Origin of the Report
This report is one of the requirements for our course MKT 460: Strategic Marketing. To fulfill this requirement, we have applied different strategic theories in this project. Main purpose of doing this report is to implementing the theoretical knowledge practically. This report is based on marketing challenges and strategies have adopted by Walton in order to meet the requirements of the competitive market.
Purpose
The main purpose of the report is to get an idea about the implications of theories like how they prepared an effective marketing plan in order to launch a new business considering company‟s marketing objectives of the new offering, current market situation of Bangladesh, what marketing strategies should be adopted to compete in this highly competitive market.
Scope
The scope of the report is wide to Walton because of its substitute product and competitive product line. Here we try to cover all the relevant issues that will be helpful to understand the necessary steps taken by marketers of Walton.
Objective
The specific objective of this report is to determine:
To understand the dynamics of multiple product business
To get an in depth idea about the customer
How to set different strategies for capturing the market
How to forecast the sales
How to maintain the supply chain
Methodology
Source of Information:
Primary Sources
The Business plan on Marketing Strategy for Competitive Advantage
Executive Summary Three friends – Lyndon Duke Hanson, Scott Seamans, and George Boedecker, founded Crocs Inc. in the year 2002 in Colorado, USA. As the firm grew, it acquired Foam Creations in Canada to own manufacturing operations, under the leadership of Ronal Snyder in 2004, and gained sole rights. Crocs is a designer, manufacturer and retailer of molded, casual footwear for men, women and ...
Primary data has been collected by interviewing the head of the marketing department, marketing executives, promotion officers and sales Executives by questionnaire & oral conversation.
Secondary sources
Secondary data has been collected from the previous studies on marketing strategy of the company, different text books, research findings, magazines, articles etc.
The research approach:
In the procedure of primary data collection two approaches were used and these are:
While collecting the primary data the instant response were found and it was possible for us to observe the real situation.
Instruments are used:
Questionnaires: One set of questionnaire would present to the marketing executives, promotion officer, salespersons for their answers.
Personal interview: Respective persons regarding marketing.
Limitation
We had faced many obstacles whilst carrying out the project. Some of the limitations faced were as:
Unwillingness of interviewees to share information regarding marketing plan of Walton.
Scarcity of published material on different product line industry.
Lack of experience in competing against international brands.
Of course time is one of the factors of report limitations. The survey was carried out and the results were analyzed within a period of 2 weeks. However, we tried our level best to cope up with all these limitations and tried to make our research paper a good one.
Products/Services:
Walton has a good number of products available in the market. The company produces home appliances, mobile, generator and motorbike. A brief description of its major products is given below:
Refrigerator:
Walton mainly produces home appliances. In fact in its website the company is introduced as the pioneer in refrigerator production in Bangladesh. Walton Refrigerator & Freezer ensures highest quality compressor, Condenser is made by 100% copper, which lasts for 20-30 years. The most important thing is that every spare parts including door with different color are changeable and available everywhere over the count.
Television:
Walton produces LED, LCD, and CRT televisions. Walton Television ensures home cinema entertainment. Walton
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Television‟s d4ta Digital Technology is one of the most innovative technological solutions that automatically reduces video noise, Selects the best picture and performs fine-tuning by auto frequency tracking technology.
Motorcycle:
Walton motorcycles are now competing with the Indian HeroHonda and TVS brand. The motorcycles have become famous because of the special specification like mobile phone indicator, Digital gear display, Fuel location meter, Air shock absorber, Remote control, Hydraulic Brake, Anti-Theft lock and Alloy rim etc. Walton motorcycles are also fuel-efficient.
Other than these products Walton also produces Mobile handsets, generators, air conditioners, DVD players, and microwave oven.
Competitors:
Most of these brands have been in this market for a long time. But none of them were able to match the market growth of Walton in the last 3 years. Although LG-Butterfly is the No.1 home appliances brand in the country,
Walton is catching up fast.
