Introduction
The work of marketing manager is one of most important in the company as particularly marketing management is concerned with shaping marketing mix of each of the products on offer, implementing both management and marketing strategies of the company. For the purposes of the following assignment we would like to discuss min-Dutch ovens, being produced by Paderno. Paderno was founded in 1925 and initially specialized on manufacturing and distributing aluminum pans and pots for households. According to the information, provided by the official website of Paderno in the USA (2013), nowadays Paderno is perceived as a leading international brand, selling items for household, as well as restaurant and hospitality industry. Paderno has extremely broad product range, and distributes its products almost all over the world with the help of great variety of placing strategies, including on-line sales, distribution via network stores, establishing Paderno stores etc.
For the purposes of the following assignment we will research into the product under study in terms of four basic utilities, identify the target at home and at foreign market, use targeting, segmentation and positioning approaches, along with elaborating on marketing mix of the product with regard to the environmental peculiarities of the foreign market and, finally, discuss ethics-related considerations, stemming from introducing the product to the foreign market.
The product: four utilities of customer’s value
According to Chelst and Canbolat (2011), the four utilities of customers’ values are functionality, time, place and easiness of possession (p.117). Dutch ovens are used to slowly braise or simmer products. In terms of functionality as a key utility of consumer value, it is necessary to mention that mini Dutch ovens are most often used to prepare side dishes and ensure individual servings of stewed meat and au gratin potatoes (Paderno official website, 2013). The important advantage of the mini Dutch ovens lies in the fact that they are easily cleaned. Matching lid allows to keep the mini Dutch oven both in heat and moisture. Currently Paderno offers 12 mini Dutch ovens, which vary in dependence of size, colour, form and price. The product can be used both by individual (private) and corporate clients. Caring about time and value utilities to make products accessible by customers when and where they want, Paderno has developed a wide range of distribution channels, so that effective placing ensures timely accessibility by customers from all over the world. Last, but not least utility of consumer value to be mentioned is ease of possession. The comfort of customers with regard to this utility is ensured with the help of introducing different opportunities for payments (e.g., paying via the Internet, different-term loans). Furthermore, as Paderno is convinced of its product’s extremely high quality, long-term warranties are available both for the product and for the lid, accompanying it.
Analysis of the product under study in terms of four utilities of customer values shows that it can be considered functional, easy in possession and offered with regard to timing and place, so that needs of both private and corporate clients can be effectively met.
Target market at home and at foreign market (Saudi Arabia)
Consumer analysis is a critical part of marketers’ work as results, obtained during this analysis, serve as basis for targeting and market segmentation, which, by-turn, allow shaping marketing mix, aiming at either just meeting or even exceeding expectations of customers. Considering the demographics of the target we can state that it is most likely to be used by women at the age from 18 to 80, both married (or being involved into stable relationships) and single, and single men of the same age scale.
We came to such a conclusion, assuming that in majority of households women are busy with cooking, while mean usually have different household-related duties. To our mind, vast majority of these people have stable income and can be considered to belong to middle class. Consumers tend to value high quality of products, offered by Paderno and are concerned about preserving their health, so, it is important for them to use environment-friendly products, made of organic materials with the help of secure technologies. As we have already mentioned above, the product is also likely to be used by corporate clients, operating within restaurant and hospitality industry. Corporate clients tend to value the same features of the product, as the private ones, as well as putting extra value on special offers and the opportunity to build long-term contractual relationships with Paderno corporation, serving mutual benefits.
The target in Saudi Arabia does not seem to be different from the one in North America. Here particular differences can be associated with consumer decision-making process as the decision to buy an item is most likely to be made not by the person, who is going to factually use it (a woman), but by the man. Such a difference is called for by the gap regarding gender roles in Muslim society, and should be taken into account. It is worth remembering that buying decision, made by male, is most likely to be based on the assessment of the interrelation between functionality of the product (utility) and the price, rather than design features, which can determine the purchasing decision, made by female.
