Creating and Marketing New Products and Services - Example

Strаtеgiс Маrkеting Рlаn Name Name of Institution Table of Contents Table of Contents 2 Executive Summary 4 Introduction 5 Overview of New Idea 5 Product Life Cycle 6 New Market Entry 7 Pioneer or Follower Strategies 9 Growth Strategies 10 Shake-out, Mature, and Declining Strategies 12 New-Economy Markets 13 Organisation Structures 13 Marketing Plan SWOT 14 Marketing Metrics 15 Marketing Audit 16 Conclusion 17 Executive Summary This strategic marketing plan will examine the creation, implementation, and assessment of marketing strategies. The focus will be on the implementation of a new idea for SportUNE, a key component of UNE Life and the University of New England as a whole. An evaluation of the organisation and literature suggests that the firm is at the mature stage of its life cycle. As such, the firm’s entry into new markets will be based on the repositioning strategy as well as the improvement and revision strategy. When it comes to selecting between pioneer and follower strategy, the firm will adopt the pioneer strategy owing to its current position as a market leader. The paper has determined that the niche and slow skimming strategies will be the applicable pioneer strategies. The paper also focuses on growth strategies. As a market leader, SportUNE will rely on the fortress strategy and market expansion strategy to retain market share and extend its offerings to new segments. The paper then shifts to the shakeout, mature, and declining market strategies and provides the most relevant strategies for each of the stages. An examination of New Economy market shows that proliferation of internet applications and the emergence of digital products are relevant to SportUNE. The next section focuses on the three levels of management and finds that the product management organisational structure would be the most applicable to the business. This is followed by a SWOT analysis of the new idea, the importance of marketing metrics, and the need for marketing audits. Strаtеgiс Маrkеting Рlаn Introduction UNE Life is a non-profit organisation that was created in 2014 after the merger of SportUNE and Services UNE (UNE Life, 2015). The objective of the combined body is to stimulate the experience of the students and staff at the University of New England. UNE Life also extends its services to the members of the community around the university. SportUNE’s role in the formation of UNE Life indicates its importance to the university and its immediate neighbours. The focus of this part of UNE Life is on sports, with its goal being to enable its target market to lead lives that attain a balance between physical activity and work (SportUNE, 2015). SportUNE was founded in 1938 and it has grown to the point where it boasts some of the best sporting facilities and the highest level of participation when compared to other Australian Universities. It is evident that its objective is to retain and improve on this level of participation. Overview of New Idea An evaluation of SportUNE shows that it has attained a high level of differentiation. In this case, differentiation defines designing features that make SportUNE different from its competitors in Armidale (Vashisht, 2005). The segment of UNE Life combines playing fields, badminton, a café, gym, crèche, squash, tennis, pools, climbing facilities, and a grandstand into one product that is accessible to all registered members. As such, it would be difficult for SportUNE to add meaningful services to its current offerings that are extensive. As such, it is recommended that the organisation extends its existing offerings to new target groups. These will include students in nearby educational institutions as well as an increased effort in marketing SportUNE to corporate firms in New South Wales and Queensland. These target markets will allow SportUNE to maximise the utilisation of all facilities and boost revenues while retaining the high participation rates in the University of New England. Product Life Cycle According to Kotler, Bowen & Makens (2014), firms that launch new products typically expect them to enjoy long and lucrative lives. However, the norm is that a product will not last forever but managers can make efforts to ensure that they get meaningful returns over the course of the life of a product. The product life cycle framework is intended to illustrate the stages that a product will go through over the course of its life (Ferrel & Hartline, 2010). Its goal is to provide businesses with a way to alter marketing strategies to retain high levels of sales and profitability. Lambin & Schuiling (2012) note that the product life cycle (PLC) can be defined as the evolution of demand for products over time. They also note that the PLC adopts the form of an S-shaped curve with five distinct stages. The first is the introductory stage, followed by a rapid growth stage, and then a shakeout phase. Products then go through the maturity phase that is followed by the declining stage where there is zero growth (Lambin & Schuiling, 2012). As stated, SportUNE has attained exceptionally high participation rates from its primary target market. A further evaluation of SportUNE shows that it has been in existence for over 75 years. The recommended idea is for