Marketing Plan on "Brocade's Mlx Router"

Quoted Instructions for "Brocade's Mlx Router" Assignment:

This is the fourth of a 5-part marketing plan.

Prepare a 4 page report, addressing the following:

1. Discuss the company*****s competitors, and the strengths and weaknesses of each.

2. Discuss how you plan to differentiate your company from the closest competitor.

3. Discuss the company*****s intention to be a leader or follower within the industry.

4. Assess the macro-environmental issues (legal, technological, social, and economic) trends with which your business must contend.

5. Identify the most significant trend to impact your business and discuss how the company intends to minimize or capitalize on this trend.

Below are the first 4 parts of this marketing plan. Please reference for details.

This was the first part of this 5-part marketing plan.

Just recently Brocade Communications Systems, Inc. announced its new MLX series of advanced routers delivering extraordinary scale, performance, reliability and cost-saving efficiency for the world most demanding networks. The MLX series of routers provide industry-leading 100 Gigabit Ethernet (GbE), 10 GbE, and 1 GbE wire-speed density; rich IPv4, IPv6, Multi-VRF, MPLS, and Carrier Ethernet capabilities without compromising performance; and advanced Layer 2 switching.

With increased network traffic, internet service providers, transit networks, content delivery networks, hosting providers, and internet exchange points rely on these routers to move this traffic and reduce the cost per bit. By utilizing the MLX router, mission-critical data centers can simplify large campus networks, support additional traffic, and achieve greater virtualization.

With the extraordinary technological advancements, and advent of the internet over the past four decades, it is no wonder the equipment utilized to make it possible can keep up. As table 1, shows just in the past ten years alone, internet usage has grown worldwide by 444.8%. That*****s equivalent to almost 2 billion people around the world utilizing the internet for various reasons.

So one may ask; just how does the internet work? The simple answer is switches and routers. These complex machines are strategically placed around the world by virtually every company to run their networks and provide access to the internet in one form or another. Since this market research is centered on the B2B world I will focus on large scale networks which include the backbone of the internet, and most large or small business internal networks.

Brocade Communications Systems, Inc. develops, manufactures, sells, and supports these switches and routers. Brocade focuses its marketing budget on selling its products to small and large scale businesses that provide internet access, transit networks, content delivery networks, hosting providers, and internet exchange points. These businesses are what make the World Wide Web so prolific in our lives today. Even though this is a large diverse group of businesses I consider Brocade marketing segmentation to be that of a niche market.

The niche marketing segment best fits Brocade because they strategically focus on a smaller market that have specific needs that they can serve well. Brocade has a global presence that allows its sales force to penetrate into countries from the U.S. to emerging markets in third world countries. Brocade markets to a broad range of demographics including company size, account size, and all types of firms. Their customer base is very diverse and includes content providers, educational institutions, the federal and local governments, and financial outlets to include the New York Stock Exchange. Regardless of the customer*****s size, location, or scalability Brocade has a networking solution.

As you can see from this SWOT analysis Brocade possesses both a strong internal and external business unit. Brocade main competitors are Cisco Systems and Juniper Networks respectively. Cisco has more than 65,000 employees and annual revenue of $40.0 billion as of 2010. Juniper Network employs more than 7,000 employees with annual revenues of $3.8 billion. Comparatively Brocade employs over 4,000 employees with annual revenues of $2.07 billion.

Brocade new MLX series routers offer massive scalable multi-terabit IP/MLPS capabilities and breakthrough 100 GbE wire-speed scalability and cost, this router is an industry leader in MPLS and IPv6 performance. The MLXe has advanced routing, carrier Ethernet options, and carrier-class reliability. This, with the expected growth in infrastructure upgrades positions Brocade MLX routers to offer customers a tremendous value for their money.

References

http://www.brocade.com/products-solutions. Retrieved October 21, 2010.

http://www.internetworldstats.com/stats.htm. Retrieved October 22, 2010.

http://moneycentral.msn.com/detail/stock_quote?Symbol=brcd. Retrieved October 22, 2010.

http://moneycentral.msn.com/detail/stock_quote?Symbol=jnpr. Retrieved October 22, 2010.

http://moneycentral.msn.com/detail/stock_quote?Symbol=brcd. Retrieved October 22, 2010

This is the second part of the marketing plan.

