NOTE: Free essay sample provided on this page should be used for references or sample purposes only. The sample essay is available to anyone, so any direct quoting without mentioning the source will be considered plagiarism by schools, colleges and universities that use plagiarism detection software. To get a completely brand-new, plagiarism-free essay, please use our essay writing service.
One click instant price quote
Background The company that I have chosen to look at is Technics SL Ltd, a subsidiary company of Technics Ltd, which is now owned by Panasonic. Technics main purpose of business is home entertainment systems but Technics SL Ltd concentrate their efforts toward turntable production. They currently produce 2 products, the SL 1200 MK 2, SL 1210 MK 2. (Appendix 1) Technics announced the worlds first direct drive turntable in 1969, the SP 10. In 1971 they marketed the SL 1100 direct drive system featuring an innovative design, which had the worlds first diecast aluminium case. In 1972, Technics launched the Silver SL 1200 MK 1 direct drive turntable, which out shone all their previous turntable releases because of its superb handling and design. In 1973, Technics were awarded the blue ribbon award for the SL 1200 MK 1, they personally thanked hip-hop DJs such as Africa Bambattaa, Grand Master Flash and Cash Money, amongst many others, for promoting their product.
They began to believe at this point that, the use for which the product was sold (mixing), was actually marketing itself as the DJ culture rapidly grew. In light of this they spent little on advertising from this point onwards believing that this would achieve much higher perceived customer value. They realised that their market was very much a niche market, so in the same way that Ferrari, market themselves, they concentrated less on advertising, more on word of mouth, and invested heavily on research and development (R& D). In 1980, Technics launched the SL 1210, which was a black version of the SL 1200. They had identical operating mechanisms inside both. Technics did this because they saw that most home entertainment companies during the 1980 s were bringing out the majority of their products in black.
Technics understood that although the majority of their clientele did consist of DJs and clubs, they also had demand from consumers wanting a luxury product for home use, as part of a hi-fi system as vinyl was the most used format to that date. This option of black casing was designed to cater for this segment. After almost 9 years of development, Technics released the SL 1210 MK 2 turntable a slightly more robust, solid version of the MK 1, built specifically to satisfy professional use. For this, they received The Gold Disc Award from the Spanish magazine Disco, which itself was dedicated to club culture, for their innovative quartz lock design which was implemented into the SL 1210 mark two.
In 1987, Technics held their first DJ Mixing Competition (DMC) brought on by the rapid rate at which the 'DJing' craze was now growing and the following that it developed. They saw this as the only advertising they needed and sponsored the event offering a pair of Technics SL 1200 MK 2 turntables to the winner. For them, there was nothing better than the best DJs from around the world competing head to head showing off their much studied and self-developed talents to the people that were interested in them. Technics were at the forefront of this DJ culture as at the time they had no rivals in the market.
No other manufacture had attempted to challenge Technics and their innovative product and design, and so Technics continued to build and sustain their reputation and image as the industry standard for the serious DJ. By 2001, Technics SL- 1210 MK 2 featured in the London Science Museum 'Most significant Exhibition in living memory. The role of the Technics SL- 1210 turntable as a major influence on popular culture has been acknowledged by its inclusion in this exhibition. It featured with 150 of the most important and influential objects from the last 250 years including Stephenson's rocket and the Apollo capsule as well as more modern items. Today, Technics SL Ltd.
is worth over $ 12 million and they sell to every major city in the world. Research Objective Technics have relied heavily, until now, on their established brand name as industry standard to sell itself and have held pride in the fact that their product has stayed as market leader, with no major changes being made to it, for almost 21 years. They have trusted so much in the product that they believe by changing it, they would lose their market share and competitive edge. My own observations suggest that, yes this may have been the case when Technics were manufacturing their product up until the mid 90 s. But at this point other manufacturers such as Vestax, Gemini and Numark began to emerge into the DJ turntable market. My belief is that the innovative functions that these new turntable manufacturers began to offer had a different appeal to DJs than the much trusted Technics SLs.
My research will aim to show: If lack of product development has hindered their competitive edge? How they can increase market share? and reduce the effects from their competitors in future? For the purpose of this research I will assume the position of an external marketing advisor acting in good faith for the company. I aim to be as accurate in my observation and evaluation as possible, giving a clear indication as to how the company can re-build their competitive edge and the effect these progressions may have on future organisational activity.
