Marketing strategies for Lex Corporation's new refrigerator in Australia

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).

Place

The third P. Of the marketing mix revolves around the decisions to be made in regard to the most advantageous channels of distribution to be used by Lex Corporation. Their decisions are centered on features such as the usage of intermediaries or the direct selling of the products as well as other logistics issues, such as storage, warehousing or transportation.

Intermediaries: the usage of intermediaries is often a favorable choice as it eases the work of the manufacturer and implies reduced costs; on the other hand, it places a new link in the process, furthering and such the producer from the end customer; in other words, the producer will be unable to maintain constant communications with the customers, and to identify new demands and retrieve feedback, they will have to request the services of a tertiary entity

Direct sales: this process implies that no tertiary party will interfere between manufacturer and buyer, but additional costs will arise as the company will have to possess and administrate a retail facility; the risks generated by direct sales are larger as are the investments, therefore, the best solution for the primary stages would be the usage of intermediaries

Logistics: the storage and transportation of the fridges will be ensured by the company and they will also offer customer the possibility to make a payment and have the product delivered at a specified time in the future; this possibility will be embraced by those customers who have recently purchased a home and do not currently have the space to store the product, but only need it after they renovate the location.

Promotions

Promotional strategies play a vital role in the successful launch of a new product as they are aimed to familiarize and attract the customer to the respective item. In making the best decisions in regard to the promotional campaign, the company will have to select the most suitable promotional strategy. Then, they will have to choose the most viable media channels on which to advertise and promote the fridge; also, they will have to develop strong advertisements. Finally, Lex Corporation must maintain constant communications with the audience.

Promotional strategy: the two most common strategies are the pull and push promotional strategies; the first pulls the customers towards the product by capturing their interest and the second pushes the product onto the market; the most suitable one in the case of Lex Corp's new fridge is the pull strategy

Advertisements: the advertisements developed by the marketing team at Lex Corporation will emphasize on the core benefits of the new fridge and the wide range of needs they are able to satisfy

Media channels: the manufacturer will use various media channels in familiarizing the audience with the new fridge and the ads will take the form of television advertisements aired during prime time television programs, radio announcements, street banners and fliers and also internet ads

Communications: similar to the media channels, the manufacturer will use various opportunities to maintain constant communications with their audience; in this particular instance, they will develop, maintain and upgrade a corporate website that will contain information on the company and the products (for the future, the company could also consider allowing online purchases). Then, the company officials will appear on televised talk shows and radio programs and will discuss new product features; also, they will grant interviews to specialized magazines and journals.

5. Conclusions

Lex Corporation is trying to establish a strong position on the domestic Australian market and in the future, they will also expand onto the international market. The currently manufactured product is a new line of fridges that integrate the latest technologies and satisfy a wide range of needs that could be forwarded by the audience. The primary target market is formed from women over the age of 25, as they represent the main force in the purchase decision. The socio-economic status of the customers is irrelevant to the company as all individuals, coming from all income and cultural backgrounds need a fridge.

Lex Corporation will initially implement a penetration pricing strategy to then replace it with a variable pricing strategy. They will use intermediaries to distribute their products to the end consumer and the advertising and promotional campaigns will be based on emphasizing the core benefits of the new fridges.

The company bases its success on the high quality of the products and they expect an increased demand of fridges, mostly due to the foreseen population growth for the future years and the continually increasing life expectancy.