Evaluation of the Components of the Marketing Mix - DA Garden - Case Study Example

Name Professor Course Title Date Report Marketing Mix Evaluation of the Components of the Marketing Mix History of the Business D.A Garden supplies is a garden supply and nursery business that has been existence for the past 13 years. The initial accomplishments of the business led to the addition and subsequent expansion of a café. The firm’s management comprises a husband and wife team. David is responsible for the garden supply and nursery sections while Alison manages the administration, bookkeeping, and landscaping projects. D.A Garden Supplies employs two full-time cashiers with the rest of the work handled by two cashiers and a landscaping consultant who work on a part-time basis. The business experienced growth through most of life before a sudden decline that began two years ago. Despite these challenges, the business has adequate resources to find a solution that will stop the decline in profitability and spur further growth. Product Characteristics The name of the business gives a clear indication of its core products and services. In addition to garden supplies, the firm has a nursery section and handles landscaping projects. The owners established a café within the firm that has expanded to serve both takeaways and sit in meals from a wide menu. The firm offers its clients access to some of the best garden supplies around the city. This is done a personalized manner as the owners get to interact with each customer. The products and services are very significant in the market due to their uniqueness. Customers can avoid large stores like the nearby Bunning’s store and get the same quality at competitive prices. They also have the chance to develop personal relationships that will give them access to professional advice from an experienced team. Channel of distribution, level of customer service, environmental factors and their impacts D.A. Garden Supplies’ customers benefit from a distribution channel that has two stages between them and the producers. The firm obtains various supplies from a supplier in Adelaide thus ensuring that they get the best prices. The marketing outcome is that clients get a brand experience that is unique. The prices are low, quality of products and services is high, and the level of customer service is higher than that offered by larger department stores. A number of external environment factors have bearing on the firm’s marketing mix. First, there is a large Bunnings store that offers similar products within 2 kilometres. There is also a small shopping centre across the road, and a new café began operations 18 months ago. These businesses offer different levels of competition and affect the firm’s marketing mix. Social and cultural changes also have an impact on the way the firm markets itself. Potential Customer Base The customer base includes institutions and homeowners. The institutions will comprise those firms that are small or medium sized. On the other hand, the homeowners are the middle-aged professionals who have achieved success and moved to houses that have sizeable gardens. Potential customers are firms that move into the area as well as young adults who are starting families. These groups offer the firm the chance to get steady work over the next 13 years of its life. The key pressure points that should be targeted through marketing activities are price and quality. These potential customers should get and understand the message that the business offers the highest quality at the best prices in the city. Customer Priorities The priority for customers who love gardening and landscaping is personalized service. Each of these clients has an overall idea of what they want to achieve. They understand the specifications of their gardens and seek a little technical advice from professionals. The other preferences include low costs and high-quality supplies and products. These preferences have a big bearing on the marketing mix as the firm has to position itself as the business that can satisfy these preferences. Marketing Mix components The marketing mix describes the choices that D.A. Garden Supplies will make in the process of availing its products and services to the market. The 4P’s of Marketing is one of the ways that these choices can be described. The firm has to ensure that it has the correct product at the suitable place, at the right price, and at the desirable time. Product/service: These describe the final products or services that the customers get in exchange for their money. They have to have the best attributes when compared to other products or services that serve similar purposes. An excellent product or service is of paramount importance to clients. Place: Place describes where a business sells its products or services to consumers. This component is vital as clients like to get products and services from convenient locations. However, a superior product or service can negate the importance of having the best business location. Price: Price is a crucial element of the marketing mix. Customers have limited resources and have to feel that they have got the best items for the available resources. As such, businesses have to offer their products and services at lowest possible prices while still generating significant returns. Promotion: This component describes the techniques used to communicate the attributes and advantages of a product. Promotion is essential in a market where potential customers lack information about the offerings of a business. However, there are cases where a product has a loyal clientele that does not require further convincing. Determining the Marketing Mix A review of the past performance shows that change is necessary at D.A. Garden Supplies. The previous marketing mix prevented the firm from meeting its business objectives. A new marketing mix should be developed to allow the firm to satisfy its existing clients and meet new business objectives. Target Market The firm should concentrate on a younger demographic and new homeowners in the North West section of Sydney. The rationale behind the choice of this target market is that getting them will allow the development of good customer relations that should guarantee access to continuous projects. New homeowners are also the group that is most likely to undertake large landscaping or gardening products as they customize their new homes to satisfy their needs. When it comes to the café, younger individuals