Marketing Plan Mkt 421 U of P

Organizational overview

Ames is a leader in North America and is known for its quality non-powered garden and lawn products. Ames was founded in 1774 by Captain John Ames. During most of the company’s past 230 years of service the company produced only shovels and controlled 60% of the U. S. market share (n. d. ). Over the past three decades Ames has purchased several companies to widen its market share to include quality non-powered lawn and garden products.

In 1991 Ames acquired the Garant Company a Canadian company and in 1997 purchased Woodings-Verona and IXL. Over the next decade the shovel giant continued to purchase various companies in the garden and lawn business. The shovel giant is again looking for ways to expand its product line; Ames will introduce a new daughter company called Safety Step. Ames is a leader in quality products and customer satisfaction, Safety Step will keep the same quality and workmanship and focus on the customer.

Order custom essay Marketing Plan Mkt 421 U of P with free plagiarism report

450+ experts on 30 subjects Starting from 3 hours delivery

Get Essay Help

• The Mission Statement is to develop and deliver the most reliable non-powered lawn and garden products including tools and decorative accessories that provide quality to our customers, maximize sustainable profitability, and drive shareholder value. We believe that our global manufacturing strategy, based primarily upon a blend of domestic manufacturing and sourced product, makes us cost-competitive while allowing us to provide a high level of customer service ("Ames true temper,"). Safety Steps is in the heart of the snow and ice to ensure quality product development is continued.

The main headquarters is in Mount Washington New Hampshire. The average snowfall in Mount Washington is 260. 6 inches (NCDC, 2010), with an annual low mean temperature of 19 degrees. Mount Washington is noted for its extreme weather conditions, one of the world's highest wind velocities (231 miles [372 kilometer] per hour) has been recorded there in 1934 (Britannica, 2010). The production plant is in Marquette, Michigan. The city has an annual snowfall of 141 inches (NCDC, 2010) and an annual mean temperature of 8. 7 (Current Results, 2010). Safety Step is introducing a heated floor mat to allow both homeowners and commercial businesses a safe, snow and ice-free walkway into and out of their homes and businesses. The mat will have multiple attachments and color options to fit the demand of the customer. New Product Description The following paragraphs below take in consideration a new product that our parent company will amplify a tangible product for a household consumer and commercial customer.

The difference between the consumer products market and the business product market is derived demand – the demand for business products derives from the demand for final consumer products (Kerin, Berkowitz, Hartley, & Rudelius, 2006). This product provides safety steps while walking through and on increment weather, snow, ice, or wet surfaces. The technology and design of the durable nonslip diamond-top surface has  in diameter holes for excellent drainage and safe passage as pedestrians walk on surface. A mat that covers a walkway or porch that prevents snow and ice from forming called Safety Step.

The mat can be purchased in different lengths and widths and has additional attachments for steps. The mat is plugged into an outlet that keeps the snow and ice from forming on it. The mat uses low wattage technology minimizing the amount of electricity used during operation. The product contains a circuit that will turn itself off in case of any power interruption or surge. It has a non-skid, non-slip proof surface that even when wet will prevent a person from slipping on it. The mat dimensions are two feet wide by five feet long.

SWOT Analysis

The external and internal factors of a business forces their company and management to come up with solutions to potential threats. A SWOT analysis aids to guide business strategies and identifies threats and opportunities an acknowledging the external and internal factors into the business plan will allows a company to achieve goals, and keeping a vision and mission of that company from failure. Highest quality of products Safety step can be looked upon as seasonal item Uses a new type of technologies’ Competitors can alter Safety Step

• Provides safety steps for pedestrians as they move on surface
• Costly to hold inventory in warehouses
• Customer service personal commitment
• Increases production; therefore, increases in production causing prices to increase
• Versatile can be used in landscaping
• Can be ordered 24hours online

Strengths

The uniqueness in the marketplace comes from the vision, mission, and values of Ames. We are well known worldwide and earn the trust of many customers and deliver the highest quality of products and services to our customers. Pedestrians walk with confidence and safety. Unique colors and costume features attract versatility.

