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Marketing Practices Analyzed and Applied
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Marketing Practices Analyzed and Applied

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Direct Marketing concepts for fictitious computer company

Direct Marketing concepts for fictitious computer company

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  • Introduction In the advancement of GlobiTech into a future of success it is necessary for the investors and designers of GlobiTech to consider the benefits and repercussions of actions that will influence or jeopardize GlobiTech’s potential. That is why we are here today. We have acknowledged the ideas that will bring GlobiTech to the table of competitors and we have put those ideas on the table for our investors and competitors to reflect upon. It was this action that has received some negative attention and brought us to question what the next best step is for our company. Today, it is up to us to determine the fate of GlobiTech—advance further into a competitive market or remain as a notable, but less engaging adversary. In this presentation we will outline the opportunities represented by direct-marketing and disintermediation as well as the dangers of following such paths. We will identify GlobiTech’s plan of action and close with the endorsement of an action suitable of GlobiTech’s goals.
  • One of the fastest growing opportunities for any company in the modern world today is direct-marketing. This is the connection between company and consumer that is cultivated to meet the individualized needs and desires of the targeted customer. Measured by the Direct Marketing Association (DMA), the growth potential of direct marketing sales averages 5.3% annually, with internet marketing claiming the majority share of direct marketing spending. The forms taken on by direct-marketing include:Face-to-face selling-One of the oldest forms of sales and marketing, where the consumer and the sales agent are present and communicating about a product. One form that GlobiTech currently employs through retailers.Telemarketing- uses agents over the telephone to call potential consumers provided by a potential buyer contact list, as well as receive orders via 800 numbers as provided by other forms of advertising. Online Marketing- Becoming more common, online marketing encompasses the ads on the search engine pages, and social networking websites. Due to online marketing we have seen a rise in click-only companies such as Amazon.com. There is also almost no company that does not have a website. These companies are referred to as click-and-mortar companies, and include companies such as Wal-Mart, Target, Home-Depot, and many others.Direct mail/e-mail- Anything sent to your home mailbox and your virtual e-mail address such as samples, coupons, letters, flyers, special offers, news updates and so on. Generally this type of direct-marketing is opt-in focused, meaning that the receiver has requested the information and is a more likely candidate for purchase. Catalog- Catalogs can be both mailed and e-mailed, or accessed through online browsing. Catalogs offer a list and display of products offered by the company along with features and options available, as well as ordering information.Direct-response Television marketing- Infomercials are one of the most popular direct-response television marketing campaigns, with special offers designed to enact an immediate response from potential buyers such as doubled offers, payment arrangements and free gifts.Kiosk- These are free-standing machines that allow consumers to place orders for services or products at will. RedBox is a more popular kiosk market which provides DVDs across the country. Other forms include Kodak picture printing kiosks.New Digital Technologies- include marketing material sent to mobile devices, vodcasts, and podcasts (Armstrong & Kotler, 2006)
  • Direct-marketing better prepares GlobiTech for approaching disintermediation–or eliminating intermediaries in the business process (Pinto, J., 2009). In fact, direct-marketing is the key which provides us a stronger chance of succeeding in disintermediation. GlobiTech’s current means of consumer relation relies on distribution of our products through retailers. While many companies may opt for this approach due to a devaluing of the middleman—that is, when the cost of doing business with them exceeds the return—GlobiTech does not feel this situation fits our reasoning for considering this approach. It is true that the internet has provided much in the way of disintermediation, and GlobiTech’s role has simply been to acknowledge this approach and consider the opportunities made available by the avenue. In providing a direct line of communication to our consumers, GlobiTech opens a new avenue for generating sales. Consider the benefits to the buyer:The Website (store) never closes-consumers can shop at their convenience whether it’s at 2 in the morning of 9 at night. There’s no travelling to the website, no traffic to sit in, no long lines at checkoutThere’s no pushy salesmen, no questions that require a sales person to retrieve an answer from someone elseCustomers can take time in familiarizing themselves with the productsA greater selection of products can be offered (including parts not typically carried in stores)Privacy and comfort of home or office shoppingAccess to product reviews from other consumers and comparisons between products are all available on the same pageMore extensive product descriptionsImmediate interactive access to representatives—no waiting for someone to come and assist you, it’s at the click of a button!Because of the lowered expense of shipping products to retailers, consumers are the direct saversOverall, the buyer has more control over their shopping experience. Consumers are not the only ones to benefit from this idea, either. Globitech grows in numerous ways because of this approach:Open a channel for a more personal relationship with our customerLower the cost of marketing and distributingProvides a more efficient means of logistics functions such as order processing, inventory handling, and deliveryOpportunity to respond to our consumers needs and questions immediatelyZero cost as is typically tied to a brick-and-mortar store front (insurance, rent, utilities, etc). Responsive and timely adjustments, promotions and offers can be focused on target marketsBest of—we gain access to a global market (Armstrong & Kotler, 2006).
