The company Baltic Innovation Holding, located in the European city – Riga, Latvia, manufactures the bodies (coachwork) for motor vehicles, trailers, and semi-trailers. It has invented an innovative product – the FIREPEN, and now presents it to the public. The Firepen is a compact and powerful tool, the first of its kind. It is the best solution to many problems. The product cuts and welds such metal and in such situations that any other technology cannot do this. Therefore, the paper shows the marketing plan on Firepen, examines the advantages of the tool, and points it out from the competitors to reveal why it is the best product to buy.
Firepen is indispensable in extreme situations, during works of liquidation of effects of natural and industrial disasters, when there is the absence of electricity, and when electric or gas welding equipping is impossible to use (Firepen, n. d.). Firepen also works under water (Firepen, n. d.). Therefore, the target customers of the proposed product can be men from 25 to 55 years engaged in the repair or rescue operations because they more often deal with metal. The potential users can be army troops, fire departments, rescue services, and maintenance crews (Firepen, n. d.). Firepen is of small size. It is 300 mm length, 15 mm diameter, and up to 100 gr weight (Firepen, n. d.). Thus, it can be easily taken anywhere. The product can be utilized in the extreme situations, such as accidents, fires, unexpected natural disasters, detritus removal, rescue processes, and in case of the absence of electricity and no accession to electric and gas welding equipping (Firepen, n. d.). The product is simple in use and does not require any special skills. Consequently, Firepen can also be used in home conditions by simple people.
Unique Selling Proposition (USP)
The earmark of many successful companies is their USP. It is important to have a powerful unique selling proposition, as it differentiates the company from competitors (Lavinsky, 2013). The unique selling proposition of the Firepen: “No accession to electricity, acetylene or oxygen, but you need to cut or weld any metal? FIREPEN is your solution with no analogues in the world!” The expression “no access to electricity, acetylene or oxygen” shows people that the proposed product does not need it and works in any situation, even under water. “Cut or weld any metal” shows that the Firepen is a tool that can be used in cutting or welding different metals of different thickness. These metals particularly include armature, pipes, steel ropes and cables, fences up to 22 mm thick, angles, and steel sheets (up to 5 mm thick and 100 mm long). A bunch of 2-3 Firepen enlarges the power and the ability to cut thicker steel formations. The expression “with no analogues in the world!” shows people that they will not find a similar product anywhere.
Pricing and Positioning Strategy
The pricing and positioning strategy have to be equivalent not to lead away customers from purchasing (Lavinsky, 2013). The company positions the Firepen as having no analogues in the world. It means that the company has a monopolistic position on the market. In this way, the company can set a high price with no fear to lose customers. However, the price still should not be too high because in this way, people will not have an ability to buy the product. The company should also take into consideration that the product is new, not yet tested by public enough, and only is entering the market. Once again, the price has not to be high. Therefore, aligning pricing and positioning strategy, the price of the Firepen has to be approximately 6,00 € per piece in quantities of up to 100 000 units per year. With such price, the product will attract people, be competitive, earn a profit, and be popular.
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The distribution plan details how customers will buy from the company (Lavinsky, 2013). The easiest way for customers to buy the Firepen is directly from the official Firepen website – firepen.eu, which was recently launched by Baltic Innovation Holding. The person can fill the form there with the needed information, and the manager of the company will contact him or her soon. The ordered product will be delivered to the person’s address during a short time in any corner of the world. Another more complicated way, is to search for and buy from distributors or other retailers, who, in their turn, will buy the Firepen only from the official website noted before.
It is done so for more comfortable purchases, for preventing damages of the product, for quick and accurate deliveries, and to make people see that the Firepen is a Baltic Innovation Holding’s invention.
The Company’s Offers
Offers are special deals the company puts together to secure more new customers and drive past customers back (Lavinsky, 2013). Even if the business does not necessarily require offers, using them will cause the company’s customer base to grow more rapidly. Baltic Innovation Holding’s offer is that the Firepen prices depend on the quantity of order and type of contract. The price list is on-demand. Thus, if a company or a person orders big quantities of Firepen or orders them on a regular basis, the price will be lower.