The product that is being marketed is the new MLX series of routers from Brocade. The MLX series is a niche product within the router industry, characterized by a high level of performance relative to the mass market routers produced by the firms major competitors Cisco and Juniper. The MLX series of routers has a broad set of features that deliver industry-leading performance in terms of speed, volume capability, high performance, and cost efficiency (Brocade.com, 2010). The routers exceed the performance of competing products. Thus, the primary characteristic of the MLX series of routers is its technological superiority.

The branding strategy for the MLX series is focused on building the MLX name among consumers of high-end routers. Secondary to this will be building the Brocade name. Because there are a number of routers within the MLX series, and these routers will be phased in and out of production according to market demands and technological developments, individual products will not be subject to any branding effort. The branding effort will only focus on the line and the company.

The MLX line branding will be built around the concept of a multi-year strategy. Brand recognition for a name such as MLX can be relatively low because the name does not stand out, so the focus will be on linking specific product attributes to that brand. Concepts such as technological superiority and improved performance for the buyer*****'s company will be specifically linked to the MLX brand. The branding strategy wishes to convey the MLX as a tool by which the buyer can improve his or her own business. The MLX brand should be associated therefore with customer success a typical message associated with the MLX brand would be that companies with rapidly growing traffic and business need an MLX. This can create an inspirational element to the brand by positioning it as the brand utilized by the successful and rapidly growing.

Brocade generally competes as a high-end producer of computer and network components. The MLX line fits into the broader Brocade product line as a new flagship for the company. Brocade*****s name will be tied to the success off the MLX, which the company expects to be a high volume product for the company and one that is strongly tied to the value of the Brocade brand as a whole. In addition, the MLX routers will be used to bring new customers to Brocade, at which point the company can also market more esoteric and specialized products.

Thus, the MLX line is expected to be a central element of the company*****'s overall brand strategy for the next few years. Brocade hopes to build its business around the MLX line of routers, and use those routers to attract new clients. As a new flagship product, the MLX will be supported with strong spending and will become the focus of a broader campaign for the company to expand into multiple different markets.

The MLX line features products for a broad range of target markets. Individual products will have niche markets, such as small businesses, medium businesses, institutions or even home users, but the line as a whole will encompass a broad range of these target markets. This gives the MLX brand a broad exposure to a wide number of computer and Internet users. While not a loss leader, the MLX routers are expected to function in a similar manner, bringing new customers to the company by offering a superior, innovative product. The strategy is not unlike that applied by Apple with the iPod, which brought millions of new customers to the company.

The organization*****'s broader strategy is to utilize the MLX routers to bring in these new customers. When the customers are impressed with the superior performance of the MLX, they will look to Brocade for other solutions as well. In this manner, the company will leverage its new customers to build all of its lines of business, not just its router business. MLX will serve the gateway function, therefore. Margins on the other products will likely be higher than those taken on the MLX, especially after marketing costs are considered, so the primary role of the MLX line is to increase total customer volume.

The fact that the MLX is being marketed as a line supports this overall strategy. The broad range of target markets serves two essential functions. The first is to provide the line with broad appeal, driving high sales for the MLX product itself. The second is to bring in as many diverse customers as possible. The result of this will be that Brocade can market a wide range of products to these disparate customers. This not only increases the company*****'s business in general for its existing products, but it will also allow Brocade to have the customer base to broaden its research and development activities. The company has quadrupled sales in the past five years, and the MLX strategy is part of an overall strategy to match this rapid rate of growth over the next five years. Increasing the customer base and allowing for an increase in research and development capability is part of this strategy.

The other way in which the MLX branding strategy and target market strategy will help support Brocade*****'s overall corporate strategy is that it will enhance the status of Brocade as a high-end maker of computer and networking equipment. At this point, the Brocade brand is not as well known as that of its major competitors, largely because of the company*****'s historic niche status. The company believes that in the long run, most consumers will demand high performance from their Internet devices, which will expand what is currently a niche market into the mainstream. Brocade hopes to ride this trend into rapidly growing sales and improved returns on investment.

