Posted at 04.10.2018
Based on NWPs current market share status the most effective strategies to put into practice incorporate a mix of market penetration and market development strategies. It is strongly recommended that NWP maintain their current reputation in their market as from the essential part and one of the firms main strengths with their ongoing business.
Recommendations for employing the market penetration and market development strategies require concentrating on customer marriage management, looking for potential alliances with businesses already in the nationwide market, using choice media channels and appearance at product advertising via their current online circulation channels while tailoring the marketing campaigns to each aim for segment.
NWP is a small, independently had New Zealand company presently holding around 10% market talk about in New Zealand looking to achieve a 15% show within the next five years, and broaden sales south Island and Australian market.
The goal and objectives of this report is to recognize different market expansion strategies and guide Jacqui Thompson of Natural Way Products (NWP) suggestions in order to achieve a greater market talk about in the brand new Zealand natural skincare market.
This report describes the recommended solutions for Jacqui to put into practice in order to attain the companies goals. These recommendations give attention to how NWP can strive to achieve the required expansion in market talk about specifically using the market penetration and market development strategies using geographic development methods and product advertising.
It is assumed that NWP have available funds to allocate to the marketing strategies suggested. With restricted usage of current customer market reviews the assumption is that the factors of difference explained by Jacqui are accurate and therefore hold the advantage over challengers' offerings. Additionally it is assumed that the marketplace share estimation is right and current and that the brand Zara's is a reputable brand.
Natural Way Products situation evaluation:
Successful established and reputable brand and product line
Current 10% market share
Current experience, knowledge and resources already in place
Quality and reliable products
Uses some locally harvested and entirely natural organic ingredients
Offers different stations of syndication through online sales and shops.
Currently limited by small market segment offering slower growth potential
Products manufactured in small batches - risk with a lot more produced the less attention given as demand raises.
Create additional services to competition by improving current top features of online system
Influential media understanding focus on natural-based products
Look for low priced opportunities and ones that leverage current capabilities
Product variants provide opportunity of reselling more to the same market
Opportunity for progress in new locations and underrepresented geographic markets
Marketing costs are less in this digital age group and easier to implement
Partnerships or alliances with other businesses
Risk of retaliation from larger competitors
Impact of global market and environment on local business
Little opportunity for using existing skills if trying to sell completely different products to different customers
Effect of increased market share on genuine and perceived quality
Alternative approaches for development in market share:
NWP could gain additional market share with its current products and current market segments by encouraging customers to purchase more. They would be able to utilise current experience, knowledge and resources making progress in existing product market segments more cost effective and less of the risk.
NWP could further advertise their products leaning on their tips of difference from competitors' offerings to be able to encourage more customers in their existing market to utilize their product, or current customers to utilize more of it. NWP could do this by introducing special marketing promotions and offerings (Boaz, 2006, p. 212); increase sales reps; expand to shops; and expose a loyalty plan to attract customers in to the market.
With the permanently increasing use of online marketing NWP might use customised marketing through their current customer database and focus on expanding the services provided through their online buying tools. With extra features and additional offers that induce a competitive benefit such as same day delivery, free gift idea wrapping service or free delivery; or discounted online offers. It's been argued by Gorton (2007, p. 37) that preserving the client databases using customer romance management is also important and could be utilized by NWP to create custom reminder responses based on prior buying patterns as reminders on special situations.
NWPs current reputation is one of the main assets they may have. Market penetration will be a useful technique for NWP, while retaining knowledge and experience in market already well known to the business they are at less risk and burning off reputation and upsetting product quality and service delivery. The drawback to using this plan is that limits market talk about development to current markets offering slower growth potential as opposed to expanding products in new market segments.
NWP should consider domestic geographic enlargement in an effort to improve sales volume level and show position. Changing from a local operation to a nationwide operation (Walker, Orville C. Jr & Mullins, John W. , c2011, p. 251) could be best executed by NWP via an alliance with a small business already in the market and also help out with stronger buying vitality from suppliers. This move does create a threat of retaliation from greater nationwide competition as well as from current regional competitors.
NWP could check out targeting non-users who be considering using the products through advertising and mass media programs or offering free examples to first-time users. By marketing to potential prospects and making them aware of the merchandise NWP could invest in television, internet and publication advertising, for example in women's health journals, or during best television slots in which the marketplace are regarded as viewers. Concentrating on media advertising as shown by Boaz (2006, p. 209) does indeed run the chance to be costly and ineffective if not publicized correctly.
NWP already offer two programs of syndication but could look at further advertising through online sales and increasing the reach of current shops in which their products are sold. NWP should look to open up alternative distribution programs such as immediate marketing utilizing a sales team; introducing products into department stores under another brand, and expanding the amount of retail outlets.
