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Unit 13 Marketing Strategy Ariel Assignment
Diploma in Business (Marketing)
Unit Number and Title
Unit 13 Marketing Strategy Ariel Assignment
The company chosen for this Unit 2 Marketing Strategy Ariel Assignment is Proctor and Gamble and the detergent marketing line and brand name which is managed by the company is called“Ariel”. This brand name and product first appeared in UK market in year 1967 and it is available in both liquid as well as powder form. There are multiple variants available with Ariel which includes detergent for woolen garments, soft clothes, gentle washing and hard washing, quick wash etc. In this Marketing strategy Ariel Assignment a detailed analysis of macro and micro environment organization is facing in UK market would be done and it should be followed by a marketing audit and recommendations. Entire assignment is divided into two parts.
Ariel detergent is the market leader of detergent products in UK and at the same time it has a very strong presence in markets like India, European markets, Pakistan, Colombia and Mexico etc. This situational analysis would be focusing on UK market and its macro and micro environmental strategies. PESTLEand SWOT would be the primary frameworks which will be used for the environmental and situational analysis of a company.
Pestle framework is for external environment analysis for a company. It includes following components in it.
- Political: Political environment of UK is currently stable and conducive for business. There is some ambiguity regarding Brexit situation but it is not making much impact to the business of Ariel because it has strong presence in both UK as well as European markets. Government policies are in favor of business growth and it would be easier for Ariel to make decisions regarding their investments because there would be not many changes in policies, taxation and other such political decisions.
- Economic: The economic growth rate of UK is not very high but it is stable and has a large base. Income of company’s target population is increasing and thus, it would be a great opportunity for company to enhance its business. Company is focusing on middle and upper class people of “Y” or tier-II cities and thus, increasing the number of stores in these potential areas is a decision which company can take (Dudovskiy, 2013).
- Social: The socio cultural factors of UK market is such that people prefer to purchase products from super markets where they can buy their products of daily usage under one roof and at competitive prices and this is where Ariel comes into picture in big way. They have tie up with almost every super market and warehouse model stores in UK like Sainsbury, Tesco etc. It makes the weekly shopping trip for most of the working class people only a one stop activity. This is the factor on which Ariel should further build upon their strategy and use this for their advantage by promoting online sales, direct to home delivery and other attributes which increases convenience for the customers.
- Technological: Countries like UK have a large number of smart phone users, internet and social networking website like Facebook, Twitter, Instagram users and therefore, the company has adopted these latest technological advancements in their marketing and promotional activities. P and G can use advanced technological developments of UK to enhance their operational efficiency and effectiveness. Introducing new techniques for bringing out major advancements to stand out the in the competition can be an important factor in affecting the UK business organizations. Such factors are responsible for driving organizations towards adopting new technologies and inventions (Hall, 2012). Advance research and development can also be done by the company in field of detergents by using technology and IT based operational systems can also help the company in outsourcing some of the activities and manufacturing which will reduce their cost and increases profitability.
Thus, the above mentioned factors such as social, legal, political and technological factors are greatly responsible for affecting UK organizations to such a great extent. Any amendments or changes in these factors will eventually influence P and G and Ariel brand in almost every aspect of their business.
SWOT Analysis is an acronym which stands for strengths, weaknesses, opportunities and threats. It helps in assessing firm’s strengths, weaknesses, markets opportunities open to you and threats which company have to face. SWOT analysis is a useful framework for understanding and for decision making for all sorts of situations in the business. In includes both internal and external factors. Strength and weakness are internal to organization and opportunity and threat are external to organization (Afonso & Sousa, 2012).
Competitive Advantages Analysis
Ariel is considered as an expensive product when compared to other similar products from third world companies and competitors. It has relatively small presence in many emerging markets. There is less brand recognition of Ariel in the market outside of Europe, India and Mexico so company has to make efforts to attract more consumers. Financial muscle of the company and its ability to execute marketing strategy in both sophisticated markets like Europe and tricky markets like India can come in handy as an advantage because that experience can be used by the company to increase its market share in both existing markets like UK as well as other developing markets. One of the biggest opportunities for P and G (Ariel) is availability and emergence of new markets which are demanding western products like China, Russia where population is continuously growing and disposal income is also increasing and customer are able to access more information about western products through social sites.
