Strategy

To successfully launch a product or service in the global economy, businesses have to rely on carefully researched information which will form a pool of knowledge form which managers will draw guiding principles which will act as the company’s philosophy or approach towards global marketing. Statistics show that between 67 to 95% of new product launches flop, mainly due to marketing reasons. (Czinkota and Ronkainen 2004 pg449) If a company has to survive, it must develop new products so as to maintain or build sales.

Companies do not have to make totally new products. They can: develop new-to-the-world products, new product lines, make additions to existing product lines, improvements and revisions of existing products, repositioning, and cost reductions. Successful new product development requires clear strategic objectives and priority setting and effective execution across the enterprise. This paper endeavors to highlight challenges faced, and approaches that successful companies took in the launching of their new products in the world market.

This is expected to form a marketing philosophy and strategy for any company the wants to launch a new product. This paper focuses on three main areas. With real life examples it identifies challenges a company faces during the product development process which commences with generation of a product idea and climaxes with launching of the product in the global economy. Secondly the writer shows important ways that technology is used to support the marketing effort. Finally the writer cautions on business blunders that a company can make when launching a product beyond national borders.

New product development is a process that commences with the identification of an opportunity in the market. A need is conceptualized into a product that is developed to take advantage of that gap. Next the idea is screened in the light of the company strategy and resources. The product idea is turned into a product concept that consumers can buy. This can be done by producing a prototype, which is tested under normal or virtual conditions like a simulation. Product concept testing generate enough information to enable the new product development manager to formulate a draft marketing strategy.

The next steps are: product development, market testing and finally commercialization. The job of new product development is not done until ‘the product is in the market, shipped at the right time, delivered to the right customers, and in the right volumes. ’ To achieve this feat the company faces many challenges. At the initial stage, the challenge is to identify an idea that can be turned into a concept that customers can buy. As Kotler says “consumers do not buy product ideas, they buy product concepts.

” (Kotler pg 359) The next challenge comes when the company produces a prototype. It is almost impossible to properly test it. Once the prototype is tested it will have generated enough information to construct a marketing strategy for launching the new product. The challenge at this stage is that market testing would ‘lead to a delay in full scale commercialization and increase the possibility of competitive interaction’. (Czinkota and Ronkainen 2004) The ‘idea stage’ of new product development posses the big challenge-where to find good ideas.

To get ideas the company has to run informal brainstorming sessions between customers and company production employees, allow time off for scouting on pet projects by employees, take apart competitors products and build better ones, and establish an idea vault. Once good ideas are found; Company decision makers can blunder when choosing ideas. On one hand they may commit the drop error where by the company dismisses an otherwise good idea. Or commit a go error whereby company hot shots permit or force a poor idea to move into development and commercialization.

“Some companies shudder when they look back at ideas they dismissed. Xerox saw the novel promise of Chester Carlson’s copying machine, but IBM and Eastman Kodak did not. ” Because product-development costs rise substantially with each successive development stage, companies must have idea screening criteria. Otherwise they stand to make either absolute, partial, or relative product failure, and hence loose money. (Kotler 2003) At the ‘test marketing’ stage the company faces investment cost and risk on one hand and time pressure and research cost on the other.

Because of new product failure rates companies have to do some sort of test marketing. They may resort to laboratory tests which may not realistic in terms of consumer behavior, micro test marketing and forced distribution tests. At Apple: “Apple Computer assumes the worst of its PowerBook customers and submits the consumers to a battery of indignities. It drenches the computers in Pepsi and other sodas, smears them with mayonnaise, and bakes them up in ovens at temperatures of 140 degrees or more to simulate conditions in a car trunk. ” (Kotler 2003)

The test marketing challenge may force the company to decide to roll out without undertaking initial market test preferring to face the risk of a product failure to the risk of loosing distribution or market penetration on a highly successful product. After successfully market testing the product, the company faces the ‘cost’ challenge of full product commercialization. It would be a pity if the company, after all its labors failed to successfully cross this final hurdle. At this stage the company can ill afford a new product that is not effectively introduced, marketed and supported in each market the company competes in.

picture what happened to Sonny Pictures Entertainment: Sony Pictures spent $125 million to make its blockbuster Godzilla, and some $200 million to make sure it was a hit. The huge campaign included billboards and busses, buttons and T-shirts, TV and Radio. Yet the only truly big thing about Godzilla was that it was a big flop. Critics penned the movie and audiences agreed. When Sony’s top brass saw the initial screening and realized Godzilla would be a bomb, they went out and spent even more money on marketing to lure as many movie goers as possible into theaters early.