the organisation to begin targeting students from other educational institutions that are in Armidale and its surrounding areas. Additionally, the business should leverage its expertise and facilities to serve more business organisations that might want to improve the physical well-being of their staff. The non-expandable demand from the primary market coupled with few powerful rivals indicates that SportUNE is at the mature stage of the product life cycle (Lambin & Schuiling 2012). The mature stage of the product life cycle has a number of discernible characteristics. First, there is insignificant growth in the market, a feature that is clearly evident at SportUNE. Secondly, there are limited changes to the design of the product. Other characteristics of the stage include high levels of profitability for firms that have the biggest market share and the presence of few competitors (Katsioloudes & Hadjidakis, 2007). The strategic implication of the stage is that business need to focus on retaining their position (Lamb, Hair, & McDaniel, 2015). It is evident that SportUNE prioritises maintaining the high participation rates at the University of New England. Additionally, the firm has spent considerable amounts in the development of its facilities. The strategic implication of the mature stage will be a reduction in future investments, with the focus being on maintenance and acquiring the few innovative sports products that might reach the market. According to Kotler et. al., (2012), the maturity stage is typically the longest stage in the product life cycle. The strategic implication is that the business should focus on ensuring that it keeps profits at the highest possible levels. New Market Entry Organisations have several options when introducing new products into the market. They can select from six types of products according to Booz Allen Hamilton Inc. (1982). The first category comprises of the new to the world products which covers products that are totally new to the market. The second category comprises the addition of new product lines thereby allowing a firm to begin operations in new markets. Businesses can also make additions to their existing lines or make improvements and revisions to old product to offer customers greater performance or value. Repositioning and cost reductions are other means through which firms can make new market entries (Garcia, 2014). In the case of SportUNE, two new market entry strategies will be applicable as the new idea focuses on two distinct markets. First, the business will rely on a repositioning strategy. As stated, the main objective of the business is to allow students to maintain a healthy balance between work and physical activities. In this case, the term student is only applicable to the students at the University of New England. The firm will need to reposition itself by offering its existing products to additional segments or markets (Iacobucci, 2001). In this case, the new segment will be the entire student population in Armidale and the surrounding areas. Instead of measuring its performance in terms of participation levels at the UNE, SportUNE will focus on assessing the percentage of all college students in Armidale and Guyra. The targeted institutions will include TAFE NSW and the New England Community College. The achievement of high participation goals will assist the firm to realise its goal of creating a generation that values physical activities. The second new market entry strategy that will be utilised at SportUNE will be an improvement and revision strategy. In addition to targeting students, staff, and members of the local community, Sportune also targets different types of business organisation (Garcia 2014). Studies suggest that physical activity is correlated with improved health and thus productivity at the workplace (Pronk & Kottke, 2009). There is an ongoing trend where business tend to the well-being of their staff by enroling them into programmes that are similar to what SportUNE offers (Macdonald, 2015). This segment offers SportUNE the opportunity to generate additional income and increase the utility of its current facilities. Additionally, growth in this segment will allow the firm to counteract competitors and cement its place as the go-to location for sport and physical exercises. The improvement and revision strategy should be used to expand SportUNE’s offerings to different types of business organisations that might want to secure temporary or permanent memberships for their staff. Pioneer or Follower Strategies As stated, organisations have different options when it comes to deciding to launch new products and begin operations in new markets. One of the critical issues facing business leaders is the timing of such entries. A business can decide to adopt a pioneer or a follower strategy, with both having several advantages and risks (Kalicanin, 2008). In the case of SportUNE, the applicable strategy will be the pioneer strategy where the firm will make first moves when it comes to being innovative and adopting new technologies. According to Kalicanin (2008), the key advantages of the pioneer strategy include retaining a positive image and reputation of being a pioneer among existing clients. A firm also reduces costs, creates a base of loyal customers, and