Overall, the branding strategy for the MLX line of routers is highly-integrated with Brocade*****'s overall strategy of rapid growth and brand image enhancement. The company wishes to cultivate an image as a facilitator of communication and of business and create an element of aspiration surrounding the brand. This, it is believed, will help drive business, particularly among consumers less savvy about technical details but desiring the best performance, which the company sees as the future of the market as the high end moves into the mainstream. The MLX is going to be at the core of the company*****'s marketing strategy as a means by which to increase Brocade*****'s total brand exposure and to bring new customers to the company. The use of this extensive brand exposure to a broad range of specific target markets is hoped to create a widespread improvement in brand awareness and specific associations of MLX and Brocade as being high-performance and desirable.

References

Brocade.com website, various pages. (2010. Retrieved October 31, 2010 from http://www.brocade.com

This is the third part of the marketing plan.

Penetration pricing is when a business is pricing new products or services lower than competitors. The idea is that by having the product sell at a lower price, you can be able to build brand recognition and establish a market for it. In general, this kind of strategy is used for products that have been introduced that are of good quality. Yet, they may have trouble standing out against competitors. Skimming is when you are introducing a new product or service at a higher price and then will lower the cost later. In most cases, this kind of strategy is used when introducing products that are considered to be must have or in demand items. (Penetration Pricing,2010) The best strategy that would work for Brocade*****s introduction of the MLX router, is to use a penetration pricing strategy. The reason: the product is not in high demand, there are lots of competitors and it is of superior quality. Given these different factors, penetration would be the most appropriate strategy. As it will help to introduce the MLX router to the market and build a reputation for superior quality. Over the course of time, this will allow the company to gradually build brand recognition based upon these elements.

The best pricing tactics that Brocade should use is competing against private brands. This is where, the MLX router will be introduced at a lower price. At which point, it will be able to offer customers better quality and value in comparison with name brand products. This is important, because given the fact that the company is introducing a product where there are numerous competitors and costs are a major factor, means that this kind of strategy must be utilized. As it will help Brocade, be able to build a new market based upon superior quality and lower prices in comparison with its competitors. (O*****Brien, 2010)

The biggest legal / ethical issue that the company could be wrestling with would include: maintaining a balance between the selling pricing and supporting the company*****s profit margin. When you look at these two elements, it is clear that this is very challenging for Brocade. As they want to be able to maintain some kind of balance, in offering the customer good value and quality. Yet, there is a limit, due to the fact that there are costs and the profit margins must be maintained at all times. This is problematic, because if you do not maintain a balance when marketing the MLX router, Brocade could focus in one direction or the other, which would likely have a negative impact upon the product. Given the fact that this is new product, means that this issue must be taken into account when introducing any kind of pricing strategy. (Marketing Pricing, 2010)

As far as the distribution channel is concerned, there is an interconnected relationship between: the wholesaler, distributor and reselllers. What is happening is all three parts of the channel are dependent upon the product being successful. The reason being is because the whole seller (Brocade) wants to be able to have the MLX redefine the router market. As a result, they will have to work with internally and with resellers to understand the advantages of this product. At the same time, they have to make sure that it is priced low enough to ensure that the customers are receiving good quality. To achieve the objective, Brocade will offer suggested retail prices and marketing strategies to increase the success of the MLX. This will take place with both internally as well as with resellers, as they have a vested interested in helping the product to be as successful. When you put these different elements together, this means Brocade will have to take the lead in helping to define and establish the market. As their actions will have ripple effects upon the entire distribution channel, having an impact upon the success of the product.

The distribution strategy that is being utilized will help to identify a target market for the MLX and allow the company to achieve its different marketing objectives. What is happening is the competition for routers is so intense; that many companies are claiming they have the best products. At the same time, the primary customers for this kind merchandise are businesses. Where, they will more than likely purchase routers in bulk and at a time when they need to be replace outdated and older models. When you put these different elements together, customers will more than likely comparison shop and will evaluate the underlying strengths as well as weakness of each product. For Brocade, this means a strategy must be utilized that will address these underlying issues. While at the same time; being able to create a positive impression in the minds of customers.

