Project 3: Marketing Strategy for a New Consumer Product Scenari...

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Project 3: Marketing Strategy for a New Consumer Product

Scenario
You are the global marketing vice president at Dyson. You have been asked to attend a meeting with James Dyson, the company's founder. Dyson's CEO and the head of Dyson's New Product Innovation department will also be in attendance.

"Thanks for meeting with me today," James says. "Market intelligence has shown that our major competitors—Hoover, Shark, and Bissell—are all developing new cordless vacuum cleaners with a longer battery life than what's currently available."

James Dyson looks to you: "I need you to participate in a new cross-functional product development team that will research the feasibility of creating a cordless vacuum cleaner that works for one hour on a single charge. We also need to know if there's even a market for this type of vacuum," he says.

"We envision that this new vacuum will be used primarily in the home, but keep in mind, we want to be able to adapt it easily and cheaply for light commercial use. One way of doing this is by using swappable battery packs."

"Have an actionable marketing plan ready for me in three weeks," James says.
You know that to give the CEO the most thorough report, you'll need to conduct an internal analysis of Dyson and an environmental scan for the new vacuum cleaner. You'll need to have a detailed plan for identifying marketing opportunities, and you'll need to research the home and commercial vacuum cleaner industry, market trends, and Dyson's major global competition.

Introduction
As you have read above, this project asks you to put together a marketing plan for your CEO. The marketing plan will be for a consumer product with the potential to expand into light commercial use. The product will have a new swappable battery with longer life than the competition.

Step 1: Introduction to Marketing

One of the most important functional areas in business is marketing. Companies such as Google, Boeing, Airbus, Apple, McDonald's, and Toyota have a passion for understanding their consumers and satisfying consumer needs in "well-defined target markets" (Kotler & Armstrong, 2014, p. 4). Basically, marketing is a managerial and social function through which companies and consumers create and exchange value. Kotler and Armstrong define marketing as the "process by which companies create value for consumers and build strong consumer relationships in order to capture value from consumers in return" (p.5).

The marketing process involves the following five steps (Kotler & Armstrong, 2014, p. 5):
1. Understanding the marketplace and consumer needs and wants.
2. Designing a consumer-driven marketing strategy.
3. Constructing an integrated marketing program that delivers superior value.
4. Building profitable relationships and creating consumer satisfaction.
5. Capturing value from consumers to create profits and consumer equity.

There are five major consumer value themes (Kotler & Armstrong, 2014, p. XVI):
1. Creating value for the consumer in order to capture value from them in return.
2. Creating and managing strong local and global value-creating brands.
3. Capitalizing on new marketing technologies such as the Internet and social media (eMarketing).
4. Assessing and managing the return on marketing investment.
5. Sustainable global marketing.

Selecting a product (or a service) to develop is a serious process in which cross-functional teams contribute to researching, selecting, developing, and launching the new product. In addition, the company needs to evaluate the attractiveness of a new business) . Sometimes a company will seek external help to develop a new product as the company may lack the necessary technical expertise, market knowledge, or resources. The company may also simply want to spread the financial risk involved i.e., strategic alliances .

To carry out this assignment, you need to understand consumers, how to acquire market knowledge (through primary and secondary research), and how to turn that knowledge into products that are needed and wanted by a group of consumers. You must also be able to invent market offerings that not only create value for the consumer but also create profitability for the organization. A company should strive to do all of this while being socially responsible and engaging in ethical behavior.

There are two types of market research: primary and secondary research . Both types of research are required, and each of them has its pros and cons.

There are differences between a product and a service . A product is more than just a physical good—it can be a service attached to a physical product, a "pure" service, an idea, a place, an organization, and even a

Step 2: Understand the Components of a Marketing Plan
You will need to develop a marketing plan, which is a written document that outlines the marketing program for the new Dyson vacuum cleaner. As part of your marketing plan, include the promotional budget allocation for the entire planning period. In other words, your marketing plan details what is needed to implement your marketing program and achieve its goals. Read about vision, and then find Dyson's vision and mission statements online.

It is important to note that a marketing plan is not the same as a business plan. While the marketing plan is part of the business plan, business plans typically also include additional information on financial strategies, operations, risk management, and human resources.

