BBQ Fun Market Segments And Positioning Strategies

Assessment Task 1

1. The three target markets for BBQ Fun include the new build home owners, the renovations home owners and the replacements home owners

This market consists of people that are very proud of the laid back lifestyle of Brisbane, their education levels is moderate to highly educated and are a mixture of professionals and trades people. They have aspirations of living in richer suburbs and are also health conscious. They love to buy Australian made goods and are loyal to the Brizzy print and online magazines. To this segment, quality and service are as important as the price of the BBQ products

This market segment has many other homes in various parts of the country,   are moderately to highly educated, and see themselves as being cosmopolitan. This target market segment are health conscious and are mainly professionals that want see more exotic and fine cuisine that is associated with the humble BBQ (barbeque). This market segment remains loyal to the online and print version of the Outdoor Aspire magazine and to them quality and service is much more important than price.

This market segment are characterized by their love for, and pride in the laid back lifestyle of Brisbane, they love supporting Australian jobs and are becoming more health conscious.  They dislike Melbourne and Sydney images; they do not like ‘snooty’ urban courtyard gardens; instead, they prefer a Balinese like warm look to the minimalist Japanese style. This segment also looks to make a saving on each dollar they spend while also aspiring to more expensive and glamorous equipment if the price is right. They aspire to live in suburbs considered richer and are loyal to the print version of the Brizzy magazine. To them, quality has as much importance as price and good service is also a nice thing for them; however, price remains more important.

BBQ Fun will use a marketing mix comprising pricing, distribution, customer service, and advertising and promotion. The market positioning is on service and product as summarized in the table below

1. Previous marketing activities undertaken by BBQ Fun have included radio advertisements, and they used social media give its wide reach and cost effectiveness. However, these did not succeed; the firms’ target market is not people that use social media regularly, or even listen to the radio. Instead, they are people that remain loyal to the print (and in some instances), the online version of the Brizzy magazine. So the marketing strategy used has not been effective in reaching the target audience. Further, their previous strategy was general, rather than targeted to specific target market segments based on their unique characteristics and needs, as well as their lifestyles and outlook on life. This generalized, rather than tailor made marketing strategy is what is responsible for the marginal success
2. The required marketing activities should start with the selection of products; because the target markets have different preferences for products, BBQ Fun should select products that are mainly made in Australia for the New Builds and the Replacements; the Renovations target market segment will prefer or require exotic goods (imported) to suit their tastes. The next activity is pricing; the prices for the different product segments should be commensurate with the quality and / or service provided by the company as service and quality has an overall high appeal than price alone. Placement (distribution is another required marketing activity where the retail stores will be used, which there should also be an equally high use of online sales and internet sales because the survey shows it has 100% support and the clients would pay for the delivery and logistics charges for the products. Promotional activities also form part of the marketing activities; the company will undertake in store promotion activities where there will be raffles and competitions to win overseas trips to exotic locations. An even more effective promotional activity is the use of the Brizzy magazine using PR and paid for product reviews and product catalog inserts given that the New Builds and Replacements target markets are loyal to the print and online versions of the Brizzy magazine. The company will also need to advertise in the online Aspire magazine to target the Renovations target markets.
3. I would recommend the use of a direct sales technique where marketing and sales are done direct to the consumer. The direct to consumer (D2C) model will incorporate e-commerce sales where the target market clients visit the company website and make a direct purchase; this is plausible and highly suitable because the market survey shows a 100% support for this model, including that the clients would happily pay for the delivery charges. Having an online presence will give the company a wider (even global) reach, aside from its two physical stores. The D2C marketing activity has many benefits for BBQ Fun, including increased sales given the high affinity for consumers to visit manufacturer websites (52%) with an intention to purchase. It will give better margins; enable less dependence on retail sales or the need to set up expensive physical retail stores, improved customer loyalty and engagement, and access to clients’ in new geographies apart from Southern Queensland and Brisbane. The model would fulfill a customer need to access a store with minimal fuss or inconvenience (direct delivery to customer without the need to visit the store), and also offer flexible pricing through credit card and other platforms use (Gibson, 2016). Promotion should include drawing as much traffic to its website as possible through web based advertising using platforms such as Google and including the website (and inviting clients to visit it) in its magazine adverts and product reviews.
4. BBQ Fun will be affected by, and must adhere to the following acts;

