SWOT Analysis of STOCKL and Its Target Market - Case Study Example

Name Class Unit Table of Contents 1 Table of Contents 2 Introduction 2 Discussions and SWOT analysis 3 SWOT analysis 4 Strengths 4 Weakness 5 Opportunity 5 Threats 6 Target Market 7 Australian Market and entry mode 7 Australian outdoor advertising market 7 Worldwide competitors 8 Expansion opportunities 9 Distributors in Australia 10 Suggest some website ideas organised for the new product 11 Creative ways how to sale the first 1000 in 12 months 11 Payment plans ideas 12 Dealing with copyright infringement 12 References 13 Introduction Product review is a vital step when introducing a new product to the market. The company is able to come up with ways in which they can distribute the product, determine market size and how to seize the available opportunities. STOCKL is a family owned company and have been on the marketing industry for over 20 years offering broad range of services which includes graphic design, signage printing, vehicle graphics and wraps, signage application, drafting, building knowledge and project planning. Crank it up banner lifting systems is a new product that is being launched by the company in a few weeks’ time. The new product is an automatic hoist banner poles that do not require cherry picker. The product can be customised to meet the customer needs. This product review report takes an in-depth analysis of the new product “Crank it up” (STOCKL, 2015). The product review report will look at the Australian market and come up with a means to how to enter, competitors, expansion opportunities, expected price, distribution channels and discounts, website ideas and means to attain sales goals. Discussions and SWOT analysis Crank it up banner lifting system has the latest technology in banner lifting. The system eliminates the need for a cherry pickers and elevated work platforms. This makes it possible to change and replace banners at ease. The system is safe and reliable compared to old mechanisms. Using the technology, one is able to save money and time. The new product is uses a tensioning system that makes it possible for banners to be viewed 100% of the time (STOCKL, 2015). By offering a new product in the market, STOCKL will open a new market where they can enhance their profits. This will occur only if the competitors do not have an access to the new markets. For STOCKL, a success in the new product is a great avenue for growth. SWOT analysis is an acronym which stands for Strengths, Weakness, Opportunities and threats. Using SWOT analysis, it becomes possible to determine the products strengths and weakness as well as determine the opportunities and threats. The tool is vital as an analytical framework to carry out internal and external audit. Using SWOT, it is possible to assess the STOCKL proposition of crank it up banner system. This will help in attaining a good strategy for the new product and help in discovering ideas that are worth pursuing in the product. It is also important to carry out SWOT analysis before introducing a new product. SWOT analysis Strengths STOCKL have been in marketing business for a long period. The company have been operating for over 20 years. This gives them the required knowledge on the market, products and target customers. The experience that STOCKL have gained will be a major strength in marketing the new product. The banner lifting system is a new and unique product (STOCKL, 2015). This will help the company to gain a competitive advantage towards competitors. New products open up new markets which may enable the company to gain quasi-monopolistic profits. This is due to fact that the competitors do not have access to the new product and the new market. STOCKL have professional marketing employees. Being a marketing company, STOCKL employees are well versed with marketing and sales promotion techniques. Crank it up is a new product hence it lacks a strong brand equity. This requires a good marketing team that will help the company in attaining brand equity. STOCKL organisation culture is positive and friendly. This is a major strength for the company as they launch a new product to the market. Organisation culture is a great tool for attaining competitive advantage. The launch of a new product will benefit a lot from a positive organisation culture since it allows the growth of a dynamic organisation. This will also enable collective decision making and prevent any anticipated consequences. Weakness Launching new products to the market have risks. The main risk in launching new product to the market is failure. The company risks losing the marketing and development costs in case the product fails. STOCKL is a small company with low number of employees and a small office. The company will have to compete with large companies who have great number of employees. This may put the company at a disadvantage. There are companies such as Aluminium banners, oOh! media, APN outdoor, Adshel and Clear Channel. These are competitors have large offices and high number of employees. STOCKL have limited distribution channels in the industry. This is a major weakness as the company starts to distribute its products to the target market. Opportunity Expanding to foreign market- STOCKL has a great opportunity by expanding their market for the new market internationally. This is due to the uniqueness of their product and the availability of the market overseas. This will offer the company a larger market and hence competitive advantage. Offer franchising- franchising is a great way for the company to expand its market. Through franchising, the company will be able to lower the cost of expansion and