Executive summary
The basis of this report is information on the shoes used by trainees to achieve success of maintaining personal fitness. The report involves evaluating the marketing strategy used by Guangzhou Kala health shoes Technology Company Limited in China.
It suggests solutions for ensuring development and improvement of the company. The purpose of this report is to investigate and analyze the marketing strategy using marketing tools and techniques, SWOT analyzes, market segmentation and positioning, competitors performance and marketing mix of the company.
It will also recommend the changes in marketing strategy to be made by the firm to improve the competitive position of the firm in the industry. It also shows the benefits of marketing tactics and strategies of other successful organizations.
Introduction
Gang Liu owns Guangzhou Kala health shoes Technology Company Limited. The company specializes in the manufacture, retailing and distributor of height increasing shoes, massage slipper, healthy slipper and sandal boots in its main markets in North America, Eastern Europe and South East Asia among others worldwide (Made in china, 2011, par.1).
The company has more than 1000 employees specialized in research, development, production and marketing of health shoes. It has been in the market for over 10 years with the brand names of Nike, Reebok, Puma, Adidas and K-Swiss. It has 180 stores in china (Venture navigator 2010, par.1).
Current Strategies
The company has been offering its products or services to the market for ten years. The analyst had to ensure that the company had already established its own market internationally and had the capability of surviving in the market.
The marketing strategy evaluation and analysis suggests the ideal progress of the company and recommendations are to improve the company’s performance and competitiveness.
Their volume of annual sales had improved drastically given increased product distribution hence evidence that it will continue penetrating into the market and make more profits (Made in china, 2011, par.1).
Objectives of the Company
The firm has various objectives including provision of quality products and services that attract and maintain more customers from their competitors by satisfying and ensuring their customers hence maintaining the relationship and meeting expectations.
The company aims at using technology and innovation that improves modern enterprise management systems by developing unique products and services and increasing customer awareness. Lastly, it aims at establishing people-oriented concepts by learning and understanding customer needs and while increasing its value (Made in china, 2011, par.1).
Situational Analysis. Pestle Analysis. Political factors
The company’s location in China has created many issues and changes in the company due to the laws and regulations, global changes, data protection and the legislation of the country. There is a lot of corruption and collapse of the government representatives to the laws and regulations set by the government.
The government representatives unite with the criminals to cause crimes to the expatriates and property thus limiting growth and development of the company.
There is no transparency in the government laws and regulations forcing the company to be alert on the laws and regulations surrounding the company and to learn from the experience of other companies to avoid additional operational costs especially in research.
The government imposes restrictions on exports and imports using measures such as high taxation on smuggled goods to protect business investments. The country experiences frequent natural disasters leading to losses whenever the company is affected.
Economic factors
People in modern areas have a higher disposable income than those in the rural areas limiting the market share of the company to the urban centre. Unequal GDP and development in the country reduces the development and growth of the company operations due to low turnover and revenue.
The prices of goods and services are very high due to increased costs of transportation and raw materials. The national income comes from high taxation of businesses because most of the people in the country face financial hardships and are unable to generate enough revenue to cater for the government expenditure.
Social-cultural factors
There is high rural-urban migration leading to high unemployment and insecurity in urban areas in China. The workers are unpaid for their services and refute free labor unions and channels of appeal. These problems have led to frequent protests and demonstrations in urban areas disrupting business operations.
The country has a big gap between the rich and the poor resulting to a wide gap in education and living standards. There are high-income earners in the country who have the potential of purchasing goods without financial limitations.
The country has a variety of customs and beliefs that are essential for the growth of the company. Increased insecurity in the country limits foreign investors thus reducing competition in the market.
Technological Factors
The country is facing difficulties of water and power shortages. Power rationing measures occur when there is high demand for products and services thus minimizing utilization of production resources. The low level of education limits technology development in the country. Only the few educated are able to carry out technical activities.
SWOT Analysis
Strengths
The company motivates its workers by paying their salaries fairly and as required. It produces a variety of unique and quality personal fitness shoes that are affordable by all classes of people.
It has created good reputation in the country and internationally due to its good relationship between the consumers, other companies, and the local government safeguarding its image during disputes and marketing activities. The company is able to hire qualified and skilled employees.
It has 1000 expertise in investigation, improvement and invention of its products and services. The company has a total annual sales volume of US$ 50 to 100million and an export percentage of 61% to 70% (Made in china, 2011, par.1).
Weaknesses
Guangzhou Kala health shoes Technology Company Ltd is able to produce only height increasing shoes, massage slippers, healthy slippers, and sandal boots hence the need to innovate more brands to meet customer needs and wants (Made in china, 2011, par.1).
Opportunities
The company can easily grow due to its market establishment in developed countries such as the North America. Its brand names are famous and prosperous among many nations thus enhancing its brand image.
The restrictions of the government laws on smuggling goods gives the company an advantage over its competitors since its quality of products and services maintains. There is increased need for personal fitness globally hence; the company has a greater chance of improving its profits (Made in china, 2011, par.1).
