MKT202 Report on the fictional company Micron's Marketing Plan. Topic for the plan was Microwave Oven

1. HUSSAIN MOHAMMED ELIUS
083 371 530
Team Leader
01717-______
______@hmelius.com
FAHIM ASHAB RAHMAN
083 322 030
01717-________
_______@yahoo.com
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2. Executive Summery
Micron is entering the growing market of microwave ovens. All though in US, the sales
of “microwaves” have been declining as nine out of every four households now have an oveni; it
is still a growing market in many international markets as it is a tried and true technology and is
greatly becoming one of the standard kitchen appliances. Micron is targeting this kitchen
appliance market in South-East Asia, and also restaurants where microwaves have become a de-
facto standard for heating foods. All though the market leader Samsung has an edge, we believe
we can compete because the unique features of our product offering a more-for-less pricing.
Microwave Oven, as a consumer product, does not have much exposure in the
Bangladeshi market. In this country, most consumers tend to heat their food using gas stoves.
Our objective is to make consumers shift from stoves to microwave ovens as a primary way to
heat foots. We hope while fulfilling this objective, we will reach a 5% market share in the while
achieving break-even by the year end.
The following marketing plan includes strategy based on 4P’s of marketing- product,
pricing, promotion, and positioning. Focus has also been enforced upon advertisements and
budgeting, since all companies do worry about financial limitations even if the companies are
firmly established.
Microwave Oven, being a consumer product, is still in the growth stage in terms of usage
and sales although the market is already flooded with Chinese products. Every brand, even the
cheapest ones, knows what a customer desires and invests heavily on R&D to provide them with
those necessities. Therefore it’s rather difficult to select an area to focus, for gaining competitive
advantage. Some top brands, such as Samsung, Sanyo, etc, have already captured majority of the
market and the rest are occupied by the cheap Chinese brands.
In this situation, the new entrant possesses it’s own strengths in order to penetrate the
market successfully: ‘financial strength’ to spend heavily on research and R&D to find the
proper loopholes and ‘creativity’ to communicate the product designed for the customer through
extensive promotion in order to capture the potential market and try to convince customers to
shift to our product.
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3. Table of Contents
Executive Summery.................................................................................................2
Table of Contents.....................................................................................................3
Current Market Situation.........................................................................................4
Market Description..................................................................................................4
Product Review........................................................................................................5
Market segmentation................................................................................................6
Competitive Review ................................................................................................7
Research and surveys ..............................................................................................8
Marketing Strategy...................................................................................................8
Product Strategy...................................................................................................9
Distribution Review.............................................................................................9
Promotion Strategy .............................................................................................9
Advertisement Costs......................................................................................10
The Cost of Running the Advertisements on Different Media
...................................................................................................................................10
Message .........................................................................................................13
Media ............................................................................................................15
Measurement and Control .............................................................................15
Sales Promotion.............................................................................................16
Pricing Strategy..................................................................................................16
Budgeting ..............................................................................................................17
SWOT Analysis.....................................................................................................17
Conclusion.............................................................................................................18
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4. Current Market Situation
Microwave Ovens, first introduced in the commercial market in1952 and gaining
popularity since the mid 1980s, have been growing to become a standard kitchen appliance in
most households across the world. However, the potential of growth still exists in the vastly
untapped market of South-East Asia. Even in the world market there are huge potential to export
microwaves as the kitchen appliance market is substantial. New households are formed everyday
and each needs their own microwave. The entire culture of TV dinner has been centered around
these microwave ovens.
Micron, though a new company, is a well-funded startup with a unique selling
proposition. We plan to release a wave of microwaves to penetrate all the major segments with
several different features that will vary with the price.
Market Description
Professional chefs have often complained that microwaves are not ideal for cooking as
they are of limited usefulness because browning, caramelization, and other flavour-enhancing
reactions cannot occur due to the small temperature range. Specific segments targeted by Micron
are consumers in the kitchen appliance market as well as restaurants in need of quick reheating
of foods.
