Strategic Marketing Plan Relationship Marketing

Question: Discuss about the Strategic Marketing Plan for Relationship Marketing. Answer: Introduction This report is based on the marketing plan conducted for Grandmas Little Bakery. Grandmas Little Bakery is a small company having branches in Rosemary, Alexandria and Rosemary. They have been in this business for past seven years who have expertise in bakery products such as traditional breads, sweets, cakes and pastries. If offers the facility of both take away and dine-in (Grandmas Sydney - Bakery, Cafe Restaurants, 2016). The scope of this marketing plan seeks to analyze Grandmas Little Bakerys business on the basis of product life cycle, BCG matrix and Ansoff matrix and develop main marketing objectives based on the analyses. Further, the brand positioning strategy to be adopted by the firm has been discussed and brand position mapping is conducted. Target market is selected and strategies based on objectives are being developed. Moreover, marketing metrics are being developed and factors determining the success of the strategies are stated, and methods to control the outcomes of the strategies to achieve the objectives have been explained. Product Life Cycle Analysis Grandmas Little Bakery is in the growth stage of the product life cycle due to the following reasons: It is in the quest of building brand preference and enhance its market share; It is focused on maintaining the quality of the product and introducing new features and services to attract the customers; It is maintaining a competitive pricing strategy to gain an upper hand over its competitors and retain its loyal set of customers and attract new customers. The company aims to expand its distribution channel to meet the growing demand of their product. With an expansion in its distribution channel, the company aims to promote its products amongst a broader audience. It is aiming at creating variations in its products that could have a mass appeal (Stark, 2015). In the view of the fact that the firm wants to expand and grow in the ever expanding market of food industry, it should adopt a marketing strategy that would fulfill their long term vision and mission. To maintain smooth product flow, it should strengthen its operations and supply chain by integrating its processes. BCG Matrix Analysis Figure 1: BCG Matrix Source: (Doherty Lu, 2012) The firms are divided into four different categories on the basis of above mentioned factors: Dogs: The firms which have very low market growth and low market share are categorized under this quadrant. These firms neither consume more cash nor generate more cash. Question Mark: Firms which are growing rapidly and consuming large amount of cash falls under this category. Such firms have low market share and generally do not creates much cash. Star: Firms under this quadrant generate huge amount of cash due to their high market share, but they also consume large amount of cash due to their rapid growth rate. If a star is able to maintain its position, it would be able to become a cash cow, provided that the market growth rate is weakening. Cash Cows: Firms in this quadrant are considered as the market leader. The firms generate more return on investments, thereby creating more cash than they consume. Profits generated by the cash cows are extracted and little is invested. Considering the facts from the BCG Matrix, Grandmas Little Bakery can be categorized under the question mark of the matrix due to the following reasons: The company is infusing a large amount of capital in developing its infrastructure. It requires a substantial amount of cash to meet the recurring cost of its supplies, compensation of the employees, repairs and maintenance. It is also emphasizing on building its brand preference through addressing a larger audience through various modes of communication which would further incur an additional cost and there is a contingency whether they will get a favorable return or not (Doherty Lu, 2012). Ansoff Matrix Analysis Existing Products New Products Existing Markets Market Penetration Product Development New Markets Market Development Diversification Figure 2: Ansoff Matrix Source: (Thijsen, Tong van Leer, 2014). According to this matrix, there are four possible market-product combinations that are undertaken by various business organizations as a part of their growth and expansion strategy which are market penetration, market development, product development and diversification. Taking into consideration the above approaches, it can be validated that Grandmas Little Bakery falls under the market development quadrant of the Ansoff matrix for the following reasons: It is more focused on the products that are relevant to its core competencies i.e. cakes, pastries, breads, sweets and many others. It seeks to develop new market segments for its products by exploring new territories. The firm is at risk as it is infusing a substantial amount of capital for its expansion (Thijsen, Tong van Leer, 2014). Main Marketing Objectives On the basis of Product Life Cycle analysis, BCG matrix analysis, and Ansoff matrix analysis, the following marketing objectives are developed: Increase the Market Share: Grandmas Little Bakery aims to expand its market by covering new geographical areas to increase its market share to nearly 20% percent in a year thereby giving tough competition to its closest competitors i.e. Salt Meat and Cheese, The Grounds, and Substation Cafe (Shani Chalasani, 2013). Improve Product