Project Of Strategic Marketing

Project of Strategic Marketing

On

Group Name: Opportunity Seizers

Company Name: GFK corporation. (Detergents)

Submitted to: Prof. Awais Khan

Submitted by:

M. Farhan Saleem. Reg. No. L1f09mbam1132

Hussain Zain ul Abiden. Reg. No. L1f09mbam1138

Syed Ali Kamran. Reg. No. L1f09mbam1165

UNIVERSITY OF CENTRAL PUNJAB LAHORE

TABLE OF CONTENTS

1.0 Introduction...................................................................................2

1.2 Mission Vision................................................................................3

1.3 Values...........................................................................................3

...........................................................................................................................................

2.0 Situation Analysis.........................................................................4

2.1 Market Summary...........................................................................4

2.2 Market potential............................................................................4

2.3 Demographic Trends.....................................................................4

2.4 Consumer Behaviour.....................................................................5

2.5 Competitive Environment.............................................................5

2.6 Economy.......................................................................................6

2.7 Legal and Political Issues..............................................................7

3.0 Objectives and Action Plans.......................................................9

3.1 Product........................................................................................10

3.2 Place...........................................................................................10

3.3 Price............................................................................................11

3.4 Promotion....................................................................................11

4.0 Microenviornment......................................................................12

5.0 Macroenviornment.....................................................................13

6.0 Distribution Strategy.................................................................15

7.0 Financial Aspects........................................................................17

7.1 Fixed Costs..................................................................................17

7.2 Product Launching Cost..............................................................17

7.3 Unit Cost (Variable Cost) .............................................................................17

8.0 Advertising Goals.......................................................................18

9.0 BCG, SWOT, PLC.....................................................................20-22

10.0 Overall Assessment of Opportunity.......................................23

11.0 Advertising Objectives.............................................................24

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12.0 Advertising and Marketing Budget..................................25-26

Introduction:

We are launching a brand named “Spin n Clear” under the umbrella of

GFK corporation, Spin n Clear is very effective detergent agent by its

composition. Managers are expecting that it will make a sound image

in the consumers evoked set of mind.

A detergent (as a noun) is a material intended to assist cleaning. The

term is sometimes used to differentiate between soap and

other surfactants used for cleaning. As an adjective pertaining to a

substance, it (or "detersive") means "cleaning" or "having cleaning

properties"; "detergency" indicates presence or degree of cleaning

property.

A detergent powder which gives you a better cleaning power with

much less effort than the similar priced competitors.

Logo of Spin N Clear:

Tag line of Spin N Clear:

“Stains No More”

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The statement is showing the operativeness of the detergent. It’s

concise, achievable and realistic. Create a good sense in the mind of

reader.

Our Mission:

Our mission is to add vitality to life. We meet everyday needs for

hygiene, and personal care with brands that help people feel good and

get more out of life.

Our Vision:

To be leading firm in the detergent industry, by providing better

quality services to customers and gain larger customer base and

greater market share.

Our Values:

Integrity We always try to do the right thing. We are honest and straightforward with each other. We operate within the letter and spirit. We uphold the values and principles of GFK company in every

action and decision. We are data based and intellectuality honest in advocating

proposals, including recognizing risks.Leadership

We are all leaders in our area of responsibility, with a deep commitment to delivering leadership results.

We have a clear vision of where we are going. We focus our resources to achieve leadership objectives and

strategies. We develop the capability to deliver our strategies and eliminate

organizational barriers.Ownership

We accept personal accountability to meet our personal needs, improve our systems and help others improve their effectiveness.

We all act like owners, treating the company’s assets as our own and behaving with the company’s long term success in mind.

Passion for Winning We are determined to be the best at doing what matters most. We have a healthy dissatisfaction with the status quo. We have a compelling desire to improve and to win in the

marketplace.

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Trust We respect our GFK colleagues, customers and consumers, and

treat them as we want to be treated. We have confidence in each other’s capabilities and intentions. We believe that people work best when there is a foundation of

trust

Situation Analysis

Market Summary

At GFK CORPORATION, we have detailed information about the kitchen

appliance market as well as a comprehensive understanding of

consumer needs. According to the 2003 survey of household energy

use produced by Natural Resources Pakistan, home owners account for

74.4% of Detergent owners. Based on this information, we have

decided to target current and new home owners during our first year of

launch, as they are most likely to either have a Detergent or will need

one installed. The market size (in households) is based on information

from Statistics Pakistan from 2003, it is estimated that there are over

11 million households in Pakistan. Of these households, approximately

8 million are owned, hence 3 million households are rented.