also act as a source of revenue. The management of the business will also become easier, better market penetration and a fast mode of expansion. Start partnership with other marketing companies in other cities- STOCKL have an opportunity of engaging other companies. This is a move that can give the company an expansion platform and also enables them to expand their market reach. Increase distribution channels- at the moment, STOCKL have limited distribution channels. Increasing the distribution channels will help in reaching the target market with ease. Threats The industry is prone to new competitors entering the market. There are low barriers to entry making the company venerable to new competitors. Economic turndown- in case of an economic crisis, STOCKL is bound to lose its some of the customers. Economic shocks have a great impact on companies whose STOCKL depends on for market. Few companies will afford to advertise their product when there is economic crisis. Government regulations- government can introduce new regulations to the ads especially outdoor advertising. There have been introduction of government regulations which have serious implication on advertisers in Australia. The industry has been under both self-regulation and government regulation. Technological advancements- technologies advancements have led to digital advertisement replacing print and banner advertisement. This is a major challenges that Crank it up system have. Under digital platforms, banners and ads can change themselves automatically and with less monitoring than under the proposed product. Industries have also been utilising digital channels in their outdoor advertising replacing the old channels. Target Market “Crank it up” system banner lifting products has a large target market in Australia. The company should target companies operating in high population areas such as major cities and towns. Crank it up banner lifting systems should target airports, cinemas, concerts, exhibitions, festivals, public events, shopping malls, sports grounds, car dealership, gyms, universities and theatres. Most of the movies and cinema halls use banners in Australia. This is a major target market in urban areas where STOCKL should target. Airports also offer a great avenue for the new banner system. This is due to widespread use of banners in airports. Australian Market and entry mode Australian outdoor advertising market Australian outdoor advertising market is estimated to have revenue of $620 million. The industry has grown by 3.4% annually from 2010-2015 and employs over 1,000 people. The industry has been under competition from the digital advertising platforms such as internet, radio and television. With the advancement in technology, advertisers have been moving to outdoor advertising to reach mass market. The industry is highly capital intensive due to installations and advertising materials being used. For every dollar that is spent on the capital equipment, the industry is estimated to allocate $2.73 on the labour input to production. Research estimates that the industry incurs labour cost of 15% of the revenue (IBISWorld, 2015). For STOCKL, the new product is a major force to remain in the market. The company will have to select the potential market strategy. The potential market has already been identified. Being able to launch new products to market is a great prerequisite for competitive advantage. The four product launch strategies that can be used by STOCKL are market pioneering, relative price, product advantage and relative promotional price. The company product is unique hence has a first mover advantage. The company will thus use pioneering and the first move advantage to enter into the Australian market. The company have an advantage of being a pioneer through innovation. This will enable STOCKL to have large market share even after the followers have entered the market. The control of the new technology utilised in the crank it up banner lifting will act as a barrier and a form of resource control. This is through the attained patent once approved. Even after the followers have entered the market, the switching costs will be high. The company will be required to continuously improve their innovative technology to ensure that they maintain the monopoly as first movers (Min, Kalwani & Robinson, 2006). Worldwide competitors Outdoor advertising is a large global industry. In Australia, the major competitor is Aluminium Banners, oOH! Media, APN outdoor. Other competitors internationally are; Primedia, Ayuda, BroadSign, ADTI media, Daktrionics, Capital media, Media on the Go, Lite Tronix, Pikasso, Transit Media Group, Prime Group, Gewista, Barco, Vertical Vision, Cemusa, Christinger Partner AG, blowUp, Clear Channel, Exterion Media, JCDecaux and Kinetic Worldwide (FEPE International, 2015) Expansion opportunities STOCKL is a private business owned by family (STOCKL, 2015). The business is yet to expand to international market. The first step for the company is expanding into the Australian market. The Australian outdoor advertising market have been performing well (3.6% growth) which gives the company an opportunity to expand (IBISWorld, 2015). STOCKL should market its new products to target markets such as airports, movies, concerts and events around Australia to gain a large share of the home market before expanding abroad. This can be attained by forming strategic partnership with distributors and marketing agencies. At the moment, STOCKL has a shortage of distributors and marketers. Outdoor advertising in Australia presents a huge expansion opportunity for the company through the launch of the new product. The main cities