Market audit procedures and best practices

Market Audit

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.

I. Introduction:

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 purchases, which may be for products like that of cars, or that of household durables. Those are expected to last for a longer duration of time and would provide service to the customers accordingly, but this sort of an item will be purchased only for a hobby or even for a holiday.

III. The market

III. A. Describe the market(s) in which the product is to be sold

1. Geographical region:

In certain types of marketing, it is easy to sell the product over the entire market in the country. The method chosen is Internet marketing. The Internet provides new entrepreneurs an improved chance to challenge the established competitors, which is what this company shall be encountering in the area of hiking boots. Some of those brands have been established over many years. A successful sales operation cannot be build on in the real world in just a few days, a few weeks, or even a few months. There are many competitors to take care of, and even then, no one can really think of dominating the market for an item like hiking boots. The problem is that clients will not readily adopt new ways of buying and selling, just because of the Internet. At the same time, for some clients, Internet marketing has been very useful. (What's right and wrong with the Internet?)

Niche marketing is an area to look into. Marketing special products that meet the unique requirements of particular customer groups is one of aspects that the Internet does really well. This has been seen in the case of Dragonfly Toys at www.dragonflytoys.com or Lee Valley Tools at www.leevalley.com. Those two companies specialized products for particular requirements of the customers, and their use of the Internet has been really profitable for them. (What's right and wrong with the Internet?) Thus a special method of marketing may be looked into. Colorado has started on computerization and has selected Retek Merchandise Operations Management -- TM solutions in order to integrate and streamline the retail operations across its various chains. (COLORADO Group Ltd. Selects Retek Merchandising and Integration Solutions) One has to look carefully at the several different types of buyers who come for these products. (Online Product Launches: Target Your Four Audience Types)

2. Forms of transportation and communication available in that (those) region(s):

For this method of marketing, the product will be transported through surface transport or through couriers. Normally, surface transport is being provided free and the charges for courier are to be paid by the customers themselves. The other question is that of transport to the selling unit, and in this case it can be from one central point in America or at various individual points in different areas.

3. Consumer buying habits

a. Product-use habits:

The product is made specifically for use on rough trails. There are many styles of hiking boots to select depending on the use that is expected for them. The best type and style for any individual depends on the type of hiking that the buyer plans. For example, the occasional day hiker will not look for the same hiking boots as the cross-country backpacker. It is required to find out the kind of gear that best works for the user. Light boots are best suitable for flat, easy terrain and the occasional hiker who likes often-walked trails and not rugged paths uses them. These boots are not for climbing mountains and those who like to go for a walk in the woods use them. These are comfortable and flexible but do not provide ankle support. Light boots are usually made from nylon or light leather, and are thus softer than other kinds of hiking boots. In fact, they look like sneakers in comparison to the shoes that usually come to mind when one thinks of buying hiking boots. (What are the Different Types of Hiking Boots?)

These may be made by the company or not, but these are also priced lower. Mid-weight boots look like the common idea of classic hiking boots. These are made for use on rougher terrain, and that means rocky hills. These are still not for use for the roughest hiking but will support the feet comfortably on a day of hike or for weekend backpacking trip. The toughest boots are made of hard leather and other sturdy materials. The soles are considered to be less flexible than those of light boots, and mid-weight boots provide more ankle support. Heavy boots are meant for cross-country backpackers and hikers of the rough terrain. These are for users who plan on being away from home for sometime. These are sturdy and are made of rugged materials and these offer good ankle support also. Most of the heavy hiking boots also have a reinforced toe plate for extra protection. (What are the Different Types of Hiking Boots?) Thus the user knows his use and presumably buys boots that are most suited for that type of use.

b. Product feature preferences:

Customers first look for a hiking boot, which possess a sturdy sole. The idea over here is that he will not feel the rocks or stones while on the trails, and for this, the soles will need to be sturdy and thick enough so that traveling on the trails will not become a problem. Hiking boots are also being expected to provide not only the adequate amount of protection for the soles of the customer's feet, but they should have the enough padding, so that the sides of the feet are being protected as well. For choosing the size of the boots required, the customer's feet will have to be professionally measured by someone, and the customer should not always rely on just choosing the size they have always usually worn. Feet can change during the course of time and the sizes of the hiking boot may also vary from one manufacturer to that of another, and it is essential always to try the boots on! When the trial is being made for purchasing any hiking boots, the customer will need to wear socks like the ones that will be usually worn on for hiking trips. Socks of various different thickness or style can also dramatically affect the way as to how the hiking boots fit, or how the feeling will be during the process of walking. Some will also prefer to buy the hiking boots that are already waterproof. (Before You Buy Hiking Boots)

c. Shopping habits:

This depends on individual customers preferences and presumably he buys from the local shop or through means of orders by post or on the Internet.

4. Distribution of the product

a. Typical retail outlets:

For this purpose let us look at one of the most popular brands in U.S.. Though a young Massachusetts shoemaker initially started it, today the Timberland Company has grown into a brand, which is recognized throughout the world. They were the first to make a name due to their production of waterproof boots, and now they make all their shoes waterproof. This is useful for many city residents who do not like to get their feet wet. Timberland says, "All Timberland shoes are branded with the familiar Timberland logo, and most maintain the rugged styling of their roots." (Timberland Shoes) Even they say that someone is interested in purchasing Timberland shoes, they need not go to the local shoe store, but there are many sites on the Web that can meet the customer's order. (Timberland Shoes) If proper efforts are made, quite a few of these would be willing to sell shoes made by Colorado.

b. Product sales by other middlemen:

It is clear from the previous paragraph that one of the important selling agents is the Internet site that sells shoes and quite a few of them are middlemen. In certain cases, it would be possible to look into promotion by leaders who organize these activities as their recommendation may be of value.

5. Advertising and promotion

a. Advertising media usually used to reach your target market(s):

It has been said that the product will be sold only through the Internet. For advertising we will have to make sure that the Internet roamers will have a chance to see it. For this purpose, different types of advertising facilities are available on the Internet usually in the form of promotions lines on the search sites where people who are interested in these activities are likely to go. There are also advertising agencies who accept the responsibility of promotions as per the following terms - all that the client pays is a fixed fee for each sales enquiry and this is advertising "without the risk"; the client is guaranteed fresh, high quality and pre-qualified sales enquiries; the enquiries are delivered to the client instantly or time delayed, by means of email or web access or through direct integration with the client's own database systems; the agency pays for all advertising costs; the agency pays for all creative production costs; the agency creates a website to market the business which would be free of cost; the agency sets up and maintains handling of phone calls which would be free of cost; the billing is on a weekly basis; there is a 28 day payment term and the client retains complete control over how the brand is being used at all times. (Plan your lead generation program with the benefit of a guaranteed fixed cost per response)