Microwave Ovens come in various standard sizes. Micron plans to market their product
in the three major sizes. Furthermore, as technology cost decreases we can now add several value
added features without increasing the price. We believe that this will give us a competitive edge.
We are also the first company to use spare parts exclusively made in Bangladesh using the cheap
labour it offers. The labours, however, are highly supervised to ensure as higher quality then the
Chinese counterparts. Attention has been paid so our product requires little to no repairs,
especially during the warrantee period of 3 years.
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5. Product Review
Our first product line of microwaves will come in three sizes, Compact, Medium-
capacity, and large capacity.
• Compact: A compact microwave, also called small, portable, or countertop, is the
smallest type of typically available consumer microwave. Compacts are the most popular
size of microwave oven, dominating the market. Ours will be 50 cm (18 inches) wide,
35 cm (14 inches) or deep and 30 cm (12 inches) or tall. These ovens will be rated as 700
watts of power and measure less than 28 litres (1 cubic foot) in capacity. These ovens are
primarily used for reheating food and making microwave meals and popcorn. These
ovens are not made to cook large amounts of food.
Micron 1000 Compact is the cheapest product of the line targeting small fast food shops
and people in need of quick reheating, such as single youngs. (Market Segmentation
described later)
• Medium-capacity: These microwaves are larger than compact microwaves. Their
heights and depths are only marginally larger than compacts, but they will be 50 cm (20
inches) wide or more. Their interiors will be 45 litres (1.0 and 1.5 cubic feet) and power
runs at 1000 watts. These are the standard "family" sized microwave. They will have a
few more "auto-cook" features, and incorporate grills.
Micron 1100 Medium is targeted towards those who want to do some cooking at home,
typically a growing family.
• Large-capacity: These are big microwaves designed for cooking large meals. Large-
capacity ovens can handle 25×35 cm (9×13 inch) casserole dishes, and cook tall items
like roasts or turkey breast, with a large number of "auto-cook" and precise temperature
control measures. Large capacity ovens will use 2000 watts and have over 60 litres (2
cubic feet) of capacity. These ovens will be 50 cm (20 inches) wide, 50 cm (20 inches)
deep, and 30 cm (12 inches) high. This size will come with additional features including
combining them with convection cooking and "top browning" elements that will brown
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6. food (similar to the broiling function on an oven). This product offers the best value for
money.
Micron 1200 Large is targeted towards aspiring cooks, as well as fast-food and traditional
food shops.
Furthermore, add-ons for all the oven, such as grills and rotisseries will be available for
sales separately.
Market segmentation
Market segmentation is necessary, which is dividing a market into distinct groups of
buyers with different needs, or behavior who might require separate products or marketing
mixes. Of the four levels of micro marketing (segment, niche, local and individual), we shall use
‘segment marketing’. In today’s world, it has become necessary to divide the market using
several such segmentation techniques, and we will use four.
• Geographical Segmentation: Urban and suburban regions of Bangladesh. Notably, but
not limited to Dhaka and Chittagong.
• Demographic Segmentation: We are targeting people with a stable income of over 20,000
taka.
• Life-stage Segmentation: Our Micron 1000 model is targeted to single young people and
newly married young couples. Micron 1100 is targeted towards Full Nest 1 (youngest
child under 6) and 2 (youngest child six or over), while Micron 1200 is for Full Nest 3
(older married couple with dependent children) and Empty Nest (older married couple
with no children living at home).
• Behavioral Segmentation: Micron 1200 will be most useful for heavy users whereas the
Micron 1000 for light users. The 1200 model will also be advertised heavily during Eid
and other special occasions where convection heating (a feature often found in traditional
ovens) will be most desired.
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7. Such segments obviously overlap, but that is not undesirable at all. In fact, that will target
our prospective customers with even more precision.
