Company G Juicer Electronics Product

Table of Contents

Introduction 3

Product Description and Classification 3

Product Support of Mission Statement……………………………………………………………………………………….….3

Consumer Product Classification 5

Target Market 5

Competitive Situation Analysis 6

Analysis of Competition using Porter’s Five Forces Model 6

SWOT Analysis 7

Strengths and Core Competencies 7

Weaknesses 8

Opportunities 8

Threats 9

Market Objectives 11

Product Objective 11

Price Objective 11

Place Objective 11

Promotion Objective 11

Marketing Strategies and Implementation 12

Product Strategies 12

Price Strategies 12

Place Strategies 13

Promotion Strategies 13

Explanation of Strategies…………………………………………………………………..…….14

Implementation Plan 14

Product Tactics 14

Price Tactics 15

Place Tactics 15

Promotion Tactics 16

Monitoring Procedures 17

Introduction

Company G occupies a unique position within the global appliance market. Due to its large and sophisticate engineering prowess, the company manufactures a unique assortment of small appliances. Due to their overall quality and strong brand awareness Company G can command premium prices within the market for similar product offerings. This differentiation ultimately allows the company to generate high profits and asset turnover ratios than similar competitors within the industry. Due in part to Company G’s strong market position, it has an investment grade credit rating with low debt and borrower costs. From a marketing perspective being in a strong financial position enhances the brand as it relates to supply chain relationship. Individual companies within the supply chain feel much more confident extending credit to the company on favorable terms for example. Smaller companies within the supply chain also benefit from the stability associated with Company G as it relates to their ability to pay outstanding amounts in a timely fashion. The combination of an innovative culture, strong capital structure, and strong brand awareness make it a formidable foe within the competitive marketplace. So much so that the introduction of the its new juicer appliance will be met with mass optimism on the part of consumers (Assael, 1992).

Product Description and Classification

Product Description and Support of the Mission

Company G Mission Statement

“We enable consumers to improve the quality and convenience of their lives by providing high-quality, innovative electronics solutions.”

Consumers are now transitioning to a much healthier and more productive lifestyle. For one, baby boomers are now one of the most dominate population segments in the nation. As this generation ages they are accounting for much of the healthcare spend within the nation. Currently healthcare expenditures in the nation account for 18% of GDP up from 11% of GDP just one decade ago. Healthcare costs themselves are outpacing the overall growth of GDP growing at 5% per year. The combination of higher healthcare expenditures and health concerns have illuminated a potential problem as it relates to critical social safety nets such as pension, social security, and health insurance. To combat these trends millennials have engaged in a much more health conscious routine. This group is much more likely to join and maintain a health club membership. They are much more likely to pay premium prices for healthy food and beverage options. They are also much more conscious of their appearance particularly on social media and other internet websites. As such, the introduction of the juicer appliance capitalizes on these tailwinds (Baker, 2000).

For one, the juicer enables consumers to create healthy options related to diet and fitness within their own home, saving both time and money. In addition, the juicer can provide efficiency benefits for those who are gym advocates looking to bring their beverage with them to the gym.

As it relates to product specifications the juicer will first appear to active millennials with heavy time constraints. The juicer will be a masticating juicer. Although it requires slightly more time to prepare this form of juicer, but it leaves a little more nutrition within the juice pots and can stand in the fridge for a few days. This is particularly helpful for fitness enthusiasts who meal prep often and would enjoy the reprieve of not preparing their beverages daily. Next, the juicer will have best in class engine quality and power. An important industry indicator of quality is the number of revolutions per minute (RPM) provided by the engine. The higher the number of rotations, the greater the centrifugal force that pushes the fruit towards the grinding net and the amount of dried juice is greater. Traditionally, the competitor set usually has an engine that generates RPMs in the range of RPM is 10,000 – 15,000. Our product will increase the RPMs by over 10% with a minimum standard of 16,500. Powerful, high-quality motors allow for a greater number of rotations and longer lifespan of the device, while those with less power give less rotation. The enhances RPM will therefore justify the higher price point as the device will last longer while also providing much higher quality beverages solutions for our consumers.