As Ariel is owned by one of the largest FMCG Company P and G it has the opportunity to take advantage of R&D resources to introduce new product extensions in the existing markets and to expand it in the other cleansing material segments also like industrial cleaning, professional cleaning materials, disinfectants, Phenyl based products etc. Detergents as an industry is highly competitive with high entry barriers not because of the cost of manufacturing itself but the safety requirements, handling of chemicals and the marketing expenses which are needed in establishing a brand name. When a company is producing best products, many competitors try to copy their products. So, all over the world there is an exposure to threat from the competitors. Moreover, Social issues of consumer group like health related issues etc may affect demand as well. New regulations and legislation may increase cost of the product but that is the primary USP of Ariel as a brand name, they have the required brand value, financial muscle and marketing abilities to develop and expand into new markets and new product lines.
Evaluation Of Current Marketing Strategies
Their current marketing strategy is of differentiation in their product as compared to other competitive products. When launching a new product Ariel always made sure that it its product must establish a unique selling proposition (USP) i.e. its product should be unique and different from its competitors. Differentiation allows them to stand apart from their peer group and also provide them with an opportunity to create their brand value and charge premium pricing from the clients. More than 250 ingredients are combined and tested and then the product was finalized at Ariel for the final round which indicates the effort they make to differentiate their product from their competition. It is quite essential for any organization, especially at global level to be able to design business strategies based on social and cultural differentiation among different regions in the country. A deep understanding of the population's lifestyle, their life patterns, needs, etc. is required for profitable results. This is what Ariel has been doing with its target market in UK as well as Europe where they launched different categories of detergent for front loading and top loading fully automatic washing machine and then even launched detergents which are specifically designed for particular model of washing machine. This makes the consumer perceive the special treatment they are giving to their clothes by using Ariel detergents. Marketing of Ariel has a multi pronged approach which includes TV and radio based marketing, brand endorsement by celebrities, being a part of the talk shows and health and safety programs, Print media based promotions and online promotions which makes the entire marketing plan highly effective in nature.
The brand chosen for the assignment is “Ariel” detergents which has many variants and categories. It is manufactured and marketed by P and G which is a multinational FMCG corporation. Current market strategy and target of Ariel as a product is upper to upper middle class level and product commands a premium for itself because of its brand value and differentiation strategy. However in order to further expand its business it is recommended that they should enter in new emerging markets like China, Russia and Brazil etc and they would need a different set of strategy and marketing objectives for these markets.
Segmentation, Targeting And Positioning
Segmentation: The target population for Ariel in these countries would be middle to upper middle class people because these countries have highest number of consumer in that range. Any family with an annual income of 15000 USD and above would be a part of the target market and they would include small families, large families, couples and single work class people as well. In order to meet the needs of entire segment product can be marketed in different package size so that convenience level cannot be diluted. They can use the packaging of the new product for their routine purposes as well and they can also refill it as and when they require. Such user market would prefer to have a product which can be refilled or reused on a regular basis. It is also important to understand that market segmentation can also be done on the basis of income group. This product is launched for middle income group people because it is associated with a premium in brand only not in pricing. One market segment is done on the basis of intellectual capacity and environmental concern of the individuals as well. This segment of market is not concerned if a product is premium priced or not but their main concern is if the product and its packaging material are environmentally friendly or not. It is also focused on the fact that how this product will help in improving the environmental condition of the society around it (Adcock et al., 2001).
Targeting: Targeting these market segments requires a multi pronged approach and there are many ways to create a deep impact on each individual market segment. The first and broadest segment of market is families and working executives. They are a technologically advanced and fast paced market segment. They can be targeted by developing a promotional message and marketing communication on media channels like internet, television, Print media radios etc. direct promotion can be done using billboards and posters at supermarkets, roadside billboard and community centres. Further different market segments like environmentally concerned group of people and health conscious females can be targeted by using communication channels like talk shows, health talks, health magazines, environmental articles and documentaries etc. it can be promoted that reusable material and property of the packaging of product reduces the waste plastic products disposal in the environment (Jaakko et al. 2007).