As a result, the distribution strategy that we are utilizing: will introduce the product at a lower price in comparison to competitors as it is creating a substitute. These elements are important, because they will help to provide an alternative for customers to choose from. However, in order for any kind of distribution strategy to be successful, the product must stand out against competitors. The obvious reason being price is often associated with quality. Given the fact that the MLX is going to be introduced at a lower price, means that this could be viewed as a generic router (hence it is of inferior quality). To mitigate these kinds of effects requires, emphasizing the overall quality of the product and how it is superior to competitors. When you put these two factors together, this will help the customer to see the MLX as the next generation of routers, selling at a superior value. Once this takes place, it will create a new market for the MLX and will address the issues that are of concern to the customer.

At the same time, the approach of having the company work with the entire distribution channel will help to ensure that everyone understand the strengths of the MLX and how to effectively market it. This is significant, because improving collaboration will help to increase support and positive reviews of the product, a result of the entire distribution channel working together to make the MLX a success. Over the course of time, this will help to increase the favorable opinions of the product and its awareness.

When you look at these different elements, it is clear it will help Brocade to support the MLX as it is providing an effective way for customers to see the value and quality that is offered in comparison with competitors. This helps to establish an alternative product that is giving them superior value, in comparison to similar merchandise. Then, when you ensure that everyone in the distribution channel is working together brand awareness is increased even more and the various benefits of the product and what it has to offer, can be promoted (directly as well as indirectly). As a result, this strategy fits the product that is being promoted, with it being able to address the underlying concerns of the customer. Once this takes place, it is only a matter of time until the superior value and outstanding quality will be the key attributes of the MLX. At which point, the product will have a targeted group of customers and Brocade will increase overall company and brand awareness.

References

Marketing Pricing. (2010). The Manager. Retrieved from: http://www.themanager.org/Knowledgebase/marketing/Pricing.htm

Penetration Pricing. (2010). Reference for Business. Retrieved from: http://www.referenceforbusiness.com/small/Op-Qu/Penetration-Pricing.html

Brien, B. (2010). Competing Against National Brands. Clean Link. Retrieved from: http://www.cleanlink.com/sm/article/Competing-Against-National-Brands--10786

This is the 4th part of this 5-part marketing plan.

Abstract

The high-speed router is the backbone of any company*****s network to fulfill the high-scale objectives of small to large enterprises. Routers select the appropriate path to transfer data packages between a company*****s multi-layered network. Extreme competition has emerged in the market for this type of network-based equipment. Network equipment manufacturing companies like Brocade, are continuously developing new equipment to keep pace with the demand for an increase in scalability and virtualization to ensure market survivability. Due to a continuous need for scalability within these networks, companies like Brocade are ensuring they develop and manufacture the best of routers to allow for this growth. Brocade*****s MLX series routers are a part of this development. Most of the Internet Service Providers and transit networks rely on these routers to ensure they meet high-level traffic requirements within their networks (Brocade, nod.).

Since Brocade*****s MLX series routers are a technology product with innovative features, effective advertisement is essential. Brocade not only needs to meet the required objective of persuading customers to buy the MLX routers, but they also need to familiarize and demonstrate their product to potential customers. With new technological advancements being made seemingly daily and the variety of networking products available in the market; efficient advertising is an essential pillar in the success of Brocade*****s MLX router series.

Advertising for these highly technical products, is at best a real challenge. Meaning the information surrounding the performance and effectiveness for these products is typically important to a certain group of interested persons or buyers. The reason behind this is perhaps these are more product ***** ***** commodities and therefore firms believe that it is their real technology that people are willing to pay for and not the *****image*****. However, the fact remains that in the contemporary world where a technologically advanced product enters the market, the network router market is as much competitive as any other fast moving consumer good. This is why effective advertising is as much necessary for network routers as any other product. With so many choices in manufacturers and products in the marketplace, consumers have many alternatives (List Building Toolkit, 2010). Under such competition, a company cannot afford to depend entirely on its product*****s technology, no matter how unique it is ***** effective advertising is a need for the day.

