Background
of Ayura Pvt (Ltd)
Maxhold Pvt (Ltd) is a
Quoted Company Founded in 1973 which has grown to become one of the leading
players in the FMCG, Transport and leisure markets. Maxhold has been exceptionally
performing in all these sectors and has become to be among the best in each of
these markets.
Maxhold owns six
leading Brand names in the FMCG category which has ranked themselves as the
second biggest player in the FMCG market. Their products range from personal
care, home care to Food and beverages and these products have become major
challengers to competitors and have gained Maxhold a substantial market share
in these subcategories among the rural and urban population.
In the Transport sector
Maxwell operates a ticketing agency and is the local General Sales Agent for
several international airlines. Maxhold also provides Freight forwarding
services for both sea and air cargo with a fleet of vehicles and is known as
the “Total service Provider” in the sea freight services.
Maxhold also operates
the most outstanding hotel chain in the country under the brand name Max Hotels
with three city hotels and twelve resorts all growing with the country’s boost
in tourism.
Therefore Maxhold Pvt (Ltd)
as a company has great potential and has been known to be the best among all
the sectors it operates. Maxhold Pvt (Ltd) is well known among the rural and
urban population with its products addressing almost all of the geographical
areas.
The company’s latest
development in the FMCG category is the introduction of a massaging equipment
under a separate business unit. It is expected that through this the company
will be able to capture the health conscious market segment who seeks personal
wellbeing through ayurvedic remedies.
This product will be
introduced under the Business unit “Ayura
Pvt (Ltd)” which will be the newest addition to the FMCG division and Ayura
Pvt (Ltd) will be operating in the “Wellbeing” subcategory and as the first step;
a massaging equipment will be introduced called “Relief+” which carries the slogan “Gives relief to life”
This is a small
massaging equipment which is made out of wood which can be used to easily get
instant relief from backaches, shoulder pains and muscle pains that occur then
and there in the usual day to day life. This is an equipment which gives
relaxation which can be used by anyone at any time of the day.
The main raw material
needed is wood and it is expected that Khomba
wood will be used as the main raw material, the main reason being its ayurvedic
value. The secondary reasons for selection of this wood are that it is not an
endangered tree and also because this raw material is easily available.
Vision
of Ayura
To become the Total Solution Provider for
Personal Wellbeing seekers.
Mission
statement
Ayura hopes
to cater to all the needs and wants of our target customers by being a one stop
manufacturer for all the wellbeing related products and expects to address all
of the customers’ needs in time to come starting from small muscle aches to
long term obesity using herbal ayurvedic practices and such related equipment
which will have minimal or no side effects.
Company
Objectives and Goals
- To commence trading by the end
of July 2013
- To achieve an income of Rs. 3
Mn in the first year of trading
- To achieve a profit of Rs. 1 Mn
by the end of the first year of trading
- To win local quality standards
awards within the first two years of commencement.
- To win international quality
standards awards within the first four years of commencement.
- Be the benchmark for
competitors and the ultimate trend setter in products and services
offered.
Situation
Analysis of Ayura Pvt (Ltd)
Internal environment analysis for
Ayura Pvt (Ltd)
Strengths
Maxhold is a well-known company to the public and for each
brand of Maxhold owns a high brand equity and loyalty. Already having a
position like this in the mindset of the customer can be an added advantage
when launching a moderately new product into the market. Positioning this
business in an area of upper and lower middle class and affluent people can
lead to success, which makes location strength as well. Numerous strengths
exist in the development of a wooden massage tool business. It is the chance to
provide wooden massage equipment at a reasonable price for clients who seek
healthful treatments and massages. Target customer who does not have separate
time to allocate to go to a spa will embrace our product as it can be used at
home without any difficulty.
Wood massager does not have many local competitors.
Therefore it is easy for Ayura Pvt (Ltd) to acquire a larger market share. By
being the second biggest player in the FMCG industry, maxhold already has a
good supplier and a distributor base. Ayura Pvt (Ltd) can also use those
suppliers and distributors as well as their contacts when it comes to its
wooden massager.
Service providers, delivery and warehousing is another area
which has to be considered. Even though our SBU is new, as we are a leading
company in the market, we have a good delivery channel as well as enough
warehousing facilities.
Weaknesses
Main
weakness in the business of wooden massager market is producing a quality
product at a lower cost. Chinese imports being the main competition, makes it
very difficult to compete with their pricing as they are already offering the
product at a very lower price. Financing might be hard to come by, as
convincing the management that you can make a success out of this type of
business is difficult.