For example, a new couple with over 20,000 taka monthly income around Eid will be
more prospective then without any one of the criteria.
Of course we are targeting more then just consumers. We also found that more and more
fast food shops are popping up all over the country and they are need of quick reheating of the
foods. Micron 1200 has been built just for such a kind of heavy usage.
Competitive Review
As noted before, Microwave Ovens have been around since 1960s and have gained
popularity to now become a default kitchen appliance. Many well-reputed business have already
an established market in the microwave industry. Yet, it cannot be forgotten that this is still a
growing market and as such, penetration to this market is possible. Competition from such well
established firms is a major factor to consider.
A December 1999 Consumer Reports study on microwave ovens supplies data about
percent of "repairs and serious problems" for microwave oven brands. This data was compared to
the implicit price values estimated in the final hedonic regression model for microwave ovens to
see if consumer valuation of brand was consistent across studies. Of the eight brands included in
the final hedonic model and the 12 brands included in the Consumer Reports study, six brands were
common to both studies. The following is an ordinal ranking of brand value for both studies
results:
Consumer Reports Hedonic Brand
Percent of Repairs Variables
Brands
Ranking Ranking
1 Samsung Amana A
2 Sanyo General Electric B
3 Emerson Whirlpool C
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8. 4 General Electric Samsung D
5 Whirlpool Emerson E
6 Amana Sanyo F
Such reviews, unfortunately, is out-of-date. Bangladesh also does not have or provide
secondary data to the public or even carry out such reviews. As such, primary research was taken
to analyze the countries market. The biggest competitors are, in order:
1. Phillips – 34%
2. Sharp – 25%
3. Samsung – 14%
4. Moulinax – 12%
5. Sanyo – 7%
6. Others – 8%
Research and surveys
A primary data research was executed in order to denote current customer preferences in
order to design a complete product for them. It has been found that as a new participator in the
market competition, we should provide a complete package to the customer. Talking in
management language, all the features to focus on, mentioned above, has become hygiene factors
for the customers, they have knowledge about oven and have already chosen their loyalty;
therefore the product designed should provide differentiated needs of the customers by providing
a complete package. People today are more concerned about artificial chemical usage; green
revolution is showing its colours.
Marketing Strategy
Microns primary marketing strategy will be to through extensive promotion to create
demand for a yet properly untapped market. Our consumer targets have been discussed above in
Market Segmentation. The primary consumers are households, but we are also targeting fast-
food shops with our more expensive Micron 1200 model.
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9. Product Strategy
Micron microwave product line will come with all the features as described in the earlier
product review section, plus a three year warrantee. Depending on sales volume, we plan to
introduce several more ovens with more specific features next year. Microns distinctive logo will
be featured prominently in all our electronics and packaging and the logo will be further
reinforced into prominence during the marketing campaign.
Distribution Review
Micron brand of microwaves will be distributed through a network of retailers in the
electronic markets around Bangladesh, specifically Dhaka and Chittagong. Our partners will
incorporate some major electronic specialty store from the shopping malls to “Stadium”.
Although distribution will be limited primarily only in Bangladesh, we plan to expand to
India in beyond from the third quarter of the year. We also plan to experiment sales using e-
commerce, which has yet to gain traction in the sub-continent.
Trade promotion will be provided for the first year to all our retailers in the first year. We
are hopeful that this will allow them to stock more of our goods.
Promotion Strategy
To accomplish a task, it is important to decide the objective first. Likewise, the objective
of this mix was decided in the very beginning. Objective is defined as a specific communication
task and achievement level to be accomplished with a specific audience with a specific period of
time. Objective could be of four types. It could be informative, persuasive, reminding, or
reinforcing. In this stage it has to be decided that what type of objective to follow.
For this oven brand, informative objective has to be followed. Since the brand is new in
the market, so this approach will be appropriate for the introductory stage. The aim of such
(informative) advertising is to create awareness and knowledge among the customers so that the
new brand can occupy a space in the market, as well as in consumers’ mind where lots of other
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10. oven brands have already taken place. So it is the marketer’s first approach to make consumers
aware about this brand and inspire them to go for it.