The gamble paid off. Sony would end up grossing more than the millions of dollars it spent to make and market Godzilla. (Kotler2003) Many other companies have received a lackluster reception by consumers due to failure to properly prepare for this final hurdle. Technology plays a big part during product development. Most functional areas of the company get involved at some time or another. Each area has an information system. All business processes can be integrated into single information architecture called an enterprise system.

With a unified and, an all encompassing information system technology platform that houses data on all the key business processes the company’s capabilities to achieve strategic goals is enhanced. Information technology has helped companies to work jointly with customers and business partners on designing new products or modifying old ones. For example: Extranet enables customers of Cummins Inc. to access updates on their engine orders. Truck manufacturers can view early prototypes for Cummins line of engines and ask for modifications.

Real-time design collaboration tools let Cummins engineers work with customers’ engineers via the web. A customer council reviews all significant updates to the Cummins site. (Laudon and Laudon 2005 pg 60) During concept testing, the product concept is presented to appropriate target consumers and getting their reactions. Web technology has assisted many companies test their product concepts at almost no cost. For example: National Semiconductor has used “applets”-simple multimedia applications written in Java-and parametric search technologies to make its entire product database available on the web.

With the means to track customer searches, National Semiconductor can know when a customer did not find a product. That information helps National Semiconductor shrink the time needed to identify market niches and to develop new products. It is basically high-quality market research-free. (Kotler pg360) The field of Simulation has enabled businesses to produce prototypes that fit the attributes outline in the product-concept statement. By use of sophisticated virtual-reality technology, it is now possible to produce cost efficient prototypes. For example:

Boeing designed its 777 aircraft on a totally digital basis. Engineers, designers and more than 500 suppliers designed the aircraft on a special computer network without ever making a blueprint on paper. Its partners were connected by an extranet enabling them to communicate, share ideas, and work on the design at a distance. A screen shows how difficult maintenance access would be for a live mechanic. Such computer modeling allowed engineers to spot errors that otherwise would have remained undiscovered until a person began to work on a physical prototype.

Avoiding the time and cost associated with building physical prototypes reduced development time and scrappage and rework by 60 to 90 percent. (Kotler 2003 pg366) Legal and ethical implications loom large in today’s business environment. Success in launching a product in the global market requires not only comprehensive fact finding and preparation, but also an ability to understand and fully appreciate the nuances of different cultural traits and patterns. (Czinkota and Ronkainen 2004) An emerging perspective on ethics in multinational business is that ethical behavior provides a competitive advantage.

A firm’s ethical capabilities arise from: knowledge and skills to understand ethical frameworks and respond effectively to cross cultural ethical situations, 2) leadership, teamwork and organizational culture that facilitate ongoing dialogue and leaning about global ethics and 3) human resource systems and other organizational practices that acquire, develop and sustain these capabilities. (Francesco 2005 pg63) Carelessness can lead to costly advertizing blunders as well the many hilarious legal and ethical faux pas that hit the media once in while. For example: On ethical and legal matters,

In an ad with the headline “The water of life,” a man attends the running of the bulls in Pamplona and, after narrowly escaping being trampled, celebrates with a glass of Johnnie Walker Red Label. In many countries, the Pamplona setting raised hackles because people said, “The Spanish don’t know anything about whiskey. ” The ad was a total failure in Germany because to Germans it seemed simply reckless. “Also,” said Jenny Vaughn, worldwide brand director for Johnnie walker, “because of the German animal rights campaigners, you can’t show a gold fish in a goldfish bowl on German television, so a bull run was just not on. ”

Difficulties with language usually arise through carelessness, which is manifested in a number of translated blunders. An advertizing campaign by Electrolux highlights the difficulties in transferring campaigns between markets. Electrolux’s theme in marketing its vacuum cleaners, “Nothing Sucks Like and Electrolux” is interpreted literally in the United Kingdom, but in the United States, the slang implications would interfere with the intended message. Managers also need to be careful of myths and legends. One candy company was ready launch a new peanut-packed chocolate bar in Japan, aimed at giving quick energy while they crammed for exams.