Threats
The poor economic status of the country and the high taxation of revenue by the government reduce the company’s profits and capabilities.
There is increased competition from other personal fitness shoes producers in the world by producing better products and services and establishing dominant markets for example, the Reebok Company (Made in china, 2011, par.1).
Differential advantage/competitive edge (USP)
The company produces unique and quality products that differentiate the company products and services from its competitors.
Their products are very important in personal fitness trainer’s institutions since they reflect a lot in customer benefits. Its efforts to understand consumer needs and wants of personal fitness globally has generated a bigger market share and advanced the profits of the company (Made in china, 2011, par.1).
Segmentation targeting and Positioning (STP)
Segmentation
Segmentation divides the company’s target markets into different sectors. Segmentation is important to the company to improve its profits and market strategies by understanding their customer needs that attract and maintain them from the company’s competitors.
The company’s establishment and progress has majored on behavioral and geographic segmentation (Doole, 2008, p.197).
Behavioral Segmentation
A good example for this form is a case in which customers make purchases based on the benefits they get from the product, level of usage of the product, level of loyalty, user status and level of their readiness to purchase (Doole, 2008, p.198).
The company has discovered the rising need and demand for personal fitness in many countries due to the increased health problems and activities. They used shoes since personal fitness shoes are much different from the normal unhealthy shoes.
This has led to the increase in their penetration in the market since the consumers are willing to buy the shoes at any cost and time. The personal fitness trainers also advise their customers on the shoes to use to keep fit (Dance, 2009, par.1).
Geographic Segmentation
The company has its main markets in North America, Eastern Europe, South East Asia, Africa and Mid East Asia. This segmentation has enabled the company to develop appropriate marketing strategies and decisions regarding its brands and multinational business progress. It has established 180 stores in China (Made in china, 2011, para.2).
Positioning
The idea of positioning is relates to the way consumers perceive and evaluate products and services. Consumers rank the features and attributes of the product against those of the competitors. The company’s ability to identify the need for shoes personal fitness has enabled the company to be different from its competitors.
The company uses shoes to attract consumers who seek personal training and making them get comfort and the necessary fitness they need. This has enabled the company to attract and maintain their own customers and that of competitors through the benefits derived from the product.
The company has established international markets that are in developed countries enabling the company to maximize its profits. This has enabled the company to increase its total sales volume drastically (Made in china, 2011, par.2).
Marketing Objectives and Goals (SMART)
The company aims at enlarging its market worldwide by ensuring accessibility to products and communication. It evaluates and analyzes its markets to reflect on the changes necessary in the business. Individual branding differentiates their products through creating a products image and unique identity.
This helps to distinguish its products from that of the competitors. The company keeps on evaluating and understanding the government laws and regulations to make investment decisions to avoid disagreements during their market operations.
This helps the company to reduce unnecessary costs on losses. The company wants to increase awareness of its products through advertisement and public relations. It started with trade shows in the end of October to the beginning of November 2011.
Marketing Strategies and Programmes (4P’s)
Marketing mix designs to respond to the cultural diversity and complexity resulting from the marketing environment. Due to the challenges experienced and threats of perception as a less competitive producer, the marketer requires creating a program that registers the maximum possible impact in its target markets (Doole 2008, p.187)
Price
The company uses variable pricing and promotional pricing. The variable pricing helps the organization to set prices according to the level of demand and quality of the product.
Since the product is for leisure, the prices are slightly higher than prices of other essential products due to the high demand and lower than the price of competitors due to the sensitivity of market.
Promotional pricing is a technical pricing reduction process used by the company to give discounts, special offers, vouchers, pay later and interest free credit to their customers. This company is determined to maximize its current profits to grow globally, maintain price leadership to compete effectively with competitors in the market to ensure its survival and penetration into the global market (Made in china, 2011, par.3).
Product
The product’s quality has attracted the attention of consumers. Due to the increased competition in the market for personal fitness shoes, the company has taken into consideration creating unique and quality products.
The company responds to the customer needs and preferences by designing height-increasing shoes to be used for personal fitness training. The customers have responded by increasing their purchase of the products as indicated by the increase in the total annual sales volume (Made in china, 2011, par.3).
Place
The company exports more than 60% of its products making it an international company. This makes decisions more complex for the company hence demands for more coordination of the flow of goods and raw materials across the target markets to ensure superior customer service in foreign and local markets.
The company has reporting offices, foreign branches and retailers to ensure control of its markets (Made in china, 2011, par.3).
Promotions
The company attends to diverse issues that affect effective communication about its brands in foreign and local markets. The company understands legal and segmentation constraints in its target markets to make promotion decisions.
The company uses promotional tools such as giving out toys as gifts and research on the progress of the company. They use techniques such as trade shows, website promotions, email marketing, press releases, and newsletters for example, “The New York Times” (Marketing Find, 2005, para.1).
