FanFare Inc. Marketing Strategy Essay
Nowadays, the management must not disregard marketing strategies even if these companies are already established. Continuous improvement and product innovation is necessary to catch up with the new technology and customer requirements. This paper would show the different marketing strategies that Fanfare Inc. could do in order to improve their sales and Marketing Performance.
Purpose of the Project
The main purpose of this paper is to provide information regarding the marketing strategies that the company could implement to increase their market share and sales. The strategies include the improvement of product knowledge of the sales force, product awareness of customers, innovation and the product’s sales channels.
There are several marketing considerations that the firm needs to see to improve its marketing performance. Advertising is crucial in the promotion of the products of a manufacturer. In the discussion, the several advertising alternatives that were discussed were the use of trade shows, consumer advertising, and advertising placements in magazines and circulation in the industries that use mini-fans.
Sales Organization is also an issue for consideration in the development of marketing plan. This would be discussed in detail in the latter part of the paper. Other marketing considerations that would be used in the report are,
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Several technical concerns in the company were also raised. Product innovations, systems production set-up, the flexible production and Quality Control needs to be addressed. The marketing department had been assigned to determine the necessary steps that the company must do in order to address the issues that were reported by the clients. Each of these technical concerns are important in addressing the customer needs and preferences.
Fanfare manufactures and engineers small electric fans that are used for heating and cooling units. These small electric fans are incorporated in automobiles, appliances, and electric equipment. Fanfare had been in the industry for over 40 years. Fanfare shares only 21% mini-fan category market, 32% is shared by Air Circ Inc. and 25% is shared by M.T. Mind and Sons. The other remaining percentage of the pie is shared by small suppliers in the industry. The company has 21 Regional Sales Managers and each is responsible for the sales development and service in a defined geographical territory. The divisions of Regional Sales Managers are as follows: 12 in the United States, 5 in Europe and 4 in Asia.
III. SWOT Analysis
The SWOT Analysis can be used as a tool to analyze the industry and the firm. In order to have a successful marketing plan and sure a better performance, the marketing department must invest on its Strengths and Opportunities and make some adjustments on its Opportunities and Threats. This part of the paper discusses the Strengths, Weaknesses, Opportunities and Threats of the company.
The company has been in the industry for over 40 years. This span of time only shows that the company had maintained its businesses and is still doing business with its regular customers. The 40 years in the industry had created a niche of customers or clients in the industry. As stated a while ago, there are 21 Regional Sales Managers in the company. The use of the Regional Sales Manager had been able to increase the area where the company market’s its product. Since their Regional Sales Managers are spread out, this ensures that the company has clients in different locations in the globe. Based on the data, the company has its own pool of regular clients such as Uni-dash. The pool of regular clients makes sure that the company has customers.
The company has several weaknesses that the marketing manager had exposed. The company had been unable to tap new prospective clients in the past years. The Regional Sales Manager counteracts that they do not have enough time to explore the different clients in other industries. Since the Regional Sales Officers are not able to cross paths with different clients, the company is left behind regarding the information needed in product specifications in other industries. As a result the sales people are unaware of the needs that the customer requires in the product. Product Innovations seems to be impossible since the sales people do not know the needs of the market because of lack of contact with the other industries.
Another factor that did not help in the marketing performance of the company is the fact that the products does not have a brand name. This makes the products made by the company as generic ones and thus the company had not been able to use its reputation as a good quality maker of fans. Lastly, the company is still using an outdated scheme in its Quality Control. Present scheme in the industry is that for every 100,000 fans only one is defective. Since the company is using the scheme 2 out of 100 fans is used, tendency is that the clients are expecting a 0.02 or 2% rejection rate which is if converted to 100,000 gives a value of 2,000 minifans.
The company can introduce its product and increase contact by launching their products in Trade Shows. Internet Marketing like e-commerce could also provide help in the selling and promotion of the product. The company could also use magazine advertisements and provide information on their products in the circulation of the industries that uses their products. This could increase opportunities of company awareness in the consumers. Other industries that use the system production in order to have sales. An example of which are the dashboard manufacturing in cars. The company could consider doing such measures in their product to increase it sales. Lastly, the company could make a flexible production to address the exact demand of the customer and avoid inventory build-up.
The dangers that the company faces are its competitors Air Circ and MT Mind and Sons. If the company do not increase its share in the market, there could be a chance that either of the two supplier could gain the current share of the market. The Research and Development team creates innovations based on what could be a potential product for sale. The Research and Development team must make a step in garnering information that they need before developing a product.
The company aims to improve its sales performance in the industry by at least 5 percent in the next year. The company aimed for an improvement of 5% because this is the most feasible value in sales performance improvement.
This part of the research discusses the different strategies that the company can undertake to improve its sales performance. Strategies are ranked according to its effect in sales growth and information.
A. Marketing and Client Research
Since the company lacks sufficient knowledge in its client, it is important for the marketing department to gather information on the industry. The company could hire marketing professionals to do a research on the needs and wants of the clients in the industry. The group must determine the clients of the mini fans, the percentage of consumption of the mini-fans per industry so that the company would be able to determine what industries they should concentrate on. These professionals would only be hired until the research is complete.
The company could do several advertising schemes to improve customer relations and product knowledge to its clients.