Positioning: Positioning of the product is to be done as a cost friendly healthy and environmentally conscious detergent which is developed keeping the changing trends of customer in mind. Product is also positioned as a high value product because it doesn’t use harmful chemicals as a raw material for detergent. Positioning of product is done directly in the market as a revolutionary product which solves and addresses many issues like health, durability, reusability, environmental impact and refilling the boxes after usage.
Recommended Objectives And Goals
Marketing aims and objectives of Ariel for new markets like Brazil are as follows.
- To establish the brand name of Ariel in top 5 recalls of detergent decision makers in a period of 1 year.
- To gain at least 10 percent of market share in Brazil in a period of 12 months of launch of Ariel in market.
- To develop a marketing and distribution channel which can achieve a growth rate of 10 percent in sales on a quarterly basis.
- To execute a marketing strategy which enables Ariel to develop its entry in Brazil into a profitable business endeavour with break even in 1 year.
We have already analyzed the market scenario of Brazil with respect to the political, economic and demographic scenario and hence the next step is to develop a marketing mix based on the analysis so that the products can be priced, promoted and sold in the right way to the right people. (Young, et. al 2007) We will make use of different models and then determine a marketing mix that would suit the company and its market positioning in the best possible way.
Marketing for this new product will be done in an integrated manner where different marketing channels would be communicating similar message in different forms. IMC program will be prepared for this product which will include multiple media channels like television, print media, radio, social networking sites, internet and viral marketing, blogs and information portals etc. punch line for the product is devised as “ A Sensible Detergent” this punch line covers the main theme of the product in it in a concise manner. Further marketing will mix will include a value for money pricing and premium product approach for market entry. This product is designed to use market skimming strategy to gather market share because after some period of time similar products will be launched by the rivals making it critical for the company to adopt market penetration by then to conserve its market share (Paliwoda, 2009). Differentiation of the product is the main theme which is being used here. Promotion of the product will be done using conventional channels and environmental clubs as well because they are considered as a credible source of information and have a big fellowship.
- Product: High value detergents with low toxic content and a environmental friendly packaging. Brand value would be high but prices would be purely value for money.
- Place:In Brazilian market specially in urban centres like colleges, supermarkets, malls, offices, factories and community centres etc.
- Promotion: using IMC technique with a multipronged approach for different market segments. Different channels will be used specially in advanced communication technology like “TV, radio, internet, social media, print media, direct marketing and talk shows, blogs etc.
- Price:Value for money pricing with a high quality product for middle to upper class market segment who are interested in high value product but also concerned about the health and environmental friendliness (Brassington and Pettitt, 2000).
Recommended Marketing Strategy
Different policy ideologies have different kind of impact on organizations. They affect every aspect related to these organizations in terms of its economy, financial condition, marketing, new technologies, new projects and other business strategy related to them. These policies result in bringing a lot of changes in the strategies and various amendments in the organization in order to cope up with the consequences of the implemented policies. These changes might involve undermining the existing services provided by the organization or expanding them to a higher level (Dhingra, 2016). In UK, international trade is one of the key factors that have strengthened the economic growth of the country. A major part of the country’s population is involved in the international trade for their source of income. International trade can be explained as the process of exchange of goods, services and capital across international borders that is the exchange of all these things between two or more countries. In most of the countries, international trade is considered as a great contribution to the gross domestic product (GDP). In the recent years, international trade has proven itself to be a great factor in the economic development of any territory. It provides an opportunity to the consumers, producers and the countries to get more exposure to the new markets and their products (International trade, 2016).
The functionality and major decisions of almost every organization is driven by market forces. Market forces are the economic factors that have impact over the price, demand and availability of a product or commodity. The demand and supply of products are the major market forces affecting the price and quantity of products/services and these forces are very dynamic, keep on changing with time. Any organization that fails to effectively respond to these essential market forces may lose the race of acquiring higher position in current competitive market. Generally, the effects of these forces are such that excess demand leads to an increase in price and production while excess supply leads to reduction in price and output (Rondina & Shim, 2015).