Step 3: Conduct an Environmental Scan

Dyson relies on quantitative and qualitative information from its industry and from markets to make important decisions, including go/kill decisions for its new product developments (Cooper, 2011). Several tools are available to Dyson; these include the following:

• PESTEL analysis (sometimes called PEST analysis): A PESTEL analysis enables Dyson to identify, analyze, and monitor the political, economic, social, technology, legal (including regulatory), and environmental factors that may impact its operations (Frue, 2017).
• Porter’s five forces analysis: Porter's five forces analysis is a framework that helps Dyson understand the competitive forces at play in its industry, and how these forces may impact the way economic value is divided among its competitors in the industry (Porter, 2008).
• SWOT analysis : A SWOT analysis is a planning and brainstorming tool that helps Dyson evaluate its projects and formulate its business plans. SWOT stands for strengths, weaknesses, opportunities, and threats. Dyson uses this tool to identify and analyze its internal strengths and weaknesses, as well as its external opportunities and threats. The results of this analysis may help Dyson improve its business, or forecast how a new product will perform (Harmon, 2016).

Research the vacuum cleaner industry (home and commercial, domestic and international). Include the following items in your analysis: market trends, market opportunities, threats, and Dyson's major global competition.

Milestone 1: Conduct the following three analyses for Dyson: PESTEL analysis, SWOT analysis, and Porter's five forces analysis. Present your results in a four-page report (excluding cover page, reference list, tables, graphs, and/or exhibits). Be sure to support your work with the required readings, scholarly sources, and reliable nonscholarly sources using UMUC's library search engine. You will combine the work you have completed in this milestone with the other milestones and submit all work together in the final step.

Step 4: Conduct a Consumer Analysis

Now that the environmental scan has been completed, the new product development group needs to conduct an analysis of consumer buying behavior in this industry. Outline how the team would conduct this analysis, while considering both current and potential product users. Your analysis should address how you would determine the following:

• What needs are being met by the product purchase? What are the benefits to the consumers? Make sure that you differentiate between features and benefits; go beyond manifest motives and consider latent motives.
• Who is involved in the purchase process? Who are influencers, buyers, and users?
• Where are the products sold (distribution channel)?
• How often are the products purchased? Is there seasonality to sales?

Milestone 2: Present your results in a three-page report (net, excluding cover page, reference list, tables, graphs, and/or exhibits). Be sure to support your work with the required readings, scholarly sources, and reliable nonscholarly sources (such as Bloomberg, Yahoo! Finance, Money, Forbes, Fortune, and Harvard Business Review) using UMUC's library search engine. You will combine the work you have completed in this milestone with the other milestones and submit all work together in the final step.

Step 5: Segmenting, Targeting, and Positioning (STP)

The first step in developing a marketing strategy involves segmenting, targeting and positioning (STP).

Segmentation is breaking down the market into homogenous groups; targeting is selecting the consumer groups on which you will focus your marketing efforts. The appropriate segmentation variable is dependent on the needs and wants of the consumers. These decisions require extensive marketing research on the consumers and are directly tied to your value proposition. Once the segmentation variables are determined and the target markets selected, you need to develop a positioning strategy. Positioning refers to the image of the product that you want the consumer to have relative to the competition.

Describe the market research you would conduct to analyze and segment the market for the new vacuum cleaner. Explain how you would select a target market or markets for the product offering. These can be domestic markets, international markets, or both. In addition, explain the process of positioning the new Dyson vacuum cleaner relative to the competition.

Milestone 3: Your research results should be presented in a three-page paper (excluding cover page, reference list, tables, graphs, and/or exhibits). Be sure to support your work with the required readings, scholarly sources, and reliable nonscholarly sources (such as Bloomberg, Yahoo! Finance, Money, Forbes, Fortune, and Harvard Business Review) using UMUC's library search engine. You will combine the work you have completed in this milestone with the other milestones and submit all work together in the final step.

Step 6: Begin the New Product Development Process

Dyson's new product innovation process involves both incremental and radical innovation. Radicalness is the combination of the degree of differentness and newness. This includes innovations that are new to the world, the industry, or to Dyson. Most radical innovations are new to the world (e.g., digital photography), and are very different from existing processes and products. On the other hand, incremental innovations lie at the other end of the spectrum; they are not exceptional or particularly new, they may currently exist in the industry, and may involve minor tweaks, adjustments, or changes from existing products. A radical innovation may become an incremental innovation over time as its underlying technology becomes more common (Schilling, 2013). Once your idea is developed, write a value proposition for your new product.

