After reading the Case on Laura Lee, you are required to consider the Four Ps and how they apply to Laura Lee Designs. List each of the Four Ps with your thoughts and analysis, and using Ansoff’s Matrix, explain how can the organisation meet its customers’ needs and what strategies could be used to enhance the communication mix.
The four Ps of marketing useful for Laura Lee Designs are those decision variables that are under the control of firms and affect the demand level of the firm’s products. Environmental and competitive variables are not under the direct control of the firm. The four Ps of marketing are also called the marketing mix, and they help to maximize the production potential to get control of the marketplace. The four marketing decision variables are price variables, product variables, promotion variables, and place variables. They are interdependent for the company’s success.
The price variables in the business consist of allowances, deals, distribution and retailer mark-ups, and discount structure. The pricing variables are what manufacturers fix as the final price of products taking into consideration distribution and retailer profits and the competitor’s price.
The product variables are the quality, models, size, packaging, brands, service, etc. The commodity must be sold in return for money and the company will need to consider the quality of the product. Each unique marketplace needs different pricing, branding, and packaging of the commodities.
The promotion variables in business are advertising, sales promotion, personal selling, and publicity. Selling a product is very important by creating public awareness through media such as newspapers, television, tradeshows, and the internet. Promotion activities are for creating in the minds of customers, the need for the product.
Place variables are deal with the channels of distribution for a product, outlet location, sales territories, and warehousing system. The business must know about the product and also where and to whom the product is sold. The analyses of the four Ps are a necessary product in business.
Outline a Marketing Plan for Laura Lee Designs using tactics, as well as explain the need to be innovative in the market
A marketing plan contains factors such as market penetration, market share, profit margins, budgets, financial analysis, capital investment, government actions, demographic changes, emerging technology, and cultural trends. When the market is attractive, the business is strong and will want to offer support using the best resources, effective marketing, and sales to generate profits.
Need to be innovative in the market
Innovations in the market are needed not only in business but in society as well. New technology and new companies develop with different styles. Free flow of information means sharing information faster and without any limits.
Team leading and hiring
A well-run business has the ways to inspire, empower and encourage innovation and innovators internally. Employees must stick to the ways the business is moving for innovation. Hiring the right people will go a long way for innovation at any level of business. Innovations in the organization make a product that can have market leadership. Innovation entails the generation of new ideas through brainstorming sessions by connecting people and selecting the right team.
One innovator leads the other
The company’s innovation and creativity come up with new gadgets, devices, products, food, and services. The benefit of having good innovators is that they can inspire and lead others to do the same. This will form a chain reaction which is beneficial for the company.
The different areas of innovation that support the business are government supports to create and stimulate the innovative business, help in identifying and implementing a business model, innovation with technology, and new product development.
Identify and assess techniques for developing new products
Marketing requires new ideas and successful marketers adjust their marketing efforts. The changing market demand and the competitor’s pressure require new ideas. Competition and technological development make it easier to crate and market new products. New products also earn a high profit than older products by innovation for at least a period of time. Expanding the product mix with new product mix and ideas also helps in expanding markets and increasing profitability.
Explain briefly four distribution methods
Successful marketing consists of distribution channel and business ideas for the target buyers and developing the packaging and pricing of the product. It may also be necessary to change the marketing strategy for a certain period with flexible choices. The variety of distribution channels used are as follows:
Retail outlets
These retail outlets are owned by the company and by an independent merchant who acts as representatives of the manufacturer. They may also become the exclusive retailer of the company’s products
Wholesale outlets
Wholesale outlets of the distribution channel are owned by independent distributors and independent brokers.
Salesforce
Salesforces for the business is mainly compensated by the salary, commission, or both.
Direct mail
Direct mail through the company’s own catalog or flyers.
Telemarketing
Telemarketing through a contracting firm or of your own business.
Cyber marketing
TV and cable
Distribution channel of the direct marketing and home shopping channels etc.
Explain in detail how a Distribution Method could be a competitive advantage to an organization
The competitive advantage to the organization of factors that influence the physical distribution of both external environment and internal organization is as follows:
External environment
External Environment being discussed as a competitive advantage to the business are:
Logistic Rate
Logistic Rates in markets are more regular and mature in the business. The increasing trend of logistic rates in the market will lead to higher distribution costs. Service providers are having a major role in the market due to competitive logistic rates and higher service with a lower rate for foreign companies.
Infrastructure Development
Governments provide an opportunity to promote local economic development and these developments may facilitate the physical distribution of the business.
Labour Cost
Labour costs will not be a pressure on the distribution operation with regard to salary and welfare facilities. Due to the economic system, the labor cost remains stable for a longer period of time.