are the most likely group to go out for meals or order takeout. The presence of a kid's menu also highlights the importance of targeting young couples who have children. Business objectives The primary business objective is to increase profits. An examination of financial records shows that gross revenue has risen marginally in the period between 2011 and 2014. However, this has not corresponded with an increase in profitability with net profits declining from $62,171 in 2011 to $39,706 in 2014. Further examination of the finances shows that there has been no growth in the nursery and landscaping sections of the business. D.A. Garden Supplies needs to alter the services offered in the gardening and landscaping sections in order to boost revenue and increase profitability. Variations in Product, Price, Promotion, distribution, and services The firm can meet its objectives if it institutes changes in its product, pricing, promotional activities, services, and distribution channels. Product The firm offers a unique brand experience by combining a café and the garden supplies and landscaping. However, this uniqueness has not generated overall business growth over the last two years. The value of the firm’s product can be increased by the addition of gardening and landscaping classes, delivery of supplies, and a new landscaping department that makes use of latest computer technologies. The two classes will be offered throughout the week and will generate more business when those who complete the program establish their own gardens. Pricing The target market will be the younger generation and new house owners. The nature of the personalized services at D.A. Garden Supplies and a target market that is composed of successful individuals will necessitate premium prices. The firm will need to increase the margin from the landscaping, gardening, and marketing departments so as to get higher profits. Additionally, the business will need to cover the costs of a $150,000 business loan. Promotional activities The financial statement shows that advertising expenses have increased steadily from 2011 to 2014. The firm needs more promotional activities that target young professionals. It is evident that word of mouth has been effective in the past, but the firm needs a promotional mix that includes direct marketing, advertising in local media, sales promotions, and public relations. Additionally, the firm can provide brochures to real estate firms to target new homeowners. Distribution channels Most of the products get sourced from a supplier in Adelaide. The firm should shorten the distribution channel and get products from manufacturers. This can allow the firm to charge the same prices and get higher margins owing to the cheaper cost of buying products from manufacturers. Services The business should retain the same level of service in the café due to the rising profits from the section. The addition of delivery services, classes, and computer aided landscaping services should boost the performance of the other sections of the business. New Services and Products The new products and services match the targeted audience. Young people prefer to shop online, and a delivery service is critical for the firm to develop an online platform. The gardening and landscaping classes are also necessary as younger generations have insufficient knowledge about these activities are will be likely to join a class. The computer aided landscaping will also attract younger, tech-savvy individuals. The new services and products will have an overall effect of increasing revenue, thus allowing D.A. Garden Supplies to meet its profitability objectives. Additionally, the brand will position itself as a premium provider of gardening supplies through the addition of these unique services and products. Suitability of Marketing Mix to the Budget The move towards sourcing products from manufacturers will reduce gardening supplies expenses. On the other hand, computer aided landscaping will result in approximately $36,000 in set up costs that the firm will have to pay upfront. The delivery section requires $150,000 that will be obtained through a loan with a five-year repayment period. The marketing mix also calls for additional spending in promotion. For this reason, the firm is likely to make a significant loss during the first year with the new services. However, the addition of new services will increase the number of clients who will be served in the long run and rescue the firm from the recent decline in profitability. D.A. Garden supplies should be able to earn record profits when it completes the loan repayment. Implementing and Monitoring the Marketing Mix Activities Summary of Components being monitored The promotional activities will be monitored to ensure that they meet the communication objectives of targeting younger generations. The product, distribution channel, and price will also be monitored and compared to the organisational objectives. The revenue from the café, gardening, nursery, and landscaping departments will also be monitored to ensure that they grow. Finally, there will be a quarterly evaluation of financial statements. Relevant Information for Monitoring Sales data, number of new clients, demographics of new clients, market share, cost of promotions, and profitability are some of the relevant information to be monitored. Recommendations for adjustments The firm needs to make periodic adjustments that should be based on reviews. These adjustments should be done to increase the effectiveness of the marketing mix or to reduce impacts on the budget. For instance, the cost of promotions should reduce to a lower level after the first year if there is a marked increase in new business. Successes in the gardening, nursery, and landscaping sections that come from the new products and services should also lead to adjustments in the café business. This will be done to increase its future contribution to the overall financial performance of D.A. Garden Supplies. Future monitoring and adjustments Businesses operate in an environment that is extremely unstable. Changes in various environmental factors such as the level of competition can alter a firm’s fortune in a drastic manner. For this reason, D.A. garden supplies will have to undertake continuous monitoring and adjustments to the marketing mix. The monitoring and adjustments should be done on a quarterly basis to ensure that organizational, strategic, and operational objectives continue to be met. Read More