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Key marketing concepts for XYZ Wood Products

Describe about the Strategic Planning and The Marketing of Wood Products.

XYZ Wood Products is leading furniture Retail Company based in New Zealand and working with the mission of providing the customer with unrivalled range of wood manufactured products catering living room, dining room, bed room, home office, home decor, kitchen, children, bathroom and garden. The company strives to make the product affordable, without compromising quality and customer service (Steiner, 2010). In the assignment the bed room range manufactured by XYZ Wood Products. The report focuses on marketing concepts including marketing v/s selling, marketing mix, segmentation and positioning. It also analyzes the domestic and global market for XYZ Wood Products and new product introduced and PLC explored.

Marketing can be defined as a management process that enables the movement of products and services from the company to the customer. It includes the designing the marketing mix that is related with controllable variable product, price, place and promotion and how it will be segmented to the target customers by positioning it effectively to achieve the goals and objective of the company (Steiner, 2010). The American marketing association (AMA) defines marketing as

Marketing is range of activities and process developed by the company to communicate, exchange and deliver the product and service developed with a view to add value to the customers, partners and the community at large (Peter, & Donnelly,2011).

It is observed from past research that the evolution of marketing exhibit five distinct phases and they are simple trade era, the production, sales era, marketing era, and marketing company era. The recent development in the marketing field has added two more phases namely relationship marketing era and social/mobile marketing era. The simple era reflected limited supply and commodities was the king. It was replaced by production era where the industrial revolution leads to mass production ending the limitation concept (Dibb et al., 2005). It was taken by the sales era where the demand reached saturation and competition grew and companies promoted commoditization to sell focussing on price as the competitive advantage.  It was followed by marketing department era where the company realized the importance of marketing activities like advertising, sales promotion and public relation to satisfy the customer more effectively.  Then came the marketing company era where the marketing become the goal of the company and customer the king.

Marketing and selling

Marketing is the process whereby the company thinks the customer needs and satisfying those needs as the primary motive of the company. On the other hand the selling is the process whereby the company applies tools and techniques of attracting customers to buy the product without any concern for the value creation of the exchange to the customers (Dibb et al., 2005). In other word marketing aims to satisfy the needs of the customers while selling aims to make the customer buy the products of the company. In context to XYZ Wood Products the company will sue the marketing concept by manufacturing products that satisfy the needs of the customer by creating value for them.

Marketing v/s selling and marketing evolution

The marketing mix (4Ps) is an essential part of the marketing process where the company use the controllable variable namely product, price, place and promotion to attract the target segment of the customer identified by the company (Constantinides, 2006). In context to XYZ Wood Products the marketing mix is explained below

Product – XYZ Wood Products intend to promote the bedding products namely single cot, double cot and king size cot to the customers to satisfy their need of comfortable sleep in the home.

Price - XYZ Wood Products intends to opt for the cost plus pricing as the pricing strategy with 20|% mark up as profit so that customers can afford the bedding range without a pinch on their pockets (Constantinides, 2006).

Place - XYZ Wood Products will use the own stores and other furniture retailers like supermarket to reach the target customers.

Promotion - XYZ Wood Products will use the combination of print, electronic and digital to communicate with the customers. Furniture magazine, TV, You tube, Face book and Twitter will be major media selected to send the message.

Marketing segmentation is part of the STP process whereby the company classify the wide market of New Zealand into small identifiable group on the bases customers sharing similar preference of furniture.  In context to XYZ Wood Products it is the bedroom furniture and the customer segmentation will be done on the basis of demography and psychographic such as Upper middle classes, Middle upper class and Middle class (Wedel, & Kamakura 2012). Again it will be grouped on the basis of single customers, married couples and family customers who will have the need for single, double and King size bedding.

Positioning is part of the STP process that explains the communication strategy adopted by the company to reach the message related with the product to the target customers (Tsai, Wu, & Liang, 2008).  Based on the segmentation of customers identified above the company will use the lifestyle based positioning that also communicate the affordability factors.

