Marketing Management: Rivanna Natural Design Report (Assessment)

Introduction

Rivanna Natural Design, Inc. manufactures a range of products that include plaques, gifts, gifts, recycled products, FSC-certified products, GSA products, and custom products. It is a benefit company that does not only focus on profits, but it also concentrates on improving its surrounding environment through adopting sustainable practices and improving the lives of its employees and customers (Rivanna, 2013, para 1).

Target market

Rivanna’s finished products target the corporate market that comprises of universities, federal agencies, and non-governmental organizations. The Federal government, through its numerous agencies, is one of the major buyers of the company’s products (Find The Company, 2013, para 5).

Rivanna’s 3BL

Rivanna is a benefit company that has introduced policies on proper management of the planet. The company seeks to offset carbon by limiting its carbon dioxide emission from activities such as office heating, electricity use, and business travels (Rivanna, 2013, para 3). Tree planting is a major practice of the firm since trees are the leading raw materials for the firm (CPAR, n.d. para 1).

Marketing Mix

Product

Gifts manufactured by Rivannaare aimed at being used to honour others for their favours, love, or splendid performance and appreciation. The design should integrate elegance and incorporate fine craftsmanship. Much of the competitor’s gifts are manufactured using expensive materials, but they are lacking in terms of elegance and customisation. Rivanna gifts will be differentiated from the competitors’ products through the adopted manufacturing mode.

Workers literally measure the wood material depending on customers’ specifications and curve it out before making the surface smooth using sand paper to create fine art work. Other decorations are incorporated with every detail of the customer’s considerations being prioritized. The final merchandise reflects the ideal product idea that was originally intended by the customer.

Our focus will be on grass, wood, and fibreglassas the perfect raw materials in order to enhance sustainability. We shall collect sawdust and pieces of waste wood from wood factories. For the glass material, we shall collect old glass products meant for dumping from households and use heat to recycle and remould it to achieve the shapes intended for our products (Vargas-Hernandez, n.d., p. 33).The availability of these materials is guaranteed, which is positive for sustainability.

New changes in the appearance of the product will be introduced. New small-sized gifts will be introduced, with cheaper prices. This will increase our customer base to include buyers who wish to pay less for the same quality gifts (Kim & Goyal, 2011, p. 2535).

Price

Rivanna currently adopts an absorption-pricing strategy where the main target is to recoup all the costs incurred during product design. The company arrives at specific prices for its gifts by including the variable cost, and incorporating a proportionate figure of the fixed costs (Robert, n.d., p. 327).

The change in the pricing strategy is informed by the perceived value of our gifts to the customers (Dhruv et al., n.d, p. 1). Although our competitors’ products are highly priced and comprise of expensive material, we believe that the fact that they are 100% machined while ours are mostly handmade assures us of a higher degree of customisation.

Rivanna’s recycled glass gifts currently are priced at $23. This price will shift to $50 once the value-based pricing strategy is adopted in place of the currently used absorption-pricing strategy. A personalised modern times desk clock is valued at $70.29 in comparison to Silverflake Co, which is Rivanna’s competitor (Silverflake, 2013, para 1).

The $27 rise in price of our glass gifts is in consideration of the high value of our products, and in comparison to the high prices of similar products made by our competitors. Although $50 represents an increase, our glass gifts will still retail at a lower price compared to $70.29 charged by Silverflake Co. for the personalised modern times desk clock.

Place

Rivanna currently relies on placed orders to distribute its finished products to the market. On reception of orders, the company arranges for the shipment of the same to the particular location of the ordering customer.Changes will be implemented on this distribution system such that a new system that integrated channels and intermediaries can be adopted.Using independent agencies and distributor networks is also a cheaper option because the company will not have to pay them directly, but rather it will rely on their own sales performance to gain from stocking the products (Victor& Fang-Tzu, n.d., p. 835).

Marketing Campaign and Promotion

Rivanna will use advertising to promote its products in the market (Bruce, Peters, &Naik, 2012, p. 793). Advertising will be carried out on the electronic media, via CBS TV channel. The choice of CBS has been based on its latest viewership statistics, which indicates that more Americans watch it than any of its competitors. The company will also adopt online advertisement (Tavor, 2011, p. 121).

Promotional activity will involve short-time sales promotions (Manuere, Gwangwava, & Gutu, 2012, p. 1157). This will be through printed out coupons to market its products. Other media channels will be used, including competitions and contests for customers and potential buyers.

Equally, Rivanna will adopt creation of publicity (Williams, 1985, p. 1) for promotional purposes. Media releases will be sent regularly to print and broadcasting media to highlight on the products’ quality. Company officials will also give interviews on a regular basis to the media, and particularly use word of mouth to appeal to buyers.