Next the product will have much more flexibility as it relates to the product offering. In addition to the typical blender setup, the product offering will also provide various travel containers that can be used for those looking to go to the gym, a short walk in the park, or a short trip to the grocery store. Again, the aim for this product specification is to provide convenience and ease of access. In addition to the availability of the containers, the unit itself will have flexibility with its speed settings. The ability to adjust the speed is very useful if you like to make different juices and those with citrus and juices with hard fruits and vegetables, as well as exceptionally healthy juices of green leafy vegetables. Soft vegetables such as strawberries, peaches, grapes, and the like can go off at a lower speed, but for hard, rooted vegetables such as beetroot and carrot, more speed is required. The ability to adjust the speed to the food can affect the quality of the juice and will certainly save the time of consumers (Hoyer, 2001).

All these specification enhance the mission of providing quality and convenience with high quality solutions.

Consumer Product Classification

The product will be classified as a convenience products for the reasons mentioned above. To summarize, the factors supporting this classification are as follows:

1. It shortens the time of creating pertinent and relevant beverages for consumers

2. It lasts longer, lowering the downtown associated with maintenance and shopping for other alternatives.

3. It provides flexibility and quality not offered by alternative products allowing consumers to create different beverages with a single product.

The product can also be classified as a specialty product as it:

1. Relies on high quality materials

2. Will be marketed as a consumer product that consumers will seek

3. Selections will be very limited to high end retailers.

Target Market

The target market for the product are higher end, fitness enthusiasts with very demanding time constraints imposed on their lives. These individuals tend to be higher earners, and work long hours, requiring them to have a convenient and quick option to create their beverages. In addition, the target market has high discretionary income and are not price sensitive as it relates to their product demands. These customers demand high quality and are willing to pay premium prices to benefit from high quality products (Blythe, 2001). The customers live an active lifestyle tend to be between 35 and 55. As active consumers, these potential customers are heavily concentrated in warm weather coastal areas which include Florida, California, Texas, and Louisiana. Most of these individuals own a home and have a family of two children. The median household income of the target market is $75,000 which is well above the medium household income of America at $52,000.

Competitive Situation Analysis

Analysis of Competition using Porter’s Five Forces Model

Competitive Rivalry: Competition is higher within the appliance market. Competitors often compete based on a price and are well capitalized. Innovations are often copied through alternative means. As result, competitors are heavily incentivized to innovate

Potential New Entrants: The industry benefits from strong barriers to entry. The industry requires large amounts of fixed cost and inventory investment. In addition, new entrants must establish supply chains throughout their distribution networks. Finally, to succeed large investments must be made in research and development personnel.

Bargaining Power of Buyers: Buyers have very large bargaining power as there are numerous alternatives to choose from. As a result, it is difficult to raise prices unless the product is truly innovative and unique

Bargaining Power of Suppliers: Suppliers have limited power as they are numerous and fragmented. As a result, no one supplier controls a dominate market position within the supply chain.

Substitutes: The threat of substitutes is very high in this industry as consumers can elect to use numerous alternatives within the industry. These alternatives vary in price and quality which further fragments the industry.

SWOT Analysis

STRENGTHS *indicates core competency

· Innovative Culture

· Strong liquidity and balance sheet

· Market leading positions in key product categories

· Product Category expertise

· Strong Brand

WEAKNESSES

· Lower market position with lower price point items

· Business model is predicated on consumer confidence and macro-economic factors

· Industry can quickly become commoditized as competitors copy innovations.

OPPORTUNITIES

· International expansion

· Servicing agreements, insurance, and other add on products

· Loyalty programs

THREATS

· Technology innovations from competitors

· International competitors with lower labor costs (China, India)

· Changing consumer sentiment and economic depression

Strengths

Innovative culture- The company’s culture of innovation is a competitive strength as it allows the company to bring to market new and unique product offerings. These products generate higher margins and increase profitability. In addition, the innovations allow the company to occupy a unique niche within the marketplace relative to competitors

Strong Liquidity and Balance Sheet – A strong financial position allows the company to be opportunistic as it relates to acquisitions or investment opportunities. This flexibility ultimately allows the company to earn higher returns on capital while also enhancing shareholder returns.