NWP may possibly also target different age groups of women by tailoring the marketing campaign and presentation to appeal more to each market segment. The same expertise currently found in the business can be employed with ease to the new segment therefore reducing cost and risk.
Expanding products into further market segments will be an efficient technique for NWP, using geographic growth, their current circulation channels, and additional advertising. It is also suggested (Snyder, Tom & Melts away, Brian, 2010, p. 173) that a potential alliance with major customers or with other national like-minded businesses may very well be successful in reaching development in market talk about.
With 15 years of business and products already proving to be successful NWP could expose more products to the marketplace under their recognized brand name Zara's. Ultimately NWP would need to offer a new product not presently offered by rivals and could get this to offering more appealing than competitors' by providing first discount offers for first-time users and then continuing at a high price once they've obtained duplicate business.
NWP would reap the benefits of utilizing their existing customer repository to learn their preferences and also to gain reviews for potential services. If using this plan NWP would benefit from integrating current users into the creativity process by asking for new product ideas from them and pursuing typically the most popular of those ideas.
NWP could also look at presentation existing products in new ways to charm more to the current marketplace. Or try promoting the current product in department or retail stores under an alternative brand name.
Unless risk management is carefully monitored this may be an ineffective strategy for NWP (Leithhead, 2011, para. 3). Managing the risk involved in product development could put pressure on NWP as resources would have to be reallocated to the introduction of the new product. Product development could be costly and unrewarding for NWP. If resources are extended to develop new products the quality of their existing offerings could go through. Identifying critical reference limits, recognises Gorton (2007, p. 27), is vital to avoid a negative impact on the quality of current products.
Diversifying the existing product range may help reduce NWPs overall business risk through offering products in various customer categories. NWP curently have an established brand name under the name Zara's providing an advantage should the new product or concentrate on market segments be unsuccessful NWPs other product lines are unlikely to be infected.
Zara's would assist in leveraging services belonging to the same brand and help the business to disperse their customer base while also supporting the business develop its product portfolio through release of complimenting products in the market (Keller, Philip & Kotler, Kevin Street, 2009, p. 28).
NWP could expose a diverse costing strategy with lower quality, cheaper to create products; however this would be going resistant to the core beliefs of the business which is not advisable.
The huge risk with this strategy for NWP will there be is often little opportunity for using existing expertise as it involves selling very different products to a totally different market. This would make NWP vulnerable to a major response from competitors as they attempt to enter other market segments with products that may influence competition. Diversification strategy is comparable to starting an entirely new business (Holden, Philip R. , & Wilde, Nick, 2007, p. 75) also affecting high risk and it is not recommended for NWPs progress strategy at the moment.
Attempting to increase consumption among current customers is less threatening to a competition which avoids bigger competitor responses. The drawback to using market penetration is the fact it limits market share expansion to current market segments offering slower expansion potential instead of expanding products in new markets.
Using market development in similar segments the company can apply current skills easily to the new segment therefore lowering cost and risk. Domestic geographic development is a highly effective way to improve market talk about.
Increasing use of online marketing makes a focus on expanding the assistance provided through current online purchasing tools a useful avenue for development in market talk about.
An effective way of focusing on non-users is through further advertising and marketing stations or offering examples of the products for first-time users.
NWP should consider the result of increased market talk about on actual and recognized quality before seeking increased market share - too many customers can strain the firm's resources, harming product value and service delivery.
Unless risk management is directly monitored product development and diversification could be ineffective approaches for NWP. Introduction of your diversified charges strategy with lower quality, cheaper to create products can be an option for different markets and potential market development; however this might be going from the core values of the company which is not beneficial. Managing the chance involved with product development could put pressure on the company's resources.
Inform current and respected clients of constant delivery quality and services provided to construct further customer satisfaction and maintain customer loyalty. Focus on expanding products in new markets.
Create/amend marketing budget to find out affordability of marketing techniques for tailored campaign concentrating on a more youthful/older generation specific to charm to each focus on section. Contact potential associates and shops in the South Island and Australian marketplaces for geographic market enlargement.
Create/amend marketing budget to find out affordability of marketing techniques for improvements on NWP online ordering system with extra features and additional offers.
Contact media stations such as women's health mags and other mass media and advertising channels. Advertise offering samples of products either in-store or by online ordering in order to target non-users within the prospective market.
Ensure NWPs increase in product sales will not impact firm's resources through reallocation and reviewing of quality product and service delivery. Employ management to keep up specific target markets.
Employ risk management specialist management and put into practice risk management plan to monitor changes in market and client satisfaction. Focus existing know-how on market development and market penetration strategies.