Executive Summary
Air Cleaning Technology, Inc provides air cleaning pieces of equipment which help to control air pollution since 1977. It is led by Mr. Paul Krause, the Chief Executive Officer of the business. Air cleaners include the dust collection equipment, collect smoke-metal dust and mist collection. It also offers customers air and water heat equipment. The business also sells replacement filters over the internet which makes it convenient for the customers. In addition, restaurant admissions are accounted for in the company. Air Cleaning Technology, Inc is a member of the International Kitchen Exhaust Cleaning Association (IKECA) that educates its members through safety and cleaning techniques. IKECA is a non-profit organization that aims at improving the standards and practices of the kitchen exhaust cleaning pieces of equipment to achieve safety in specific areas. The restaurants are assisted for the incidents that might happen in the kitchen such as fire. Insurance companies will be asked to inspect the air cleaning staff and be responsible for further check ups.
Businesses like the Air Cleaning Technology, Inc should then be able to come up with an effective market penetration strategy in order to increase sales of the available products. Also, to penetrate the market through promoting the products in the market in a manner where sales are increased and prices are lessened. Market penetration strategy for the company requires the profound analysis for a Business-to-business interaction between the ACT and its customers. A good promotional strategy should be developed to attract customers and give them benefits that would maintain the level of sales. This should be emphasized on the advertising campaigns and other important elements of the promotional mix. Pricing strategy should also be assessed carefully and respond to the expenses of the business that will develop larger market and boost sales.
Target Market Definition
Considering that Air Cleaning Technology, Inc operates in a B2B manner, target market is most likely to be comprised of Engineers, Architects, Restaurant owners, City agencies, Mechanical controllers, Landlords and also people who are in knowledge of what the product will bring to them (ACT, 2007). Primarily, the target market attributes the people who are in the position of facilitating such equipment products for a certain business. ACT should cater to the market where in the products will satisfy the needs and wants of each customers and meet their expectations as well.
Situation Analysis
Putting up a business such as the ACT should be very specific most importantly for the consideration of internal and external factors. Business environment of the organization is indeed a small scale compared to other business giants marketing their products and services internationally. A SWOT analysis should be conducted to essentially evaluate the main objectives and mission of the business. Identifying the strengths, weaknesses, opportunities and threats of the business comprise of discussing the favorable and unfavorable factors that might encounter the business.
SWOT Analysis
The strengths of Air Cleaning Technology, Inc cater to the objective of focusing on the demands of the customers and valuing employee relations. Having 22 employees in the business is quite difficult to maintain the operation at work. However, this is seen to be one of the strengths for the business because they keep the workforce intact for the employees. Another strength seen on the business is the quality assurance of the technologies that the business uses in order to respond to the needs of the customers (Patterson, 2008). It will be an effective tool to use the air pollution management campaign for the business in order to attract customers and develop company loyalty.
However, weakness is also seen on the part of having difficulties for maintaining natural occurrences regarding the prevention of air pollution. Also, many similar businesses arise for competition which calls for tough hard work for each key player. This is seen to be a harmful factor in achieving the objectives of the business because of building the trust for a certain company is noted. But, competition in business should be regarded as a healthy factor though because it determines the position and level of the business in the market through other companies in the industry.
Opportunities fall into the category of enumerating the possible outcomes done by the campaign for air pollution prevention and the use of high technology to provide quality products and services. Improving the company’s public relations and advertising area would help attract opportunities for the business and increase its sales and profits. And the price reduction is seen to be useful for making more sales. But threats such as mismanagement of the given ad campaigns and lessening the price might seem to affect the total earnings of the business. The business should put on a highlight for the pricing strategy of the products and services pointing for the increase of sales and not risking the quality level and consistency of the products. Thus, analyzing the strengths, weaknesses, opportunities and threats of the business is an effective way for looking into the position of the company into the industry and assessing the possibilities of attaining the objectives in specific period.
