MKT 350 - Marketing Plan PDF

Preview

Summary

Completed marketing plan for marketing 350 ...

Description

MARKETING PLAN FINAL ESSAY

1

A Strategic Marketing Approach to Revitalize the Automotive Cup Holder Industry March 27, 2018 MKT350

2 Executive Summary The introduction of Revolution Cup Holders is an innovative solution to automotive convenience that appeals to the automotive enthusiast. By analyzing the strengths, weaknesses, threats, and further product opportunities associated with our product, we have been able to isolate the ideal market penetration strategy with consideration towards product development and quality standards. By maintaining a high level of quality and distributing through a differentiated approach with European automotive manufacturers, we anticipate a substantial and profitable level of demand with opportunities to expand and increase production in the future of the products life. In it’s entirety, Adjustable Climate Controlled Cup Holders seeks to provide a convenience oriented solution to the sustainability of beverage quality during the users commutes, while simultaneously ensuring that the beverage is held securely to enhance the safety of the user’s commute. By developing an assembly which utilizes the climate control adjustment functions already present in the enthusiast-oriented vehicle equipped with our cup holder assembly, we have provided the user with an integrated, convenient, and satisfying aid that will enhance the driving experience and promote productivity and success within the surrounding facets of their lives.

3 Product Proposition Identifying the Value in the Revolution Cup Holder Assembly The progression of the automobile has seen change and development in many facets throughout the last century. It appears, however, that the automotive industry has neglected to accommodate the convenience of beverage transportation. Studies have shown that humans are biologically inclined to spills, coupling this possibility with the dangers of transportation poses an incredible opportunity for an innovative and convenient solution. Picture this: You’ve prepared yourself for an early morning in the office after a long weekend, anticipating the stacks of paperwork waiting for you at your desk, so you fix a cup of coffee to shock your brain into action. At this point, you’re ready to get into the luxurious sedan that hard work has allowed you to enjoy on your commutes to work, mindlessly placing your coffee in the cup holder as you fasten your seat belt and adjust the climate control. The rush of traffic and the humor of your morning podcast distracts you from the difficulties of the paperwork waiting on the corner of your desk among a million other things, until you find yourself in the parking garage below your office. Stammering back into reality, you grab for your coffee cup without looking and spill a just-noticeable amount of your khakis. Without a chance to enjoy that cup of awakening Joe, it’s gone cold, and you find yourself with stained slacks, a mess waiting for you in the car on your evening commute home, and no coffee to put a fire beneath you on your busy day. Now imagine a feature that could prevent this exact problem, a cup holder assembly that could have been adjusted to maintain the temperature of your coffee with the ease of the climate control screen that heated your seats and activated your defroster before you left for the office. This feature simultaneously adjusts to accommodate the height and width of your precious cup of

4 coffee or diet soda to ensure that it remains secured while you focus on the major worries on the road ahead, all at the convenience of your fingertips. This is the purpose behind our product, the Revolution Cup Holder Assembly. Analysis of Revolution Cup Holders Financial Position Revolution Cup Holder Assemblies can be identified as a pioneer product in the automotive industry, which allows for some independence when setting pricing goals. Revolution Cup Holder Assemblies has determined that direct and variables costs for each application of the assembly will deviate slightly, the analysis of the financial position has been completed consideration for differentiated manufacturing costs between model applications. In any given application, we anticipate that each assembly will require five-hundred dollars in materials and manufacturing costs. Considering that this product will be offered as an option through a differentiated distributive channel member, and that the product is targeted towards a progressive group of customers, the entry market price for cup holders will be set at $899. While the marginal profit per unit will vary slightly, this price-skimming approach will set a standard that challenges potential competitors. In the first year of sales, our company anticipates sales of ten-thousand units at an average cost of nine-hundred dollars, yielding net sales of $9,000,000. We assume that initial investment in fixtures and equipment will cost approximately $500,000, and that variable costs for each unit produced will be approximately two-hundred dollars. At this production level we can anticipate $2,500,000 in sales required to reach the break-even point, which equates to just under forty-two-hundred units. By utilizing effective situational analysis and responsive marketing strategies our production quota can be expected substantially higher than this production level comparative to the anticipated sales level.

