Challenges faced by Jumbo Software Limited
Jumbo software limited is a small enterprise operating in its first year. The company sells custom made software’s such as accounting, book –keeping, calendar programs and other related products to over 50 businesses in the country. Recently, the company launched an accounting software. Currently, Jumbo software’s biggest challenge pertains to how it will raise its profitability and make better use of its resources. For this reason, the company seeks to develop a sound marketing plan and strategy that would ensure a significant increase in sales of the company’s products.
Since its inception, the company has strived to evolve into a provider of high quality custom-made book-keeping and accounting software as well as other related business-to-business specialty items.
The company faces stiff competition from other software companies that offer accounting and book-keeping software. At the moment, the main competitors of Jumbo include FreshBooks, Xero, Zoho Books, Netsuite, among others. Given that Jumbo is a new startup in the market, it is difficult for it to obtain a significant market share of the intended target market since its competitors are significantly developed. However, the firm has great prospects to compete with rival firms due to the fact that its software is unique and user friendly unlike the others.
It is worth pointing out that most accounting software companies throughout the country have been forced to cut their overall marketing budgets on factors such as mass media advertising. Instead, they have shifted towards sales promotion and specialty advertising. Therefore, this trend provides a significant platform for the company to market its products through specialty advertising.
Today, most target firms for the company’s product prefer convenience and ease of use. Therefore, if the commodity is time consuming and difficult to use, consumers simply dispense it. In this regard, Jumbo software fits this consumer trend and would successfully meet the accounting and bookkeeping needs of the client firm. In addition, the shift to a paperless society makes the software more desirable to firms, thereby creating the need to automate some accounting and book keeping tasks. Indeed, these factors are highly beneficial to Jumbo Software Limited.
By focusing on commitment to service and quality, Jumbo software will be able to effectively develop and implement a niche differentiation strategy in the market. At the moment, Jumbo’s main target market consists of manufacturing companies and large corporations . Particularly, the firm’s ability to differentiate its products and customize them to fit the specific needs of its clients will contribute to high annual returns. So far, the most profitable product is the bookkeeping software that has been tailored to meet clients’ needs on record keeping.
Target market of Jumbo Software Limited
As noted earlier, the main target groups comprise of large corporations and manufacturing companies. Such firms often have a significant proportion of book keeping records, and a user friendly and easy to use accounting software is preferred. Jumbo software has capitalized on this need , and has created a simple procedure for implementation. Predominantly, the process begins when Jumbo’s sales representative call on potential clients and using the company’s standard template, develop a sample accounting or book keeping software for the client. Once the sale has been finalized, the software developers complete the concept which includes the design, copywriting, and customization according to the specifications made by the client. Specifications are then sent to the supplier for approval. In turn, this high level of service by Jumbo’s personnel sets the company’s products from that of our competitors.
Jumbo software can largely be classified as a specialty product. As such, it tends to promote and develop a strong brand identity for the company in order to create customer loyalty. Potential clients often spend a lot of time searching for the perfect software to meet their firm’s accounting and book keeping needs. For this reason, Jumbo has developed a strong marketing team to promote the awareness of its software to potential clients. Over the past few months, the company’s software has developed from a novel product into a known brand. In the next few years, Jumbo accounting software will be the household name in the market.
The company’s software is packaged and stored in an electronic disk that is then transferred into the client’s computer. The disk is labeled with the company’s name and logo at the top.
Jumbo accounting software will go through various stages from the beginning to the end of its market. Specifically, its product life cycle stages comprise of the development stage, growth, maturity and decline. The development stage is the initial stage of the software’s cycle. In this stage, the software is initially introduced to the market. The sales are typically low during this stage because many firms are unfamiliar with the commodity (“Product Life Cycle,” n.d.). At this stage, it is prudent for Jumbo Limited to raise the awareness of the product through the use of a place strategy such as specialty advertising, direct selling and intensive distribution to the clients. Using these place strategies, the firm must set a low price for the product to attract more clients (“Marketing Mix,” n.d). However, as the cycle proceeds to the growth stage, a high demand for the product will develop, thereby raising the sales. To maintain the sales, the company will adopt a competitive pricing strategy. With regard to a placement strategy, the firm will adopt an intensive distribution strategy to ensure that the product is sold to as many locations as possible. When the cycle reaches maturity stage, sales growth would have stabilized. At this point, the company would have reached most of its target customers (Marketing Insider, n.d.). Here, the firm will adopt a selective distribution place strategy to ensure all its identified clients have access to the product. The final stage of the cycle would be the decline stage. At this stage, the demand is projected as significantly low and the firm will consider to upgrade the product by adding more features and giving it a fresh life (Martin, 2014). Therefore a place strategy such as intensive distribution through retailers will help boost the sales for the firm. In turn, this would ensure continuity of the product’s cycle in the US market.
Competition faced by Jumbo Software Limited
The company will employ various means to reach clients and potential clients. Given that the company has limited financial resources, it is important that the available resources are managed effectively. In this regard, Jumbo will focus on two main factors, that is networking and advertising. Primarily, advertising will be done through online platforms using search engine ads. Consequently, it will allow the company to realize results within a few days instead of using paper prints where it is impossible to get the actual effect. With regard to networking, Jumbo has identified trade fairs and conferences where potential clients might attend. By attending these events, our personnel will network with potential buyers, thereby expanding the customer base.
Owing to the nature of the product, the inventory level is autonomously in preserved in a software format. Therefore, the data is stored in discs, computers and backed up in cloud. For this reason, there is no apparent need for storage rooms. The data is then transported by members of our staff in the discs and installs it into the client’s computer.
