempur-Pedic at $3,499. The Luxury-Pedic mattress will be priced at $2,099. The focus is to build value in the concept of adding more material increases the size of the mattress allowing which causes an increase in the cost of the mattress. There is not a real pillow top in any of the Tempur-Pedic, Serta, or Sealy mattress lines, making Luxury-Pedic a true one of a kind, but in soft equivalences Sealy is priced at $2,099, Serta $2,199, and Tempur-Pedic at $4,999. The Luxury-Pedic pillow top will be priced at $2,299. The point is to no be cheaper than a low-end mattress, but to be at a lower price than Tempur-Pedic. We will be at a higher price than Sealy and Serta with the benefit of much better quality.
Distribution Strategies
The distribution strategy for Luxury-Pedic will be following Indirect distribution. Luxury-Pedic Mattresses will initially be built and assembled in two factories in New Mexico and Kentucky to allow for easy mass distribution to wholesalers and mattress retailers. As Luxury-Pedic's increase in the success, additional factories will be built to shorten delivery times in order to allow for an increase in mattress sales. The objective of the distribution strategy is to be able to get new mattresses to wholesalers and retailers in less than 72 hours after ordering. Developing clear objectives is vital to a successful marketing plan. There are numerous essential elements to consider when creating effective marketing objective. It's important that the objectives are specific, measurable, achievable, realistic and time-specific or SMART for short.
The SMART approach let you how to manage your marketing activities successfully. Luxury Pedic is always evolving. The mattress industry is continuously growing. Key performances indicators are an important part of information used to describe how companies such as Luxury Pedic will progress towards its marketing goal within the next three years. Retailing at competitive rates of $1899-2500 depending on the mattress performance level, Luxury Pedic is priced to achieve increased profit revenue continuously. The key performance indicators are based on legitimate data and business objectives, and they are not always financial but they are necessary for directing management to their full potential. Some other essential performances include new and existing customers’ status, customer segmentation by profitability or demographics, customer referrals, advertisement, and testimonies.
Demand forecasting
Demand forecasting and estimation gives businesses valuable information about the markets in which they operate and the markets they plan to pursue. The purpose of demand forecasting and estimation is to find a business's potential demand so managers can make accurate decisions about pricing, business growth and market potential. Managers base pricing on demand trends in the market. Demand forecasting and estimation is critical for inventory management. Businesses buy inventory based upon demand forecasts. Demand forecasting and estimation methods are typically accurate for short-term business planning. Estimating demand for the long-term is difficult because there are many unforeseen factors that influence demand over time.
The expansion of the global mattress industry is forecast to reach 3.7% p.a. in the coming years. Between 2007 and 2013 the market increased with an average annual growth of 4.9%. Currently, cellular plastic and rubber mattresses account for 40.9% of the global demand while the remaining market share is divided between other mattresses (41.8%), and mattress supports (17.3%). China, France, Germany, Japan and the United States represent the largest mattress markets while the strongest annual growth is forecast to occur in Tanzania (24.1%), Ethiopia (15.4%), Philippines (15.0%), Rwanda (14.8%) and Bolivia (13.3%).
Marketing Objectives
Developing clear objectives is vital to a successful marketing plan. There are numerous essential elements to consider when creating effective marketing objective. It's important that the objectives are specific, measurable, achievable, realistic and time-specific or SMART for short. The SMART approach let you how to manage your marketing activities successfully. Luxury Pedic is always evolving, the mattress industry is continuously growing, and key performances indicators is an important part of information used to describe how companies such as Luxury Pedic will progress towards its marketing goal within the next three years.
Retailing at competitive rates of $1899-2500 depending on the mattress performance level, Luxury Pedic is priced to achieve increased profit revenue continuously. The key performance indicators are based on legitimate data and business objectives; they are not always financial, but they are necessary for directing management to their full potential. Some other key performances include new and existing customers' status, customer segmentation by profitability or demographics, customer referrals, advertisement, and testimonies.
Implementation Milestones
As a new company, setting milestones in a marketing plan allows your company to track the progress of company goals; allowing the business to determine if it can reach the task by a particular date and if there is enough data to move to the next activity. Luxury Pedic will identify their tasks, the start date, and the scheduled completion date, each event will continue until every task is finished. Creating a milestone table for your business sets the plan in concrete terms with real budgets and deadlines. Luxury pedic started by identifying each milestone, assigning a due date, allocating a budget, and designating a responsible person or group for each task, this is how a plan is implemented.