The company then learned about a Japanese folk legend that eating chocolate with peanuts can cause nose bleed. Te launch never took place. (Czinkota and Ronkainen 2004 pg70) To develop a marketing philosophy or approach to new product development a company needs to accumulate a pool of knowledge about the way things are done. Research into how other companies successfully launched their new products and the challenges they faced, would enable the company to develop an effective marketing strategy. It is important to carefully consider each step of the new product development process.

Technology pervades every step of the new product development process. Business functions like marketing, production and the supply chain have information systems integrated together for efficiency in production. It is possible to use simulation to test prototypes as well as conduct cost effective market tests on websites before commercialization of a product. Since the world is becoming a global village and companies have to compete abroad, it is important to have a good understanding of the ethics and legal systems of nations that constitute foreign market so as to avoid careless blunders that may proof costly when launching a new product.

References Kotler, Kotler. (2003) Marketing Management, 11th ed. Upper Saddle River, New jersey, USA: Pearson Education, Inc. Laudon, K. C. and Laudon, J. P. (2008) Management Information Systems: Managing the Digital Firm, Pearson Education, Inc. Upper Saddle River, New Jersey, USA. Czintota, M. R. , Ronkainen, I. A. , (2004) International Marketing 7th Edn. Thompson South Western, Mason, Ohio, USA. Francesco, A. M. , Gold, B. A. , (2005) International Organizational Behavior, Pearson Prentice Hall, New Delhi, India.

In any organization, Balance Scorecard Measurement System is laid down by way of the company’s strategy in four classes’ i. e. financial, customer, functional, and Continuous growth. All of these four perspectives are mainly considered as the cornerstone for company’s direction, target setting, etc. playing the role of a linkage to organizational branches in order to establish their contributions.

The Balance scorecards are chiefly applied in the companies to amend the communication system internally or externally, relationship formulation between vision, strategy and actions, performance evaluation, etc. Earlier, the balanced scorecard measurement system only kept conventional financial standards, but these conventional financial measures were inadequate to furnish the fair information. Thus, in this competitive environment for leading and measuring performance, the companies should create future value through investment in customers, innovation, suppliers, employees, processes, and technology.

The balanced scorecard utility proposes that organizations managers or executives have to view the organizational performance or its status from four views i. e. learning and growth perspective, financial perspective, Customer perspective and internal business process perspective. After that they should create table, gather information and examine it in concern to each of these views, so that it will be easy to amend the organizational performance effectively. The diagram shown below reflects the following four perspectives:

(Balanced Scorecard Basics, 2009). The following table shows four major perspectives that may be considered in order to improve the organizational performance. The balance scorecard is made on the basis of the four factors: (Balanced scorecard) This measurement system allows the companies to chase a result that is linked with finance. It also allows supervising the performance build up. In order to balance the long term or short term objectives, it furnishes the model that considers the various decisive business indicators or factors.

Along with this, balance scorecard measurement system also relates and equilibrates the various indicators in the organization i. e. financial and non-financial, tangible and intangible, functioning drivers and results, internal and external views, etc. For example: Balance the external measures i. e. shareholders, customers, investors with the internal measures i. e. critical business processes, innovation, learning, and growth.

Contents Market Segmentation, Positioning, Targeting: A case of Tata Nano in India EXECUTIVE SUMMARY: Targeting and positioning strategy of Tata Nano and recommendations for the company are given. INTRODUCTION: BACKGROUND: According to Howard and Sheth (1969, p. 70), “market segmentation depends on the idea that the company should segment or divide the market in such a way as to achieve sets of buyers” Historically sellers were engaged in mass marketing. They were into the mass production, mass promotion and mass distribution of one product to all consumers in order to obtain economies of scale.

This approach of marketing segmentation made the producers to compete against their competitors in terms of products and services. Kotler says “the product differentiation is to provide variety to the buyers rather than to appeal to different segments”. DISCUSSION: CRITICISM OF MARKETING SEGMENTATION: When the size of the market is so small to do marketing When a brand is a dominant brand in the market. When more number of people falls in the same category. Most of the brands do not operate within the same segment.

Certain brands cannot fit into a particular segment which is a drawback to this strategy. In very small businesses and brands this strategy will not work and it is not possible. CASE OF TATA NANO IN INDIA AND ITS MARKET SEGMENTATION: Tata Motors is the leading automobile manufacturer in India with a huge portfolio which includes trucks, passenger cars, buses, and utility vehicles. Even though there are many products from Tata Motors an interesting case of Tata Nano is discussed further.