The recruitment of competent workers and the
required machinery and equipment is also an expensive proposition and can hurt
profitability. Availability of key resources would be a problem as the required
wood is not unlimited is supply.
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Strengths
|
Weaknesses
|
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Financial
|
Unlikely
for a smaller business organization, as they are the second leading FMCG
company in the market, it is obvious that they have enough funds to carry out
this new SBU and its product.
|
Finance
people may not act favorably to our decision because it is a new area of a
target market we are going to cater to. They might think it will be risky due
to the fact that Chinese are our competitors who are well-known for low cost
manufacturing of various products.
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Managerial
|
Maxhold
has a strong management with them.
|
SBU
may not get an overall supervision of that management and also management
might not give their support if they think this is a high risk area.
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Production
|
Economies
of scale can be generated based on the scale of the organization.
|
It
won’t be easy for the workers to adapt into the production process of a new
product.
|
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Marketing
|
Existing
brands have a very good market makes it easy to transfer funds to the
marketing of the new product as the existing products does not need huge
advertising.
|
Marketing
a new product will be costly. Organization will have to incur a lot of
advertisement and promotional expenses to take the product into the market.
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|
Human
Resources
|
Have
an employee base which exceeds 1100 people makes it easy for the organization
to allocate the required employees to the SBU. And also, with the name of our
organization, it won’t be a problem to recruit new employees if required.
|
Takes
time to train and develop the required employees for the SBU.
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Other Micro Environmental Factors
These are the elements
which directly interact with and which fall under the control of Ayura Pvt
(Ltd). However there are some micro environment elements that are out of the
total control of the business such as behavior of the customers and competitors.
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Customers
|
·
Customer behavior can be influenced up to some
extent by the marketing mix elements. The final decision always lies with the
customer. Their thinking patterns, responses to price changes access to the
location etc will depend on the value proposition they place at the product
offered by Ayura Pvt Ltd.
·
Hence Ayura Pvt Ltd should be equipped to deal
with such reactions of the customers when introducing eco- friendly products.
The quick responses by the customers have to be identified and addressed
instantly.
·
Customer preferences should always be taken
into consideration and this should be a continuous process where the demand
factors and trends need to be captured through ongoing product development.
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Competitors
|
·
Although competitors also can be influenced by
the marketing mix elements it is always impossible to predict their moves
unless Ayura Pvt (Ltd) has marketing intelligence.
·
Unexpected responses from the competitors are always
possible. To face such situations Ayura Pvt ltd has to increase the budgeted
expenditure on Advertising, promotions and product development activities.
Same as new entrance to the market can never be stopped.
·
Ayura Pvt ltd can always get a competitive
advantage through promoting its eco-friendly product.
·
Ayura Pvt ltd should keep a close eye on
potential competitors as new entrants to the market can never be stopped. And
by building a loyal customer base such potential threats can be minimized.
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Suppliers
|
·
When company
considers manufacturing of the product, suppliers play a main role in the
production process. The company highly
depends on raw materials for production until in-house raw materials are
available (through the cultivation of trees). The company has to sign
agreements with the most appropriate and reliable suppliers of wood so that
production can be carried out smoothly without any disturbances.
|
In preparation of
marketing plan above, most of the changes might not have been considered and it
is assumed that the above conditions to be present in the real world. Therefore
when it comes to the execution of the plan such unexpected changes need to be
developed through an emergent plan. But the importance of having a marketing
plan is that although the volatile factors in the environment make it impossible
to implement the marketing plan as it is, the original marketing plan gives the
Ayura Pvt (Ltd) a guideline or a framework as to how it should focus on with
the new operations.
Factors in the Marketing Environment (Opportunities and
Threats Analysis)
Political & Legal Environment
·
The changes in the political environment are totally
out of the control of Ayura Pvt (Ltd). The country has gained political
stability after the end of the war which lasted for more than Twenty years.
·
The
majority of 2/3 has won by the current Government and this has enabled the
business community to carry out marketing and business activities in a more
stable approach for developing health business opportunities.
·
However a feasibility study will have to be
carried out on political influences on the Ayura Pvt (Ltd) in terms of (PESTEL),
(Act of cosmetic, equipment and medicine etc.) But at the moment we expect the
impact to be minimal on our brand; “Relief+”
due to the reputation that has already been built by the parent company Maxhold
Pvt (Ltd).