Milestone 4: Present the results of your activities in a two-page report identifying your new product idea, explaining the procedure you used to develop the process (from idea to launch), and state your value proposition. Be sure to support your work with the required readings, scholarly sources, and reliable nonscholarly sources (such as Bloomberg, Yahoo! Finance, Money, Forbes, Fortune, and Harvard Business Review) using UMUC's library search engine. You will combine the work you have completed in this milestone with the other milestones and submit all work together in the final step.

Step 7 : Develop a Marketing Strategy

In the 1960s, the 4Ps of marketing (product, price, promotion, and place or distribution) were developed. The 4Ps are also referred to as the marketing mix. Any change to one of these components was thought to have a profound effect on the other three components. The concept of marketing mix still exists, but today we think about it in a more sophisticated way. The product is now defined in the context of the company's overall offering, which may include a bundle of products and/or services under strong branding. Marketers today are "more focused on solutions than products" (Marshall & Johnston, 2011, p. 12). Place has shifted to include the notion that sophisticated integrated supply chains are crucial to a business' success. Today, price is widely regarded in terms of value. Finally, the Internet and high-tech advanced digital promotional tools have totally changed the concept, scope, and the outreach of promotion (Marshall & Johnston, 2011).
Describe how you would develop the marketing strategy for the new Dyson vacuum cleaner. Given your target market (or markets) and positioning strategy, what factors would you consider when deciding on the marketing strategy for the initial introduction of the new vacuum cleaner? Creating a marketing strategy involves a series of interrelated decisions. See the marketing plan template for a sequence that is used by many organizations.

First, you'll need to consider product or brand strategy. Keep in mind the needs/wants of your target and how you've decided to position your product relative to the competition. Make a plan to develop a detailed product description that includes all attributes and features of the product. The description should also include the product's brand name, intended packaging, logo, and supplemental products. As you make these branding strategy decisions, it is imperative that you stay focused on the consumer. Remember that Dyson's consumers do not buy features; they buy benefits, both tangible and intangible. It is also critical to understand the consumer: Who makes the purchase? Who influences that decision?

Next, you'll want to think about pricing strategy. Pricing is very strategic as it is the only marketing mix variable that generates income for Dyson. As vice president of marketing, you need to decide on your price objectives and strategies; consider pricing tactics like discounts, bundling, and incentives. When developing a new product, you need to decide whether your initial pricing strategy should be one of skimming, premium, or market penetration. Take into consideration the nature of the vacuum cleaner industry, your competition, and your product. Profit margins and a breakeven analysis will also need to be considered; as well as the perceived value of the product as you determine your final price point. Describe how you would go about making these decisions, and the major issues involved.

Then you'll need to consider distribution and supply chain strategy. These strategic decisions all deal with how consumers acquire your product. Will you market directly to consumers, or have a number of intermediaries? What channels and intermediaries will you use? Will you use exclusive, selective, or intensive distribution? Are you going to promote and sell the vacuum cleaners online? Distribution decisions focus on marketing channels as well as the physical distribution of the vacuum cleaner. Explain the criteria you would use to make these distribution and supply chain strategy decisions.

Finally, you should consider your integrated marketing communications and promotion strategy. The marketing communications and promotion strategy is often the most visible element of a marketing strategy. Dyson's communication strategy involves developing an integrative mix of a number of different tools at your disposal, while keeping in mind the needs and characteristics of the target market(s). The Internet and social media play a crucial role in many product categories and with many consumers. But, you should not fail to consider traditional communication elements such as advertising, personal selling, sales promotion, and publicity/public relations. It is essential that your promotion objectives are clearly defined, and that a holistic and integrated marketing communication approach is used.

Milestone 5: Submit a four-page report outlining how you would develop your marketing mix strategy. Be sure to support your work with the required readings, scholarly sources, and reliable nonscholarly sources (such as Bloomberg, Yahoo! Finance, Money, Forbes, Fortune, and Harvard Business Review) using UMUC's library search engine. You will combine the work you have completed in this milestone with the other milestones and submit all work together in the final step.