Situation analysis
Walton has introduced first advanced research and manufacture technologies and equipments for customized commercial and household Refrigerator & Freezer, Motorcycle and Air- Conditioner etc. in Bangladesh. The company desires to provide the latest technology based products with innovative design, excellent quality and many different models & capacities. Walton produces its goods within the country. Most of these brands have been in this market for a long time. But none of them were able to match the market growth of Walton in the last 3 years. Although LG-Butterfly is the No.1 home appliances brand in the country, Walton is catching up fast. In the present condition of Bangladesh Walton Hi tech Industries is a big Industry in Bangladesh. It puts up the economy image of our country. As an electronic appliance producing it is doing fine. We are proud to know that it is one of the biggest ISO certified local company here. They really do not rely on other countries. They are the only company who is producing electronics good in this country; other competitors are importing their products. Walton is been serving goods to customers from a long time. Since then Walton is experiencing customers‟ satisfaction.
Very less customers have complained about the goods. Still the product development department is trying hard to overcome those complains and give them a better product. Walton possesses a lack in their management skills. This causes for hiring unskilled employees. Behind this there is a reason of hiring employees by recommendation existing employees. By this many employees get chance to work just because they are known to the existing employees Instead of being the only domestic electronics manufacturer Walton has lot of competitors. Specially the Chinese Companies, My One etc. These competitors are against. More over LG is starting a firm which will be producing goods in Bangladesh this is a direct competition to Walton.
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The Ansoff product-market matrix helps to understand and assess marketing or business development strategy. Any business, or part of a business can choose which strategy to employ, or which mix of strategic options to use. This is one simple way of looking at strategic development options: Each of these strategic options holds different opportunities and downsides for different organizations, so ...
So this is a big threat for them. Walton has created huge enthusiasm among the consumers of its target market with its slogan “Aamader Ponnyo”. They accepted Walton‟s endeavor of manufacturing some electronic items like, refrigerator & Freezer and motorcycle for the first time in Bangladesh, and are more than ever willing to buy a product of high quality made in our own country. On the other hand, as a local manufacturer Walton can sell quality products at comparatively lower price than other competitors. It also makes its product available at the nearest possible places in each areas of Bangladesh through Walton Plazas (own showroom) and countrywide dealers. New Walton Plazas are being opened frequently in different places of the country for getting closer to the customers. In order to providing the quickest possible after sales service to the customers Walton has already established 39 Service Centers and opening more service centers is under process. Walton equally values its sales and after sales service for maintaining a long and positive relation with its customer and thus retain and increase the customer.
Market Segmentation
Geographic
Behavoir
Factor
Market
Sagmentation
Demograp
hic
Psychograp
hic
Geographic:
Geographic segmentation calls for dividing the market into different geographic units such as nations, states, region, cities or neighborhoods. A marketer can choose few geographic areas, region or cities for their brand. Because based on the geographic segmentation a marketer can identify its total market size, target market etc. of their brand.
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Critical Thinking is convergent or "judgmental" thinking, where the mind discovers a common attribute, expressed as a word or phrase, which is shared by more than one idea or concept in the population of ideas being considered. These emerging attributes describe the "glue" that connects the associated ideas. Put another way, the associated ideas are "judged" to belong to a particular class or ...
Based on geographic segmentation our brand segmentation is:
Region: The local area of Bangladesh.
Density: Mass population
Walton produces its goods within the country. They really do not rely on other countries. They are the only company who is producing electronics good in this country; other competitors are importing their products. On the other hand, as a local manufacturer Walton can sell quality products at comparatively lower price than other competitors. It also makes its product available at the nearest possible places in each areas of Bangladesh through Walton Plazas (own showroom) and countrywide dealers. New Walton Plazas are being opened frequently in different places of the country for getting closer to the customers.
