Free Essay On Strategic Plan-Tech-Knowledge
MKG631 - Strategic Marketing
Section 1: Customer Analysis
Major current and potential customer segments
In business strategic plan, the client analysis section helps in assessing customer segments. In business strategic plan, the client analysis section helps in assessing customer segments served by the business. Segmentation plays a major role in developing a sustainable competitive advantage. An effective strategic marketing plan should focus more on customer analysis because it assists in understanding market segments (McLoughlin and David 26). The Tech-Knowledge Mobiles specializes in the manufacture, distribution, and sales of smart mobile phones globally. Tech-Knowledge is an established firm with branches in almost every country in the world. Goods and services offered by the company must satisfy the selected customer segment. There are five major types of customer segments namely: repeat customers, sale/discount customers, ready-to-buy customers, potential customers, and impulse buying customers.
Tech-Knowledge’s strategic plan aims at ready-to-buy and potential customer segments because they help stimulate a marketing strategy. Tech-Knowledge Mobiles aims at targeting the younger generation segment, especially the employed class of between 25 and 40 years. The ready-to-buy customer segment is important for Tech-Knowledge because it will bring into business customers with a need for a product. Additionally, the above customer segment will have a desired need and saves the company time spent looking for a specific product that a customer wants. On the other hand, the potential customer segment plays a major role in growing the marketing structure of the business. Tech-Knowledge Industry has different display shops and also a website and hopes to venture into internet marketing and social media advertising and promotion plans in order to stimulate more buyers and gain huge profits. The availability of a company website makes it easier for customers to gather information about a product through the internet and plan on how to acquire the product later.
Conducting customer analysis will help in strategic planning of Tech-Knowledge by identifying major customer segments. Additionally, the company will conduct an effective market research for the for Smartphone products to proposed customer segments. Knowing the major customer segments and understanding what customer wants in a product helps in gathering the relevant market data needed to improve company productivity.
Online shopping forms the basic form of shopping for many customers. Tech-Knowledge will encourage diversity through establishing an online shop because people from all over the world can easily enter the company website and browse for their desired products.
Section 2: Competitor Analysis
Existing and potential competitors by segment
A company should implement a strategic competitive plan in order to position the strengths against competitor’s weaknesses. The main competitor analysis used for this company poses limited threats to competitors. Understanding competitors’ strengths and weakness play a significant role in establishing an effective competitor analysis plan (Czepiel and Kerin 1). The main competitors for Tech-Knowledge Mobile are Advanced-Tech, ABC Mobiles, Mobi-Tech, and DD PhoneExperts. Each customer segment contains existing and potential competitors. Advanced-Tech is the major competitor in the mobile industry because its products come with a variety of features, but their prices are higher compared to Tech-Knowledge. In order to win the competitive advantage, Tech-Knowledge has decided to reduce the price of their mobile gadgets and accessories. The company uses promotion as the main competitive strategy to attract more customers.
Competitors’ sales, market share, cost structure and profits
Competitors use different sales strategies and cost structures to take up any opportunity that arises in the market. The most common sales strategy adopted by competitors is the online sale method. Figure 1 shows the sales, market share and profit statistics for Tech-Knowledge’s competitors in the year 1.
Advanced-Tech made the largest number of sales with approximately 300 million U.S. dollars and 31 percent market share in year 3. The values of sales, market share, and profits for each competitor are shown in the appendix.
Tech-Knowledge investment in R&D
Tech-Knowledge has greatly invested in Research and Development (R&D) in order to ensure the management is always aware of the external environment for the purpose of winning the competitive advantage. The company spends approximately $3.15 billion annually on research and development.
Tech-Knowledge’s marketing mix strategy focuses on the 4ps, product, price, promotion, and place. Product: The Company has introduced a series of Smartphone products such as Smartphone Y3, and Tech-Know N2 and other accessories. Tech-Knowledge also offers unique product designs to fit different customer segments.
Price: Tech-Knowledge products are offered at the most affordable price in order to win the competitive advantage.
Place: Tech-Knowledge offers its products to customers through distributors located in all parts of the world. The company uses established mobile operators and retailers to sell its products to target customers.
Promotion: Tech-Knowledge usually advertises its products on newspapers, television, radio, and billboards. The company also holds frequent promotion campaigns where they give current and potential customers discounts on their products.
Tech-Knowledge lacks an effective positioning strategy, and brand identity compared to competitors like Advanced-Tech and Mobi-Tech. The company aims at establishing a unique positioning strategy in order outdo its rivals. Advanced-Tech Galaxy S7 currently in the market is highly positioned compared to Tech-Knowledge’s Smartphone Y3 making Advanced-Tech more successful in the market. Tech-Knowledge plans on using a differentiation strategy that ensures its new products attract more attention from customers.