We intend to try an experimental approach for this particular product, because the
customers are erudite about typical oven, thus, we shall place our advertisement in such a way,
that it appears that it had existed in the market forever. This might assist in gaining loyalty
faster.
We have also hired a creative agency well known to produce creative advertising in
Bangladesh, such as ads of GrameenPhone. We are confident that they will provide us with eye-
catching advertisement that will help us enter the market (as of now, no microwave oven retailers
advertise their product in Bangladesh).
As said earlier, we will be focusing on an intense advertisement campaign. As such, more
details are as follows.
Advertisement Costs
Television Commercial
An estimated cost for making it:
• ‘Dhoni chitro’ (a well established studio) charges Tk 875 per hour
• Amitabh Reza (a famous ad maker) charges 7-8 lac, including editing and shooting, etc.
Print Advertisement
An estimated cost for making it:
Since the company personnel will be doing it so we are assuming that the cost involved in
making a print advertisement will be minimal
The Cost of Running the Advertisements on Different Media
Channel Time Advertising cost (for 1 Cost 1st
week) month
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11. Channel i • Weekdays (on Saturday between For news, 256,500
10-30 to 11-00 news, Monday • Weekdays (22,500x3)
between 10-30 to 11-00 and + (24,000x3) =
Wednesday between10-30 to 11 139,500
news) • Weekends (22,500x2)
• Weekends (on Friday, and + (24,000x2) = 93,000
Saturday from 7-30 to 8-00 news)
• Mid breaks in 9 o clock For a TV program,
programs on weekends (on 12000 X 2 = 24000
Friday, and Saturday)
Bangla Vision • Weekdays (on Sunday between For news, 198,000
10-30 to 11-00 news, Tuesday • Weekdays
between 10-30 to 11-00 and (13500X3)+(22500X
Thursday between 10-30 to 11 3) = 108000
news) • Weekends
• Weekends (on Friday, and (13500X2)+(22500X
Saturday from 7-30 to 8-00 news) 2) = 72000
• Mid breaks in 9 o clock
programs on weekends (on For a TV program,
Friday, and Saturday) 9000 = 18000
Table 1: Electronic Media (First Month Advertisement Budget)
Total advertising budget for 1st month in television = Tk. 454,500
Channel Time Advertising cost (for 1 week) Cost 2nd month
Channel i Weekends (on Friday, and For news, 117,000
Saturday from 7-30 to 8-00
news) Weekends (22500X2) +
(24000X2) = 93000
Mid breaks in 9 o’ clock
programs onweekends (on For program,
11

12. Friday, and Saturday) 12000 X 2 = 24000
Bangla Vision Weekends (on Friday, and For news, 90,000
Saturday from 7-30 to 8-00
news) Weekends
(13500X2)+(22500X2) =
Mid breaks in 9 o clock 72000
programs onweekends (on
Friday, and Saturday) For program,
9000 X 2 = 18000
Table 2: : Electronic Media (Second Month Advertisement Budget)
Total advertising budget for 1st month in television = Tk. 207,000
Newspaper Position Number of times Rate Cost for 1st
ad inserts month
The Daily Star 3rd Page, 8 Col 8 Inch , 4 days in a month, Tk. 4000 per inch 1,024,000
