Executive Summary
The marketing plan belongs to a firm that deals with the production of software. The firm has identified a new market niche in relation to the consumer buying process. In order to exploit this niche, the research and development department has designed new software that will produce an ‘unmet needs’ list. The accuracy of the software in predicting the future consumer product needs is high at 95% degrees of confidence. The development of the software will involve the firm’s work in project-like situations with set deadlines.
The plan identifies the various marketing aspects in relation to the new software. These aspects relate to various business environments. The market analysis considers the nature and trends of the technological environment in relation to the consumers. A SWOT analysis related to the firm is also developed. The firm has developed various competitive strategies which include cost leadership, focus, and differentiation strategies. The marketing strategies have been incorporated including the marketing mix. The financial analysis identifies the cost involved in software development. Implementation and control strategies have been formulated to ensure that the software succeeds in the market.
Project Description
In order to attain a high competitive advantage, the firm has decided to develop new software. The product development will be undertaken by the firm’s research and development department. The project involves the development of software that will aid the consumers in the identification of their future product and services needs. This is due to the fact that the software will be able to produce the ‘unmet needs’ list with a high degree of accuracy at 95%. The software will utilize consumer information such as bank and credit card data. The Research and Development department will work in teams whereby each team will have a definite role in the software development. Some of the roles that the teams will undertake include market research. Every team is expected to meet the set deadlines and specifications (Jonathan 2008).
Situation Analysis
Market Analysis
The technological environment has experienced rampant growth in the past decades. Technology has been incorporated into the retail market for instance through the use of credit cards in the buying process. This has affected the software industry increasing the size of the market which is further increased by the increased rate of globalization. The changing lifestyles amongst the consumers for instance the incorporation of online shopping increases the prospects of market growth in the software industry.
SWOT Analysis
Strengths
The firm’s strengths lie in its highly skilled employees especially in relation to research and development and a strong management team. This leads to the development of high-quality software. The research and development team enable the conduction of continuous and comprehensive research in its product innovation processes. The skills of the research and development team of the firm lead to a reduction in the barriers of entry of the firm within the technological environment enables the firm to be effective in This has resulted in increased product and store loyalty amongst the consumers. The management team is good at risk-taking especially with regard to project implementation (PEST analysis 2007).
Weakness
In the development of software, a lot of human resources are required to conduct comprehensive market research. This is deficient for the firm. The financial resources are inadequate in the firm resulting in a financial strain for the firm. This may have negative effects on the firm in its effort to develop the software. The market research conducted with regard to the consumers’ purchasing behavior does not represent the consumer entire market.
Opportunities
The political environment results in increased opportunities for the firm with regard to the business regulations that are stipulated (PEST analysis 2007). Amongst the regulations include the ease of a firm patenting its new products. This creates a barrier of entry for other firms. The firm can easily patent its software innovation for a number of years which means that the firm can protect its market. The changing trend in consumer behavior with reference to the incorporation of information technology such as the use of credit cards in their purchasing presents increased opportunities for the firm. The changing lifestyle amongst the consumers due to globalization has resulted in complexity in their decision-making process. This is an opportunity for the firm since it can continuously innovate the software to ease the decision-making process amongst the consumers.
Threats
The technological environment is characterized by increased dynamics. This poses a threat to the firm’s software product in relation to the intense competition. The competitive nature of the software industry has resulted in the emergence of conglomerates which are a threat to the smaller software firms. There is increased vulnerability in the software industry with regard to security. This is due to increased chances of data hacking if the software security installations such as the firewalls are not well configured. This would result in a reduction in the credibility of the software amongst the consumers (Goldberg 2005).
Target Audience
The management has targeted the consumers who have incorporated technology in their buying process. This has enabled their segmentation into the organization and the individual consumers. Examples of the organizational consumers identified include the learning institutions, governmental and non-governmental organizations (Market segmentation 2007).
The organizational and individual consumer’s decision-making process is usually complex and takes a lot of time. The software will increase the efficiency of the decision-making process. This increases the chances of success for the software amongst this audience. From the results of the market research, the firm identified that there is no such type of software in the market. The lack of substitute software in the market means that there are minimal chances of consumers shifting from utilizing the software (Five forces model 2009).
Competitive Advantage
The firm’s competitive advantage is enhanced by its skilled research and development team. The development of the new software will further enhance its competitive advantage. This is through the incorporation of diverse generic strategies. These include the focus, cost leadership, and differentiation strategies (Porter’s generic strategies 2004). The focus strategy has enabled the firm to concentrate on a small market segment that is related to the consumer decision making process.
The minimal cost will be involved in the process of developing the software. The low cost of software development gives the firm a cost advantage. This will be factored in the pricing strategy be by setting the price of the software lower than that of the competitors. This will result in the firm being a low-cost leader thus creating a barrier of entry to the market. Through this, the firm intends to have an increase in its market share with an approximate margin of 10% by the end of the financial year.
The unique nature of the software by producing the ‘unmet needs list’ with a 95% degree of accuracy will make the software to be differentiated from those of the competitors.
