Executive Summary
The need for a geographical business growth informs the adoption of a market dominance strategy by Prius Electronics. The transition in the management of this family-owned enterprise has necessitated the deepening of its hold on the high-end market. The approach relies on the spending power of the said market segment. On its part, the potential for growth relies on the enormous profits expected from the application of the market dominance policy. The following Prius Electronics marketing plan focuses on the various marketing aspects of the company. Also, the program highlights an implementation strategy for the marketing plan. A five-year expansion plan of the company shows projected market share and profits growth. Since the company specializes in electronic products, integrated marketing communications methods are proposed in the marketing plan.
Background Information
Prius Electronics is a family-owned business founded in 1990. The family members started the company as an outlet for second-hand electronic items like television sets and radios. However, the need for diversification made the organization shift from second-hand material to electronic products that were brand new (Thorpe & Morgan, 2007). Today, the company has five branches in several parts of the Illinois State in the United States of America.
Prius Electronics markets itself as a supplier of authentic and high-tech electronic items. The products are aimed at enabling the clients to cope with the dynamics associated with the technological world. According to Morgan and Hunt (2002), a company seeking to gain a competitive advantage over its peers should strive for uniqueness.
The company has its headquarters in Chicago. However, its presence is felt in 15 other towns within Illinois. Among others, it has operations in Addison, Barrington, Auburn, Bloomingdale, and Aurora. Shaw (2012) argues that proximity to customers is an effective marketing strategy. Most of the outlets are located within a 3-mile radius of residential areas.
The company is both a wholesaler and a retailer of electronic material. The products range from television sets, computers, cameras, phones, and other home appliances. The company has a three-year warranty policy for all the products sold. It is the only outlet in Illinois that offers clients such a system. Such a plan is expected to increase sales and other earnings in the organization (Paswan, Blanckson & Guzman, 2011).
In this paper, the marketing plan adopted by the company is analyzed. Among others, an environmental analysis of the company is conducted. In the study, competitive, economic, political, legal, technological, and socio-cultural forces are reviewed. Also, the primary and secondary target markets are identified.
Mission Statement
Prius Electronics intends to the leading supplier of high-quality electronic equipment. Therefore, the company’s mission statement is ‘Leading in quality electronics supply, to enhance your living experience.’
The company only maintains a relationship with leading electronics manufacturers — poor quality results in automatic cancellation of any business relations. The mission also reflects the overall objective of the company. The mission statement also enhances Prius electronics brand name in the electronics industry.
An Environmental Analysis of Prius Electronics
Overview
As aforementioned, the entity was founded as a distributor of electronic appliances for home and office use. Over the years, it has grown to become a marketer of the latest brands of electronic equipment. Presently, the company is undergoing a leadership transition. The current chief executive officer is about to hand over the company to his son, given that it is a family-run organization. The transformation creates the need for a marketing plan meant to take the company into the future (Paswan et al., 2011). As such, it is essential to understand the business environment in terms of competitive, economic, and political forces.
Competitive Forces
Intense competition in the electronics business requires companies to make their presence known to the consumers. Companies are expected to engage in advertising as part of their marketing strategy (Morgan & Hunt, 2002). Today, the American market is characterized by a myriad of different types of advertisements from prominent electronics companies. The scenario is what leads to stiff competition in the electronic industry in Illinois and the more significant American market.
Competition is usually skewed to favor some parties depending on the category of the commodities sold (Shaw, 2012). In the case of Prius, competition in the low-end products segment is exceptionally high. Such products are those whose price is less than $100. However, the same products might cost more than $100 due to added features. Such a scenario leads to what is referred to as a high-end product.
An example is in the iPhone series of products, where there are a 5s and a 5c. The latter is low end, while the former is high end. Competition, in this case, arises due to the affordability aspect.
Economic Forces
According to Paswan et al. (2011), the financial situation in a country has a ripple effect on the operation of businesses. Similarly, the prevailing harsh economic situation in the American economy has forced many companies to cut costs on such issues as promotions. The most significant budget cuts in this perspective are in the mainstream advertising platforms like newspapers and television.
