Customer Analysis on Equine Industry and Products free essay sample

Due to the range of disciplines and activities covered by this market, targeting just one group could lead to increased sales through word of mouth promotion or competition between sports. Creating a marketing strategy with respect to the product, price, place and promotion (McCarthy, 1960) should maximise sales, brand position and loyalty as well as encouraging repeat sales. It is important to highlight the quality and benefits of the product, as customers will feel more relaxed about a purchasing decision if the risk is reduced (Kalish, 1985: 1569). 2. Rationale for a new product The product idea is a trolley with multi-surface wheels used to transport saddles, bridles and tack such as bandages or boots. It is a modification of an existing trolley in circulation which only carries three saddles (Robinsons, 2009b). By attaching bridle hooks and a small basket it creates a more productive design as more equipment can be carried in one journey. The product fulfils a need for all horse owners and those involved in the tacking up process. It allows saddlery and tack to be easily and safely transported and stored. It eliminates health and safety issues of carrying heavy equipment and the risk of damage to equipment through dropping, falling or improper storage. Equipment can remain clean and dry as it elevated, not left on a damp yard or dirty stable floor. 3. 0 Target market The aim is to launch the product into the equine industry, an extremely large and varied market, its contribution to the wider economy is often ignored (Graham-Suggett, 1999: 31), therefore it is underappreciated and the launch of a new product could prove very profitable. As the industry is so fragmented and dispersed, there is a huge variety horse owners to target all connected by overlapping organisations and governing bodies (Graham-Suggett, 1999: 33). The trolley will be aimed at the average horse owner, of which there are an estimate 1. 3 million in the UK (BETA, 2006: 15), but has the potential to be altered slightly to then be offered to professional riders, riding schools or the racing industry in the future. It is estimated that there are 2,000 livery yards/riding schools, 2,000 breeders and 750 trainers of race horses (BETA, 2006: 15). 3 % of the population of the UK have some interest in the industry, with 11% directly involved either through the sports themselves or as spectators (Defra, 2004: 13). With around ? 4 billion total horse related expenditure in the UK each year, the equine industry is growing both in leisure and competition (BETA, 2006: 19). Similarly, ? 140 ? 170 million was spent on saddlery and tack in 1999 (BETA, 1999: 21) a figure that is only likely to rise with changing fashions and increased interest in the sport. Similarly, the Henley Report (Defra, 2004) outlines key strategies to promote the equine industry both in the UK and international. Therefore, the industry is only likely to develop and grow in the future. A strong market position will be held as there is a greater understanding of the customer’s needs as well as competing with a smaller number of rival brands. It would be uneconomical to launch the product in an undifferentiated market, as it has such as selective appeal (Armstrong Kotler, 2009: 209 210). 4. 0 Rationale for brand position Branding is the way in which businesses add value and individuality in the market place. It allows customers to differentiate between various products on offer (Baines et al, 2008: 374). The trolley would be marketed as more of a niche product, taking a large share of a small part of the market (Blythe, 2005: 86), however relatively value for money, therefore enabling competition on grounds other than price, such as quality and durability of the trolley (Hooley et al, 2004). This is in order to attract a wider cross section of the market. In terms of competition, there is only one similar product in the UK produced by Stubbs Equestrian, costing ? 41. 40 through online sales or Robinsons catalogue (Robinsons, 2009b). The trolley should be branded in a way that will distinguish it as better quality and value including: the physical characteristics of the trolley, it must use superior materials with a more attractive design, the packaging should be eye catching and if it is made recyclable it will give the company a socioeconomically advantage, as a â€Å"green company† (Baines et al, 2008: 383). The brand name should be easy to remember, advertising the product through word of mouth. By registering a trademark, the trolley is protected and greater value added to the company (Hooley et al, 2004). . 0 Marketing mix A mixture of elements used to pursue a particular market response, the aim of the marketing campaign is to maximise sales at as low a cost possible, in McCarthy’s (1960) analysis of the marketing mix cited in (Waterschoot Van de Belte, 1992:84), he describes the 4P’s method these are: 5. 1 Product In order to sustain growth of the brand, Ansoffs (1957:114) matrix can be used as a guide for opportunities, threats and resource requirements (see figure 2). It provides strategic direction for the marketing strategy as the arket penetration section aims to promote high sales volumes in a current market (Brassington Pettitt, 2006:955-957). In respect to the trolley, this means high sales to existing Countrywide customers or members of the equine industry. This can be achieved by demonstrating to customers that the product satisfy their needs and expectations (Blythe, 2005: 141). The customer must perceive the trolley as solving a problem and it’s superiority to other products on the market (Zeithaml, 1988: 4) by using in store promotions such as: demonstration, flyers and leaflets, poster campaigns or competition give away (Jefkins, 1994: 124-126). An alternative strategy would be market development, selling more of the existing product to new markets (Ansoff, 1957:116). After selling to horse owners, other equestrian enthusiasts can be targeted such as: equestrian professionals, riding schools, stud farms and racing yards. In terms of product development, the trolley is a new product being introduced into an existing market (Ansoff, 1957:116) and so purchasing the product entails a lot of risk for the consumer. The higher the service provided, the more valued the product is by the customer (Birgelen et al. 2002: 46-47) and by offering a warranty or after sale service, customers will feel more confident about investing in the product as risk is reduced. Finally, diversification, introduction of a new product to a new market (Ansoff, 1957: 116) the trolley could move away from the equine industry entirely and be marketed to other sectors such as leisure, home or garden. 