McKinsey 7s framework
This framework is essentially comprised of the structure, strategy, systems, skills, style, staff and shared values (Patterson, 2008). The main outline of the business is the structure which basically shoulders the major functions of the business and executing the strategies that it has. The systems refer to the employees involved in the operation of the whole entity and each capability is described in terms of the skills on how they make the products and offer the services in the style of their own. Staffs also accounts for the employees as Air Cleaning Technology, Inc employs 22 persons. Each plays a significant role in the team and shared values are practiced not only inside the business but also to the customers in a B2B manner.
The 7s framework largely depicts the internal environment of the business where everything starts. It is the main factor for developing such strategies and planning for the market penetration. The more the business performs at its best, the more it will present effective promotional strategies in the external environment.
Proposed Mission Statement
Air Cleaning Technology, Inc should aim at giving exceptional quality products for the customers and design innovative tools that will help minimize the costs of the businesses in contributing for the prevention of air pollution. Meeting the expectations of every customer should be at first and the products should ensure the users to be worth the value of money. Using high technology is for the benefit of the customers to have an easier and practical operation inside the business. In addition to, Commitment for the satisfaction of the customers should be strongly highlighted by the ACT. Incentives for the customers are also taken account for achieving the objectives intended in attracting the target market.
For the staffs and the whole organization, ACT aims at giving full support for the key players in the business in order to achieve a strong team for manufacturing the best products and offer the best services among any other competitors.
Current Economic Analysis
For the specified target market of the Air Cleaning Technology, economy of the California where the business is located can be viewed as a stable state. In 2007, it is marked that the gross state product of California is approximately $1.812 trillion which is the largest GSP in the United States and accounts for the 13% of the whole US GDP. Business services are one of the California’s largest sectors when it comes to job and thus this makes up for the ACT to emerge in the market and contribute profits for the economy. Though the state is focused more on other industries, Air Cleaning business is seen to be vital for specific businesses in maintaining the ventilation of the business. Positioning the business in the economy depicts a niche in the market. With the consideration of viewing the business as not one of the primary leading industries in the state, it still means profit because leading industries such as tourism needs the products and services of an air cleaning business. Therefore, the profitability constitutes the current economy situation of the target market and prevails to be in a high level (Patterson, 2008).
Competitive Analysis
Air cleaning industry as prevailed in the market includes many competitors for ACT and distinguishing factors should be justified in order to emerge and establish a name. Competitors have similar business structures and just differ on the ways they execute the portfolio of the business. Analyzing the competitors for the business depicts more on the maintenance of its products and services. Thus, ACT should develop a technique on how they will maintain the quality of the offered products as well as maintaining the customers.
Product Positioning Strategy
Evaluating the customer’s perception regarding the product with regard to the products of the competitors or other alternatives in order to solve the problems they encounter is necessary for developing a product positioning strategy. Knowing the feedback of the customers toward the value of the product, its features and benefits are important in comparison to other competitors. Hence, this is primarily achieved through the use of promotional tools and advertising (Lenskold, 2003).
For the business, the managers should be able to administer the product positioning through giving much importance to the marketing activities on the positioning strategy. In this case, price, promotion and advertising are seen to be very important to increase the positioning strategy. As such, for the Air Cleaning Technology equipments, the product benefit attributes for the air cleaning equipments which helps maintain safety and clean ambience for the business (ACT, 2007). The use of air cleaning equipments helps the customers to control air pollution through the provision of installation, service, parts and repair for the equipment. It can be used by the engineers, architects and other businesses in order to operate in a safety manner. Specifically, the dust collector systems are used to get the dust that resulted from various operations in the business. Engineers may be helped through the processes of site constructions that appear to be messy and harmful if materials will be flaunted anywhere. This may cause damage and accidents for the workers and the whole security of the business may be put to risk. More often than not, a lot of air cleaning companies is operating in the same structure and what distinguishes the company from each other is the way they market the products. Price and quality should be looked into a different perspective for each company that offers the same, and thus make up for the name of the company (Lenskold, 2003).
