In the K, Beleaguers;s continuing goal is to have Its products as close as possible to TTS consumers, regardless of where they live. Its aims are to understand its consumers in its many different markets and delight them with innovative products for their skin and beauty care needs. This strengthens the trust and appeal of Beresford brands. The business prides itself on being consumer-led and this focus has helped It to grow NAIVE into one of the largest skin care brands In the world. Beleaguered continuing programmer of market research showed a gap In the market.
This led to the launch of NAIVE [email protected] young In 2005 as part of the NAIVE VISAGE range offering a comprehensive selection of products aimed at young women. It carries the strength of the NAIVE brand image to the target market of girls aged 13-19. NAIVE VISAGE Young helps girls to develop a proper skin care routine to help keep their skin looking healthy and beautiful. The market can be developed by creating a good product/range and introducing It to the market (product-orientated approach) or by finding a gap In the market and developing a product to fill It (market-orientated approach).
Having identified a gap in the market, Beresford launched NAIVE VISAGE Young using an effective balance of the right product, price, promotion and place. This is known as the marketing mix or four AS’. It is vital that a company gets the balance of these four elements correct so that a product will achieve Its critical success factors. Beresford needed to develop a mix that suited the product and the target market as well as meeting Its own business objectives. The its position in the market. Optimized means the product had a new formula, new design, new packaging and a new name.
This case study shows how a carefully balanced marketing mix provides the platform for launching and re-launching a brand onto the market. Product : The first stage in building an effective mix is to understand the market. NAIVE uses arrest research to target key market segments which identifies groups of people with the same characteristics such as age/gender/attitude/lifestyle. The knowledge and understanding from the research helps in the development of new products. NAIVE carries out its market research with consumers in a number of different ways.
These include: ; using focus groups to listen to consumers directly ; gathering data from consumers through a variety of different research techniques ; product testing with consumers in different markets. Beresford market research identified that younger consumers wanted more peccadilloes face care aimed at their own age group that offered a ‘beautifying benefit, rather than a solution to skin problems. NAIVE VISAGE Young is a skin care range targeted at girls who do not want medicated products but want a regime for their normal skin. Competitor products tend to be problem focused and offer medicated solutions.
This gives NAIVE competitive advantage. NAIVE VISAGE Young provides a unique bridge between the teenage market and the adult market. The company improved the product to make it more effective and more consumer- friendly. Beresford tested the improved products on a sample group from its target audience before finalizing the range for re-launch. This testing resulted in a number of changes to existing products. Improvements included: ; Changing the formula of some products. For example, it removed alcohol from one product and used natural sea salts and minerals in others. ; Introducing two completely new products. A new modern pack design with a flower pattern and softer colors to appeal to younger women. ; Changing product descriptions and introducing larger pack sizes. Each of these changes helped to strengthen the product range, to better meet the needs of the market. Some of these changes reflect Naive’s commitment to the environment. Its corporate responsibility approach aims to: ; reduce packaging and waste – by using larger pack sizes ; use more natural products – by including minerals and sea salts in the formula ; increase opportunities for recycling – by using recyclable plastic in its containers.
Price : Lots of factors affect the end price of a product, for example, the costs of production or the business need to maximize profits or sales. A product’s price also needs to provide value for money in the market and attract consumers to buy. There are several pricing strategies that a business can use: ; Cost based pricing – product and does not take account of consumers. ; Penetration price – an initial low price to ensure that there is a high volume of purchases and market share is quickly won. This strategy encourages consumers to develop a habit of buying. Price skimming – an initial high price for a unique product encouraging those who want to be first to buy to pay a premium price. This strategy helps a business to gain maximum revenue before a competitor’s product reaches the market. On re-launch the price for NAIVE VISAGE Young was slightly higher than previously. This reflected its new formulations, packaging and extended product range. However, the company also had to take into account that the target market was both teenage girls and mums buying the product for their daughters. This meant that the price had to offer value for money or it would be out of reach of its target market.
As NAIVE VISAGE Young is one of the leading skin care ranges meeting the beautifying needs of this market segment, it is effectively the price leader. This means that it sets the price level that competitors will follow or undercut. NAIVE needs to regularly review prices should a competitor enter the market at the ‘market Roth’ point of the product life cycle to ensure that its pricing remains competitive. The pricing strategy for NAIVE is not the same as that of the retailers. It sells products to retailers at one price. However, retailers have the freedom to use other strategies for sales promotion.