which have experienced growth of outdoor audience are Perth (+6.8%), Sydney (+4.5%), Brisbane (+4.2%), Melbourne (+2.1%) and Adelaide (1.2%) (MOVE, 2014). These are cities that STOCKL should seek to expand their business. This can be attained by marketing the new product to target customers in these cities. The company will be expected to increase the expenditure on the new product since it is on the introduction stage through marketing research and development. Later, the STOCKL should seek international market such as New Zealand, China and Indonesia. This can be attained through joint ventures with major firms such as APN News & Media Limited and Ooh! Media. Possible channel options The company is expected to use retailers, wholesalers and distributors. The price options will vary depending on the channel being use. The retail price for the crank it system will be set at 2000$. The wholesale price will be set at 1850$ while distributors will be purchasing at 1800$. The prices will be fixed and not negotiable. Distributors in Australia STOCKL can engage several distributors in Australia. The major suppliers that the company can engage are; Sytronic Pty Ltd, Australasian Technical Solutions, Hazsigns Pty Ltd, Helen Mcconnell Photography and Eosh Consulting. Distributors will enable STOCKL to have their products near their target market. The company can engage distributors by selling the products to them. After the product launch, the distributors are among the first to learn the product shortcomings. This is through the customer feedbacks. The information helps a lot in ensuring that the product is viable in both medium and long term. The information from the distributors is vital in long term product development. The distributors will act as part of the product marketing channel and hence help on enhancing demand for the product. Being a business to business company (B2B) STOCKL will require distributors who have good connection with business requiring outdoor advertising. This will enhance the company market reach. Suggest some website ideas organised for the new product The company website needs to be upgraded to ensure that it enhances its online visibility. STOCKL website requires search engine optimisation (SEO). This will make it possible to increase traffic to the company website hence marketing the new product. This will involve increasing the web rankings through making content assessable, use of interesting content, linking all company websites, using key words, organising content and making regular updates. The product launch page can be improved through use of a strong identity, using a gimmick and leveraging use of social media (Chu & Kim, 2011). Creative ways how to sale the first 1000 in 12 months STOCKL new product must engage in aggressive marketing to attain the sales goal. In order for the company to make sales of first 1000 products in 12 months, they have to follow several strategies. One of the strategies to attain the sales goal is to enhance use of technology. Selling in the modern market is easier for the companies that embrace technology. I would suggest STOCKL to engage internet market tools such as social media. Almost every business that STOCKL will engage with have internet connection, hence can utilise internet marketing and selling. Electronic world of mouth (eWOM) will enable the company to create viral marketing (Chu & Kim, 2011). Another key strategy is identifying the genuine prospects. Despite the high amount of research used, the final results will pay. This will make sure that the company does not waste time and capital on prospects that will not buy the product. Lastly, the company should access their perfoamcne before planning for success. This will enable them to plan for higher targets. Payment plans ideas STOCKL should adopt flexible and cash payment methods for its products. This is through allowing electronic cash payments as well as cash payments. The use of internet can help the company to set an online shop where consumers can purchase from any location where distributors are located. This method will be convenient for both company and buyers. Cash payments should be used depending on the buyer preference. Dealing with copyright infringement STOCKL have to prevent copyright infringement on its new product. Patent infringement lawsuits are costly, can lead to injunction and are time consuming. The company can ensure that there is no copyright infringement by employing a patent attorney. The company should also been vigilant in the market to ensure that their idea is not being copied. STOCKL have already applied for a patent which is pending (STOCKL, 2015). References Chu, S. C., & Kim, Y. (2011). Determinants of consumer engagement in electronic word-of- mouth (eWOM) in social networking sites. International journal of Advertising, 30(1), 47-75. FEPE International, (2015), Membership, Retrieved from, http://www.fepe.com/page.php?id=24 IBISWorld, (2015), Billboards and Outdoor Advertising Services in Australia: Market Research Report, Retrieved from, http://www.ibisworld.com.au/industry/billboards-and-outdoor- advertising-services.html MOVE, (2014), 3.6% Audience Growth for Outdoor , Media Release Monday 19 May 2014, Retrieved from, www.moveoutdoor.com.au Min, S., Kalwani, M. U., & Robinson, W. T. (2006). Market pioneer and early follower survival risks: A contingency analysis of really new versus incrementally new product-markets. Journal of Marketing, 70(1), 15-33. STOCKL (2015), Services: Flag poles, “Crank it up”, STOCKL.com, Retrieved from, http://www.stockl.com.au/flag-poles-1/ STOCKL (2015), Services, STOCKL.com http://www.stockl.com.au/flag-poles/ Read More