Economic Environment
·
Changes in this environment will have a great
impact on Ayura Pvt (Ltd)’s decision to introduce a new ayurvedic product.
·
The income level of the population needs to be
taken into consideration and it is not guaranteed that the per capita income of
the individuals is going to be doubled by 2016 or a high economic growth rate
will continue in the foreseeable future due to the economic instability taking place
globally. Per capita income of Sri Lanka for the year 2012 is USD 2923. (Source: Central Bank Annual Report) Although this is a good
indicator it is better to be equipped with contingent plan to execute if the
economy doesn’t activate in the way it is expected to.
·
Interest rate fluctuations, changes in demand
& supply in the global markets, employment rate will have a direct impact
on Ayura Pvt (Ltd)’s marketing plan.
·
The inflation rate will affect the disposable
income of the people hence the decisions of the people could change as the
staple food items become expensive. The May inflation rate in Sri Lanka took a
hike to 7.3% from 6.4% in April and if this continues to increase the reduced
purchasing power could have an impact on the demand for “Relief+”
Social & Cultural Environment
·
People believe ayurvedic
products have lesser side effects than other western products.
·
New social aspects adopted by the middle aged
and elder generation needs to be studied before going ahead with the new brand
“Relief+”.
·
When considering the target group in terms of
social class, medium and upper level income earning families seek massaging
products with an ayurvedic touch.
·
In terms of the cultural aspects, as herbal
products are preferred by a majority of people in any cultural background it is
expected that the cultural environment would not create any major challenges.
·
As this product is mainly aimed at middle level
and high income earners their attitude towards ayurvedic massaging equipment
needs to be taken into consideration and their preference for convenient,
herbal massaging equipment is captured in the product “Relief+”.
Technological Environment
·
New technology can always be beneficial to
provide a quality product to the customers. Newly developed and
dermatologically tested herbal oils can be introduced as a complementary
product that goes along with the flagship product “Relief+”.
·
Also the benefits that can be gained to the body
using this product can also be given through in depth testing of the product
using technologically driven medical equipment.
·
And also the same medical equipment can be used
to identify the hazards that can be caused by using the massaging equipment
incorrectly.
·
Technology can be used to modify the product at
a later stage in the PLC to improve the effectiveness of the product.
Natural Environment
·
Ayura Pvt (Ltd)
is practicing Green Marketing for their marketing mix. The organization uses
environmental friendly raw materials in producing “Relief+”.
·
Since the
massaging equipment is made out of wood, consideration should be made as to
which tree will be used as the main raw material and such tree should not be an
endangered tree and it should be of ayurvedic value.
·
The company is
planning to grow the trees in-house in space dedicated for such cultivation for
manufacture of the massaging equipment and also for the herbal oil which is
produced as a complementary product.
·
The Ecological factors have a high impact on the
company’s marketing plan for “Relief+”.
The worst possible impact from the ecological environment is the sudden floods
and landslides taking place in the cities, Nuwara Eliya and Colombo &
suburbs during heavy rain as the company cannot distribute their products and
which could also hinder production activities as well due to unavailability of
Raw materials. The possibility of incurring such incident is less but the
effect of such incident would be substantial for both production and
distribution.
Macro environmental impact on “Relief+”
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Macro environmental factors
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Issues affecting the new product
|
Impact
|
||
|
Political and legal
Environment
|
|
High
High
Medium
High
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Economics Environment
Introducing
new brand
|
·
Global economic conditions
·
Conditions of recession and unemployment.
·
The increasing trend in the inflation rate in
year 2013. (April 6.4% - May 7.3%)
·
Impact of increasing oil prices in the global
market
|
High
High
High
High
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Social and cultural
Environment
Introducing
a healthy product for target customers
|
·
High density of the population in the world as
well as in Sri Lanka will increase the number of potential customers for Ayura
Pvt (Ltd).
·
The increasing trend of lower income earning
families moving to higher income earning bands can widen the target group.
·
Health and physical habits and life styles are
being changed in Sri Lanka as people show more preference for natural,
ayurvedic products.
·
According to family life cycle, Ayura Pvt
(Ltd) introduces family product
·
Thinking
patterns and attitudes towards massaging
(Global and local consumers)
|
Medium
High
High
Medium
High
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Technological
Environment
|
·
Ayura Pvt (Ltd) will have to use new online purchasing
and billing systems to deliver a faster service to the customers.
·
Company has the opportunity to increase the efficiency
through technologically driven manufacturing equipment.
·
The company engaging with digital marketing
·
High technology being used to modify the
product to improve effectiveness.