gains the ability to limit imitation by competitors. In general, pioneers seek the competitive advantage that comes with being first in a new field (Neubert, 2013). Having selected the pioneer strategy, the firm will have to select between niche, mass market, and the skimming and early withdrawal strategies. The niche strategy applies to firms that want to gain leadership in a specific market segment (Avlonitis & Papastathopoulou, 2006). The strategy applies to situations where there is large potential demand, fragmentation, short adoption process, and limited financial resources. It is evident that this approach applies to SportUNE given that it is a non-profit organisation that has limited resources, high demand, and a short adoption process. In contrast, the mass market strategy focuses on getting as many customers as possible to adopt a new product. This strategy assists businesses to gain a footing in the market before competitors get into the market (Avlonitis & Papastathopoulou, 2006). A look at SportUNE’s business shows that this strategy will not be applicable given that the firm will target two specific segments that cannot be referred to as mass markets. Skimming and early withdrawal is an additional pioneer strategy that SportUNE might have to consider. The strategy entails targeting as many customers as possible and maintaining high-profit margins. This allows a business to recover its investment in the shortest time possible before exiting the market when the entry of competitors causes prices to go down (Avlonitis & Papastathopoulou, 2006). The slow skimming strategy would be relevant for SportUNE as it applies to situations where prices remain high, promotion expenses low, and the potential target market is small. Additionally, the lack of an imminent competitor will allow the business to generate high returns over a long duration. These returns should then be reinvested into SportUNE to improve the quality of services for the core target group of UNE students, staff, and the local community. Growth Strategies Growth markets attract businesses since they find it easier to gain shares and benefit from periods of low price competition. Additionally, the worth of share gains is higher and early entry allows a business to remain in touch with fast-changing technologies. It is an acceptable fact that market leaders and followers will adopt different sets of policies when it comes to handling growth markets. As the market leader, SportUNE’s objective will be to retain the current customers through strategies like increasing the levels of satisfaction, reducing the attractiveness of alternatives, and encouraging repeat subscriptions. Additionally, the firm will seek to increase demand from late adopters of sports and other physical activities. When it comes to strategies, SportUNE will need to select between a fortress, expansion, confrontation, flanker, and contraction strategies. An evaluation of these strategies shows that the market expansion and fortress strategies will apply to the business. According to Spiers (2006), the fortress defence strategy allows a business to achieve the objective of retaining market share in growth markets. Here, SportUNE will focus on ensuring that current customers remain loyal by making sure that the firm’s current competitive advantages are improved upon. The strategy is suited to SportUNE as its focus is on a relatively homogenous market that will prefer the extensiveness of SportUNE’s offerings. Additionally, current competitors will find it difficult to match the resources that have been acquired across SportUNE’s 77-year existence. The advent of technology also means that the business will be in a position to carry out extensive marketing campaigns to build a level of awareness that will match and surpass potential competitors. In addition to defending their positions, share leaders might want to gain more customers in a growing market. The market expansion strategy will apply to SportUNE. The business will attract new customers by extending its facilities to more user segments (Gilligan & Wilson, 2012). The proposed idea for SportUNE relies on the fact that the business is attractive to segments that might be outside UNE’s immediate environment. It is an acceptable fact that not all educational institutions have the space and finances to create facilities that match the ones offered at the organisation. In the same way, small and medium sized business might prefer to enrol their staff in wellness programmes that exist instead of investing in expensive equipment and hiring trained professionals. These circumstances provide growth opportunities for SportUNE without threatening the quality of services offered to current members. Shake-out, Mature, and Declining Strategies As stated, products pass through five distinct stages of sales and demand in their lives. These are the introduction, growth, shakeout, maturity, and decline stages. The final stages present enormous challenges that arise when business fail to manage the transitions. The shakeout stage commences when a business experiences reductions in the rate of growth as a result of changes like excessive capacities, higher costs, and increased competition (Hill & Jones, 2011). Firms that are in weak positions typically fail or get