Demographics:
In demographic segmentation the market is divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, religion, race, generation, nationality and social class. It is very popular and very important segmentation for distinguish the customer. Marketers do demographic segmentation for two reasons. First reason is that consumer wants, preference, and usage rates are often associated with demographic variables and second reason is demographic variables are easier to measure.
Based on demographic segmentation our brand segmentation is: Age: 22-50
Family life cycle: Young generation, married, single and other.
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Gender: Male, Female
Occupation: Students, businessmen, and professionals.
Gross Family Income: BDT 20,000 per month or above.
Religion: Every religion
Social class: Every social class
The customers of Walton are basically middle class people who earn not that much handsome and so on. The people who love country products are basically attracted to Walton. So the main market is the people who can hardly afford Sony or Samsung LG and this kind of flashy brands. Still as an improving country the percentage of middle class people are more. So it seems like Walton has a good hold on market.
Psychographic
Psychographics is the study of personality, values, attitudes, interests, and lifestyles. Because this area of research focuses on interests, attitudes, and opinions, psychographic factors are also called IAO variables. This type of segmentation divides the market into groups according to customers‟ lifestyles.
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It considers a number of potential influences on buying behavior, including the attitudes, expectations and activities of consumers. If these are known, then products and marketing campaigns can be customized so that they appeal more specifically to customer motivations.
The main types of psychographic segmentation are:
Lifestyle – different people have different lifestyle patterns and our behavior may change as we pass through different stages of life. Walton has arranged a range of products for different lifestyle of people.
Opinions, interests and hobbies – This covers a huge area and includes consumers‟ political opinions, views on the environment, sporting and recreational activities and arts and cultural issues. The opinions that consumers hold and the activities they engage in will have a huge impact on the products they buy and marketers need to be aware of any changes. Walton is much aware about consumers opinions, interests and hobbies.
Behavioral
Behavioral segmentation divides customers into groups based on the way they respond to, use or know of a product.
Behavioral segments can group consumers in terms of:
Occasions:
When a product is consumed or purchased. For example,
Walton products are purchased by middle class and lower middle class families when they need for household electronics, Motorcycles etc. Besides of this in apartments and business organizations especially different offices buy Walton generators.
Usage:
Some markets can be segmented into light, medium and heavy
user groups. Walton Company also segmented into light, medium and heavy user groups.
Loyalty: Those who buy one brand all or most of the time – are valuable customers. Walton tries to segment their markets into those where loyal
customers can be found and retained compared with segments where customers rarely display any product loyalty.
Benefits Sought
Benefit segmentation requires marketers to understand and find the main benefits customers look for in a product. Walton is an excellent example in the market where research has found some benefits through its products.
Positioning
Although there are so many different definitions of brand positioning, probably the most common is: identifying and attempting to occupy a market niche for a brand, product or service utilizing traditional marketing placement strategies (i.e. price, promotion, distribution, packaging, and competition).
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Positioning is also defined as the way by which the marketers attempt to create a distinct impression in the customer’s mind. Walton has positioning concept in order to survive in the competitive marketplace. They has a core idea concept with a positioning concept. A Core Idea Concept simply describes the product or service. Its purpose is merely to determine whether the idea has any interest to the end buyer. In contrast, a Positioning Concept attempts to sell the benefits of the product or service to a potential buyer. The positioning concepts focus on the rational or emotional benefits that buyer will receive or feel by using the product/service.
A successful positioning concept must be developed and qualified before a “positioning statement” can be created. The positioning concept is shared with the target audience for feedback and optimization; the Positioning Statement (as defined below) is a business person’s articulation of the target audience qualified idea that would be used to develop a creative brief for an agency to develop advertising or a communications strategy.
Walton’s brand positioning process:
Walton has an effective brand positioning process. Effective Brand Positioning is contingent upon identifying and communicating a brand’s uniqueness, differentiation and verifiable value. It is important to note that “me too” brand positioning contradicts the notion of differentiation and should be avoided at all costs. This type of copycat brand positioning only works if the business offers its solutions at a significant discount over the other competitor(s).
