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Maketing Plan

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Page [MARKETING PLAN ] “THE BEST ALLROUNDER”
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Page 1: Maketing Plan

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[MARKETING PLAN ]

“THE BEST ALLROUNDER”

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Table of ContentsSWOT ANALYSIS...........................................................................................................................................3

1. Strengths.........................................................................................................................................3

2. Weaknesses.....................................................................................................................................5

3. Opportunities..................................................................................................................................6

4. Threats.............................................................................................................................................7

2.0 Marketing objectives and Strategy........................................................................................................8

2.1 Marketing/ Financial Objectives........................................................................................................8

2.2 Strategy Statement..........................................................................................................................11

3.0 Marketing mix development...............................................................................................................22

3.1 Product design and development....................................................................................................23

3.2 Distribution Strategy........................................................................................................................26

3.3 Promotion plan................................................................................................................................28

3.4 pricing strategy................................................................................................................................39

4.0 Projected Income Statement.........................................................................................................41

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Current Situation Sealax is a highly reputed company situated in Perth, Australia, producing and specializing in outdoor sealers for the past 50 years. At present John Williams is heading the company after succeeding his father. The business has progressed in a moderate manner under him for the past 10 years.

The range of sealers is specially designed to give a protective coat to pavers, brick walls and roof tiles. The business model and range of sealers have remained unchanged since his father commenced business. Since John took over the business, the company has centered around product orientation, which is paying full attention on maintaining and developing the product making life easier for the business.

Although Sealax sealers are popularly being used amongst the building industry it has failed to make an entrance to the general public. Business has declined by 30% throughout the past 3 years because of intense competition resulting in an excess capacity of 50000 liters. John has effectively realized the negative effects of not paying attention to the customer needs and wants and as a result he plans on turning his approach to being more market oriented.

An idea of a “single protective sealer for anything and everything” has always been in the back of John’s mind for ages. Based on this John has decided to develop a new product and explore new markets thereby successfully covering a market gap. The fact that the competitors in this industry has not developed a sealer that can multi task is what John tries on capitalizing thus making this a huge business opportunity for Sealax and John’s current vision.

Market research revealed that there is currently no such product as a multi surface sealer on the Australian market. Capitalizing on this opportunity, after 12 months of intense research and development, Sealax has come out with a new product. It has successfully modified the properties of one of its existing sealers to produce a flexible sealer that can be sprayed on all surfaces especially on fabrics – to protect the objects from sun damage for up to 20 years. The sealer can also replace the original appearance of slightly faded objects and protect them for a further 10 years. The multi surface sealer is water based one. It sprays on blue but dries clear in 30 minutes to ensure that the object is completely sealed with no missed areas

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SWOT ANALYSIS

1. Strengths

1. Experience

Sealax sealers are extensively used across the building industry. Being in this industry for the past 50 years has enabled Sealax to deal with all business related problems and situations due to the high levels of experience it has gained This is a huge advantage and a strength for the business as they have established suppliers which means high bargaining power, low prices, established intermediaries would mean low transportation costs, low warehousing costs and established customers meaning brand loyalty, continuing sales, customer feedback etc. This also indicates that Sealax has a healthy market share. So they have enough experience about the industry and they can clearly understand about customer requirements.

2. Production Capacity

Sealax has an annual production capacity of 150000 litres of sealers. In the past 12 months, it produced and sold 100000 litres of its current products indicating an excess capacity of 50000 litres. The fact that Sealax plans on introducing a new product to the market would enable the company to compensate sealer liquid from the excess capacity. This is a strength for the business in terms of low cost which would lead to economies of scale and thus lead to achieving a lower minimum efficiency scale. Having an excess capacity is also advantageous to Sealax as they do not have to allocate a separate warehouse to store new goods minimizing costs once again.

3. Innovation

A need for a new product for Sealax is essential taking into consideration its current situation of a drop in business activity by 30%. Through extensive research and with the help of Sealax’s chemical engineers, Sealax has been able to create a new product that would cater to all needs when it comes to sealing purposes. This process is strength to the business as it would have the first mover advantage along with guaranteed sales with the patent (2 years). The new sealer is a unique one which is able to seal off any object from a brick wall to a cushion. This unique benefit of the sealer itself will be an added advantage to Sealax in terms of strength.

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4. Low Cost

As Sealax has been in the market for over 50 years, it has established suppliers, distribution networks etc which would suggest low cost in producing, marketing and selling activities for its new product which will bring out a low total cost for 1 unit. After calculation of all cost Sealax would be able to sell a unit at cost for $6.50 which is way below the prices of sealers in the market which range from $12 - $50. If the business can focus on productivity along with efficiency it could use its low cost as a huge strength.

5. Direct selling

The company sold specialty sealers directly to the trade for application by trades’ people. (Eg:- builders, roof tillers, bricklayers, landscapers and gardeners)Direct sales help to cut the additional expenses and efforts. For example advertising and distribution costs. So the profits come directly to the company.

