Since it began, more than two thousand years ago, the Olympic Games have been the competition grounds for the world’s greatest athletes. From its beginning, as a competition for the citizens of ancient Greece and other surrounding countries, the Olympics have developed into a worldwide, commercially oriented event, which also bring a great benefit to the Games’ host country and provide many opportunities to nearly every walk of life. The London 2012 Olympic Games is coming. For many companies, their enterprise image is undoubtedly a best advertising in the publicity event. Rational utilization of Olympic sponsorship, grasping the opportunity to promote the enterprise image and seizing the business opportunities has a highly positive effect for their brand value and company benefit from the Olympic Games.
After 1960s in the preparation of each Olympics, nearly all the countries pay much attention to large-scale and modernization construction in stride, but less consider the influence of these construction on cities and natural environment, which has brought the host city some negative consequences, and also affected the development of the Olympic movement. From the 1980s, the International Olympic Committee (IOC) and host cities begin to pay attention to the environmental problems. “Green Olympics” is one of the three themes in 2008 Beijing Olympic Games, which means all the aspects about environment have been involved in Olympics. At the same time, the “Green Olympics” emerges a large number of business opportunities as the green product is becoming an emerging industry.
About our company:
Our D&M Company is an environment-friendly products company which was founded in 1990. We hold a brand new production concept and devote ourselves to produce a range of green products, in which green food is our main product. With the slogan ‘Quality Green Health Integrity’, our products are based on protecting the ecological environment and promoting human sustainable business. Now we have become one of the largest and most valuable food companies in China. I am making a plan for our company to grasp the opportunity in 2012 London Olympic Games to popularize our products and expand our enterprise image.
1. Propose different segmentation criteria to be used for two products you suggest to sell in two different markets.
For the different roles and sex, we have different types of products in the once–in-life-time opportunity. We have already planed to prepare some new products for athletes and tourists.
1.1 Athletes Market
There is a great deal of profit in athletes who are the main role of Olympics and they all have the desire to win. So this time, we focus on Olympic athletes and provide them exercise-nutrition food which is used for restoring their strength and promoting their performance. This food is one of our pioneer products combined with multivitamin and natural-occurring substance. Of cause, these products are some innocuous green drugs which are very safe and effective. And then, we choose some foreign teams and our own national team as our athletes market first.
1.1.1 Foreign Athletes
As a multinational company, we devote ourselves in exploring world market. We provide our products to Olympic teams from different countries. By negotiating with several Olympic teams, we have made them decide to accept our exercise-nutrition food. It is our first step toward internationalization, in which we hope our brand and products will give a good impression to the whole world. We will also offer a three-off discount for them and build up long-term business relationship with those teams.
1.1.2 China Athletes
China team is supported by our products as the appointed products. Hoping that China team will perform well and our company can promote international enterprise image, we’ve carried out a free sponsoring program for our own team. In this program, we’ll provide free VIP cards and some sporting goods for them so that they enjoy our latest technology and good service.
1.2 Tourists Market
During the Olympic Games, there will be many foreign and local tourists in the host city. They form another strong group of the Olympics and they are also our second largest customers. We choose two representative groups from tourists to sell another main product.
1.2.1 Women Market
Women always have a great purchasing power in the world. They are there not only beside the various kinds of clothes, shoes and ornaments, but also beside the skin care products and supplements. One of our main products is designed for women. We involve vegetable oil, natural factors and vitamin in this nourishing product, aiming at letting women enjoy the natural-based products to protect their skin and remain youthful. It is a combination of skin care products and nourishment which is different from other kinds of products for women with technological and natural content. We will also push a discount strategy for them to popularize our product and promote the sales.
1.2.2 Men Market
Compared with women, men pay less attention to their skin and appearance. But they also care about their body and health. Our organic food is one kind of nourishment which is rich in protein, vitamins and various polysaccharides but lower in fat. For those men who want to improve their muscles and get a good health, our product is a good choice for them. Although this is also an important market for us, we only provide some discount and souvenirs for them instead of a strong merchandising for women.
