Marketing Strategy: Product Launch, Macro-environmental Analysis, Economic Environment (Research Paper Sample)

Marketing Strategy: Product Launch
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Table of Contents TOC \o "1-3" \h \z \u 1.Introduction PAGEREF _Toc434440415 \h 32.Market Overview PAGEREF _Toc434440416 \h 33.Macro-environmental Analysis PAGEREF _Toc434440417 \h 43.1.Political Environment PAGEREF _Toc434440418 \h 43.2.Economic Environment PAGEREF _Toc434440419 \h 53.3.Social Environment PAGEREF _Toc434440420 \h 63.4.Technological Environment PAGEREF _Toc434440421 \h 73.5.Legal Environment PAGEREF _Toc434440422 \h 83.6.Ethical issues PAGEREF _Toc434440423 \h 84.Market Segmentation PAGEREF _Toc434440424 \h 105.Market Targeting PAGEREF _Toc434440425 \h 116.Positioning PAGEREF _Toc434440426 \h 127.Recommendations (The 4 Es) PAGEREF _Toc434440427 \h 137.1.Experience PAGEREF _Toc434440428 \h 137.2.Everywhere PAGEREF _Toc434440429 \h 137.3.Exchange PAGEREF _Toc434440430 \h 137.4.Evangelism PAGEREF _Toc434440431 \h 148.Conclusion PAGEREF _Toc434440432 \h 14References PAGEREF _Toc434440433 \h 15
1 Introduction
One of the most daunting tasks for any company is to launch a new product in the market. As explained by Jagdish (2011) this phase of business planning requires a lot of marketing research. Businesses need concrete and accurate information about their market before moving in with a new product. This paper is a marketing report for launching new toy, the "Smart-phone for kids." This is a product that is expected to provide a real smartphone experience to children. Kids will be able to access internet under the control of their parents. Phone calls will be made for free, over the internet, within a range of 150 metres. Parents will have control over the device and will also be able to track the location of their children using GPRS technology. This product was chosen because it has the characteristics of a highly competitive product, and is likely to attract the attention of the market for kid’s toys.
2 Market Overview
The UK toy market had been hit by a continuous decline in sales since the year 2009. 2013 was a significant year, with sales newly launched toys improving by 16%. The estimated average spending on toys was set at £306 per child under the age of 12 years (Goutam, Brian, & Bernard, 2014). However, the total sales were short of the year’s target by a 1% margin. This was mainly attributed to a 12% decline in the sales of pocket money toys, which are usually sold for $5 or less. In the year 2014, the British toy market presented the best results since the year 2010. There was a 4.4 increase in the total sales of toys which was valued at 130 million raising the total to 3 billion, from the previous year’s 2.9 billion. The UK toy market is rising at a slow but steady rate; it is expected that this market will grow proportionally to 2015’s economic growth rate. Majority of UK toy companies produce their products from China due to low-cost technology and cheap labour. The British toy customer is very sensitive to price, and this means that toy companies should set reasonable and competitive prices, apart from selling top-notch goods.
3 Macro-environmental Analysis
1 Political Environment
The British toy market has a lot of health and safety standards that govern this vast industry. The EN71 is a comprehensive standard that oversees all toys that serve children of 14 years old and below the European market (Prymon, 2014). There are seven major health and safety standards, and an additional one that take care of electrical toys. Didem & John, (2013) explain that it is a criminal offense to sell unsafe toys in the UK, and the producer, in this case, must prove that all required procedures were followed while manufacturing the toy. In accordance with these regulations, the "smartphone for kids" toy has been built with ultimate care to meet the highest standards of quality. The product has low risks of flammability although it must be stored away from extreme heat to maintain it in excellent condition. Apart from the painting used on the products, there are no more chemicals that could present a health hazard to the users. The lead content in the paint applied to these products has been maintained below 0.009%, as per the requirements of EU safety standards. This toy is classified under class1 radioactive products. It has been specially engineered to keep radio wave exposure at a minimum level when in use.
