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Marketing management report 2
1. Rennes International School of Business
ESC RENNES
Executive Master of Business Administration
EMBA
COHORT 1 (2003 - 2004)
Marketing Management
Conducted by:
Dr. Rod McCOLL
E-Firm Marketing Plan
By
Magdy A. Sattar
Abed El-Hamid Mohamad
January, 2003
Cairo, Egypt
3. 1. EXECUTIVE SUMMARY
The marketing department at E-Firm is preparing the annual marketing plan for the
year 09 for both the Sonit and Vodite markets. We will introduce three products for
Sonite market SEMI, SELF, and SEXY, and one product VEST for the Vodite
market. For the Sonite market, as we are facing a various and intense competition, we
will benefit from our financial position and being the second largest market share to
enlarge our production and targets one brand per segment. We will reposition SEMI
to attack the Hi segment, SELF to attack Si segment, and SEXY to attack the Ot
segment. Through increasing our sales force and advertising we belief that this will
guaranty at least 30 % of the Sonite market. As for the Vodite market we belief that
there is no threats of new entries for next year 09, and the existing two competitors
will go for price-cut strategy to harm us(the market leader). We will benefit from our
financial strength as market leader to enlarge our production to obtain the current
position through increasing our sales force and advertising, we belief that this will
guaranty at least 70 % of the Vodite market.
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4. 2. REPORT OBJECTIVE.
The purpose of this report is to submit a Market plan for “E-Firm” being E-Firm
marketing manager, focusing on external analysis, internal analysis, SWOT analysis,
and financial analysis, objectives, strategic alternatives, strengths and weaknesses of
“E-Firm”, and competitor analysis. The objective for me and my team partner is to
build our analytical skills and develop our ability to work effectively in a team
situation.
3. MISSION STATEMENT.
The marketing department mission is to insure a secure position for E-Firm among
the wealthiest firms, through market share of 35 %, highest contribution margin, and
ROE indicator of 4.5, by selling what the consumer wants to buy and exceeding his
needs expectations.
4. OBJECTIVES.
Achieve 35 % market share of the total markstart market for the next
period.
Achieve the highest contribution margin with average of 55 % of the
total revenue for the next period.
Achieve ROE indicator of 4.5 for the next period.
Achieve the sales target for the next period.
Achieve the share of each targeted segment for the next period.
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8. The current situation for Markstart market tells us that U-Firm is the
market leader with more than 30 % of the market, despite the fact that
the firm is facing vicious competition in the Vodite market.
Both E-Firm and A-Firm are the challengers with average of 25 % and
18 % for each as market share, both trying to cope up with the leader,
and E-Firm is doing better in this direction.
The O-Firm and I-Firm are the market followers sharing an average of
25 % of the market, but O-Firm is an aggressive follower, and its
performance could be a threat.
E-Firm is doing much better with Vodite market, and it performs
poorly with the Sonite market.
6. SITUATIONAL ANALYSIS.
6-1 External analysis.
Macro-environment.
Factors
For the factors such as social, cultural, demographic, political, and
Technological there are no major changes that could affect the business
environments, also for the economical factor, the GNP growth rates and the
inflation rate change is zero.
Actors
Consumers:
The markstart market is divided into two major kinds of consumers relative to the
products type, whether its Sonite products consumers, or Vodite products consumers.
In each kind we have variance segments. There are five main segments for the Sonite
market (Buffs, Singles, professionals, high earners, and others), and three main
segments for the Vodite market (Innovators, Early adopters, and Followers).
Competitors
For macro-perception only five firms are competing in producing and marketing
fourteen Sonite brands and three Vodite brands, with the expectation of introducing, a
new, or modifying one brand per firm per year.
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9. Micro-environment.
Industry & Market.
Threat of intense segment rivalry
There is a strong competition with a very Low switching cost, no major
differentiations between the rival products along with the low exit barrier.
Threat of new entrants:
There is no threat of new entrants in the market because there are only five companies
but the threat is the producing of new brands from the existing companies.