Weakness

The Safety Step may be looked upon as only a seasonal item. Incremental weather only; therefore, overlooking the fact that the Safety Step technology design provides efficiency, safe comfort, and in all kinds of weather.

Opportunities

The unique colors and custom attachments provide a wide range of surfaces uses. The technologies that Safety Steps requires extra workers; therefore, providing new jobs. Ordering on telephone has direct access to talk with customer representatives, earning and keeping the trust of personal commitment. Promotes less injuries and lost time at work, or decorative yard landscaping feature.

Threats

Competitors can alter the Safety Step to make something similar whereas Ames would have to do fast adjustments; therefore, causing an increases in production or cost making the Safety Step less appealing because it becomes too expensive to own. Trends Recently on the news everyone has heard about how crazy the weather has been. The State of Washington covered in snow for weeks; the state of Texas covered four days of nine and 10 inches of snow. The world’s ever-changing environment it is a perfect time to launch a great product like the Safety Step.

Marketing research

Market research for the Safety Step consists of consumer analysis and industry analysis. Consumer analysis will consist of secondary data gathered from the 2000 US Census Bureau that lists the potential households in cold weather states that may purchase the Safety Step. Primary analysis will consist of surveys of shoppers at a few targeted stores in the regions in which the Safety Step is planned to be sold. Demographics Demographics for the Safety Step are areas of the United States that experience cold weather below 35 degrees F. The Safety Step can be marketed to both consumers and businesses.

Consumers would purchase the Safety Step to ensure a clear snow free/ice free walkway during the wintertime. Using the US Census Bureau results from 2000 there are 31 states in which the Safety Step may be marketed. Appendix A shows the states and the total households per state. The Census results show a US market potential of 60 million households in 31 cold weather states. Psychographics The consumer psychographics are homeowners in cold climates that have walkways prone to ice buildup. Homeowners with ice buildup fear someone slipping on the ice and causing an injury.

Homeowners can be liable of injuries sustained on their property because of negligence. Safety Step will prevent any ice from forming on walkways removing the fear for the homeowners. Behaviors (e. g. purchase behaviors) Safety Step will be marketed to homeowners stating the benefit that the product provides to the consumer by eliminating ice buildup. The convenience of placing Safety Step on the walkway at the beginning of cold weather and plugging it in will be communicated to the consumers to promote the product. Geographical considerations

Safety Step will be marketed in the colder states because of its snow/ice melting features for the consumer market. The business market will also be targeted in the colder states.

Industrial analysis

Competitor Analysis Safety Step competition for the consumer market comes in many forms. The snow shovel is one source of competition in which the homeowner believes that if they just shovel well enough there will be no need for the product. Another competitor is the chemical product that the homeowner throws on top of the ice and as the chemical starts to work the ice is melted.

The shovel and chemicals both need to be used after the snow or ice has built up whereas the Safety Step prevents snow and ice from forming on the walkway eliminating the potential of someone slipping. Segmentation Market segmentation for this product is important to justify the necessary marketplace needs. This product may be useful for some clients, and yet others may not find a need. This segmentation process is important to understand the needs of the client. A client who lives in Mexico is most likely not going to need a mat that warms up. This is understandable that this is not the target demographic .

Criteria

The geographic segmentation involves extensive research into the needs of the clients within the different areas. Demographic segmentation is based on the age, income level, purchasing power, gender, family size, nationality, religion, education (Mathe, 2010). The demographic segmentation focuses more on the larger purchases that a family may make such as a home or vehicle.

Target markets

The sale of this product is more likely to be based on geography. Certain states with different climates will be more inclined to purchase a product that they can use in the winter.

The Safety Step will be marketed to the all states that have a temperature that drops below 40 degrees in a normal year. These states will be the primary sales areas, but the product will also be available through website and catalog throughout the world. This product is important for those who have had issues with bad weather and are having issues with safety outside. Differentiation and Positioning The competing consumer products are shovels and chemical products that melt snow and ice after it has formed. Safety Step will be marketed with the approach that the mat melts snow and ice before it can build up on the customer’s step.