Conversely, approximately 6 million home owners (households) own a

Detergent.

Market potential

The household penetration of domestic electrical appliances is very

well developed in most sectors of the Pakistani market. Detergents are

a potential market for penetration, as they are convenient for young

families with two income earners.

Retail volume sales of Detergents are predicted to increase by 13%

over the 2003 to 2008 period. Household penetration of Detergents

increased over the review period, yet the relatively low penetration

rate presents a continued opportunity for new sales over the

forecasted years.

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Demographic Trends

The trend toward convenience is also largely driven by the shortened

time that households devote to household chores, as work placed

greater demands on time, thereby leaving remaining time during the

average day devoted to leisure rather than cooking and cleaning.

According Statistics Pakistan, the number of new constructions has

been consistent since 2002. In 2005, there were 135,461 new

constructions. This is an important market for GFK CORPORATION to

target as new appliances are sought items for these consumers.

Pakistan has a large informal economy, which the government is trying

to document and assess. Approximately 49% of adults are literate, and

life expectancy is about 64 years. The population, about 168 million in

2007, is growing at about 1.80%.

Relatively few resources in the past had been devoted to socio-

economic development or infrastructure projects. Inadequate provision

of social services, high birth rates and immigration from nearby

countries in the past have contributed to a persistence of poverty. An

influential recent study concluded that the fertility rate peaked in the

1980s, and has since fallen sharply. Pakistan has a family-income Gini

index of 41, close to the world average of 39.

Consumer Behaviour

With competition being prominent throughout the Detergent market

segment, there are many different types and styles of Detergents

available to own.

Built-in units accounted for 94% of retail volume sales in 2003, up from

91% in 1998. Although there are counter top and portable models

available, these are rarely found in Pakistani homes. With the size and

design of most kitchens, built-in models are easily accommodated and

the added convenience of not having to manually hook the appliance

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to the sink and the space-saving features of a built-in Detergent are

primary factors behind the decline of the freestanding model. In fact, it

is now difficult to find freestanding Detergents in retail outlets, as most

models on the sales floor are built-in.

Economy

The economy of Pakistan is the 27th largest economy in the world in

terms of purchasing power, and the 48th largest in absolute dollar

terms. Pakistan has a semi industrialized economy that mainly

encompasses textiles, chemicals, food processing, agriculture and

other industries. Growth poles of Pakistan's economy are situated

along the Indus River, diversified economies of Karachi and Punjab's

urban centers, coexist with lesser developed areas in other parts of the

country. The economy has suffered in the past from decades

of internal political disputes, a fast growing population, mixed levels of

foreign investment, and a costly, ongoing confrontation with

neighboring India. However, IMF-approved government policies,

bolstered by foreign investment and renewed access to global

markets, have generated solid macroeconomic recovery the last

decade. Substantial macroeconomic reforms since 2000, most notably

at privatizing the banking sector have helped the economy.

GDP growth, spurred by gains in the industrial and service sectors,

remained in the 6-8% range in 2004-06. Due to economic reforms in

the year 2000 by the Musharraf government. In 2005, the World

Bank named Pakistan the top reformer in its region and in the top 10

reformers globally. Islamabad has steadily raised development

spending in recent years, including a 52% real increase in the budget

allocation for development in FY07, a necessary step toward reversing

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the broad underdevelopment of its social sector. The fiscal deficit - the

result of chronically low tax collection and increased spending,

including reconstruction costs from the devastating Kashmir

earthquake in 2005 was manageable.

Inflation remains the biggest threat to the economy, jumping to more

than 9% in 2005 before easing to 7.9% in 2006. In 2008, following the

surge in global petrol prices inflation in Pakistan has reached as high

as 25.0%. The central bank is pursuing tighter monetary policy while

trying to preserve growth. Foreign exchange reserves are bolstered by

steady worker remittances, but a growing current account deficit -

driven by a widening trade gap as import growth outstrips export

expansion - could draw down reserves and dampen GDP growth in the

medium term.

