Executive Summary
The environment that surrounds motherhood in the 21st century has complicated the lives of many mothers in the developed and developing worlds. Currently, most mothers are mainly concerned with how to deliver healthy babies and then continue to cultivate positive body images. Nevertheless, most new and experienced mothers reckon the weight gain/weight loss difficulties that accompany motherhood. Most modern mothers have realized that it is possible to deliver a baby and attain the body shapes that they had before childbirth.
This marketing strategy contains the efforts of the child-mother products retailer Babies R US as the company launches a campaign to assist mothers to take care of both their needs and those of their offspring. The company has sought to develop the “Kangaroo Moms Campaign” an initiative that proposes that women can take care of their children and resort to their day-to-day activities at the same time.
The “Kangaroo Moms Campaign” is an extension of Babies R US’ Mother and Baby Club range of products, and it assists new mothers to meet various goals and timelines in their motherhood journey by providing them with professional care and advice. The campaign will be held in conjunction with some select Babies R US stores particularly the recently unveiled superstores that feature a combination of both Babies R Us and Toys R Us retail centers. The project is expected to enhance the co-existing client/customer relationships between mothers and Babies R US and at the same time boost the company’s revenue.
The expected return on marketing investment (ROI) will be assessed in the short term. The ROI is expected to be in a factor of 3.0. in the first six months and 5.0. in the first year. The objective of this project is to come up with the most effective marketing strategy that can be applied in this campaign. The marketing assessment will include among other aspects a PEST and SWOT analyses. The marketing objectives of the marketing campaign are clearly outlined in the marketing plan. For instance, it is the objective of the marketing team to ensure that the venture adheres to the laid out performance indicators.
External Assessment: The Company
Babies R US is a subsidiary of the parent company Toys R Us Inc, an organization that is primarily a retailer of baby products and toys. The company was instituted in 1948 and it was subsequently listed on the New York Stock Exchange in the year 1978. Babies R Us and Kids R Us are the two main subsidiaries of the ‘R Us’ brand. The company is headquartered in Wayne, New Jersey within the United States of America but it has various international subsidiaries in Europe, North America, and Asia.
The company has had an average annual turnover of approximately fourteen billion dollars in the course of the last five years (Toys R Us, 2016). Babies R Us (BRU) is the branch of Toys R Us (TRU) that deals with products for infants and new mothers. As of 2015, the entire company had over 1550 store locations and retail presence in thirty-six countries across the world. Eight hundred and ninety of these stores are spread out over 48 states across the US. As an entity, TRU offers a wide array of products including juvenile-centered objects, toys, learning, entertainment, and seasonal.
Although TRU focuses on juvenile and infant products, its main clients are the parents who are the direct purchasers. Consequently, TRU has endeavored to provide services to mothers with the view of cultivating a mutual relationship with its clients. Apart from physical retail locations, the company also sells its wares through three different websites. The company’s main competitors include companies such as Wal-Mart, Marks N Spencer, and Sensational Beginnings, and Target Corporation.
Market Opportunity
The current market for wellness programs is dominated by personality-associated brands. However, BRU is a pioneer company when it comes to product retailers selling structured services. Most of the company’s competitors only provide services in the form of customer service. The campaign’s main agenda is to enhance customer relations and increase company revenue at the same time. Consequently, the success of the marketing campaign is not solely judged based on the amount of revenue that the campaign injects into the company.
The initial uptake of these services is expected to be slow at first and continue to pick up pace in the second and third years of the moms’ campaign. Consequently, by the first year, the capitalization of the campaign is expected to fall below the cost of marketing. In the second year, the size of the market in the US is expected to be worth ten million dollars and three million in international markets.
By the third year, the company is expected to reap an annual revenue of approximately fifty million dollars from the Kangaroo campaign within the US alone and an additional twenty million dollars from the international market. The next part of this marketing plan presents the market considerations that will assist the business to grow consistently. The SWOT and PESTLE analyses “enable a business to keep up with the changing environmental trends and to strengthen the foundation of their strategies (Day, 2014).
SWOT Analysis
A SWOT analysis was conducted with the view of assessing the company’s prevailing market position. The SWOT analysis revealed that BRU operated in an environment that was subject to threats and weaknesses that could be turned into major strengths.
PESTLE Analysis
Porter’s Five Competitive Forces Model
Porter’s “five forces model is a recognizable framework for analyzing an industry or a certain business about prevailing competition” (Grundy, 2006). The model can be useful in helping businesses assess their competitive edge. Below is BRU’s competitive analysis using Porter’s Five Competitive Forces Model.
