Introduction Consider it a fresh start. Introducing a new product to the market is not only described as selling and advertising. Indeed, launching a new product needs more than that, in orders to be highly demanded and successful. Other factors contribute to making a product successful: great strategy dedicated employees, good information systems, excellent implementation, especially when it comes to launching a new product to a highly developed market. That is where marketing is used, as today's successful companies at all levels have one thing in common - they are strongly customers focused and heavily committed to marketing. Marketing, more than any other business function, deals with customers, creating customer value and satisfaction are at the very heart of our research.
Although we will explore more detailed launching a product process in terms of successful marketing later on. Perhaps the simplest definition is this one: Marketing is the delivery of customer value and satisfaction at a profit. The goal of the marketing is to attract new customers by promising superior value, and to keep current customers by delivering satisfaction. (Adrian Payne, "The Essence of Services Marketing", p. 30). Executive Summary In order to make a comparatively successful research, it has been decided to launch to the market and describe our possible actions in terms of target market, market segmentation, product positioning, consumer buying process, product life cycle concept, product strategies, product differentiation, competitors, branding, distribution and promotion issues and marketing implementation process.
In order to demonstrate all the aspects of the marketing a new product will be introduced. This will be a new anti-wrinkle cream from "Imperial Russian Skin Cosmetics" This cream is called "Anti-Wrinkle Strike." To make this research consistent, it has been divided into following parts: introduction (the one you have a current opportunity to read the first of all), executive summary, body, which will talk about all the aspects of the Australian Market and major findings accompanied by conclusion where all the major findings can be seen. Market Introduction Product As it was mentioned above, our cream is called "Anti-Wrinkle Strike" and it is produced by a leading Russian company in cosmetics industry, that is "Imperial Russian Skin Cosmetics." As far as market introduction is concerned, this cream can be described as a Total Turnaround Visible Skin Renewer, a big break for complexions everywhere. This next-generation de-aging expert instantly reveals clearer, brighter. Livelier skin. Then keeps skin at its best: softer, smoother, more even-toned.
Does it by casting off cells past their prime. Finally, for eyes, all the proven repair and protection of our most famous skincare complex. Plus, never-before repair technologies to successfully treat the appearances of lines, dryness, puffiness and dark circles. All night, all day, it accelerates skin's recovery process and protects its defense systems to give you skin a younger future. Nurturing stronger, newer, healthier-looking skin to surface.
The result? Under its wing, skin looks fresh and visibly less lined. Is better, better to resist environmental assault. This talented newcomer was simply born to succeed. See why. Anti-Wrinkle Strike. Allergy Tested.
100% Fragrance Free. International patents pending. What else can be added to these exceptionally attractive characteristics? The product must be introduced in consistency with so-called successful management techniques that will be described below. Place/Distribution The key strategy of our company is to choose outlets that are best suited to selling our product successfully. Taking in account possible difficulties with a demand on our product, that is currently unknown for an average Australian consumer, we decided to distribute a small batch of anti wrinkle cream into the major stores such as "Grace Bros." and "David Jones" especially around Bondi Junction/Bondi Beach, Edge cliff, Rosebay and Watson's Bay.
These areas are very well known as a residence of Russian-cultured population. This feature can be used for the benefit our company as these consumers will be loyal to our production. Russian cosmetic stores are situated around these suburbs, and we find it easier to distribute the first arrival of our product to these stores. After that we will have an approximate idea of the demand for the product and we will distribute more of it to major stores of Sydney. Distribution channels. The origin of our product is the city Ekaterinburg but we also have retailers in Moscow, Saint Petersburg and Vladivostok because in the last ten years our product became very popular all over Russia.
In the last seven years small factories were opened in the following countries: The United States of America - New York (Brighton Beach), Switzerland - Zurich, France - Paris, Israel - Haifa and, finally, Ukraine - Odessa (Deribassovskaya St. ). Promotion In order to make a product sell successfully, attract local customers and make it competitive we will provide free demonstrations and give free testers to the customers in major cosmetic salons around Bondi Junction. Product will also be advertised in local newspapers such as "Sydney Morning Herald", on radio stations and possibly on television. Under other circumstances, for example a successful advertising campaign in the above mentioned sources, we will try to place an advert in more expensive fashion magazines but we will stay on the same local position, using magazines like "Women's Weekly" that is read by Australian women aged over 35. Our firm targets this age group of Australian women.
