Teragren Company Marketing Strategy - Case Study Example

TERAGREN COMPANY MARKETING STRATEGY (Student Name) (Course No.) (Lecturer) (University) (Date) Teragren Company marketing Strategy Introduction It is the aim of every business to ensure that it experiences a growth. Marketing strategies offers businesses opportunity to ensuring that they meet their target goals in relation to creation of a positive brand identity, taste, and preference within the market. Considered as one of the fastest growing firms in the construction industry, Teragren Company uses bamboo products to construct houses, workshop, and flooring. With the nature of organizational commitment and beauty resulting from the use of such products, there have been increasing demands for products made from bamboo. The organization continues to enjoy the growth due its marketing strategies that often aim at increasing the scope of its operation from the Northern America to other parts of the world. However, in the growing competitive market, there is a greater of need for the organization to identify factors, which might help improve the image of their brand (Petri, 2004, 79). These factors contribute to either success of the organization or failures depending on the methods which organization integrate them to initiated development. Teragren Company is one of the greatest companies thriving in the construction industry that uses bamboo with an annual increment in the volume of operations. It is crucial to take tract of brand image factors especially those influencing smooth management of the organization. Moreover, understanding the relationship between these factors and circumstances revolutionizing management structures forms the bottom line of identifying the best methods of beating the competitive market. Factors influencing organizational decisions relating to marketing strategies of bamboo products can be either internal or external. Before implementing any promotional strategy, the chosen method must have the ability to elicit attention, interest, desire, and action among the potential customers. Promotional strategy must also ensure that in the end of the marketing process, the name of the business and products are familiar to the customers, creation of good will and favorable brand image, and attract more customers. Various marketing strategies Product strategy Teragren focuses on its product strategy to maintain its scope of operation within the market. The production of quality and products that are more efficient is the key objective of the company. However, a determination of the cost of production versus the benefits realized from such operations determines the ability of the firm to withstand the upcoming companies within the region operating in the same line of products (Beall, 2010, 102). Regardless of the continued target to meet the demands of the customers, adequate consideration of the alternative models of production is essential to maximize profit. Through the adoption of the use of bamboo in the production of the flooring materials, the company has maintained a constant supply to the customers at affordable costs. In the recent past, the company relied on pine for the production of such materials. Unfortunately, pine took long period to mature and at the same time the cost of production was higher limiting the returns. Pine took approximately 25 years to mature with oak, which was the other alternative, taking longer. The focus on the use of bamboo for the production of such flooring materials remains environmentally friendly. The products of bamboo are renewable reducing waste and eventual minimal cost of purchasing new raw materials. Earlier Teragren imported bamboo from China as from 1997 to 2006 recording an increase in the production rate from $13.6 million to $20 million. Teragren continues to maintain a high quality of its products using bamboo of sufficient age in their production. The better brand of bamboo flooring continues to remain at the top regardless of their higher prices. The production of goods with high standards and preference remains the pride of Teragren. It therefore helps it meet its objectives of quality product delivery to its customers while maintaining affordability (Williams, 2007, 77). In order to implement the continued use of bamboo as the best alternative for producing flooring materials, an understanding of the taste and preference of the consumers come first. The initial stage to the implementation plan of product strategy is receiving feedback from the consumers. Likewise, consistency in research for new and better flooring materials provide an upper hand in the maintenance of the quality of the products. Moreover, comparison with same products from other related companies act as a scope of improvement. Practices of branding should be flexible to future changes without compromising its brand (Miller & Muir, 2004, 112). In cases of rebranding, the company has to consider the brand awareness, its relevance to the targeted market and vitality. Market Segmentation The success of any company depends on an understanding of its market structure, targets, and positions itself in a manner that maximizes its sales in both local and international markets. Proper market segmentation is the core factor that has been enjoyed by Teragren Company to maintain the higher preference of its products. An understanding of the market controls the organization of the products developing the norm