Research Approach The literature that I will be using to conduct my research is: Kotlers (1996) Product Concept McCarthys (1964) 4 P Framework Porters (1980) Porters Generic Strategy Porters (1980) Porters Five Forces Using the ideas from Kotlers (1996) Product Concept and The Marketing Concept I will look at the 4 main competitors under McCarthys 4 P Framework: Product, Price, Place and Promotion. This is a widely used philosophy that underlines all marketing decisions and assessment. The Product concept identifies that by improving the product in terms of Product, Price, Promotion and Places sold it will increase competitive edge and product profitability (Kotler, 1996). Adcocks (2001) states that much off the criticism of the traditional 4 Ps is based on the restrictive nature of the elements and the nave application, which can lead to real strategic problems. Nevertheless, many of the outcomes of an organization can be categorized using the traditional framework of the 4 Ps. However, using the 4 Ps as an analysis tool to examine marketing strategies maybe, if applied correctly, some what beneficial but, it sheds little light on the how and why the company derived at there product position and strategic marketing decisions.
It simply acts as a snapshot tool that assesses what company is doing currently. It does not highlight problems such as purchasing of parts, the manufacturing process, and management structure and whether there is sufficient money for product development. For example, rival companies such as Vestax maybe able to offer a cheaper retail price of their product due to lower cost bases. The 4 Ps will not highlight such factors.
However, the purpose of this analysis is not to delve into financial and supplier matters too much, but to establish how Technics can build higher perceived value and benefits to customers and thus, an increased competitive edge over rivals. By looking at the Four P we can strategically analyze what one company is doing and what one is not doing. Also, the 4 Ps does not involve a customer perspective (Adcock, 2001). The results do not show what the customers needs, wants and demands are but simply show what the customer is currently getting. Therefore, a customer perspective will be taken from numerous surveys that have been conducted by the magazine DJ and sapphires. co.
uk, dated between December 2000 and March 2002. I found these surveys and reports to be the most relevant to my research as to identify customer needs, wants and demands as they where mainly compiled from DJs themselves from home users to professional users. One of the problems with using such information is that it can often be interpreted wrong leading to incorrect customer perspective if one view is followed to tightly. So I have used this information in conjunction with my own observations and interactions as a DJ. Michael Porter (1980) has argued that a firms strengths ultimately fall into one of two headings: cost advantage and differentiation. By applying these strengths in either a broad or narrow scope, three generic strategies result: cost leadership, differentiation and focus.
They are called generic strategies because they are not firm or industry dependant. Using Porters Generics Strategies, I will aim to suggest ways in which Technics can increase their competitive edge. The problem with Porters Generic Strategies (1980) is that the principles seem to exist without consideration to competition, buying power, suppliers power, threat of substitutes and make no suggestion as to how the strategy is actually implemented. However, they do provide a basis on which to idealize different forms of strategy that are available to an organization and the risks and benefits involved in implementing each one. Next, by adapting Porters Five Forces, we enable ourselves to see how some of the characteristics of the generic strategies may effect any decisions made by the organization. The results of this will provide the last step of the framework in order for a manager to build competitive strategies for the organization.
Results Using the results from market share studies done by DJ magazine the following market shares were given. The graphs show a considerable drop in market share for Technics, from 50 % in 1996 to 37. 5 % in 2001. They identify the main competitors in the market as Vestax, Gemini and Numark. Firstly using McCarthys (1964) 4 P Framework we can comparatively look at Technics SL ltd and the main competitors in the market under the headings Product, Price, Place and Promotion. For the purpose of this research it is unnecessary to delve into every single aspect of each company and each turntable. This would become much to complex for the reader to contemplate and it is only necessary to point out the major differences between the companies on these grounds.
Industry analysis using 4 P framework: Product, Place, Price and Promotion Technics currently only market two products, the SL 1210 and the SL 1200, which are actually the same product in two different colours, silver and black, standard retail price is 325. Vestax, Numark and Gemini all offer a range of turntables from beginner turntable to professional turntables. The prices vary between 100 and 450. Vestax have opted for a higher price and higher quality on their products in an attempt to adopt higher customer value than Technics claiming that the additional features it offers are shown in the price, 400 - 450. Gemini and Numark mainly concentrate their focus on the lower priced turntables, which are not as robust, but this is reflected in their low price. They have done this in an attempt to penetrate the lower end of the market.
Some of the main features that have come out in the last 5 years have been the reverse play mode, replaceable pitch, replaceable display light, 78 rpm option and detachable power and audio leads (Appendix 2). All of which are not currently available on Technics turntables. In terms of places sold, it hardly varies from manufacturer to manufacturer. Turntables are purchased mainly by specialist retailers, who then compete between themselves to offer the best prices. Specialist retailers seemed not to compete on which product was sold as the customer in this buying situation is often sure which turntable he wants, but not how cheap he can get it.
However, the differences I found from researching was that the specialist retailers competed in margins of 20 - 30 between each, nothing that enormous and so most people often purchased from the place that was closest or offered free delivery. In terms of promotion, the major differences found were that Gemini and Numark often produced magazine advertisements which was not found in Technics or Vestax. Alternatively, Tec...
Free research essays on topics related to: main competitors, porters five forces, market share, competitive edge, generic strategies
Research essay sample on Porters Five Forces Competitive Edge
