Marketing plan
Overview of the market
Ukrainian market
The Ukrainian market is intriguing and exciting. The mixture of business, casual, fashion and sports cultures within the elite target audience makes this market a great opportunity for new brand of luxury products. The socio-economical status determines the focus for the best products.
Often the price is not a barrier and moreover when it defines whether it is a unique product like ours or is a regular quantity item. Ukrainian elite wants to have the latest and the best, where at the same time they want to be the only ones to have it and this is a price that they are willing to pay. With rich cities, like Kiev and Donetsk, that take the shopping into a new level, this niche market is ready for a product like ours.
With needs for much more than just classical leather accessories, the Ukrainian market demands not only high quality classic line, but sports and leisure ones.
The research we realized was based on many factors:
Competitors
Geographic Area based on Income Revenue;
The Product;
Point of Sales: department store.
Current economic situation
Today, the Ukrainian economy faces challenges on three fronts:
weakening growth;
unstable financial markets;
elevated inflation.
The economy is clearly in a slowdown that resembles past periods that were the leading edge of a recession.
Economic growth has been slowing since the third quarter of last year coming off solid growth rates in the second and third quarters of 2007.
Also, personal income growth has been flat, and there has been a significant softening of employment, manufacturing activity, and sales at the retail and wholesale levels. Indeed, some areas such as employment actually have been contracting. Job growth in recent months was negative, and the unemployment rate has moved up drastically.
A key to the success is an approach, where the Company needs to present information in a creative way. By offering a collection of truly unique items, there is more of a chance that something will catch the eye and speak to visitors on an emotional level.
Consumer Profile
The prototype of the consumer can be defined as executives and business people who live in the Kiev and Donetsk, a clientele that are looking to pay for exclusivity, comfort and quality.
Competitor Analysis
IKEA is a furniture and home products retailing company that entered the Ukrainian marked in 2007. Manufacturing affordable furniture, this company is considered one of the main competitors for the company like Wood Work.
Mega Shopping Centers, established in 4 Ukrainian regions, attract the large number of consumers, who are eager to buy inexpensive but high quality furniture and home accessories. IKEA systematically reduced our prices every year so that we will always be on the side of the customer. This has been made possible mainly because we use the full strength of the IKEA concept and the IKEA organization to purchase in large numbers, using the best supply chain methods to keep prices low. In the store, we request that you, the customer, do your part to shop on your own, and together.
Liga Nova is the major furniture supplier-company in Ukraine, with retail stores in 19 regions of Ukraine. This company operates in different fields (CALLIGARIS furniture (Italian design), restaurant furniture, house furniture, office furniture, household electric appliances), middle and high income oriented.
Segmenting, Targeting, Positioning
Segmenting
Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behavior. The world is made up from billions of buyers with their own sets of needs and behavior. Segmentation aims to match groups of purchasers with the same set of needs and buyer behavior. Such a group is known as a 'segment'.
The purpose for segmenting a market is to allow your marketing/sales program to focus on the subset of prospects that are "most likely" to purchase your offering. If done properly this will help to insure the highest return for your marketing/sales expenditures. Depending on whether you are selling your offering to individual consumers or a business, there are definite differences in what you will consider when defining market segments.
Wood Work company offers custom-made furniture that is made from natural materials from Western Ukraine and is aimed at representatives of middle income level.
We segment our customers in the following way:
The older generation. People who are more likely to gather the whole family for a dinner. The representatives usually organize home-made dinners that require big and convenient dining furniture. People, who value old traditions and pig family-parties. Old people are most likely to spend most of time at home, that is another reason on this type of segmentation. To say more, according to a survey, elderly people most of the time prefer home-cooked meals, and that means that a significant amount of time they spend in the kitchen, where nice furniture create the cozy atmosphere.
Non-working women. According to the secondary data, non-working women with children spend the biggest part of their time in the kitchens, cooking home-made meals, baking for their families. And they pay a great attention to dining sets and kitchen furniture, looking for one that will perfectly feat in their houses.
Families with/without children. People who have a permanent accommodation and are eager to have high quality furniture without spending too much money.
Having determined the more general segmentation characteristics you can proceed to a more detailed analysis of the market. There are literally thousands of ways to segment a market, but the following are some of the more typical segmentation categories.
