Tire Manufacturer Sabertooth Tires Inc. Term Paper

Length: 12 pages Sources: 1+ Subject: Business - Advertising Type: Term Paper Paper: #54736525 Related Topics: Target Audience, Market Segmentation, Auditing, Audit
Excerpt from Term Paper :

After the warranty has expired, customers are encouraged to address their requests to the repair service within the company.

d. Pricing Strategies

In order to adopt the most appropriate pricing strategy, Sabertooth took into consideration the comparative advantages that differentiate their products from the competitors' products, the costs that needed to be covered, the profits that have to be registered and also the need to set an affordable price for the future clientele. In order to meet all these demands, the price has to be established based on a combination of three pricing strategies: Competitive Pricing, Cost Plus Mark-Up and the Bundling and Quantity Discounts.

The first strategy to implement regarding pricing is the Competitive Pricing. This strategy is used so that Sabertooth does not promote a considerably higher price than Charon Tires Inc. And Course Tire Ltd. And in order to insure the tires' competitiveness on the market.

The second strategy used to set the Sabertooth tires' prices is the Cost Plus Mark-Up. This strategy is useful because it insures the manufacturer that the established price will be sufficient to cover the expenses registered with the new items and will also generate profit.

Finally, the third strategy implemented in establishing the price is the Bundling and Quantity Discounts. This strategy increases customers' fidelity to Sabertooth and rewards it.

e. Promotion Strategies

To decide upon the suitable promotion strategies to implement, the marketing department at Sabertooth took into consideration the following criteria: advertising the tires onto three communication channels: television, radio and fliers; the allocated budget; the company's slogan, as well as the means of communication with the targeted market segment.

Based on these criteria, the marketing department felt it would be best for the company to approach promotions from both Pull as well as Push strategies. These two strategies imply that final customers, as well as retail sellers and other intermediaries would become better acknowledged with the product and generate an increase in the demand for Sabertooth tires.

f. Distribution Strategies

Before deciding upon the appropriate distribution strategy, Sabettoth marketing department looked at the available distribution channels, retail sellers and other intermediaries, intermediaries' and company's own capability to stock and transport the tires.

Based on the available distribution channels, Sabertooth chose to sell their products throughout indirect distribution to retailers. These retailers will be chosen based on the Selective Distribution strategy.

IV. Implementation Strategies a. Action Plans

The product strategies will be implemented within the company's own premises and will generally regard the production process. Employees will be suitably motivated and supervised in order to properly produce, handle, pack and repair the tires.

The Competitive Pricing strategy will be implemented by closely analyzing the prices promoted by Charon Tires Inc. And Course Tire Ltd. Sabertooth tires will be placed on the market at slightly higher prices to explain the better quality and the longer warranty period, but not high enough to be unaffordable and drive customers towards the competitors' products.

The Cost plus mark-up strategy will be implemented by closely analyzing the costs that have been registered with the manufacturing, promoting and distributing the tires and based on this costs, a price will be formed. The price will include both costs as well as remaining profits.

The Bundling and Quantity Discounts strategy will be implemented by offering long-time customers special discounts. Also, granted discounts will be the new customers who purchase larger quantities of Sabertooth tires.

Pull and Push promotion strategies will be implemented as follows:

The Pull strategy will familiarize final customers with the product. The final customers will then demand the product from retailers, who will be forced to buy the tires from the producer;

The Push strategy familiarizes retailers with the new tires. Retailers buy the products and resell them to the final customer.

The indirect distribution implies that the products will be sold to retailers, who will then resell the tires to the final customer. Further, the Selective Distribution strategy implies that only a certain number...

...

Budgets

Sabertooth allocated a total of $2.5 million for producing, promoting and distributing the new tires. The funds will be spent in the first year of production to cover expenditures as depicted in table 1.

Sabertooth Tires Inc. foresees that they will fully recover the expenses within the first year of selling the new tires onto the market, as they should register an income of $3.2 million, as depicted in table 2.