  • As you can very well see, the central aspect of the e-commerce revolution is disintermediation.However, as much benefit as there is to be gained from opting into the direct-marketing and ideals the internet provides, we need to acknowledge the damaging potential it carries as well. A very real and sizeable issue we face is the relationship we have with our retailers. Currently, our retailers account for 65% of GlobiTech sales. When this idea was first proposed our retailers struck back with claims of profit loss and as a result of which, these retailers would refuse to carry our product. This is not new. In fact, when e-commerce started its considerable growth in early 2000, many brick-and-mortar retailers went head-to-head with the major manufacturers of the products they sold. The results of which proved devastating to those companies (Disintermediation, 2011). The ideas those retailers are putting forth is that manufacturers and consumers alike need them—the middle man. Plenty of market reports available today demonstrate the power of a vengeful retail giant. They argue not only their own profit loss and decline in sales, but they convince the general public that e-commerce is damaging to unemployment rates and results in the elimination of third party vendors and small businesses that cannot compete with the lowered prices offered by the large manufacturing company. The end game leads to law suits and policies that bar sales of products via the internet, despite what consumers want: quality products for low cost (Atkinson, 2001). In rolling the dice of joining the e-commerce market, there are factors to consider that could spell GlobiTech’s success or failure.
  • Due to the challenges we face with the idea of entering the e-commerce market it becomes increasing necessary to weigh our goals as a company. Winston Churchill said “if you fail to plan, you plan to fail.” As we identify the goals of GlobiTech, we chart the course for achieving those goals. If we plan for the dangerous tides ahead, we better prepare GlobiTech to enter her future. Instead of fighting our retailers, we must identify the means in which we may retain their service and loyalty, as well as progress in the e-commerce community. I think we can all agree that the goals of GlobiTech at this point in her life is to reach the markets that want and need our products. In order to do so, relationships need to be built, both with the consumer and the retailer. In accurately positioning ourselves on the internet as well as in the brick-and-mortar locations, we can effectively lower costs for the company as well as the consumers, while maintaining a peaceful and satisfying relationship with the retail agents and the customer. With efforts of maintaining superior products and embracing the innovations of tomorrows technologies, GlobiTech can continue to grow as a company ready to expand into the future.
  • Having identified the goals of GlobiTech we can approach a solution that works and satisfies the needs of all parties. We expect that our retailers wish to retain the customer base they have, while profiting from the products they carry. Despite the reactions to the idea of e-commerce, we understand that retailers also wish to provide a quality service to their consumers. That is why they choose to carry GlobiTech products. On the other hand we have our consumers who want a quality product. They also want low prices and convenience. Their satisfaction is the key to success of both the retailer and GlobiTech. Bringing all the pieces together is what our goal is today. The proposition on the table, I believe, satisfies all angles. We understand that in certain geographic regions particular products do not sell as well as others. In all regions there is no location that caters to parts and accessories. My recommendation is to maintain a site that suffices carrying the products that are not sold in stores or not sold well in stores. We can limit the product available in stores to only our strongest selling products, and at the same time provide the retailer a greater supply of those items which accrue better sales. We can further maintain relations with our retailers by offering, as Wal-mart does, a site-to-store pick-up option that eliminates major shipping costs. Service may also be provided at some retail locations, which would be covered by warranties assumed in the cost of the original purchase price. Accessories such as MP3 players, printers, scanners, cameras, etc, will be carried only online. We will also initiate an online ordering system for our retail agents purchasing wholesale supply. By putting the retailers in line with the consumer, and providing their discounted price, we can maintain that hosting an e-commerce is as much for the retailer as it is for consumers.