Advertisement

Rivanna will be conducting this promotional campaign in order to create market awareness. This will enable more potential customers to realize about the availability of our products in the market and how the products are perfectly designed to enable users attain greater return for their money.The campaign is also aimed at enabling the company in raising significant revenues that transform into higher profits for the company.

Our target audience is mainly government agencies and departments, as well as other private sector organisations.In addition, we also intend to attract individual buyers wishing to acquire gifts for their friends, relatives, and other loved ones.

Advertising will be carried out on electronic media, specifically on the CBS TV channel. The choice of the channel has been based on its latest viewership statistics that show that more Americans watch the channel than any of its competitors.

The TV advert will appear shortly before the prime time news bulletin, when it has been determined that more people watch the channel. The company will also adopt online advertisement (Tavor, 2011, p. 121) to reach out to a huge audience including international potential buyers living outside the United States of America.

Our adverts will begin by emphasising on the words:“better awards lead to better planet”. We shall remind the audience that while our focus is on designing “awards that honour people”, we do not forget the critical part of “honouring our planet” as well. Towards the end of the advert, we shall remind the audience that “we love trees” and as such, they can give us their support by “liking our Facebook page and supporting our initiative of donating $1 for enabling our tree planting program”.

Advertisements by the company will commence on September 1st 2013 and will be covered on the leading TV channel in America. The advertisements will be aired during the prime time news bulletin hour, when both listenership and viewership peaks. The advertisements will be aired on a daily basis for three consecutive weeks, beginning September 1st 2013 before taking a one-week break and resuming for another three consecutive weeks.

Our promotional campaigns will cover across the USA. We have settled on CBS TV channel because it enjoys national outreach in its coverage. This, coupled with its huge audience command will enable us achieve our target objective of reaching every potential customer in America.

The total cost of the promotional campaign will be $30,000. The entire amount will be used on television advertisement, which is estimated to cost the company slightly less than the figure. We shall determine our return on investment (ROI) by dividing the difference between our targeted sales revenue and our promotional campaign budget against the campaign budget’s total figure.

Appearance and message

The TV advert will have a background music that will include voices of birds singing and the sound of water splashing as it flows on a rocky river-bed. A video footage of three Rivanna gift products will appear, with a human figure appearing and lifting the gifts.

The person, a well groomed middle-aged man, will begin discussing about the gifts by noticing how the materials used in their design are natural. He will compliment the products for being the best awards in the market by virtue of the natural materials used in the design. He will note the fact that indeed the awards are not only better, but they also assure of a better planet through their simple and natural materials.

A second person, a well groomed woman still in her college years, will join the man in the video footage and pick the third gift. She will explain how a Rivanna gift product is manufactured, right from the growing of grass, its harvesting, drying, collection of fine wood grains and pieces from the wood factories, to the collection and remoulding of fibreglass meant for dumping.

She will emphasise how the entire process of designing the products does not undergo any machining, but all products are wholly designed using bare hands. This, she will add, is to ensure greater customisation results in order to increase customer satisfaction.

The two will eventually hold hands together as a PowerPoint message with the words “We love trees! If you do too, like us on Facebook and we’ll donate $1 to plant a tree” will flash. The image of the two will then fade out gradually as the image of flowing water on a rocky river-bed will grow bold and the volume of the music on the background will increase.

Finally, there will be a guestappearance by William Ernest McKibben, as he will announce the specific agents, distributors, and stockists from whom the Rivanna products can be acquired.

Stages of AIDA +S (satisfaction) to be served

Attention/Awareness

The choice of having William Ernest McKibben as a guest attendant in the advertisement will purposely seek to create the needed attention. McKibben is a renowned environmentalist whose efforts are well recognised by a majority of Americans.

Interest

Airing our advertisements during prime time news hour will help us generate the right interest from the audience. Most people spare their time to watch news on CBS during this time, and we believe a significant section of the viewers are potential buyers of Rivanna products.

Desire

The video clips and footages showing our workers collecting waste materials as part of our raw materials will create a lot of desire amongst the audience. The environmental benefits that our activities result in will only succeed in enhancing this desire even more.

Action

Our advertisement calls for buying action from the potential buyers by requesting them to visit and like our Facebook page. We have further included an incentive by promising a $1 contribution from every like we receive on the Facebook page. We believe that no visitors to our page will leave without reading through the contents. Facebook is a more interactive platform that will enable visitors to read and ask more questions.

Satisfaction

We shall make use of our Facebook page to enhance repeat buying and reach out to thousands of our customers in a bid to understand their experiences better. Facebook will be our main platform of interaction with our customers because of its high degree of flexibility.

This will consequently inform on their decision to buy our products in appreciation of our efforts to conserve nature through use ofenvironmentally friendly methods (Geller, 1998).

