Marketing Manager Trevor Smith acquired some Market research data before meeting
ID: 443635 • Letter: M
Question
Marketing Manager Trevor Smith acquired some Market research data before meeting with his boss to discuss the company’s situation (see exhibits). Jogger Inc. has focused on producing portable CD-players since 1995.
Exhibit 1: Market share and profit information
2004
2005
2006
2007
Unit sales
150,000
110,000
105,000
50,000
Profit (US $)
500,000
480,000
470,000
250,000
Market share
15 %
16%
14 %
15 %
Number of outlets carrying Jogger players
1000
1100
1500
1600
Average unit cost(US $)
20
21
22
21
Exhibit 2: Consumer research study (sample of 100 randomly selected product users)
Jogger Inc
Industry average
Average quality rating (out of 100)
90
83
Variance of quality rating
17.8
8.5
Average willingness to pay for a player with comparable features
$ 25.9
$ 35.9
You are asked to assist Trevor in putting together a Marketing Plan for Jogger Inc.
Perform a brief SWOT analysis for the company (2 items for each cell, use a diagram here). Please refer to the data from the exhibits. (6 points)
Discuss 2 possible reasons for the situation Jogger Inc. is in and document your arguments with data from the exhibits (4 points)
Identify a target customer segment and give recommendations with respect to each of the 4 marketing mix tools about how Trevor Smith can improve the business situation. Justify your choices briefly. (6 points)
2004
2005
2006
2007
Unit sales
150,000
110,000
105,000
50,000
Profit (US $)
500,000
480,000
470,000
250,000
Market share
15 %
16%
14 %
15 %
Number of outlets carrying Jogger players
1000
1100
1500
1600
Average unit cost(US $)
20
21
22
21
Explanation / Answer
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
Two possible reasons:
4 Marketing Mix tools:
Product:
Jogger inc should maintain consistency in product quality so that variance level in quality rating will be minimized. It will increase the confidence of the customers and no. of referrals will also increase. Company can also all some value added features that will attract customers.
Price:
Company should opt for competitive pricing and it should always be less than the price , consumer is willing to pay.
Place:
Company has already a network of 1600 outlets. They are required to be sensitized so that they will sell actively. Further, training can also be provided to give them a good understanding of the product. Distribution of outlets should be such that it will cover all those areas that own potential customers. It should not be excessively concentrated in one particular area.
Promotion:
Company can utilize promotional techniques to promote the product. Mass media will be a better option to reach the target customer. Events can also be created at places of public gathering to encourage people to first try and then buy it.
Industry average for willingness to pay is higher than that of Jogger Inc. product. Thus, company has to focus on those customer who belong to middle income group.
Strengths
- Higher average quality ratings ( 90)
- Increased profit per unit ($5 / unit in 2007 in comparison to $3.33 / unit in 2004)
- Offering consumer surplus
Weaknesses
- Variation in quality (17.8 that is hgher than the industrial average)
- Unable to utilize the increased distribution network
Opportunities
- Galvanize distribution network to increase sales of product ( 1600 outlets in year 2007)
- It owns only 15% market share it means that huge scope is there to increase the market share
Threats
- High variation in quality can lead to further reduction in sales and loss of market share.
- Overall market for the CD player is shrinking thus, company should reinvent