Example research essay topic: Metropolitan Areas Market Penetration - 1,043 words

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... niche. It may be more worthwhile to capitalise on this advantage, re-target it at the right market segment, and turn-up a bigger player in this special market. Cons of Not Developing a Front-Engine Mower By not developing front-engine mowers, SMC will forgo sales opportunities in a large market share with high growth opportunities.

There is also a danger that its existing consumers in the non-metropolitan area may change preferences for the perceived more powerful front-engine mowers. Further Analysis of Marketing Strategies In the earlier paragraphs, we have analysed SMC using SWOT analysis and discussed the pros and cons of the alternative marketing strategies it can pursue. In this paragraph, we further analyse the alternative marketing strategies using the growth path matrix (figure A) and the means-ends chain (figure B) to select the marketing strategy to pursue. Figure A Products/Technologies Market Existing Related New Existing (A) Market Penetration (C) Product Extension Product Expansion Related (B) Market Extension (D) Business Extension Business Expansion, Concentric Markets New Market Expansion Business Expansion, Concentric Products Conglomeration (A) Market Penetration We have discussed that the characteristics of the sales trend of Smc's riding mowers tend to indicate that the product is in the mature stage of its life cycle. This means that the potential of increasing sales for the current product in the current geographical market is low. Also, there is a mismatch of the riding mower product and the current market segment that it is serving.

Pursuing a market penetration strategy in the current geographic market is therefore not recommended. We recommend that SMC maintain its current level of advertising and sales effort in the current geographic market (non-metropolitan areas) and consumer market (industrial users). (B) Market Extension The private-brand offer provides SMC with a good opportunity to pursue a market extension strategy i. e. to introduce a slightly modified riding mower product to a new geographic market - metropolitan areas. However, if the offer is accepted based on the terms given by the chain, it is not financially feasible, bearing most of the risks and not growing a market for its brand of products. We have discussed that Smc's riding mowers are not the preferred product for industrial users in the non- metropolitan areas.

However, there is a potential for SMC to be popular among the homeowners who wish to mow their gardens or lawns in the metropolitan areas. It is likely that the national retail merchandise chain has noted this potential or it would not project that it can sell a volume of riding mowers that is equivalent to double the current volume that SMC is selling. Having weighed the pros and cons, we recommend that SMC reject the private-brand offer and pursue a market extension strategy with its own efforts. It can approach a wholesaler or another retail merchandise chain that is willing to offer more profitable partnership terms and should preferably enter the metropolitan areas before the chain that approached it does. SMC is not advised to counter offer the chain that approached them as the contract for producing 8, 200 mowers can only earn half the rate of return that it is currently enjoying for its sale of 4, 200 mowers, when the sale price of the mowers is 5 % higher than its current list price of $ 650.

In view of the low bargaining power that SMC has, as a small player in the market, it is almost impossible to expect the chain to agree. (C) Product Extension If SMC pursues a market extension strategy for the riding mowers, its resources will be strained if it also introduces Trim-Max simultaneously. Also, it is observed that the configuration of Trim-Max may be more suitable for residential users than industrial users. Thus, we will recommend that SMC defer the introduction of Trim-Max till it establishes a distribution network in the metropolitan areas through its market extension strategy for riding mowers. In any case, we do not expect SMC to be tardy in its entry into the metropolitan areas, thus this deferment will be a short one. Another product extension effort is also recommended for SMC in the medium term. SMC can reconfigure its riding mower by shifting its engine to the front or by enlarging the mower physically.

We do not expect huge research and development expenses to be incurred but these changes can improve its competitiveness in its current market segment, where users perceive their mowers to be less powerful or durable. This will make its product more right for its current target market segment. (D) Business Extension Finally, when SMC establishes a distribution network in the metropolitan areas, it can pursue a business extension strategy. In other words, it can introduce its new Trim-Max product to the metropolitan areas (new market) through the distribution network. Figure B The growth path matrix discussion has explored the means to increase unit sales volume to increase long-term profits.

We will now consider the alternative of increasing productivity. Decreasing Inputs Extending the sales of riding mowers to the metropolitan areas will give SMC the opportunity to decrease inputs and hence increase efficiency as it can improve asset utilisation. Increasing Outputs SMC can improve its sales mix by reducing the volumes of less profitable product variants. We recommend that SMC eliminate the sales of Push Lawn Mower "Kits" since they are not profitable at all. Consign and Recommendation In summary, we recommend that SMC adopt the following Marketing Strategy: Metropolitan Areas Non-Metropolitan Areas Industrial Users Population expected to be small, will not target Industrial Users Riding mowers may not be suitable. Product in its mature stage.

Do not adopt a Market Penetration Strategy (A) Adopt a Product Extension Strategy (C) Residential Users Population expected to be large, riding mower is a suitable product Adopt a Market Extension Strategy (B) and eventually a Business Extension Strategy (D) Residential Users Population expected to be small, will not target (i) Reject Private-brand offer (ii) No change in advertising and sales effort in the current geographic market (iii) Target riding mowers at the residential user market in metropolitan areas (Market Extension) (iv) Defer introduction of Trim-Max (v) Cease Push Lawn Mower "Kits" sales and Develop a more appropriate product for the industrial users in the non-metropolitan areas (Product Extension)

Research essay sample on Metropolitan Areas Market Penetration