Analysing Marketing Opportunities
The Ergopen is a new, specialist pen to be released by ‘Got An Inkling Australia’. ‘Got An Inkling’ has been primarily producing high quality refillable and specialist pens for niche corporate and education markets. The Ergopen combines their high quality pen production with a physiologically designed sleeve that uses bio-ceramic technology to harness nature’s far infrared thermal energy (www.farinfraredmedical.org).
This may serve to relieve pain associated with long periods of writing and arthritis, rheumatism, and carpal tunnel syndrome. The target market for this pen includes professionals, workplace health and safety, remedial/rehabilitative occupational therapy, academics, and school students.
The following information serves as foundation research into the potential impacts of manufacturing the Ergopen. This company will be looking into macro environmental trends that help identify possible opportunities and threats that are outside the control of the company. In nature, these macro environments are economic, demographic, technological, cultural, natural and political.
Economic
“The economic environment consists of all factors such as salary levels, credit trends, and pricing patterns that affect consumer spending habits and purchasing power” (www.allbusiness.com, 4954903-1).
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With 64% of students studying full time (Australian Bureau of Statistics, media release 6227.0); it is likely that a large proportion of this target market will fall into the low income earning bracket. The Ergopen, whilst kept in an affordable price range, will be considerably more expensive than standard pens. It is, however, a one time purchase with the refillable cartridges being the consumable product.
Other economic areas to consider are the rising costs of material for manufacture, high operating costs, and the costs of releasing any new product into a market. The company, being Australian owned and operated, also creates growth for the Australian economy, strengthening the wealth and stability of Australian business markets. Roy Morgan research says that 90% of Australians prefer to buy Australian made (www.roymorgan.com/news/polls/2010/4600/).
‘Got An Inkling’ has considered the higher costs of manufacturing in Australia compared to cheaper assembly in overseas markets. This additional cost is justified given the popularity of Australians buying Australian made products and the associated economic benefits.
Demographic
“Demography is the study of human populations in terms of size, density, location, age, sex, race, occupation and other statistics” (Kotler, Brown, Burton, Deans, Armstrong, 2010, p137).
The Australian Marketing Dictionary adds gender, income level, marital status, ethnic origin and educational level to this list (Bradmore, 1990).
Some of Ergopen’s target markets are those enrolled in higher education, students, academics and professionals. Australian Bureau of Statistics tell us that approximately 2.7 million people aged between 15 – 64 years old were enrolled in formal or non-formal education in May of 2010. Over half (56%) of the Australian population had a qualification in May 2010 compared with 47% in 2001 (www.abs.gov.au).
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This indicates a steady increase in the numbers of those studying and therefore a steady increase of potential customers in the future.
The ABS also tells us that of 8,217,700 people, 1,093,200 are attending higher education, 755,700 are at school, 598,500 are at TAFE and 383,800 are studying at other education institutions. These statistics consist of only students and don’t include employment figures. There are also 14.5 million people aged 15 to 64 working and an additional 302,400 between ages of 65 to 74 still working in Australia. Ergopen is ideally suited for a wide range of consumers in this abundant, growing target market.
Technological
The technological macro environment is a broad concept based on finding better ways to do things. This creates generous prospects for new products and marketing opportunities.
“Things to be considered include: whether offerings can be made more cheaply and to a better standard of quality using new technologies, whether technology can be used to innovate, and whether distribution or communication can be improved using technology” (Elliot, Rundle-Thiele, Waller 2010 p 49).
There is no doubt that a pen such as this can be seen as a technological innovation to standard pens, however, with advancing technologies including PC’s, laptops, palm pilots, digital recorders and tablets, there is certainly a drop in the number of people utilizing the “good old pen” for extended periods of time. Research indicates that using laptops in class can be a disadvantage (Lauricella, S. Kay, R. 2010, p.151).
The Ergopen would be marketed to those environmentally conscious and for older members of the population who haven’t quite embraced the sprinting pace of technological advancement, as well as those who just find writing a preferable way to commit the information to mind.
Developments in technology mean that communication is instantaneous and world wide, huge advancements are being made in the process of manufacturing, supply, distribution and marketing. Whilst this is positive, the rapid advancement in technology can also pose a threat to companies. Technology is, after all, the concept of finding better ways to do things (Elliot et al, 2010).
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This may include rival companies producing a comparable product that is cheaper and more easily manufactured. Advances in technological environments introduce ways for competitors to promote a similar product more effectively than those used to promote Ergopen.
With ‘Got An Inkling Australia’s’ already long standing success in the industry, some of these technological trends hold little impact on the release of the Ergopen. There is, however, the threat that cheaper or lower quality reproductions could be released into the market, risking the design and technology of the Ergopen’s therapeutic properties. A possible solution to this, in the form of patents, will be discussed later in “Political trends”.
