MKT 421 Week 4 Learning Team Assignment Marketing Plan Phase III
MKT 421 Week 4 Learning Team Assignment Marketing Plan Phase III fin571
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Date Created: 11/11/15
MARKETING PLAN PHASE III 1 Marketing Plan Phase III Team MKT/421 Instructor April 11, 2011 MARKETING PLAN PHASE III 2 Marketing Plan Phase III Effective marketing strategies are essential in the launch of a new product. Without an effective marketing strategy, a company may have the best product in the world, but be unable to sell it to consumers. The intent of this paper is to identify the components of what makes a marketing strategy effective, and how to distribute the product into the hands of the consumer by using the marketing mix. Marketing Mix The marketing mix is made of the four P’s: product, price, place, and promotion. These elements are planned and adjusted until the right mix is achieved, which is to serve the needs of the consumer while generating the most favorable income (WebFinance, Inc., 2011). Product Best Buy has developed the new product called the Universal Smartphone, and will provide contract carrier service for the new line of phones. The new flagship phone features a candy bar design, which makes its light weight and easy to carry in one’s pocket. The new phone line is built on a new magnesium frame with a screen constructed of a product called Gorilla Glass, which makes the phone virtually indestructible. The frame is enhanced with Chameleon technology that allows the phone to change colors based on the temperature of the user, much like a mood ring. The touch screen permits the user easy access to a full keyboard as well as an endless variety of applications, which can be downloaded to any phone to give the user his or her own personal Universal Smartphone. The new phone has a more advanced OS (operating system) than its closest competitor and will be called “Universal OS.” The phone has blue tooth and wifi capabilities, plus the option of integrating with all laptops that feature VM Ware application that allows the user remote control access to all Windows, Apple, and Droid OS devices. Other new features include MARKETING PLAN PHASE III 3 office applications such as Open Office, RDP (remote desktop), and with Universal Plus, IT customers will have access to server and data center monitoring and control. Best Buy will be the service provider for the new Universal Smartphone line and will carrier its own service plans. The contracts will be a standard twoyear contract, with the option of upgrading at 18 months. Best Buy will provide a wide selection of plans to choose from to meet the needs of all consumers, including the teen, the family unit, an organization, and even the corporate executive. In addition, Best Buy will provide data packages at lower rates than the leading competitors. Price Many pricing strategies are used by both manufacturers of cell phones and by distributors. According to PC World (19982011), the average consumer spends seventy six dollars for a new phone but smartphones typically run around one hundred ninety nine dollars. Most distributors such as Best Buy offer options, such as buying a phone new without a contract at full price, while also allowing a discounted phone with a new or renewed contract. For the Universal line of phones offered by Best Buy, the company will stay with this model and offer new phones without a contract for five hundred ninety nine dollars, or a new phone with a two year contract for two hundred ninety nine dollars. The profit for Best Buy will not be in the sale of the phone itself, but rather in the contracts created by its users. These are longterm contracts that average 2 years at an average of seventy five dollars a month, or one thousand eight hundred dollars over the life of a two year contract (Chan, 2009). Best Buy will market the available data packages to the same extent as it does the phone. For Best Buy, the phone will be the avenue in which the customer will commit to a 24month data plan. Unlike other carriers of cell phones and data packages, Best Buy will offer significant discounts when customers switch from another carrier and phone to the MARKETING PLAN PHASE III 4 Universal line of devices. When a consumer brings in an existing contract with another carrier and the phone purchased through that carrier Best Buy will offer a 10% discount on a new phone and data plan upon exchange. Place For Best Buy, the best channels of distribution will be direct from the manufacturer to Best Buy’s warehouse and distributed using channels already available. Recreating channels that already exist would be time consuming, costly, and ineffective. This reduces the total cost and increases the margin for the Universal smartphone. There will be no significant increase in overhead to incorporate the phone into each store’s shelves. Availability will start with the current store locations and Best Buy Mobil kiosks in shopping malls. The production costs for the Universal Smartphone will be similar to the costs for Apple’s iPhone consisting of: total materials $172.46, Manufacturing costs 6.50, grand total of $178.96 (Xing, 2011). It has been suggested that Apple manufacture it’s iPhone in China to maximize its profit margins of 6265% (Xing, 2011). However, even if Apple chooses to continue to manufacture the iPhone in the United States, it still would make a profit margin of over 50%, and it may be considered socially responsible by consumers. The markup for the universal will be 50%+ with the suggested selling price five hundred ninety nine dollars. This gives Best Buy the chance to increase the perceived value of the phone. Producing the phone in the USA and using “tough” materials in the case of the phone will make the phone more durable in the minds of the consumer. Improving the consumer’s opinion of the Universal Smartphone ultimately increases the value of the phone. Pace The pace of the life cycle of the Universal OS will move more quickly through the introductory stage and market growth because of the technology advancements in the operating MARKETING PLAN PHASE III 5 system, the chameleon enhancement, and the durability in using a magnesium frame and gorilla glass. According to Perreault, Cannon, and McCarthy (2009, p. 265), “the greater the comparative advantage of a new product over those already on the market, the more rapidly its sales will grow.” The new features in the Universal OS will provide the same advantage. The Universal OS will enter the market maturity a short time after the growth stage, because it will become outdated from the introduction of newer, more advanced technology in the Smartphone industry as compared to others currently on the market. The price strategy used for the Universal OS will be another factor in the length of time it is in the market maturity stage before eventually going into the final stage of sales decline because of outdated technology. The product life cycle of a Universal OS will move quickly through all stages of the product life cycle because it will be affected by the rapid changes in technology in the Smartphone industry to satisfy the consumer’s needs in the fast paced world of globalization in the business environment. Conclusion Finding the correct marketing mix is essential to the successful launch of the new Universal Smartphone and Universal OS. Finding the right method properly to use the four P’s in the marketing mix, product, price, place, and promotion can make or break the process in which the Universal will be introduced to the public. A great deal of thought and planning has gone into the development and launch of the new Universal Smartphone and the Universal OS. A marketing strategy must be well thought out to be successful. Best buy must offer the best product for the best price, to the right target groups, and market them effectively. By following the ideas set out in this paper, Best Buy has the opportunity to capture a large market share of the Smartphone market, and by using its own OS can have the potential to generate a large amount of income. MARKETING PLAN PHASE III 6 MARKETING PLAN PHASE III 7 References Chan, C. (2009, October 29). Total Cost of Ownership for Motorola DROID on Verizon [Msg. 1]. Message posted to http://www.androidcentral.com/totalcostownershipmotorola droidverizon PC World, We’re Holding On to Our Cell Phones Longer Than Ever. Retrieved from: http://www.pcworld.com/article/206100/study_were_holding_on_to_our_cell_phones_lo nger_than_ever.html Perreault, W. D., Cannon, J. P., & McCarthy, E. J., Jr. (2009). Basic marketing: A marketing strategy planning approach (17th ed.). New York, NY: McGraw Hill. WebFinance, Inc.. (2011). BusinessDictionary.com. Retrieved from http://www.businessdictionary.com/definition/marketingmix.html Xing, Y. (2011, April 9). How the iPhone Widens the U.S. Trade Deficit with China. Message posted to http://wallstreetpit.com/70362howtheiphonewidenstheustradedeficit withchina MARKETING PLAN PHASE III 8
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