Technology

The Spin n Clear Detergent uses cryogenic technology to clean your

Stains in a way that is economically and ecologically viable. The use of

dry ice pellets allows for a clean method of removing dirt and grime,

while at the same time it does not produce any secondary wastes.

The dry ice medium is chemically neutral, electrically non-conductive

and totally non-abrasive. There are absolutely no secondary wastes

and the material being removed generally becomes light dry dust that

is captured in filters. The dry ice blocks, pellets, and powders are

shown in the diagram below.

Upon impact, the dry ice pellets sublimate immediately to gaseous

carbon dioxide. The dwell time of the dry ice pellets on the surface

material is minimal and other than very slight sub-cooling of the

surface significant heat transfer does not take place. The surface being

cleaned will have an un-appreciable drop in temperature. Contrary to

popular opinion, the surface is not frozen. This would cause a brittle

state and shattering would be possible.

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The majority of the removed material falls to the bottom steel

receptacle. The dirt, being food residue, can simply be composted or

alternatively, the dirt can be vacuumed into your home vacuum

cleaner. The term “ice” is an idiom for dry ice. There is no water in

carbon dioxide. Since the dry ice sublimates from a solid directly to a

gas upon impact, it is a virtual impossibility to leave moisture from the

dry ice itself. The duration of the cleaning process depends upon the

size of the load in the Detergent. A typical run during the scientific

studies showed 20 minutes required.

Legal and Political Issues

As a general trend in legal and political implications relevant to

Detergents, among other home electrical appliances, water and energy

efficiencies are major preoccupations.

As an example, the Energy Star programme is a nationally developed

rating system for energy efficiency for large domestic electrical

appliances, which assigns an Energy Star rating in the form of a sticker

on the appliance at the retail level. Promotion of the Energy Star

program by the Federal Government is supported by national

mandates to increase the efficiency of resource utilization in the

consumer market.

Moreover, there is the regulation of all electrical appliances with a

power supply of more than 30 volts RMS, they must comply with the

Pakistani Electrical Code as stated in the federal Electrical Safety Act.

The industry took a number of corrective measures to comply with

increasingly stringent federal, provincial and local regulations

concerning pollution control. During the 1980s, CSA developed

approximately 30 Energy Efficiency Standards covering a wide array of

appliances, including Detergents.

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In 1993, a new EnerGuide label was introduced to provide the

estimated annual energy consumption rating for each appliance. It also

includes a scale that shows how energy-efficient an appliance is

relative to similar models in an effort to help the consumers select a

model to meet their needs.

Since these regulations were enforced, there have been significant

improvements in the energy efficiency of all new kitchen appliances

introduced to the market. With reference to Detergents, this translated

into an average annual energy use reduction of 37%. The SPIN N

CLEAR Detergent will further reduce energy consumption by 50% as

compared to current products on the market.

Objectives and Action Plans

The primary target for our first year on the market is residential

homeowners as they are environmentally conscientious individuals and

are attracted by new innovative products. They were also the essence

for developing this product so it is important that they be the first to

have the opportunity of using our product.

Idea generation: The concept of this energy efficient, low cost

Detergent arose from customer complaints based on feedback

conducted in July 2009.

Idea screening: GFK CORPORATION, a company which is concerned

with the comfort and convenience of its customers considers that the

new SPIN N CLEAR Detergent is in-line with the company's objectives,

strategies and resources. This was confirmed in September after a

meeting held with GFK CORPORATION executives.

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Concept development and testing: Development took one year

with a final prototype available and ready for testing in November

2009.

Marketing strategy development: In January 2010, the penetration

business strategy was agreed upon as being a cost effective and

affordable strategy for launching the new SPIN N CLEAR Detergent.

Business analysis: Following the business analysis completed in

December 2009, which was included in the marketing plan, it was

determined that a return on investment will be achieved after 5 years

with only the first year showing yearly losses. Following the fifth year,

it is forecasted that GFK CORPORATION will make approximately $7

Million profit on their new product, SPIN N CLEAR.

Product development: The final prototype was completed in October

2009.

Commercialization: The product will be launched in January 2010.

4 P’s of Marketing:

Product:

The product was developed based on customer feedback and market

research conducted on Pakistani consumers. To do so, we have not

only taken into account consumer concerns about environment,

energy, water, pollution, detergents and noise, we have anticipated

these expectations, and have now surpassed them by designing the

only detergent that addressed all these issues simultaneously.

