Strategies Tony Bennett Ashford University BUS620 Managerial Marketing July 9, 2012 Abstract This paper will summarize the generic marketing activities of a retail establishment with the purposes of assessing their market and segmentation strategies. After the assessment a strategy will be developed to improve the marketing of the product. The example used for the analysis will be a company located in the Philippines called CDR King.
CDR King provides the latest technologies in computer related products and accessories at affordable prices by bypassing middlemen, bringing the product direct to the customer which greatly reduces cost. Generic Strategies CDR King is a retail chain located exclusively in the Philippines who initially sold media products but has now increased their product line becoming a full blown technology provider. CDR King is now selling the latest computer related products and accessories with over 100 branches across the Philippines.
According to (cdrking. com) the company’s vision “is to provide every Filipino with the latest technology at an affordable price” and the mission is “to be the No. 1 top media & technology provider in the Philippines that could provide the latest technology at an affordable price without extra cost and also to be able to deliver up-to-date technologies to the Philippine market with the latest computer related products as well as computer accessories. ” CDR King Marketing Strategy
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CDR King’s generic marketing strategy places an emphasis on low cost and affordable products. The cost leadership strategy involves a company winning market share by focusing on cost-conscious or price-sensitive customers. This is accomplished by having the lowest prices in the target market, or the lowest price to value ratio (Muller and Walker 2010).
For this approach to be successful the company must have lower operating cost than its competitors. CDR King accomplishes this by: • Not selling ther branded products • They do not participate in heavy advertising • Warranties are kept short so they are not factored into the price CDR King operates very similar to a franchise model. All of its products are sold with a CDR King logo, all employees wear uniforms and every CDR King store has the same color scheme. The model of the company is molded after McDonalds except they sell cd’s and technology gadgets and not hamburgers. CDR King collects all payments manually and manage inventory in the same manner.
The strategy is to penetrate the technology market through customers they consider the regular Joe. The current target market of CDR king is the C and D market across the Philippines, this market would be the equivalent to the middle to lower class in the United States. After much success in the technology gadget market the company has decided to expand on its business model by venturing into the vending machine market, selling items like blank disks, optical mouse, Bluetooth dongles, card readers, memory cards and usb drives.
The company currently has one located in Quezon City at its Technohub and plans to roll out more in the next several weeks (gmanetwork. com).
CDR King Weaknesses No matter how successful a company is they’re prone to make mistakes and have weakness; CDR King is no exception. The retail stores are big, stocked full with inexpensive products which can make navigating through inventory a challenge sometimes. When you combine that with the manual processing of purchases, it creates long lines at the checkout counter.
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Upon entering the CDR king store you are given a number and sometimes the wait to see a salesperson can be extremely long. I have no idea of what the hiring requirements are for store employees but customers often complain about the interaction with the salespeople; they are perceived as rude and impersonal. The other big complaint about the company is the quality of the actual products. The products are manufactured in China and have a very short life span normally lasting just long enough to make the week long warranty expiration date.
I would have to agree with this assessment of the product because of my own personal experience with the company. In the past I’ve purchased at least 5 notebook chargers each lasting about 1 month at a time. Each cord cost around 600 pesos which is equivalent to 12 U. S. dollars. The last time I needed a cord I did not purchase it from CDR King but from one of its competitors. The cord is clearly made with a much better quality and I have not had any problems with it at all. Improved Strategy As the saying goes “if it’s not broke then don’t fix it”.
The CDR King cost approach has been a very effective strategy for the company and leads in the market place on low price; I would recommend keeping that strategy the same. I would suggest the company focus their efforts in a few different places. 1. Eliminate the manual ordering process – by converting the manual order taking process into a computerized system the company could greatly decrease the amount of time it spends with each customer, improve and speed up the inventory process, and generate reports on inventory gaining insight into which products sell the most or the least and which products have the most defects.
This would allow them to make much needed adjustments to defective products costing the company the most money. The company could also use the system to obtain demographics, geographies, and psychographics to greatly improve the cost associated with marketing activities. 2. Improve customer service – re-train the employees with the overall goal of becoming more personal and sincere. The HR department should be the first step in the new superior quality service campaign, encouraging them to only hire individuals with a strong track record in customer service. . Discontinue the vending machine business – if the company already has problems with a combination of customer service, cheap products and warranties the vending machine business would only increase the dissatisfaction among customers. Attempting this line of business is going to make the existing problems with the company much worse. Conclusion In conclusion, the CDR King has started a great business but like all entities the need to evolve is always a part of the life process.
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The company now has the lead on a niche market, selling low priced computer related parts and accessories to a specific class of people located in the Philippines. However competition will eventually arise, a company can always figure out how to do something bigger and better. In order for the company to move into the right direction and to the next level, the changes I suggested should be implemented as soon as possible.
The more the company delays, the more it increases its chances of losing the dominance they currently hold in the marketplace. References Mullins, J. W. , Walker, Jr. O. C. (2010).
Marketing management: A strategic decision making approach (7th Ed. ).
Boston: McGraw-Hill Irwin http://www. cdrking. com/? mod=faqs http://www. gmanetwork. com/news/story/264015/scitech/technology/cdrking-vending-machines-anyone