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2. Weaknesses

1. Brand Image For the past 50 years Sealax has failed to create brand loyalty. For a big company like Sealax, brand loyalty is really important in order to maintain a competitive position in the market thus operating profitably. Sealax has failed to create brand loyalty and therefore weighing a disadvantage on the company’s performance. This atmosphere indicates a situation where Sealax will has a low amount of customers. Customers will not will to purchase Sealax products as it is not known to the general public due to poor brand loyalty. And even though customers know about Sealax products they are unlikely to purchase these products as they would be more attracted towards branded products introduced by rivalry companies, who have strived to create a reputed image and taken the opportunity to build a strong belief in customers leading to the purchase of their products with no fear. Therefore this can be analysed as a main weakness for Sealax. Also Model of the business and the ranges of sealers have remained unchanged since last 10 years Customers do not know the Sealax products well. Because in the past they sold their specialty sealers directly to the trade.

2. Market Orientation John has not ever been market oriented. Market orientation rises competition both in the local area and internationally which leads to merchandise parity and this creates customers having more choices. John desires to be market oriented and he has to have the proficiency or enthusiasm to change the goods to suit the desires and wants of the regular clientele. As John has not ever been market oriented Sealax’s goods are hardly renowned to the public.

3. Intense CompetitionCompetition can be both direct and indirect. The fact that Sealax’s business activity has declined by 30% over the past 3 years is because of intense competition. Market research indicates that there are larger sealer manufacturers with often better products and/or lower prices; this falling under direct competition. Companies such as Wattyl, Crommelin, ScotchGard produce sealers which protect specific surfaces and as a result poses an indirect competition to Sealax.

4. They do not have a patent.In Australia sealers are absolutely vital products and thus persuade most citizens’ house desires. There are no direct competitors but there are indirect competitors who eager to exact replicate the merchandise. According to the study carried out at Sealax the merchandise can be made a duplicate within 2 years. Thus being a gigantic handicap to Sealax.

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3. Opportunities

1. They have an opportunity to introduce a new product or modify an existing product which is suitable for the sun exposure.

Sun damage is the main threat for all types of Australian houses (surfaces) which are exposure to the sun. So there is a very good opportunity to modify or develop a new product to the Australian market.

2. There is a clear need in a product which is suitable for all surfaces.

The introduction of the new product will play a big role for the company as the product has a special property of sealing any type of durable. Taking into consideration the customer point of view, customers have a tendency to buy a product in a particular field (in this case the sealing of durables) that solves all problems at once. This mind set will help boost sales for Sealax, thus creating a big opportunity for the business.

3. Securing Market Share

The introduction of the new product would mean that Sealax would not have direct competition for its product. The fact that the product is a unique product suggests positive sales figure, this bringing out the image of sustainability as there is a high number of potential customers. All these overall positive aspects of the business will ultimately lead to securing overall market share thus suggesting a good opportunity.

4. The First Mover Advantage

An opportunity can be defined as a favourable or advantageous circumstance or combination of circumstances. The fact that Sealax is the first company to discover a product that can be used to seal off any durables gives them the first mover advantage which is considered a great opportunity for any business. It also brings out positives such as securing the patent for the product; in Sealax’s case securing its product for 2 years.

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4. Threats

1. High competition

Competitors are rivalry firms/people who produce and sell similar products in the market. We can see that Sealax’s business activity has declined by 30% due to intense competition. This may have been costly to Sealax and the increase in the competition due to price differences in the market for outdoor products manufactured and sold by other companies also poses as a liable threat. When product prices in other companies are lower than Sealax’s products customers may tend to go for cheaper products. And when customers move out, purchasing other company products, Sealax will come across difficulties like facing an excess capacity of 50,000 liters per year and it may be difficult for Sealax to maintain the excess capacity as well and recover the sales loss.

2. Competitors will copy the formulation in 2 years time. Even though Sealax has spent much time on research and development and now introduced new products to the market, it is likely that other companies would copy and produce similar products to the same set of customers. And this would have a negative effect on Sealax as there are chances for Sealax to lose potential customers as a result Sealax being unable to operate effectively and efficiently whilst the main aim of an organization being the customers. Customers are said to be the eye openers of an organization.

3. Awareness

Unsought products are products, where the idea of certain products has not reached customers clearly. Basically people do not know about the product. A lot of aggressive and heavy advertising is required for these types of unsought products. The business should introduce and make consumers aware of the products. This has failed in Sealax and as result poses a huge threat to John.

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2.0 Marketing objectives and Strategy

2.1 Marketing/ Financial Objectives

Brand awareness

We expect to increase brand awareness up to 100% target customers within next 12 months through the attractive promotional campaigns.

By producing multi surface sealer in high quality with innovative features.

Establish the online retail stores and create an opportunity to the customers for

conveniently purchasing.

Offering loyalty card for the purpose of increasing customer loyalty.

Maintaining the sponsorships for the competitions

Organizing sealax workshops to increasing the awareness in multi surface sealer

people as well as ordinary Australians who concern with health and fitness.

Offering rewards for the retailers as trade promotions.

The special features of sealax sealer that provide benefits to the customers include,

- Good weather resistance- Resistance to temperature extremes and moisture - Ability of non flow

At the room temperature when the sealer is exposed to moisture in the air, it is cured forming flexible, durable and tough silicone rubber.