These take account of the competitive nature of the high street. They may use: ; loss leader: the retailer sells for less than it cost to attract large volume of sales, for example by supermarkets ; discounting – alongside other special offers, such as ‘Buy one, get one free’ (BEFOG) or two for one’. NAIVE VISAGE Young pricing strategy now generates around 7% of NAIVE VISAGE sales. Place Place refers to: ; How the product arrives at the point of sale. This means a business must think about what distribution strategies it will use. ; Where a product is sold.
This includes retail outlets like supermarkets or high street shops. It also includes other ways in which businesses make products directly available to their target market, for example, through direct mail or the Internet. NAIVE VISAGE Young aims to use as many relevant distribution channels as possible to ensure the widest reach of its products to its target market. The main channels for the product are retail outlets where consumers expect to find skin care ranges. Around 65% of NAIVE VISAGE. Young sales are through large high street shops such as Boots and Supersede.
Supersede is particularly important for the young-end’ market. The other 35% of sales mainly comes from large grocery chains that stock beauty products, such as USDA, Tests and Kingsbury. Market research shows that around 20% of this younger target market buys products for themselves in the high street stores when shopping with friends. Research also shows that the majority of researchers are actually made by mums, buying for teenagers. Mums are more likely NAIVE distributes through a range of outlets that are cost effective but that also reach the highest number of consumers.
Its distribution strategies also consider the environmental impact of transport. It uses a central distribution point in the I-J. Products arrive from European production plants using contract vehicles for efficiency for onward delivery to retail stores. Beresford does not sell direct to smaller retailers as the volume of products sold would not be cost effective to deliver but it uses wholesalers for these smaller accounts. It does not sell directly through its website as the costs of producing small orders would be too high. However, the retailers, like Tests, feature and sell the NAIVE products in their online stores.
Promotion Promotion is how the business tells customers that products are available and persuades them to buy. Promotion is either above-the-line or below-the-line. Above- the-line promotion is directly paid for, for example TV or newspaper advertising. Below-the-line is where the business uses other promotional methods to get the product message across: ; Events or trade fairs help to launch a product to a wide audience. Events may be business to consumer (BBC) whereas trade fairs are business to business (BOB). ; Direct mail can reach a large number of people but is not easy to target specific consumers coextensively. Public relations (PR) includes the different ways a business can communicate with its stakeholders, through, for example, newspaper press releases. Other PR activities include sponsorship of high profile events like Formula 1 or the World Cup, as well as donations to or participation in charity events. Branding – a strong and consistent brand identity differentiates the product and helps consumers to understand and rust the product. This aims to keep consumers buying the product long-term. ; Sales promotions, for example competitions or sampling, encourage consumers to buy products in the short-term.
NAIVE chooses promotional strategies that reflect the lifestyle of its audience and the range of media available. It realizes that a ‘one way message, using TV or the press, is not as effective as talking directly to its target group of consumers. Therefore NAIVE does not plan to use any above-the-line promotion for NAIVE VISAGE Young. The promotion of NAIVE VISAGE Young is consumer-led. Using various below-the-line routes, NAIVE identifies ways of talking to teenagers (and their mums) directly. ; A key part of the strategy is the use of product samples. These allow customers to touch, feel, smell and try the products.
Over a million samples of NAIVE VISAGE Young products will be given away during 2008. These samples will be available through the website, samples in stores or in ‘goody bags’ given out at VISAGE arrowheads up and down the country. ; NAIVE VISAGE Young launched an interactive online magazine called FYI (Fun, Young & Independent) to raise awareness of the brand. The concept behind the magazine is to give teenage girls the confidence to become young women and to enjoy their new- found independence. Communication channels are original and engaging to enable experiences relating to NAIVE VISAGE Young being their first skincare routine.
It is promoted using the Without chart show and the TM digital TV channel. ; In connection with FYI, NAIVE VISAGE Young has recognized the power of social network sites for this young audience and also has pages on Namespace, Faceable and Bebop. The company is using the power of new media as part of the mix to grow wariness amongst the target audience. Conclusion NAIVE VISAGE Young is a skincare range in the I-J market designed to enhance the skin and beauty of the teenage consumer rather than being medicated to treat skin problems. As such, it has created a clear position in the market.
