Marketing Problem Faced by MetalCoat - Case Study Example

Marketing Problem Faced by MetalCoat Introduction Trujillo Group is a new company, owned by Carla, and it conducts marketing for some small software companies. Though at the early stage, it was easy for Carla to sale the software products, but with growing market competition it was going tougher day by day. Carla received an offer from MetalCoat to handle its marketing department. It is a good opportunity for Trujillo Group, but before taking up the decision, Carla should analyze the present situation of MetalCoat in depth and she should also check that how she can help her own business by accepting this proposal.

Marketing problem faced by MetalCoat MetalCoat is facing a problem in its marketing strategy as its sales are declining. Their customers are basically industries of mid Ohio. As many producers are in this field, hence competition is high along with sharp price competition and low margins. The marketing approach used by the company is not appropriate as per the product’s present life cycle phase. Analysis of the problem MetalCoat’s product is at the maturity phase of its product life cycle.

It is a crucial phase, as because further success of the company depends on its present marketing strategy. At the maturity phase, intensity of marketing has to be increased, and MetalCoat should search for new potential customs in the market. There are many factors that effects product life cycle (PLC) like the rate of competition in prevailing market, availability of new potential market, existing features of the product and the efficiency with which marketing mix (product, price, place and promotion) are being utilized.

The main problem for MetalCoat is the high completive market and low profit margin. Being a small company it does not enjoys economies of scale, so the cost of production is high and profit margin is narrow. It has the potential to extend its production by four times. The company does not have enough funds to go for vigorous advertising and sale promotion. If it continues with this state, soon the company’s maturity phase will be over and it will enter in decline stage of PLC. Recommendation If Carlo undertakes the marketing proposal of MetalCoat, it will be highly challenging for her to redesign the marketing strategy for MetalCoat.

While setting the new marketing strategy, she has to first find out that how well she can use the marketing mix of the product to reposition the product in its existing market. Repositioning will help to shift back from maturity phase to growth phase. For that Carla has to focus on better marketing communication. The company can introduce certain new value added features to attract new customers; integrated communication is a good way of reposition the product. As price cannot be enhanced, hence company has to reduce its cost of production and should cut the marketing cost.

Personnel selling and sales promotion are good tools to reduce the length of distribution channel and to reduce the cost of marketing. Being a highly competitive market, push marketing strategy will not be so effective, hence the product should be positioned in such a way that it can enhance the demand (pull marketing strategy). The firm does not have too much capital to invest, so it should go for vertical marketing where it can integrate or outsource its non-core activities like distribution to some third party (Kerin, et al., 2003, P.234-253).

If Coral can understand and implement the proper marketing strategy, it will help MetalCoat to retain the growth phase and she can also help her own business to grow. Reference Kerin, A. K., Hartley, W. & Rudelius, W. 2003. Marketing: The Core. McGraw Hill Professional.