Since the product is technology driven, the advertising campaign for the MLX router must be both persuasive and informative. In order to capture the attention of potential customers, the ad campaign should be visual, primarily face to face (sales force), however television or the internet may offer additional advertising forums. The advertisement must highlight the differences that make Brocade*****s MLX routers stand out in the market from its competitor*****s. As part of an initial launch, some buying incentive could be given so that it provokes the customer to opt for the product over its rivals. These incentives may include discounts on purchases of other Brocade products, Brocade support contracts, and extended equipment warranties or guarantees.

The advertisement*****s focus should be on the unique selling point of the MLX router. In this case, it should focus on Brocade*****s latest high-end technology, cost efficiency, operational reliability and scalability. It should highlight the fact that the Brocade MLX router is more reliable than other networking products available in the market. For this reason, the advertisement should be demonstrative making these mediums the best.

While these three mediums remain the best to promote the MLX product, other important mediums like magazines, newspapers and industry buzz should not be ignored to maximize reaching all potential consumers. Advertisements should be published in technology magazines and aired on science, educational, and news channels that target a demographic consistent with a wide viewership of Information Technology professionals.

Awareness could also be created through social networking websites such as Facebook in order to capture the target audience. These social networking websites can also play an effective role in assisting the firm to carry out pre launch and post launch tracking studies for the effectiveness of the ad campaign.

In order to test the effectiveness of the MLX router*****s advertising campaign, a market survey should be carried out before formally launching the campaign. This will test how much awareness about the router is already there in the market and what is the scope of further sales. After formally launching the advertisement campaign, another market survey should be carried out testing the awareness level in the target market about the product. The difference between the pre launch and post launch survey will be used to measure the overall effectiveness of the campaign.

Although the regular advertisement campaign will be launched and continued as per the above mentioned plan, other promotional activities will also be carried out in parallel. One of these promotional activities includes referral incentives and discounts on the products based on different levels of purchasing power. By offering incentives, customer*****s who otherwise may opt for the competition*****s products due to the price factor, will consider purchasing the Brocade MLX Router. Another important promotional opportunity is for Brocade to sponsor sales events that will be attended by potential customers as well as participating in industry trade shows.

Considering the fact that the Brocade MLX Router is a technical product, assessment of customer satisfaction is very important in order to ensure quality management. In order to do so, continued post sales support will be fundamental in its success. Customers will be contacted on a regular basis to ensure they are satisfied with the performance of the product and if the product meets their expectations. Maintenance contracts should be sold after an initial burn-in period for all products. Support contracts should be offered as an additional post-sales product for all equipment under maintenance. Supplemental support will be made available to customers for a limited time in the case support packages are not purchased. Internal mechanisms and product management groups will be in place to track and correct product defects.

It is very important to keep an eye on and bridge the gap that arises between the firm*****s expectations with the campaign and the actual experience. There is a chance of a negative gap to occur if customers are not satisfied with the products performance. For a technical product like a network router, where customers have multiple networking product options available in the market, it is extremely important that customer satisfaction is ensured. A fundamental approach to this is for the sales team to stay engaged with the customers to understand their expectations and experience as related to their networks. Another good option to assess this is to regularly observe product reviews that are published online by the customers using the product (List Building Toolkit, 2010). Once an issue is identified, a thorough internal review will be required to assess what proportion of customers are facing the same problem and the problem will be referred to the relevant department. Individual product management groups will continually review necessary changes and implement these changes as the need arises.

References

Brocade. (n.d.). Brocade MLX Routers. (2010). Retrieved November 26, 2010 from http://www.brocade.com/products/all/outers/product-details/netiron-mlx-series/index.page

List Building Toolkit. (2010). Research wireless internet router reviews before you purchase one. Retrieved November 26, 2010 from http://www.listbuildingtoolkit.com/research-wireless-internet-router-reviews-before-you-purchase-one

Articles Base. (2007). Netiron Mlx fuels foundry Vs. Cisco battle. Retrieved November 24, 2010 from Netiron Mlx Fuels Foundry Vs. Cisco Battle

AMEinfo. (2010). Brocade delivers on Brocade one promise with world*****'s most powerful 100 Gigabit Ethernet Router. Retrieved November 24, 2010 from http://www.ameinfo.com/242238.html