Generally Tata Motors follow the marketing segmentation concept and they have succeeded which already prevails in the history. Tata Nano which comes under the passenger car segment was launched in January 2008. India’s passenger car segment has been grown extraordinarily for the past four years and it was the clever strategy of Ratan Tata to launch a product in that segment. Heading to the marketing segmentation of Tata Nano is quite interesting. Tata Nano is specially designed and manufactured for the middle class and lower middle class people in India (Interview of Ratan Tata).

Marketing Segmentation for Tata Nano: Geographic: rural areas, semi urban areas, small towns, large cities and metropolitans. Demographic: Age group: people of age group above 18 (as the legal age for driving in India is 18) Size of family: family size not more than 5. Psychographic and Behavioural: ANALYSIS OF TATA NANO’S MARKETING SEGMENTATION: From the above segmentation variables and how Tata Nano is segmented, it is clear that the manufacturer wants his product to be used by almost everyone in all geographic conditions.

In demographic segment the income group of $220 can easily purchase this car is mentioned. But again they say this can also suit the people who own cars already for the sake of increasing the count which adds privilege to them as well as their status. Even in the occupation category, it is mentioned that right from students to any profession person can use Nano which again puts a lot of people in the category. TARGETING AND POSITIONING OF TATA NANO: Tata Nano’s targeting strategy starts from its tag line “The people’s Car” and “the world’s inexpensive car”.

Tata Nano is segmented to the middle class and lower middle class people who had only dreamt about cars which also include the people who earn $220 per month. Their target customers are those who are extremely price conscious and have low latitude of acceptability. Industry wise they target the two wheeler industry, three wheeler industry (which are more costly than nano), public transports as well to an extent. Hence pricing is their most effective targeting strategy. (Admap magazine, www. warc. com/admap) Positioning of Tata Nano is solely based on its price which may also become a drawback to them in future.

Tata Nano is well positioned which will be doing a marketing for the entire Tata Motors. As Nano will be the first car of many customers there will be a possibility of customers to follow Tata Motors if they have a good value for money product and good customer relationship management. As mentioned Nano will be the first car people will surely change their car and that might be possibly for another car in Tata Motors itself. Moreover Tata is also got a wide range of cars which are durable and better quality which suits Indian roads. (NDTV news) {draw:frame} {draw:rect} {draw:frame} {draw:frame} draw:frame} {draw:frame} CONCLUSION AND RECOMMENDATION: The marketing segmentation concept is a good strategy in marketing but not applicable for all industries, services or products. Nano is got a good segmentation and its well targeted and positioned. As Nano is targeting people with its price strategy, in future due to some inflation if value of money increases they might not be able to convince their customers. Tata is a good reliable brand in India and now the positioning of Nano as the first car of many people will surely help them in growing their Tata Motors organisation.

REFERENCES: Caroline Tynan and Jennifer Drayton, Journal of marketing management, 1987, 2, No 3, 301-335. Smith, W. R. (1956), “Product differentiation and market segmentation as alternative marketing strategies”, _Journal of Marketing, _2J (3), pp. 3-8. Baker, M. J. (Ed) (1984), Macmillan Dictionary of Marketing and Advertising, London, Macmillan. Haley, R. L (1968), “Benefit segmentation: A decision-oriented research tool”, Journal_ of_ Marketing, 32(3), pp. 30-35. Chisnall, P. M. (1985), Marketing: A Behavioural Analysis (2nd edition). Maidenhead, Berkshire, McGraw-Hill UK Ltd. Lunn.

T. (1978), “Segmenting and constructing markets”. In: Consumer Market Research Handbook (2nd edition) (Eds. ) Worcester, R. M. and Downham, J. , London, Van Nostrand Reinhold Co. (UK) Ltd. , pp. 343-376. Haley, R. L (1968), “Benefit segmentation: A decision-oriented research tool”, _Journal of_ Marketing, 32(3), pp. 30-35. Siddharth Vinayak Patankar, (2009), “_NDTV’s review of the Tata Nano_”, NDTV Profit Online, [http://profit. ndtv. com/2009/03/23220600/How-does-the-Tata- Nano-drive. html]. www. tatanano. inservices. tatamotors. com Joseph Sassoon, Admap magazine, www. warc. com/admap.