Geographic segmentation:
Geographic segmentation – based on location such as home addresses;
We consider some of geographic elements when we segment our market. We use Kiev and nearby regions as a basis.
Targeting
After the market has been separated into its segments, the marketer will select a segment or series of segments and 'target' it/them. Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments.
Target marketing can be the key to a small business’s success.
The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing provides a focus to all of your marketing activities.
So if, for instance, I open a catering business offering catering services in the client’s home, instead of advertising with a newspaper insert that goes out to everyone, I could target my market with a direct mail campaign that went only to particular residents.
Several lines are manufactured to fit the needs of the target market:
Classic Line is developed for a wide range of consumers who respect family values and traditions, including antique style. Target consumers mainly live in suburban areas of Kiev. This line is more oriented on the representatives of older generation, conservative people.
Modern Line customers live in similar location with Classic line consumers, the difference concludes in the various tastes and financial status of such consumers. In other words, this line expresses a more formal occasion usage. Modern style is in fashion now and closer to younger generation.
Mixed Line is created to meet the needs of our consumers, with the demand for both fancy and practical dining sets, used both during a formal meeting and for every day family dinner.
Positioning
No matter which target marketing strategy is selected, the overall marketing strategy should involve the process of positioning the firm’s offerings in ways that will appeal to targeted customers. Positioning is concerned with the perception customers hold regarding a product or company. In particular, it relates to marketing decisions an organization undertakes to get customers to think about a product or company in a certain way compared to its competitors. The goal of positioning is to convince customers to believe the marketer’s offerings are different in some way from its competitors on an important benefit sought by the market. For instance, if a customer has discovered she has a need for an affordable laptop computer, a company such as Dell may come to mind since their marketing efforts position their products as offering good value at a reasonable cost.
To position successfully the marketer must have thorough knowledge of the key benefits sought by the market. Obviously the more effort the marketer expends on segmentation (i.e., reached Stage 3) the more likely they will know the benefits sought by the market. Once known, the marketer must: 1) tailor marketing efforts to ensure their offerings satisfy the most sought after benefits, and 2) communicate to the market in a way that differentiates the marketer’s offerings from competitors.
For firms that seek to appeal to multiple target markets (i.e., segmentation marketing), positioning strategies may differ for each market. For example, a marketer may sell the same product to two different target markets, but in one market the emphasis is on styling while in another market the emphasis is on ease-of-use benefits. The important point is that the overall market strategy must be evaluated for each target market since what works well in one market may not work as well in another market.
The dominant feature that differentiates Wood Work company from our competitors is using only natural materials, and production of custom-made furniture.
The benefit of our product is 100% natural, thus environmentally friendly and, therefore, valuable for health. Materials will be delivered from Western Ukraine, when other companies (i.e. Liga Nova) distribute wood from abroad (mainly Russia). Therefore, we can position ourselves as a company with affordable prices, oriented on people with middle level of income. We introduce several major lines to satisfy all segments of customers. The company’s product is represented by custom-made kitchen furniture.
4 p’s
Product
The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-user's needs and wants. The scope of a product generally includes supporting elements such as warranties, guarantees, and support
Wood Work is a new company which furniture is produced from solid oak and pine hardwoods. The Company demonstrates a combination of customized production and natural materials using high-tech technology. There are professional furniture workers, so we make it our mission to produce only the finest quality products. Each piece is built to reveal the value to future generations. The company offers custom-made furniture. The company’s product is represented by dining sets. Production range can be summarized partially made by machine.
Several lines are manufactured and are further segmented in terms of various models and forms:
There are three product lines that are suitable for Ukrainian market:
Classic Line: a type of furniture that won’t go out of style, and is developed for a wide range of consumers (families with children), who respect family values and traditions.
Modern Line: this line expresses a more formal occasion usage. Modern style is in fashion now and closer to younger generation.
Mixed Line: created to meet the needs of our consumers, with the demand for both fancy and practical dining tables, used during a formal meeting and for every day family dinner. Such furniture comes with an extra set of different-style shift legs that can change the style and atmosphere of the occasion.