Step 8: Financial Analysis, Implementation, and Control

Your financial analysis should include the total number of units produced annually, average unit cost, total annual costs (Average unit cost X Number of units manufactured), average unit price, annual sales (Average unit price X Total number of units sold), and a breakeven analysis.

In addition, explain your schedule for implementation, the controls you intend to put in place, and how you intend to proceed (i.e., contingency plans) when your benchmarks are not met.

Milestone 6: Submit a one-page report explaining your financial analysis and implementation. Be sure to support your work with the required readings, scholarly sources, and reliable nonscholarly sources (such as Bloomberg, Yahoo! Finance, Money, Forbes, Fortune, and Harvard Business Review) using UMUC's library search engine. You will combine the work you have completed in this milestone with the other milestones and submit all work together in the final step.

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Marketing Plan Template
Project 3

1.0 Executive Summary
As the latest offering of innovative products from the Dyson stable, the company's latest offering, a cordless vacuum cleaner with a swappable battery unit is set to be launched for the benefit of its customers. The product would be unique to the extent that it offers more hours of uninterrupted usage to the customers and hassle-free storage and retrieval of the product. This makes it a delightful user experience as against the conventional vacuum cleaners where a customer needs to run around finding a source of power and also heavy handling of the equipment while storing and retrieving.

The environmental scan for the potential market of the product shows that there is a high scope for the new product in the market of vacuum cleaners. Since the existing customers are facing difficulties about vacuum cleaners with cords, our cordless vacuum cleaners would prove to be a valuable substitute for these outdated models. Hence there would be new demand as well as replacement demand for the new product owing to its disruptive technology.

The segmentation, targeting, and positioning of the product should focus on marketing the product to the population of the 25-54-year-old population particularly housewives and others too. The company should use differentiated pricing and not premium pricing for the new product to capture the major share of the potential market. The marketing objective thus focuses on achieving a market share of 10% within a year and 40% over the next five years.

The Breakeven sales for the product are proposed to be 75000 units in the first year and the continuing years. The Total costs include $30,000,000 as fixed costs and $400*75000 = $30,000,000 as variable costs. The price of the product should be placed at $800 which would yield a revenue of $60,000,000 per year (75000*$800).

2.0 Situation Analysis
2.0 Product or service description
The new Dyson Model X is the vacuum cleaners that provides the convenience of cordless lightweight model with extended cleaning time facilitated by swappable batteries.
2.1 Internal environment scan (SWOT analysis)

The strengths and weaknesses of a company represent the internal environment of the company and opportunities, and threats represent the external environment of the company(Mackechnie, 2015).

Strengths of Dyson:
Innovations in new product development are one of the key strengths of the company. The company makes heavy Investments in research and development in producing products that would make life easier for people. This has created brand loyalty amongst its customers as the Machines provided by Dyson like the bagless vacuum cleaners, energy efficient dryers, and desk fans with no blades have made revolutionary products that expand the strength of the company(Harmon, 2016)

Weaknesses:
The main weakness of the company is its high priced products than its competitors like Hoover, Siemens, Oreck, etc. This is mainly due to the fact of a high quality of the products being made by the company. This is the major weakness of the company as its products satisfy only the needs of the high-end customers in the industry due to its higher price(Research, 2018).

Opportunities: Dyson sells its products in over 50 countries and it still expanding to become a Global leader. The profits of the company have doubled since it has started exporting as the quality of the products has created a good brand image for the company(Gottlieb, 2004).

Threats: Dyson faces a lot of competition in the Global market, and its competitors already possess high brand image in the world market. The biggest competitors that Dyson faces in the world market include Electrolux, Siemens, Bosch, etc. These competitors provide a wide range of vacuum cleaners each one for a different use.

2.2 Marketing objectives:
The short-term marketing objective of this new model is that Dyson model will achieve a 10% market share in the industry of Vacuum cleaners by the end of the first year, and the long-term objective is that it will achieve a 40% market share by the end of the fifth year(Kerin, Hartley, & Rudelius, 2017).

3.0 Environmental Scan
3.1 PESTEL analysis

Political environment: Political issues like Brexit of the UK from the European Union have not affected the company so far. The world Trade organizations tariffs, which comes in a range of 5 to 10% has not affected the company's operations for trading with European Nations(Wood, 2017)....

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