Positioning the product is what the point of views of the target market and it is not, in reality, affected by the company. It can be altered because of the counter actions that resulted from competition (Kotler and Keller, 2006). It is a must that the managers should build rapport with the customers and be able to possess a competent image for the company in order to emerge in the competition. An extensive market research should then be conducted by the company to study and evaluate the behavior of the customers and public relations should be emphasized to achieve the objectives of the company.
Pricing Strategy
Since B2B is the main point of the air cleaning business, pricing strategy should be focused in order to make a difference among any other business which has the same offerings. Penetration pricing can be a good technique for making a comparatively low introductory price which means giving out products and services that does not constitute the same price as other companies offer. It can be a good foundation for attaining the customer’s brand loyalty and increase market shares as well as the sales. But considering the product quality and the target market, a relatively high price can still work for the company but of course maintaining the technique of differentiating from any other brands. Hypothetically, if the company sells for 10, they could try minimizing the range into 9 or 8 in order to attract customers while maintaining the quality of the products (Baker, 2008).
Promotional Strategy
In developing the promotional strategy for the company, advertising, sales promotion, public relations, publicity and personal selling are considered. Promotional activities that will be used to communicate with the customers about how Air Cleaning Technology, Inc products and services differ from other brands should be put in a unique and creative way. Advertisements on TV can be an effective tool for communicating the benefits of the customers that they will get from patronizing the brand. Print and radio also accounts for the same result and this makes up the 20% of promotional strategy for the business.
However, a B2B target market somehow does not fit advertisements to be used a main tool for convincing such customers because they are more into the corporate profile. Instead, sales promotions, public relations and personal selling are the three areas that should be put on a highlight. ACT should interact with the managers in order to sell the product and this should be accelerated in terms of personal selling (Barlon, 2006). Public relations will build a good relationship between the companies that they are affiliated into. This would also maintain the trust and confidence for the customers on the company to continue utilizing the products of ACT. And sales promotions go into the sense of having promotional activities that would help boost the buying behavior of the customers in a short term. This depicts activities such as decreasing the price of dust collector for every purchase of related products and acquiring free installation services. Free inspections can also be given for a promotional activity that may mean a lot for the company.
Key Recommendations for Implementation
In a year, it is expected for the company to develop a new portfolio intending to maximize the promotional activities of the business in order to increase sales and achieve the customer’s brand loyalty. Implementation of the objectives should come across a firm strategy for the related prices and promotional tools that will be very helpful for both parties. ACT should conduct a market research in two months time and be able to construct a marketing plan for the target market. The objectives should be attainable enough like what are stated in the context. Sales promotions and other related promotional tools should adequately aim at the customer’s satisfaction and meet their expectations. The members of the company should establish goodwill with the customers in order to accomplish a successful personal selling process and help increase brand awareness through personal selling.
The business could therefore use the effective short term promotional activities to build lasting brand awareness and patronage for the products and services of the company. This should be attained in a span of a year and expand the whole business in 5 years time which depicts having a larger market share.
References
- Air Cleaning Technology, Inc’s official website (2007), Web.
- Baker, M. (2008), The Strategic Marketing Plan Audit, Cambridge Strategy Publications, p. 3.
- Barlon, K.. (2006) “The concept of the marketing mix” Presentation on marketing management, vol 1, 2006, pp 2-7-Turku university –Finland
- Kotler, P. & Keller, KL. (2006). Marketing Management, 12th ed.. Pearson Prentice Hall.
- Lenskold, J.D. (2003). The Path to Campaign, Customer, and Corporate Profitability by James D. Lenskold. McGraw-Hill Professional.
- Patterson, L. (2008). Marketing Metrics in Action: Creating a Performance-Driven Marketing Organization. Racom Communications.