The plan is to draw attention to the fact Safety Step is a safer product because it does not allow the snow and ice to build up on the step whereas the competitor’s product does. This will give Safety Step the unique position of promoting the product as safer than the competitor’s promotes. Another marketing strategy that will be used is the Safety Step’s ease of use. The plan is to market Safety Step to the consumers with the information that the all the consumer needs to do is lay the mat down on the step and plug it in before the weather turns cold. The approximate cost to operate is $0. 02 per hour.

This is an estimate based on the cost per kilowatt-hour is $0. 15. Cost per kilowatt-hour may vary by state or region. The marketing approach will continue by stating Safety Step will provide a snow/ice from form on the walkway even during a heavy snowstorm unlike shovels or chemical products that require the consumer to go outside and shovel or apply the chemical to the step. The position defined with ease of use approach will be put the Safety Step on the consumer’s steps at the beginning of the cold weather plug it in and the consumer does not need to bother with the product until spring comes.

This will differentiate the product from shovels and chemicals that have to be used frequently during winter months. Product Life Cycle Product life cycle needs to be understood and managed for a product to be successful. The market introduction phase for Safety Step may be a longer process than other products handled by Ames Company because there is no other product currently on the market similar to the Safety Step. The marketing approach during the introduction phase will be to demonstrate the product at local Home and Garden shows held in major cold weather cities throughout the United States.

Additionally, direct mailings will be sent to households in major cold weather cities informing the consumer of the product. These approaches should provide the interest needed for the product to move into the market growth phase of the product life cycle. The market growth phase of Safety Step should last one winter season and possibly even two winter seasons before competitors develop a similar product. During the market growth phase advertising will continue with the direct personal approach for sales. The plan is to have one-on-one meetings and demonstrations of the product in the customer’s home.

It is expected that the demonstrations will increase word of mouth publicity that will increase sales. Once the consumer interest has been established and the competition has similar products Safety Step will enter the market maturity phase of the life cycle. During this phase the marketing approach will be to offer discounts for consumers who buy more than one Safety Step. The advertising for Safety Step during the maturity phase will point out Safety Step’s durability and quality attributes as well as pointing out any other attribute that Safety Step has that the competition does not.

The maturity phase of the life cycle should last a minimum of two to three years before another better product is introduced and sales start to decline. The sales decline life cycle may be short in duration as the new products take sales away from Safety Step. The approach during the sales decline phase will be to advertise the Ames company brand along with the products quality and durability features. The product price may also have to be reduced to keep consumers interest. The price will only be lowered to such that the company is still making a small profit but not much.

The production of Safety Step will be stopped once the competition has driven the price below the cost to produce the product. Planning a marketing strategy for all four phases of the product life cycle will help to make Safety Step a successful product.

Marketing mix

In order for an organization to be successful, balance marketing fosters the termination of a new product or service. When examining the marketing mix for a product launch or new service eliminating the threat factor can happen if managed correctly.

Understanding the tools are necessary, as marketers call the four Ps, will put the right product or the right type of service at the right point of sale price. Product and Service A new product or service first step is to consider where to begin, create and develop the process launch unto the public. An organization considers itself first when asking does it meet the needs in the perspective for the customer, how assessable can the organization provide and distribute its product or service; moreover, will the customer consider that the new product is a fair price and easy to remember the brand because the marketing communications developed.

Type of Product Introducing

Safety Step when weather grows tough and budgets are tighter, customers can rely on Ames to offer a quality new product at an extraordinary price. Safety Step is a heated floor mat offered to both homeowners and commercial businesses. This product provides safety steps while walking through and on incremental weather, snow, ice, or wet surfaces. The heated mat electrical waves built within provide enough heat to penetrate through snow and ice. The melted and wet surface drains from the sides of covered area.

The technology and design of the durable nonslip diamond-top surface has  in diameter holes for excellent drainage and traction.