Threat of buyers- growing- bargaining power:
The bargaining powers of buyers, distribution channels can be considered high
especially in departmental stores where the business is controlled by 15 chains and
Mass Merchandiser where the business is controlled by 8 chains and low switching
cost.
Consumers.
Segmentation size and growth rates
The market studies shows (annex 1) that 68 % of the market
consumers are Sonite products consumers and the remaining 32 % are
Vodite products consumers.
For the Sonite consumers 61.4 % are the Others` segment and the
forecasted growth to this segment for the next five years is 74.3 %,
also we have 25.7 % of the consumers are the Singles` segment with
forecasted growth for the next five years 38.1 %.
For the Vodite consumers 91.5 % are the Followers segment with
forecasted growth for the next five year 1113 %.
Shopping habits
The market studies shows (annex 2) that, for the Sonite market 40.5 %
of the consumers prefers to do their shopping through mass
merchandise stores, 33.7 % of them prefer department stores,
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10. and 25.9 % of them prefer the specialty stores. For the Vodite market 43.2
% of the consumers prefer to do their shopping through the specialty
stores, 27.7 % of them prefer department stores, and 29.1 % prefer mass
merchandise stores.
For the Others` segment almost 86.5 % of them prefer shopping
through mass merchandise and department stores, and for the Singles
we do not detect what they prefer.
For the Follower, which is the biggest segment, almost 80 % of them
prefer shopping through mass merchandise and department stores.
Purchase intentions
The market studies shows various demands for the different brands in
the market (annex 3).
The Others segment demand for SUSI is 48.9 %, for SARA is 28.4 %,
and for SEXY is 15.8 %.
The singles segment demand for SOWH is 22 %, for SONO 17.2 %,
and SARA is 12.2 %.
The Followers’ segment demand for VEST is 92.5 %.
The Adopters’ segment demand for both VEST and VULI is
considered equal.
SELF is highly demanded by the Buffs` segment.
SEMI is highly demanded by the high earners segment.
Brand awareness by segment.
The market studies show (annex 4) that the Others` segment is highly
aware of SUSI brand and fairly aware of SARA brand, but their
awareness of SEXY brand is weak.
Although the SULI brand has the highest awareness 68 % by the
Singles segment, the SOWH and SONO are higher in demand.
The VEST brand even with the poor awareness, 37.6 % by the
Followers segment still is the highest demand, 92 %, for this segment.
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11. All the consumers segments are highly aware of all the U-firm
products both Sonite and Vodite.
Brand volume market share per consumers’ panel.
The market studies (annex 5) show that the volume market share per
consumers’ panel is the results of brands demand per segments.
Brand volume market share per distribution panel (annex 6).
For specialty stores, the brands SUSI, SOLD, and SARA have the
highest share of the Sonite products, and VULI brand have the highest
share of the Vodite products.
For department stores, the SUSI, and SARA brands have the highest
share of the Sonite products, and VEST brand have the highest share
of the Vodite products.
For mass merchandise stores, the SUSI, and SARA brands have the
highest share of Sonite products, and VEST brand have the highest
share of Vodite products.
Distribution panel coverage (annex 7).
For specialty stores, the brands SULI and SAUD have the highest
coverage of the Sonite products, and VULI brand have the highest
coverage of the Vodite products.
For department stores, the SUSI, SULI, and SARA brands have the
highest coverage of the Sonite products, and VEST brand have the
highest coverage of the Vodite products.
For mass merchandise stores, the SUSI and SARA brands have the
highest coverage of Sonite products, and VEST brand have the highest
coverage of Vodite products.
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13. Our market studies ratings of competitors on key success factors.
Competitor Market Net Stock price Return on Distribution Brand Sales and Purchase
Name Capitalization Contribution index investment coverage by Awareness Market intention
channel shares
E group G G G E G G G E
U group E E E G E E E E
O group F F P F F G F F
I group P P P P F F P P
A group F F P F G F F F
Where E = excellent, G = good, F = fair, P = poor
Competitors Strengths
Good distribution coverage influences their brand awareness and
encourages the increase of buyers purchasing intention.