Cultural
“Cultural environment describes social and cultural factors that affect peoples’ attitudes, beliefs, behaviours, preferences, customs and lifestyles” (Elliot et al 2010 p50).
‘Got An Inkling’s’ aim in releasing to the consumer market is to embrace a modern look with the Ergopen. All pens will be manufactured with selected colour schemes used to appeal to specific ages and social trends within the broader target market. Despite this attempt at fitting into social trends, there remains a question that consumers will not find the pen fashionable due to the unusually shaped therapeutic sleeve.
‘Got An Inkling’ believes that the unusual look of the pen will be overlooked for the holistic advantage it holds. “The alternative and complementary medicine in Australia is growing at a rapid rate. It is currently estimated that the market is worth over one billion dollars. In Australia, as well as overseas, this market appears to be growing at about 30% per year” (www.instudy.com/articles/twealtmd.htm).
‘Got An Inkling’ have concluded that the growing interest in holistic therapies will serve to be a major selling point of this pen therefore its unique appearance will make it more identifiable rather than a deterrent. It is also found that buyers are willing to spend larger amounts on quality products that are seen as status items.
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For the purpose of this assignment, I am assuming myself as the owner of a plastic molded toy company in United States that manufacturers, and distributes plastic molded toys through retailers across the country and around the world. The company is capitalizing on the strong growth in the children’s toys segment and planning to expand in an aggressive manner throughout the nation. The company ...
Natural
‘Got An Inkling Australia’ has given consideration to natural resources when formulating the plan to produce the Ergopen. Although the sleeve of the Ergopen is unable to be produced in this company’s current factory, ‘Got An Inkling’ have chosen to contract that portion of the production to another, already established, far infrared material plant. Outsourcing operations will be considerably more cost effective and better for the environment than expanding the current factory.
Environmental macro environments have been thoroughly considered when choosing method of manufacture. “The role of the government is to legislate for the public good, and though it will foster economic growth, it must also ensure that workers, the general public and the natural environment are adequately protected… environmental issues are now a matter of concern for organizations of all sizes in all sectors.” (Young, P.Byrne, G. and Cotterell, M. 1997 p.488).
‘Got An Inkling Australia’ has embraced these government initiatives for a better future by making the choice to go with an Australian manufacturer over the cheaper alternative of overseas markets. They chose to stay within Australia for both support of the Australian economy and for support of initiatives that work towards a healthier future. “A world-class manufacturing enterprise must be implementing sustainable practices as part of a holistic approach to manufacturing” (www.industry.qld.gov.au/key-industries/271.htm).
The impact on the environment with the manufacture of this pen is minimal as the two components of the pen are already being produced sustainably, they are merely being put together to create something new and innovative. Additionally, a refillable pen has less impact on the environment once waste product volumes are taken into account.
Political
The Political environment includes all laws, government agencies and lobbying groups that influence or restrict individuals or organisations in the society (www.allbusiness.com).
This is a very broad and diverse concept to explore.
Some of the main legislations governing ‘Got An Inkling’s’ release of the Ergopen would include: Trade Practices Act, Sale of Goods Act and the Prices Surveillance Act. Other things to consider are Fair Work, Industrial Relations, Product Safety, Fair Trading and other laws surrounding export, should the company choose to market internationally. Because the factory producing pens and the far infrared material plant have been in production for a number of years many policies and procedures are already in place to ensure the compliance to these legislations. Therefore, the largest obstacle amongst these for the company would be product safety legislation compliance. Product testing would need to be conducted to ensure this pen meets industry standards, not just as a pen but as a holistic aid.
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As discussed earlier, with the risk of the design being copied or reproduced, there is also patent and copywrite laws to consider when producing an item that is unique to the market (www.ipaustralia.gov.au).
Conclusion
Breaking into the consumer market is an exciting time for ‘Got An Inkling’. Management within this company believes that Ergopen does pose a slightly higher risk in relation to cost, patent design, and outside manufacturing contracts. These risks and budget concerns will need to be methodically deliberated in a marketing plan. The company remains positive that this opportunity to break into the consumer market with a high impact, quality product, will outweigh these related risks. There is not only the opportunity to market to consumers but to target new areas within their current corporate and educational markets including areas such as workplace health and safety.
With their large target demographic, low environmental impact, and the growing popularity of alternative therapies, ‘Got An Inkling’ can reach out to consumers as an Australian company concerned with the needs of their customers, economic growth and environmental impact within their country. The company’s managing directors and staff, plan to continue to analyse the marketing of this product more extensively for the specified niche groups within the target markets outlined.