Another thing to be researched into is the development of restaurant and hospitality industry in Saudi Arabia. Despite the fact that relevant market there is currently characterized by significant developments, it is worth remembering that there are still a significantly smaller number of corporate clients by comparison with the North American markets.
Competition
The level of competition at the USA market can be estimated as very high, partially due to the fact that the product under study (mini Dutch oven) can be substituted with variety of other cookware, appropriate for stewing or braising. Furthermore, consumers tend not to distinguish between different pans and, therefore, can easily mix products. Extra tension, typical both for the U.S. and Saudi Arabian market is associated with the fact that consumers are now able to order goods, produced by different manufacturers from all over the world, via the Internet, so all the enterprises, which use e-distribution channels, can be perceived as competitors. Among most important competitors at the U.S. cookware market it is worth mentioning such U.S.-based enterprises as Regal Ware Worldwide, Le Creuset, AMC in the USA etc. All above-mentioned enterprises distribute their products both via the Internet and through network stores or their own stores.
As for Saudi Arabian market, it is necessary to mention that the vast majority of cookware, which is being sold in Saudi Arabia, is being imported there, merely from China. These cookwares are mostly oriented to the needs and wants of average consumers, therefore, it is worth considering the ways to apply segmentation, positioning and differentiation methods to get the product promoted at Saudi Arabian market.
Segmentation, positioning and differentiation
According to Dibb&Simkin (1996), the segmentation approach is based on the principle, which says that creating successful marketing strategy requires three basic elements (steps),ywhich are analysis, strategy and implementation programme (12). Entering new market always requires careful segmentation, so that we can clearly know whom we are appealing to, when introducing the product. Segmentation presents the basics for creating the marketing mix, product’s positioning and differentiating strategies. As we have already mentioned in the subsection, dedicated to competition, cookware in Saudi Arabia is to great extent represented by items, imported from China and sold at average prices. Taking into account high quality of Paderno products (with regard to necessary input costs) and costs, associated with the need to get items transported from the USA to Saudi Arabia, it is evident that Paderno will not be able to address price-related needs, wants and expectations of those with average income as its products (namely, mini Dutch oven) is likely to be more expensive than the ones of lower quality, imported from China.
Taking into account this consideration and the fact that small number of enterprises, which produce cookware tend to be oriented to offering luxury items, we would like to suggest considering needs and wants of clients, who value not only high quality and environment-friendliness of the products they buy, but their prestige and the opportunity to associate them with particular kind of lifestyle, so that Paderno mini Dutch ovens can be considered luxury products. Therefore, it is worth basing positioning strategies on the assumptions that Paderno imports most quality products, which meet high U.S. standards, stemming from environment, health safety and associated legislation and allows to cook dishes, which can be only cooked in the U.S. top restaurants, at home.
There are different strategies of products’ differentiation. The one, which can be currently considered potentially successful for Paderno activities, should lie in emphasizing the needs of narrow target and, therefore, constituting the strategy, based on underlining uniqueness of the product, determined by its U.S. origin and meeting high quality and safety standards. Furthermore, after having studied potential target’s attitude to the Western lifestyle, if it is proved that this attitude is a positive one, an attempt to differentiate the product with the help of associating it with Western lifestyle can be made.
Major environmental factors, which can affect sales
The analysis of external environmental factors, which are likely to exert the influence on business performance is usually conducted with the help of PESTEL tool. PESTEL analysis focuses on political, economic, legal, environmental and social factors at the market. In case of Saudi Arabia it is worth mentioning that the politics takes place in the context of absolute monarchy, founded upon the rules of Islam. Despite apparent stability of the monarchy, it is worth taking into account the events of Arab Spring, and consider possibilities, connected with economic destabilization. Economy of Saudi Arabia is an oil=based one, characterized by extremely strong governmental control over it. Nevertheless, compliance with no unusual regulations is going to be required due to the fact that the country belongs to the WTO, and import-export and related activities in Saudi Arabia have been harmonized with WTO law. Legal environment in Saudi Arabia is stable. Due to the fact that the country is world’s largest exporter of oil and simultaneously tends to get variety of other goods imported from abroad, its legislation is supportive in relation to export and import. Environmental factors are not viewed as influential ones with respect to the activities, which Paderno plans to conduct in Saudi Arabia.