Facts about harm associated with tobacco and contact information for quit programs provide access to information and support School education programs that focus on assertiveness skills, academic success and developing a negative attitude to smoking all help young people to modify personal behaviors and enhance skills that will be protective against smoking in future Quitting service Creating Supportive environments: Promotion of smoke free messages and regulation of place creates a variety of physical and social support structures accessible to individuals Frightening media campaigns “every cigarette is doing you damage” maintained powerful antismog attitude in the with advertising of pharmaceutical products, such as nicotine patches, the urgency to quit is implemented by the sense of having a solution readily available. Most indoor and public places are smoke free, providing safe physical and social environments for people to work and interact socially.

Non-health initiatives like housing, counseling and anti-violence strategies reduce stress and anxiety that might lead to smoking. Employment and training programs to reduce boredom associated with unemployment-?address socio-cultural and socioeconomic determinants which influence tobacco use. Regulation of place of sale aims to eliminate the sale of tobacco products to minors and aka them less visible: hidden behind counters Strengthening Community action Local educational strategies such as peer support and mentoring programs improve self-esteem and the sense of worth among students which can be protective factors against harm from tobacco use.

Families and parents provided with safe places for children to avoid tobacco smoke-?parks Reorienting Health services: ‘Lifestyles’ prescription pads are tools used by Gaps to initiate discussions with patients about lifestyle behaviors-?help doctors introduce preventative assuages and recommendations for improving lifestyle behaviors. Building Healthy Public Policy. High levels of taxation on tobacco ensure cigarettes are less affordable, reducing access for younger people in particular Imposition of laws that prevent smoking in most public and indoor environments I. E. No smoking in pubs and clubs Place of drug education in all Australian schools an important cornerstone of public policy. Delivery of anti-smoking messages and development of anti-smoking attitudes as young as possible is critical.

Tighter regulation of product safety

• Economic General economy growth in global
• Economic downturn in Western Europe in 1993
• Inflation and Devaluation of Currency Growth of entertainment industry in Emerging markets
• Cost advantage in India
• Social Different local cultures and history Changes in customers preferences
• Significant role of television & film
• Significant role of kid’s and family’s entertainment
• Technology Technological advancements
• Recent social trend in smart phones and APS Development of world’s media
• Environment
• Echo-Friendly
• Philosophy
• Sustainable
• Development
• Legal
• Antitrust
• Law
• LimitsOpportunities

PESTLE Analysts – conclusion

From the analysis of PESTLE, there are a quantity of factors tend to impact the Walt Disney to change. However, the social factor is the most important one (Kara and Couture, 2014). The key drivers are identified as following: Various new media platforms appear due to technological advancements. As the development of technology facilitates generating of various new media platforms, smart phone and computers are used by people more frequently than watching traditional television (Kara and Couture, 2014). Moreover, people may choice to see films in the APP and Internet instead of going cinema.

The Walt Disney has to update the technology and create products in new media platforms in order to meet the changes of people’s life style. The needs of entertainment are multiple and volatile. Nowadays, the demand to entertainment increases as development to overall economic. However, the people’s needs of entertainment are volatile and multiple, which means they usually are attracted by fresh and prefer trying new products (Bailey and Harington, 2007). Moreover, they may not be satisfied with Just seeing films in the cinema but going to theme park to gain live experiences.

Last but not the east, people may pay more attention to quality of services rather than product itself (Bailey and Harington, 2007). Therefore, the Walt Disney has to improve the ability of innovation and quality of service in the future.

 Internal analysis:

In terms of internal environment of company, a tool that identifies the strengths, weaknesses, opportunities and threats involved in a business venture called SOOT (Pall et al. , 2009). It is a common structured planning method used to evaluate the internal environment.

