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August 01, 2008

Sunbeam and Café Series: on Marketing Strategies and Advantages

Executive Summary

Success in any company that operates for marketing and profit acquisition lies on the ability of the management in positioning and establishing the products/services being offered. Furthermore, the ability of the company and its management to compete and maintain a competitive edge among its competitor is another basis to say that it is successful. The constant development and innovation on the product line and the growing number of clientele also define the corporate standing of a company.

This paper aims to analyze and determine the major marketing issues of Sunbeam. Specifically, it will discuss the marketing decisions taken by the company administration in relation to the general marketing, especially of Café Series. A SWOT analysis and other relevant marketing and management related factors are also included on this report. Lastly, practical and strategic recommendations will also be elicited in relation to some pitfalls observed in the case study.

With this case study, the following are the identified marketing issues that contributed to the overall standing of Sunbeam and its Café Series product line:

*      Deliberate product innovation and development

*      Superior and focused customer service satisfaction

*      Effective and appropriate implementation of the marketing mix

The subsequent are the drawn recommendations that might help in the continuous growth and success of the company in marketing the products and managing the company.

*      Efforts and programs in innovations, research and development (R&D) must be sustained in order to determine the significant changes that might affect the overall status of the company.

*      Customer feedback system must be reinforced since customer satisfaction is among the strength of Sunbeam.

*      Leadership and management of the company must be a supplemental mechanism in the workforce. Human resources management improvements must be considered.

Sunbeam established itself as Australia's most trusted small appliance brand (Reader’s Digest 2001). With its achieved status, long years of operations, and various products being offered to its target market, the company obtained the creditability and reputation in providing quality and high standards products in the market. Its success is undeniably apparent. Sunbeam’s success in promoting its products lies within the effective implementation of marketing strategies and management of the company’s workforce.

 

SWOT Analysis

Strength

*      The company has a long tenure in the appliance industry and gained market status (especially in Australia).

*      It offers unique products and constant innovation.

*      Sunbeam excels in focused customer service and ensured satisfaction.

*      They are committed in quality and performance with regards to its product offerings.

*       The management uses an efficient implementation technique on the chosen marketing strategy especially in relation to the marketing mix (Price, Product, Place, and Promotion – 4Ps).

Weakness

*      Sunbeam as an appliance distributor is well-respected and trusted but it possesses an impression that it only caters to the upper class customers. Due to this perception, competitors can use this weakness to gain competitive advantage and acquire more income than the company.

*      Gendered marketing may also serve as a weakness for gender hinders the purchasing decisions of the potential clients.

Opportunity

*      The company having a wide collection of products can use it to attract consumers who are looking for products that their competitors do not offer.

*      Since the company has an easy to use website, it should try to encourage buyers to purchase their products that are not selling.

Threat

*      Sunbeam’s threat includes the changes that might occur within the area of operations such as economic changes, varying customer preferences, changing lifestyles, and other relevant factors.

*      The threat of stiff competition is always present.

 

Sunbeam’s Major Marketing Issues

Among the major issues identified in the case study presented are the following:

Product Innovations and Development. In order to sustain the growing market of the company, the efforts exerted in searching for potential opportunities and creation of new products for the target market is valuable. Generally, before a profit-oriented company start to operate, there should be product/s that is being offered. The various changes in the lifestyle and preferences of the consumers prompted every company worldwide to improve and to innovate their traditional product offerings. The term innovation means the development of something new from its beginning to its completion and from its initial idea until it becomes a viable business (Rouse 1992). Innovation plays a great role in creation and development of new products of Sunbeam. This is evident as shown in the launching and expanding the traditional product line. However, it must be considered that the product and business development processes must be supported by an appropriate culture throughout the enterprise (Robert 1995; Krackhard 1995). Thus, innovation and development in the product line must be a product of knowledge and culture (Zangwill 1993) within the immediate jurisdiction of the company’s operations. With Sunbeam, the management utilizes R&D programs and consumer feedback in order to identify the existing culture of the target market.

Superior Customer Service Satisfaction. A certain marketing expert stated that in achieving business success, all you need is a customer. Theories and concepts on how to manage are no longer necessary. Solving all problems is not also a guarantee to be efficient. All you need is to find out what you do right for the customers and you’ve already got and do more of it. Truly, the customers play as the key players in the success of a business. That is why customers’ satisfaction and welfare must be the primary goals of the management regardless of some circumstances taken at hand. In Sunbeam, customers are always prioritized. Their satisfaction after their purchase of products is ensured by the company’s management.