Section 3: Market Analysis
Market evolvement in terms of product life cycle
The Smartphone’s industry forms one of the fastest evolving businesses in the world today. Smartphone offer customers with a variety of options because they are manufactured using modern technologies and are best for communication. Additionally, the use of Smartphone has overtaken the demand for personal computers (PCs) because Smartphone gadgets contain many functions in a single gadget. The product life cycle of Tech-Knowledge Smartphone gadgets is limited to technology advancement. Each year the company launches a new model that contains more features compared to the previously launched model. On the other hand, the competition keeps changing as other vendors introduce more sophisticated and technologically advanced gadgets. The Smartphone industry is the most competitive because each company aims at introducing unique and more advanced phones.
Changes in competition and R&D
The competition and R&D changes frequently as the number of customer segments increase each day. Institutions and organizations are currently using Smartphone technologies leading to increased competition. The increasing number of customer segments makes Smartphone companies invest more in research and development.
The elements of the marketing mix are changing as customers demand more advanced products to quench their technology thirst. Promotion acts as the most significant marketing mix strategy that most competitors use to attract customers’ attention.
The profitability of the company depends on the promotion strategy used, and the method of product offering adopted.
Tech-Knowledge’s profitability trend is not stable because it diverges each year. Tech-Knowledge got high revenues from sales but experienced decline in profits. As shown in the graph in Appendix II, the long-term revenue trend goes up while the long-term profit trend goes down. The company’s cost structure plays a significant role in ensuring it makes more revenues and at the same time makes huge profits.
Section 4: Environmental Analysis
Environmental threats, opportunities and trends
Tech-Knowledge faces threats from both internal and external environments. The fierce external environment is bringing stiff competition to the Smartphone industry greatly affects Tech-Knowledge Smartphone Company. The major environmental threats include huge competition in the Smartphone market from other established brands like Advanced-Tech, MobiTech, and ABC Mobiles. Tech-Knowledge’s partnership with Microsoft is the best opportunity that the company enjoys. Tech-Knowledge was the first company to manufacture Windows phone and uses the opportunity to a competitive advantage against other firms.
The major uncertainties affecting Tech-Knowledge business and marketing structure is the inability of the company to catch with changing customer needs. The company needs to increase its trends in research and development in order to acquire first-hand information about the Smartphone market needs.
Section 5: Internal Analysis
Existing cost and profit structure
Tech-Knowledge faces significant internal threats because the existing cost and profit structures do not satisfy the current market needs. Smartphone manufacturers must make contact with network service providers and subsidize costs to final consumers. The cost structure adopted by Tech-Knowledge fails to consider the impact of service providers in the overall sales outcomes. Lack of enough information concerning market needs leads to changes in cost and profit structures (Cromar 3-4). Appendix II shows the cost and profit structure for Tech-Knowledge during years 1, 2, 3, 4, and 5.
Tech-Knowledge’s portfolio considers future changes in customer needs. The company has invested more than $3 billion on research and development in order to increase the competitive advantage and become number one Smartphone manufacturer globally.
Section 6: Strategy Development
Company mission: To become the best Smartphone manufacturers in the world incorporating most current technologies in order to meet our customers’ needs.
Target market: The Company will focus on serving a bigger market comprising of individuals, companies, and institutions of higher learning.
Company brands: The main brands, that the company will market, include Tech-Knowledge Y5, Smartphone S3, Tech-Knowledge headphones, and wireless accessories.
Profit forecast: Tech-Knowledge expects to achieve total annual sales of 500 million units and profit of 100 billion U.S. Dollars. The expected market share is 40% within the following two years.
Expected timeline: Tech-Knowledge expects to achieve its marketing stimulation goals within a period of two years.
Cromar, S. Smartphones in the U.S.: Market Analysis. 2010. Web
Czepiel, J.A., and Kerin, P.A. Competitor analysis. n.d. Web
Gartner. “Gartner Says Smartphone Sales Grew 46.5 Percent in Second Quarter of 2013 and
Exceeded Feature Phone Sales for First Time.” Press Release. August 14, 2013. Web February 3, 2015 http://www.gartner.com/newsroom/id/2573415
McLoughlin, Damien, and David A. Aaker. Strategic Market Management: Global Perspectives.
Hoboken, N.J: Wiley, 2010. Print.
Appendix I: Competitor’s sales, market share and profits for a three-year period
Appendix II: Cost and profit structure for Tech-Knowledge Mobiles