Walton’s brand positioning process involves:
1. Identifying the business’s direct competition (could include players that offer Walton‟s product/service amongst a larger portfolio of solutions)
2. Understanding how each competitor is positioning their business today (e.g. claiming to be the fastest, cheapest, largest, the #1 provider, etc.)
3. Documenting the provider’s own positioning as it exists today (may not exist if startup business).
4. Comparing the company’s positioning to its competitors’ to identify viable areas for differentiation.
5. Developing a distinctive, differentiating and value-based positioning concept.
6. Creating a positioning statement with key messages and customer value propositions to be used for communications development across the organization.
Walton’s product positioning process:
Walton‟s product positioning process involves:
1. Defining the market in which the product or brand will compete: Walton surveys who are the relevant buyers of their products.
2. Identifying the attributes (also called dimensions) that define the product ‘space’
3. Collecting information from a sample of customers about their perceptions of each product on the relevant attributes: Walton collects information from a sample of customers about their perceptions of each product on the relevant attributes. Then they try to add features in their products and try to improve their product quality and service.
4. Determine each product’s share of mind: Walton determines each product‟s share on mind.
5. Determine each product’s current location in the product space: Walton determines each product’s current location in the product space.
6. Determine the target market’s preferred combination of attributes: Walton determines the target market’s preferred combination of attributes.
7. Examine the fit between the product and the market: Walton is serious about examining the fit between the product and the market. Walton‟s positioning concepts: Walton has three types of positioning concepts:
1. Functional positions
Solve problems: Walton always try to solve their problems in respect to product quality and service.
Provide benefits to customers: Walton always try to provide benefits to customers like providing quality products at a reasonable price and after sales service.
Get favorable perception by investors (stock profile) and lenders: Walton gets favorable perception by investors (stock profile) and lenders.
2. Symbolic positions
Self-image enhancement: Walton has already enhanced their self-image in Bangladesh market by providing good quality products and by giving better service.
Ego identification: Walton has successfully identified their ego.
Belongingness and social meaningfulness: Walton seriously thinks about Belongingness and social meaningfulness.
Affective fulfillment: Walton is very sincere about affective fulfillment.
3. Experiential positions
Provide sensory stimulation: Walton always try to provide sensory stimulation.
Provide cognitive stimulation: Walton always try to provide cognitive stimulation.
Market Needs
The consumers always demand quality, unique, distinguishable product and service at a reasonable price. The company that provides superior value to the customers will in turn wins the consumers‟ heart. To win consumers‟ heart it is very important to identify their needs. We tried to find out the things that consumers look for while purchasing the Walton product. In the summer season country face the electricity problem that‟s why, people need the generator in the summer season. In our city road we always face the traffic jam. For this situation people need a motorcycle because only two wheels transport is suitable in the traffic signal. In the whole country are under the electricity now. So people want refrigerator and television very deeply. In the rural area of our country every family want a refrigerator and television. But they want quality product in reasonable price. That‟s why Walton is their first choice. Now a days we are using 3G mobile internet. Walton give their mobile 3G facility, higher camera in both front and back and other facilities what other companies gave but there price is very reasonable for the whole class customer. Walton knows the customer‟s want and that‟s why they are very successfully operating in the market.
Market Trends
Present market condition is pretty ultimate. People want the services that will meet their expectation level and also match with their desired price. Walton think, today‟s market can give the total satisfaction to the customer. According to our survey, we have found that at least we can fulfill a group of customers‟ desire. In addition, those people are from middle class, and low middle class income level, and not quite educated about the market situation, price, quality product etc. therefore, from a bird‟s eye view, we can state that the market demand is getting quite high for the product and there is a great likelihood to enter the market and have well position in it. In Bangladesh, the branding of hi-tech is a new concept. Traditionally hitech products were traded in the foreign market where customers had to conscious about the quality of the product. They had to trust the words of retailers; otherwise they had to back home without purchasing product. By considering all those factors, Walton is ready to provide the facility to its customers to purchase hi-tech product in hassle-free environment, where they will be ensured about the quality of the product and most importantly purchase them with a reasonable price.