Table 1: Sabertooth expenditures

Running Costs:

Commodities Costs

Fixed Charges

Staff Costs

Storage Costs

Advertising Expenses

Promotional Expenditures

Distribution Costs

Other Expenditures

Table 2: Sabertooth incomes

Sales Revenues

Sponsoring Incomes

Other Incomes c. Timing/Schedules

The new Sabertooth tires will be placed onto the market starting with January 2008. The schedules for the three remaining months of 2007 and the entire year of 2008 are as presented below:

October 2007 is dedicated to beginning production of the tires; attracting investors and starting to develop the advertising campaign;

November 2007: continuing production of the tires, continuing to attract investors and finalizing the advertising campaign;

December 2007: finalize production of the first lot of tires; begin hading out fliers on the street and in specialized retail stores;

January 2008: launching the advertising campaign throughout television advertisements and radio announcements; placing the first lot of tires onto the market; commence production of the second lot of tires;

February, March 2008: continue with the advertising campaign; continue placing tires onto the market, continue production of the second lot;

April 2008: finalize production of the second lot of tires, place them onto the market;

May through August 2008: production of the third lot of tires and their placement onto the market; advertising campaign still continues, but it is not as intensive as in the first months of 2008;

September through December 2008: production of the fourth lot of tires and their placement onto the market; advertising campaign still continues, but it is not as intensive as in the first months of 2008.

V. Monitoring and Control Strategies a. Research

Monitoring and control strategies vary from an organization to the other, based on the nature of the activity developed. However, they are generally meant to insure that the production goes according to the initial plan, and in full accordance with all regulations.

There are six significant monitoring and control strategies: "parallel and serial processing control; hierarchical control; bottom-up control strategies; model-based control strategies; combined control strategies and non-hierarchical control." b. Trend Analysis

The commencement of selling the new tires is expected to be slow, but nevertheless to constantly register growth. Here are the expectancies for sales revenues adherent to the months of 2008: January - $30,000; February - $45,000; March - $60,000; April - $80,000; May - $90,000; June - $130,000; July - $200,000; August - $210,000; September - $230,000; October - $300,000; November - $310,000; December - $305,000.

The chart above presents the sales evolution throughout the entire 2008 and reveals a constant ascending trend. The significant increase in sales for July and October can be explained by preparations for summer vacations and winter.

c. Marketing Audit

In order to insure success, the marketing department had their plan audited. The audit regarded the plan itself but also the company's internal and external marketing environment. The audit team concluded that the plan was designed is in full accordance with the reality on the market and the actual state within the company.

VI. Conclusions

The present plan was developed by the marketing department at Sabertooth Tires Inc. And it was audited and approved by Kotler Marketing Group. The plan was developed in full accordance with all government, socio-cultural, judiciary, moral and ecological norms. Furthermore, the plan fully depicts the realities of the internal as well as the external environments.

The plan concludes that:

Sabertooth possesses sufficient and adequate resources to launch production of the five lots of new tires;

the SWOT analysis reveals that the manufacturer possesses sufficient strengths in order to take full advantage of the external opportunities;

the Sabertooth marketing objectives are specific, measurable, achievable, realistic and have a suitable timing;

the targeted market is formed of drivers of ages between 28 and 50 and who register above medium incomes;

Sabertooth Tires Inc. will develop and implement appropriate product, price, promotion and distribution strategies;

producing and placing the new tires onto the market will be done with a budget of $2,5 million; expenses will be recovered within the first year from sales revenues;

the remaining months of 2007 will be allocated to developing the advertising campaign and the commence of production; 2008 will begin…

Sources Used in Documents:

Bibliography

IFAS and EFAS, Strategic Business Planning, What Tools Are Useful in Assessing Strengths and Weaknesses? http://209.85.135.104/search?q=cache:b6fa13O__2kJ:www.agecon.purdue.edu/staff/gray/Extension/Strategic%2520Planning/internal.ppt+internal+environment&hl=en&ct=clnk&cd=2,last accessed on September 21, 2007

Marketing Teacher Ltd., SWOT Analysis: Lesson, 2007, http://marketingteacher.com/Lessons/lesson_swot.htm, last accessed on September 21, 2007

Tutor 2 U, Marketing Objectives, SMART Objectives, http://www.tutor2u.net/business/presentations/marketing/marketingobjectives/default.html, last accessed on September 24, 2007

Target Market Selection, Net MBA, Business Knowledge Center, 2007


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