5 Situational Analysis Evaluation of Revolution Cup Holders Product Strengths The proposition to develop and market a cup holder assembly that utilizes climate controlling adjustability as well as height/diameter adjustability to automotive manufacturers an unoccupied market. In pioneering this innovative product, we align with modern industry trends to continuously promote innovation and develop practical solutions which aid in the convenience and safety of the automotive experience. The importance of innovation in new product offerings in the automotive field plays a major roll in facilitating market success, reaffirmed in a recent reflection on the automotive industry which states, “what is particularly notable about the current wave of innovation in automobiles is not so much the speed with which it has emerged (though that is remarkable) as the breadth of the innovation” (Parkin, Wilk, Hirsh, and Singh). With this being identified as an industry-driving approach, our product offering will exemplify a high level of innovation and integration as a means to differentiate ourselves from the entrance of horizontal channel members. Considerations for Expansion Opportunities with Revolution Cup Holder Assemblies Developing further from the assets identified in the product strengths and production standards identified previously, we have considered the opportunities that the company will be forced to interpret throughout its integration within the industry. Since the offering currently has no market presence, it will be crucial to acquire patents on the offering; In doing so, we hope to secure a sustainable market share, ultimately allowing the company to focus on reducing production costs. By lowering unit product costs our company increases the potential to expand into economy-oriented offerings more practically. Beyond these short-term opportunities, we have incentivized the need to secure long-term production contracts through major automotive

6 manufacturers to implement our products as an integrated amenity in their production vehicles. While the overall outlook focuses on the integration of this product in the automotive industry, we have also identified potential for product adaptation in the aerospace industry as a potential segment for expansion. Analyzing Weaknesses for Revolution Cup Holder Assemblies and Posing Solutions Substantial concerns have also been considered in forming our marketing plan for the Revolution Cup Holder Assembly. We understand that the offering is restricted to more enthusiast-oriented applications; a market shortcoming that we have planned to expand into after reducing production costs; which we have acknowledged and positioned the company to develop an alternative offering to fulfill later on. We have also considered the demand for maintenance associated with our product. As a solution, we have allocated resources to send educated product representatives to manufacturing facilities as well as major automotive dealerships. The responsibilities of these associates will provide service training to mechanics and sales representatives while simultaneously fulfilling the roles of public relations ambassadors to ensure the satisfaction of our clientele. Overall, we have taken intensive consideration in developing a market penetration strategy that accommodates high start-up costs as well as research and design expenses. By allocating finances towards the costs associated with introducing our product to the market and budgeting accordingly, our companies marketing position has considered a variety of possible risks within the channel and developed systematic approaches to counter them. Evaluation of Industry Threats towards Revolution Cup Holder Assemblies After defining the strengths, opportunities, and weaknesses associated with the implementation of the Revolutionary Cup Holder Assembly, we have proceeded to thoroughly

7 evaluate the potential threats within the products market penetration strategy. Our considerations are reaffirmed by Ron Harbour, an automotive manufacturing efficiency specialist, in his statement, “…it is possible for a startup to succeed, It requires a unique product, proper funding and near flawless execution” (Harbour). Revolution Cup Holder Modules has positioned itself with an offering that exemplifies this approach, by introducing an offering which satisfies unmet needs within the industry. While investing in marketing efforts, the company also intends to invest in streamlining the manufacturing process and R&D improvements as a means to reducing production costs. The importance of funding R&D is exemplified in a Berkshire Hathaway critique on the modern automotive industry which states, “…the global automotive manufacturing industry has started observing high investments in R&D to comply with the strict regulatory measures and increase profit margins. Even with the economic crisis, prominent automotive manufacturing companies are planning to boost their offerings to stay competitive” (Hathaway). Cumulatively, this response to potential market threats creates a dynamic entity that can pioneer the product segment and ensure sustainable market presence throughout its adaptation into the automotive market. Analysis of Revolution Cup Holder Assemblies Industry Position By outlining these variables we can confidently begin to develop a business model that reaffirms our anticipated market position as well as isolate our channel orientation. While the Revolution Cup Holder Assembly will be distributed through automotive manufacturers from a channel perspective, we intend to take responsibility in creating advertisements to inform potential buyers independently, which leads us to to developing a marketing strategy. Isolating Market Position Identifying Potential Consumer Focus