Awareness: The firm is focusing on reviving its existing product portfolio by invigorating the interest in the products which has been in the market for a longer time or for the products which has a huge brand loyalty. Increase in Product Sales: Grandmas Little Bakery seeks to increase its sales to improve its financial structure and gain greater hold in the market. It aims to double its sales figures by the end of the financial year by adopting penetrating pricing strategy. Brand Recognition: Grandmas Little Bakery would consider strategies to rebrand its products to enhance its brand recognition through superior but consumer friendly product packaging. The firm is also considering alternatives for its logo and tagline to gain attention of customers (Armstrong et al., 2014). Strategies Based on Objectives Considering the main marketing objectives and the 7Ps marketing mix of Grandmas Little Bakery, following strategies are determined: Expansion of Product Categories (Product Strategy): To stay competitive in the long run of the business, the firm is aiming to develop new products across various categories in order to increase its product portfolio and create the brand more competitive in the market. Promotion of New Products (Promotion Strategy): The firm would promote their newly introduced products chiefly in-store to its loyal customers who seeks recommendations from the restaurant staff on what to eat or anything new in the menu. Further the firm would organize promotional events for its new products like competition for designing an advertisement campaign for promoting the new products of the firm (Wilson Gilligan, 2012). Budget Pricing (Pricing Strategy): The firm is keeping its prices very low gain attention of the customers of the competitors. A small coffee is priced as low as 3 Australian dollars. In order to gain customers and ensure its return on investment and earn revenue, the firm must calculate the production cost associated with each of its product along with fixed and variable cost. After the evaluation of the cost associated with product, the firm needs to evaluate the products offers by its competitors and their pricing strategies and improvise accordingly (Hollensen, 2015). Increase Market Coverage (Place Strategy): The firm aims to increase its outreach by opening small food joints in the interiors of the suburban areas where the customers would be able to place their orders. In case, the customers are resides far away from the food joints, the food would be delivered to their home. This would help in spreading words about the firm in unclaimed territory. Augment Workforce Quality (People Strategy): People are crucial aspect in the process of service delivery, because the service cannot be separated from the individual offering it. Grandmas Little Bakery is recognized as much for the food as for the service quality offered by the staff. Customer service training to improve its service quality and customer experience is considered to be the top priority of Grandmas Little Bakery. Improvised Service Delivery (Process Strategy): The procedure of service delivery is critical as it guarantees that the standard of service quality remains consistent throughout. Therefore, Grandmas Little bakery has chalked out a blue-print that would serve as a framework for the service delivery process of the business. State of the Art Interior (Physical Evidence Strategy): Services might be intangible, but the interiors of any restaurant or hotel act as a catalyst in attracting the customers. Grandmas Little bakery pays much attention to such fact and provides an atmosphere by creating an innovative interior design and decorations to suit every mood and occasion, waiting lobbies with luxurious sofas for customers to relax as they wait for their turn. By aligning marketing objectives with the strategies, the firm could go beyond customer satisfaction an offer customer delight. Selection of Target Market Based on customers analysis, the following set of customers is considered as the target market for Grandmas Little Bakery: Workers: The firms aims to attract daily wage earners working in various construction sites in the suburban areas of Alexandria, Canberra and Rosemary by offering them food at affordable and pocket friendly prices to increase the number of customers and market the products through word of mouth (Kotler et al., 2015). Existing Customers: The firm would seek to retain its existing set of customers by offering various new products from time to time in order to retain their loyalty towards the brand. It is important to maintain a healthy relationship with existing customers by making them feel welcome. Families: There are many families residing in the suburban parts of the Alexandria, Canberra and Rosemary. They hardly get time to be together; therefore they tend to go out together on the weekend to spend quality time together so it gives the firm an opportunity to attract them by offering attractive family offers and discounts (Alon Eugene, 2012). Brand Positioning Strategy Brand positioning is a technique through which a product is being placed in the minds of the target customers. It explains the benefits that can be perceived by the customers upon the usage of the product. Grandmas Little Bakery aims to position its brand as most cost effective in its each of its product category. It wants to keep the prices of its pastries, cakes, cookies, traditional breads and sweets at competitive level to compete with its rivals i.e. The