Competitors Weakness
Bad management of firm capital reduces net contribution of the
products; witch affects their financial position and increases the risks.
6-2 Internal analysis.
Performance
PLCs
350000
300000
250000 units
200000 value
150000 after
100000 before
50000
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
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14. 120000
100000
80000 units
60000 value
40000 after
20000 before
0
-20000 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
200000
150000 units
value
100000
after
50000 before
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
The product life-cycle of E-firm brands shows the following:
SEXY and SELF brands are still in the growth stage.
SEMI brand is in his decline stage.
For the Vodite brand VEST is in the growth stage.
BCG Matrix
As shown below that for Si segment both SELF & SEMI brands need to be
repositioned in order to increase their market share. For the Ot segment SEXY brand
also need to be repositioned in order to gain more market share. SEMI brand is a
cash cow for the firm for the Hi segment. For the Vodite market VEST brand is a star
for the followers, which is the biggest growing segment in the coming five years.
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16. Marketing mix
Products
For SEXY, SELF, and VEST brands we need to be more innovative
and increase the brands variation.
For SEMI no need to improve brand quality or features.
Price
For SEXY, SELF, and VEST brands a slight decrease in price will be
more competitive.
For SEMI no need to change price.
Promotion
For SEXY, SELF, and VEST brands introduce big campaign to
increase brand awareness and brand benefits.
For SEMI just the minimum and concentrate the message to the Hi
segment.
Place
For SEXY, SELF, and VEST brands we need to be available through
all channels.
For SEMI increase the availability through the department stores.
Competitive advantages
Good and strong financial position.
Market leader in the Vodite market
Strong competitor (second market share) in Sonite market
7. SWOT ANALYSIS.
7.1 Opportunities.
Economic situation is stable GNP growth rate is stable 2% and
inflation rate is also stable 2%.
Follower segment in Vodite market is expected to have a magnificent
increase in the next five years (1113%) increase.
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17. Single segment in Sonite market is expected to have 38% increases
over the next five periods.
Others segment in Sonite market is expected to have 75% increases
over the next periods.
7.2 Threats.
Starting of price war especially in others segment by the market leader
of this segment (U firm) which affect profitability of this segment.
Expected Declining in Hi-earner segment in Sonite market over the
coming five years.
New entrants in Vodite market.
High bargaining power of buyers with low switching costs.
7.3 Strengths.
We have good position in total brands awareness by consumer in
segments (Buffs, Professionals and Hi earners).
Market leader (Dominant) of follower segment in Vodite market with
95% market share.
The best return on investment in period 8 with 5.34% ROE.
7.4 Weakness.
Our sales force is not enough for covering the three distribution
channels, but; we could increase our contribution by 2,605 K$ in
SEMI product and 278 K$ in SELF product if we increased our sales
force by 10 for each channel.
Vest Brand awareness especially for Followers segment is not enough
for the sales of the product in this segment.
Self product does not fit with the targeted segment which is single
even the awareness is acceptable.
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18. 8. FUTURE OBJECTIVES.
Achieve 30 % of the Sonite market.
Achieve 70 % of the Vodite market.
9. STRATEGIES.
Reposition SELF brand for Si segments.
Reposition SEMI brand for Hi segments.
Reposition SEXY brand for Ot segments.
Maintain VEST brand in the current situation.
