Term Paper on "Marketing Strategies for a New Fridge"

Term Paper 10 pages (2877 words) Sources: 3

[EXCERPT] . . . .

Marketing Strategies for a New Fridge in Australia

The new line of fridges will be manufactured by Lex Corporation and will initially be launched onto the Australian market, with future possibilities for expansion onto the international market. They will also distribute their products to the entire Asia-Pacific Region. The domestic market is attractive as it is expected to grow in the years to come. A demographical trend worth consideration is given by the aging of the population, the reduction of the birth rate and the increasing life expectancy, all generating an increase in the population. In terms of social organization, most Australians live in urban areas and see the fridge not as a luxury, but as a constant necessity. Form a technological standpoint, various advancements have been made and the producer has integrated several features into the new fridge as to best satisfy the growing and changing needs of their current and future customers.

Limitations are posed by the natural and political environments, both of which generate additional expenditures for Lex Corporation. To better explain, the natural environment is threatened by a shortage of natural resources, which require superior and more efficient extraction and processing technologies, which then imply increased costs. These regulations, alongside with others, such as customer satisfaction and protection, are enforced by the political environment, which issues wide sets of regulations Lex Corp must comply with. All of these once again increase the costs and the major problem resides in that the manufacturer can not entirely incorporate the additional expenditure into the retail price to the end consumer without risking a decrease in its customer base.

2. Target Market

Establishing a clear target market is a crucial step in the process of developing a marketing plan as it has the primary feature of helping the organization. From this particular stand point, a clearly identified target market helps the manufacturer save time and money from best knowing who and how to address. In other words, without an established target audience, the company will lose time and money by addressing those that are not interested in purchasing the respective item, the new fridge in this particular case, and most importantly, by neglecting the desired customer base. "The goal of market research is to find your best customers. Target markets are those individuals or groups most likely to become your customers. They have common characteristics and needs that your business will be able to satisfy" (Pinson and Jinnett, 2003)

Two features must be taken into consideration when establishing the target market: the characteristics of the product and the identified needs it will satisfy and secondly, the characteristics of the desired market, the domestic Australian market in this instance. The needs that will be satisfied by the new fridge refer to a fresh preservation of the eatable aliments while containing them at proper temperatures in modern designs and with reduced energy consumption. These needs, alongside with other product features will be more extensively presented in the Marketing Mix, Product section.

The market features that help Lex Corporation identify its target market revolve around the following:

The number of households in Australia is expected to increase by somewhat between 39 and 47%

Life expectancy at birth increases dramatically

Birth rates decrease dramatically, revealing a different distribution of wealth and increased sources for the population, also generating changing and increasing demands

The domestic market is characterized by a low density and accounts for less than 0.5% of the world's population; China has 20.4% and Japan has 1.9% of the world's population

97% of Australia's population lives in urban areas and considers fridges as a necessity

The most commonly used strategy to identifying the proper target market is given by segmentation. "Market segmentation describes the division of a market into discrete homogenous groups that will respond differently to promotions, communications, advertising and other marketing mix variables. Segmentation is used by marketers to make marketing investments more efficient. Proper segment selection and an understanding of each segment's unique dynamics are critical in shaping marketing strategy" (Fox and Gregory, 2004). A primary step in applying market segmentation is the identification of the selection criteria. The most common such criteria are given by age, gender, income or cultural background.

In terms of gender, most of the household purchasing decisions are made by the mother or the mature woman; men or fathers seldom get involved in the decision to purchasing a new fridge. In terms of age, most decisions are made by mature individuals who run the household; fridges can also be bought by teenagers who move out of the parents' home, but their decision will most of the times be influenced by the mother. In terms of income and cultural background, the new product will address all categories as they all need a fridge. Foremost, due to the technological improvements integrated within the new fridge, it will also aim to address those individuals that are concerned with the safety of the planet and also with the reduction of their own electricity bill. All in all, however the new fridge will address a wide range of individuals as it will satisfy various needs, Lex Corporation's primary target market will be formed from women over the age of 25, coming from all cultural backgrounds and realizing all levels of incomes.

3. Marketing Objectives

Establishing the marketing objectives is yet another vital step in the process of launching a new item onto the market. These goals have to be SMART, in the meaning that they are:

Specific - what exactly does the company desire to achieve, such as consolidate market share

Measurable - the company will be able to measure and state when the goals have been reached, such as the goal in the first example will be reached when the company possesses a 20% market share

Achievable - this means that the goals must be challenging for the organization, but not impossible to achieve

Realistic - the goals will be achieve during the specified amount of time and through the usage of the available resources (capital, labor force and technologies)

Timely, or Time-sensitive - this establishes a timeline for the goals to be achieved, such as the end of the first year since the new fridges have been launched onto the Australian market (Acuff and Wood)

In this particular understanding, fridge manufacturer Lex Corporation desires to establish the following SMART goals, all to be achieved during the first year of selling the new fridge:

Form and consolidate a loyal customer base

Offer the highest quality products and best satisfy the customers' needs and wants

Maintain constant communications with the customers as to identify and serve any new needs; from this standpoint, Lex Corp should try to identify and satisfy new needs even before the customers become aware of their existence

Realize sustainable sales during and after promotions; several companies have realized impressive sales during promotional campaigns, but when these ended, the company was unable to sustain sales and encountered major difficulties

4. Marketing Mix

The marketing mix is yet another vital component of the marketing plan which helps the organization identify the cores on which to base their future strategies. "The marketing mix is a term used to describe the combination of elements comprising the offer that a business makes to its customers. Many people are familiar with the four P's of the standard marketing mix: Product, Place, Price and Promotion. These four elements fully describe the business offer for goods: What is the product? Where and how is it distributed and sold? What is the pricing policy? How is it promoted? If any of these four elements is varied, then a new business offer is being made" (Clarke, 2000).

Product

The primary product dynamics include decisions to be made in regard to the identification of the new fridge's core benefits and how these will help customers best satisfy their needs. Other decisions to be made regard the brand name under which the items will be sold, the functionality of the fridge, the styling, quality, safety, packaging, repairs and support, warranty and other accessories and services (Net MBA, 2002-2007).

The primary benefits the new fridge will offer the customers are given by its modern design and the incorporation of the latest technologies, which has a dual benefit. First of all, these technologies ensure the buyer that the fridge has been manufactured in compliance with several environmental regulations. In other words, its production has used limited natural resources and has had limited negative effects upon the surrounding environment. Secondly, the superior technologies will also personally affect the customer as they will make the fridge consume less power, reducing as such the household's electricity bill. Also, the technologies ensure the buyer of the compliance with all market regulations and the ultimate high quality of the product.

Brand name: the new fridge will be sold under the Lex brand name and will benefit from the good reputation the company has created so far

Functionality: the stated functionality of the fridge is to… READ MORE

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