of offering alternatives depending on the market mix of every location. For instance, highly branded and first grade products with higher prices distributed to areas occupied by high profile people. Such people are rich and capable of buying at higher prices (Mankiw, 2014, 285). On the other hand, people living in low-income areas needs products designed in smaller quantities, which are easily affordable to them. Therefore, smaller packages are important to promote the sales. An understanding of the behaviors of the consumers also provides information on the market fragmentation. Lifestyles and personality encompassed with mode of shopping provides the best sales. The company needs to adopt an online platform for interacting with its customers. Through such platforms, the company is capable of maintaining an online. Another alternative model of marketing would be delivery of products to the clients’ residential areas. Whether on payment upon or free, the company would capture most parts of its market expanding by a greater extent. The implementation plan revolves around setting up a team that monitors the market trends. Recognition of gaps that require various market segments helps in determining the market target model. This would work towards empowering business, consumer, or both. The consideration of such markets targets maintains the local and international relevance outlining the targeted group of people. A formulate decision making is, thereafter, essential in determining the buying patterns of the consumers. In the end, the company targets the customers by producing goods that meet the taste and preference of a particular group within the market (Thrall, 2002, 241). The best positioning provides an outstanding brand image that remains in the minds of the consumers. Through such stepwise implementation schemes, the company is capable of winning a greater number of buyers. Pricing strategy Pricing is a marketing strategy in which organizations use the price of the commodity to create a competitive advantage. With the rising number of businesses emerging and operating with wood flooring industries, the level of competition is becoming stiffer making organizations operating within this industry to formulate individual marketing strategies. These strategies have to be sustainable in order for business operations to run as required. From such background, some businesses often reduce the prices of their commodities with an aim of attracting more customers. Although such kind of marketing strategies work for most organization, it is important to note the reduction in the level of profit margin. In relation to cost-benefit analysis, pricing strategy has both merits and demerits as a marketing strategy with Teragren Company (Cdilda, 2007, 188). The major cost of this method is the reduction in the level of profitability. With implementation of pricing strategy, the profits would reduce due to the unchanging cost of production. That is, if the cost of product remains the same but the organization reduces the price of the commodity, then the overall profits accrued to the business will reduce. In order to implement an efficient pricing strategy, Teragren Company must begin by conducting a marketing survey to determine the prices, which properly suits it. To some extent, the organization might fail to realize profits since the amount of returns realized equalizes the cost of production. Some of benefits likely to result from the use of pricing strategy are increased demand, sales volume, and scope covered by the product. In most cases, many customers often purchase products of low prices irrespective of the quality; hence, through pricing strategy, the organization has a chance of increasing the number of customers. Cost benefit analysis thus provides the basis of comparing the benefits of the proposed marketing strategy and equivalent costs. Depending on the ratio of the outcome, the organization might decide to employ the strategy or not (Bird, 2007, 245). Nevertheless, with clearly set and implemented marketing strategies, Teragren Company is certain on improved brand identity, consumers’ tastes, and preferences. Through cost-benefit analysis, the company has an opportunity of weighing all the expenses resulting from selection of a particular marketing technique and the benefits likely to result from proper and effective implementation of the chosen marketing technique (Zikmund, 2013, 211). Supply chain mechanism Supply chain mechanism is a type of marketing strategy offers the organization an opportunity of determining the best method in which it could supply its products. Sometimes businesses fail due to wrong marketing campaigns put in place. The time in which the product reaches the consumers is crucial in determining the amount of sales of a particular product. In this case, Teragren Company is not the only company involved the flooring using the bamboo. As a result, if the organization were to create a marketing strategy that is sustainable, then Teragren Company would begin by estimating the time in which it products reaches the market. In every competitive market, consumers would tend to go for available products thus the need for organizations to reduce the number of intermediaries who in most cases are the major causes in the arrival of the product in the market Sweeney, E., Grant, D. B., & Mangan, D. J., 2015, 97). In addition, to reduce the level of scarcity in the market at any given