Features

• Vinyl top is tough enough to take abuse from works shoes and wheelchairs.
• Safe comfort provides workers with a cushioned area to stand or work that decreases strain on feet and legs. •Resist oil, greases, and liquid
• Runners (sides of the mat) are beveled around the entire mat to prevent tripping hazards
• Snow /ice melting features for consumers/ business markets
• Versatile can also be unitizes landscaping Identification/ Brand

Ames Corporation is a quality merchandiser that customers can trust with reliable service. Ames distinguishes products from the competition with unique colors, and custom features that extends mats through easy attachments. Production and Delivery Service Products can be ordered online through secure shopping 24 hours a day. If a customer is registered through Ames website, Ames will offer discounts of 10%. Orders on a telephone have direct access to talk with a customer service representative. Orders in and service by mail fax, online or phone features to keep any customer happy.

Ames has several large warehouses with large stock quantities. Shipping in some cases will be free, and for large orders because of super size surfaces coverage, Ames provides installing services as customer courtesy. Pricing The Safety Step mat has little to no competition in the market in comparison to other products as potato chips. The research has shown that less than 10 competitor mats are available for purchase now. The competitor’s mats range from $99. 95 to $127. 98. These mats are primarily online with little to no advertisement.

The Safety Step will be priced accordingly to ensure sales are possible for the company and the employees. Although there is not a single way to price a product there are many ways to test the market and find an appropriate price for an item. The pricing strategy for this product begins with performing a market analysis, segmentation, targeting, and positioning. Understanding that this mat is most useful in an environment that is more likely to have ice or snow is necessary when analyzing the market. The product sales will need to be focused on the beginning of the winter season.

The spring and summer months are less likely to have a large amount of sales. The demand will increase in the beginning of the winter cycle; the price of the item should coincide to help sell the item. The cost of production will also have an effect on the product. The company will attempt to maximize the current profit, while taking into account revenue and costs. Maximizing the quantity of product is justified to have preparation of customers. The status quo is keeping the product stable avoiding price wars among other companies.

The company will choose to focus on a cost plus pricing method to achieve the production costs as well as a small profit to achieve a toehold in the market. Once the product has been placed for sale the market will show the company what if any reduction of price should take place. If the product sells quickly than the company may need to reevaluate their pricing strategy for the future. Safety Step will be price competitively at $99. 00. Production costs for each mat is roughly $38 dollars, distribution costs is a percentage of each sale and base pay for the sales team. This comes to about $15 dollars per mat sold.

If the staff sells 100 mats to a retailer, they will net $1500 dollars. Marketing of the product is $3 dollars per mat. The retail price of the mat should be $99 dollars; this price is based on the $56 dollars in costs and overhead with $10 dollars going to the retail establishment for sales. This leaves a profit of $33 dollars per mat. This profit will go toward revelation of the product and the continued manufacturing of the product. Based on 100 mat sales the company would make $3300 dollars in profit. This mat must have 1000 sales in order for the company to have a good profit base.

Once the market has been tested with this price the sales will show if the product price is too high or too low.

Placement

The company will have Safety Step manufactured at the existing facility in Camp Hill Virginia. This manufacturer will complete an established amount of mats within the necessary time frame. Production costs are based on the different sizes, and components of the mats. The company may decide to focus on three sizes than they must have three separate prices and production costs for the mats. The company will focus on one mat that is 24 x 5; this particular mat has 120 volts and 263 watts.

This mat is one color and one size to make the production costs less than they would be in the future.

Promotion

Promoting a product is not only about developing the correct product at the correct time, but also the communication involved with all parties. A company would not want to promote a product that was used for ice and snow in a climate that never receives snow or ice; the likely hood of the product selling is not very high. Promotion is the fourth “P” in the marketing mix designed to teach the end consumer about the product, what the product does and how the product can help the user.

What benefits the consumer will receive from the product and will the price of the product fit into the budget. Promotion is also used to persuade a customer that the product is the correct one for him or her. The promotional mix is a combination of personal selling, advertising, sales promotion, public relations, and websites. The first thing a company needs to ask its self is what strategy they believe will work best for the company, will they use the “PUSH” or the “PULL” method. Safety Step believes the “PULL” method would work best for the new heated mat.