Composition:

A detergent typically consists of ionic and anionic surfactants which act

as the detergent to remove the dirt from the clothes, perfume,

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phosphors which make clothes appear whiter (it is these that show up

under ultraviolet light), and for powders anticaking agents to prevent

the powder becoming one large lump in the presence of moisture. For

liquid detergents, the bulk of the product is water; for concentrated

liquids, somewhat less water, but still the product is mostly water.

Biological laundry detergents contain enzymes which act

as catalysts to "eat" the dirt off of the laundry; these function best at

the kinds of body temperatures found in warm-blooded creatures

(30 °C (86 °F) to 50 °C (122 °F)) and will perform no better, and

sometimes worse, at higher temperatures. Detergents may have other

additives such as bleaches and fabric softeners and these are usually

advertised clearly on the packets as selling points.

Place

We plan to launch this product in the major urban cities in Pakistan,

namely Lahore, Karachi, Islamabad and Multan. The launch will

coincide with the National Home show occurring in each of these cities.

The National Home Show provides GFK CORPORATION with the

opportunity of bringing awareness to the marketplace. The National

Home Shows all take place in the spring season amongst these 4

different cities. GFK CORPORATION will continue to maintain product

availability through their key retailers.

Price

The prices of spin n clear detergent powder for various sizes of packages are as follows;

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2Kg -------------------------------- Rs 199.001 Kg -------------------------------- Rs 99.00500g -------------------------------- Rs 59.00200g -------------------------------- Rs 29.0065g -------------------------------- Rs 9.00

Promotion

We have different promotional campaigns that will help to bring

awareness to this new product. The Statistics Pakistan 1996 Census

found that only 22% of Pakistan's population (6.4 million) live in rural

areas. Therefore, as mentioned above, we will concentrate our launch

in the urban areas. As we plan to launch in major cities in Pakistan,

namely, Lahore, Islamabad, Karachi, and Multan, our launch in each of

these cities will follow the same pattern.

MICROENVIRONMENT:

The factors of this environment are explained below:

Suppliers:

Suppliers are an important link in the company’s overall customer “value delivery

system.” All GFK corporation approved agencies handled by commercial department.

Marketing Intermediaries:

Marketing intermediaries help the company to promote, sell, and

distribute its goods to final buyers. They include resellers, physical

distribution firms, marketing services agencies and financial

intermediaries.

It is very difficult to deal with all the wholesalers and retailers

individually so GFK corporation has a sole distribution system.

Customers:

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Consumer markets consist of individuals and households that buy

goods and services for personal consumption. In the case of our

chosen product “SPIN N CLEAR” , a detergent , the main customers

our house-wives because they are the ones who buy detergents.

Competitors:

There are 3 main players in the detergent industry of Pakistan.

1) Colgate-palmolive corporation ( Brite , Express power , Bonus )

2) Lever Brothers ( Surf , Wheel )

3) Proctor & Gamble ( Ariel )

Publics:

The company’s marketing environment also includes various publics

such as , Financial publics , Media publics , Government publics ,

Citizen action publics , Local publics , Internal publics and the general

public. Amongst all the publics the most important is the general public

, because they are the ones that but the product so the company

needs to be concerned about their attitudes toward its products.

MACRO ENVIRONMENT:

The factors of this environment are explained below:

Demographics:

In the case of “SPIN N CLEAR” the demographics that we have found

out are , that any housewife who is both price sensitive as well as

quality conscious , belongs to any class, any occupation , if can afford

Spin N Clear will buy it.

Psychographics:

People who are ambitious, hygiene conscious, those who want to be

authoritative are Spin N Clear buyers, because when it comes to

personality values than no compromise.

Technology:

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GFK corporation was the first one to launch in “polythene bags.” This

was a change in technology the poly packs don’t get torn off after

getting wet like the carton boxes, so this change found a ready

market.

Economy:

Spin N Clear is a premium quality detergent at a relatively low price

than other detergents of same quality. This was made possible by

launching it in polythene bags so as to cut down cost price.

Market size:

Due to the launching of different detergents in sachets , a large number of soap users are

converting into detergent users because now they can afford to buy a detergent at the

price of soap. Total per annum sale of detergents in Pakistan is upto 40,000 tons. This

market is growing at a rate of 4.25% per annum.