For example, when ordering a batch of up to 200 000 units per year, the price is 5,80 € per piece; ordering up to 300 000 units per year costs 5,60 € per piece; ordering up to 400 000 units per year is 5,40 € per piece; ordering up to 500 000 units per year costs 5,10 € per piece; and when ordering a batch of more than 500,000 units per year, the price is 4,95 € per piece. The Firepen has a two-year guarantee, and if it breaks during that period, the company will pay the money for the product back or replace it with a new item. The company also will pay the money back if the product is damaged during the delivery. The Baltic Innovation Holding also offers free delivery when the big quantity is ordered.
The marketing materials are the collateral the company uses to promote its business to the current and prospective customers (Lavinsky, 2013). At present time, the Firepen is not promoted enough; the marketing materials are almost not used. The basic marketing material that The Baltic Innovation Holding uses for Firepen is the official website. There is pointed the detailed information about the usage of Firepen, its attributes and features, and other useful information. Also, the useful marketing material will be direct emails to potential customers with the persuasive information about the product.
Step 1. Order Placement
Step 2. Order Payment
Step 3. Paper Downloading
Besides, to create the most efficient marketing strategy, there is a need of a blend of online and printed materials. The most important printed marketing materials are business cards, posters and banners, promotional items, promotional apparel, and brochures and postcards (Parker, n.d.).
Business cards truly have a powerful effect. Customers can grab a few of them to share with friends, and the company can hand them out at expos, professional meetings, and even social events (Parker, n. d.). When a person hands other person his or her business card, they create a mental and visual link (Parker, n. d.). It will good to use color strategically to reflect the brand – to use yellow and grey colors, as the Firepen is colored with them.
Posters and banners are the graphics of a large format that attract attention and give the ability for the company to outline the product or declare a special offer. It will be good to use oversized format printing to create a full-color poster for a future event and to explore oversized engineering style prints as well, for a more exceptional look. (Parker, n. d.)
It is important to use the company’s logotype strategically on promotional items and instruments. Small branding, a logotype, or a slogan on useful things, such as the notebooks the personnel uses with customers, can have a big influence (Parker, n. d.).
Regarding promotional apparel, wearable branding donned by personnel or customers and fans is efficient and long-lasting (Parker, n. d.).
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Brochures or fliers are important as a way to represent the product’s information fast and remind the company’s customers about the product (Parker, n. d.). It is good to use brochure holders to show the materials at the front counter and in trade show or expo booths (Parker, n. d.). In addition to the messaging, logotype, and location, it is considerable to include feedbacks from satisfied customers and the URL for the company’s website (Parker, n. d.).
Postcards: It is useful to create picture postcards for customers to take with as a souvenir or send them to friends (Parker, n. d.). This format has to be used to promote events or sales to customers or as thank-you and holiday message notes to loyal patrons (Parker, n. d.).
Product promotion is one of the needs for placing the brand in front of the public and drawing new clients. There are many ways of promoting a product in addition to marketing materials, online promotion, TV and radio advertisings, and newspapers.
The useful promotional strategy is contests. The majority of contests do not even require a purchase. The concept is to promote the brand and put the company’s logotype and title in front of the public rather than earn money through a hard-sell campaign. People are fond of winning prizes. Sponsoring contests can get attention to the product without company openness.
Another way of promotion is product giveaways and giving the potential customers the ability to sample a product. It will be useful to sponsor in store promotions, giving away product samples to allure the public into testing new products.
One of the most important ways of Firepen promotion is causes and charity. Promoting the Firepen while maintaining a cause can be an efficient promotional strategy. Giving customers a feeling of playing a role in something bugger just by using the product creates a winning situation. The company acquires the customers and the socially conscious picture; customers receive a product they can utilize and the feeling of helping a cause. One way to do this is to give an interest of the product profit to the cause the company has helped.
Giving away functionary branded presents can be a more efficient promotional way than distributing simple business cards. It will be useful to put the business card on a magnet, pen, or key ring. These are the presents the customers may utilize, which keep the business in a clear view rather than in the trash or in a box with other business cards.