Nonetheless, companies are still relying on promotional activities in a bid to advertise their services. A survey conducted in the American market indicates that many companies are taking to specialty advertising. The same is aimed at ensuring brand visibility despite the promotional budget cuts. The new form of marketing is mostly done by large companies that can afford to allocate funds to such ventures.
Slow economic recovery witnessed in America implies that many companies will rely on specialty advertising. The objective is to receive value for the funds spent creating awareness for products and services (Shaw, 2012).
Political Forces
According to Shaw (2012), the political situation in a country affects the performance of businesses operating there. Today, the high handedness witnessed in the House of Representatives can ruin enterprises in the country. For instance, the recent government shutdown resulted in decreased sales in small businesses operating in various industries. The effects of such policies and political realities are not restricted to small businesses. For example, they have the potential to affect the operations of large companies like Samsung Electronics negatively.
Legal Forces
The specialty advertising referred to earlier is characterized by the distribution of goods to potential customers through emails (Morgan & Hunt, 2002). Many clients have lodged complaints regarding the letter sent to them regarding it as junk. Companies like Prius Electrical are less affected by the problems associated with these types of emails. Promotional correspondence affects the clients who had not placed orders for the products more than it affects those who have already expressed their interest to acquire the item.
There needs to be a legal framework aimed at regulating such forms of advertisement. However, since this appears to be the most preferred form of marketing plan in such economic situations, many companies are likely to ignore any legal implications associated with it. For example, large companies will most likely opt to continue sending the mail since they can afford to absorb the consequences.
Technological Forces
The technology world is changing at a very high pace. New products are launched almost daily. Morgan and Hunt (2002) suggest that emerging trends are forcing manufacturers to improve the specialization of appliances. An example is in the television market segment. Consumers and producers are shifting to flat screen television sets. The new television sets are accompanied by further modifications to enhance the quality of their signal.
Manufacturers are continually developing televisions with higher definitions to improve the quality of pictures received. It is crucial for companies to increase their sales before a new version of an appliance is launched.
Socio-Cultural Factors
The need to increase household incomes implies that customers will spend most of their time working and less on leisure. They will most likely spend money on appliances that are capable of making their work more accessible (Morgan & Hunt, 2002). An example of such a scenario is evident in the sale of mobile phones. Clients will prefer a mobile phone that has many applications. Such applications include those used in taking photos and organizing one’s diary. As a result, electronic outlets will be forced to stock such commodities to meet the customer’s demands.
Markets
Prius Electronics Market Tiers
There are two tiers of markets in which products are sold (Shaw, 2012). The choice of a particular tier depends on the type of commodities sold by a company. The two are the primary and secondary markets. The marketing plan of a company is expected to respond to its markets. Prius Electronics is operating in the two types of markets.
Prius Electronics Primary Market
According to Paswan et al. (2011), the primary market is the bedrock from which a company gets most of its revenues. Earlier, this paper established that there is high competition in the less costly commodities’ market. The management at Prius Electronics wants to avoid stiff competition by targeting the high-end market. Persons or organizations that can comfortably purchase electronics worth $5000 per week are the company’s primary market. Identification of this segment is inspired by the need for niche differentiation to increase profits.
Given the dynamic nature of electronic appliances, it follows that a company dealing in the same will be required to offload its products before a new version is introduced in the market. Over the past decade, Prius Electronics has relied on the high-end market to ensure high sales volumes. Moving forward, the company needs to expand its space within this primary market.
Secondary Market
It is the second tier in the market. It is used to supplement the revenues generated by the company from the primary market (Morgan & Hunt, 2002). Prius Electronics uses low-end buyers as its secondary market. The niche comprises of commodities whose shelf life is rarely affected by the entry of a new product. In such cases, home appliances like iron boxes and blenders are reasonably priced to attract low-end buyers.
Branding Strategy
Logo and Name
Slogan
“Making life easier.”
