Market Audit Term Paper
- Length: 10 pages
- Subject: Business - Advertising
- Type: Term Paper
- Paper: #29648303
Excerpt from Term Paper :
The first point that has to be looked into is the health of the company, Colorado Australia. The company is passing through a bad phase and this is not the time for a product launch as generally no new introduction can make money for a period of time after launch. When the company launching the product is itself in a relatively poor condition of finances, then it is less likely to take risks that will be required for the successful development of the new product. Here the situation is likely to be of a new brand in a new market, rather than a totally fresh launch. The company is already exporting substantial quantities and it is possible even the same item is being exported for sale by another organization under a different brand name. It may be possible that expansion of sale of quantities under that arrangement may be more profitable for the company then taking the risk for the launch of a totally fresh brand. At the same time, the market chosen is one in which the company may be helped by its major shareholders. That is a matter to be settled between them.
The next question to be decided is the variety of boots that the company is going to launch, as there are many different varieties that are available, and the different varieties are available at different price levels. This means that the different levels will yield different profits and the marketing strategies will have to be determined accordingly. At the same time, the volume of sales will also be different at different price levels. Even stocking patterns will have to be different for different price levels. One of the important things to do before launches is to recognize the Strengths and Weaknesses before trying to deal with the Opportunities and Threats.
The concentration should be on concentrating the positives: the more Strengths and Opportunities. The more of them that exist, the better; as they can be seen as influences resulting in the success of the company. One should be aware that the most important rule is not to leave anything out any matter however small the issue might seem to be. Considering all this, it was decided that marketing should be conducted on the Internet, as this will give less difficulties in stocking the shoes at different levels. At the same time the high price level will also permit the company to utilize their special skills in developing new product to a level, which will make it different from other similar products. This may develop an image for the brand so that it can be developed later and extended into a full range.
At the same time, the choice of the product by customers is also difficult and often they are likely to choose products, which are not suitable for their requirements. This makes it easier for development of the brand if it has a full range. However this difficulty can be met if the product is sold on the Internet by an organization, which has products at all price levels. What matters is that customers should get products, which are suitable for their requirements. The advertising on Internet is relatively less expensive and there are also agencies, which are willing to take total responsibility for advertising. This would make launch simpler and one can even work out the trial on an experimental basis before finally deciding what to launch and where to launch. In short, it may be better to take this launch as a trial and finally deciding on specifications and all other matters based on the launch.
Before talking about the product let us discuss a little about the company. The company is situated at 140 Melbourne Street 4101 Australia. It has a total of 1981 employees with Rowan Webb as the Managing Director. The company is engaged in retail and wholesale sales of footwear and clothing. The operations are in five divisions. (Colorado Group Ltd.: (Australian Stock Exchange: CDO)) The company is not doing very well now. Colorado Group Ltd. has become the last retailer in the current year to reduce its earnings guidance, and thus avoid any hopes of a probable recovery in the sector. The company is based in Brisbane, and it said that continued softer trading conditions had caused it expecting a five per cent reduction in earnings before interest and tax -- EBIT in the period from 2005 to 2006, exempting any influence from acquisitions. Investors have sold Colorado shares, and sent the stock falling from 31 cents to Australian $4.71. (Colorado dashes hopes of retail recovery)
The company had $60 million of profits before taxes last year, but for the first half of this year the expectations are for $10 million only. The company has five major brands of Colorado, Mathers, Williams, Jag and Diana Ferrari. (Colorado dashes hopes of retail recovery) According to reports, Colorado said that the increase in fuel prices was the biggest reason for it not to achieve its forecasted profit of $60 million for the current year and this was reported in the Financial Review of 23rd September 2005. The company is a big retailer of clothes and footwear and they have footwear stores under the brand name of Mather and Williams the Sherman. The sales in these stores are not up to the mark and the expectations of fall in profits are repeated. (Search for Colarado)
Growing organically and through acquisition, Colorado Group now has 399 stores through its five footwear and fashion chains in Australia and New Zealand. (COLORADO Group Ltd. Selects Retek Merchandising and Integration Solutions) One of its divisions, Mather Shoes is a footwear store and the concentration is on women's shoes, and also men and children's shoes. This division also sells accessories, like fashion handbags, belts and scarves. Williams the Shoe men is engaged in the operation of a chain of footwear stores across Australia, but mainly for casual shoes. Diana Ferrari supplies women's footwear, accessories and apparels. (Stock Overview for 'CDO.AX')
II. The product
II. A. Evaluate the product as an innovation as perceived by the intended market
The product that it is planning to sell is hiking boots. The company has some specific reasons for entering the United States market, and the two main aspects are that the product is not price sensitive and the company has some advantages. The company does not have a high market share, but is well established. The Colorado Group can turn back its history to the first Williams store, and that was opened in Ballarat in 1864. Both the Williams and Mathers were being established in the year 1923. These businesses have been shown as entities on the Australian share market for quite some time and have now been acquired by U.S. group Kinney Shoes in the years1969 and 1988 respectively. Kinney Shoes is a part of the Woolworth chain in the U.S. And that means the organization will be able to get support in that market from that of an established business house. (Feel comfortable walking a mile or more in Colorado's shoes)
1. Relative advantage: The product has to be up to the market and that depends on the design and quality that is achieved. For this particular product, material comes from all over the world for sale in U.S., and there is no reason why this product should have any particular disadvantage. The reason for choosing U.S. has been given above.
2. Compatibility: For this sort of a product, the basic concern comes with the quality of the product and that should not be difficult to achieve for Colorado group to achieve, as Australia is one of the biggest manufacturers of leather in the world, and that is the prime requirement for making boots.
3. Complexity: The Company has been in the business of boots from 1864, and there is no reason for them to feel that manufacturer of boots should cause them any great difficulties. The difficulty should be in the area of marketing, which is discussed later.
4. Trialability: Boots and shoes are made to sizes, which are international, and the other specifications can be informed. At retail outlets, potential buyers even try out the pairs that they intend to buy. That is all the trial that is involved. Since the marketing will be done through Internet here, a time span may be given to the customer to return the boots, if they do not fit.
5. Observability: This is the number of times, the potential customer will be able to view the product and this is achieved through advertising and different media have different characteristics for this purpose. The advertising strategy will determine this.
II. B Major problems and resistances to product acceptance based on the preceding evaluation:
This sort of a product is being viewed in classical marketing theory as products, which are being purchased only on that of impulse and are not for the purpose of investment…