The Privacy Act of 1988 which prohibits unauthorized use of personal information to solicit for commercial activities

The Competition and Consumer Act that prohibits attempts to restrict competition, inducing individuals to place their interests above those of BBQ Fun staff, and giving misleading or false information; a three year warranty must explicitly be three year, not a variation.

Australian e commerce best practice model and the Australian e marketing code of practice; these will be applicable because of the proposed e-marketing and e-commerce D2C model.

The New Builds

There must be adherence to the ADMA (Australia Direct Marketing Association) direct marketing code of practice where BBQ Fun can send her customers that purchase online promotional items through e-mail

BBQ Fun will also be impacted by the Spam Act 2003 when it undertakes e-mail marketing; they must adhere to this act in conducting e-mail marketing and promotion campaigns.

1. The expected outcomes from marketing activities include;

Increasing the loyal customers list to 16000 from 10000

Establishing brand recognition for their brand in South East Queensland so that out of three people, at least two recognize their brand if a random survey was undertaken, within one and a half years

Double digit growth in sales revenue in every subsequent year

Continuous growth in gross profit margins in subsequent years

Reduce per store overheads through disciplined expenses management

Action Plan for a Promotional Activity

The plan will involve undertaking the promotional activity as a project; this is to make BBQ Fun a project driven organization and will start with the formation of a project team consisting of the following with their roles;

The project oriented organization has a higher chance of success than in traditional hierarchical organizations, according to Camilleri (2016). The first step is to develop a responsive and user friendly online presence by building an e-commerce website that is integrated to its information system backbone and run as a database. This will ensure that all operations can be captured and recorded in the CRM system already in place for both physical store sales and online sales. The project manager will be a consultant to oversee the project and ensure the following deliverables and intents of the company are achieved;

• Increasing the loyal customers list to 16000 from 10000
• Establishing brand recognition for their brand in South East Queensland so that out of three people, at least two recognize their brand if a random survey was undertaken, within one and a half years
• Double digit growth in sales revenue in every subsequent year
• Continuous growth in gross profit margins in subsequent years
• Reduce per store overheads through disciplined expenses management

The website will be developed iteratively with the respective managers and users being available to comment on the usability and functionality of the system. After it’s developed, data can be migrated and the system tested to ‘go-live’. While the system is being developed, BBQ Fun should engage in promotional activities that include advertising aggressively in the Aspire and Brizz magazines, both the hard cover and the on-line versions of the magazines. Radio can be used as well as Television (electronic media). Further, the product catalog inserts should be paced in the magazines and aggressive advertising and promotion of the e-commerce website be done to sensitize users to it. That is the reason for the iterative development so that the e-commerce website can function, albeit in an isolated manner as it is built and perfected. The hype around the web e commerce site should create a huge impact, and involve even social media use where possible, but with aggressive promotion of the website. When the e-commerce prototype that can run large transactions is ready, it should be used as a promotion font where the in store promotional activities are also undertaken online, for example, with introductory offers at bargain prices and with a promotion to win an overseas trip to an exotic location. The e-commerce prototype should be able to handle online sales and metrics taken on its effectiveness, while it should also serve as a customer service point that also incorporates social media and on-line chat; a chat bot is proposed to respond intelligently even when there is no customer service agent; the aim is to offer excellent customer service on the e-commerce website.  Based on the performance of the e-commerce website, the developers can make last minute adjustments and go live. In the meantime, aggressive promotion of the e-commerce website, with offers such as limited time free deliveries be undertaken to attract customers to use the online sales portal, while inviting clients that stay nearby the store locations to visit the stores and also enjoy offers. As the system is being developed, the customer service agents and store representatives will be trained on the new system to provide the best possible customer experience. Further, the company will have to build up a significant stock of high quality locally made products, as well as import quality products targeted at the Renovations customer segment. The metrics on the effectiveness of the promotion should be measured and a dashboard created for real time monitoring; the e-commerce system will integrate into the CRM backbone and online database to enable managerial accounting and provide real time data and information for monitoring purposes. The aggressive promotion can run for six months after which, it can be toned down; the expectation is that sales revenues will increase, the company will be operationally efficient, helping reduce costs, and gross profit margins will increase, while the loyal customer numbers will increase, as will customer service and customer satisfaction. Activities are shown in Appendix I, table 1