Market Leading Positions – As market leader the company can enjoy benefits that are not given to competitors. This can include stronger supply chain relationships, favorable borrowing terms, higher brand awareness and so forth.

Product Category Expertise – This strength is a core competency as it the company has a strong and established history of delivering high value products to the market. The company employees can continue to leverage this strength to further build the brand and command premium prices.

Strong Brand – This strength is a core competency as the company spends heavily on adversties to establish the brand in consumers mind as a premium product.

Weaknesses

Lower market position with lower price point items – The company as a premium provided does not currently have offerings within the larger but less profitably lower tier segments. As a result, consumers may not have access to the strong brand characteristics above as the company prices them out of the market

Business model is predicated on consumer confidence and macro-economic factors – The current business model is heavily reliant on discretionary spending. Appliances are not required products and as such are heavily reliant on consumer confidence regarding the future. A severe economic depression will reduce the overall likelihood that consumers will purchase our products

Industry can quickly become commoditized as competitors copy innovations – Due to the overall competitive nature of the markets, any strategic advantage imposed by one company is quickly competed away by rivals who replicate the strategy. This in turn lowers profitability for the industry and forces still further innovation.

Opportunities

International expansion – Emerging markets are now the largest opportunity for growth for Company G. Markets such as China, India, and Brazil all have growing and viable middle-class consumers. The target market for our products are also looking for convenience and comfort when it comes to products. As the middle class continues to growth their discretionary income, our products will become much more competitive

Servicing agreements, insurance, and other add on products – Our products are within the premium category and consumers pay high prices for them. Naturally, consumers want the product to last if possible. As a result

Loyalty programs- Loyalty programs allow the business to generate large incremental sales without the corresponding need to incur higher marketing and advertising costs. It also provides a compelling value proposition for the company as it relates to data. Through loyalty programs the business can cater marketing programs to customer needs at a more granular level. Finally, from a financial perspective the accounts receivable can be collateralized and sold to other investors if the company determines they are receiving adequate value.

Threats

Technology innovations from competitors – New competitor can create, manufacture, and distribute similar products to our target market. They can also gain access to capital in the same manner as us.

International competitors with lower labor costs (China, India) – Low labor countries has strategic advantages that can allow to manufacture products at a much lower relative cost. China in particular uses state owned enterprises that subsidize competitor operations. THIST can put our business at a disadvantage relative to costs.

Changing consumer sentiment and economic depression – Our business is cyclical. A dramatic change in consumer sentiment or discretionary income will result in a large drop in sales. As our product is discretionary, during periods of economic stress, consumers will postpone purchases.

Market Objectives

Product Objective

The objective of the juicer is to produce a best in class offering that has the highest RPMs in the industry at 16,500. The objective is also to have the longest lasting product in the market at 10 years backed by a company sponsored warranty. We expect to enter the market with this product offering within the next 365 days. The objective is to manufacture a 16500 RPM in product and bring it to market. Progress will be measure on a quarterly basis.

Price Objective

The price of the juicer will be selling at a healthy margin to costs. Here the company is currently targeting a 20% operating margin with the production of the juicer. In the marketplace the price will be comparable the highest priced competitor which is currently $600.00. We intend to sale our product at roughly the same price in the market while offering no discounts or sales. We enter the market with this price offering immediately. The objective is to evaluate the manufacturing process over 60 days. Identify areas of efficiency that lower costs within 90 days and reduce costs by 20% with 120 days. These cost saving will be used in the price of the product with 180 days.

Place Objective

The product will be distributed to the following appliance and home goods retailers in higher growth markets. The high growth markets will initially consist of Texas, Florida, California, and Louisiana. The product will only be sold at higher end retail establishments that appeal to our target market which include

1. Nordstrom’s

2. Macys

3. Amazon

4. BestBuy

5. Target

The objective is to identify key partners with 30 days. Begin negotiations in 90 days and reevalut the distribution strategy on annual basis.

Promotion Objective

As a high-end product there will be very limited promotions or sales on it. This will only devalue the product and condition the consumer to expect sales on price reductions on a go forward basis. Our target market is higher end and does not need a discount for them to purchase the product.