4 color on Sundays per column
So
Tk.256000 per
day
The Daily Star Back Cover On Friday 4 days 30,000 per issue 120,000
Weekend in a month
Magazine
The Daily Prothom First Page, 8 inch 8 On Thursdays 4 Tk.6500 per inch 1,664,000
Alo column days in a month per column
So
6500 X 64 = Tk.
416,000 per day
Table 3: Print Media (First Month Advertisement Budget)
Total advertising budget for 1st month in newspaper and magazine = Tk. 2,808,000
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13. Newspaper Position Number of times Rate Cost for 1st
ad inserts month
The Daily Star Back Cover On Friday 4 days 30000 per issue 120000
Weekend in a month
Magazine
The Daily Prothom Sports page On Sundays 4 Tk.2000 per inch 200000
Alo 5 column 5 inch days in a month per column
So
2000 X 25 =
Tk.50000 per day
Table 4: Print Media (Second Month Advertisement Budget)
Total advertising budget for 2nd month in newspaper and magazine = Tk. 320,000
Radio Timing Number Rate Total
station of times ad plays Cost for
1st month
Radio Between 12 pm to 4 days in a Tk Tk
Today 6 am for 30-50 sec week (Sun-Tue 37000 for the 37000
and Fri)— whole package
it will be
played once per
day
Table 5: Radio Commercial (First month budget)
Here, we have only mentioned the cost of running advertisement for the first and second
month. We didn’t put the cost of third month onwards because we have decided not to allocate a
fixed sum of money for running the ad from then. We would observe the response of consumers
and, based on that, decide the amount of money to be allocated for advertisement purpose.
Message
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14. The message of the advertising has been developed following a creative strategy. The
steps of the ad (as followed in this IMC mix) are as follows:
Message Generation
There are several ways of generating the advertising message, such as emphasizing on a
single benefit, developing a character, or developing a story. For this advertisement, housewives
can be shown demonstrating how easy the microwave oven is in using and how reliable they are.
Along with the mentioning of low price, the demonstration should be informative since it is a
new product and awareness needs to be created.
Message Evaluation and Selection
• Positioning statement: Key message: Till date we have decided on ‘Micron Microwave
Oven, pours delight upon food’. The creative process shall persist till the morning of
presentation in order to strive for excellence.
• Target audience: Male and female population from urban, and sub-urban middle, class
and above population.
• Benefits to promise: It is an easy-to-use, powerful and reliable oven.
• Media to be used: Broadcast (television, print (newspaper, magazines)
• Message Execution: For the advertisement of this oven emotional positioning will be
done. It means there won’t be any explicit information in the TV commercial, but in the
radio and print media shall provide the rational information (Convection Heating, Made
with “green” materials, uses low voltage).
Message execution style would be “combination” of different moments of life, shall be
depicted to stir the emotions.
• Order of presentation: the most important message (the benefits) is placed in the last part
of the ad.
• Conclusion drawing: For the teaser ad, leave it to the audience. But for the complete
advertisement, conclusion would be drawn. Since audience size is large but the product is
targeted toward the educated (assumed) class, the message shall not be too explicit. The
audience is expected to be self motivated.
• Message sidedness: One sided argument would be placed.
• Message appeal: Emotional appeal is followed here.
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15. Media
A medium is considered as the general category of available delivery system. It includes
broadcast media, print media, and direct mail and so on. For marketing Micron, these three types
of media (broadcast, print, direct mail) are to be used. The specific media vehicles that would be
used in these different medium are listed in the following page:
Broadcast Media- Television Channel i
Broadcast Media- Radio Radio Today
Print Media- Newspaper The Daily Star, Prothom Alo
Print Media- Magazine Star Weekend Magazine
Direct Mail Personnel of the company
The manner, how it would be telecasted in different channels and radio station, published in
newspapers and magazine, has been discussed in detail in the budgeting section.
Measurement and Control
First, the level of advertisement in different media and the volume of sales should be
measured. Questionnaires could be given in different stores and shopping malls to find out the
current condition of product in the market. Also questionnaire could be given to the people of
target audience to find out their response about the product. Information like, whether they
recognize or recall the message, how many times they saw it, what points they recall, how they
feel about the message, their previous and current attitude towards the product and company etc.
could be found through the questionnaires. If it is observed that, the rate of sales is satisfactory
because of advertisement, then it is to be assumed that, the product is doing well in the market.