point, Teragren Company must ensure that it develops a proper supply chain with the least number of distribution channels in order to offer the customers’ adequate time to interact with the bamboo products. Beside the duration of interaction, efficient and effective supply chain, also allow customers to ask questions relating to the quality and durability of products made bamboo materials. Implementation of this marketing strategy depends on the ability of the organization carry out all duties relating to transport and distribution materials made from bamboo resources. If the Teragren Company has the capacity to handle all the activities frequently carried out by the intermediaries, then it will experience reduction in the duration of time spent in transporting the materials and products (Blanchard, 2010, 183). Even though some of the cost would result from such decisions, there is need to consider the benefits associated with reduced distribution channel. Some of the costs include loss of jobs and contracts by the intermediaries, increased cost of advertisement, which the intermediaries initially handled, and problems associated, with the scope of distribution (Sweeney, Grant, & Mangan, 2015, 151). The major benefit accrued to properly developed supply chain is the reduction in the duration taken for the products to reach the market and opportunity to control the price in the market considering the fact that most intermediaries are the major price determinants in the market. Moreover, it offers the organization an opportunity to interact with potential customers directly and note their complaints, which might be useful in ensuring an enhanced product quality. Promotion strategy and personal selling strategy Promotion technique is a method most business entities use in spreading information relating to the product in question. Organizations use this method to inform, remind, or persuade the customers to purchase or invest in their products. In some cases, businesses often fail due to inadequate information about the product and services offered by the organization to potential customers; therefore, promotional strategy offers organizations such as Teragren Company an opportunity to persuade the customers to hire its services or purchase its products. It offers a cost effective method of developing a brand identity. However, it is a marketing strategy that requires much time for combing through the existing catalogues and scouring website pages that look almost similar to the catalogues (Fanning, 2005, 231). Depending on the type of promotional strategy an organization chooses, it might offer an opportunity of creating a competitive advantage against the competitors or if poorly developed and implemented, organizational performances might continues deteriorating due to incompatible strategy employed. There are several promotional strategies including advertisement, sales promotion, and public relations. Implementing each of them requires different amount of finances, hence, it is important to conduct a cost benefit analysis in each case in order to determine which strategy is worth implementing. Advertisement is form of communication, which Teragren Company might use to persuade potential customers to develop interest in products relating to bamboo as the raw materials. The main objective of using this technique is to increase organizational profitability realized from the sales, hence Teragren Company must plan and consistently ensure that it upholds the quality of the products and services it produces to the customers (Keenan & Riches, 2007, 213). While planning to implement advertisement as a method of marketing, the company has to identify the aim of the advertisement. Personal selling strategy on the other hand uses human resources as the media for passing information about the products and services offered. In this case, the sales person comes into physical contact with potential customers and tries to convince them to purchase products from the organization. The aim relates to reasons behind advertising the product whether it is to increase sales volume, produces, and service listings or improving the image of the brand within the market. Another factor is the target, which defines the portion of the population the organization intends the information to reach. Media play an important role since it acts as the link between the company and consumers. They include televisions, radios, and internet. Moreover, the company must also take into account the number of competitors available in the market, media channel they are using, and cost of advertising in each of the media. Most appropriate marketing strategy for Teragren Company Personal selling strategy Personal selling is a marketing strategy that seeks to extend the exposure of the brand in question. In this case, business entities use human personnel on the ground to offer services such as educating the consumers on how to use various products, informing them to the existence of the company, and persuading them to use products and services from the organization. Personal selling is one of the methods that would work efficiently and effectively for Teragren Company. This method of marketing offers the greatest freedom to the organization to adjust the quality of information it passes to the customers (Koekemoer & Bird, 2004, 133). The strategy that offers the shortest link between the customers and the producers since the customers freely interacts