·
Technologically driven testing being used to
give customers the pros and cons of using the product.
|
High
High
High
High
High
High
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Ecological
Environment
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·
Sudden Floods, landslides and bad climate
caused by heavy rains will adversely impact manufacturing and distribution
network.
·
Use of natural eco-friendly raw materials that
will not harm the environment while being used and when being disposed.
·
Adoption of Green Marketing.
·
Cultivating the Raw materials in-house to
reduce cutting down of trees and minimize carbon foot print.
|
High
High
Medium
High
|
Competitor Analysis
This industry is identified as a highly
competitive industry where very few numbers of players compete with each other
to expand their market share using innovative thinking. The main competitor in
this niche market is Yinzhou Abili Plastic
Industrial & Trade Co (Ltd). There are other major foreign competitors who manufacture and market
similar massaging equipment.
Mentioning about local competitors is
indispensable when it comes to competitor analysis. Local equipment and
ornament sellers in Pettah sell cheap foreign made (mainly Chinese) wood
massagers for customer at different prices. Those small vendors sell Yinzhou
Abili’s and other competitors’ wood massagers and foreign competitors also sell
their products through the Sri Lankan cosmetics and equipment sales agents.
The Following “Competitors’ likely response
model” is developed to predict the future moves of the main international
Competitor Yinzhou Abili Plastic Industrial & Trade Co (Ltd).
Competitors’ likely response model
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Major Competitors
Better Craft Co (Ltd), Cixi Lefan Commodity Co
(Ltd), Ningbo JMC Manufacture Co (Ltd) are some of the other major
international competitors of Ayura Pvt (Ltd) who are in the same
industry offering their services to the same selected segment. Yinzhou Abili is
the global market leader having 40% market share. It is situated in “Star
position” in BCG matrix. (1st Quadrant)
Competitors’ Positions
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|
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Auyra
vs. competitors
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Marketing
capabilities
|
Geographic
coverage
|
Extend of diversity
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Level of innovation
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Auyra
Pvt (Ltd)
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1
|
2
|
3
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4
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5
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1
|
2
|
3
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4
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5
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1
|
2
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3
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4
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5
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1
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2
|
3
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4
|
5
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|
Yinzhou Abili Industrial & Trade Co., Ltd.
|
1
|
2
|
3
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4
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5
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1
|
2
|
3
|
4
|
5
|
1
|
2
|
3
|
4
|
5
|
1
|
2
|
3
|
4
|
5
|
|
Better Craft Co., Ltd
|
1
|
2
|
3
|
4
|
5
|
1
|
2
|
3
|
4
|
5
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1
|
2
|
3
|
4
|
5
|
1
|
2
|
3
|
4
|
5
|
|
Cixi Lefan Commodity Co., Ltd
|
1
|
2
|
3
|
4
|
5
|
1
|
2
|
3
|
4
|
5
|
1
|
2
|
3
|
4
|
5
|
1
|
2
|
3
|
4
|
5
|
|
Ningbo JMC Manufacture Co., Ltd
|
1
|
2
|
3
|
4
|
5
|
1
|
2
|
3
|
4
|
5
|
1
|
2
|
3
|
4
|
5
|
1
|
2
|
3
|
4
|
5
|
(Rating: 1- Low 5-
High)
According
to above table Ayura Pvt (Ltd) can use geographic coverage and level of
innovation as its core advantages. It helps Ayura Pvt (Ltd) to present a unique
product proposition over competitors. Ayura will leverage on this strength to
create a competitive advantage against the competitors. Ayura Pvt (Ltd) does
not possess vast marketing capabilities and Auyra is low in diversification
which needs to be addresses in the near future. These can be identified as
internal weaknesses which need to be converted into strengths.
Competitors’ quality of the service,
pricing, distribution and promotion
Competitors’
quality of the service, pricing, distribution and promotion may have an
influence on Ayura’s marketing activities. Above mentioned competitors
marketing mix is as following:
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Competitors
|
Quality of the service
|
Pricing
|
Distribution
|
Promotion
|
Process
|
Physical Evidence
|
People
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Yinzhou
Abili Industrial & Trade Co. Ltd.
|
High Quality of
the product
|
Psychological
pricing strategy
|
Island wide,
South Asia China
Thailand,
Singapore
|
Online promotion
Advertising
Sales promotion
|
Online ordering system
Customer care
|
Reputed high
class client base (Hotels, Spas, air lines)
 |
Skill full work
force, High hospitality, Unique uniforms.