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Communication for awareness

Communication is an essential element of any strategy. It is necessary in order to create awareness about sealax products among potential customers, and it may include distributing informational brochures or print and broadcast media advertising. The idea is to spark interest in our modular multi surface sealer by explaining its features and benefits and to answer any questions consumers may have about our products.

Product range

We recommended the wider product range towards customer’s convenience and

attraction. It can be more varied as follows.

Price range (per liter)

Below $150

between $150 and $200

between $200 and $250

Distribution channel

There are different channels of distribution. Market research shows that the best

distribution channel for Sealax Company to use is the Manufacturer to Retailer to

Customer Distribution channel (short channel). This is most effective and efficient in

order to achieve their goals.

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Financial objectives

Increasing sales by 75%

Decreasing production and administration cost by 20%

Increasing net profit by 60%

Increase sales during the Month of December by 25.6% (Christmas season)

Increase push promotion incentives by 2%

Increase pull promotion incentives by 6%

We prefer to promote the products to the direct consumers through strategies including e-mails and in-store display during the introductory stage of the product.

We also target to distribute our product, among all the sports stores in Perth by the end of the year 2014.

To reduce the production cost by 25% through reduction of general overheads by the end of the year 2014.

We target to achieve 20% increase in sales through promoting the product to the sports clubs as well as schools within the next six month.

We aims to increase the profit by 20% through cutting down on production cost by the end of this year.

To increase contribution margin from 40% to 48% within next 12 months

To raise sufficient capital to finance expansion, preferably through loans at reasonable

interest rates

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2.2 Strategy Statement

MARKETING STRATEGY

Sealax marketing strategy is simple use the available channels appropriately to impact growth, gaining considerable name recognition through word of mouth. Contracting for sealers and finishing services in our commercial and municipal markets is not an impulse decision, so the primary thrust of the marketing strategy is to inform our prospective clients of reference work similar to the services they require.

In rank order we have identified where our priorities lie in developing market presence to acquire clients.

1. Word of mouth2.Client testimonials3.Local business associations4.Traditional print media, Internet advertising, and miscellaneous promotion techniques

Marketing strategy is essentially a pattern or plan that integrates sealax organizations ‘major goals, policies, and action sequences in a cohesive whole to achieve customer success.

A marketing strategy may involve several interrelated components, such as market selection, pricing, distribution and promotion. Efficient use of these components may help Sealax Company maintain or increase our sales. Getting potential clients may require advertising through several different channels, which can be costly for a sealax company. Sealax can devise several marketing strategies to stand out from the competition and achieve sealax objectives under budget. Sealax Company is a major Australian company in Perth, which make the new range of multi surface sealers. Sealax branded products are targeted for consumer’s attitude.

Sealax counts Wattyl, Crommelin, and ScotchGard as its main competitors and other brand mentioned were Dulux, Premier painting, and AJ Blunt paint.

The objectives have been set. Strategies have to be built to active these objectives.

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Growth Strategy

ANSOFF GROWTH MATRIX

A marketing strategy is something that affects every part of an organization. It is about using everything that a business does to create value for others. This includes customers but it also benefits employees and shareholders. The main purpose of a marketing strategy is to set out the means by which agreed marketing objectives are to be achieved.There are many types of marketing objectives. In this sealax company, these might include:

Increasing market share growing sales/turnover enhancing the strength of the brand creating loyal customers Managing costs effectively, thus increasing profitability.

A common marketing objective is to growth. There are a number of ways in which organizations can grow. For example, they might expand internally. This is known as organic growth. A quicker but higher risk option is external or inorganic growth. This involves acquiring or merging with another business.

One positive benefit of growth is that it helps sealax to reduce costs through economies of scale. These include:

Efficiencies arising from use of new technologies – multi- surface sealer Improved buying power as it can bulk buy at lower costs The ability to recruit more specialists to improve decision-making.

By lowering costs, an organization increases its profitability and becomes more competitive.One way of analyzing the various strategies that an organization may use to grow the sealax is with Ansoff’s growth matrix. This considers the opportunities of offering existing and new products within existing and/or new markets and the levels of risk associated with each.

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This matrix suggests four alternative marketing strategies:

Market penetration- involves selling more established products into existing markets, often by increased promotion or price reductions or better routes to market.

Opening more retail outlets (increasing market penetration) Targeting either for all customers who are house owners or under rent and all Customers

who are involved with consumer durables in a daily basis.

Product development -involves developing new products or services and placing them into existing markets.

Sealax development a patented special materials Continuing to invest in new product development especially focused on a flexible sealer

that can be applied to all surfaces especially on fabric. Research & development and innovation Detailed insights into customer needs (and how they change) Sealax Being first to market

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Market Development- entails taking existing products or services and selling them in new markets.

Enter new market or segment with existing products. Enter oversee market development Exporting the sealax product to a new country e.g.:- US Sealax product dimensions or packaging New distribution channels e.g.;-( moving from selling via retail to selling using ecommerce

and mail order) Different pricing policies to attract different customers / create new market segments.

Market development is a more risky strategy than market penetration because of the targeting of new markets.

Diversification - involves developing new products and putting them into new markets at the same time.