with the officials from the company and receive the answers to the questions they inquire immediately. Moreover, personal selling as a marketing strategy would offer Teragren Company an opportunity to focus issues precisely affecting the needs of the customers compared to other methods of product and services promotion since it a two-way information flow. More importantly, personal selling as a method of marketing creates an environment for the company to realize its strengths, weakness, opportunities, and threats (SWOT) which are the main integral components while analyzing the performance of the organization. Personal selling does not only offer information on SWOT relating to organizational management, but also the strengths and weaknesses of the product and through such information, the company might improve the quality of the product in order to meet expectation of the customers. Unfortunately, personal selling strategy is one of the most expensive methods of promoting the products and services of the organization in question. If the Teragren Company uses to employ the use of personal selling as a means of marketing its bamboo products and services, then it would be, less costly if the company trains and uses its employees instead of hiring other organizations and independent individuals. The main goals of using personal selling to enable the organization find new prospects, convincing the potential customers to buy organizational products and services, and ensuring full satisfaction of the customers (Birn, 2004, 301). Consequently, personal selling offers the best strategy of ensuring reliable and efficient customer-producer; nonetheless, the interaction between the sales person and customers is limited at any given time, that is, the sales person can only attend to the needs of one customer at a call. Moreover, the cost of contact with the customer is higher when compared to other forms of product promotion. Even though the cost of marketing using personal selling is high, it offers more benefits compare to other methods. Since it one of the oldest methods of promotions, personal selling has been experiencing changes over the years in relation to approaches in which sales people use to ensure effectiveness and efficiency (Stone, 2008, 110). Teragren Company could employ both transactional and relationship marketing in a bid to ensuring that the consumers develop a positive taste towards its products. Target market In order for any business to succeed, it is important to identify the target while strategizing on how to market a product or service. The process begins by identifying the customers’ prospects and intuitions about the market. In this case, the market includes the customers, competitors, and industries using bamboo products for commercial and construction purposes. The success of any business relies on the number of potential customers ready to purchase its products (Brown, 2000, 195). Moreover, proper definition of the product market might not limit the production since it offers avenues for the company to identify sectors utilizing its products and adjust as required. Some of the target markets for Teregran Company are the construction industry, conservation sectors, and agricultural sectors. Construction industries Just like any other wood, bamboo products provide a composite material used in construction for quality and strong structures. Teragren Company mainly focuses on other industries within construction sector to provide bamboo as the construction material. Some of the companies are those dealing in structures having connections with community cultures like in Southern Asia, South Pacific, China, India, and some areas in Central and Southern America. Countries like China and India uses bamboo in holding up simple suspension bridges through twisting the culms and attaching them together (Longenecker, 2009, 144). Even though the use bamboo in scaffolding had been banned in China for construction of more than six stories, some areas like Hong Kong are still practicing it thus offering market for the company. Environmental conservation sectors With global rising of environmental concerns, many organizations are coming up in the aid of environmental resources from the increased amount of carbon dioxide in the atmosphere. Bamboo plantations play an important role in carbon sequestration, therefore contributing greatly to environmental conservation and global warming control. Since Teragren Company has a plantation of bamboo, over the years it has been marketing its seedlings as well to conservation industries. The plant has the ability to utilize the available carbon dioxide during photosynthesis to produce carbohydrates, thus reducing the impact of climate change (Wilson & Piepkorn, 2008, 242). Other potential industries utilizing the bamboo are within the fish farming sector since the plant offers better breeding grounds. Hence, while marketing, it is important to note such targets as the market. Agricultural industries Teragren Company has some bamboo species, which might act as food and fiber products. These species include Moso bamboo, which is edible. Plantations with such species utilize less pesticide due to the ability of the plant to kill pest. Meso bamboo does not only kill the pests, but also discourage the growth of the weeds within the plantations. Moreover, the bamboo shoots play a greater role in the production of fertilizers than fiber. These agricultural