Background information
The Elite Mobile Company specialises in customised smart phones in the Asian and European markets. The products are Cynosure and Panacea. These products have performed relatively well as compared to the products of its six competitors such as the Red, and the Blue among others. The performance has been very promising in the European and the Asian markets, especially for the high market segment.
The Elite Mobile Company’s business mission is to be the global leader in provision of affordable, convenient, and quality mobile phones within a sustainable business environment. With the current market condition, there is need to introduce a new product in the Asian market. Specifically, the proposed product will target the low segment of the Asian market. The proposed product will be called Altezza. There is need to introduce the third product to improve the company’s competitive advantage and expand its current market.
Current situation and trends
The Elite Mobile Company has performed well in the European and Asian markets. The company has been successful in its Cynosure and Panacea brands. The brands mainly target the high-end market segment in the Asian and European market. The price elasticity of this segment is rather high and thus, the availability of cheaper models with reasonable features has a significant impact on the realized growth.
The demand growth estimates for Asia (23%) seems even more promising than in Europe (19%). In Asia, the market is still clearly dominated by high-end segments. By offering new high-tech model targeting the low-end segment, the Elite Company can create more demand and improve on its sales.
Therefore, the proposed new advanced product, when brought to the Asian market, might turn out to be very successful in the long run. If the Elite Company decides to launch the new product called the Altezza, it will have to be sure that product is not too close to others in terms of features. Similarity causes the products to cannibalise each other and reduce the competitive advantage.
Competition and micro environment
It is difficult for any aspiring company to enter into the Asian and European mobile phone market and manage to break even easily since there are many players. The notable players are the Red and the Blue companies among others which control over 70% of the market. There are several substitute brands from which the potential customers can choose from.
Among the substitute brands include those of the Red, Blue, One Phone, Tech Mobile, and Cooper Tech. All the players in the Asian and European industry are putting measures in place to ensure they attract more customers and therefore expand their market share. Fortunately, the Elite Mobile Company’s proposed third product is well positioned within the above parameters since its targets only the low-end market segment in the expansive Asian market.
Trends (size and growth rates) for the overall market and key segments
Currently, the company has two products which are Cynosure and Panacea. They both retail in the European market at €520 and €250. Sales to the high-end household and companies are higher than the regular citizens and companies. The total sales for Cynosure are 17.60 while for Panacea sales are 11.15.
The total sales of products sold for competitors are higher than those of the Elite Company. For instance, total sales for product sold by Blue were 83.39 while the total sales of products sold by One Phone amounted to 163.49. The other two companies also had a similar amount of sales.
It can be noted that the total market share of household (0.10%) is less than the market share of high-end households (0.09%) for both products. The competitors also had a similar trend of market share. Therefore the third product proposed by the Elite Company may give it a clear competitive advantage. The pie chart presented below shows the market share for both products.
The product that the company intends to introduce in Asia is known as Altezza. The product will retail for €650. The sales value shows that the product targets low-end households and low-end companies.
The total sales will be 4.59. In terms of market share, 0.07% will be sold to low-end households and 0.09 will be sold to low-end companies. The pie charts presented below shows the proportion of the market share.
In terms of awareness, Cynosure (42.26) is more known in the European market than Panacea (8.79). The proportion of awareness in high-end household and companies is higher than ordinary groups. Also, the intention to purchase Cynosure (11.84) is higher than that of Panacea (6.49).
For the Asian market, the total proportion of awareness in the high-end households is 5.76 while for high-end companies is 13.04. The total proportion of awareness is 18.81. Finally, the intentions to purchase are estimated at 5.82 for the Asian market. Therefore, introduction of the Altezza product into the low-end segments in Asia will be the game change for the Elite Company.
Key issues and objectives identification
Opportunities and threats
The company’s mission has remained feasible since the mission aims at addressing the immediate and future needs of customers within friendly prices, as indicated in the European and Asian markets. Therefore, the introduction of Altezza into the Asia low-end segments will increase the Elite Mobile Company visibility and revenues in the global market.