acquired by rivals. In the case of SportUNE, the applicable strategy during the shakeout stage is retaining a competitive advantage that will ensure continued growth. This will allow the firm to consider taking more aggressive actions during the later stages of the life cycle. Sustaining competitive advantages during the shakeout stage should allow the organisation transition to the mature stage (Spulber, 2007). As stated, the firm can adopt more aggressive strategies once it survives the shakeout stage. The strategic options available for mature markets include increased penetration, market expansion, and extended use. The applicable strategy for SportUNE will be the market expansion strategy where the firm will concentrate acquiring untapped segments. In this case, the untapped segments will comprise wider student population around Armidale and corporate-backed memberships. The firm will leverage its strong position and few competitors to guarantee sustained profitability in the mature market. The final stage of the product life cycle occurs when products experience declining market environments. SportUNE will have to take a strategic approach that will allow it to strengthen its position within its few segments. This is the definition of the niche strategy, meaning that it would be the most relevant strategy in a declining market environment (Hill & Jones 2011). New-Economy Markets The New-economy describes industries that make extensive use of the internet and electronic commerce. Additionally, the term can apply to firms that develop and market hardware or provide telecommunication services (Graham & Smith, 2004). The fitness and wellbeing industries have seen a rapid proliferation of devices and application that seek to provide wide-ranging data on the physical activities undertaken by users. Relevant examples include wearable fitness trackers like the Fitbit, Garmin, Jawbone, and smartphones that can record detailed information on fitness (Datoo, 2014). Improved access to the Internet has also meant that fitness enthusiasts can access high-quality fitness plans from online sources at no cost. The strategic implication is that part of SportUNE’s market has access to cheap alternatives that might be superior in terms of customisation and global reach. However, SportUNE benefits from its differentiated product range that include a wide array of team sports that cannot be accessed through the internet. Organisation Structures Businesses typically have organisational structures that have three levels; the top, middle, and low levels (Raju & Parthasarathy, 2009). Each of these sections has different levels of responsibility and authority. For instance, the top level comprises of directors, presidents, vice presidents, and CEOs whose responsibility is to oversee the entire organisation. In the case of SportUNE, the top level management will include the UNE Board of Trustees, and the Vice Chancellor. The middle level includes department, branch, and general managers who are accountable to the top management. The heads of UNE Life as a whole as well as its different sections like SportUNE, Belgrave Cinema, and the Stro fall under this category. They are responsible for ensuring that their individual sections meet the objectives set by the top management. Finally, the low-level management consists of forepersons and supervisors. As stated, SportUNE offers a broad range of facilities, products, and services. Each of these sections falls under the control of a supervisor who reports to the middle-level managers. The functions of the low-level managers include making recommendations to higher levels of management, assigning tasks, and maintaining quality standards. The product management organisational structure would be the most relevant to SportUNE. The structure will ensure that the management of SportUNE will benefit from decentralised decision making. This will allow SportUNE to continue differentiating its products with a view to retaining high levels of customer satisfaction. Marketing Plan SWOT The proposed idea necessitates increased penetration in two distinct segments. SportUNE has attained high levels of membership in its primary market and will need to target more students from regions around Armidale. Additionally, it is proposed that the business increase its offerings to businesses that want to secure memberships for their staff. The key strength of this approach is that it will require minimal expenditure in terms of marketing and facilities. SportUNE is a non-profit organisation, a feature that places limits on its expansion strategies. The key weakness is the fact that there are considerable changes in the consumer base since part of the target market is a student population that does not have permanent residency in Armidale. The new economy provides significant opportunities in term of marketing SportUNE to the new segments. An additional opportunity is a current trend towards fitness. When it comes to threats, the proliferation of fitness devices and apps means that more people are taking a personalised approach to fitness. The target firms might simply suggest that their staff purchase these devices and keep track of their fitness without having to be members of sporting organisations like SportUNE. The other applicable threat