Brand Extension
Introducing the very latest Super High Definition curved television
Performance Analysis
The performance analysis is based on the need to increase each of the metrics per year. The objectives are as follows:
- Quantitative
- To increase market share by 75%
- To improve website visitors by 60%
- To increase the customer value by 65%
- To increase the rate of growth by 70%
- Qualitative
- Developing the company brand
- Improving the company’s image
- Enhancing awareness of the company
- making relevant considerations
SWOT and Needs Analysis
Strengths
The company has adopted the market differentiation strategy evident in the primary and secondary markets. Such an approach is one of its advantages. Also, Prius Electronics has taken the specialty advertising strategy, which makes it possible to maintain a small number of employees. Such a manageable number means that the company can afford to allocate resources to support the marketing strategy despite slow economic growth (Shaw, 2012).
Further, the organization has created a working relationship with manufacturers and distributors of the products. The same helps to maintain the high quality of the goods sold. Consumers in the primary market place second orders at a very high rate. Such a rate affirms that the quality of services delivered is satisfactory. Clients inform their friends and other people of the high quality of products, increasing the number of new clients by 6% per month.
Weaknesses
By being a family business, Prius Electronics has adopted a centralized management hierarchy. The structure lacks a managerial backup. In such circumstances, Shaw (2012) suggests that there is a limited knowledge base in the company. The operations of such a company are threatened if the leadership is undermined. The dynamic nature of electronic appliances adds to these weaknesses.
Opportunities
According to Morgan and Hunt (2002), annual expenditure on advertisements in America stood at $130 billion in 2012. The figure is expected to grow in subsequent years. Analysts estimate that a quarter of the budget is spent on specialty advertising. Prius is a company keen on the said advertising platform. The figures indicate an opportunity that the company can exploit to increase growth.
Threats
The primary threat to electronics is the constant change in their specialization. Morgan & Hunt (2002) indicates that with the dawn of the internet age customers are keen on smart technology. The high-end market, in particular, is interested in the said appliances. However, owing to the limited numbers of their high-end market coupled with the dynamism mentioned above, a threat of low sales volumes looms.
The Market Dominance Strategy
As aforementioned, the transition in the company informs the need to increase profit margins. Consequently, the company requires a marketing strategy that will increase profitability and shareholder returns (Shaw, 2012). Going forward, the said strategy will boost growth. More specifically, the company will take a niche approach to this strategy.
Over the next five years, the company intends to develop a niche in the high-end market segmentation. Morgan & Hunt (2002) posits that electronics are luxury products, and the said market has the best purchasing power. The five-year time frame is sufficient as the company seeks to go national. According to their forecast, their marketing activities will primarily target the said niche, and the proposed timeframe is adequate.
Positioning Statement
Prius Electronics is h leading electronics distributor in Illinois. We pride ourselves in the sale of authentic appliances for the home and office, respectively. The state of the art quality of our products enables their fast application. We offer competitive prices, and to those who make electronic purchases, a considerable discount is made.
Consumer Behavior
Shaw (2012) argues that a marketing plan ought to respond to their clients’ behavior in the market. As aforementioned, the high-end products usually have a short shelf life before a new product is introduced with advanced specifications. Such clients are, therefore, keen on having the latest electronics. Consequently, the company is forced to ensure they are fully stocked with the latest models.
Prius Electronics Branding, Pricing, and Distribution
Achievement of the overall objectives of Prius Electronics will depend on the execution of effective branding, pricing, and distribution plan. These activities influence the purchasing and consumption of the electronics products offered by the company. Hence, an ineffective plan might cause extensive losses for Prius Electronics.
Branding Plan
According to Laforet and Sanders (2005), a brand refers to the name, symbol, sign or term, or combination if these elements to identify a company’s goods or services. Branding differentiates products or services from those of competitors, with similar products.
Since Prius Electronic deals with leading manufacturers, branding concern of the company will focus on gaining Prius brand more recognition in the market. The company will use promotions as a primary brand marketing strategy. Also, advertisements will mostly be web-based, considering the extensive application of e-commerce.
According to Kotler (2011), online promotions and advertisements also facilitate sustainability, more than print promotions. Online brand promotions will also elevate the image of the company as being technology updated, considering the kind of products sold.