Target market:

Normally speaking detergent is a product which is purchased by the

housewives but still there is a big target market.

Demographics:

Age:

People of all ages like to wear clean clothes.

Gender:

Male and Female.

Family size:

No limit of members, clothes are to be washed.

Family life cycle:

Young or old, married or single.

Income:

3,400 and above ( because Spin N Clear is not marketed in sachets so

a person has to earn this much so that he can spend atleast 1% of his

income to buy a small pack of Spin N Clear.)

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Occupation:

Students , Working people and Housewives.

Social class:

Upper class , Middle class and working class.

Psychographics:

Lifestyle: Achievers , Strugglers and Ambitious people.

Personality: Hygiene conscious , Strong and Authorative.

Promotional Target Market:

Promotion of the product in the target market is very important to

create sales.

SPIN N CLEAR was promoted among the following age group

customers.

Matured age group:

By launching the 1st ever pakistani detergent in polythene pack.

Young age group:

By launching it in a colorful and attractive pack.

Distribution Strategy:

The distribution of SPIN N CLEAR is done by a distributing agency

The company has divided Pakistan into 2 parts:

1) Sindh

2) Punjab

Sindh is further divided into 4 zones:

1) Karachi

2) Hyderabad

3) Sukkur

4) Quetta

Punjab is further divided into 5 zones:

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1) Lahore

2) Faisalabad

3) Islamabad

4) Multan

5) NWFP

Each zone is fed by a warehouse , which feeds 60 towns around each

zone.

Everyday sales persons of all particular zones visit shops of their

related area , collect sales reports and next orders from the

shopkeepers on order taking cards.

The order taking card has the following information:

Name of the shop

Name of the shopkeeper

Name and signature of the person ordering

Address of the shop

Quantity and sizes of the product

After collecting this information, at the end of the day all the sales persons submit the daily sales report and the order cards to the distributor so as to arrange for the delivery for the next day. Then the next day the vehicles of distributor deliver the quantity required by every shopkeeper at his shop.

Selecting the Right Advertising Approach

Once a company decides what type of specific advertising campaign it

wants to use, it must decide what approach should carry the message.

A company is interested in a number of areas regarding advertising,

such as frequency, media impact, media timing, and reach.

Advertising Evaluation

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Once the advertising campaign is over, companies normally evaluate it compared to the established goals. An effective tactic in measuring the usefulness of the advertising campaign is to measure the pre-and post-sales of the company's product. In order to make this more effective, some companies divide up the country into regions and run the advertising campaigns only in some areas. The different geographic areas are then compared (advertising versus nonadvertising), and a detailed analysis is performed to provide an evaluation of the campaign's effectiveness.

Summary

Advertising is the paid, nonpersonal promotion of a cause, idea, product, or service by an

identified sponsor attempting to inform or persuade a particular target audience.

Advertising has evolved to take a variety of forms and has permeated nearly every aspect

of modern society. The various delivery mechanisms for advertising include banners at

sporting events, billboards, Internet Web sites, logos on clothing, magazines, newspapers,

radio spots, and television commercials. While advertising can be successful at getting

the message out, it does have several limitations, including its inability to (1) focus on an

individual consumer's specific needs, (2) provide in-depth information about a product,

and (3) be cost-effective for small companies. Other factors, such as objectives, budgets,

approaches, and evaluation methods must all be considered.

Financial Aspects

In order to determine the cost to manufacture and ultimately the

selling and retail price, the following analysis of the fixed costs,

product launching costs, and unit costs (variable costs) are analyzed.

Fixed Costs

As is the case with every product launched at GFK CORPORATION, we

include in our budget money allocated for employee satisfaction. We

believe satisfied employees will lead to better products that are

designed and manufactured in a more efficient way. Furthermore, at

GFK CORPORATION, we ensure that all our manufacturing processes

are environmentally safe, and that any manufacturing by-product is

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properly disposed. Therefore, budget is also set aside for the

environment. The executive and office staff salaries are averaged and

accounted. Twenty percent is added to their salary to account for their

benefits. Office supplies include items such as computers, software

licenses or paper.

Product Launching Cost

The product launch costs will be added to the fixed costs. These,

however have been separated out because they only apply to the

product launch (i.e. the first year). Our unit price will be set, to ensure

the product launching costs are zero in the second year. The table

below lists the extra cost associated with launching the new product.