Develop different sealer products such as multi surface sealer

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Competitive strategy

The sealax brand is considered a specialty brand. The company has little direct and indirect consumer advertising. Maximum exposure of product advertising to consumers. It is opposite of niche marketing, where the idea is to advertise and market products to a specific target group of people. It could be MASS MARKETING.

Marketing mix-

The marketing mix is one of the most famous marketing terms. The marketing mix is the tactical or operational part of a marketing plan. The marketing mix is also called the 4Ps and the 7Ps. The 4Ps are price, place, product and promotion. The services marketing mix is also called the 7Ps and includes the addition of process, people and physical evidence.

Analyze the marketing mix of the sealax and emulsions, but before that let us have a brief look at the target Market and Market Segmentation of Sealax.

TARGET MARKET

Sealax is having a wide range of products that fulfills the needs of all type of customers, yet its main focus in on the upper/elite class and the upper middle class. Comparatively little emphasis is made on the lower middle class. Industrial customers are also included in their target market.

Sealax has infact categorized its customers into three categories.

1. A- constitutes the elite / higher class2. B- Constitutes the upper middle class both these categories include the people

who can easily afford the sealers (highest quality) of Sealax.3. C- Middle – middle and lower – middle class which usually afford the normal/

average quality sealers of sealax.

Therefore they define their Target Market according to the class categories and not through territories.

MARKET SEGMENTATION

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Sealax provide their products only to the traders (registered) which in turn serve to the various market segments, which are as follows:

• Sealers /painting• Sealers /painting Contractors• Architects• Construction companies• Consumers

PRODUCT

Sealax a proud organization, dealing in sealers has a wide rage a quality sealer suitable for all sort of surfaces and climates not only for the household customers, but they have also developed brand loyalty among industrial customers.

PRODUCT RANGE

Sealax is producing both "WATER BASED" sealers as well as "OIL BAES" Sealers.

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WATER BASED SEALERS

• Sealax special sprays on blue

This is premium quality sealer and is washable. It is used for masonry surfaces and has a durable, smooth, finish.

Coverage: 1liter (7 piece outdoor dining setting) -4 liter / coat.

Sealer Natural Whites

These sealer cover with unique fragrances, especially features for the people and customers who are sensitive to the smell to sealers. They have nine subtle hues of white are washable and have a smooth, durable finish.

Coverage: 11-16 m2/liter/coat

Sealax Weather shield

It is the weather protective sealer used for exteriors which is extremely durable against all extremities of weather. It has been tested and proven for 15 years.

Coverage: 12-13 m2 /liter/coat

Sealax Once

It is a new breakthrough in sealer technology as it completes the job in just one coat. This special emulsion saves time has a high coverage and therefore is highly economical.

Coverage: 7-8 m2 /liter/coat

(Only one coat needed)

Sealer plus Emulsion

This sealer is basically for the price sensitive people as they call it Sheild’s value for money emulsion sealers". It has quite a many beautiful popular shades for wall surfaces and has a smooth finish.

Coverage: 11-16 m2 /liter/coat

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SOLVENT BORNE SEALERS

• Sealax Synthetic Enamel

It is sheild super gloss enamel which is ideal for wood and metal surfaces. It is also available in non-yellowing brilliant white.

Coverage: 13-15m2 /liter/coat

Sealax Pearl Glo

It has a subtle sheen of pearls and is suitable for all surfaces. Its high washbility makes it especially ideal for kitchens bathrooms.

Coverage: 13-15 m2/liter/coat

Sealax Aluminum

It has a brilliant aluminum finish and is capable of resisting high heat. It is used to decorate both metal and wood surfaces.

Coverage: 14-16 m2/liter/coat

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Product position

Product positioning is a marketing strategy that aims to make a brand occupy a distinct 'position,' relative to the competing brands, in the mind of the customer. Firms apply this strategy either by emphasizing the distinguishing features of their brand (what it is, what it does and how, etc.) or try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through advertising. Once a brand is positioned, it is very difficult to reposition it without destroying its credibility.

Sealax’s research and Product development Department has come up with a first class product. In order to make the product a success in the market it is vital to position the product.

The main highlight of the new product introduced by Sealax is its Special property of being able to Seal any surface, this unique feature would be the best and most strategic path for Sealax to take in positioning its product. It could start off by advertising all features and also indicate that the product is a Utilitarian one whilst being affordable. Sealax can thus propose to position the product as a reliable, all purpose, and long term protective product at an affordable price.

The sealax has given the image of high quality and an extra ordinary product for their houses thus charging the high prices for their brands. The recent campaign of sealax is aim at giving the consumer the importance of home. They want to give impression that sealax protects their homes well than other competitors. Sealax has established itself as the clear market leader within the decorative sealer market and is a household name in decoration and protection. Brand image consumer research shows that the brand clearly outperforms all major competitors in all categories.

Sealax brand values are summed up very clearly in the words ‘worth doing, worth sealax’. Sealax is committed to delivering high quality innovative products which perform to high standards expected by its consumers. The brand has strong family values and is a respected and trust icon. This image is reflected in the well-known. The position is based on the strong and unique points.