The pull stratergy requires direct interface with the end user of the offering. Use of channels of distribution is minimized during the first stages of promotion and a major commitment to advertising is required. The objective is to "pull" the prospects into the various channel outlets creating a demand the channels cannot ignore (Center for Business Planning, 2010, para 12). The product cannot be promoted effectively in warmer areas causing the company to work with specific areas and to build a strong bond with customers to help ensure safety. Safety Step will focus on the benefits of product advertising. This is especially beneficial when you have introduced a new approach to solving a user need and comparison to the old approaches is inappropriate.

Initial Sales Promotion

Safety Step will focus sales of the heated floor mat through the company website www. safetysteps. com. Sales from the website are virtually free of charge to the company with only a small set up fee and the process of fulfilling the orders. Personal selling to households and businesses in major cold weather cities will be the main focus in the initial selling process.

Safety Step wants to have a personal relationship with its customers; with one-on-one meetings and demonstrating the product in a home or business setting to allow the customer to feel comfortable to ask questions and see the product in person with no pressure. Safety Step believes that with this approach the product can sell its self and the customer will learn Safety Step is about not only safety but also the customer. Safety Step will advertise through direct mail via an 8 ? x 11 glossy sheet showing areas used without a mat and also used with a mat.

Ames the parent company has a large database of addresses, phone numbers and e-mail address for both businesses and homeowners available to Safety Step. The flyer will also picture other options currently available for snow and ice removal including salt pellets, sand and rocks, Sodium chloride (NaCL), which may contain cyanide. Calcium chloride (CaCl) is slightly better because less goes farther, but it is still not ideal, considering its run-off still increases algae growth, which clogs waterways. Potassium chloride is another salt to avoid.

Customers will learn the advantages of Safety Step and how it will not only help the customer but also landscape plants, especially those particularly salt-sensitive, like tulip poplars, maples, balsam firs, white pines, hemlock, Norway spruce, dogwood, redbud, rose bushes, and spirea bushes (The Daily Green, 2010). Landscaping can be an expensive cost to customers and the Safety Step can eliminate the need for chemicals that can cause damage and even death to landscape plants. Safety Step will have promotions for customers who wish to purchase more than one mat and with the purchase of the accessory all in one transaction.

Contests also can be used to find the most creative ways a mat has been applied around a business or home. This will not only benefit the customer but also the business with a flow of new ideas and ways to better help the end user.

Budget

Safety Step has allotted a budget of 11. 7 million dollars for the first year of operations. Areas covered include personnel, marketing research, marketing communication, channels, customer acquisition, retention, and other. Safety Step has looked at each area and broken each section into sub-sections see appendix B attached. Safety Steps has allotted the largest portion to the personnel section.

The personnel section has sub-sections of salaries/wages, benefits, payroll taxes, commissions, and bonuses. Salaries and wages tops out the chart at 7. 2 million in burden with taxes coming in second at two million. Safety Step believes the allotted amounts should cover the personnel section with a contingency included. Marketing and Research have a budget of 260 thousand dollars. This amount covers both the primary and secondary research for the Safety Step mat. Secondary research has been allotted approximately five thousand per month to cover quality problems should they exist.

Safety Step and the Ames Company are known for their quality products and service and keeping a fund for problems is essential. Marketing Communications falls second in regard to cost of budget. A budget of 1. 1 million has been set. The areas with the larger amounts being spent are branding at 240 thousand, advertising at 435 thousand, and public relations at 140 thousand. Advertising the Safety Step in a positive and customer-focused atmosphere is critical for the continuance of the product. Channels have a budget of 96 thousand. Channels include communications and training, promotions and incentives, and commissions/bonuses.

Commissions and bonuses are awarded in December of each year allowing a budget only in December. Training and communication is included to ensure the quality of the sales team at Safety Step. Incentives are also included each month to promote the sales team. The sales team, production, and office staff will need focus and drive and offering incentives will help with morale and positive workflow. Safety Step has a section for other to include postage, attorney fees, telephone, travel, computers, and office equipment. Postage will be a large expenditure with mass mailings to costumers to educate them in Safety Step.