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Better
Craft Co. Ltd
|
High Quality of
the product
|
Value pricing
strategy
|
Island wide,
China, South Asia
|
Online promotion
Events
|
Online ordering system
Customer care
|
 Reputed High class clients (Air
Lines) |
Skill full work
force
|
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Cixi
Lefan Commodity Co. Ltd
|
High Quality of
the product
|
Target Return
pricing strategy
|
Island wide,
South Asia, China
Thailand,
Singapore
|
Online promotion
Advertising
|
Online ordering system
Customer feedback
system
|
 High class clients (Hotels) |
Skill full work
force, High hospitality, Unique uniforms.
|
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Ningbo
JMC Manufacture Co. Ltd
|
High Quality of
the product
|
Psychological
pricing strategy
|
sland wide,
South Asia,
China,
Thailand,
Singapore
|
Online promotion
|
Online ordering system
|
Reputed High
class clients (Air Lines)
|
Skill full work
force
|
Porter’s
five forces analysis
Michael Porter's famous
Five Forces of Competitive Positioning model provides a simple perspective for
assessing and analyzing the competitive strength and position of Ayura Pvt
(Ltd).
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Industry
rivalry
The existing rivalry in
Sri Lanka for this industry is not a high as many established international
players have not yet penetrated to the Sri Lankan market successfully. But
there are small individual players who sell the cheap Chinese versions in the
Pettah market. These vendors are well known by customers therefore Ayura needs
to fight with these small sellers. International players will also eventually
try to strengthen their relationships with these small local sellers therefore
Ayura needs to keep an eye on the competitor moves.
As this industry as a
whole has not yet reached maturity the existing rivalry is not so intense, but
rivalry can be increased as there is more room for product differentiation.
Also this industry does
not have high exit barriers such as high disposal costs, and if a firm incurs
losses they can easily exit which will also have a favourable impact on
rivalry.
Threat of substitutes
In Porter's model, substitute products refer to products in other
industries. Threat of substitutes is high for Ayura Pvt (Ltd) as producing
similar goods and services that are close substitutes such as massaging centres
which practice ancient massaging treatments, Massaging chairs, or pain killers
for muscle pains, are high in Sri Lanka.
Supplier bargaining
power
A wood massager manufacturing industry requires raw materials, labor,
components, and other supplies. This requirement leads to buyer-supplier
relationships between the industry and the firms that provide the raw materials
used to create products. Suppliers, if powerful, can exert an influence on the
producing industry, such as selling raw materials at a high price to capture
some of the industry's profits. Auyra’s bargaining power is low as it is a new
company in the industry and also because the parent company (Maxhold) does not
have any agreements with wood suppliers as currently they do not produce a
product made out of wood. Therefore they need to start new relationships with
suppliers who will have a higher bargaining power.
The suppliers bargaining power will increase further as a result
of high switching cost Ayura has to incur if they decide to find a new supplier
in a short period of time and also because the component supplied by the wood
supplier is a significant component in production the supplier bargaining power
will be quite high.
If the supplier finds our product attractive, they will have the
capability to practice forward integration which will be a threat for Ayura in
future.
Customer bargaining
power
The power of buyers is the impact that customers have on the
manufacturer’s products. Here, customer bargaining power is low because buyers
are fragmented (many, different) - no buyer has any particular influence on the
product or price.
But we need to build a solid, loyal customer base as the customers
have no switching costs they can be easily attracted to competitor’s products.
Threat of new entrants
Long run profitability and market share will be damaged if
significant entry occurs. Ayura’s threat of new entrants is high as four
potential competitive firms wish to enter the market for massage equipment in
Sri Lanka.
But then they will have to adhere to local regulations which can
be long legal procedures and Ayura being a local manufacturer has an advantage
over the foreign competitors.
If Ayura
manufactures in huge quantities to get economies of scale, then the cost can be
reduced which can actually be a barrier for potential entrants.
Market Analysis
Under the Market
Analysis Ayura Pvt (Ltd) mainly considers about the market size, major market
segments, Future market developments in terms of trends, customer preferences, attitudes and
buyer behavior, needs and wants, decision making units and their disposable
income.
Major market
segments
Kotler, P (2009 p96) defines
segmentation in the following manner: -
Segmentation
is the process of breaking down the mass market in meaningful buyer groups
based on selected attributes.
Segmentation for Ayura Pvt (Ltd) is
carried out based on the following variables.