Domestic market and global market are different types of market demanding different marketing process in terms of marketing mix, segmentation and positioning. In addition it is influenced by micro and macro environmental factors that differ for domestic and global markets (Vaughn, J. 2011). When XYZ Wood Products is catering to domestic market the company is concerned with the local customers whose taste and preference are well understood by the company. On the other hand when XYZ Wood Products is planning to enter international market it is essential for the company to conduct a market research to understand the external factors namely the political, economic, social, technological, legal and environmental factors that influence the decision of the business. The cultural barrier in terms of language, tradition and ethnicity plays a crucial role in purchase decision made by the customer and the company needs to understand this barrier and overcome them to establish the business in the international market (Vaughn, J. 2011). The political relation and legal proceeding and regulation also need to be well understood to sustain the business in the international market compared to domestic market.

The marketing mix – 4Ps

The major difference between Domestic and Global markets for XYZ Wood Products is related with the market entry required to establish the business in the international market. It includes comparing the pros and cons of different market entry methods namely exporting, franchising, licensing, Joint venture, and strategic alliance (Peter, & Donnelly,2011). Further it is essential for XYZ Wood Products to make a decision between standardization v/s adaptations. In the domestic market XYZ Wood Products use a particular marketing mix that satisfy the needs of the customers in the local market but the same marketing mix can prove to be fatal in the international market owing to the difference in the taste and preference of the customers.

XYZ Wood Products plans to introduce the bath room products as the new wood products in the domestic market of New Zealand. It is new concept in the wood manufacturing industry and it will define the furnishing market by providing natural product to customers. It is for the repressnt the bathroom accessories for household customers. The new wood product namely bathroom product planned will undergo the eight step of new product development. They are product idea generation, screening of ideas, concept development, testing and analysis, technical development of the product, test marketing, commercialization and follow up. The product development team in association with the marketing development team to execute the first three steps and the R&D and product development team take care of the concept development, testing and analysis, technical development of the product. Finally the marketing team conducts the test marketing and execute the commercialization. Finally the product launch takes place.

The new product developed by XYZ Wood Products will follow the product life style (PLC) that is applicable for all products in the market environment. The product life cycle of any product exhibit four different stages namely introduction stage, growth stage, maturity stage and decline. The bathroom product of XYZ Wood Products can be explained with the PLC for the next ten years. One the product is launched in the market the first stage of PLC namely the introduction stage starts (Jain, & Haley, 2009). It may take a year or two to establish the product in the market based on brand value, market competition in the wood product market, and product acceptance by customers and success of the product. If the product is well accepted and succeeds in the market the next stage namely growth stage starts. The company enjoys rising market share supported by promotional campaign. It can last for three to seven years depending on various market factors and product attribute. This is saturation period as the product achieves maturity. This is stage where many company opt for new market including international market. The market share is stagnant and promotion decreases. This is final stage and the decline of the product starts in terms of market share. The company either discontinue the product or modify to give new life to the products.

References

Constantinides, E. (2006). The marketing mix revisited: towards the 21st century marketing. Journal of marketing management, 22(3-4), 407-438.

Dibb, S., Simkin, L., Pride, W. M., & Ferrell, O. C. (2005). Marketing: Concepts and strategies (p. 850). Houghton Mifflin.

Jain, S. C., & Haley, G. T. (2009). Marketing planning and strategy. Cincinnati South-Western Publi       

Peter, J. P., & Donnelly, J. H. (2011). Marketing management: knowledge and skills: text, analysis, cases, plans.

Steiner, G. A. (2010). Strategic planning. Simon and Schuster.

Tsai, M. T., Wu, H. L., & Liang, W. K. (2008). Fuzzy decision making for market positioning and developing strategy for improving service quality in department stores. Quality & Quantity, 42(3), 303-319.

Vaughn, J. (2011). Environmental politics: Domestic and global dimensions. Cengage Learning.

Wedel, M., & Kamakura, W. A. (2012). Market segmentation: Conceptual and methodological foundations (Vol. 8). Springer Science & Business Media.

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