1.2.3 Children Market
Children who are a large group in food are chosen by us in Olympics. Our nourishing product is not only for women, but also is designed for children. These elaborating nourishments will be come in the style of souvenirs which is an inexpensive and attractive way. Those souvenirs are well-designed aiming that give them a good impression and interest about our products and provide a two-off discounting card. We want to expand our potential customers through children.
2. Outline the factors which influence your choice of targeting strategies
2.1 Market Factors
2.1.1 Size of the Segment
The size of the segment is relatively large. We choose the most typical groups as our first customers—athletes, children and women. Because we are not like those major international brands, we can’t expand our brand in a very short time or we don’t have enough funds to make our market fine sorted. This division is relatively practical and effective for our products and company so that we needn’t invest too much fund.
2.1.2 Segment Growth Rate
The Olympic athletes are our main target customers. This market is mature and easy to share and our strategy is also applicable for those new members. Women and children are our potential customers whom we only look forward to forming a good enterprise image and making them interested in our products and company. If these markets work well, we’ll exploit the new markets and enlarge the export.
2.2 Economic and Technological Factors
2.2.1 Barriers to Entry
Because our products are organic green, we should meet many standards and criterions to make sure they are safe and effective so that we are welcome to Olympics by the host city and IOC. But we also should pass a rigid inspection before the Olympic Games which may takes more time and money.
2.2.2 Level of Technology
Compared with other traditional goods, our products are involved in a series of high technology. We have our own raw material site and a high-tech production line. And some food expert and scientists are dedicated to the research of our products and GM food. We must ensure our products show the best enterprise image and reach our customers’ satisfaction.
2.2.3 Investment Required
We plan to take a special fund for Olympics which are more efficient and cheaper than those TV advertisements. There is nearly the best way to advertise to the whole world. In tourists market, our souvenirs and products for women cost little. It’s convenient to manufacture multitudinously and easy to be accepted by those customers. Our fund is mainly used for athletes market which we think is worth doing.
2.3 Competitive Factors
2.3.1 Competitive Intensity
Although our products are related to food, the competitive intensity is very low. As a multiplex company, our products range over every field. In food field, there are a great diversity of sports drinks, snacks and special restaurants. According to investigation, more than 100 starred hotels and 1000 restaurants are located in London.
2.3.2 Quality of Competition
In the competition of Olympic market, we should know that only the extraordinary ways and products can attract people’s eyes. In order to take market share, we keep away from those mainstream products in market strategies.
2.4 Differentiated Marketing
The company attempts to introduce several product versions, each aimed at a different market segment (for example, the manufacture of different styles of the same article of clothing).
3. Describe how your products are developed to sustain competitive advantage
3.1 New and Unique Product Adoption
Our exercise-nutrition food for athletes which is a new concept distinguished from those traditional sport drinks is niche targeting and designed only for athletes compared with those companies whose products have no pertinence.
3.2 High Technology and Difficult to Replicate
Our products are totally green and safe because of our own raw material site and the high-tech production line. Our products are tested repeatedly by our scientists and experts and pass a rigid inspection before investing. We have our own manufacture method and unique technology. So we’ll have a wider development space and a new market.
3.3 Superior to competition
In the market competition, our products reflect a theme of our era that we should pay attention to the environment and accept green products. These are not just attractive effective and popular products, but a trend for human beings. We believe that people are more willing to accept this kind of product.
The plan is set during the Olympics and has a long term effect. Before Olympics we have already cooperated with some teams and make them acknowledge our products, and also we will give them a long term discount. Our special souvenirs which are prepared for next generations care for the children’s expectations. As a new industry, we focus on the profits in the future not today.
3.5 Applicable to multiple situations
In order to make sure our products can cover a range of situations as many as possible. We put our products in and out the Olympic matches to ensure the customers can contact our products and communicate with our workers everywhere. We also adopt several ways to popularize our product.