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Variable
|
Sub variables
|
Analysis
|
|
Demographic
|
Age
|
From infant to
matured adult
|
|
Gender
|
Male , Female
|
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Occupation
|
Professionals
and working class, Non-working
|
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Monthly income
|
From Rs.15,000
to Rs.200,000 (family income Rs.60000 upwards)
|
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Nationality
|
Sri Lankan,
Foreign
|
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Life styles
|
Customer in busy
life style
Housewives
|
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Behavioral
|
Brand loyalty
|
Customers who
are conscious about the branded products.
|
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Cost
consciousness
|
Customers who
are more conserved about the price
|
|
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Geographic
|
Climates and region
or province
|
Customers who
consider about climatic conditions (hill country, down south, Colombo and
suburb).
|
|
Socio Economic
|
Social class
|
Lower class,
Lower middle class, Middle class, upper middle class, Upper class
|
Ayura mainly expects to
target the customers of upper and middle classes according to the socio
economic classification and also males and females above 20, under demographic
segmentation.
Another segmentation
criterion will be urban and sub urban customers under geographic segmentation
as our foremost segment to be catered would be the people in the urban and
suburb areas. We will be distributing “Relief+”
island wide even to the rural customers, but we expect that most of our sales
will come through customers from urban and suburban areas.
Market
size
There are more than 20
million people/ customers in Sri Lanka. From that Maxhold has been serving more
than 1000000 customers in different diversified markets. From the existing
customer base of Maxhold, we expect the market for the wooden massager would
approximately be around 40%.
(Market size is based on the existing customer base of Maxhold)
Ayura expects to
capture more of the potential customers who are not already a part of Maxhold
Pvt (Ltd) in later stages in the Product Life cycle, but initially it is more
feasible to reach the customers who are already in Maxhold’s customer base.
Future
Market Developments
1. Growth
Demand for massaging
equipment has been increasing throughout the last decade or so as the
lifestyles of the customers have become very busy and them not having enough
time to go to a spa for a massage. As you all can see, the business of the
customer does not show any indications of reducing. Therefore, we can forecast
that the demand for our massage tool will keep increasing along with our market
share.
2. Trends
·
Going to a spa is being identified as a
waste of time.
·
The mentality of customers about spas is
not very favourable. Therefore they hesitate to go to a spa.
·
Everything has become instant. People
won’t go for time consuming methods and these wooden massagers obviously save
time.
·
People are becoming lazy and not very
healthy which leads to an increase in demand for health products.
·
Many people are starting to prefer
ayurvedic products and value such eastern practices. This trend is happening
worldwide.
3. Future market and demands
People with diseases
such as arthritis are considerably increasing. This will be a good solution for
them. As this helps the customer to get a good massage without going to a
special location, there will be a very good demand for the wooden massager in
the future.
By considering the
future developments, we can think of new developments for the product and address
these issues as and when they arrive.
4. Customer preferences
When doing the market
analysis we have identified the following requirements which have been proposed
by the customer.
Customers prefers to
buy products,
·
Which are low in price
·
Which are readily available for them to
purchase
·
Which has a quality finishing etc
·
Which gives them a clear benefit for the
price they pay
5. Attitudes and buyer behaviour
As this is a moderately
new product into the Sri Lankan market, customers will not embrace it right
away. But we have a main advantage, which is the Parent Company. We have a very
loyal customer base for Maxhold who has a very good attitude towards the
company and products. Therefore when marketing our wooden massager, we must pay
great attention on those customers and should always inform them that Ayura is
a subsidiary of Maxhold Pvt (Ltd) in all our promotions. Also we have to create
a considerable set of early adopters and an early majority of customers if we
want to make our product successful in the market.
6. Needs and wants
There are numerous
newly emerging needs and wants of customers. Earlier they did exercises or
asked someone to massage them when they wanted to feel a relief or get some
relaxation. And some do not want to go to a spa to get this relaxation as their
attitude towards massaging centres is not so positive. The modern customer most
of the time does not have time to travel and get things done. The customer is
exposed to different types of information Media. Their needs and wants are also
changing rapidly in this dynamic market environment. We have to be aware of
those changing needs and wants and take all the necessary actions to address
these and survive in the market.
7. Decision making units and process
As we are in the B2B
and B2C market we have to pay attention to both B2B decision making process as
well as B2C decision making process. We have to give equal importance to the
phase, creating awareness as well as post buyer behaviour and make decisions
based on them to provide a better product to the customer.