Distribution Plan
Distribution constitutes a key marketing element for Prius Electronics. Distribution determines where the product will be sold, as well as how the products get to a particular location (Kotler, 2011). Through distribution, Prius Electronics will be linked to the consumers of the products they sell.
Prius Electronics should use both direct channel and channel intermediaries in the distribution process (Balmer and Greyser, 2006). Some of Prius Electronics stores should sell directly to the consumers, while the others will utilize wholesalers and retailers as intermediaries.
Prius Electronics should also use intensive distribution strategy (Kotler, 2011). The approach implies placing the products of the company in as many locations as possible. In this way, the company will be able to enhance its popularity as much as possible. Also, customers’ convenience will be facilitated. Distribution through retailers also promotes the image of the company brand.
Pricing
Pricing plays a critical role in the determination of the demand for the product (Bititci, & Mcdevitt,1997). Prius Electronics product pricing is influenced by several variables, such as intermediary pricing and legal constraints. Therefore, the company is not the sole determinant of how the products sold are priced.
To build profitability, Prius Electronics should rely on both psychological and price based pricing (Balmer and Greyser, 2006). Consumers usually evaluate the quality of electronic products through the price. Psychological pricing will facilitate the quality value of the company. Also, demand-based pricing should be used to enhance the profits of the company.
Prices, however, should be continuously evaluated. Price evaluations ensure accommodation of cost factors and other business factors. The pricing plan would also ensure that competition in the industry is matched, a well as creating prestige for the company (Balmer and Greyser, 2006).
Marketing Strategy Information
Company Competitors
Prius Electronics major competitors include companies like Phillips Inc., Samsung Electronics, and LG Inc. The competitors fall under the category of the intra-type competition. According to Porter (1980), intra-type race refers to competition between firms in differing businesses.
Prius Electronics mainly focuses on supplying electronics products of other companies. Therefore, the competition is intra-type since the manufacturers of these electronic products also sell to other distributors.
Competitors Strengths
The significant strengths of Prius Electronics competitors include their global presence and superior brand names. Also, the competitors have their distribution shops, through which they sell their products.
Competitors Weaknesses
Prius competitors, however, exhibit some weaknesses. These competitors have few stores company shops in any given locale. Also, their supply chains show shortcomings in reaching out to local consumers (Kotler, 2013). The competitors also lack enough communication with consumers, in addition to their inflexible procedures.
Prius Electronics should exploit these weaknesses through e-commerce and increased retail shops (Kotler, 2013). The company can also use these weaknesses through aggressive advertising and competition.
Differentiation strategy about the closest competitor
The closest competitor of Prius Electronics is Phillips Inc. Phillips Inc produces and supplies a broad portfolio of electronics products. The products range from refrigerators, radios, television, cameras, and home appliances, among others.
According to Porter (1980), differentiation involves gaining competitive strategy through the provision of unique products or services to customers. Prius Electronics business market is very competitive and saturated.
Prius Electronics should focus on supplying products of given companies, such as Samsung and LG. These companies have esteemed brands and quality products. By providing products from these companies only, Prius Electronics can gain a competitive edge against Philips Inc.
Implementation Strategy
According to (Juran & Gryna, 1980), the success of any marketing plan depends on the implementation and management of the program. Pius marketing plan indicates the objectives, and tactics essential in the realization of these objectives. The goals include enhancing the company brand, shielding competition, and making the company a prime option for electronics consumers.
Prius Electronics marketing plan activities will include online and social media advertising, targeting customers through promotions, continuous branding, and public relations management.
Implementation of the marketing plan will begin by comprehensive customer targeting and segmentation. Targeting customer groups facilitates the effectiveness of the plan since the company deals with a wide range of electronic products.
Subsequently, social media campaigns will be launched. Brand promotion is, however, a continuous process, which will be only enhanced through the marketing process. The implementation strategy will be feature components shown in Table 1 below:
Expansion Plan
Prius Electronics intends to carry out a five-year expansion. The plan will result in broader coverage of the area supplied by the company. Also, the market share and profitability of the company is expected to increase over this duration as well.