  • We have already identified many of the benefits of expanding our operations to the online market. With the digital technologies made available through computers, we practically have our customer doing all the labor of inputting their information into our database. The customer creates their own file, their own shipping label. There’s no more sorting through massive files and paperwork to view our customer’s purchase history. Through these self-made databases, we can design marketing material specifically for each consumer. We open doors to immediate communication. We see speed and convenience surpassed, with access to a greater variety of the products we carry. Best of all, the shop is never closed. However, entering e-commerce means bracing some more intense issues as well. Where our retailers prices have assumed the cost of quantity discount and shipping, we are now asking the customer to pay that shipping charge. A possible solution to this may be to provide the more easily shipped items via our website and supplying our retailers with items that are much more difficult of expensive to ship. Other options to resolving this may be simply placing the cost of shipping into the product itself and eliminating the shipping cost altogether. GlobiTech will also have to embrace the consumers who fear internet shopping for its notorious hacking issues, and the problem represented by the inability to touch and feel products of interest. One method of disbursing fear of hacking may be to utilize a third party payment feature that consumers are already comfortable with, such as PayPal. In response to the lack of tangible products, our descriptions and specifications may contain unlimited amounts wording as well, we can place images on the site with 3-D aspects and rotating features. Other foreseeable problems that will be embraced are the socialization and competition factors. Let’s be honest, shopping was once a means of socializing. Anymore, people approach the checkout with cell phones in their ears. We can place socialization back into the shopping experience. By providing our customers with forums where they can ask other consumers questions, or read reviews by other purchasers, and share with others what they have gained or created using our products, we put people back in touch with people. As for competition, it’s out there. We know that. We will be compared to our competitors endlessly. We will push to be ahead of them at every turn. In listening to the feedback from our buyers we can easily identify and carry out the ideas and innovations expected. Competition occurs in every market. How we contend with that competition is what stands GlobiTech out from the rest (Advantages, 2010).
  • Products The products to be specifically maintained by the online market will include special order computers, printers, scanners, as well as accessories such as MP3 players, and mobile devices. The products which have been reported as generating fewer in-store sales will be launched online, and available for shipping to the retail location or the consumer’s choice address. Repairs and support services will be offered online as well as at retail locations. Driver downloads and associated media will be maintained by the website as it currently is. Consumers will also have the option to purchase additional software designed by GlobiTech through the online store.Placement Current marketing vehicles used by GlobiTech include representation at local trade shows, however, we will be expanding this as well. In matching our competitors, GlobiTech will conduct a small team of individuals to travel for the purpose of marketing the GlobiTech brand at tradeshows across the country, with intentions of expanding overseas as well. While you can currently find our company listed in several of the Yellow Pages in our state, we will be adopting a 1-800 number and placing a national ad with Yellow Pages. We have begun the hiring process for web designers who will maintain the GlobiTech site and pursue other forms of online marketing such as FaceBook, e-mailing and blogging. We will continue to place our ad in PCWorld magazine, however, we will begin consuming full page ads. We will advise our retail agents to place sales on their stock and note these sales in their newspapers and flyers.
  • Pricing While we strive to maintain a competitive market with other leading manufacturers, GlobiTech understands the need to reflect quality in pricing. As we know with Apple, Inc. cost reflects the quality of the product. While many of our products are competitively priced, GlobiTech will continue to challenge the superiority of its products over all others, both in quality and cost. By monitoring the sales results and feedback of consumers before, during and after changing product prices GlobiTech can enhance responsiveness to consumer demands. Coupled with optimum customer service, we can expect to see growth an loyalty of great magnitude.GlobiTech has already begun the process of becoming a well-known and worthy component of the computer manufacturing network through its campaigns in all major marketing avenues. However, GlobiTech is just entering the phase of its life where it will be competing for consumer loyalty on such levels as those that participate on social networking sites such as Facebook, Myspace, and Google +. Our name will be within the top 10 listed companies in search engines like Google, Bing, Yahoo, and many others. In further reaching for our target markets we have already begun establishing contracts with online colleges to provide their students with discount computer technologies. Through our provisions of exceptional quality and service, GlobiTech will rise to the top. Our consumers will find satisfaction not only in the products and services we offer, but more easily in a true loyalty rewards program that gives back to the consumers that make GlobiTech a leading company.