3B Achievement

The advertisement highlights the fact that Rivanna brand strictly focuses on using nature to manufacture products and ensuring that nature remains preserved. Unlike the competition, the brand does not only focus on profit maximisation, but it also considers the importance of preserving nature (Hayat, Ghayyur & Siddique, 2013, p. 145). The realisation among the audience of the fact that Rivanna is a benefit company will help with strengthening the brand name.

In terms of buzz, the advertisement’s unique footage of workers collecting waste material destined for dumping and consequently transforming it into valuable gift products will be the subject of discussion. Informal discussions mainly on social networks, such as Twitter and Facebook, will prove the fact that the idea is the centre of much discussion. Discussions about this advert will stem from the uniqueness that materials that are considered as useless can be transformed into value (Vikkraman, & Kumaravel, 2012, p. 36).

This advertisement convinces people to consider the fact that nature is a critical aspect, and they should appreciate every effort that is geared towards preserving it.

People seeing this advertisement will develop the interest of getting hold of our products immediately and ascertaining the fact that indeed the waste materials highlighted in the advertisement were used in designing the product. We will evaluate the number of people who will like our Facebook page, as included in the advertisement and volunteers to support the $ 1 per tree initiativeto ascertain the effectiveness of the advertisement (Prabakaran, 2012, p. 12).

Evaluating effectiveness

We shall employ the use of unique contact information and URLs that will be displayed on our advertisement footage to seek consumers’ views and opinions.

Statistics from the website and Facebook visits, in addition to phone contacts will inform us of the market’s reception and views about the advertisement (Micu & Plummer, 2010, p. 137). Our most valuable customer in terms of sales volume is the Federal Government. This customer is also Rivanna’s most valuable on the basis of their influence and symbolism.

Both our corporate customers and the institutions of learning, mainly universities and colleges, are our most loyal customers. This category of customers is less likely to switch loyalty because of price.

However, the individual buyers of our gifts are the least loyal amongst our buyers. The individual customers also only make purchases after making a deal. Most of past customers fall within the category of individual buyers. They can be best enticed to purchase our products if we lower our prices, as they are sensitive to price (Micu & Plummer, 2010, p. 137).

Repositioning

High sustainability

High sustainability

Low sustainability

Marketing Budgets and Implementation Calendar

The leading TV channel in terms of viewership is CBS, with an average weekly viewership of 5.1 million people (Kondolojy, 2013, para 2). Rivanna’s current annual revenue is $2,484,000 (U.S.A. Business Directory Library, n.d., para 1).

Calculation process

CBS TV:

  • Marketing Objective: Double sales = $4,869,000
  • Weekly CBS viewership: 5.1 million
  • Advert cost for 2 minutes:$250
  • Daily advert duration: 4 minutes
  • Total number of days: 42
  • Total advertisement cost: $21,000
  • Expected viewers to be converted: 0.25 million (rate: 4.9%)
  • Expected new revenue: $6,250,000
  • Sub-Total “play it safe” budget: $30,000

Online Advertisement:

  • Weekly online audience: 4 million
  • Advert cost per day:$250
  • Total number of days: 25
  • Total advertisement cost: $6,250
  • Expected viewers to be converted: 20,000 (rate=0.5%)
  • Expected new revenue: $500,000
  • Sub-Total “play it safe” budget: $8,000

Coupons:

  • Weekly coupon viewership: 5,000
  • Coupons distributed daily: 500
  • Cost of each coupon:$5
  • Total number of days: 30
  • Total coupon cost: $75,000
  • Expected converts: 6,000 (rate: 28%)
  • Expected new revenue: $150,000
  • Sub-Total “play it safe” budget: $ 75,000

Print:

  • Weekly audience: 100,000
  • Daily cost per print:$1,000
  • Total number of days: 42
  • Total print cost: $42,000
  • Expected audience to be converted: 100,000 (rate: 17%)
  • Expected new revenue: $2,500,000
  • Sub-Total “play it safe” budget: $45,000

Interviews:

  • Daily interviews: 4
  • Cost per interview:$1,000
  • Total interview cost per day: $4,000
  • Total number of days: 30
  • Interview audience per day: 1,000,000
  • Total advertisement cost: $120,000
  • Expected buyers to be converted: 20,000 (rate: 0.067%)
  • Expected new revenue: $500,000
  • Sub-Total “play it safe” budget: $30,000

Competition and Contests:

  • Daily competitions & contests: 20
  • Cost per competition & contest: $100
  • Total daily cost: $2,000
  • Total number of days: 30
  • Participants per day: 50,000
  • Total competition and contest cost: $60,000
  • Expected no. of buyers to be converted: 5,000 (rate: 0.33%)
  • Expected new revenue: $125,000
  • Sub-Total “play it safe” budget: $60,000