Target market

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A specific group of consumers at which a company aims its products and services. This can be an excellent way to target a specific group of customers. For example, a housing estate which is reaching a certain age might respond well to a leaflet or flyer offering your services. With direct marketing you can soon tell what is and isn't working, so be prepared to try out different approaches. A limited period offer such as 10% off all work can often attract business and make people respond more quickly.

In the introduction of the new product would mean that Sealax would have to identify their target market for this product. Fortunately, as most house hold in Australia suffer from Harsh Sun damage, the target market does not need much segmentation: In other words the product can be targeted to all households and all customers who use consumer durables.

Taking a more thorough and closer look at the target market Sealax’s ideal target market is all customers who are either house owners or under rent and all Customers who are involved with consumer durables in a daily basis.

The Price of the new product is affordable as Sealax is targeting Customers who are usually in the middle class range.

3.0 Marketing mix development

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Sealax is a leading paint in Perth over 50 years of time. They provide all kinds of paint under their trade name. They have done splendid job when it comes to indoor furniture. But other things were not so lucky for them due to high heat and ultra violate ray all outdoor items such as water heater, air-con condensers, pool pump and filter, outdoor furniture, garden pots and ornaments, external door and windows and frames etc…..

In present Sealax having competition due to lack of innovation, they supply their products same as 50 years an ago which still using old strategies. As a result of that Sealax does not actively markets its products, they just relying on regular customers. So there sales have declined 30%, so they really need a good innovation product to compete successfully in the market by understand common problem and giving them a better solution.

Now Sealax have come up with an idea to design a protective coat a pavers, brick walls and roof tiles which idea of “a single protective sealer for anything and everything”. Because all Perth homeowners clearly need this product that will spared this to the mass production of market and also their primary goal in long term should be maximize their distribution and spared it all over the Australia.

Sealax needs to position the new advanced product range; by highlighting the key attributes that will intern help distinguish ourselves from the other competing brand. Consumer perception needs to be changed in order for them to accept our products because in the starts public won’t be accept the product straightly. So for that they need to consider about the five stages of consumer buying behaviors ( need awareness- can create the need for a new invention in outdoor paint with our patent and also people need it due to heat and UV rays, information search – clearly and repeatedly send the message across to the consumers, evaluation – seen our way in to the evoked bunch by carefully positioning our products in consumers mind and carefully remind them why we are here, and how we can help, purchase- make distribution exclusive and the easiest destinations to purchase our products from, post purchase- keep track of our clients, give them the proper after sales resources, guarantee so we can continue the good relationship in further years) needs to be critically analyses data through a research for the success of the product.

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3.1 Product design and development

Product development in brief is a process creating or marketing a new product to be sold by a business to its customers whereas design refers to the activities involved in styling, look and feel of the product, deciding on the products mechanical architecture and selecting materials and process that are necessary to make the product work.

The product design of a business is the way in which the sealax company can attract their customers as there are some customers who are more attracted and addicted towards a products design. Sealax can attract customers by maintaining a good packaging system where it makes the customer feel that the product is well developed and maintained in good quality. Also sealax should focus more on developing the product as well because normally customers look out for quality and long use furniture’s. As sealax is a mass operating company it has to maintain its quality to hold on to its customers without losing them as in a business product development and design is more important in the point of view of a customer.

As mention above sealax have to develop their new product and test it before they put it on to the market. To test the product they have to come up with new marketing strategy and to see the customer satisfaction they can test it on their loyal customers and see their respond and evaluate it in successful manner after that they can put their product in to market in successful way.

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when we thinking about this protective code that can covers almost everything in outdoor we came up with the name called ‘SHEILD’ which means giving the best protection that going beyond the expectation and we came up with a slogan, “Best All Rounder” explains more than what the customer expects. The main reason for such a slogan is because our product has almost all protective features required and expected by a customer. Our product is a multi-surface sealer which can be used for all kind of things and also it fights against damages and sun rays. It has many features and that’s the only reason why it is named as the multi surface sealer as it can be used in any situations effectively and also for multi surface’s, and also it has another Key feature which is long usable/durability.

Our logo represents a shield which gives the customers strong ideas about the product. Our Product is well protected from sun rays and it avoids damages to its maximum. For an example we can see that shield is for the protection so like that our new product THE SHEILD will protect all outdoor materials from sun rays as well as other damageable resources. We guarantee that our product is similar to a strong shield. It will be more useful for its price and quality and also it is specially made for long durability.

Sealax is a company which have indefinite protection under common law that mean they have a trademark already so we have to get a patent to our new innovation sealer so we have our protection at least for 20 years. In that we can bring it as a well-known brand by using marketing strategies. So do company will be on business for longer period

Packaging is a main element in a business where it safeguards the product. Also a good and safety packaging gives the consumer an idea about the product, for an example, the customers will feel the quality of the product and also the safety of the product according to the way the product is being packed. Customers can be attracted towards the product if there is a good and innovative packaging. Also in packaging we can do little bit of promotion too such as giving product information through labeling and when having attraction to the product it will be easy to recognized. And we are going to introduce different kinds of spry bottles also.