5. 2 Price Pricing of a new product is crucial for diffusio n into the market, therefore the optimal price must be found in order to maximise sales. As diffusion increase, the market decreases, therefore sales may benefit by dropping the price of the trolley later in the products life. Krishnan et al. (1999: 1656) found that a monotonically declining price policy is most successful in areas of price sensitivity, as there is a level of risk associated with any new product, this seems like the best marketing strategy for the trolley. Therefore, using Rogers (1995) curve of innovation (see figure 3), early adaptors such as equine professionals such as event riders can be targeted with a premium price, as demand falls, the price can be â€Å"skimmed† to encourage the laggards, maximising sales. However, dropping the price could be ineffective, particularly with the uncertainty of the future. A price drop would depend largely on the size of the future market and so the number of customers that would benefit from a price drop (Krishnan et al,. 1999: 1656). Figure 3: Categories of innovation (Roger, 1995) cited by (Baine et al, 2008: 94) Consumers use price as a method of judging a products quality and advantage, there is a positive correlation between price and perceived product quality (Zeithaml, 1988: 10). High quality products have higher profit margins, and so the price of the product must also be high, due to price elasticity (Carpenter, 1987: 212). Similarly, higher priced products are less vulnerable to price cuts from competition or price increase from suppliers (Kamakura, W. Russell, J. 1993: 10). However, a lower priced product would help consumers to become aware of the product as it represents value for money (Yoo, et al. , 2000: 199). 5. 3 Place In store Physical surroundings can play an important role in consumer behaviour as it impacts their perceptions of the store. (Bitner, 1992: 59-60). The store and its staff should provide a welcoming environment to encourage customer loyalty, repeat purchase of the product, and to promote sales through word of mouth. Promotional material could be displayed, drawing attention to trolley as well as positioning it amongst the equine merchandise to maximise sale potential. By placing the product in a widely known country store, it is available where the target customer finds shopping most convenient (Blythe, 2005: 141). Online sales Technological and cultural changes have lead to a huge consumer base using the internet to seek pre-purchase information or online shopping (Alba et al,. 997: 38). Online sales are extremely interactive and can be undertaken anywhere as well as eliminating any physical constraints such as shelf space or product display, due to the nature of consumerism, the consumer could be manipulated with â€Å"interactive decision aids† (Haubl Trifts, 2000: 5) such as search engines, and attracted to the produ ct even when their intention was to purchase something completely different. The online service allows the product to be delivered straight to the customer’s door making it convenient. 5. 4 Promotion All new products are categorised by two stages: awareness and adoption. Awareness can only be achieved by advertising or word of mouth and adoption is conditional of product awareness. Consumers will be willing to pay more for a product if the information received from early adaptors reduces uncertainty (Kalish, 1985: 1569). Advertising can reach a mass audience at a low cost per exposure. It has become part of everyday life and consumers view advertised brands as more legitimate (Armstrong Kotler, 2009:387). However, advertising is expensive and impersonal in comparison to a salesperson. As advertising has become second nature, a lot of people tune it out, not taking in any of the information. It would be more beneficial to target equestrian magazines such as Horse and Hound or British Dressage as they have a higher geographic and demographic selection (Armstong Kotler, 2009 :400), just the equestrian market can be targeted. It will also be displayed amongst other reputable equestrian products, having a positive effect on the reputation. Throughout the year there are a huge number of equestrian events, from open British Dressage and Show Jumping events, open to the average horse rider, to international events such as Badminton or The Horse Of The Year Show attend by professionals and enthusiastic spectators. Demonstrations and trade stands could target the market all in one place, it is flexible with high repeat exposure as customers walk by (Armstrong Kotler, 2009 :400) particularly when a high volume and variety of consumers will attend the events. In store promotion such as leaflets, poster campaigns, demonstrations and displays can be used to attracted consumers attention, promoting sales (Jefkins, 1994: 124-126). 6. 0 Conclusion Equestrian and outdoor stores provide the perfect marketing environment for the trolley as they are everywhere, appealing to the country and leisure market. The product itself appeals to all members of the equestrian community as it is not discipline specific, nor does it age or gender discriminate. It solves a problem suffered by both amateur riders and professionals alike. A promotional campaign through the media and outdoor sales as well as the internet and company website will encourage mass sales of the trolley because of its quality and unique design. By targeting a niche market such as equine, a gap in the market is being for filled as the market itself is often underestimated.