8. Disposable income
According to the
Central Bank Report, the disposable income of the people is increasing in the
foreseeable future but we cannot rely on this prediction with certainty as the
economy is highly volatile. But it is expected that disposable income will
increase even by a small percentage. Therefore along with the disposable
income, the purchasing power which will also increase our sales.
Strengths,
Weaknesses, Opportunities and Threats Analysis
The internal and external audit
allows us to produce a systematic SWOT analysis. Widely known and used in
marketing planning, these initial letters stand for strengths, weaknesses,
opportunities and threats. The strengths and weaknesses analysis come from the
internal half of the marketing audit of Ayura Pvt (Ltd) and the opportunities
and threats come from the external half of the marketing audit of the company.
SWOT Analysis
|
Strengths
Located in
the heart of the commercial city of Colombo.
Parent
company is a public quoted company.
Parent
company is reputed for providing high quality products.
Using high
technology.
The company
is financially strong.
The company
is optimistic regarding future opportunities in the industry.
It is easy to
execute marketing activities as the expertise needed is already available
in-house.
Highly
innovative ideas. |
Weaknesses
Being a new
company to the industry.
Low level of
experience and knowledge on the industry as a massaging equipment manufacturer.
Going under a
separate business unit names as Ayura Pvt (Ltd) may not get the same response
from customers as for Maxhold Pvt (Ltd).
Limitations
in setting goals for the future. (they may not be in line with SMART)
Lack of raw
materials as it used 100% natural raw materials. |
|
Opportunities
Economic
upturn in the country – 8% growth expected in 2012. (Source: Central Bank of Sri Lanka) and is expected
to improve in the near future.
Increasing
trend of preference for ayurvedic herbal remedies.
Expected
growth potential in the industry.
Changing Life
patterns of the middle class families which affects positively to the
industry.
Post war conditions in the country increases
tourist attraction which can be potential customers.
2012
Government budget proposals plan to encourage the industry of health and physical sector
Ability to
take the advantage of new product promotions and trends set by the large
players already established in the industry.
The absence
of a market leader in this niche market.
Increased
awareness about healthy products among people. |
Threats
Unavailability of skilled & trained labor.
High labor turnover rate in the industry.
Very high competition prevailing in the
industry as small players offer cheap massaging equipment with similar
features.
Adverse economic conditions in other countries
can affect the choices of tourists.
Attitudes of the Sri Lankans towards massaging
products.
Customers in the local market not willing to
spend a lot of money on ayurvedic products, especially for massage.
The customers might not be able to
differentiate between “Relief+”
and other cheap massaging equipment of similar nature.
The competitors will try to copy the product. |
Objectives and
issues of Ayura Pvt (Ltd)
Marketing
Objectives
Sales/Target market objectives
1.
Achieve a market share of 15% by the end of
2020.
2.
Increase the revenue of massaging equipment
range of Ayura Pvt (Ltd), up to 3% total revenue by the end of 2015.
Promotional objectives
3.
Initiate an advertising campaign by the end of
July 2013 through printed and electronic media.
4.
Develop and establish the brand “Relief+”
5.
Develop the website in year 2013 which includes
an online ordering and payment system.
Product development objective
6.
Introducing innovation into the ayurvedic
industry in year 2015 with the motive of promoting and stimulating the local
ayurvedic industry.
Customer objectives
7.
Increase the customer satisfaction to 95% in
year 2014.
8.
Introduce the customer feedback system at the
end of this year.
9.
Getting in to favorable agreements with the
spas, leading outlets, medical institution and hotels to expand our services.
10.
Establishing advantageous contracts with banks
and insurance companies.
11.
Modifying the product through continuous product
development to keep the customer delighted.
Issues that will affect their
attainment
1.
The advertising campaign and feedback system is
highly dependent on the financial resources.
2.
When we increase the satisfaction level of customers,
we have to hire highly skilled workforce which will be difficult to find in
this specific industry.
3.
Our market share being highly depended on world
economic conditions.
4.
Sales and Profit goals will vary due to changes
in Macroeconomic indicators in Sri Lanka which happen due to economic
instability.
5.
Cultural issues and attitudes of Sri Lankans may
affect the company’s operations. Mainly the revenue from local customers.
6.
There will be severe competition and pressure to
our operations from competitors (Pettah vendors and International players).
Marketing Strategy
The Marketing strategy
can be identified using the Ansoff’s Matrix.
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Market penetration
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·
Building
awareness among the existing customers and the new customers.