However, the selling of branded product is a new concept to people. For that reason, we have to do lots of advertisements which will be expensive and many fixed costs for starting up the business will be occurred.
SWOT Analysis
The overall evaluation of a company‟s strengths, weakness, opportunities and threats is called SWOT analysis. SWOT Analysis is an important planning tool that helps a person or organization to identify and understand its internal strengths and weaknesses. It also matches these strengths/weaknesses with the opportunities/threats in the environment.
Strengths:
Wide product range
Strong local presence
Quality products at low price
Comprehensive knowledge on the market and consumer.
Increase the uses of advance high-tech technology.
Cheap labor cost.
Opportunities:
Achievement of sales growth through introduction of new products. Increase of sales in major cities.
Competitors‟ weaknesses offer extra opportunities to increase sales further.
Launching of new products every year.
Weaknesses:
Lack of skilled men power and after seals service Transportation problem.
Proper monitoring problem facing in marketing activities
Week distribution Channel
less organized distribution & compliance to market demand.
Threats:
Competitive market
Chinese brands
LG‟s Production Factory in Bangladesh
Increased price of Raw materials
Lack of good technology and better R&D people.
Set up cost of new plant has gone high
Porter’s Five Forces Model
Prof. Michael Porter teaches at the Harvard Business School. He has identified five forces that determine the state of competitiveness in a market. The forces also influence the profitability of firms already in the industry. These five forces are summarized in the above diagram. (The fifth force is the degree of rivalry that currently exists among firms already in the industry.) Here are a few additional details about Porter‟s model. (Simon & Schuster, 1985)]
Barriers to Entry
Economies of scale mean larger firms can produce at lower cost per unit. This tends to lower the number of firms in the industry and reduce competition. Proprietary product differences are the characteristics that make a product appeal to a large market segment. But only those characteristics that cannot be copied at low cost by competitors (“proprietary”) will be a barrier to entry. Brand identity is the extent to which buyers take the brand name into account when making purchase decisions.
Bargaining Power of Suppliers
Differentiation of inputs means that different suppliers provide different input characteristics for inputs that basically do the same job. The greater the degrees of differentiation among suppliers the more bargaining power suppliers have. Presence of substitute inputs means the extent to which it is possible to switch to another supplier for an input (or a close substitute).
The greater the number and closeness of substitute inputs the lower the bargaining power of suppliers.
Threats of Substitute
Relative price performance of substitutes is the price of substitutes for your output compared to the price you are charging. If the price of substitutes is lower, the competitive threat increases as the price differential increases. Switching costs refers to the cost to the buyer of switching from one seller to another. The greater the switching costs the lower the threat of substitutes because buyers have a stronger incentive to stick with a single supplier. Buyer propensity to substitute is the extent to which buyers are willing to consider other suppliers.
Bargaining Power of Buyers
Buyer concentration versus firm concentration refers to the extent of concentration in the buyer‟s industry compared to the extent of concentration in your industry. The more concentrated the buyer‟s industry relative to your industry the greater the bargaining power of buyers. Buyer volume is the number of units of your product the buyer purchases from all sources. The greater buyer volume compared to the quantity purchased from you, the greater the bargaining power of buyers.
Rivalry Determinants [with other firms in the industry]
Industry growth is the speed at which the market is growing. Rapidly growing markets provide less incentive for firms to aggressively compete with each other. Intermittent overcapacity is the amount demand fluctuates during a year and the impact lower demand has on how efficiently the firm is able to use its plant and equipment. In some industries a decrease in demand leads to significant idle productive capacity, while other industries are not as susceptible to this factor. More intense rivalry is likely to be fostered in an industry in which firms face either large amounts of unused plant capacity or face frequent idle capacity. Concentration and balance is the number of firms in the industry and their relative size. An industry in which a few firms supply most of the output is likely to not be very competitive because the large firms will control the market. (Simon & Schuster, 1985)
PESTLE Analysis:
Political
Economical
Legal Factors
Social
Tecnological
Enviromental
Political Factor:
High duty fee on Imported Home Appliance Product.