Conclusion
The company has tried to penetrate the market quickly since it has only ten tears since its establishment and has managed to be a global corporation.
Its products are essential to the society in helping its consumers keep fit. Health benefits are one of the most important things in consumers hence the company has higher chances of greater market share in the future.
The poor economic status of China has encouraged the company to seek international markets in order to improve its profit. The company uses a uniform global focus for all its markets to attain a global market perception and image irrespective of the origin of the product.
Recommendations
The company should make minor adjustments on the packaging and labeling of its products to cater for the diversity of languages, culture and climate. The company should focus on producing and availing its products to the target market to attract and maintain more customers from its competitors.
The company should conduct frequent and effective evaluation and analysis of their target market segments in order to make informed decisions on productivity and operations in the markets (Ferrel, 2008, p.311).
The company should also understand the right mode of entry to use while venturing into foreign and local market in order to determine the amount of control they have on those markets. This would enable the company to focus on its SWOT analysis to create a superior advantage over its market and competitors (Bennett, 2002, p. 194).
The company should approach its target markets in a gradual manner to reduce the risks of losses and increase its knowledge and performance of the target markets. The company should analyze its marketing mix to facilitate effective participation in the target markets to ensure survival and sustainability in the local and foreign market (Hoffman, 2008, p. 3).
Marketers should be in a position to face the challenges of ensuring high levels of competitiveness in the foreign markets. This pressure for globalization presents an image of a highly globalized producer.
While confronting these challenges, the marketer increases the knowledge and understanding of the target market enabling the firm to create marketing programs and plans of the local cultural conditions that shape the needs and wants of their customers (Haasen, 2003, p. 26).
The company should be careful in allocating part of its budgets to ensure all its activities compete effectively to avoid loosing its customers to the competitors. The product marks the starting point of the procedures of the business hence it should reflect the customers’ expectations and be able to attract the attention of customers in the market.
The company should use vivid advertisement to create awareness to reach a vast number of people at the same time. This helps to boost customer turnover very fast if communication is good and effective. The employees of the firm should get involved in creation of effective marketing programs to enable them understand their roles within the marketing process (Kotler, 2008, p.29).
The marketing programs should include motivation, coordination, education, and communication of the company’s employees. The company should focus on the key elements of the exchange process to create customer satisfaction, the organization and even the society.
This helps to bring out the desired objectives and determine the implementation of the trading programs by enhancing the knowledge of the company’s products or services mix, increasing the pride of the company’s products and services, creating awareness of the opportunities for new products and services and business development, and helps improve the company’s marketing skills (Turner, 2003, p.105).
It is important that the company embrace control and consistency in its markets to ensure successful programs, for example, successful promotional programs achieves because of an integrated marketing programs and definition of marketing and communication objectives (Barker, 2005, p.183).
The marketer should understand the cultural expectations of their customers to allow them to adapt quickly to the product characteristics. The company should maintain and improve its technology and innovation to ensure it keeps pace with the changes and demands of its customers.
It is important for marketing managers to understand different customer attitudes towards price and perception of quality in determining price levels. This is because consumers rely heavily on price to make judgment on quality of a product or service when they have little or no information about the product (Hoffman. 2007, p. 2).
The company should pass promotional messages frequently to inform, educate, and remind customers of their products and services. The marketers should analyze the information from the market and evaluate each marketing mix element with a view of indicating the relevant areas where adjustments are required. Marketers are keen at this stage to utilize resources to attain the maximum favorable impact within the specified periods (Hoffman, 2008, p. 2).
References
Barker, R. 2005, Integrated organizational communication, London: Juta and Company Limited, p.183.
Bennett, R. 2002, International marketing: strategy planning, market entry & implementation, New York: Kogan Page Publishers, p. 194.
Dance, 2009, Adult dance fitness and performing arts. Dance 101, Atlanta. Web.
Doole, I. 2008, International marketing strategy: analysis, development and implementation, Dublin City: Cengage Learning EMEA. p. 187.
Ferrel, O. 2008, Marketing strategy, New York: Cengage Learning. p. 311.
Haasen, A. 2003, New corporate cultures that motivate, Westport: Greenwood Publishing Group. p. 26.
Hoffman, S. 2007, How Do Motivation and Leadership Affect the Corporate Culture of Multinational Firms, Black Rock City: GRIN Verlag. p. 2.
Hoffman, S. 2008, Are the four p’s of international marketing of equal importance to all firms. What factors might cause some to more or less important than others: a short article, Black Rock City: GRIN Verlag. p. 2, 3.
Kotler, P. 2011, Marketing insights from A to Z: 80 concepts every manager needs to know, New York: John Wiley and sons, p. 26, 29.
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Turner, P. 2003, Organizational communication: the role of the HR professional, Birmingham: CIPD Publishing. p. 105.
Venture navigator, 2010, Individual branding, The Business Edge Consortium, Kansas City. Web.