Control Metrics
It is important to set the rules of engagement within Luxury-Pedic. In order to measure success, we must be able to have a way to create company goals and establish the way to control what needs to be done in order to achieve the objectives set forth. We must be able to have a rule to measure current success, as well. We must be able to deliver efficiently on four types of marketing control. Those types are Annual Plan Control, Profitability Control, Efficiency Control, and Strategic Control. Annual Plan Control provides us with the ability to see if the results the company is looking for are being reached. Profitability Control shows us where we are making money and, even, where we are losing money. If it is found that money is being lost, we can adjust what is being done to produce a positive gain in revenue.
Depending on the money that is lost, the product or idea will go directly to the end of life cycle to save cost in that area. Efficiency control gives us the opportunity to see how our marketing dollars are being spent in relation to the impact that our marketing strategy is having on our consumer base. Strategic control will give us a roadmap letting us know if the company is going down the right path in product offerings and how we are going about to make these offers available to the public. With the proper control measures put in place, we can see a complete picture of how the company is doing at any particular time.
We will be able to identify problem areas quickly and create contingency plans when needed adequately to address any needs or areas of concern. Its falls on management to steer the company in the right direction. Creating a culture of success is vital. Frontline employees must be on board with the direction the company is moving. If it is determined that there are issue in that area by way in bad performance results, for example, it is up to management to find the right path to correct those performance issues. All parts of the business must work well together in order to serve our consumer base actually.
Contingency Planning
"Marketers must be ready to update and adapt marketing plans at any time" (Kotler & Keller, 2011, p. 55). There are many variables that can affect daily, monthly, and quarterly numbers in terms of production and revenue. We must be ready to address any and all areas of concerns promptly. The introduction of a new mattress company can affect the way we market and advertize to our consumer base. Competition in a marketplace can have several adverse effects. One thing we must be prepared to adapt to is the effect competition can have on pricing and promotions. Too much competition can drive prices down which mean Luxury-Pedic must change to be successful. We may need to invest in more cost friendly products that can deliver the same quality and comfort to cut cost, but will allow us to still deliver on our promise to our customer base with more affordable pricing.
Major geological events can have an immediate impact on demand of our products. Floods, tornados, and hurricanes can create mass devastation that can leave our consumer base in need to rebuild. Adjustments in our offerings and promotion to assist in helping rebuild our community will increase our overall customer satisfaction. Community service events and product donations would be a way for us to stand out above the rest of our competition to show that we care about our customers and our community. During such a period, the company could see a short term dip in revenue. With the establishment of community service projects in the time of need, we can predict that we will reap positive long term success from that. Luxury-Pedic must be flexible in our approach and delivery of our products to our customer in order to achieve high success.
In conclusion, a successful firm starts with a marketing plan within its first fiscal year. A marketing plan is a highly detailed and written document that summarizes how a firm plans to reach its marketing objectives. Luxury-Pedic has outlined its marketing plans and detailed tasks to reach these elements, executive summary, situational analysis, marketing strategy, financial projections, and implementation controls will be discussed among other elements. This paper has defined the following objectives that Luxury-Pedic will implement to achieve this successful marketing plan.
References
BedTimes. (2012). Research Finds 5 Key Mattress Consumer Segments. Retrieved from http://bedtimesmagazine.com/2009/01/research-finds-5-key-mattress-consumer-segments/ Kotler, P., & Keller, K. L. (2011). Marketing Management (14th ed.). Upper Saddle River, NJ: Pearson Prentice Hall. Perry, D. (2010). Mattress industry should sell dreams. Furniture Today, 34(37), 33. Retrieved from http://search.proquest.com.contentproxy.phoenix.edu/docview/346182942?pq-origsite=summon&http://search.proquest.com?accountid=35812 Wise, W. L. (2012). Going to the mattress. The Post and Courier Retrieved from http://search.proquest.com.contentproxy.phoenix.edu/docview/1115405056?pq-origsite=summon&accountid=35812
The Typical Elements of Marketing Plan. (2016, Sep 24). Retrieved from https://studymoose.com/new-product-launch-marketing-plan-5-essay
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