is a downturn in the economy. According to Ranchhod & Marandi (2012), businesses operate in an increasingly risky environment necessitating the creation of contingency plans. The contingency planning process involves enumerating critical assumptions about the future and assessing the probability of each assumption being correct. This allows a business to create contingency plans that can be brought into action at the relevant time (Fifield, 2008). Marketing Metrics According to Karami (2012), organisations need well-defined strategies to be successful. These strategies can only be created where a firm has well-defined objectives. An evaluation of SportUNE led to the conclusion that its focus was on providing world-class facilities to the students, staff, and local community around the University of New England. The firm will retain this focus as it expands its focus into the student population in Armidale and increases its focus on corporate membership. This facilitates the conclusion that the firm’s SMART objective is to retain the highest levels of participation rates across the year. The nature of the SMART objective has a direct correlation with marketing metrics. SportUNE operates as a non-profit, a feature that reduces the importance of prioritising profitability over other performance measures. As such, the most applicable marketing metric will be the measurement of customer satisfaction. According to Hans-Ruediger (2012), this metric also links customer satisfaction with financial performance. There is a direct link between customer satisfaction and overall profitability since satisfaction is the best indicator of the probability that current customers will make future purchases (Farris, Bendle, Pfeifer & Reibstein 2006). SportUNE should monitor complaints, issue surveys, and expand customer loyalty schemes to gain an understanding of how customers perceive the organisation (Hans-Ruediger, 2012). This will allow the organisation to gain enough feedback that can guide corrective actions when the firm deviates from its SMART objective and overall strategy. Marketing Audit Baines, Fill & Page (2011) note that marketing audits are essential to making sense of all the information that is collected and analysed during the marketing strategy process. As in the case of the financial audit, a marketing audit allows a business to understand the health of its marketing programmes (Baines, Fill & Page 2011). The audits that are typically undertaken include the marketing environment audit, marketing strategy audit, marketing organisation audit, marketing functions audits, and marketing systems audits. It is worth mentioning that a business can decide to undertake these audits or to contract an external consultant to undertake periodic audits. The proposed idea of targeting a broader student population as well as corporate memberships necessitates a broader understanding of the environment in which SportUNE operates. It is therefore recommended that the business undertakes a marketing environment audit to understand the forces that operate in the macro-environment (Baker, 2001). The audit will concentrate on factors that are bound to have an impact on the SportUNE’s future. According to Baker (2001), these forces are divided into the technological factors, economic factors, socio-cultural factors, and political-legal factors. The assessment of key trends in these areas should allow SportUNE to alter its marketing objectives and strategies to increase the chances of success. Conclusion In conclusion, SportUNE’s position as part of a non-profit organisation places limits on the scope of its operations. This marketing plan has proposed the expansion of SportUNE’s existing services to students in Armidale as well as corporate firms that want to get membership for their employees. An evaluation of the product life cycle and SportUNE’s position in the market shows that the organisation is at the mature stage of its life cycle. This is considered the longest stage in the product life cycle and the firm should concentrate on securing its position and ensuring that the core target market remains fully satisfied. When it comes to new market entry, SportUNE will rely on the repositioning as well as the improvement and revision strategy. It is recommended that the business adopt the pioneer strategy when launching new products owing to the advantages of being a pioneer. Here, the niche strategy and the slow skimming strategies will apply. When, it comes to growth strategies, the marketing plan recommends the use of the fortress and defence strategies. The paper has also considered the strategic implications of the shakeout, mature, and decline stages, with the recommendations being for the firm to maintain its competitive advantage, undertake market expansion, and implement the niche strategy respectively. The marketing plan examined the relevance of new-economy markets, organisational structures, and provided SWOT analysis of the new idea. Finally, the paper focused on the relevant marketing metrics and marketing audit strategies for SportUNE. In summary, the recommended strategies should allow SportUNE to strengthen its position as one of the nation’s premier providers of sports facilities and services. 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