Online Marketing Strategy
Most customers go online these days to find and review new products to purchase. As such, having the right online marketing strategy can help the company secure new customers and gain competitive advantage (Lavinsky, 2013). There are four key components of online marketing strategy: keyword strategy, search engine optimization (SEO) strategy, paid online advertising strategy, and social media strategy (Lavinsky, 2013).
Search Engine Optimization (SEO) Strategy
The company has to understand what people are searching for when discovering the business in a search engine. The keywords are used to drive targeted traffic to their products. The Google AdWords Keyword Tool helps with searching for the keywords. Therefore, the keywords for Firepen are: “Firepen”, “cut”, “weld”, “tool”, “no analogues”, “under water”, “order”, and “price”. These words are the most frequently used when searching for similar products. This strategy will point out the Firepen from the competitors.
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It is considerable to check if the used keywords are still unique and if they are efficient, and to update the keywords used for a product if needed to stay competitive and to make the website be higher in the search.
Paid Online Advertising Strategy
The best way to promote the website is Google ads. Google AdWords is a service of the context and searching advertising from Google. It gives to the company the ability to order an advertising of the website, which will be highlighted on the top of Google search. Potential customers will see it at once while searching what they need in Google. The payment is charged only for the transitions to the website or for a call to the office of the customer. A price for the click is the maximum amount that the customer can offer. The bigger the price is, the higher is the advertisement among competitors in the search. Facebook ads are the same as Google AdWords, but the advertisement will be put on Facebook.
Social Media Strategy
The social media websites such as Facebook and Google+ propose a way to promote the product in a more informal environment. Social networks unite with a world of potential clients that can observe the company from another prospect. Rather than viewing the company as “endeavoring to sell” the product, the social network can view a company that is on a more private level with people. This can assist to lower the division between the company and the buyer, which represents a more attractive and congenial picture of the company.
Conversion strategies refer to the techniques the company employs to turn possible customers into paying customers (Lavinsky, 2013).
One important conversion-boosting strategy is the usability testing. Usability testing retracts having genuine clients use the website and then registering their usage experiences. It assists the company to identify models and define the basic sources of friction on the website. When the results are collected, the company can change its website design and content to detract any obstacles standing in the way of meeting company’s goals. This, in turn, flows out in a conversion boost (Sen, n. d.).
Another strategy is to reduce distractions. It is considerable to take away all distractions on the path of the users. Typical distractions like inopportune time or place of pop-ups, using too many competing desires, or high-contrast background colors can influence the customers’ road to convert. The company should use high-quality images and descriptions for the Firepen that can assist users in making fast decisions. When using pop-ups to demonstrate any promotions or to require visitors to take concrete actions, it should be tested to define if it is distracting to users. Qualified testing to comprehend the visitors and their purposes needs to be done afore carrying out a successful pop-up. Constant testing of the website users’ experience is important to identify and change the details that cause distractions. For example, when the company needs information about its users, long registration forms are a big turn-off for users. Using social login to make the sign-up process simpler creates a winning situation for both the company and its customers.
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The next strategy is to create a compelling and clear value proposition. A value proposition is a promise to consumers that the company will deliver through the product. If the perceived advantages prevail the perceived costs, the company’s prospects will be motivated to act. Therefore, the company’s value proposition should be the first thing people see when they view the website. Focusing on the points of differences is important. Include the features that are important to the company’s prospects and not available from the company’s competitors while communicating the value proposition.
Credibility is also a good strategy. Having credibility indexes on the website is one of the best ways to make the way within all the existing marketing clamor and lead conversions to online businesses. There are a lot of ways to reach this, and these indexes will assist consumers to trust the Firepen: a trust badge, which demonstrates clients that the website is safe and secure for use, and that it helps contribute to trust and assists in conversions; the feedbacks, which give credibility and originality to the product and demonstrate how other companies have succeed in working with the company; the user reviews and estimations, which rank high as credibility indexes; and the customer success tales and case studies.
Joint Ventures and Partnerships
Joint ventures and partnerships help reach new customers or better monetize existing customers (Lavinsky, 2013).