The company’s five-year expansion plan is as outlined in the graph below:
The upwards trend indicates expansion of Prius Electronics, in both profitability and market share. The company projects 20% growth annually, for the five-year expansion plan.
Attainment of the projected growth would be achievable only through the steady growth of the various divisions of the company. The expansion will feature increment in the number of employees, supplies capacity of the company, and increased number of stores. As the company grows, however, massive changes will require being affected. Otherwise, the company runs the risk of being crushed by its growth. Thus, the expansion plan will accommodate from finance, human resources, marketing, and operations functions, for effectiveness.
The growth plan facilitates the objectives of the company. The project will also enhance the realization of the main goals of Prius Electronics. The program, therefore, accommodates the long-run vision of the company, and prospects in five years.
Social Media and Media Tools used in Implementation of the Prius Electronics Marketing Plan
Implementation of Prius Electronics marketing plan will extensively apply social media for marketing purposes. Facebook and Twitter social networks will be used for this purpose. Application of these social media networks is due to the popularity of their usage in society.
Currently, Facebook and Twitter constitute leading social media networks. The extensive usage of these applications would facilitate reaching out to a massive number of Prius Electronics product consumers.
Performance Measurement
According to Juran and Frank (1980), performance measurement is an overall managerial system aimed at preventing and detecting conformance to desired goals and objectives. Performance measurement would optimize the effects of the marketing Prius Electronics marketing plan. Various standards are used in measuring performance. Prius Electronics will apply multiple rules in the implementation of this marketing plan.
Performance Standards
Two performance standards for measuring Prius Electronics marketing plan will include Customer satisfaction and sales growth. Customer satisfaction would be derived from feedback surveys. Sales growth would be reflected in the flow of the company’s inventory.
Prius Electronics would also measure performance through customer results, such as coverage, responsiveness, and satisfaction (Harrington, 1991). The standards reflect the objectives of the marketing plan, hence their suitability.
Monetary Methods
Profit margins and Balanced Score Card (BSC) would be used to ascertain the returns derived from the marketing plan. According to Bititci, Carrie, and Mcdevitt (1997), profit margins provide with a ratio of the net income of a company, about the revenues, net profits, and sales. Increase in the profit margin will indicate the profitability of the proposed marketing plan.
The balanced scorecard would translate the objectives of the marketing plan into financial, business processes, customer, and growth of the organization (Harrington, 1991). The economic measures are essential since they define the performance of all organizational elements.
Overall Performance Assessment
Overall, the performance of the Prius Electronics marketing plan can be expected to be positive. Since the plan factors in all the business environmental factors, success is apparent. The marketing plan also features an expansion plan, thus indicating some of the expected results and goals of the company.
The objectives of the Prius Electronics company marketing plan are smart. Therefore, attainment is possible. However, the realization of these objectives will be determined the effectiveness of the implantation strategy, ass well as environmental factors.
It is another crucial aspect of the company. According to Kotler (2011), the concept involves a specified ‘cocktail’ of sales promotion techniques, including personal selling. It also requires advertising and public relations campaigns. Integrated marketing communications refers to a relatively new concept. The concept combines and coordinates the various communications channels (Kotler, 2011). It provides customers with a clear message about products.
Integrated Marketing Communication
Integrated marketing communications will enhance the realization of Prius Electronics marketing plan. Coordinated utilization of the various promotional methods would determine the effectiveness of the marketing plan. The marketing plan should utilize social networks, online advertising, artworks, publications, and catalogs, among other relevant methods for communication. The selected promotional purposes are more valuable for Prius Electronics.
The integrated marketing communications strategy for Prius Electronics will require an extensive total marketing communications mix. The mix will constitute advertising, direct selling, sales promotions, and public relations.
The selected promotional methods indicate that Prius Electronics keeps up to date on changes in the business environment. The arrangements are even more appropriate, considering the nature of electronic products sold by the company.
Although mass media advertising has long been dominant, market fragmentation has given rise to media fragmentation. Prius Electronics should utilize the fragmented media for effective marketing communication.
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