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3.2 Distribution Strategy

It’s vital for every business to have a distribution channel as it facilitates the flow of products and information from the supplier, manufacturers and importers to the ultimate consumers. For a company like Sealax distribution is very important in marketing because they determine a product’s availability in the marketplace. Distribution is all about placing a product at the right place at the right time. The main responsibility of distribution goes to the logistic department of sealax. The logistic department is responsible for the storage movement and availability of the new sealer in the market. There are different channels of distribution. Market research shows that the best distribution channel for Sealax Company to use is the Manufacturer to Retailer to Customer Distribution channel.

In the short run, sealax has to target 500,000 houses in Perth. For one year, anyhow sealax has to target at least 200,000-250,000 houses as their product can be copied in 2 years’ time. So by targeting 200,000-250,000 houses for one year, sealax can successfully go through 400,000-500,000 houses before the product is being copied. Therefore Sealax has to distribute their products for more than 100 outlets and every outlet, over 150 sealers should be sold per month to achieve a successful target in the end of the year.

In current situation sealax has a channel length of both direct marketing and short term marketing. They already using direct marketing as their channel length, they specifically say that they sold sealers directly to the trade for application by trade people so they can promote their new brand to them more than any one. In 12 months of time they can expand their sealer as the planned for that they can use short term method because they don’t have strong way to archive customer directly for that they need to reach a retailer through them only Sealax can get attention from customers,in this process retailers playing a huge part.

Sealax as the Manufacturer that choose to expand into the retail market must fully understand the potential advantages and risks involved with such a decision. Sealax products will be made available for customers at many hardware stores, furniture stores as well as shopping malls around Perth. Sealax as the manufacturer has a greater advantage when it comes to product wholesaling they can use their own warehouse which can store their distributions and they can provide them to their retailers so it would be more cost effective and also retailers can cover a wider range in the market and it may be helpful to conduct their own wholesaling tasks. They can do their business successful by storing goods and delivering to retailers by conducting their own warehouse so we plan to expand our warehouse facilities when we comes to a stable situation by analyzing our marketing plan in long run.

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Warehouse design for the long run. To facilitate the online distribution facilities better to cut cost and improve a faster delivery method.

In distribution strategies retailers play a huge part. Retailers are the people with more experience on selling consumer products, so Sealax can gain advantage through them. As the product is being sold to the retailers there won’t be any storage costs, insurance costs, security costs etc. Also the price of the products would come down as a result of lowered inventory holdings, shorter supply chains, increased margins, better forecasting capabilities etc. The retail store can act as a single point of contact for the buyers for all things relating to the product manufacturers, such as after sales services, replacement of faulty products, sourcing of product related accessories, promotions,

When it comes to such situation like distributions there will be some disadvantages to because ‘shield ‘ our sealax production may be having some effect from external parties so we need to be close with retailers as possible and motivate them because they are the one who can promote your product well among the customer

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3.3 Promotion plan

“SHEILD” THE ALL ROUNDER

Promoting a product plays a key role in fulfilling the marketing mix. Along with product, price and place, Promotion is an essential factor when it comes to marketing of a product. To build a promotions plan is not a easy task for that they need to do researches first they need to build a plan for short term for that have to build a plan by targeting first 12 months. In this case sealax is introducing a new product so they have to come up with new strategies and also they need to stabilize their own branding image because their business has a decline of 30% of sales in past 3 years because of intense competition from larger sealer manufactures such as WATTYL, CROMMELIN and SCOTCHGRAD. So Sealax needs to be more specific and targeted in their business.

Sealax needs to works on introduction promotion on the “SHEILD” their new product for that first they needs to basic objectives for that new product requires the target markets to be adequately informed of the product’s existence and benefits. So that Sealax needs to inform and educate customers about the product, influence through promotion and remind again and again about the product to customers. To complete those task sealax need to create awareness and interest about the product. Need awareness is already created by factor of effecting outdoor furniture by rusted and faded so Sealax now just need to create interest among people by giving strong publicity and promotion, they can do that by targeting loyal customers as targeting and promoting and analysis them according to that Sealax can create a long time promotion plan and also from that Sealax can educate their customers about the “SHEILD” and also they can position the brand name and image as well. Then it will be helpful to maintain public relationship among seller and buyer so through that Sealax a maintain top-mind awareness to, they can maintain customer loyalty and build more loyal customers and also when they able to do that every one will know when it say “The All-rounder” it’s about “SHEILD” the product from Sealax paints.

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As mention earlier first they have to target first 12 months for the promotion plan for that they have to follow following procedures

1. There are specific objectives – basic objective of Sealax should be sufficiently detailed for the planning of the promotion mix. These objectives could be expresses more specifically determined the best promotion methods. Example- trials using loyal customers

2. Developing the IMC- Sealax promotional campaign is for the next 12 months and during this period multiple objectives are required. Mass awareness and interest, encourage evaluate & trial with customers, build buyer seller relationships reposition brand. Every promotion method has its limitations as well as advantages. Using a collective mix of IMC is ideal; Sealxa can cover all key sages of the product life cycle.