This shows that NAIVE understands its consumers and has produced this differentiated product range in order to meet their needs. To bring the range to market, the business has put together a marketing mix. This mix balances the four elements of product, price, place and promotion. The mix uses rotational methods of place, such as distribution through the high street, alongside more modern methods of promotion, such as through social networking sites. It makes sure that the message of NAIVE VISAGE Young reaches the right people in the right way. Answer the following questions: 1.
Describe what is meant by a business being ‘consumer led’. 2. What are the key parts of the marketing mix? Explain how each works with the others. 3. Explain why the balance of the marketing mix is as important as any single element. 4. Analyses the marketing mix for NAIVE VISAGE Young. What are its strongest points? Explain why you think this is so. Case-2 : SOOT analysis in action at Soda In 1895 in Czechoslovakia, two keen cyclists, Facial Laurie and Facial Clement, designed and produced their own bicycle. Their business became Soda in 1925. Soda went on to manufacture cycles, cars, farm ploughs and airplanes in Eastern Europe.
Soda overcame hard times over the next 65 years. These included war, economic depression and political change. By 1990 the Czech management of Soda was looking for a strong foreign partner. Volkswagen GAG (VGA) was chosen because of its reputation for strength, quality and reliability. It is the largest car manufacturer in Europe providing an average of more than 5 million cars a year – giving tit 12% share of the world car market. Volkswagen GAG comprises the Volkswagen, Audit, Soda, SEAT, Volkswagen Commercial Vehicles, Lampooning, Bentley and Budgets brands.
Each brand has its own specific character and is independent in the market. Soda I-J sells Soda cars through its network of independent franchised dealers. To improve its performance in the competitive car market, Soda Auk’s management needed to assess its brand positioning. Brand positioning means establishing a extinctive image for the brand compared to competing brands. Only then could it market research data from internal and external strategic audits. This enabled it to take advantage of new opportunities and respond to threats.
The audit provided a summary of the business’s overall strategic position by using a SOOT analysis. SOOT is an acronym which stands for: ; Strengths – the internal elements of the business that contribute to improvement and growth ; Weaknesses – the attributes that will hinder a business or make it vulnerable to failure ; Opportunities – the external conditions that could enable true growth ; Threats – the external factors which could negatively affect the business. This case study focuses on how Soda Auk’s management built on all the areas of the strategic audit.
The outcome of the SOOT analysis was a strategy for effective competition in the car industry. Strengths To identify its strengths, Soda I-J carried out research. It asked customers directly for their opinions about its cars. It also used reliable independent surveys that tested customers’ feelings. For example, the annual JDK Power customer satisfaction survey asks owners what they feel about cars they have owned for at least six months. JDK Power surveys almost 20,000 car owners using detailed questionnaires. Soda has been in the top five manufacturers in this survey for the past 13 years.
In Top Gear’s 2007 customer satisfaction survey, 56,000 viewers gave their opinions on 1 52 models and voted Soda the ‘number 1 car maker’. Soda’s Octavia model has also won the 2008 Auto Express Driver Power ‘Best Car’. Soda attributes these results to the business concentrating on owner experience rather than on sales. It has considered the human touch’ from design through to sale. Soda knows that 98% of its drivers would recommend Soda to a friend. This is a clearly identifiable and quantifiable strength. Soda uses this to guide its future strategic development and marketing of its brand image.
Strategic management guides a business so that it can compete and grow in its market. Soda adopted a strategy focused on building cars that their owners would enjoy. This is different from simply maximizing sales of a product. As a result, Soda’s biggest strength was the satisfaction of its customers. This means the brand is associated with a quality product and happy customers. Weaknesses A SOOT analysis identifies areas of weakness inside the business. Soda Auk’s analysis showed that in order to grow it needed to address key questions about the brand position.
Soda has only 1 . 7% market share. This made it a very small player in the market for cars. The main issue it needed to address was: how did Soda fit into this highly competitive, fragmented market? This weakness was partly due to out- dated perceptions of the brand. These related to Soda’s eastern European origins. In the past the cars had an image of poor vehicle quality, design, assembly, and materials. Crucially, this poor perception also affected Soda owners. For many people, car ownership is all about image. If you are a Soda driver, what do other people think?
From 1999 onwards, under Volkswagen GAG ownership, Soda changed this negative image. Soda cars were no longer seen as low-budget or low quality. Neutral image in the mid-market range it occupies, compared to other players in this area, for example, Ford, Peugeot and Renault. This meant that whilst the brand no longer had a poor image, it did not have a strong appeal either. This understanding showed Soda in which direction it needed to go. It needed to stop being defensive in promotional campaigns. The company had sought to correct old perceptions and monster what Soda cars were not.