·
Sponsoring
events & parties.
·
Advertising and
promotion.
·
Sponsoring
Lifestyle Magazines and Ayurvedic institutions
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Market development
|
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Product development
|
|
·
Get the
expertise knowledge on auyrvedic therapy and latest trends.
·
Uplift the
facilities and the physical atmosphere of the premises.
·
Ensure the
quality of the new product.
·
Get the
customer opinion on introducing new products on its features and benefits.
|
|
Diversification
|
Market penetration
Ayura Pvt (Ltd) can
acknowledge the existing potential customers about the new brand’s uniqueness
and benefits as a way of penetrating. Ayura Pvt (Ltd) can attempt to increase
awareness by introducing the new body massage product with a bundle of oils at
a special discount rate on Sri Lankan premier online discount store “Anything.lk”
which is another worthy opportunity.
Product
Development
Ayura
Pvt (Ltd) should
acquire massaging and therapy expert’s knowledge regarding the latest trends in
the market in general and add new features to the product continuously in order
to maintain the company’s competitive position and to always be ahead of
competitors.
Customer value
Kotler, P (2009 p96) defines
customer value in the following manner: -
“Customer
perceived value is different between customer cost and customer benefits”
Our company always
tries to delight our customers by offering a quality product beyond their
expectations. This includes providing them with more benefits (both physical
and mental) for the price they pay.
Perceptual Map will be as
follows;
High
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Low High
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Competitive advantages
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Based on the Porters‟
Generic Strategy” Ayura’s strategy is identified as “Differentiation” Strategy to
extend the market using the differentiated oil wood massager. As in general the
number of occasions, situations have increased with the promotion to both urban
and rural population the demand for unique comfortable items has increased
island wide.
Target Market
Kotler, P (2009 p96) defines target
market in the following manner: -
“A
set of buyers sharing similar or common needs and wants that the company
decides to serve”
According to the
Marketing Audit a Differentiated Targeting Strategy has been adopted by Ayura
Pvt (Ltd) to identify the different needs of specific segments. Therefore Ayura
Pvt (Ltd) will target above categorized segments which would increase their
revenue. In general Ayura Pvt (Ltd) will be using mass marketing but marketing
activities will be targeting the below groups mainly. Also the company targets
mainly both B2B (Business to Business) and B2C (Business to Customer) segments.
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Product
|
B2C
|
B2B
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Age
|
Social
class
|
Hotels
and pubs
|
Spas
|
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Target markets
|
From young to matured adults (Age
30 years and above)
(local & foreign)
|
Middle class
and Upper class
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Positioning
Kotler, P (2009 p96) defines target
market in the following manner: -
“Positioning
is designing the company’s offering and image to occupy a distinctive place in
the mind of the target customer.”
Ayura Pvt (Ltd) should
continue to focus on positioning itself as a provider of unique, convenient and
affordable massaging equipment which gives instant relaxation or relief through
an ayurvedic remedy. Through this the consumers should be able to differentiate
between “Relief+” and other widely
available massaging equipment with similar features. The differentiation which
we try to give to the customer through proper positioning is that this product
comprises of natural herbal ingredients which has a medicinal value. As “Relief+” is made out of Khomba wood
this is a 100% ayurvedic product and also as we plan to introduce a herbal oil
as a complementary product this can add value when it comes to positioning “Relief+” as a 100% herbal ayurvedic
product. Under positioning it is always understood that correct positioning of
the company will leave it at the top of the customers mind as a brand with a
unique value offering.
The Massage
equipment should be positioned in the target audience well. The prices could be
relatively high or can be in line with the other brands introduced for such
occasions by competitors, but if the company wishes to go with a high price,
this should be justified through the uniqueness and high quality of the
product. The brand “Relief+” should
be positioned in an attractive manner where the value that is being offered
through this statement is clearly visible to customers and organizations. This would
definitely add some attractiveness to the person who ultimately consumes the perceived
value and features.
Positioning slogan
Positioning slogan
should be differentiated from competitors’ slogans and this should give an idea
of what the product offers. It should not be too descriptive and long but a
brief, simple and an easy to understand statement.
Ayura Pvt (Ltd)’s positioning slogan is,
“Gives relief to life”
This slogan gives a
basic idea of what this product provides in simple English. At a glance it
gives the benefit that is sought through the use of a massaging equipment which
is relief. This slogan is also easy to remember and it relates with the brand
name which can be used as a complement. This will be highly beneficial when
initiating promotional activities to market the product.
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