Competitive Rivalry
BRU’s has rivals throughout the world and they include Mothercare Plc, Wal-Mart, Target Corporation, and the Marks Spencer Group. Although these companies do not provide professional wellness and fitness services, BRU’s entry into this business will introduce fierce competition. Overall, this factor affects the firm negatively because attracting new customers is the main challenge for BRU in regards to the Kangaroo BRU Campaign.
Threat of New Entry
There are high limits of capital injection into the new venture. Also, it is difficult for the company to ascertain the financial investment risks that are associated with the venture.
Threat of Substitution
Currently, there are various programs for clients to choose from when it comes to post-motherhood wellness. Therefore, it is hard for customers to change from their current providers. This factor is manifested negatively in the marketing plan because BRU has to maintain high levels of competitiveness.
Buyer Power
On one hand, there are high switching costs for customers and this is a negative factor because it forces BRU to package its services better than those of its competitors. On the other hand, the company has significant bargaining power as a known retailer within the US and other parts of the world.
Supplier Power
This factor is manifested positively because as a giant retailer, BRU has negotiating power for the products that will encompass Kangaroo BRU.
Global Markets
In North America, BRU is expected to encounter higher levels of competitive rivalry as it seeks to launch new services. For instance, competitors in North America will be weary of BRU’s long-term brand exploits. On the other hand, the small wellness-program providers in countries such as Canada have to deal with the risk of BRU’s entry into the market. In North Europe, buyer power is currently experiencing an upsurge after a long period of economic downturn. The company also has immense supplier power in both the US and North America where it has been operational for the last four decades (Toys R Us, 2016).
Creating the Marketing Strategy
Mission Statement
The company’s mission statement is listed on its website as follows: “We are relentlessly striving to be the best toy and baby products retail company in the world” (Smith, 2003). The company also strives to bring smiles in the faces of children while still assisting parents to make the best choices in regards to parenting.
Marketing Objectives
The immediate marketing objectives for the Kangaroo BRU Campaign include the unveiling of the program in selected retail superstores across the United States and other parts of North America. After the initial launch, the company will then concentrate on providing both group-tailored and individual services. The services will initially be offered to both pregnant and post-natal mothers.
The marketing campaign aims to achieve at least 60% awareness among targeted customers two weeks before the program is launched. One method of creating the initial market block will be by offering gift/discount vouchers to consumers of related products. To gauge the performance of the company’s marketing strategy, clicking systems should be used to assess the interest of consumers.
Financial Objectives
The foremost financial objective for the company is to deliver an increase of at least twenty million dollars in revenue during the first year of operations. This financial objective will be achieved through the expansion of the campaign in satellite program centers. E-commerce will be a useful tool in the full activation of the project in the US and other outside markets. The company does not expect to achieve significant market share in the wholesale market segment. For instance, “in the year 2015, the wholesale market segment of BRU in the US achieved sales of approximately six hundred million dollars” (Toys R Us, 2016).
Target Market
The current market strategy aims to pursue expansion and consequent significant growth in the company’s existing markets. Furthermore, the marketing team for this project aims to implement its target market strategy by using the Igor Ansoff methodology of monitoring market-growth strategy. The core element of the target market is guided by the fact that the Kangaroo BRU Campaign is a new service-offering that amounts to service diversification. The core target market for the market campaign is new mothers who are interested in achieving fitness and wellness as they seek to go back to their day-to-day activities.
The Kangaroo Moms Campaign is an extension of BRU’s “Mother and Baby Club”. This club mainly seeks to extend useful professional services to new mothers. The company’s website promises clients of the ‘Mother and Baby Club’ “to help you every step of the way, from the moment your little one is born to their first steps and beyond” (Toys R Us, 2016). Kangaroo Moms is a product that is packaged as a combination of both products and services to new mothers.
Positioning
The company is seeking to provide a service that none of its main competitors provide. Also, the company has created a solid reputation as a solid brand over the last 40 years. These two factors put BRU in a good position when launching the Kangaroo Project. The company has managed to develop long-term connections with customers and this is a solid selling point for the new product. Clients of the Kangaroo services should expect dependable, affordable, and time-tested services from BRU’s stores.
Marketing Mix
Product Strategy
The firm aims to develop the campaign first whereby it can manage to attract customers with a new and exceptional repertoire of services. When this initial success is achieved, the company can proceed to rely on web-based methods of marketing to assess the progress of the campaign (Chaffey, 2012). The new campaign will, on one hand, drive up the sales of existing products and bring in new sales revenue for the soon-to-be provided professional services. Consequently, the sales campaign is not in competition with any of the company’s existing products.
