Sample on Competitive Market Analysis
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7225 Downloads I Published: 09 Mar ,2017
In order to survive in this Competitive Market, it is essential for marketing managers to focus on Effectual Marketing Strategies that assist them in providing information and knowledge regarding their products within the market (Lefebvre, 2011). Marketing is considered as the way through which organization can interact with customers to promote their products within the market as well as to meet the expectations of them. Therefore, it is considered as an integrated plan that focuses on selling the products and services within the marketplace so that organization may attain profit through enhancing the sales volume. The present report focuses on Costco Wholesale Corporation that possess wide range of merchandise that are mainly marketed to the other businesses and large families. However, this report will focus on understanding the concept of marketing as well as their approaches related with the segmentation, targeting and positioning of products.
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Customers are considered as the key factor within the marketing process to whom organization is rendering products and services (Lovelock, 2011). Therefore, for accomplishing the vision and objectives of the company, marketing manager of Costco must focus on marketing process to satisfy the customers by providing required products and services to them. Key elements of marketing process are as follows-
Situational analysis: One of the key elements in marketing process includes situational analysis under which marketing manager of Costco determines the gaps that are present in the market to satisfy the unrealized needs and wants of the customers. With this element, marketing manager would also focus on identifying the needs of customers related to the products that are offered by Costco. After identifying needs, company can modify their products according to the customers (Element of marketing process, 2015).
Marketing strategy: Another element in the process includes devising marketing strategy set by the marketing manager of Costco so that it may gain opportunities present within the market (Ghauri and Cateora, 2010). Marketing strategy involves different approaches related with the segmentation, targeting and overall positioning of the Costco in order to launch products and services in the target market.
Implementation and control: Last element within the marketing process of Costco involves the implementation of marketing plan by introducing the required product within the market. However, marketing manager of Costco should also monitor the marketing strategy so that needs of customers may get satisfied (Tanner and Raymond, 2011).
Marketing orientation refers to the model that focuses on researching the target market and provide merchandise according to the needs and requirements of customers. However, it also includes the procedure of reacting on the needs and wants of customers by developing or improving the products as per their needs (Lagarde, 2012). However, marketing manager of Costco with proper marketing orientation would easily detect or discover the changing trend among the customers and provide them required products faster than the other retail competitors. The benefit of marketing orientation to the Costco warehouse include-
When marketing manager of Costco takes the decisions for the company, than there are certain micro and macro environmental factors that directly and indirectly affect the marketing decisions. For analysing the micro environment of Costco, marketing manager must adopt SWOT analysis that measures the internal strength and weaknesses of the organization as well as threats and opportunities that exist in the external market (Lantos, 2011).
Political: Political factor mainly affects the decisions of Costco regarding the marketing of wide range of products in the nation and international market. For instance; changing tax rate may directly affects the pricing policy of company. Increase in tax rate will higher the prices of products offered by Costco.
Economical: Costco needs to focus on the different factors while marketing their products in the different region. For instance; main area where Costco offers their products is American market. With the slow growth of American market, marketing manager of organization will reduce or lower the prices of products (Riefler, Diamantopoulos and Siguaw, 2012).
Social: Now days, social factor influences Costco to understand the preferences of customers by considering ths factors such as age, gender, social class and income level. With the increasing demand of corporate social responsibility, marketing manager is focused on organizing social program to develop awareness in the the society as well as to enhance the brand image of Costco (Salaimeh, 2008).
Technological: In the contemporary environment, technological factor acts as an opportunity for the marketing manager of Costco. Now days, company is focused on attracting and targeting customers through initiating e-commerce. Technological factor also plays a vital role in influencing the marketing decisions of Costco.
Marketing manager of Costco divides the whole market within the targeted groups according to the needs and requirement of customers so that company can easily sell their products in the market (Singh, 2007). Segmentation criteria is mainly achieved by carrying out the research in the market to determine the trends and preferences of customers. There are different forms of segmentation such as geographical, demographics, behavioural or psychographic etc. For instance; to segment market for clothing apparels, marketing manager of Costco mainly focuses on demographic segmentation on the basis of customer income. However, company mainly focuses on offering low price for their wholesale products to the customers. However, for the higher income customers, company would offer high quality and branded clothing apparels that would satisfy their needs and wants (Doole and Lowe, 2008).
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Targeting is defined as a procedure in which marketing manager of the organization selects the expected or actual customers to whom they offer and sell the products in the market. For increasing market share, it is essential for the business to target the correct market to meet the expectations of customers. However, there are different targeting strategies that may be used by Costco that are concentrated, undifferentiated and differentiated to target the market for selling a range of apparels (Wymer, 2011).