Through introduction of the third brand, the positioning strategy will enable it to survive the competition from other companies such as the Red (23%), Blue (19%), One Phone (21%), Tech Mobile (27%), and Cooper Tech (18%). As a result, the demand for the company’s low-end product will continue to grow since the objective of this expansion strategy is to attract and retain the low-end market segments characterised by demand for affordable mobile phones.
Threats
The potential risk factor that may face the Elite Mobile Company, through expansion of product line, is the possibility of rejection by the target market in Asia since most of the customers are used to common mobile phone brands. Besides, competition from established firms such as the Red, Blue, One Phone, Tech Mobile, and Cooper Tech will reduce the market share since these companies may go into the same business line of the Elite Mobile Company has intentions of expanding into.
Finally, compliance with safety, environmental, and other regulations will be a major hindrance to the future expansion of the company since most Asian markets have very strict rules on the externalities, as a result of a business activity. These regulations change from time to time.
Strengths and weaknesses of the products
Since the current distribution channel is already developed as indicated in the Elite Mobile Company brand preference table, the objective is very realistic since marketing resources (distribution patterns) are fully operational to facilitate a market exercise on target and segmenting position for the Altezza brand in Asia. Besides, the Altezza brand is unique to the Asian market.
The emphasis on the low-end segments for the Altezza brand leaves the firm susceptible to several possible large-scale economic downturns. In addition, the single market focus reduces the firm’s competitive edge. The Elite Mobile Company has not operated in the target market for expansion, hence may not have exact projections on the sales of the workbook as indicated in the excel sheet.
Marketing strategies
The Elite Company may follow direct selling as a marketing strategy within its current distribution network for the Cynosure and Panacea brands in Asia. The direct selling may be integrated within the Business-to Business (B2B) and Business-to-customer (B2C) models to make the strategy more effective in the highly stratified Asian market.
Through timely appeal to emotions and self prejudice, the Elite Mobile Company’s Altezza product will be packaged to engage the ‘perceived goodness’ and need to identify with ‘the ideal’ in the functionality and deployment within different television, social, and print media advertisements targeting the Asian market. These attractive values will be clearly painted as perfect in the various advertisements about the Altezza product through the use of bright and powerful communication themes.
The advertisement message will be presented in two channels, that is, below-the-line and above-the-line. Under the below-the-line approach, the product will be marketed directly through the print and visual press for all the customer segments. On the other hand, under the above-the-line approach, the advertising message will be presented via the social media to appeal to the youthful customer segment consisting of the young technological gauchos and digerati in the Asian market.
Action plan
The Elite Mobile Company currently owns two mobile phone brands within the targeted market for the high-end segments. Therefore, the Altezza product will be integrated within the distribution network of the other two products in the Asian market. The marketing strategy will target low-end customers and low-end companies in the expansive Asian market. In order to reach these segments, the action plan will be implemented as follows.
The Elite Company will consider different market segments when tailoring the Altezza product in order to attract the low-end customers. For instance, in the proposed Asian market, the company may come up with an after sales product service that suits the customers within the lower market segment. An example of a product that suits the market segment is the affordable and relatively simple Altezza smart phone brand.
In the promotional strategy, the Elite Mobile Company may use persons from the Asian origin to advertise the products. This will succeed in attracting the targeted market segment. In relation to pricing, the Elite Mobile Company may use skim pricing strategy since demand for the Altezza product is relatively inelastic. Concerning the place, the company may use the renowned television channels in Asia to keep in touch with the target segment. Apart from the TV channels, the Elite Mobile Company may use its website channel to reach out to the targeted market segment.
Conclusion
Marketing strategy is essential before actualising projections from a blueprint. This plan functions on the margins of informed decision-making after a comprehensive research on the viability and sustainability of the proposed Altezza product in the Asian market.
The product targets the low-end market segments as a strategy for gaining competitive advantage over products of the competitors such as the Red, Blue, One Phone, Tech Mobile, and Cooper Tech companies. From the simulation results, the company is well positioned to reap maximum benefits from introduction of the Altezza brand into the Asian market.