3. Use of informal communication Face Book page for Sealax Twitter page for Sealax (the CEO could post the tweet of the day to keep

contact with customers and customers can tweet to Sealax about their problems to )

Instagram – encourage customers to participate in competition “the best house with Sealax” Picture of the month

Gmail – can communicate and give orders through E-mail facilities. Youtube profile – Sealax can upload documentaries regarding their new

products and correct way to use it. Sealax App – a running app that indicates the instructions and colure meter to

check how much need paint have been faded according to standards

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4. Keeping with budget- marketing Budget is very important for Sealax if kept within the means of the budget. In turn could help Sealax during pricing decisions. Plan is also to compete with the competitors and give customers preferred range of price. However Sealax is planning to launch the new product range the cost of marketing would reach stars. The Marketing team is requesting the rest of the divisions to provide help and understand why we are expending such an amount. This way it’s easier for the organization to achieve its long term goal.

Don’t be disparaged as the revenue will not come in directly after the campaigns

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Promotion methods

To compete well in field its necessary to have good promotion methods by having good promotions methods only can attract customers to your product and also you can well educate customers about your product.

1. Advertising Advertising is very common and effective method that lot of business today, but the key of successful advertising is that company has to choose the right way to address their customers in proper and clear way. When you paying of non-personal presentation and promotions of product you have to make it valuable.Popular advertising media includes television, newspapers, magazines, radio, cinemas, billboards and etc…… Sealax we can use following methods to give the massage to customers. They have to analysis their customer’s behavior and advertise well like what time all they are in one place and easy and accurate way to get to them. Advertisements in television is the easiest way to reach your customers but in Perth lot of people are having a busy life style so for that using billboards and radio would be more easy and it would be more cost effective also because busy Perth people won’t get a chance to see television so they can see billboards when they travelling presenting it in attractive way will helps customer to remember about the product. They can do other method such as advertising in paper magazines to go more among the public because they only have 2 years to come on a good stabilized position in the market.

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Billboards of ‘SHIELD’ the Best All-rounder

Magazine Advertisements on ‘SHIELD’ the Best All-rounder

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2. Publicity

“Only one coat that all it need!!”Simply the Best All Rounder

Publicity is the grater tool of promotion by because it can be more cost effective in such a situation that Sealax doesn’t have much gain power due to the loss of past 3 years they need to use more business to customer relationships to build a good number of buyer to their product. Publicity it a tool which it very important it’s about product information appearing in mass media so it goes to large amount of people so Sealax need to plan it well to be success in this product.Publicity it may be free but getting it would be hard people believe media is independent so they believe whatever media says. Sealax can give their massage through having press conference also with media conference and giving key objectives about the use of “SHEILD” the new all rounder sealer, what are the benefits of using this, how long you will be protected, how much would it be. When they giving this information they should give those in more affricative way to reporters because if they satisfied only they can write more good and strongly recommended to the consumers to purchases it, also Sealax can release their product by having a press release that attract more customers and also they can participate on a talk shows and educated more about the product also Sealax can give a chance to audience to ask questions and answers they by doing that they can build their trustworthy more and more. To do all that Sealax need to build a good and strong press/media relationship by offering sponsorships as they can afford

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News release about “SHIELD”

Sponsoring public media by “SHIELD”

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Talk show programs about “SHIELD”

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3. Personal selling

Personal selling is very useful for Sealax because they are already doing with some of their customers they provide specialty sealers to doorstep so they need to improve it and develop better human resources

The Mentioned in the survey the following trends that insist the importance of personal selling and in house selling,

1. No single sealer dominates all outdoor categories.

2. Around 80% of the respondents have at least sealer of Sealax ( can personally encourage the exchange methods “give your old sealax buckets to the nearest Sealax store or retailer and get a 25% discounts for it”

3. The criteria’s of choosing an All Round Sealer is also mentioned

4. for most recent purchase 60% of the respondents said that the brand name and style decisions were made WHILE AT THE RETAIL STORE!

(In store promotions and personal selling will up the ante for Sealax if followed methodically)

Sealax can participate in

field selling Direct marketing activities using the Perth based representative as well as other sales

agents and sales representatives. In store retailing

The process of personal selling process should be practiced accordingly

1. Prospecting (collecting data from stores, loyal customers etc.)2. Approach (well-dressed well trained Sealax sales staff)3. Present – face to face demonstrations , let the customer experience it first-hand (make

them try on the furniture, giving a test turn, show new design features )4. Closing – customers may give 100 of reasons to post pone the purchase but get feature

information to persuade them in the near future before they forget the existence.5. Follow up – maintain the relationship further. To avoid cognitive dissonance provide

them proper after sales practices.

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4. Sales promotion Using sales promotion is connecting to the customers or retailers to purchase the product by using lot of promotional activities other than publicity, advertising and personal selling. This is very handy in short term and aimed to produce immediate results. This would be costly but it’s more effective

Push Objectives & Strategies

A push promotional strategy works to create customer demand for your product or service through promotion: for example, through discounts to retailers and trade promotions. Appealing package design and maintaining a reputation for reliability, value or style are also used in push strategies. Push indicates sales promotion related to sales where the manufacturer’s or suppliers promote the product to retailers. Push promotional strategies also focus on selling directly to customers, for example, through point of sale displays and direct approaches to customers.

