The company’s iconic children’s sugar coated cereal breakfast is a household brand in the country. In spite of this fact, the company has been facing intense competition from companies that offer substitute products. These products have consequently been eating into our market share and this is surely an issue that needs to be dealt with.
As a member of the Marketing department who has been charged with coming up with an effective strategy that can be used to market the product and ensure that it regains its lost market share, I have a proposal that if correctly implemented will surely work. Since the cereal product’s margin ratio is one of the highest in the company, the company has already dedicated more than enough funds to finance this project and funds are therefore not an issue.
The strategy that I am proposing is actually based on two of Michal Porter’s generic strategies. These are product differentiation and the segmentation strategy (Randall 24).
A comprehensive analysis that I have conducted on the nature of our competitors’ products reveal that most of are actually mirror images of our product. They contain almost the same quantity and proportions of nutrients including vitamins, reducing sugars, fats and proteins. Although it is not safe to say the products have been copied form our own, it is very clear to see the impact that the threat of substitutes has had on our product performance in the market.
In light of this information, I propose that the company modifies its sugar coated cereal production process so that it can produce a more superior product. One aspect that should be modified is the sugar coating of the product. Since, the level of sugar coating in the product is almost similar to that of substitute products in the market; I believe that modification in this aspect will help to increase the product’s customer base since children are more appeased by increased level of sugar coating in the product.
This strategy is actually based on the identification of a narrow market segment and availing a product that is made for that segment (McDaniel 34). The specific segment that I have is the T.V watching children. These children who spend a lot of time in front of the television are already one of the largest customer groups. Concentrating on this special group of customer and then offering a high quality and cheap product that is specifically designed for this market segment will definitely yield a lot of positive results. One particular aspect that can be incorporated into this campaign is an alteration in the quantity of the cereal in a given package without necessarily increasing the price of the package. Doing this will attract more customers from this market segment to buy our product.
The company has already pumped a lot funds into this project and it is therefore my sincere hope that it will take my recommendations seriously. I have already conducted some initial feasibility studies on this project and I have found that is actually viable and the results are very promising indeed. It is definitely possible to differentiate the product and target the specific market segment. At the same time, the proposed should be socially responsible. For example, the amount of sugar in the product should be within the allowable ranges stipulated by the relevant food regulatory bodies. Taking such action will prove to be beneficial to the company’s long term financial and social value.
Therefore, investment in the project will be in line with the company’s management desire to increase company’s profits and regain the market share that has been lost as result of intense competition and the availability of substitute products.
If by any chance the manager comments that there is no need to fix the defect in the company because it is not big enough, I would politely remind him that prevention is indeed the best medicine and it is therefore wise to engage in the strategy right now because it will ultimately curb more degradation in the company’s level of market share.
McDaniel, Carl D. Marketing. New York: Harper & Row, 2001. Print
Randall, Geoffrey. Principles of Marketing. London: Routledge, 2005. Print.