It realized it was now time to say what the brand does stand for. The marketing message for the change was simple. Soda owners were known to be happy and contented with their cars. The car-buying public and the car industry as a whole needed convincing that Soda cars were great to own and drive. Opportunities and Threats Opportunities Opportunities occur in the external environment of a business. These include for example, gaps in the market for new products or services. In analyzing the external market, Soda noted that its competitors’ marketing approaches focused on the reduce itself.
Audit emphasizes the technology through its streamline, Pursuing Durra Techno’ (advantage through technology). BMW promotes the ultimate driving machine’. Many brands place emphasis on the machine and the driving experience. Soda I-J discovered that its customers loved their cars more than owners of competitor brands, such as Renault or Ford. Information from the SOOT analysis helped Soda to differentiate its product range. Having a complete understanding of the brand’s weaknesses allowed it to develop a strategy to strengthen the brand and take advantage of the opportunities in the arrest.
It focused on its existing strengths and provided cars focused on the customer experience. The focus on ‘happy Soda customers’ is an opportunity. It enables Soda to differentiate the Soda brand to make it stand out from the competition. This is Soda’s unique selling proposition (USPS) in the motor industry. Threats Threats come from outside of a business. These involve, for example, a competitor launching cheaper products. A careful analysis of the nature, source and likelihood of these threats is a key part of the SOOT process.
The UK car market includes 50 different car makers selling 200 models. Within these there are over 2,000 model derivatives. Soda I-J needed to ensure that its messages were powerful enough for customers to hear within such a crowded and competitive environment. If not, potential buyers would overlook Soda. This posed the threat of a further loss of market share. Soda needed a strong product range to compete in the I-J and globally. In the I-J the Soda brand is represented by seven different cars. Each one is designed to appeal to different market segments.
For example: ; The Soda Baby is sold as a basic but quality ‘city car’ ; The Soda Superb offers a ore luxurious, ‘up-market’ appeal ; The Soda Octavia Estate provides a family with a fun drive but also a great big boot. Pricing reflects the competitive nature of Soda’s market. Each model range is priced to appeal to different groups within the mainstream car market. The combination of a clear range with competitive pricing The following example illustrates how Soda responded to another of its threats, namely, the need to respond to EX. legal and environmental regulations.
Soda responded by designing products that are environmentally friendly at every stage of their life cycle. This was done by for example:; Recycling as much as possible. Soda parts are marked for quick and easy identification when the car is taken apart. ; Using the latest, most environmentally-friendly manufacturing technologies and facilities available. For instance, areas painted to protect against corrosion use lead- free, water based colors. ; Designing processes to cut fuel consumption and emissions in petrol and diesel engines. These use lighter parts making vehicles as aerodynamic as possible to use less energy. Using technology to design cars with lower noise levels and improved sound quality. Outcomes and benefits of SOOT analysis. Soda Auk’s SOOT analysis answered some key questions. It discovered that: ; Soda car owners were happy about owning a Soda ; the brand was no longer seen as a poorer version of competitors’ cars. However, ; the brand was still very much within a niche market ; a change in public perception was vital for Soda to compete and increase its market share of the mainstream car market. The challenge was how to build on this and develop the brand so that it was viewed positively.
It required a whole new marketing strategy. Soda I-J has responded with a new marketing strategy based on the confident Logan, the manufacturer of happy drivers. ‘ The campaign’s promotional activities support the new brand position. The key messages for the campaign focus on the ‘happy customer experience and appeal at an emotional rather than a practical level. The campaign includes: ; he ‘Baby Cake’ TV advert. This showed that the car was full of lovely stuff with the happy music (favorites things’) in the background. ; An improved and redesigned website which is easy and fun to use.
This is to appeal to a young audience. It embodies the message ‘experience the happiness of Soda online’. Customers are able to book test drives and order brochures online. The result is that potential customers will feel a Soda is not only a reliable and sensible car to own, it is also ‘lovely to own. Analyzing the external opportunities and threats allows Soda I-J to pinpoint precisely how it should target its marketing messages. No other market player has ‘driver happiness’ as its USPS. By building on the understanding derived from the SOOT, Soda I-J has given new impetus to its campaign.
At the same time, the campaign has addressed the threat of external competition by setting Soda apart from its rivals. Conclusion Soda is a global brand offering a range of products in a highly competitive and fragmented market. The company must respond positively to internal and external issues to avoid losing sales and market share. A SOOT analysis brings order and structure to otherwise random information. The SOOT model helps managers to look internally as well as externally. The information derived from the analysis gives direction to the strategy.