That is market segmentation chosen by our firm, which will be discussed in the following abstract. Market Segmentation. In order to address our product to the right group of people we classify it Australian customers into groups with different characteristics, needs and behavior on the basis of demographics, geography, age and life cycle, sex, income and lifestyle. According to Australian Bureau of Statistics, Australian population consists of 52% of females and only 48% of males. Geographical position of Australia is also a very significant factor when determining market segmentation. As it is known Australia is located in that part of the world where sun causes quick - aging and negative impact on a skin.
To ensure your skin is protected, an average Australian woman needs a day cream with a high Sun Protection Filter, also known as SPF and according to clinical tests a filter with a coefficient of 15 and over should be used in order to prevent aging and to reduce a risk skin cancer. This group of risk in Australia consists of mostly women as their skin is thinner and more sensitive than that of men. Market positioning. Our company should arrange a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of consumers. We should develop marketing mix for our target segment. It will be expressed mostly in terms of price for our product in order to gain competitive advantage over other brands.
This may be gained by offering consumers greater value, either by offering lower prices or providing more benefits to justify a higher price as Australian cosmetic market is highly developed and we are facing strong competitors such as ESTEE LAUDER, L'Oreal, CLARINS, CLINIQUE. Price Our product will be introduced under relatively low price because of its net price. Our product is imported from Russia and almost all the products in the Russian market are cheaper than in Australian market but the quality of the product usually exceeds the quality of Australian products as far as cosmetics is concerned. Using this opportunity we can offer our product for an affordable price which is lower than that of our competitors. Of course, our foreign price, that is Australian price for our Russian product, will be higher than its domestic price.
In Russia, in Ekaterinburg, where the major office of our company is situated "Anti-Wrinkle Strike" costs about $20. But in Sydney our cream will approximately cost $45 because we have to add the cost of transportation, tariffs, importer margins, wholesaler margin and retailer margin to its factory price. Depending on this edit costs, the product might have to sell for two to five times as much in another country to make the same profit. We decided to set the price that is approximately twice as high as in Russia.
We may also push the price up if our product sells successfully. The graph below shows the comparison in price of a typical 50 ml anti wrinkle cream and those of foreign competitors. According to the diagram above, it can be seen that "Anti-Wrinkle Strike" is the cheapest in the cosmetics industry in Australia. Indeed, Australia was chosen by us in order to demonstrate the higher quality for the lower price. Product life cycle In Australia our product will go through the product life cycle, that is the course of a product's sales and profits during its lifetime. It involves five distinct stages: product development, introduction, growth, maturity and decline.
The first stage of the product lifecycle that is product development is almost completed as our firm is highly experienced in countries listed in distribution channels, but "Imperial Russian Skin" thinks that there should be a greater range of cream introduced to the Australian cosmetic market. We will have a greater variety of cream, such as lip line cream, eye line cream and night moisturizer. All of them contain anti-wrinkle ingredients. Another stage is introduction to the market that is a period of slow sales growth as the product is being introduced in the market. Profits are not existent in this stage because of heavy expenses of product introduction, however, we hope to achieve some profit because of the low factory price for our product in Russia. Also, we take in account a cost of transportation from Vladivostok (Russia's Far East) to Sydney via Seoul (South Korea), which approximately costs A$1300 for a 60 kilo cargo.
We hope to get a discount from Korean Air Cargo Company, as we will try to be a frequent customer for them after reaching the following stage of the product life cycle, which is growth. This is a period of rapid market acceptance and increasing profits. During this period we hope to push the prices up and therefore, achieve higher profits. All of the above will allow us to extend our line of products under the same brand name, for example, we would like to launch a baby cream with a high Sun Protection Filter so that women could also take care of their children without worrying about changing the used brand.