Broadcasting Media:

  • Daily no. of broadcasts: 10
  • Cost per broadcast:$120
  • Total broadcasts cost per day: $1,200
  • Total number of days: 30
  • Audience per day: 1,000,000
  • Total advertisement cost: $36,000
  • Expected buyers to be converted: 100,000 (rate: 0.33%)
  • Expected new revenue: $2,500,000
  • Sub-Total “play it safe” budget: $40,000

Total “play it safe “budget: $288,000

Total cost per customer: $0.57485

Total ROI for the campaign: $42.49

Conclusion

The objectives of our planned marketing campaigned will be achieved successfully by the end of the specific period within which our attention is focused. Our main objective is to achieve all the goals within the specified deadline using our budget figure. We have ascertained that the resources set aside and the costs involved match together.

List of References

Bruce, N, Peters, K, & Naik, P 2012, ‘Discovering how advertising grows sales and builds brands’, Journal of Marketing Research (JMR), vol. 49, no. 6, pp. 793-806

CPAR n.d., The Donor Center, viewed June 2013http://www.cpar.ca/The Donor Centre/Partners-Sponsors.aspx

Dhruv, G, et al n.d., ‘Editorial: Retail value-based pricing strategies: new times, new technologies, new consumers’, Journal of Retailing, Pricing in a Global Marketplace, vol. 88, pp. 1-6

Find The Company 2013, Rivanna Natural Designs, Inc in Charlottesville, Virginia, viewed 9, July 2013, http://companies.findthecompany.com/l/5683343/Rivanna-Natural-Designs-Inc-in-Charlottesville-VA

Geller, LK 1998, Direct marketing techniques: Building your business using direct mail and direct response advertising, Crisp Publications Inc., Lanham, MD

Hayat, K, Ghayyur, M, & Siddique, A 2013, ‘The impact of consumer perception based advertisement and celebrity advertisement on brand acceptance: a case study of the Peshawar market’, Journal of Managerial Sciences, vol. 7, no. 1, pp. 145-157

Kim, T, & Goyal, S 2011, ‘Determination of the optimal production policy and product recovery policy: The impacts of sales margin of recovered product’, International Journal of Production Research, vol. 49, no. 9, pp. 2535-2550

Kondolojy, A 2013, NBC number one among adults 18-49 & CBS wins with total viewers in week 40 ending June 30, 2013, Zap 2 it, viewed 9 July 2013, http://tvbythenumbers.zap2it.com/2013/07/02/nbc-number-one-among-adults-18-49-cbs-wins-with-total-viewers-in-week-40-ending-june-30-2013/189918/

Manuere, F, Gwangwava, E, & Gutu, K 2012, ‘Sales promotion as a critical component of a small business marketing strategy’, Interdisciplinary Journal of Contemporary Research in Business, vol. 4, no. 6, pp. 1157-1169

Micu, A, & Plummer, J 2010, ‘Measurable emotions: how television ads really work’, Journal of Advertising Research, vol. 50, no. 2, pp. 137-153

Prabakaran, VV 2012, ‘Impact of advertisement on consumer buying behavior’, Journal of Marketing & Communication, vol. 8, no. 2, pp. 12-18

Rivanna 2013, Our story, viewed 9 July 2013, http://www.rivannadesigns.com/about us/history.php

Robert, FG n.d., ‘Regular Article: Strategic transfer pricing, absorption costing, and observability’, Management Accounting Research, vol. 11, pp. 327-348

Silverflake 2013, Our favorite products, viewed 9 July 2013, http://silverflake.com/

Tavor, T 2011, ‘Online advertising development and their economic effectiveness’, Australian Journal of Business & Management Research, vol. 1, no. 6, pp. 121-133

U.S.A. Business Directory Library, n.d., Rivanna Natural Designs, viewed 9 July 2013, http://usa.bizdirlib.com/m/wholesalers/Rivanna_Natural_Designs

Vargas-Hernandez, J n.d., ‘Organizational sustainability: The case of handcrafts micro business in Southern San Sebastian’, Extension Farming Systems Journal, vol. 7, no. 2, p. 33-33

Victor, B., K, & Fang-Tzu, C n.d., ‘The benefits of a three-level coordinated distribution policy in the value chain’, Expert Systems with Applications, vol. 38, pp. 835-842

Vikkraman, P, & Kumaravel, K 2012, ‘A study on impact of T.V. advertisements on buying pattern of adult girls at Erode City’, European Journal of Economics, Finance & Administrative Sciences, vol. 48, pp. 36-41

Williams, E 1985, ‘Product publicity: Neglected promotional tool’, American Business Review, vol. 3, no. 1, p. 1-1

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