As all companies want to slowly expand and grow its customer base and enter into new markets, even Ariel need to consider globalization. With an economic, geographical and infrastructural comparison of the developing countries like Brazil, one thing that has been highlighted is the fact that Brazil has an affluent market and is a part of several international organizations such as United Nations and World Trade Organization.
Baron Approach Of Business
The company, P and G (Ariel) in this case is hence acting as baron. The geographic coverage is not very high but the product strength is very strong. This is the main characteristic of a company adopting a baron approach or strategy to marketing. (Badrinarayanan, 2009) Argos is not expanded in various geographic segments and is currently operating only in few markets others than the UK and Europe. But the product line of the company is extremely strong. The company is doing very well in the UK and even for the Brazilian market, it has the capability of providing quality and differentiated products. Some of the websites that are mostly used in Brazil are Youtube, Amazon, The Standard, Daily Nation etc. Ariel must carry out a strong extensive campaign to advertise on these websites for better promotion of its digital medium of sales. Also Brazilian use lot of socializing event and promotions on these platforms is also a good and strong option. In addition to the pricing, Ariel also needs to offer several discounts and promotional offers in the beginning to the consumers. It must provide launching discounts and free products to all its customers. And in addition to that initiating a membership system with accumulation of points that can later be redeemed for products can also be of great help.
Since the company produces and deals in a varied number of products, having a product divisional structure makes sense. The proposed product divisional structure is as shown below:
According to the plan that has been developed, one thing has become very clear that in order to serve the consumers in a timely and effective manner, Ariel needs a sound and robust delivery and supply chain system because it is only because of these supply chain operations can the raw materials be delivered for production and the end goods can go to stores or consumers. No operation of the firm can be completed without the help of these supply chain and logistic requirements. (Christopher, et. al 2002).
In conclusion it can be said that the above marketing plan is to produce and promote the products supplied by Ariel into a new international economy, i.e. Brazil After analyzing the different environmental situations of Brazil, we have devised a strong and detailed marketing mix to ensure promotions of the products in the Brazil market. Brazil is a developing country and hence does not have a sound infrastructure system. The government is now developing new projects for enhancing and improving the infrastructure and transport in the country but it is not still developed. And thus, the lack of appropriate infrastructure and transport services can create serious issues for the supply chain of the company. Ariel can however get better equipment for facilitating the supply of goods from one place to another (Stank, et. al 2001).
Stank, T.P., Keller, S.B., & Daughtery, P.J.(2011), Supply Chain Collaboration and Logistical Service Performance, Journal of Business Logistics, vol.22, no.1, pp.29-48
Christopher, M., & Towill, D.R. (2012), Developing Market Specific Supply Chain Strategies, International Journal of Logistics Management, vol.13, no.1, pp.1-14
Badrinarayanan, V.(2011), Technology Adoption in SMEs: A Strategic Posture Matrix and a Research Agenda, Research paper, Association for Small Business & Entrepreneurship 35th Annual Conference
Paliwoda, J. (2009) "Back to first principles". International Marketing: Modern and Classic Papers (1st ed.). p. 25.
Brassington, F and Pettitt, S, (2000), Principles of Marketing, Second Edition, Prentice Hall, Harlow
Rondina, G., & Shim, M. (2015). Financial prices and information acquisition in large Cournot markets. Journal of Economic Theory, 158, 769-786.
International trade, 2016 (online) available at http://www.internationaltrade.co.uk/ last accessed on 9/11/2016
Dhingra, S., Ottaviano, G., Sampson, T. 2016 (online) available at http://cep.lse.ac.uk/pubs/download/brexit03v2.pdf last accessed on 17/11/2016.
Jaakko et al. (2007). "Mobile customer relationship management: underlying issues and challenges". Business Process Management Journal 13 (6): 772.
Adcock, D. (2001) "Introduction". Marketing: principles and practice (4th ed.). p. 15.