As it was mentioned earlier, the buyers of the Firepen can be army troops, fire departments, rescue services, and maintenance crews. These people may also need work wear. It could be quite lucrative to partner with companies that produce the work wear. For example, such companies are Helly Hansen, Forestry Suppliers, FlamePro, Bristol Uniforms, and others. They can have a list of thousands of customers to whom they sold work wear (and who probably will need Firepen in the future).
The companies that provide metal can also be good partners. Such companies include Industrial Metal Supply Co., Alcan Aluminum Ltd., and many others.
To secure these companies, the Baltic Innovation Holding can offer an interest from purchases made by consumers form these companies’ lists.
Referral programs efficiently put the existing customers to work as the company’s own sales personnel. Happy customers refer others to the business and are rewarded for their efforts. Referral marketing can be a cost-effective instrument, as the business just pays when new business comes.
A simple and straightforward referral program for Firepen is that of a flat referral bonus. In other words, if an existing customer refers another customer to the company, the referring person gets a cash bonus or a discount on a product. This marketing strategy can be implemented with the Firepen website and the online referral form that allows customers fill the contact info of the person they’re referring and send it directly to the manager. When that referral becomes a buyer, the payment is sent or the discount is made to the referring party.
Strategy for Increasing Transaction Prices
It is considerable to pay attention to the transaction price. The transaction price, or the sum customers pay when they buy from the company, can prescribe the company’s prosperity (Lavinsky, 2013). For example, if the competitor’s medium customer transaction is higher, they will receive more incomes and profits per customer. As a result, they will afford to outspend the company on advertising, and prolong to acquire market share at company’s cost (Lavinsky, 2013).
The Firepen is being sold wholesale. The transaction price is 6,00 € per piece in quantities of up to 100 000 units per year. Consequently, the company earns a big profit at once. However, it is appropriate to increase the price in the future to 12 € per piece in quantities of up to 100 000 units per year, when people will test the product and see that it is worth the price.
Prices That Inspire
It is more profitable to invest in getting existing customers to buy more often rather than spending a lot of time and energy trying to provide new customers. By using retention strategies, the company can increase revenues and profits by getting customers to purchase from them more frequently over time.
The first step to build superior customer retention is to set customer expectations betimes. A good way to encourage loyal customers is to under promise and over deliver. By setting expectations betimes and a tad lower than the company can provide, the company can exclude incertitude as to the level of service it needs to offer to assure its customers are satisfied (Beard, 2014).
The next strategy is to give the clients a rapid polite call, to notify them of coming changings, and to give some shrewd recommendations as to their superior plan of offensive. This active individualized approach will support customer loyalty and make other customer retention strategies more efficient. Carrying out a monthly email marketing campaign, beginning a blog, or building social profiles on LinkedIn, Twitter, and Facebook will also help support customer loyalty.
The financial projections are used to identify how much money is needed for promotion and other strategies and to determine which promotional expenses and other strategies should give the company the highest return on investment. The financial projections are also useful in setting goals for which the company should strive (Lavinsky, 2013).
Marketing materials are not expensive, but considering the amount of the printed material, the total cost will be approximately 700 €. The promotion strategy, such as advertising on TV and giving prizes is the most expensive strategy. The total cost will be approximately 5000 €. Considering that it is the most direct way of promoting the product, it will give the highest return. The online marketing strategy is based on the Google AdWords. The total cost for the online marketing strategy will be approximately 1300 €. The partnership will take approximately 25% interest on purchases made by consumers from the partner companies’ lists. The referral strategy will take 300 €. The strategy for increasing transaction prices will increase profit twice in the future. Considering the company’s offers, the average price of Firepen will be 5 € per unit.
Summing up, due to the strategies made, it is expected to increase the quantity of customers and accordingly sales and profits threefold. Given the fact that in past year the net turnover of the Baltic Innovation Holding was 3 million EUR, and the net profit was 100,000 EUR (Credi Web, 2014), the future net turnover is going to be 9 million EUR, and the net profit is going to be 300,000 EUR. If the price will be raised to 12 € per unit due to the strategy of increasing transaction prices, the profit will be doubled.