Provide Incentives to retailers We would give incentives to them on the quantity of stocks purchased. For every 10 units of 1Litre spray cans purchased the retailer gets 2 units of 1 liters cans free.

Shelf Location In the case of Sealax, the company could draw customer attention by highly promoting their product at supermarkets, malls etc. In order for this to succeed Sealax would have to negotiate with the relevant authorities to allocate a shelf location that is likely to catch the customers’ eye whilst being a secure one. We have decided to pay each store a stocking fee to secure a better eye catching shelf.

Motivation to Sell The biggest concern for Sealax or for any other company in a business situation is to secure its employees. Retail staff would also come under this category. It is the human resources department’s duty to make sure that the retailers have well trained salesman. In order for these salesmen to succeed they need high motivation and as result Sealax should consider to motivate retail staff to sell more Sealax products. As a move to retailer salesman motivation we have decided to gift Vouchers to salesmen who have closed sales with 150 liters.

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Pull Objectives & Strategies A pull promotional strategy uses advertising to build up customer demand for a product or service. Other pull strategies include sales promotions, offering discounts or two-for-one offers and building demand through social media sites such as YouTube.

Capturing the Customers Attention When promotion is taken into consideration it is vital that any product have a good packaging. In Sealax’s case their promotion department needs to come up with a suitable package to draw customer attention. This strategy will help the business to maximize their sales revenue as the packaging of a product can be very influential. And also we have decided incentives which are already mentioned in Push strategies that would make retailers stock our products at an eye catching shelves location in their stores. These strategies would draw more customers towards this product and also this would make easy for customers to know about the product.

Product Trial It is a smart move for any business that invents a new product to always try a test market. This involves selling the product on a trial basis. Most customers would not be willing to try a new product when they are quite comfortable with their old choice. And in this situation it is important for Our Company to try and persuade the customers to try our product. In Sealax’s situation the business can target the Perth region or a specific region first. The introduction of a trial product would make customers try and know our product and also will help bring out negatives of the product through customer and retailer feedback and also give a rough idea to the business on the sales activity.

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3.4 pricing strategy

Out of the four marketing Principles the only Principle that generates revenue for the Sealax is the price. Price concepts can be used as an indicator of quality (since Sealax is a specialty product it’s very important to create and maintain the image of quality deliverance), Flexibility of the Marketing Principles (the only Principle that can be directly and easily adjusted).

Sealax as a specialty product should invest on non-price competition. This was the demand is inelastic; customers are less price sensitive more brand loyal less price loyal and good long term marketing strategy to follow, as price competition is only short term.

A good valuable change to the product can sky rocket the sales (demand). This indirectly promotes only a few direct competitors. With the Sealax new space age innovative product line Non price competition is easily sustainable.

Before making pricing decisions Sealax should consider these factors mentioned below. As price can make or break a product. The only way of generating revenue is trough price; a great in-depth analysis is important.

Factors are:

Internal factors – target market- marketing mix elements- and pricing objectives

External factors- trade demands – buyer response- competition –legal consideration-and other environmental factors

If these facts considered when making pricing decision it have guaranteed the decision is the right one.

Pricing method

This is pricing in the real-world. Price is not set using any scientific formula. There are simply too many factors, supplier has better control over pricing if it product are directly to consumers or if they are sold through agents or brokers. In this scenario Sealax using retailers too so they have to use both methods to have a good profit in the market.

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Two main pricing strategies which are,

1) Recommended Retail Pricing

2) Mark up Pricing

Recommended retail pricing

Recommended retail pricing means the price that the consumer pays must be of great concern to the manufacturer. The recommended retail pricing law allows retailers to change the price much lower than the RRP in order to compete against the competitors whereas there isn’t any direct competition Sealax would be able to sell the product at the maximum recommended retail price. Therefore Sealax could charge a good reasonable price which they could cover all the cost, expenses and gain a good profit. Because of this pricing strategy the manufacturer Sealax would know the exact price of the product in the market.

Cost of a 1 liter Spray Can- $ 3.00

Price to retailer Price = Cost + (Cost*Mark-up %) Price = $4.50 + 4.80 ($9.30*330%) Price = $9.30+30.69 Price = $40

Price to Customer Price = 40 Commission 11.11% Selling price 45 RRP 50

Cost of a 4 Liter Container - $ 12.00

Price to retailer Price = Cost +Overhead per litre+ (Cost*Mark-up %) Price = $18 +19.20+ ($37.20*21%) Price = $37.20+7.80 Price = $45

Price to Customer Price = 45 Commission 6.25% Selling price 48 RRP 48

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4.0 Projected Income Statement SEALAX COMPANY PROJECTED INCOME STATEMENT FOR YEAR ENDING 2012

Sales

1Litre (45*35000) $1575000 4 liter (48*3750) $180000

Total Sales $1755000 - (Cost Of Sales)

1 liter (9.30*35000) $325500

4 liter (37.20*3750) $139500

Total Cost Of Sales $465000

Gross Profit $1290000 -(Expenses)

Administrative $30000

Travel $20000

Sales Representative $50000 Promotion $140000 Total Expenses $240000 Net Profit $1050000

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