Keller School of Management |
Graves Enterprises needed assistance in with doubling sales in their consumer and commercial markets within the next year. With the help of marketing directors for the consumer and commercial sectors, as well as an outside market research firm, Graves Enterprises must develop a marketing plan that satisfies the wants and needs to its target market, in addition to maximizing sales.
Graves Enterprises is the maker of consumer and commercial care products. As Vice President of Marketing, It is my responsibility to double sales of both consumer and commercial markets within the next year. Currently, Graves Floor Care Products are priced comparable to their direct competitors in both markets. They are also distributed through the same distribution channels, so there is basically no real incentive for the distributors or retailers to carry Graves Floor Care's products over those offered by the competition. The sizes and packaging of Graves products is no different than that of the competition. The very small differences are not exploited by our company. Some differences include a unique, proprietary chemical cleaner that cleans "dry" helping to reduce mold. In addition, the Graves products reduce mold. Graves products utilize environmentally friendly chemistry, contain “Scotchgard” for continued stain protection. They are also hypoallergenic, and offer a pleasant citrus aroma for up to three months after use. Currently, there are two marketing directors, one for the consumer market and one from the commercial market, which report to me. Below are the recommendations that they provided on a new marketing plan after carefully reviewing the market research. My decision on the market plan was based upon the analysis of both written reports.
Joshua Edwards, Marketing Director of Consumer Products, defined our target market for consumer products to be homeowners, female, between the ages of 29-59, with an income level of $75K-$150K. The primary competitors of this market are rented carpet steam cleaners, Kleen Floor Spray 'n Vac and Kleen Floor Spot Cleaner, and people who do nothing to clean carpets. Kleen Floor products are found in grocery stores and mass merchandisers. Edwards felt that Graves Enterprises is just cannibalizing Kleen floor products and not growing the market.
According to Philip Kotler, consumer behavior is defined as the study of how individuals, groups and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and wants. It is influenced by cultural, social, and personal factors. The recommendations that Edwards gave was to first development of a new product line that is promoted as "safe, effective, and eco-friendly", pricing it 1.5 x the price because of the eco-friendly aspect. He also suggested that we manufacture our packages from recycled plastics, resulting in less cost while also complementing the eco-friendly aspect. This would net Graves a 2x profit increase. The problem with this recommendation is that we don’t have any clues or an indication of the customer’s buying behavior. How do we know what needs to satisfy? Our Market Research Consultant, Edward Matthews of ES Associates conducted five focus group sessions and conducted and analyzed a mail survey. He found that customer were happy with their current floor cleaning products. The eco-friendly aspects of our product were the least influential to their purchase decision. Price was ranked #1, while cleaning efficacy of the product was #2. I feel that introducing an eco-friendly product would result in a loss of profit, because it will not grow the market. I do however think that we should manufacture our packages from recycles plastics, because of the lower costs to our company to package the product. We will also set…