8 The focus of the Revolution Cup Holder Assembly is to provide an innovative module that aids in the convenience and satisfaction of the driving experience. The elements of innovation and convenience are qualities which we associate with automotive buyers who can be categorized as “enthusiasts” or individuals seeking a more luxurious experience. We also acknowledge the offerings application towards individuals who spend a sufficient amount of time traveling, which has lead us to encourage implementation in more spacious, touring models and sport-utility platforms as well. After isolating the most applicable platforms to implement our initial offering towards, we considered the most advantageous segments that exemplified the standards of our business as well as the individuals we anticipated to respond to our offering, we have decided to market our product to high-end European automotive manufacturers such as BMW and Audi in their sport sedan and SUV model lines. By selecting these two manufacturers as the carriers of our product, we hope to spread awareness that can be reinforced by the manufacturer’s high-quality brand images, increasing consumer demand as we expand our offering. The decision to market our product through a small number of retailers aligns with a differentiated approach, considering that each module for different platforms will vary slightly to allow for optimal integration. From this analysis we have been able to further narrow our prospective initial target market as individuals seeking innovative technology in enthusiast focused automobiles. Delivering Product Awareness to the Identified Segment As a means to ensure the deliverability of our product offering, we have developed cohesive strategies to position our product effectively to the identified segment. By developing informative advertisements to spread awareness, considering the pioneering position of the product, we can ensure that the market is informed and aware of the amenity being introduced to

9 the automotive industry. We anticipate the target segment to respond to this offering rapidly, focusing our efforts towards the automotive dealerships and sales associates to educate buyers on the technology and to convey the benefits associated with the offering. Marketing the offering through these personable encounters will ensure that the target buyer is reached and thoroughly comprehends the value proposition associated with the Revolution Cup Holder Assembly. With these advertising methods, we hope to create a positioning strategy which responds to customer wants from a market position with no current competitive offerings. Sustaining Market Growth and Product Implementation In order to promote the sustainability of Revolution Cup Holder Assemblies, the company has composed a comprehensive financial strategy to ensure competitive market involvement. In the products continuation, promotional contracts will be offered to a larger amount of automotive manufacturers who exemplify the original target segment criteria. After the target audience has been reached, advertisement format will shift to a more persuasive structure, exemplifying the value added to various emotional experiences by the convenience of a preserved beverage. In summation, Revolution Cup Holder Assemblies has isolated its value position and situated the offering accordingly through this differentiated strategy. Considering the product offering to be a luxury-good, and that its application aligns with enthusiast-oriented automotive models, we have decided to introduce our product through the European automakers Audi and BMW, who we have deemed to exemplify the business position of the Revolution Cup Holder Company. This decision to introduce our product offering through European markets is expected to promote the innovative structure and raise attention by other manufacturers during the monopolistic period under the acquired product patent.

10 Works Cited Hathaway, B. (2018, January 16). Automotive Manufacturing Industry Market Assessment – A Case Study on Gaining Better Visibility Into Effective Market Positioning Strategies. Retrieved March 28, 2018, from https://www.businesswire.com/news/home/20180116006030/en/Automotive-ManufacturingIndustry-Market-Assessment-–-Case Singh, A., Hirsh, E., Wilk, R., & Parkin, R. (2017, March 01). 2017 Automotive Trends. Retrieved March 28, 2018, from https://www.strategyand.pwc.com/trend/2017-automotiveindustry-trends Truett, R. (n.d.). Want to be the next Tesla? Good luck. Retrieved March 28, 2018, from http://www.autonews.com/article/20171015/MOBILITY/171019747/automotive-startups-tesla...