As for industry environment we cannot help mentioning high bargaining power of buyers (caused by the fact that lots of competitors operate within the market), high risk of new entries (due to governmental support of import) and significant level of competition at the market.
Campaign for the product: 4ps dimensionEntering new market is always accompanied by introducing the product to new target with the help of marketing tools. The way marketing managers frame the product in terms of such a campaign is extremely important for future sales. When entering the market of Saudi Arabia, we will emphasize product aspect of marketing mix. As we are oriented to introduce the product as the luxury one, we will pay extra attention to quality dimension and healthiness of the product. Product differentiation is based on product dimension; therefore, it is not worth considering pricing a key element to be focused on.
Prices can be higher than the ones for similar products, testifying to high quality of products. The next component of the marketing mix we would like to briefly refer to is promotion. Promotion is necessary to make potential and existing consumers aware about the product, pricing and places, where the product can be purchased. There are five basic types of promotion, which include advertising, PR, personal selling, direct marketing and salespromotion (Belohlavek, 2008, 43). To my mind, Paderno can make use of different types of promotion. Sales promotion can be viewed as most reliable and effective tool to introduce the product to the new market. Furthermore, as we have claimed below, it is worth basing promotion on associating the brand with Western lifestyle. Placing strategy is very important for the product, which has been for the first time introduced to the new market, as it is important to reach the customers. As opening Paderno stores in Saudi Arabia can be connected with considerable difficulties with regard to governmental protection. I t is worth considering the opportunity to distribute the product in large retail stores. Another way to be employed is emphasizing e-sales and promoting Paderno website in terms of Saudi Arabian Internet space.
Summing up, we can state that marketing mix of the product will be elaborated on with the orientation to high-income clients, who value quality and healthiness of products they buy. The campaign will be measured with the help of sales measurement and consumers brief surveys.
Ethical marketing considerations
Marketing ethics is the area of applied ethics. Important areas of marketing ethics (advertising and promotion) overlap with media ethics. Promotion is often associated with using different images and slogans. It is quite important for marketing managers to take into consideration the need to ensure neutrality of images and slogans, so that they are not abusive for the representatives of any culture, any nation or another minority group. In case of expansion to new markets it is necessary to elaborate on new promotion strategies, which will be suitable for the representatives of Saudi Arabian society. Lifestyle branding should be also used with considerations, regarding the attitudes towards Western culture in the East. There is no significant difference between international and the U.S. ethical marketing considerations due to the fact that all marketing considerations under study are related to cross-cultural perspectives of management and marketing, so they orient at differences, which must be considered both at the international and national level.
Conclusion
The assignment below was aimed at researching into the ways Paderno USA can expand to the U.S. market, introducing mini- Dutch ovens. For the purposes of assignment we conduct analysis of the target in home country and Saudi Arabia, identified the ways, which can be employed with the help of segmentation, positioning and differentiation approaches to attract customers at the new market, analyzed competition and presented the reframed marketing mix, based on previously considered segmentation, positioning and differentiation approaches. We also dedicated significant attention to analyzing external environmental factors, which are likely to exert influence on business operation in Saudi Arabia and relevant internal environment considerations. Complex analyses helped us find out that entrance to the market is possible with some considerations.
References
Belohlavek, P.(2008). Unicist marketing mix. Houston: Blue Eagle Group
Chelst, K., Canbolat, Y.B. (2011). Value added decision-making for managers. Boca Ration: CRC Press
Dibb, S., Symkin, L. (1996). The Market Segmentation Workbook: Target Marketing for Marketing Managers. London: Thomson Learning
Paderno USA (2013). Official website. Retrieved 26 October 2013 from http://world-cuisine.com/about_us/