1. Introduction of Products in Trade Shows
According to AllBusiness.com, trade shows are beneficial to the promotion of products. In the United States and Canada there are over 110 million people who attend more than 4,000 trade shows. Through showcasing, the company would be able to show the capabilities that their product has. There are four steps to a successful trade show according to allbusiness.com. The company must plan, prepare, present and follow-up. In planning the marketing group must determine the right show for their product. The Industry or Trade Association could help to determine the right shows that the company must join in, these groups could provide referrals and schedule of shows Preparation on what the plans are must be done. The budget for the trade show is important. The staff that would go to the affair must also be selected, product demonstrations and giveaways, displays and other materials needed must be prepared. Presentation of the booth would depend on the committee assigned. After the show, the company would be able to gain contacts and leads in marketing their products. Information on the new trends and customer requirements could also be gathered in the trade shows because the company is able to interact first hand with its customers
2. Using the Internet as a marketing tool
Since the firms can go directly to the website of the manufacturer. Through the use of the internet, the middlemen are cut out of the picture. Information regarding the goods is shown and selling could be done online. Transactions with the customer could also be direct through the use of the internet. However, dropping the sales force completely could also become an obstacle in the sales. There are some people who prefer not to use the internet. Not all people like to transact their businesses online. The roles of the representatives would be to look for these firms.
In an article from Syracuse University, that had featured the Dell Company the strategies that the company had used had led to the downfall of the B2B business of the company. The choice of products to sell, the suppliers, the timing and competition had led to the downfall of the B2B business. According to an article from D.Edson company, the company had investigated the top B-to-B websites and had found out that Traditional Branding, Advertising and some level of customer service are present in the B-toB websites. Most of the companies that are in the top 50 site uses the internet to cutdown costs in marketing. An example of which is the ORACLE. The company had been able to save a Billion dollars in a year because of B-to-B marketing.
3. Increase Company Awareness
Based on the applications of the mini-fans in the industry, it is better for the company to advertise in the horizontal publications. If the company chose Vertical Industry magazines, it would just target a specific industry. Since the aim of the company is to know the different industries where their product should be used then it is more beneficial to them to introduce the product to horizontal marketing. Advertisements are necessary so that the company would be well-known in the industry and it is also necessary to build up the image of the product.
Purchasing agents are big influences in the marketing of a certain product. The company sales representatives of Fanfare must persuade the purchasing agents that the right product that the company needs is the mini-fan of Fanfare. Through the purchasing agents, the company can also determine the requirements of the clients and if ever that most of the purchasing agents are in need of a certain type of mini-fan the company could develop one to provide for the specifications of the client.
Business to business marketing is important in the case of the mini-fan because the company’s products are usually a part of a whole. Mini-fans are assembled to the main product of that company and it cannot be used independently by the consumer. The reasons stated above just show that it is good to have business to business marketing strategy.
C. Training Regional Sales Managers Versus The Use of Industrial Representatives
As discussed, the training of regional sales managers and the accompaniment of the technical people when going to clients is a rather extreme approach to broaden the opportunity of the market. However, this is better rather than firing the Regional Sales Managers. IF the company laid off the Managers as it was stated in the case, the managers would be absorbed by the competitors. Through grooming and training of the Regional Sales Managers, the sales force would learn more about the product which is really a necessary tool for a sales representative to have.
If the technical people or representatives in the research and development team could go with the marketing sales personnel during the meeting with the client. By doing so, the R&D team would be able to produce the products with the correct specifications. Through advertising in vertical magazines and circulation, the introduction of the product to new industries would be covered.
D. Production Strategy
The manufacturing of systems incorporation of the mini-fan is a bit off from the capabilities of the plant as per Deirdre and Kant. Although it is a good idea to introduce such concepts in the market, it would be hard for the company to do so because of its capabilities and the time that would be consumed in developing the air handling system customized for a specific client.
Short runs are more feasible than the systems incorporation. However, short runs are more expensive than long runs. In order to gain back the costs of the repeated changing of production styles, the company could increase the prices of the product. However, this could again affect the sales of the said product.
E. Improvement of Quality Control
The company must make a new scheme for its quality control. Rejects can be additional cost of materials and processing. If there are rejects the reputation of the company is also at stake. Although this cannot be quantified in monetary terms, it has an effect on the economic accounting. Through the use of EVA or Economic Value Added concept, the company is able to compute its economic loss in terms of its rejects.
VI. Conclusions and Recommendations
The management could still deliberate on what part of the strategy would they do first. The success and improvement of the marketing performance would depend on the decision that the management would take. The chronology of strategies can also affect the performance of the Fanfare. It is advised that the market research would be the first choice of the management because this would be the source of information that the company needs for their marketing and production requirements
Syracuse University. (2005) Dell Computer Corp.: Failure in B2B E-Commerce Strategy Retrieved last September 25, 2007 from Syracuse University Website: web.syr.edu/~efedelma/dell.html
WWWeb-Works Web Design Studios. (2007). E-business Web Sites Examined. Retrieved last September 25, 2007 from D. Edson & Company Website: dedson.com/e-business/e-business_sites/e-business_sites.html
All Business. (2007). Trade Show Strategies. Retrieved last September 25, 2007 from All Business. Website: http://www.allbusiness.com/print/897-1-22eeq.html