Unit Cost (Variable Cost)

Some manufacturing materials are expandable during the

manufacturing process. The cost of these types of materials depends

on the number of units produced. To minimize the mileage, two trucks

will be in each of the four cities specified earlier, and the merchandise

will arrive by train to each city leaving from Lahore.

Advertising Goals:

Once a company decides what type of specific advertising campaign it

wants to use, it must decide what approach should carry the message.

A company is interested in a number of areas regarding advertising,

such as frequency, media impact, media timing, and reach.

Frequency refers to the average number of times that an average

consumer is exposed to the advertising campaign. A company usually

establishes frequency goals, which can vary for each advertising

campaign. For example, a company might want to have the average

consumer exposed to the message at least six times during the

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advertising campaign. This number might seem high, but in a crowded

and competitive market repetition is one of the best methods to

increase the product's visibility and to increase company sales. The

more exposure a company desires for its product, the more expensive

the advertising campaign. Thus, often only large companies can afford

to have high-frequency advertisements during a campaign.

Media Impact Media impact generally refers to how effective

advertising will be through the various media outlets (e.g., television,

Internet, print). A company must decide, based on its product, the best

method to maximize consumer interest and awareness. For example, a

company promoting a new laundry detergent might fare better with

television commercials rather than simple print ads because more

consumers are likely to see the television commercial. Similarly, a

company such as Mercedes-Benz, which markets expensive products,

might advertise in specialty car magazines to reach a high percentage

of its potential customers. Before any money is spent on any

advertising media, a thorough analysis is done of each one's strengths

and weaknesses in comparison to the cost. Once the analysis is done,

the company will make the best decision possible and embark on its

advertising campaign.

Media Timing Another major consideration for any company engaging

in an advertising campaign is when to run the advertisements. For

example, some companies run ads during the holidays to promote

season-specific products. The other major consideration for a company

is whether it wants to employ a continuous or pulsing pattern of

advertisements. Continuous refers to advertisements that are run on a

scheduled basis for a given time period.

The advantage of this tactic is that an advertising campaign can run

longer and might provide more exposure over time. For example, a

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company could run an advertising campaign for a particular product

that lasts years with the hope of keeping the product in the minds of

customers. Pulsing indicates that advertisements will be scheduled in a

disproportionate manner within a given time frame. Thus, a company

could run thirty-two television commercials over a three-or six-month

period to promote the specific product is wants to sell. The advantage

with the pulsing strategy is twofold. The company could spend less

money on advertising over a shorter time period but still gain the same

recognition because the advertising campaign is more intense.

Reach Reach refers to the percentage of customers in the target

market who are exposed to the advertising campaign for a given time

period. A company might have a goal of reaching at least 80 percent of

its target audience during a given time frame. The goal is to be as

close to 100 percent as possible, because the more the target

audience is exposed to the message, the higher the chance of future

sales.

The Boston Consulting Group (BCG) matrix provides a firm an

opportunity to assess how well its business units work together. Each

business unit is evaluated in terms of two factors: market share and

the growth prospects in the market. Generally, the larger a firm’s

share, the stronger its position, and the greater the growth in a

market, the better future possibilities. Four combinations emerge:

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A star represents a business unit that has a high share in a

growing market. For example, Motorola has a large share in the

rapidly growing market for cellular phones.

A question mark results when a unit has a small share in a

rapidly growing market. The firm’s position, then, is not as strong

as it would have been had its market share been greater, but

there is an opportunity to grow. For example, Hewlett-Packard

has a small share of the digital camera market, but this is a very

rapidly growing market.

A cash cow results when a firm has a large share in a market

that is not growing, and may even be shrinking. Brother has a

large share of the typewriter market.

A dog results when a business unit has a small share in a market

that is not growing. This is generally a somewhat unattractive

situation, although dogs can still be profitable in the short run.

For example, Smith Corona how has a small share of the

typewriter market.

Firms are usually best of with a portfolio that has a balance of firms in

each category. The cash cows tend to generate cash but require little

future investment. On the other hand, stars generate some cash, but

even more cash is needed to invest in the future—for research and

development, marketing campaigns, and building new manufacturing

facilities. Therefore, a firm may take excess cash from the cash cow

and divert it to the star.