It highlights the key internal weaknesses in a business, it able to identify where it had strengths to compete. The structured review of internal ND external factors helped transform Soda Auk’s strategic direction. The case study shows how Soda I-J transformed its brand image in the eyes of potential customers and build its competitive edge over rivals. By developing a marketing strategy playing on clearly identified strengths of customer happiness, Soda was able to overcome weaknesses. It turned its previously defensive position of the brand to a positive customer-focused experience.
The various awards Soda has won demonstrate how its communications are reaching customers. Improved sales show that Soda Auk’s new strategy has delivered benefits. Answer the 1 . What was the key weakness that Soda was able to identify? 2. What strength did Soda use to turn its brand weakness into an opportunity? 3. How has Soda strategically addressed external threats? 4. What in your view are the important benefits of using a SOOT analysis Case-3 : Marketing strategy for growth Businesses must respond to change in order to remain competitive.
Developing appropriate strategies which allow them to move forward is essential. Wilkinson is a prime example of a business that has responded to changing customer needs throughout its history. It is one of the Auk’s long-established retailers of a wide range f food, home, garden, office, health and beauty products. James Kinsey K) Wilkinson opened his first Wilkinson Store in Chartroom Street, Leister in 1930. After the Second World War, the asses saw a rise in the use of labor-saving devices and DID. Wilkinson responded by making this type of product the focus of its sales.
In the asses customers wanted more convenience shopping. Wilkinson started selling groceries and supermarket goods and created the Willow brand. In the asses Wilkinson extended its range of low-cost products to include quality clothing, toys, toiletries and perfumes. In 1995 it opened a central distribution centre in Workshop, serving stores in the north of England and in 2004, a new distribution centre opened in Wales. In 2005 Wilkinson launched its Internet shopping service, offering over 800,000 product lines for sale online. Wilkinson currently has over 300 stores, which carry an average of 25,000 product lines. 0% of these are Willow ‘own-brand’ products. The company’s target is to see this element grow and to have over 500 stores by 2012. Wilkinson growth places it in the top 30 retailers in the I-J. Recently it has faced increasing challenges from competitors, such as the permanent sector. Wilkinson needed to combat this and identify new areas for growth. Over two years it conducted extensive market research. This has helped it create a marketing strategy designed to continue growing by targeting a new market segment – the student population.
This case study focuses on how Wilkinson created and implemented this strategy, using the findings of its market research to drive the strategy forward. Marketing strategy aims to communicate to customers the added- value of products and services. This considers the right mix of design, function, ultimately to encourage them to buy. An important tool for helping develop an appropriate marketing strategy is Nations Matrix. This model looks at the options for developing a marketing strategy and helps to assess the levels of risk involved with each option.
Marketing strategies may focus on the development of products or markets. Doing more of what a business already does carries least risk; developing a completely new product for a new audience carries the highest risk both in terms of time and costs. Based on its research, Wilkinson committed to a market development strategy to sell its products too new audience of students. This is a medium risk strategy as it squires the business to find and develop new customers. It also carries costs of the marketing campaigns to reach this new group.
The main focus of the strategy was to increase awareness of the brand among students and encourage them to shop regularly at Wilkinson stores. Market research Market research is vital for collecting data on which to base the strategy. Market research takes one of two main forms – primary research and secondary research. Primary research (also called field research) involves collecting data first hand. This can take many forms, the main ones being interview, questionnaires, panels and observation. Secondary research (also called desk research) involves collecting data which already exists.
This includes using information from reports, publications, Internet research and company files. Both methods have advantages and disadvantages. The advantages of primary research are that it is recent, relevant and designed specifically for the company’s intended strategy. The main disadvantage is that it is more expensive than secondary research and can be biased if not planned well. Secondary research is relatively cheap, can be undertaken quickly and so enables decision-making sooner. However, secondary research can go out-of-date and may not be entirely relevant to the business’ needs.
Wilkinson undertook primary market research using questionnaires from students across the I-J and secondary research using government and university admissions data. The statistics revealed that there were three million potential student customers. They had a combined annual spend of around E billion per year. This research confirmed that the choice of focusing on the student market as a means of growth was valid. Wilkinson undertook further research to identify how to reach students ND persuade them to start shopping at Wilkinson stores.