One example of a business where IM will not work is a business that that sells electric wheelchair. Additionally, companies looking to sell products to a wide range of people and are looking to have large number of sales will not find IM as useful as outbound marketing (OM). While IM is good because it is cheaper to imploy and brings in higher value potential customers, it only captures a small market. OM should still be pursued if a company is seeking for large sales and large customer base. The most optimal marketing strategy may still be to apply both methods of marketing with the right
The primary cost advantage is Wal-Mart’s superior distribution capability (location of stores, inside-out growth patterns, cross-docking, superior information management). Wal-Mart’s prices are low by the industry standard, which, combined with its lower costs, indicates a strategy that aims at growth in volume through grabbing increased market share. Low prices, advanced data management and extremely motivated employees (“10 ft rule”, “sundown rule”) means a better customer experience than at other discount retailers, even though Wal-Mart remains a self-service retailer. In addition, the large size of the traditional Wal-Mart stores adds convenience by offering a one-stop solution by offering a wide range of products. It’s worth mentioning that Wal-Mart acquired volume through a careful consideration of locations, away from competition.
With all the different products shown in H&M, it could be more of an eye sore, confuse the buyers, but does give more options. In our economy today, spending $350 on a scarf is just absurd to most. Most people love bargains, but tend to forget they get what they pay for. A lot of people choose H&M over Burberry, just because it’s more affordable. Ten years from now, the person who bought a jacket from Burberry will be in perfect condition, conditions permitting, rather than the jacket from H&M. The fabric used for
Cloning the industry price If the virgin mobile clone the industry price they have various advantage to lure the customer, they have the differentiated applications and superior customer service. Also they are offering fewer hidden charges and better off-peak hours. Also our calculation (exhibit 1 & 2) shows that break even for the virgin mobile is less compare to industrial average but there are numerous drawbacks which outweigh this price strategy. • Virgin will loose the advantage of transparent pricing structure for customer by not eliminating all hidden charges. • Virgin may have to abandon its preferred target market of teenagers, due to contract implementation and billing system.
There was not one dominant player within the industry; they were more equally balanced thus increasing rivalry. The High fixed cost for running a discount store resulted in an economies of scale effect, this can be seen when Wal-Mart decided to gain economies of scale by building their own distribution centres to add value. Going public in order to finance the extra storage was important for Wal-Mart to utilise capacity as efficiently as possible, they did this by creating distribution hub around 15-20 stores. The increased rivalry continues, this was due to the low levels of product differentiation and little in the way of own branding, products were standard in nature through all discount stores. Also the low switching cost and consumer awareness of shopping around to find the best bargains increased competition around stores to capture customers.
Colgate Business Case Do the advantages outweigh the disadvantages for China and Mexico, respectively? China The Chinese toothpaste market was developing quickly, in part due to the popularity of new flavors. Also the freshness segment was rather unknown for Chinese people and China is a booming market with a lot of people. This could generate more sales and improve profit. The worldwide market share of Colgate and diversification could also improve by entering the Chinese market.
These two companies occupied more than 74% market share in 2004. As such companies usually have a better reputation and are better recognized, they could have higher customer loyalty. Therefore, consumers are less likely to switch to other producers. Moreover, economies of scale could also help some incumbents to cut average costs, making it even more difficult for new entrants to survive. The Power of Suppliers Suppliers supply raw materials including caramel coloring, phosphoric or citric acid, natural flavors and caffeine to concentrate producers.
Q1- Why, historically, has the soft drink industry been so profitable? First of all, we need to define the players in the soft drink industry which are: the suppliers of raw material such as (sugar, artificial sweeteners and packaging), the concentrate producers, the bottlers, and the retail channels. Looking at the five forces frame work, we can see why this industry has been so profitable. The threat of new entry is low for many reasons; the need of economies of scale and the existence of brand loyalty to either Coke or Pepsi. Also the absolute cost advantage for early entrants as new entrants will have to incur high cost in a plant, advertising, or R&D.
TFC’s current competition(CNN and Lifetime) however seems to be profiting very well from catering to a certain demographic which in turns leads to better advertisement deals that TFC currently has. Since TFC is a 24/7 network a “broad” (Fashion for Everyone) approach towards marketing has been the theme thus far, a theme that has worked up on till now which poses the question as to if segmentation is the change that is needed to post better numbers against competitors. The Problem here is not that TFC’s profits are being threatened; it is that the market is changing and TFC is being slowly left behind. Being a 24/7 Fashion Only Network, it is not necessarily as desirable as say ESPN, hence it is critical to target the right viewers thus offering advertisers an attractive mix of viewers when compared with what competitors are offering. Research has shown that TFC viewers were predominantly women between the ages 35 and 54.
However the positive effect of a recession for Tesco is that a lot of customers eat out less and eat more at home which give Tesco an opportunity to increase their output and come up with cheaper alternative meals to getting a takeaway or going to a restaurants. Competing Technology I think the use of technology has made Tesco a top competitor in the market. They have capitalised on the use of online shopping and provide a delivery service through their website www.tesco.com, this is very useful for people who may not have time to go to the shops they can simply order everything they want online. Also I think that the ageing population would also find online shopping more convenient if they were able to assess and utilize the website. Tesco have also set up their own mobile service which is growing in popularity.