A SWOT (“Strengths, Opportunities, Weaknesses, and Threats”) For example: A strength could be:

Your specialist marketing expertise. A new, innovative product or service. Location of your business. Quality processes and procedures.

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Any other aspect of your business that adds value to your product or service.A weakness could be:

Lack of marketing expertise. Undifferentiated products or services (i.e. in relation to your

competitors). Location of your business. Poor quality goods or services. Damaged reputation.

: An opportunity could be: A developing market such as the Internet. Mergers, joint ventures or strategic alliances. Moving into new market segments that offer improved profits. A new international market. A market vacated by an ineffective competitor.

A threat could be: A new competitor in your home market. Price wars with competitors. A competitor has a new, innovative product or service. Competitors have superior access to channels of distribution. Taxation is introduced on your product or service.A word of caution, SWOT analysis can be very subjective. Do not rely on SWOT too much.

THE PRODUCT LIFE CYCLE

Products often go through a life cycle. Initially, a product is introduced.

Stage in the Product Life Cycle New product offerings require

considerably more advertising to make customers aware of their

existence. As a product moves through the product life cycle, fewer

and fewer advertising resources are needed because the product has

become known and has developed an established buyer base.

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Advertising budgets are typically highest for a particular product

during the introduction stage and gradually decline as the product

matures.

Since the product is not well known and is usually expensive (e.g., as microwave ovens

were in the late 1970s), sales are usually limited. Eventually, however, many products

reach a growth phase—sales increase dramatically. More firms enter with their models

of the product. Frequently, unfortunately, the product will reach a maturity stage where

little growth will be seen. For example, in the United States, almost every household has

at least one color TV set. Some products may also reach a decline stage, usually

because the product category is being replaced by something better. For example,

typewriters experienced declining sales as more consumers switched to computers or

other word processing equipment. The product life cycle is tied to the phenomenon of

diffusion of innovation. When a new product comes out, it is likely to first be adopted by

consumers who are more innovative than others—they are willing to pay a premium price

for the new product and take a risk on unproven technology. It is important to be on the

good side of innovators since many other later adopters will tend to rely for advice on the

innovators who are thought to be more knowledgeable about new products for advice.

At later phases of the PLC, the firm may need to modify its market strategy. For example,

facing a saturated market for baking soda in its traditional use, Arm & Hammer launched

a major campaign to get consumers to use the product to deodorize refrigerators.

Deodorizing powders to be used before vacuuming were also created.

Overall Assessment of Opportunity

We can summarize from the findings provided in the Situation Analysis,

that there is a significant opportunity that can be capitalized on when

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looking at the current dishwashing market. To prove this point, let us

summarize the key findings of the Situation Analysis, namely: the focus

of improvements to Detergents; the forecast growth in the Pakistani

economy; coupled with the proliferation of home improvements. These

three main areas constitute the opportunity, to which our innovative

new technology shall only be improved.

In conclusion, these three factors are the perfect blend of opportunities

on which our idea can flourish. The area of greatest opportunity for

growth and innovation, within the existing Detergent market, lies in

the diffusion of the cryogenic cleaning technology. This cutting-edge

technology, currently in-use in the aerospace industry, and patented

for in-home cleaning, refers to the art of water-and-detergent-free

dishwashing. We are then left with spotless and bacteria-free Stains

every time, without having to pre-soak before actually washing. This

technology is the answer to noise-reduction demands, as noise is

eliminated, as well as water, energy and conscience use. All in all, the

perfect combination between consumers demands of possible

upgrades to the existing Detergents and a way to capitalize on market

maximization. This will evidently take the market by storm.

Advertising Objectives:

Advertising objectives are the communication tasks to be

accomplished with specific customers that a company is trying to

reach during a particular time frame. A company that advertises

usually strives to achieve one of four advertising objectives: trial,

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continuity, brand switching, and switchback. Which of the four

advertising objectives is selected usually depends on where the

product is in its life cycle.

Trial The purpose of the trial objective is to encourage customers to

make an initial purchase of a new product. Companies will typically

employ creative advertising strategies in order to cut through other

competing advertisements. The reason is simple: Without that first trial

of a product by customers, there will not be any re peat purchases.