Export promotion schemes of Bangladesh Government.
Tax Incentives on Import of Plant.
Constant Government Support
Economic Factor:
Increase in per capita income
Growing GDP high disposable income
Increase in Spending Power
A huge prospect of a profitable export sector
Socio-cultural Factor:
Manufacturing Eco-Friendly product
Changing lifestyle of middle income people
Technological Factor:
Improvement in Technology made electronics cheaper
Increased quality of production
Production Process:
Recieve Order
Raw materials
Import/Local
Store Godown(fifo)
Production Floor
Finished goods
Delivery
Target Markets
A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve.
For targeting market; mostly undifferentiated (Mass) marketing strategy is followed here. In some cases several companies also follow the differentiated (segmented) marketing strategy.
A product‟s position is the way the product is defined by consumers on important attributes the place the product occupies in consumers‟ minds relative to competing products.
Walton uses their tagline „ amader ponno’ as they are Bangladeshi product for market positioning. Positioning of refrigerator, automobile products to the customers mind is very difficult because same products are marketed by a large number of companies. Companies are trying to create competitive advantages to make the position in the customers mind. Price, quality and design are used for making the competitive advantage. The marketing of electronic products is direct marketing.
Customers of Walton are: Higher middle class people
Middle class people
Lower middle class people And
Institution
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Conclusion:
When finishing this research it can be found that the Marketing management did play a significant role in the success of WALTON. To achieve the leading position, success, lot of improvement is required for every divisions of it. As home appliance or auto products became essential for the consumer day by day, many marketers are coming with these products in this electronic industry. So that it has also become a competitive market for WALTON in spite of having a good brand image and local presence in Bangladesh. They should also take much more attention and careful action to establish its product line in the market. Also should be identify their customer‟s behavior and keep the commitment with them strongly. To build a positive perception and awareness among the consumers about their product they have to be stronger in their promotional activities and should maintain a good relationship both internally and externally in their corporate life. However it can be concluded that every company needs an accurate strategy before they explore the market. They should be clear about the marketing analysis and the advantage, disadvantage, mission, vision and goals. Then found the place of them. People can learn some successful experiences from some examples, but can‟t copy the strategy from others. Since every company has its own way of operation and characteristics.
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Exploring Strategy.
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Harvard Business Review.
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“Curvilinearity in the diversification-performance linkage: An examination of over three decades of research.” Strategic Management Journal. ucture, and Economic Performance,
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https://balancedscorecard.org/Resources/StrategicPlanningBasics/tabid/45 9/Default.aspx on 18th November 2013.
http://assignmentpoint.com/business/internship-report-on-the-marketposition-of-walton.html on 18th November 2013.
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http://risingbd.com/english/detailsnews.php?nssl=5c572eca050594c7bc3c3 6e7e8ab9550&nttl=15012013743#.UpXI4sRQG5- on 20th November 2013. ltonbd.com/) 19th November 2013.
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Advantage.
cott Gallagher 2003, Why Does Firm Performance Differ? Updated: 14 Feb. 2013
Appendix:
Interview Questionnaires:
(formulation, implementation):
What business you are in? What is the market opportunity? What is the market size? How can the market be segmented into logical customer groupings? What are the key industry trends that are fueling our success? What industry trends can inhibit our success? What is your customer‟s primary reason for buying or wanting to use our product or service? What categories of competition threaten your success? How will you differentiate yourselves to best combat competition? What barriers to entry into the marketplace are you creating for yourselves? What features and associated benefits does your offering provide? How do you deliver the features identified in previous question? How important is price in the decision process?