SOOT Analysts:

SOOT Analysts Strengths:

1. Strong Diversification
2. Brand Reputation
3. Loyal Customer
4. Acquisitions ; Alliances
5. Economies of Scope
6. Creative process
7. Large investment in R

Weakness

1. Cultural Difference
2. Low financial management ; operation
3. Limited targeted markets
4. Large R cost
5. High sunk cost
6. Risk factories

Opportunities:

1. Growth of entertainment industries in emerging markets
2. Further expansion in new emerging economies
3. Global localizatio
4. Development of technology
5. IT Advances ; Mobile Gaming
6. Cost advantage in India

Threats

1. Intense competition national ; global.
2. Increasing piracy
3. Change to customer’s taste and preference
4. Continuous Need For Technological Updates
5. Economies Recession
6. Negative Publicity Due to Unexpected Event

 Some Important Elements in Details

Firstly, the Walt Disney Company has highly diversified products and service portfolio. Therefore, it can conducive to reduce the business risks and enter new market to increase the revenue (Ammo’s, 1975). Most importantly, all kinds of tangible and intangible resources will be shared and utilized more effectively (Ammo’s, 1975).

For example, the same trademark can be used and Disney cartoon characters in television can be copied into clothing and stationery. Secondly, the Walt Disney Company has strong brand reputation. Brand Value Listed 27th in the world’s 500 most valuable brands ($ 20,548 million brand value in 2013 $ 23,580 million brand value in 2014 ). Meanwhile, brand reputation also strengthens the customer’s loyalty (Uncles, 1995). Last, the Strategic and Tactical Acquisitions help the company to accelerate the global expansion and become the leader of its industry.

As an international company, the cultural difference could be an obstructive element to run business successfully in each geographic segment (Bailey and Harington, 2007). For example, the revenue of North America is quite outstanding while there is a great loss of Disneyland in Europe Paris. It states that the company is more concentrated on North American as it is based on native cultural but misunderstanding the consumption behavior of European. Moreover, the financial management is one of capacities. As operation cost is high in company, it leads to low profits and earning rate.

Finally, there is limited range of targeted audience group as targeted markets of company are mainly focused on children and youth There are a number of opportunities in emerging markets like china and India whose entertainment industries is in growth (Baker, 2008). China has large population, which exists huge potential population consumption. In the meanwhile, entertainment industry will be supported by sustainable tourism policy introduced in China as it can attract more tourists. India has a cost advantage in terms of salary and overall cost of production.

It illustrates that making an animation movie in India costs 60,000 dollar compared to 250, 000-40, 000 dollar USA (Baker, 2008). Therefore, it is opportunity for the Walt Disney Company to expand products and invest in emerging markets. Furthermore, as development of technology, company may benefit from IT advance like designing mobile gaming with Disney characters to meet the new demands of customers. Disney faces many media conglomerates competitors includes Victim Inc (VIA), Time Warner Inc. (TWX) and Compact (CAMS) in its various segments.

Marketing is about how to get the consumer, become aware of the product hence consume it. There are four P’s found in marketing. These are Product, Place, Promotion and Price. The first, product means that you must have a good or service to sell to market. The second, place means you must look for a place to sell the product. The third, promotion depicts that you must make the potential consumer aware of your product and the last price, means you must price the product according to the target market’s capabilities.

If you’re targeting the rich, than price the product accordingly. For companies, marketing is a must and they know that if they can’t market the product they will go out of business. Even though a product’s quality is very good, if there are no sales, it is a waste of time. This paper is about the ‘place’ part of the market mix. It is about leapfrog, an educational toy maker and other toy manufacturers and their quest with Wal-Mart the leading supermarket in the United States. Supermarket space has become a very key feature in the marketing of goods.

Supermarkets like Wal-Mart have realized this and are thus becoming unreasonable when dealing with suppliers. Wal-Mart has been able to sell itself until it has become one of the most preferred shopping places in the United States. Wal-Marts gets about 100 million customers (about a third of the US market) in a week according to (Zimmerman & Hundson 2006). It is considered the largest toy re-seller in the US with about 45% of the retail toy business. It overtook “Toys R US” the previous largest toy reseller in the 1990’s (Zimmerman & Hundson 2006).

Wal-Marts’ goal has been to offer the lowest prices as possible to its consumers. The founder Sam Walton found out that by pricing lower markups, one gets to sell more due to the sales volumes. This concept has made manufacturers find out that they are forever going to be under the mercy of Wal-Mart to offer low prices. Wal-Mart keeps a database of prices and suppliers and the suppliers who can offer the lowest price gets the shelf space. Manufacturers from US are finding themselves competing against those from China and the Asian market whose prices are way down compared to US prices. Read about open access good example

Factories in Asia use the “sweat shop” concept to manufacture and labour is way cheaper there. In the US, manufacturers are faced with more costly labour and operation costs. The US manufacturer thus feels he is hardly ever going to make a profit if he adheres to Wal-Mart’s conditions The toy industry is a $ 20 billion dollars a year industry in the United States. The main companies found include Leapfrog, Jakks pacific, RC2, among others. Wal-Mart has made all the other resellers of toys like Toys R US out of business by offering toys at lower prices.