Travel is the largest expenditure in the other sections; because of the need for salespeople in strategic areas (cold weather cities) to promote Safety Step. Computers and equipment is the second largest expenditure for the other section, Safety step believes in year two this amount should drop dramatically. Computers and office equipment are needed to offer both the customer and employees piece of mind. The computers can offer piece of mind by fast reliable service for ordering, processing claims, and tracking inventory. Attorney fees are in the section to have an on hand attorney office for any needs that may arise.

Monitoring and Evaluating

Effectiveness - A successful development process for Safety Step starts with Ames 5D Principles; in addition, will apply a perceptual map for identify opportunities by highlighting unsatisfied needs of the customer to gain an edge because Safety Step goal must differentiate.

Perceptual map gives a visual representation to the marketing team of customers’ perception of Safety Step aids in the positioning strategy. The insight gained from the perceptual map can be formulated through the four parameters’; therefore, implementing a guide of a before and after execution. Ames understands that increase of profit and sales drives the success in marketing execution, but a good marketing team also understands it is not the best indicators. During the course of an execute launch of a new product sales sometimes remain flat.

Ames will identify all performance indictors with comprehensive reports so that through execution of the 5Ds principles, perceptual map, and knowing the parameters for development will be modified the next four years. The success of Safety Step growth stage in an oligopoly market can keep the competitions in uncertainly. Ethics and Social Responsibility The marketing efforts will be monitored to ensure that Safety Step will be promoted accurately to the consumer. The advertisement for Safety Step will only contain information that is true and accurate for the product.

Packaging of the product will not have any misleading claims but rather describe the product accurately. Salespeople will also receive training to communicate accurately the product without pressuring customers while they are demonstrating the product during the door to door campaign. The company’s goal is to promote the product accurately by having knowledgeable salespeople that provides product information not pressure. Conclusion Developing a marketing plan with Perceptual Maps, SWOTT analysis, identifying environmental factors affect marking decisions.

These business decisions move the product life cycle and identifies the appropriate price strategy along with public relations opportunities for Safety Step. Therefore, allowing Team C to answer all questions, without this structure information could not be obtained in an orderly prompt manner.

References

1. Center for Business Planning (2010). Marketing Plan. Retrieved March 21, 2010, from http://www. businessplans. org/Market. html
2. Current Results (2010). Coldest Places in United States. Retrieved March 15, 2010, from http://www. currentresults. com/Weather-Extremes/US/coldest. php
3. Kerin, Berkowitz, Hartley, and Rudelius Chapter 9, McGraw-Hill/Irwin, 2004 New York, NY Mathe, AR (2010). Market Segmentation Targeting Positioning. Retrieved March 15, 2010 from website http://www. scribd. com/doc/24765486/Market-Segmentation-Targeting-Positioning-by-amarnath. NCDC (2010).
4. Snowfall - Average Total In Inches. Retrieved March 15, 2010, from Pearce, Jack and Richard Robin, ( 2004).
5. Chapter 1, Overview of Strategic Management. Retrieved March 5, 2010 from University of Phoenix, rEsource, Bus475 course Website. The Daily Green (2010).
6. Eco-friendly Ways to De-Ice Your Driveway. Retrieved March 21,2010, from http://www. thedailygreen. com/living-green/blogs/green-products-services/driveway-ice-environment-55013001 U. S.
7. Census Bureau, (2000). United states; and puerto rico . Retrieved from http://factfinder. census. gov/servlet/GCTTable? _bm=y&-geo_id=01000US&-ds_name=DEC_2000_SF1_U&-_lang=en&-redoLog=false&-format=US-9|US-9S&-mt_name=DEC_2000_SF1_U_GCTH5_US9&-CONTEXT=gct (n. d). Washington, Mount. Retrieved from Britannica Online database.

Don't let plagiarism ruin your grade

Run a free check or have your essay done for you

Check my essay Hire Writer