The "smartphone for kids" company has set strict regulations to lock-out counterfeits and low-quality products since majority of the products are produced in China. Strict regulatory procedures have been established to ensure compliance with UK importation standards. All the goods have a CE mark, which certifies that they are legally authorized and certifies to be sold in the European market. Fifield, (2007) reveals that in the year 2008, new laws were passed requiring a mandatory warning on all products that have magnets. These toys carry warning signs on the effect that magnets could cause if swallowed or inhaled. The company presents a report to the export and import regulatory board of the UK whenever it imports these toys from China. It is of ultimate importance to also confirm that all the toys are of the same standards, as required by the standardization policies in the UK. In an attempt to comply with the WEE regulations, customers are at liberty to trade-in their old toys for new ones.
2 Economic Environment
Majority of the customers who buy toys in the UK give priority to their disposable income. Just like any other rational consumer, Goutam, Brian, & Bernard assert (2014) assert that they are deeply concerned about the level of utility that is likely to be derived from different products subject to the budget constraint. This is simply a market that seeks to purchase high-quality products, at the lowest price possible that the market can offer. Running a firm in the UK is much more expensive, compared to countries like India and China. This is mainly linked to the high cost of skilled labour and inadequacy of raw materials in the UK CITATION Sla14 \l 1033 (Arjen & Desislava, 2014). Overpopulated nations like China and India have an oversupply of both qualified and casual labourers. They also have low-cost technology that gives them an edge when it comes to pricing their goods on the international market. UK produced goods are likely to be highly priced in order to compensate for their costs of operation.
Bettina & Anna (2013) explains that the toy industry is large and will keep mounting as companies continue creating new products that give a unique experience to the users. As the UK economy rallies, there is also a proportionate increase in the demand for toys. According to Mark & Paul, (2012) it is expected that there will be an upsurge in sales by at least 3% in the year 2015. This growth is anticipated to continue at a slow but steady rate, considering the fact that toys are not primary goods, and that the consumer decision to purchase them is largely influenced by the level of their disposable income. As innovation increases, it is expected that the UK toy industry will grow more lucrative and attract more customers, a move that is likely to increase the total fiscal value of this industry in the UK.
3 Social Environment
Just like Fava, Alberto, & Luciano (2010) assert, the UK market is made up of consumers who give a high value to their time. They are not willing to visit numerous stores, but prefer purchasing all their requirements from a single retailer. This has necessitated the need to move away from traditional toy stockists and distributors, to large retailers that store multiple consumer products. In that view, these toys will be sold in major supermarkets and outlets within the UK. DSJ International, The Car House Warehouse and Wal-Mart are among the major stores that will be given priority. According to Jim, (2009) it is important for companies to always differentiate their products in order to meet all the demands of their market. The smartphone for kids is not specially designed for male of female children. However, it will be necessary to create a different product design for each of these two sexes. A good way of securing a large market share is to develop products that will have an emotional effect on consumers. For example, designing a smartphone that has special features for the girl child will attract a larger female market, compared to selling a neutral product. This product meets high levels of intelligence too. Jason & Michael (2009) explain that innovation is what usually drives consumers in the toy industry. Demand for intelligent products is continually rising as people seek to purchase toys that can interact with them. The Microsoft console system is a good example of a high-tech intelligent product. User can control theirs-box by voice, command as well as well as by use of remote signals. One can just turn it off by saying, "X-box off." The "smartphone for kids" also employs high standards of intelligence. It can read texts in English, French and German; other languages will be integrated into future versions. This device also carries a unique eye detection technology; users can lock and open the device by simply looking straight into the screen. When the device is out of charge, it saves all the prevailing activities and restarts them as soon as the user charges it and turns it on. These features were all necessitated by the tight competition in the toy industry and the need to sufficiently provide for the demands of the modern day UK, toy consumer.
4 Technological Environment
According to Meerman (2010) the level of technological advancement in the UK can be described ads post-modern. The UK market has openly embraced high-tech products which guarantee quality results and safety. Anuradha (2011) explains that toy manufac...