10. ACTION PLAN & RECOMMENDATION
10.1 Brand management.
Sonite Brands SEMI SELF SEXY
Base R&D project PSEMI PSEL2 PSEXY
Production planning Ku 70 220 500
Inventory soled to trading company Ku
Recommended retail price $ 440 400 240
Advertising budget K$
Advertising research budget K$
Buffs 0 0 0
Singles 0 100 0
Targeted segmentation in % Professionals 0 0 0
High earners 100 0 0
Others 0 0 100
Perceptual objectives
Dimension 1 Performance Economy Economy
Objectives 1 1 10 13
Dimension 2 Convenience Convenience Convenience
Objective 2 5 3 1
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19. Vodite Brands VEST
Base R&D project PVEST
Production planning Ku 400
Inventory soled to trading company Ku
Recommended retail price $ 900
Advertising budget K$
Advertising research budget K$
Innovators 0
Targeted segmentation in % Early adopters 40
followers 60
Perceptual objectives
Dimension 1 Efficacy
Objectives 1 1
Dimension 2 Economy
Objective 2 -6
10.2 Sales force.
Distribution channels Specialty Stores Depart Stores Mass Merchandise
Number of sales people 30 80 90
Sales force effort allocation by brand (%)
SEMI 20 30 0
SELF 20 30 30
SEXY 10 20 40
VEST 50 20 30
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20. 10.3 R&D Project.
No (R & D) plan for this period to be postponed for the result of this period.
10.4 Market studies.
For both Sonite and Vodite market, Market studies are requested for the
following items:
Study Cost (in k$)
Industry benchmarking. 39
Consumer survey. 130
Consumer panel. 219
Distribution panel. 143
Multidimensional scaling. 90
Market forecast. 52
Competitive sales force. 38
10.5 Allocated budget and marketing expenditures.
Detailed Brand Expenditures
Sonite & Vodite Brands Units (in K$) Total SEMI SELF SEXY VEST
Advertising
Expenditure K$ 17,300 2000 3300 6000 6000
Research K$ 1730 200 330 600 600
Sales Force
Operating cost K$ 5,168 775 1,473 1,421 1.499
Hiring and training cost K$ 155 23 44 43 45
Total brand expenditures K$ 2,4353 2,998 5,147 8,064 8,144
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21. Overall Market Budget
Units (in K$) Total Sonite market Vodite market
Advertising
Expenditure K$ 17,300 11,300 6000
Research K$ 1,730 1,130 600
Sales force
Operating cost K$ 5,168 3,670 1,499
Hiring and training cost K$ 155 110 45
Firing cost K$ 0 0 0
Market research studies
Market specific K$ 633 355 278
Other studies K$ 39 0 0
Research and development K$ 0 0 0
Total expenditures K$ 25,025 16,565 8,422
Authorized budget K$ 25,350
Deviation from budget K$ 325
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22. 11. ANNEXES.
Segments Bu. Si. Pr. Hi. Ot. In. Ad. Fo. Total
Size in Ku.
Current situation 131 580 234 201 1,097 64 107 111 2,525
Next period 121 621 215 195 1,231 72 154 285 2,894
Forecasted next five years. 84 801 150 168 1,912 57 67 1,341 4,582
Size in %
Current situation 5.2 % 23 % 9.3 % 8% 43.4 % 2.5 % 4.2 % 4.4 % 100 %
Next period 4.2 % 21.4 % 7.5 % 6.7 % 42.5 % 2.5 % 5.4 % 9.8 % 100 %
Forecasted next five years. 1.8 % 17.5 % 3.3 % 3.6 % 41.8 % 1.2 % 1.5 % 29.3 % 100 %
Forecasted growth rates %
Next period -8.2 % 7.1 % -8.2 % -3.1 % 12.2 % 13.3 % 44.2 % 157.5 % 14.6 %
Total next five years. -36.1 % 38.1 % -36.1 % -16.2% 74.3 % -9.6 % -37.5 % 1113 % 81.4 %
Average next five years. -8.6 % 6.7 % -8.6 % -3.5% 11.8 % -2 % -9 % 64.7 % 16.3 %
(Annex 1)
Segments Specialty Stores Depart. Stores Mass Merchandise.
Buffs 57.3 % 21.8 % 20.9 %
Singles 33.6 % 33.6 % 32.7 %
Professionals 40.5 % 26.8 % 32.7 %
High earners 32.7 % 50 % 17.3 %
Others 13.6 % 33.6 % 52 .8 %
Total 25.9 % 33.7 % 40.5 %
Innovators 69.1 % 19.5 % 11.4 %
Early adopters 50.9 % 26.4 % 22.7 %
Followers 20.9 % 33.6 % 45.5 %
Total 43.2 % 27.7 % 29.1 %
(Annex 2)
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