4 Explain how prices are set to reflect your corporate objectives and market conditions
4.1 Pricing Policy
In this Olympic plan, we are required to reach a satisfying profit. Our cooperation with those foreign teams is long term relationship in which we intend to improve earnings gradually. Now we give them some discount to attract them with the fact that our sales are increasing. For women, our company has not been able to compete with those large companies in other industries which have a worldwide enterprise image and brand. So we will put a relatively low price for our products.
4.2 Price Expectation
According to evaluation, the best price for exercise-nutrition food is $20 each. The diagram shows that when we sell $20 each, we have a largest value of sales about $20000. Although this price approaches to cost price, it will achieve the satisfying sales. The price of women products is set $30 each and we mainly emphasize the brand effect and acceptance in them in order to make clear about the strategy for later. Take all factors into consideration, our price is lower relatively aiming that consumers at the lowest price, enjoy the best products.
4.3 pricing strategy
Our strategy is making sure that our products can influence on our customers. We can’t expect too much for our sales and profits in this kind of worldwide sports show. Because of the different people from different countries, we wish not for earnings, but for the impression and publicity.
4.4 Approaches to pricing
Target pricing is where an organization pitches a price which will deliver a target profit or return on investment over a period. The use of breakeven analysis is very important here. Cost plus is the simplest method of pricing in which a standard or traditional percentage is added to the cost. We use this way to price our exercise-nutrition food. We follow the traditional percentage which is 20% for each process and then adding the payment of workers. Because we have a high-tech production line, our cost is mainly combined with technical study and payment for research staffs which account for 30% of our product price. Adding some discount for customers, we gain at least half of the price which reaches $15 for each product. We have done the market research and predicted we’ll sell at least 10000 items, so we estimate that our whole profit will reach to $150000.
4.5 Competitive Advantage
Compared with other companies, we try to minimize our price and we are committed to the development of new products, continued mining, improve quality and achieve excellence. So our goal is cheap and good.
5 Illustrate how your promotional activity is integrated to achieve your aims for the target market
5.1 Direct Selling
We have a selling group which is trained professionally and strictly. They are responsible for our product promotion. In next Olympics, they seek for potential customers and show our products to athlete teams. We have made some samples and took out expert testimony, experimental data and constituent to our customers in order to let them understand our products entirely.
In the next Olympics, we have printed many propaganda documents for those tourists especially women. Our local franchised stores will send some workers who will guide those potential customers on the spot. Our products for those cooperating teams are packed with a strong symbol of our company and we also provide some free supplies for them, such as towels and supplements. We also advertise in some large door websites to improve our fame and popularize our activities. Hoping to promote the sale of products in food, we sponsor some local restaurants with our green food.
The customers can register in our website to become our members and get details about our company, products and activities. For each registered member, we will provide an electronic voucher which can offer these customers who buy our products first time a one-off discount. For those tourists, our publicities contain our samples, introduction and a three-off discounting card. We also provide some VIP cards which are long-term four-off discounting cards for our cooperating teams and suitable for everyone.
Those souvenirs for children and tourists are well-designed aiming that give them a good impression and interest about our products and also provide a two-off discounting card. We combine Olympic theme and environmental protection in our souvenirs with high-grade value of the collection. It’s very important for our future promotion.
Our D&M Company wishes to make use of this Olympic opportunity to expand our enterprise image and popularize our products to the world. We first face the athletes market for both national and foreign sport teams and tourists market for women and children. After analyzing the factors which influence our choice of targeting strategies, we decide to carry out an Olympic found used to introduce and sale our products which combine high technology and infinite wisdom. In this Olympic plan, although we should reach a satisfying profit and build our own international brand with our special products, our goal is to make our new and unique products recognized by the whole world. This is our first step and we’ll make a long-term plan later. In our price strategy, we are based on “quality first, the customer first” purpose, so we make our products cheap and good by stressing our advantages and characteristic. We use direct selling, advertisement, discount and souvenirs to reach our target. I believe our company will win a position in the world competition with the slogan ‘Quality Green Health Integrity’.
BPP Professional Education_Marketing (Mandatory Unit 1) London: BPP Professional Education