Meanwhile, customer satisfaction refers to the consumer’s positive subjective evaluation of the outcomes and experiences associated with using or consuming the product or service. It is inarguably one of the two core concepts that are at the root of the marketing theory and practice (Spreng and Mackoy 1996). Satisfaction occurs when the product has been able to meet or exceed the conceived expectations that the customer has (Padilla 1996). Furthermore, customer satisfaction may also be considered as the measure of the high degree of quality of the product (Jacobs et al. 1998). As the customers demand for higher standards, any shortcomings on the part of the companies to deliver would jeopardize the life of their respective company. Hence, it is really important for companies to not only maintain and protect these intangible assets. It is also a must that they increase these assets for future benefits (Sercovich 2003). According to the study of Jacobs and colleagues (1998), relationship with customers should not be regarded as a single transaction, rather, a long-term. Customer satisfaction is considered a must for customer retention and loyalty, and undoubtedly helps in realizing economic goals like profitability, market share, return on investment and other corporate target (Reichheld 1996; Hackl and Westlund 2000). The Sunbeam management is highly concerned with their customers’ welfare and satisfaction and this is the underlying principle on being the leader in their area of industry.

Effective Implementation of Marketing Mix. Marketing mix, according to Kotler and Armstrong (1990, pp. 43-44), is "the set of controllable marketing variables that the firm blends to produce the response it wants in the target market." The marketing mix is composed of 4Ps known as product, price, place, and promotion. Sunbeam perfected the application of the marketing mix. It is notable to restate that with the constant research and development in their product, pricing, placement and distribution, as well as promotion, their products remain as the leader in the appliance market. In their product, high quality is maintained. The fact that their products exceed the customers’ requirement, the price is fair. In terms of distribution, their strategic placement of the products contributes to the increase numbers of production and sales. Their products are highly prominent due to the different marketing communication tools used in promoting to the target market. 

Sunbeam’s continuous integration of all the elements of the marketing mix and the appropriate marketing and management of the internal organization also serves as a powerful weapon in combating the rapid and stiff competition in the global marketplace.

 

Recommendations

The following could be considered as practical recommendations to further intensify the competitive edge of the company.

The need to be innovative and the need to explore new approaches in the future are integral parts of the company’s culture. There is a willingness to take risks and an eagerness to break new ground. People are hired for their creativity and diversity. Innovative people are appropriately recognized. Thus, formal training sessions are used to help people free up their creative energies and become more innovative (Lepnurm and Bergh 1995). R&D programs must be directed to the progress and growth of the company. This will also help in developing more products that will address the competition in the market.

In customer welfare, consumer feedback system must be reinforced. The resolution of customer complaints and problems is a key for companies to be able to maintain the loyalty of their dissatisfied customers. Dissatisfied customers are more likely to tell people about their experience than satisfied customers are (Ganey & Hall 1997). After finding out the problems from the viewpoint of the customers, Sunbeam should undertake actions that would not only address the complaints of the customers but as well as actions that would lead to organizational improvements.

In implementing marketing strategies, there is a need for continuing optimization – the ability to assess a myriad of possibilities in order to find the best one or near best one (Hoctor & Thierauf 2003). In cooperation with the other elements of marketing and business management, strategies must be evaluated and improved. In building the impression of people about the company, Sunbeam must reach out to a broader target market and must project an image relevant to every members of the society. Its corporate social responsibility must be defined.

In the management of Sunbeam,    leadership and administration of the company must be a supplemental mechanism in the workforce. Human resources management improvements must be considered to fully utilize human asset. With the growing market and competitive edge of Sunbeam, its workforce also plays a significant role in materializing defined objectives and achieving success.

According to Kay (1995), “corporate success is based on the distinctive capabilities of the firm - those things, often the product of its particular history, which competitors cannot reproduce even after others realize the benefits these capabilities bring to the company that enjoys them.” For some people judge success by size, they look at a firm's sales, its market share, and its value on the stock market. Sometimes performance is assessed by reference to rate of return. This can be measured as return on equity, on investment, or on sales. And sometimes success is measured by growth, reflected in increase in output, movements in earnings per share, or prospectively, the firm's price-earnings ratio. All of these are aspects of successful performance. The current position of Sunbeam in the appliance industry of Australia is a clear definition of success.

 

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