The first targeting strategy includes differentiated targeting strategy. Under this strategy, marketing manager of Costco may use designing assorted promotional and publicity messages regarding their product to the different targeted audiences for satisfying their needs. Another targeting strategy is outlined as undifferentiated strategy under which marketing manager of Costco focuses on scheming single promotional strategy for every segments. For example, Costco is promoting its new range of clothing apparels for both men and women via newspaper. Last targeting strategy is concentrated strategy in which marketing manager of Costco plans impressive promotional strategy for rendering product information to the specific segment (Gevlani and et. al., 2008).
Product aligning is also considered as an effective approach in marketing wherein business has to encourage its different range of merchandise and products within the marketplace through using satisfactory techniques (Ham, 2008). Costco marketing manager has been accenting on devising or formulating attractive positioning plan of action so that sales volume and revenue of the organization can be heighten.
Costco also supports the promotion of goods and services by using different marketing strategies and that will help business to retain end users for the longer period. In many cases, it has been seen that Costco adopts contrary positioning strategy as per the concept of products and services. Hence in the present scenario, Costco can prospect clothing apparels as per the section criteria. For instance- attractive product promotion strategy can be adopted for testing youngsters and this can serve in word of mouth publicity (Heding and et. al., 2008). Furthermore numerous schemes and discounts can draw to attract youngsters, thus Costco can offer other accessories with the primary product. Thus both the positioning strategies can help Costco to increase customer attention as well as profitability ratio.
In the contemporary scenario, behaviour of customer is changing at the faster pace that directly impacts the business decisions of Costco. For instance; with the increasing technology and adoption of e-commerce businesses, customers prefer to purchase products through using internet (Wymer, 2011). Therefore, this will affect the marketing activities of Costco. Organization would adopt internet technology to provide product to the distant customers. However, it will also result in modifying the supply chain management of the company.
However, it has been observed that young customers keep changes their taste and preferences. Therefore, it will impact the sales and revenue of the firm (Environmental analysis, 2015). Through introducing a range of clothing apparels, company would mainly target the young customers as they prefer to purchase new products at low cost. Therefore, it is essential for marketing manager of Costco to address the issues and problems of customers so that they must eradicate problems within the organization.
Product is the key element that must be marketed by Costco in order to continue or survive within the competitive environment against the different competitors. Products are the key components that mainly focus on meeting the expectation of customers. Thus, manager should amend and improve its range of merchandise so that large customers and businesses get attracted towards them. In addition to this, it has been stated that warehouse corporation should improve its range of products to attract the large market area (Kokemuller, 2012).
For instance; Costco is offering a range of clothing apparels for both men and women. Hence, marketing manager would enable different packing of clothing apparels in order to attract customers. However, for gaining competitive advantage, they must also modify clothing apparels by selling clothes in different colour, different sizes, different material etc.
For distributing wide range of clothing apparels in the market, marketing manager of Costco may arrange effective distribution strategy to provide convenience to their target audiences (Positioning, 2010). However, effective distribution channel results in timely delivering of the products and merchandise to the customers. Costco mainly distributes their products from the authorized stores as it is convenient for the customers to purchase the wholesale products at the lower prices. Now days, businesses have started online websites for delivering wholesale products and merchandise. Thus, it assists in distributing products in a suitable manner. It has also started delivering goods and services through online orders and thus it helps in distributing goods in an adequate manner. In the contemporary environment, customers do not opt to visit retail store because of their busy life, therefore customers prefer to buy products through online services (Using the PESTLE analysis model, 2014). In accordance to this, company should adopt online services for distributing clothing apparels to young customers as they prefer to buy products through online.
Pricing factor plays a vital role within the organization as it is set by the marketing manager of Costco according to the market condition. Price is generally termed as the monetary value of the products that customers pay while purchasing the merchandise and products (Lefebvre, 2011). Different pricing strategies that may be used by Costco include-
Skimming prices- Under skimming prices, manager generally sets high monetary value of the clothing apparels but after sometime they reduces the prices of products according to the demand in the market. Basically, this strategy has been used by the warehouse corporation to attain higher profit ratio.
Penetration prices- Another pricing strategy that is used by Costco is penetration pricing strategy. Under this, marketing manager generally sets low prices for their products to target large set of customers. Now days, customers prefer to purchase quality product at lower prices. Thus, Costco provides quality products at low prices by using this strategy (Lovelock, 2011).
Marketing executive of Costco can divide the prospective consumers as per the income, age group and education level
Conclusively, it can be stated that marketing plays an essential role within the organization that supports in communicating product’s information to the customers. However, it is also concluded that segmenting, targeting and positioning of the products support marketing manager in preparing effective strategies so that they can easily target their audiences and provide them required product according to their requirement.
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