Renovations

Risks will be identified and managed as they come as part of a risk management strategy

The survey will be undertaken using a pre-tested questionnaire that will be developed and administered randomly in the major areas of operation and to also cover other regions. The survey questionnaire will be randomly administered electronically where the questionnaire is sent to randomly chosen people from social media sites. The aim is to make it very easy and cost effective to perform the survey. The randomly selected people will be told the survey purpose and requested to participate, with the link sent through e-mail (where possible) or using social media and be given seven days to fully respond to the questionnaire.

There were challenges to the promotional campaign, especicially getting the e-commerce website ready and running in a stable way; integrating all company systems was also a challenge

The promotion was undertaken based on a market analysis survey, with targeted marketing used for the three different target market segments. It was determined that all the customer segments had a 100% likelihood to make online purchases for BBQ Fun products and were even willing to pay for the extra shipping costs. This was because all the target customer segments wanted convenience and when making their purchases. With this in mind, the company focused the campaign around  online sales by developing a new integrated e-commerce website linked to the physical stores system to draw more customer traffic to the e-commerce sales portal. The promotional activities included aggressive advertising through the Brizz and Aspire magazines which were the preferred media by the target market segments.  Advertising entailed sponsored product reviews, adverts, and flier inserts for the company’s products. Electronic media was also used, with advertising done in radio and local television channels. Further, online promotion was also done aggressively to promote the e-commerce website, in addition to the other promotional activities that gave lucrative offers for e-commerce sales and a chance to win a holiday trip to an exotic overseas location. In store promotions were also undertaken with lucrative opening deals and also the chance to win a holiday trip. A project team was set up to manage the promotion and get a website up and running; this was informed by the principle that project oriented teams have a higher chance of attaining success than traditional hierarchical organizations.

The e-commerce system was integrated with the stores CRM system to enable performance to be tracked in real time for all the company’s operations and aid in decision making. The effects of the promotion were effective, with projections showing that the goals would be achieved ( and even exceeded). A survey was undertaken to establish the impacts of the promotion exercise as well as metrics on brand recognition. This was done by the sales team where questions were developed and pretested using a multiple choice approach. This was done to increase the chances of respondents responding as they were only required to select a response. The questionnaire was administered online and results collected in real time for analysis; this was the most cost effective and convenient method to undertake the survey. Based on the survey results and metrics from the promotion campaign, the company attained significant growth in sales revenues while operating and overhead costs dropped. Further, there were a record number of customers, with the client base rising significantly, and based on projects and extrapolation; the total number of loyal customers will be 17400 in the next 18 months, exceeding the initial target. Sales revenues rose in period as did gross profits and are projected to rise by 19% and 16%, respectively. The trend is projected to be sustained.

References

Camilleri, E. (2016). Project Success: Critical Factors and Behaviours. Farnham, Taylor and Francis.

Gibson, J. (2016). Six Reasons Why Brands Should Consider Direct-to-Consumer E-Commerce -Digital Clarity Group. [online] Digitalclaritygroup.com. Available at: https://www.digitalclaritygroup.com/direct-to-consumer-e-commerce/ [Accessed 13 Dec. 2017].

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