Again, control means comparing the actual and desired state of affairs and take steps if
these two mismatch. If it is seen that the product is not doing that good in the market regardless
of of the advertisement, everything has to be checked and, if possible, redesigned regarding the
15

16. advertisement and find out where the problem is. Finally, corrective steps have to be taken to
make the position as preferred
Sales Promotion
To increase our sales and exposure of our product we have decided to carry on certain
sales promotion activities.
• Coupons: Offering coupons to customers which will give them 5% off if they take the
coupons to the stores. The coupons will be attached at the bottom of our print ads and
when consumers tear off the coupons and take them to the stores they can get 5% off on
Micron Microwave Oven
• Kiosk Marketing: We also decided to carry on Kiosk Marketing. We will have our sales
personnel in the big super shops like Agora, Nandan, PQS and they will tell customers
about our product and company. Moreover, they will distribute our free samples and
coupons to get attention of our newly launched product. Certain other activities will be
conducted through this marketing like giving solutions to grooming problem of men,
health tips etc.
• Push sales: For retailers, we will also have to practice push sales with a high markup
pricing in order to occupy maximum shelf space. It will encourage the retailers to
promote our brand because of their own advantage.
Pricing Strategy
The Micron Microwave Oven product line will target a more-for-less approach to pricing.
Thanks to decreasing technology cost, cheap Bangladeshi labour and local materials, we would
by default have a cost benefit. With rigorous cost control we have bought down our cost
substantially while, thanks to quality control circles, maintain a quality of product that
consumers expect being surrounded by big name brands such as Samsung and Phillips.
Furthermore, a trade discount for the first year has been announced to all channel partners which
will hopefully help us create an initial demand. We hope that our low pricing, coupled with a
three year warrantee, will give us the edge over the international brands and eventually take them
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17. over. Micron 1000 starts at 7,000 Taka MRP in a market where the cheapest Samsung product is
8,500 Taka.
Budgeting
Several factors will have to be considered while deciding the budget for the following
project:
1. Stage in Product Life Cycle: The product is in the “introduction” stage in PLC. Since it is
a new product, a large amount of budget should be allocated for advertisement to build
consumer awareness. It has to be done to gain consumer tryout.
2. Market share and consumer base: As the product has to build market share or to take
market shares from competitors, it requires large advertising spending in order to achieve
it.
3. Competition and clutter: There are a lot of oven brands, i.e. competitors in the market.
Again, there are numerous advertisements on oven. So it requires quite a large
expenditure.
4. Advertising frequency: the aim of the advertisement is to aware consumers and to create
the interest in consumers’ mind. In order to do that, the ad should be repeatedly telecasted
on different media, for which large advertisement budget should be allocated.
5. Product sustainability: Oven is a commodity type product, thus it requires creating a
level of difference in terms of representation. Therefore it requires a heavy investment on
advertisement.
SWOT Analysis
Strength Weakness
• Convection Heating methods which • Lacking Brand Awareness and Image
combine traditional oven heating with
microwave. Completely new in
Bangladesh
• Value Pricing
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18. Opportunities Threat
• Low cost even through more value • Entrance to a well established market
added add-ons will result intense competition
• Increasing demand in the kitchen • The well established brands may use
appliance market as microwaves their market share as an advantage if
become a necessary accessory. they decide to advertise
Conclusion
We realize that the above marketing plan focuses mostly on advertising and promotion,
however, that has to do with our belief that a new product should be extensively advertised in a
new market. However, we all know that first year is all about gaining market share and not about
profit. We believe that Micron can achieve the highest possible market share and build a great
brand image while maintaining break-even provided the guidelines are being followed.
This Marketing Report for Micron Microwave Ovens is by no means definitive. In the
ever changing market it is necessary to update our marketing plan as we battle along the
profitable kitchen appliance.
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19. i
Microwave Oven Regression Model : United States Department of Labor http://www.bls.gov/cpi/cpimwo.htm