Grounds, Salt Meat and Substation Caf by expanding its product category of above mentioned products and it also aims to introduce new delicacies into their product range (Solomon, 2014). It aims to introduce more varieties of coffee that are rarely available in the Australian market for the coffee enthusiasts and variants of tea from the best tea estates of India mainly Darjeeling Tea for the tea lovers in Australia. The space has been a constraint in the expansion of its shop; therefore it is looking for new premises to operate on a larger scale where they wish to start the facility of serving lunch and dinner to attract the loyal customers of its major competitors in the area. The salads, sandwiches, meals, cookies are some of the specialties Grandmas Little Bakery caters to and the quality of its product is at par with its competitors (Singh, Kalafatis Ledden, 2014). Needless to say, to survive the competition Grandmas Little Bakery have to make a big turnaround in its business. The firm should adopt penetrating pricing strategy to take over its rivals because customers these days are more price conscious than quality conscious. Grandmas Little Bakery has been known for its superior quality so it should focus on its product pricing so that it could maintain equilibrium in the business. Brand Position Mapping (Perceptual Mapping) The brand positioning mapping can be done on the factors such as high perceived quality/low perceived quality, inorganic products/organic products. The following attributes should be taken into consideration keeping in mind the fact that the firm is in the growth stage product life cycle and it is entering a new market so it should keep the prices of its products comparatively low to gain competitive advantage in the market. Moreover, it should highlight its unique selling perspective like it sells organic products as it uses fresh and organic ingredients in making its products (Chen Wang, 2015). Development of Marketing Metrics Customer Acquisition Cost (CAC): This would comprise the total marketing and sales cost including advertisement expenditures, salaries, commissions, bonuses, overhead costs in a specific time frame divided by the total customers acquired during that time. The time could be a month, quarter, or maybe a year. Assuming that the firm has spent $500,000 on marketing and sales and gained 50 customers, and then CAC is $10,000 (Smith Madden, 2015). Marketing Percentage of CAC: The marketing percentage of CAC is noteworthy to observe over time, and any changes indicates that somewhat has changed in either the efficiency or the strategies. As the firm have more in-house sales team and have less complicated sales process, their marketing percentage of CAC can be somewhere near 20-50% . Marketing Generated Customer Percentage: This percentage shows what percentage of the business is driven by marketing. The firm needs to consider all the customers signed up in the specific period and look at the percentage of customers generated through marketing. Since the firm has its in-house sales team backed by strong outside sales team, their percentage may be between 20-40%. If the firm seeks to increase its percentage to 80%, it will have to generate more leads from outside marketing. Return on Investment (ROI): It shows the loss or gain of an investment by evaluating and gauging the amount of return from an investment with the cost of investment. Assuming the firm makes an investment of $5,000 in online marketing and generates $10,000 in net profit, and then the ROI would be 100% (Smith Madden, 2015). ROI= (Net Profit/Cost of Investment) x 100. Determining the Success of Strategies The success of the strategies can be measured on the following scales: Tracking Growth in Product Sales: A radical growth in the sales figure of the business would be one of the important scales to measure the success of the business. This would also reflect the increase in its customer base and revenue. Customer Research: The firm can conduct an in-house research on visiting customers to determine the level of satisfaction or dissatisfaction of the customers and take suggestions and feedback for improving their products and service quality (Czinkota Ronkainen, 2013). Increase in Market Share: Increase in the market share would also highlight the success of the strategies undertaken by the firm. Increase in market share specifically depicts the shift of customers from competitors product to the product of Grandmas Little Bakery. Controlling the Outcomes Alignment of Marketing Strategies with Business Objectives: Aligning the marketing strategies with the primary objectives of the business would help the firm in controlling the outcomes and prohibit them from facing a financial loss (Lee Carter, 2012). Accelerate Performance: Monitoring the performance of the employees and giving feedback on their performance would be beneficial in attaining the business objectives. Regular review of employees performance and feedback would accelerate their performance. Strategic Planning: Establishing a strategic plan to set task priorities, dedicate time, energy and resources and strengthen its operations towards accomplishment of organizational goal would prevent them from failure (West, Ford Ibrahim, 2015). Conclusion This report is based on Grandmas Little Bakery located in various places in Australia. It includes various kind of analysis based on product life cycle, BCG matrix, and Ansoff matrix. 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