  • As you can see, GlobiTech is only at the beginning of a major development. She is not slowing down, and not holding back. When pushed to make executive decisions that may affect her future, GlobiTech is ready to take on the challenges. In maintaining dignity, responsibility, and appreciation for the consumers who have brought GlobiTech to the frontline or computer competition she will rise to see a bright future. Though our retailers may feel as though GlobiTech is closing the door on their position, we will clearly demonstrate that we are only opening a window to allow for a greater flow, and their position is equally as strong as it has ever been. I would like to thank you for your time, and if there are any questions at this time, please feel free to ask.

Transcript

  • 1. MKT250-1103A-05 Marketing Sabrina MergenthalerColorado Technical University Professor Joel Jackson July 18, 2011 1
  • 2. Face-to-Face SellingOldest model of marketingTelemarketingSales via telephone agentsOnline MarketingClick-only companies FacebookClick-and-mortar companies Search Engine adsDirect Mail MarketingE-mail samplesletters remindersflyers couponsCatalog MarketingBound booklets displaying products offeredOnline catalogsDirect-Response Television MarketingInfomercialsKiosk MarketingSelf-servicing, free-standing machinesNew Digital Technologiesmobile messaging Podcasts/vodcasts 2
  • 3. Di GlobiTech Distributer Retailer Customer Buyer Benefits GlobiTech Benefits Comfort Building relationships Privacy Low-cost Larger Selection FastExtensive Description Effective www.GlobiTech.com Control Open to Global Market Price Savings 3
  • 4. Objections to the Growth •Profit loss •Decline in sales •Retaliation from retailers •Elimination of third parties •Law suits •Unemployment•Termination of small business 4
  • 5. Planning –Goals—Achieving Reaching target markets“If you fail to plan, you plan to fail…” W. Churchill Building relations Lowering cost Retaining retail agents Satisfying consumers Maintaining superior product Embracing innovation Growth 5
  • 6. GlobiTech Retailers Consumer relations Retain customers Lower Cost ProfitProvide superior product Provide quality service Consumer Convenience Satisfaction Low price 6
  • 7. •Logistics Functions •Shipping Time/Cost•Communication •Fearful consumers•Speed/Convenience •Inability to Hold product•Greater variety •Hacking•24/7 operation •Socializing •Competition 7
  • 8. Products Placement •Specialized Computers •Trade Shows •Printers •Phone directories •MP3 Players • Online •Mobile Devices • Broadcast media•Lower sales producing products • Print media •Services • Print displays and direct mail •Downloads •Software 8
  • 9. •Software $50-$350 All Major Marketing Avenues •MP3 Players $50-$199 FaceBook•Printers/Scanners Major Search Engines $45-$250 Google, Bing, Yahoo! Online Colleges •Mobile Devices Exceptional quality and Service $200-$499 Loyalty/Rewards program 9
  • 10. 10
  • 11. ReferencesAdvantages and Disadvantages of e-Commerce. (2010). TokoKoo.com. Retrieved from http://tokokoo.com/2010/07/advantages-and-disadvantages-of-e-commerce/Armstrong, G., & Kotler, P. (2006). Principles of marketing (11th ed.). Upper Saddle River, NJ: Prentice Hall.Atkinson, R. (2001). The revenge of the Disintermediated. How the Middleman is Fighting E-commerce and Hurting Consumers. Progressive Policy Institute. Retrieved from http://www.dlc.org/documents/disintermediated.pdfDisintermediation - Examples Of Disintermediation And Its Impact. (2011). Free Encyclopedia of Ecommerce. Retrieved from http://ecommerce.hostip.info/pages/333/Disintermediation-EXAMPLES-DISINTERMEDIATION-ITS- IMPACT.htmlPinto, J. (2009). Disintermediation—Distributors in the Driver’s Seat. Jim Pinto.com. Retrieved from http://www.jimpinto.com/writings/disintermediation1.html 11