The company seeks to achieve various objectives through the use of advertising. These objectives include:
To increase the firm’s revenues and sales. Notably, this is the main goal that the firm seeks to achieve through advertising (Pirraglia, n.d.). By advertising in online search engines, the company will reach a significant proportion of its target market, thereby creating awareness about the existence of the accounting software (Spacey, 2017). In turn, this would lead to an increase in the customer base, thereby increasing the firm’s sales and profits.
To encourage Trial and Usage. The firm will also use advertising to encourage clients to try and use the new software (Suttle, n.d.). This will act as a way of introducing the product to the target market, and offer incentives to first-time subscribers to use the software. Indeed, an impressive trial and usage creates an interest in the buyer to purchase the software for their firms.
To develop a brand name. Jumbo software limited will also utilize advertising as a means to develop a name for it (Claessens, 2018.). Specifically, the firm will advertise itself as the one-stop solution for all accounting and bookkeeping requirements of a firm. By so doing, it will develop a brand name as well as enhance the company’s image in the eyes of potential patrons.
In addition, the company will also utilize a promotional mix strategy comprising of personal selling, public relations, and sales promotion. First, the company will adopt public relations as a promotional tool for its product (Lake, 2017). As a result, this strategy will help the company build a positive public image, thereby raising the clientele base. In the same way, a personal selling strategy will allow a one-on-one interaction between the firm’s staff and customers, thereby giving the client a detailed overview of what the software will do for them. On the other hand, a sales promotion will come in handy in stimulating consumer purchase through the use of coupons and free trial periods (Lake, 2017). All in all, a combination of these promotional strategies will help boost the company’s sales and revenues in the long run.
Marketing strategy of Jumbo Software Limited
For manufacturing companies and corporations that have a high requirement for accounting and book keeping, the Jumbo accounting software creates and accountants manage their records in an organized manner. Unlike our most aggressive competitor, the Jumbo accounting software provides a system for scheduling, tracking and analyzing all records.
The company will adopt a value-based modeling combined with a digital distribution pricing strategy for its accounting software. By so doing, the company will be able to maximize continual revenue streams from its product (Carpenter, 2017). Furthermore, such a pricing technique will provide the firm’s clients with the best buying option while generating regular and reliable income steams for the company.
To obtain profit. The company will adopt the above pricing strategy with the aim of increasing the maximum current profit of the firm, and allow it to make as much money as possible from sales (McCormick, 2017). In addition, it seeks to earn a reasonable rate of return on the initial investment into the firm.
To attain a growth in sales. The firm also uses the pricing strategy above as a means to increase the sales volume by setting is price at an affordable rate (Uhlig, n.d.). This way, the level of sales increases and grows gradually, thereby having a positive impact on the profits.
To face its competitors. The firm also intends to use its pricing strategy to remain competitive in the market. As such, the company will set and modifies its pricing policies to respond to the competitors. Thus, by ensuring that it has the most competitive prices, the firm will attract more clients thereby securing a significant market share.
Jumbo will adopt a flexible pricing system to ensure that its prices remain competitive in the market when compared to those of other rival firms. Even so, it is important for the firm to focus on creating a stable price level system that guarantees its clients a consistent pricing throughout. By so doing, it will be able to maintain a competitive edge in the market and secure a loyal customer base for its product.
Conclusion
Jumbo accounting software has great potential of penetrating the market. Using the sound marketing plan developed above, the firm can reach out to potential clients. Specifically, the use of advertising, sales promotion, personal selling and public relations will go a long way in increasing the company’s sales. In addition, a favorable pricing technique will give the firm a competitive edge against its rival companies.
References
Carpenter, H. (2017). Software Pricing Strategy Part I. Silicon Valley Research Group. Retrieved March 19, 2018, from https://www.siliconvalleyrg.com/blog-2/software-pricing-strategy-part-i
Claessens, M. (2018). Aims of Advertising – Setting Advertising Objectives. Marketing Insider. Retrieved March 19, 2018, from https://marketing-insider.eu/aims-of-advertising/
Lake, L. (2017). Learn About Promotional Mix in Marketing. The Balance. Retrieved March 19, 2018, from https://www.thebalance.com/what-is-promotional-mix-2295546
Marketing Mix – Place (Distribution Strategy). The Marketing Mix. Retrieved March 19, 2018, from https://marketingmix.co.uk/place/
Martin, W. (2014). Marketing Mix | Place in Four P’s. Cleverism. Retrieved March 19, 2018, from https://www.cleverism.com/place-four-ps-marketing-mix/
McCormick, M. (2017). Why Pricing Objectives are Fundamental to Business Success. Black Curve. Retrieved March 19, 2018, from https://blog.blackcurve.com/why-pricing-objectives-are-fundamental
Pirraglia, W. (2017). Advertising Objectives, Strategies & Tactics. Chron. Retrieved March 19, 2018, from https://smallbusiness.chron.com/advertising-objectives-strategies-tactics-10303.html
Product Life Cycle Strategies (PLC) and Characteristics – Managing each PLC Stage. Marketing Insider. Retrieved March 19, 2018, from https://marketing-insider.eu/marketing-explained/part-iii-designing-a-customer-driven-marketing-strategy-and-mix/product-life-cycle-strategies/
Product life cycle. NIBusiness Info. Retrieved March 19, 2018, from https://www.nibusinessinfo.co.uk/content/product-life-cycle-strategies
Spacey, J. (2017). 11 Types of Advertising Objectives. Simplicable. Retrieved March 19, 2018, from https://simplicable.com/new/advertising-objectives
Suttle, R. (2017). Three Main Advertising Objectives. Chron. Retrieved March 19, 2018, from https://smallbusiness.chron.com/three-main-advertising-objectives-21779.html
Uhlig, D. K. (n.d.). Four Types of Pricing Objectives. Chron. Retrieved March 19, 2018, from https://smallbusiness.chron.com/four-types-pricing-objectives-33873.html
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