This has meant a decrease in profit for manufacturers. The question they are asking themselves is should they sell to Wal-Mart or completely block it out of their system. They seem to have made a choice as they are looking for alternatives before Wal-Mart kills the whole toy industry. One way that Toy manufacturers are trying to overcome Wal-Mart is by avoiding discount shops like Wal-Mart and targeting department shops. They claim that parents who have kids frequent these stores just as much (Palmen 2004).

Also negotiating with Wal-Mart is not going to be good for toy manufacturers in the United States especially because it does not want to listen to them. Hopefully with time the retail giant will come looking for them. Even though Wal-Mart will stock products from other countries, in the long run, Americans would like to buy their own hence will only go to stores where “American” toys are stocked. Toy manufacturers can also make use of new distribution channels that have come up with the onset of new technologies like the internet.

Customers can download games and the like from the firm’s website, and this will have completely eliminated the middleman. Toy manufactures should also use the ‘bad image’ that Wal-Mart is currently facing to move their products to new distribution channels. They should then woe their clients to these new stores and say that they do not deal with a partner who is being accused of moral issues. Consumers will eventually move as this is the age of practicing ethical business.

Wal-Mart has been accused of being a bad employer, a prices dictator to suppliers among other things (Gogoli, 2006). Toy manufacturers should refuse to sell to Wal-Mart because it is not doing business fairly. Price cutting is a good technique but on luxury goods. Luxury goods like toys are supposed to be priced at a higher mark up because they are not bought all the time but once in a while for example during special occssions like birthdays or festive seasons like Christmas. Making the toys cheap makes the children loss interest in them quickly as they are readily available.

However, making the toys expensive means that parents will only purchase if it is absolutely necessary or during special occasions like birthdays. Wal-Mart is trying to make toys become “cheap” goods country to why they were invented. Toy manufacturers should try their level best to prevent this from happening. Again, price is not the only way to compete for consumers and that is what Wal-Mart wants all to believe. For toys it is the experience of the toy or what it has to offer that makes it popular. So discounting the price of a toy is not its selling point but more what it has to offer.

So Wal-Mart is not the ideal ground to sell toys. It is high time the toy industry took control of their destiny and chart it in the direction they want before it is too late. Many industries have been crashed by moves of distributors. Overseas products normally have a bad reputation of failing to meet the standards of the US market. Toys made in China have had always had issues about quality, among other things. For example early this year, some toys from china were recalled because they had been made using a paint that was not approved due to its high lead content.

This is just a tip of the iceberg and China has often being accused of producing sub standard goods. Toy manufactures in the US should use such allegations of “sub standard” goods and woe consumers to buy “ American” where standards are strictly adhered to and never compromised. Consumer should thus buy from others stores not Wal-Mart who only stocks “cheap” products as well as “foreign” products All in all, the manufacturers should never allow themselves to go at a loss but instead look for other marketing gimmicks to increase sales hence increase profits. They should not let themselves be bullied by one firm.

It is one of the leading companies in Japan in the manufacturing and selling business of Dairy products. Having its headquarters in Tokyo, It is a dairy products item producing company which was founded in April 1917. Company has its operations in Japan, Australia, Thailand, Hong Kong, China, Taiwan, and Vietnam. It is headquartered in Tokyo, Japan. (Data monitor) It has a diverse product profile which includes following products. (Meiji Dairies Corporation n. d. )

• Milk and beverages

• Yogurt

• Ice-cream

• Food Products

• Childcare and health food products

• Nutritional performance food

• Frozen foods

• Foods for commercial use (Meiji Dairies Corporation n. d. )

Mission Statement

Our mission is to widen the world of “Tastiness and Enjoyment” and meet all expectations regarding “Health and Reassurance. ” Our wish is to be closely in tune with our customers’ feelings and to always be there to brighten their daily lives. Our responsibility as “Food and Health” professionals is to continue finding innovative ways to meet our customers’ needs, today and tomorrow.