This is our plan to develop brand loyalty, this makes the demand for a product more price inelastic: quantity demanded will not change much even if the price increases. (Greg Parry, "Pathways in Economics", p. 116) A situation like that may (but not necessarily will) bring in another stage of the product life cycle, which is maturity. This is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition. Hopefully, our company will not come to this point because we hope to use product differentiation, because we realize that our product has very close substitutes.
However, the product of one seller is not exactly identical with that of another in byers' eyes. Thus each seller has a kind of limited monopoly - a monopoly of his own product. In our case it will be brand proliferation: product development, brand support services, packaging, persuasive advertisements, friendly service and everything that makes the consumers believe that the product is a little different from its competitors. In order to prevent the product from coming up to this stage and to stages like decline and exit, a right marketing implementation should be used. Marketing Implementation and Management Process Imagine a neat new product called "Anti-Wrinkle Strike" that will sell for $45 (a fixed price, to keep it simple).
Now, while everyone could use it, not everyone will. Some will be afraid of anything new. Some will be loyal to existing brands. Some will want to buy an inferior product for less money. Some will want a more expensive product for prestige, regardless of quality.
The reasons go on and on, and the fact is that only "Anti-Wrinkle Strike" will sell at $45. The question for would-be marketers is... what is "Anti-Wrinkle Strike" and how can it be predicted to maximize profits? The fact that cream is hard to pin down does not mean that it does exist, and every cream built beyond it will end up producing a problem for the organization. The market only wants "Anti-Wrinkle Strike" at $45.
What are you going to do with your extra inventory of other creams beyond "Anti-Wrinkle Strike" that no one wants, and the sales people you hired to sell them? No one can perfectly predict "Anti-Wrinkle Strike", and the situation is not nearly as simple as considered here, but the objective for marketers is to forecast "Anti-Wrinkle Strike" as closely as possible in order to provide lasting value to all parties involved: to avoid missed opportunities as well as waste, loss, or failure. Summary Major Findings q Cost of the product should include the cost of transportation, tariffs, etc. In order to gain the desired profit for the company. q If the factory price of the product is low, it is possible to earn profit even in the introduction stage of the product life cycle using the right marketing implementation and management techniques, although it can be argued that this may not be achievable. q As it is known, Australian cosmetic market is very competitive.
However, we have an opportunity to differentiate it. q A right product strategy should be used in order to see the consumers' change in taste. This involves product support actions, such as brand development, persuasive advertising and friendly staff. q Promotion channels should be used in consistency with a stage of the product life cycle. That is why in the very early stage we decided to use local promotion sources, but later on, there is a possibility to turn to greater sources, such as magazines, colorful brochures, etc. q We chose women over 35 as a target segment, the population of women in Australia is 52%.
We also looked at geographical position of Australia to develop our cream as the most suitable for the population targeted. Conclusion Throughout the report we had a look at the process of launching a new product into the Australian market, which is "Anti-Wrinkle Strike." The project had looked at all aspects of the marketing in terms of target market, market segmentation, product positioning, consumer buying process, product life cycle concept, product strategies, product differentiation, branding, distribution and promotion issues and marketing implementation process. Summing up, it can be said that such developed market as Australian one needs even more efforts when it comes to launching a product, anti-wrinkle cream, for example. That is where knowledge in marketing sphere can help. Hopefully, the knowledge in this sphere was shown throughout the report. Recommendations Once again, Australian market is considered to be highly developed, that is why a right combination of marketing and management is needed in order to launch a product successfully.
Another thing a good marketer should think of is being profitable. That is why our group recommends to find a product with a low factory price, as the geographical position of Australia does not allow to transport a product easily. Also, in order to support an already launched product, we recommend having a good management and developing product support actions (see above). Market segment may also change when your consumers are not demanding product anymore, that is where we recommend targeting children, men and you van develop packaging and other attractive product differentiation techniques, such as free trial kits, toys, etc. Hopefully, these actions will have a positive impact on your product. Bibliography Adrian Payne, "The Essence of Services Marketing", Prentice Hall, London, 1993.
Australian Bureau of Statistics: web > Greg Parry, "Pathways in Economics", Tactic Publications, Western Australia.