The market target for the mobile phone in Asia and Europe is very wide. This is due to high demand between the two countries, for instance the demand growth is approximated at between 30 and 100 percent in Europe and Asia. However the demand is expected to rise during the next few years. However, with the low market penetration of the smart phone, their demand is relatively low. This however requires massive advertisement and promotion policies to boost the sale of these products.
However, in order to occupy a broad market target it requires charging comparatively low rates and prices than the other competing firms. The firm should charge a price of $200 for the smartphone and $150 for the lower class phones in both markets. In addition, the product should be able to excel in having interesting features and apps, and comparative performance that will be sufficient to convenience the customers that the product is the best. With the additional features by the help of GSM and AMPS technologies, the cellular phones are able to satisfy the needs of the consumers giving the company preference advantage over its competitors. The cost of advertisement and technology will be $ 100 and $50 respectively for each unit in this round. This is an increase from the first round that was $80 and $40 for advertisement and technology respectively. The total channel investment for department store and specialty stores would cost $200.
The target market for the produced cellular phone in Europe and Asia should also cover all the classes in the economies of these continents. Therefore, the cellular phone products should be able to cover various classes from the low classes to high upper classes. The fashion of the products should adapt the classes in the economy especially targeting the young youths of high classes. Market position when the company is positioning its product in the crowded cellular phone marketplace, the message should be clear and powerful enough to integrate human side and technology of their brands. The company has to formulate a specific message to the market communication and advertisement. This message will able to provide consumers with sense on consideration and trust to the company. The message should be formulated in a manner that it represents the understanding of what the consumers want and expects from the product. With enhanced technology, the company can be able to meet the consumers’ want by providing products that conform to the ways of their life.
Thus, the company must own the human aspect of cellular phone communications to widen the competitive advantage over its competitors. The market mix the market mix of the company is expected to take the 4p, which, is Place, Promotion, Product and Price. Price: the price of the product should be relatively cheaper, $200 but sufficient, than the price charged by the other companies. The company should also formulate a strategy to charge much lower prices at the introductory of the product in the market. After the introductory of the product, the company can raise its price in order to make substantial profit. This is because; the product will have been penetrated into the market and it is assumed that the consumers will not mind with the increase of the product.
The Asian and the European markets are consisted of four segments;
- Two corporate segments
- Two customer segments
The customer groups are subdivided into high-end customers and also low-end customers. The names of the market segments may appear the same but in their preferences they are so different. The differences arises when you compare Asian and European markets; the price sensitivity comes different in the Asian low end markets which means that it is higher than in the European markets.
The high-end segments have extra and important features because the characteristics are dependent when management analysis is done. The classic design is preferred by the low-end segments while the Avant-garde is preferred by the high end segments. When the design is made unique, it is easier for it to quickly adopt in the market and brings in stiff completion against other companies.
Research and development (R&D)
The simulation stated in this case study claims that the costs experienced in research and development are catered in against the profits that investments generate annually. Research and development is a long term investment on its own but a risky aspect in an organization which is characterized with uncertainties paybacks. In marketing research, there is a characteristic of a fixed cost that must be put in top consideration under all circumstances. The companies is committed to ensure that they incur the fixed cost in marketing research so that they can continue receiving the market research reports which are important guidelines that will serve a great role in investment. The research and development cost is categorized into two parts. That is, compactness and battery life that are expected to cost $3,500 each.
Mason, Charlotte H, and William D. Perreault. The Marketing Game: With Student CD-ROM. London: McGraw-Hill Education - Europe, 2001. Print.