Distributional Strategy
In ensuring that the software is accessible in the entire market, the firm will incorporate various distributional strategies. In the initial stages, the firm will distribute the software directly to the consumers by establishing retail outlets in different geographical areas. The direct distribution strategy is considered effective due to the technicalities and the sensitive nature of the data that the software utilizes. This will ensure that the credibility of the software is maintained. It will also consider integrating agents whose credibility is high in the software distribution strategy. This will enable the firm to penetrate the foreign market.
Market Strategy
The mission of the product
The firm’s mission in developing the software is to ease the different consumers’ decision-making processes concerning the problem recognition phase. This is through the production of the ‘unmet needs’ list from which the consumer can base his decision with regard to the product or service needs.
Through the new software developed, the management intends to reduce the opportunity cost resulting from the delays in the consumer decision-making process. This is through the timely prediction of the product’s needs.
Market Research
In order for the research and development department to develop the software effectively, it will conduct comprehensive market research. The market research will involve various variables of the macro environment such as political, economic, social and technological factors (PEST analysis 2007). The research will also involve variables related to the consumer buying process. These include how they purchase their products, the mode of payment, the frequency with which they make their purchases, and the economic factors that affect their buying process. The research will also consider the competitors in the industry. This will aid in the identification of gaps that the firm can incorporate in its new software. This will result in an increase in the value of the software. The market research will also entail the suppliers of the raw materials required to develop the software.
Positioning of the product
The new software features have made it to be strategically positioned in relation to the competitor products. This is due to its unique characteristic of producing the ‘unmet needs’ list with a 95% degree of confidence. This increases the confidence of the consumers in using its predictions as the basis of deciding with regard to their consumption.
Market Mix Strategy
Product
The new product will result in increased value to the consumer in relation to the decision-making process. This is due to the reduction of the opportunity cost involved with respect to time. Its functionality is increased by its unique characteristic as a result of a high level of differentiation by producing the ‘unmet needs’ list.
In developing the software, the research and development department has integrated the firewall’s security features in order to improve its quality. This will ensure the maintenance of sensitive consumers’ information such as their credit card and bank card numbers.
The management intends that the high level of software differentiation in the market will result in a decline in the chances of rivalry amongst the competitor firms. The suppliers’ power in the market is minimal. This is because there are many suppliers of the raw materials which reduce their bargaining power (Five forces model 2009).
Pricing
In determining the price of the new software, the marketing department conducted market research focusing on the consumers. The results of the research showed that the consumers have a higher bargaining power (Five forces model 2009). This is due to the fact that they are price sensitive.
In order to set the price effectively, the strategy that will be incorporated include the psychological pricing strategy. This strategy will reflect the consumer price-sensitive nature. The software price will be set at a price point of $ 99 which the consumers will perceive fair. Considering that the software is in the introduction phase, the management will set a price in a way that it will be possible to recover the original cost of software development.
The price set will also reflect the value that the consumers attain from using the software in their buying decision-making process. This is due to the increased effectiveness and efficiency with which the software will produce the ‘unmet needs’ list.
Promotion
In order to create awareness with regard to the new software amongst the consumers, the firm has formulated a comprehensive promotion strategy. This is due to the fact that the new software is in its introduction phase of the product lifecycle. The intensive promotion of the product will ensure that the product is effectively launched in the market (Marketing teacher 2000). The promotion will incorporate the posting of advertisements on the radio, television, and written materials such as newspapers. The promotion strategy will also involve the firm sponsoring major sporting events where it will post adverts for its new software. In relation to creating awareness in the global market, the firm will enter into a contract with the main search engine companies such as Yahoo and Google where it will be posting the advertisements of the new software in line with predetermined schedules.
Financial Analysis
In developing the software, various expenditure items will be incurred. The firm’s management has reached a consensus to utilize the retained earnings as the source of finance for the project. The management has estimated the budget for the software development to be approximately $ 400,000. The following is the itemized expenditure items and the associated cost
Implementation and Control
In order for the idea with regard to the development of the new software to be effectively implemented, the research and development team will work in a project-like environment. The management has formulated a policy aimed at rewarding the teams that produce excellent results and meet the set deadlines in relation to their role. Before the firm undertakes the software development in large quantities, it will undertake a pilot project. The management has projected the duration of the pilot project to be three months. This duration will enable the research and development department to test the reliability of the software. The management will also be able to identify various aspects of the new software that would require modifications.
After establishing the efficiency of the software, the firm will develop the software in large volume in order to meet the market demand. Continuous market research will be conducted by the consumers. This will enable the firm to obtain market feedback effectively with regard to the new software. Market research will also help in the identification of the changes in trends with regard to consumer’s consumption patterns. This will enable the firm to continuously update its software so that it can reflect the software market demand.
Reference List
- Austin, t, 2009 “Center for business planning” marketing plan, Business resource software Incorporation.
- Goldberg, Y. 2005, Practical threat analysis for the software industry, PTA Technologies.
- Jonathan, M. 2008 “Software engineering” Software development project description.
- Marketing plan builder, 2009, Product positioning.
- Marketing teacher, 2000, The product life cycle.
- Max-pedia, 2009 Five forces model by Michael Porter.
- Minds Tool, 2004 Porters generic strategies.
- QuickMBA.com, 2007“Marketing”, Market segmentation, Centre for business and Management incorporation. Web.
- QuickMBA.com, 2007 “Strategic management.”, PEST analysis. Web.