Promotional Strategy
BRU will depend on the time-tested retail store and superstore distribution channels to reach out to potential target customers. The company will also launch various internet-based campaigns. Gifts and vouchers will also be another promotional strategy for the company. As the campaign progresses, the company can use the member-get-member promotional scheme to build momentum. The campaign will also rely heavily on internet-based platforms to reach target audiences. Click monitoring systems will be useful in gauging the campaign’s initial reach.
Pricing Strategy
The company plans to use a pricing strategy that will have a psychological impact on customers. For instance, the initial registration will cost the members fifty-one dollars, whereby the one extra dollar will be donated to an infant mortality-prevention charity program. The registration offers mothers access to goods, services, and professional guidance. Competing products offer customers either products or services but not a combination of the two.
Distribution Strategy
The main distribution strategy for BRU’s products will involve relationship marketing, whereby chat-forums, social interactions, and the use of special discounts will be the main moving channels for the new service. Distribution of the services to new mothers is a prioritized strategy. The rationale for this strategy is that the BRU has robust channels of distribution and there is no need to establish new ones.
Contingency Plan
If the company decides to combine its services and goods into one package, the company can end up sustaining the Kangaroo Program for a long time. For example, if the Kangaroo program is used as part of a package that includes goods for both the mother and child, this will change the marketing mix’s pricing, distribution, and promotional strategies. Furthermore, this contingency plan will give the program a chance to gain popularity before finally launching it as an independent product.
Financial Assessment
Table 1: Sales Forecast
The sales of the company are expected to increase gradually peaking in the third month. During the third month, the progress of the campaign will be evaluated and adjusted accordingly.
Expense Forecast
Websites will account for 60% of the initial campaign expenses, the superstore channels will take up 20% of the marketing resources, while the other 20% will cover additional expenses.
Marketing Expenditure
The following is the marketing expenditure for the company:
Marketing Expenditures Alignment with Strategy and Tactics
Although Kangaroo Moms is a new product for BRU, its main purpose is to cultivate customer relationships. Consequently, the expenditure for the campaign will also be used to market existing BRU products, which will be part of the Kangaroo Moms package. The strategy of using existing channels of distribution as a means of minimizing expenditure raises the ROI by a factor of two (MacInnis & Heslop, 2010). For instance, BRU currently utilizes all the methods of expenditure that are listed above except for the press release and promotional booklets. Even if the campaign performs dismally, it is expected to have a significant ROI.
Break-Even Analysis
The monthly revenue break-even amount for the marketing plan amounts to approximately ten million dollars. This break-even cost assumes that there will be below average product uptake and other company’s products will inevitably benefit from the campaign.
Key Performance Indicators- in twelve months
BRU’s marketing campaign will be monitored using several selected indicators. Consequently, the indicators will be used as a scorecard for the campaign.
The key performance indicators (KPIs) are the central framework for performance-measurement as far as the Kangaroo campaign is concerned. The indicators are engineered to focus on the non-financial performance aspects of the campaign. Therefore, managers can use these non-financial metrics to gather a more-balanced aspect of overall performance. The table below illustrates four key performance indicators that will be used to assess the effectiveness of the marketing campaign in twelve months.
Post-Sale Customer Feedback
The marketing plan will rely on the feedback from the customers to evaluate the progress of the campaign. For instance, there will be data collected from the customer’s clicking habits. The clicking system will be monitored periodically throughout the first year of the campaign. The data will be used to rate the effectiveness of the marketing campaign. Another method of collecting feedback is through questionnaires.
The results of the post-sale feedback will be made public and used to improve the marketing campaign at some point. The main idea in this campaign is to create a connection between the product and the customers. Overall minimization of product-performance issues signals the success of the marketing campaign and the subsequent connection between the product and customers.
References
Chaffey, D. (2012). eMarketing eXcellence: Planning and optimizing your digital marketing. New York: Routledge.
Day, G. (2014). Strategic market planning: The pursuit of competitive advantage. London: West Group.
Grundy, T. (2006). Rethinking and reinventing Michael Porter’s five forces model. Strategic Change, 15(5), 213-229.
MacInnis, M., & Heslop, L. A. (2010). Market planning in a high-tech environment. Industrial Marketing Management, 19(2), 107-116.
Smith, P. R. (2003). Great answers to tough marketing questions. Boston: Kogan Page Publishers.
Toys R Us. (2016, August 15). Toys R Us corporate profile and strategy.