sectors play an important role in creating the market the company to sell them bamboo seedlings and mature bamboo sticks. Besides, most local government especially in China and India are encouraging the use of bamboo shoots for manure considering the less effect that it has on the environment. Strategies for combating competition using SWOT analysis SWOT, which stands for Strengths, Weaknesses, Opportunity, and Threats, plays an important role in determining factors affecting the company. In most cases, these factors often operate from within the organization; therefore, it is important to analyze all organizational activities to determine the factors contributing to growth and those that lead to continuous deteriorating performance. Strengths of the company One of the factors contributing to the growth is involvement in environment conservation issues. Through such practices, the company has been receiving international recognition as it advocates for alternative source of construction material rather than wood. In addition, the company also offers quality services and flooring products since it only exploits mature bamboo. Quality engineers and analysts from the organization play an important role in testing the quality of each species of bamboo before any use in construction activities. Teragren Company also has its own plantation of bamboo that discourages expenses relating to imports. Using personal selling as a marketing strategy, the company might pass information to organizations utilizing bamboo and its products (Zikmund, 2013, 211). Weaknesses Flooring using bamboo materials are quite expensive and highly unreliable especially during hot seasons when their productivity is low. Bamboo materials cannot withstand the pressure resulting from a six-story building therefore limiting the construction activities of Teregran Company. The walls and roof structures constructed using bamboo materials does not provide enough insulation in areas where it is critical like North America. In addition, handling of toxic chemicals in the manufacturing of bamboo flooring and plywood materials posed a serious hazard to the employees. Solid wastes resulting from bamboo processing are highly hazardous, hence posing greater threat to environmental conservation. Opportunities Teragren Company enjoys several opportunities resulting from dealing in bamboo for construction purposes. With the rising fight for environmental protection, many countries like China and India are opting for bamboo as construction materials since it does not involve deforestation. Since the company is complaint with ISO 9001 that recognizes quality products, it has the ability of operating globally. Moreover, through its ISO 14001 for Environmental Management System (EMS), the company has been able to attract organizations dealing in environmental conservation. The company also has partner like Mill Valley Bamboo that deals in similar products. These partnerships offer exchange programs that the company could use to increase its brand in the market (Dibachi & Thomas, 2003, 195). Threats The major threat is the rising number of companies offering alternative products like Mill Valley Bamboo. These threats offer substitute products leading to increasing levels of competitions in the market. Moreover, companies like Smith & and Fong Company offers bamboo products at lower cost in a bid to create a competitive market. Consequently, such activities tend to reduce the profitability of Teragren Company. In certain area like China, the law is changing and becoming more restrictive to the number of stories one might build from the bamboo plants, as a result, the limiting the organizational scope of operation. The changing climatic condition is another factor influencing the future survival of the company. With continuous rising in the global atmospheric temperatures, the future survival of the company is not certain. Conclusion Competition is one of the market factors that is inevitable in every form of industry. With the rising number of companies coming into operation within bamboo flooring industry, there is need for Teragren Company to develop marketing strategies that would cushion the brand image in the market and guarantee organizational taste and preference in the market. Nevertheless, with properly implemented analysis models at the Teragren Company, it tends to enjoy market dominance in the bamboo flooring industry especially within the Northern America. A highly integrated management system at the company, international image branding system, and proper customer relations at the company’s branches are some the factors cushioning the sales of bamboo products and services offered by the company in the market. Moreover, through market segmentation strategy of the company, it has been able to devolve some of the services it offers to the potential customers. Through the aims and goals of the company, creation of a positive organizational culture acts as an important factor that has enabled it to enjoy competitive advantage over their competitors who rely on other organizations for the manufacturing materials. References Beall, A. E., 2010.Strategic Market Research: A Guide to Conducting Research that Drives Businesses.New York, iUniverse. Bird, G. R., and Bird, G. R., 2007. An introduction to international macroeconomics: Theory, policy and applications. New York: Palgrave. Birn, R., 2004. 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