Continuity Continuity advertising is a strategy to keep current

customers using a particular product. Existing customers are targeted

and are usually provided new and different information about a

product that is designed to build consumer loyalty.

Brand Switching Companies adopt brand switching as an objective

when they want customers to switch from competitors' brands to their

brands. A common strategy is for a company to compare product price

or quality in order to convince customers to switch to its product

brand.

Switchback Companies subscribe to this advertising objective when

they want to get back former users of their product brand. A company

might highlight new product features, price reductions, or other

important product information in order to get former customers of its

product to switchback.

Advertising Budget:

Once an advertising objective has been selected, companies must then

set an advertising budget for each product. Developing such a budget

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can be a difficult process because brand managers want to receive a

large resource allocation to promote their products. Overall, the

advertising budget should be established so as to be congruent with

overall company objectives. Before establishing an advertising budget,

companies must take into consideration other market factors, such as

advertising frequency, competition and clutter, market share, product

differentiation, and stage in the product life cycle.

Advertising Frequency

Advertising frequency refers to the number of times an advertisement

is repeated during a given time period to promote a product's name,

message, and other important information. A larger advertising budget

is required in order to achieve a high advertising frequency: Estimates

have been put forward that a consumer needs to come in contact with

an advertising message nine times before it will be remembered.

Competition and Clutter

Highly competitive product markets, such as the soft-drink industry,

require higher advertising budgets just to stay even with competitors.

If a company wants to be a leader in an industry, then a substantial

advertising budget must be earmarked every year. Examples abound

of companies that spend millions of dollars on advertising in order to

be key players in their respective industries (e.g., Coca Cola and

General Motors).

Market Share

Desired market share is also an important factor in establishing an

advertising budget. Increasing market share normally requires a large

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advertising budget because a company's competitors counterattack

with their own advertising blitz. Successfully increasing market share

depends on advertisement quality, competitor responses, and product

demand and quality.

Product Differentiation

How customers perceive products is also important to the budget-

setting process. Product differentiation is often necessary in

competitive markets where customers have a hard time differentiating

between products. For example, product differentiation might be

necessary when a new laundry detergent is advertised: Since so many

brands of detergent already exist, an aggressive advertising campaign

would be required. Without this aggressive advertising, customers

would not be aware of the product's availability and how it differs from

other products on the market. The advertising budget is higher in order

to pay for the additional advertising.

Marketing Budget

Financial Statements for Marketing

Failure to properly cost and budget your marketing plan could lead

to problems. While insufficient funding for such items as equipment

or staffing may immediately come to mind when budgeting for the

whole business, it's the lack of a properly constructed marketing

budget that dooms many marketing plans and campaigns. A

marketing budget is the marketing plan written in terms of costs.

Marketing Budget

A marketing budget is an estimate of projected costs to market your

products or services. A typical marketing budget will take into

account all marketing costs e.g. marketing communications, salaries

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for marketing managers, cost of office space etc. However much of

the budget is concerned with marketing communications e.g. public

relations, website, advertising, etc. Both are considered here.

The costs in a marketing budget will be allocated according to the

campaign and the media to be utilized. Some prior research will be

necessary for the cost estimates to be as realistic as possible. This is

called advertising or marketing communications research.

Helpful Pre-budgeting Research

Industry and Market Research

Competitor Analysis/SWOT

Internal marketing performance records e.g. marketing

metrics, marketing controls.

Marketing Audit.

Typical general marketing expenses:

Advertising agency commissions

Salaries for marketing managers

Salaries for marketing support e.g. marketing assistants.

Office space

Fixtures and fittings

Travel costs

Other direct and indirect marketing costs, including marketing

communications costs.

Typical marketing communications costs:

Personal Selling

Public Relations

Printing

Mailing

Website Development & Hosting

Brochure Design

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Advertising

Television Advertising

Radio Advertising

Direct Marketing

Newspaper Advertising

Proposal Development/bid submittal

Networking

Event Attendance

Sales Promotion

Many other marketing communications tools.

Summary of the Marketing Budget

Marketing budgets ensure that your marketing plan or campaign is

realistically costed. Some pre-budget research into your industry

and market, your competitors and your business's historical

marketing metrics helps marketing managers make a more

informed calculation. You should cost out all general marketing and

marketing communications expenses. You could also work in

conjunction with an accountant to make sure that the figures are

complete and realistic.

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