Seating Capacity
We base our seating capacity on 70 cm per person. Use the following formulas to calculate seating capacity for a table:
Rectangular, Square tops: length of table including all leaves / 60 x 2 + 2
270/60 x 2 + 2 =
11 people
270 cm
Rounded Top: (Diameter of table x 3.14) / 60
Example: 183cm round—(183 x 3.14) / 60 = 9.44 - you would be able to seat 9-10 people
Depending on the market demand the services provided by the company will vary:
Manufactured furniture is partially made by machine
As an extra service restoration of the furniture ( including antique) will be available. The price is individually determined.
Price
The price varies according to the amount of material used to construct the piece of furniture:
The price of material used x 250% for Classic line.
The price of material used x 350% for Modern line.
The price of material used x 400% for Mixed line.
Table – 1 factor
Chair – 0.2 factor
Materials:
Factor (сорт) – 1.2 ( 0,75 is the lowest) - 700 UAH Oak
- 450 UAH Pine
155mm
1m
155mm
Classic Line
Price for a table
Oak – 1 750.00 UAH
Pine – 1 100.00 UAH
Price for a chair
Oak – 350.00 UAH
Pine – 225.00 UA
Modern line
Price for a table
Oak – 2 450.00 UAH
Pine – 1 570.00 UAH
Price for a chair
Oak – 490.00 UAH
Pine – 315.00 UAH
Mixed Line
Price for a table
Oak – 2 800.00 UAH
Pine – 1 800.00 UAH
Price for a chair
Oak – 560.00 UAH
Pine – 360.00 UAH
Kitchen shelves, cupboards and counters’ prices are calculated individually depending on amount of the material used considering the factors from 1.2 – 1.5, and the number of shelves, sizes and styles.
Promotion
Due to the nature of our product, Wood Work will use target promotion, aimed at the target audience – middle income families with/without children. Types of promotion – promotion mix:
Show room The specialized show room is a powerful tool to promote our product, due to custom-made service provided.
Printed Brochures Printed materials will be given out in the restaurants, and family shopping centers to create a positive image of the company in consumers’ minds. The information about products we offer, prices, our contacts will be printed.
.
The Internet. Internet is used to increase the sales of the product at home or in the office. It has been proven that major sales on the Internet takes places between office hours, where big executives are just spending hours in their offices
Department stores. Depending on the city there are some shopping centers. They are strategically located in the most busy areas. The specialized boutiques are the traditional and yet still a powerful tool to promote exclusive products.
Web Advertising Own Internet site will give an opportunity to check out our ready-made pieces and to create own style to fit the financial situation, taste and desire. (Placing our advertisement in Ukrainian Web Search site “Meta”). Internet is used to increase the sales of the product at home or in the office. It has been proven that major sales on the Internet take places during office hours, when employees have spare time to surf the Internet.
Advertising in specialized periodicals (magazines)
Idei Vashego Doma (IDV) – a fashion magazine that was established in 1997 and offers the information about the innovations in the world of design and interior, keeps the reader updated about the latest styles of furniture and accessories. Published 12 times a year + two additional “Inter’er ot A do YA” issues (every April and May). 35000 magazines are published per month and cover the whole territory of Ukraine.
Brochures (1000 units) 2,5 years |
Advertising in specialized periodicals 2,5 years |
Broadcast Advertising (internet web-site) 2,5 years |
Total ( 2,5 years) |
1500.00 UAH x 30 = 45 000.00
|
Last page of magazine (A4 format)- 8200.00 UAH/month x 30 = 246 000.00 |
1600.00 UAH /month x 30 = 48 000.00 |
339 000.00 |
Trade fairs and exhibitions Trade fairs and exhibitions will be aimed at making new contacts. Wooden World company purpose is to establish brand awareness.
Place
This refers to how the product gets to the customer; for example, point-of-sale placement or retailing. This third P has also sometimes been called Place, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. also referring to how the environment in which the product is sold in can affect sales.
The proposed distribution channels for the Company’s product include one show room, located in Degtyarivska street. It will be opened from 9.00 till 17.00, and samples of our furniture will be demonstrated for consumers to choose the most suitable one. Also the manager will take orders in the show rooms and provide consumers with consultations.
The manufacturing process will take place in a workshop, (Vyl. Osvity, 7).