Land Price
Land Price will not affect the physical distribution of the business. By obtaining the rights by means of bidding, auction, and agreement for the maximum tenure price for commercial, residential, and industrial use will help in this matter
Energy Price
Changes in energy prices take place due to inflation and the shortage of energy products. Energy price will not affect the physical distribution but will lead to an increase in the distribution cost of future business.
Internal organization
The internal factors which influence the physical distribution of the organization are as follows:
Demand and Supply Changes
The changes in demand and supply of the product will influence the distribution of the business. The increasing demand of the customers will promote economies of scale. This reduces the distribution cost and improves the service performance to the customers by the business. For a particular area, the decreased cost of supply will lead to higher distribution costs.
Competitive advantage will help the company take offensive and defensive action to create a position in the business for successful competitive advantages. The types of competitive advantage are cost leadership, differentiation, and focus in the business. Cost leadership in the business means to become a low-cost producer and achieve economies of scale. Differentiation in the business means measurement of diverse needs by buyers and marketing products accordingly. This can be in the areas of the product, distribution, sales, marketing, and services differentiation to the customers.
In a hypothetical situation, imagine yourself as the manager of Laura Lee Designs, recommend some measures to monitor and review marketing performance
The marketing process of the business is to develop marketing aims and their objectives, plan and budget performance, measuring their business performance, and establish the revision and corrective actions. This requires the marketers for personal communication with customers and changes in the marketing mix.
It also requires control measures and increasing the response rate of performance which will improve marketing productivity and performance. But performance measures could limit creativity. Cost and time factors force the managers to look for success in specific markets.
The changes in the marketing mix increase the success rate and improve marketing performance. Financial performance and customer acquisition provide profitable market segments which improve the economic models. (Source: The Opportunities and Pitfalls of Performance Measures in Database Marketing Systems, by John Alfred Lewington)
Organizations work hard to lift their prices as high as their level of differentiation, to increase the firm’s level of revenue.
Explain in detail the Price Strategies, an organization may use.
Price strategies are used to price a product. Factors that help the organization to know the pricing strategy are as follows:
- Premium pricing: Premium pricing can be resorted to when the product has a near-monopolistic hold in the market. This is can happen by being the only product available. It can also happen when no substitutes are available or the demand for the product is so high that buyers do not care about the price of the product.
- Penetration Pricing: This is used to gain penetration into the market by lowering prices even when competitor prices are going up.
- Economy Pricing: This is being able to price the product as economically as possible. An example would be marketing the product through supermarkets where prices are lower than what is found in smaller stores.
- Price Skimming: Price skimming has resorted when a new or unique product is introduced into the market. At this stage, the company can afford to charge a high price and obtain maximum profit until a substitute or a competing product enters the market. When this happens the pricing is brought to a more realistic level.
- Psychological Pricing: This is more of a psychological approach to pricing rather than a realistic one. The pricing can be fixed at the level which the company feels is attractive to the customer. It can be priced high so that customers feel that it has a high value. Alternatively, customers will feel that pricing like 9.99 or 99.99 is cheaper than what they had expected for the product.
- Product Line Pricing: If a company has several lines of products, fixing the same price for all products that fall into one line is called product line pricing. Such pricing can affect the demand for a similar product marketed by competitors.
- Optional Product Pricing: This is a tactic whereby customers are forced to spend more on the product once the demand for it is established. An example would be different models of the same car that are priced higher for being equipped with options like anti-skid breaks, side airbags, sunroof, etc.
- Captive Product Pricing: This sort of pricing is resorted to when additional products are required to run or maintain the main product. For example, buying a printer would require the customer to buy consumables like ink and paper, etc. pricing the printer low and charging a high price for cartridges is an example of this sort of pricing.
- Product Bundle Pricing: This is pricing by combining a bundle of products instead of offering only one. They help to move the old stock of the company products. The products are sold in a bundle by the suppliers as per customers’ needs.
- Promotional Pricing: Promotional pricing as the name suggests is when a product is being promoted. Pricing could be made lower than competitors or instead give offers like buy one and get one free.
- Geographical Pricing: Geographical pricing makes a variation in price for the different areas of the world. When the customer’s demand for the product varies according to geographical locations, the standard of living, transportation costs (too far away places or isolated places, etc) are the factors that affect geographical pricing.
- Value Pricing: This can happen during times of recession or intense competition. Pricing the products so that sales will not be affected has to be done in such a case. Otherwise, the product may become unfamiliar to the customer in the long run.
Using an example of an organization, or a brand, explain what is Premium Pricing, and how does it works?
Premium pricing of a product is feasible if the product in question has something unique or special in terms of style, looks, quality, or any other factor. The company can afford to charge a premium price for the product and still find markets from discerning customers. Such a price will have no relation to the actual cost of manufacturing the product.
An example can be found in the automobile industry. The price of a Rolls Royce car or Bentley is priced much higher than other similar-sized vehicles. But the quality of the care offered is seen by the customer as a justification for the cost of the car.