General Marketing Strategy

Meiji Dairy Corporation deals in all kind of dairy products having their main aim to be the leading organization of food market. The company’s basic target market is domestic and overseas markets in Asia and Australia. Company highly values innovation as the success factor. By innovation, diversification, and strong marketing, Meiji managed to become the comprehensive food supplier in Asian market. Innovation: It is basically identification and analysis of new product development that is in line with the company’s mission. It is also known as new product development. (Hill and Sullivan, 1996)

Meiji Dairy Corporation has often used this strategy to become the market leader in dairy products. Diversification: It is a corporate strategy that helps in increasing profitability through greater sales obtained from new products and new markets. (Marketing n. d. ) The company has diversified its product line which paid off making it the largest seller of milk in Asia in 2008. The company did diversification by mergers of milk producers in different countries and also by joint ventures. They entered the Chinese market through joint venture. (Encyclopedia n. d. )

Positioning:

Positioning is the designing the product and its image in consumers mind. Meiji has positioned their product as a healthy product. The brand has been positioned for all people specially targeting health conscious people. (answers n. d. )

Segmentation:

Segmentation is a useful strategy which divides the people with similar needs and wants into groups. (Marketing teacher). Meiji has not bound its product to any age group, life style or on the basis of any other demographic characteristics. The brand is for all the users in different life styles and age groups.

Marketing and Distribution objectives:

They are the objectives that the marketing department needs to achieve. Whereas the distribution objectives are objectives that distribution needs to achieve to contribute to firms objectives. These decisions include the cost, selectivity, recruitment of distribution staff (stockists) etc. The distribution objectives for Meiji dairy products ? Minimize total distribution costs for a given service output ? Determine the target segments and the best channels for each segment ? Objectives may vary with product characteristics The marketing objective can be

• to achieve increased market share by 5 % in one year

• Inform target audience about features and benefits of our product and its competitive advantage, leading to a 10 percent increase in sales in one year.

The distribution objectives helps in achieving the marketing objectives thus overall Meiji’s objectives. To achieve increased market share in china it needs to improve its distribution channel. It has to decide how Meiji wants its product to reach its final consumer. Situation Analysis for Channel Design A distribution channel is used by the company to make it reach the final consumer.

Meiji uses direct or indirect method of channel distribution. (E How). Market Environment: Market potential for the dairy product is very high in China. Since people are getting more and more heath conscious now they prefer to eat healthy foods. Apart from being health conscious china is holding major events of the world like the Beijing Olympics. The Market size is also very high having around a population of 1 billion(geo hive) , China is the most populous country in the world hence a huge market to target. Having an intensive distribution system it can increase its sales.

Chinese government has played an important role in promoting dairy consumption in an effort to enhance citizens’ nutrition under the slogan, “A glass of milk every day can make people stronger. ” (LU, 2009). China is a huge market with great number of retailers, wholesalers, and agents. Meiji can provide its products to Chinese consumers by the indirect channel. Demand Trend for Dairy Products The demand for milk is expected to grow as the people are getting more and more aware of the nutritious factors of dairy products.

Current Market Segments

Meiji is currently supplying its products to Japanese owned grocery stores in Shanghai to target the Japanese population and the Taiwanese population in Shanghai.

Opportunities:

• Growth in consumer awareness is directly related to word of mouth advertising

• The growth segment of the products life cycle will show consumers that Meiji is preferred over the others

• Changes in market segmentation will be a new path for new markets. (Flavored Milk)

• Current targeted consumers become brand loyal to Meiji

• Ability to stay ahead of the competition by complying with new packaging and product laws even though it is not required to do so.

Distribution Strategy:

The distribution strategy is very important decision for Meiji Dairy Corporation. As it produces the products that are of short life, the products should reach the consumer in high quality. The shorter the chain of distribution, the more control Meiji will have on the presentation of the final products. Price setting is also a major factor in determining the distribution strategy as the merchandisers sets their own prices. Read about Dutch Lady Strength and Weaknesses

The two distribution strategies that Meiji can use are

• Intensive Distribution Strategy

• Selective Distribution Strategy

Intensive Distribution Strategy

In the intensive distribution strategy, Meiji should sell its products through every possible store. As dairy products are low involvement products that are bought on daily or weekly basis, it should make its products available in every conceivable product possible. It can develop an intensive distribution strategy that brings its products to every door, through effective communication, door-to-door sampling, and exciting consumer promotions. The company should should use indirect and direct method of distribution.