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Marketing Plan for General Electric essay example
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Marketing Plan for General Electric

General Electric Marketing Strategy

According to the National Fire Protection Association (NFPA, 2008), “cooking fires are the #1 cause of home fires and home fire injuries” resulting in hundreds of deaths and hundreds of millions of dollars of damage each year. With such troubling reports kitchen safety has become increasingly important to consumers. In order to demonstrate commitment to consumer safety General Electric is pleased to introduce its latest innovation in cooking products development – the GE Cook Alert.

GE is committed into achieving leadership by developing global technical capabilities, increasing new product growth, and investing in global research. With today’s competitive environment GE’s commitment to quality is a top priority to the company; making a commitment to its customer to ensure the highest standards of manufactured products (GE. com, 2008). Innovation has been the key to GE’s past and will remain the key to its future.

As the firm continues its introduction of the latest innovation in cooking products development – the GE Cook Alert – General Electric must determine the viability of the product in the existing household appliance market. To accomplish this, GE will conduct various forms of marketing research. Marketing research is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions.

To begin marketing research for the GE Cook Alert, GE attempts to identify the target market, understand the buyers / consumers purchasing decisions, and analyze the current competitive landscape. Product DescriptionThe purpose of the GE Cook Alert is to alert the user when the range burner remains on after removing cookware from the burner. Often, when a range burner is turned low or on the simmer setting the person operating the stove is unable to see the flame on a gas stove, or the coils are no longer red on an electric stove. This can result in accidental burns or fires.

To reduce the likelihood of such accidents, the GE Cook Alert would project a consistent and timed warning beep with accompanying flashing warning light to notify the user that the range is still in operation. The GE Cook Alert will help prevent burns to customers, children, and home property, while eliminating wasted energy. SWOT AnalysisStrengthsThe strength of GE Cook Alert product is that no one has developed it yet. GE will be the first to develop and implement this product for the new product line of gas and electrical ranges available to the consumer within 12 months.

Consumer trust in the GE brand name image is high. WeaknessesThe product is untested at this point. The cost to implement and introduce the GE Cook Alert may outweigh the benefit. Figures have not yet been calculated to determine final cost and future projection ratios. OpportunitiesThe GE Cook Alert will provide GE with excellent public relations and media exposure for its investment in consumer safety and energy efficiency. If successful, such safety adaptations could be developed for a wide variety of GE appliances and products.

There is also the opportunity for retro fitting appliances that do not have this sensor. ThreatsThe GE Cook Alert could be quickly copied by GE competitors in the household appliance market such as Samsung and Phillips. TrendsThe most important trend in appliances in recent years is the introduction of high-energy efficiency appliances. New developments in technology has lead to the creation and marketing of appliances that provide consumers substantial savings on gas and electrical energy. In addition to safety, the GE Cook Alert product would help reduce wasting valuable energy and thus increase consumer savings.

Research Approaches

Marketing has decided upon two methods of research for the GE Cook Alert. The first method will be a series of focus groups, including participants from urban and suburban areas. The focus groups will be held in Philadelphia, Los Angeles, and Chicago. Education levels, economic levels, and marital status will further classify the participants in an effort to get more accurate statistics and facts of how the population will respond to the Cook Alert. The second method will consist of survey research. This will be conducted in two ways.

First, a massive mailing distribution will allow the marketing department to reach a large amount of people. These surveys will be used to reach as many people as possible. In spite of the low response rate this method typically provides marketing believes that it will yield beneficial data. The second survey will be conducted via the Internet by placing a banner and GE promotional “free giveaway sweepstakes” entry form on the Google homepage. This relatively new survey method is growing in popularity and allows GE marketing to reach a larger section of the consumer population.

Target Market

The GE Cook Alert is a specialty item that would be incorporated into GE’s existing and upcoming line of household cooking ranges for a small additional charge. The sensor would appeal to residential homeowners currently using or considering the purchase of gas or electric range units. The target consumer falls within the middle to high income demographic and values safety in the home due to the presence of young children. This segment will be buying major appliances due to the starting of new careers, growing families, or upgrading of existing appliances within the household.

Location of the target demographic is global; however, initial focus will begin primarily within the United States through major appliance retailers such as Sears. A smaller secondary target market will consist of households with individuals that have special disabilities such as memory deficits, cognitive disorders, visual deficits, or auditory impairments. Buyers / ConsumersWhen customers buy products or services, they are essentially purchasing a set of benefits to meet their needs and expectations known as the concept of product or service.

The concept of product or service comprises not of the physical bits consumers buy, but the perception of the consumers in terms of the benefits gained from the product or service. As indicated in the target market section, the target demographic of GE’s improved cooking ranges will be heads of families with one or more children in the home that place a growing emphasis on safety in the home. Therefore, the marketing strategy for the GE Cook Alert is to create the perception that this is a device that allows the user to feel more secure while cooking or after cooking in the household.

Competitors and Substitutes

The US household appliance manufacturing industry consists of about 300 companies with a combined annual revenue of $25 billion, where the top 20 companies hold 95 percent of the market” (Business Wire, 2007). Further, the home appliance industry has a slow growth rate, meaning most competitive companies produce similar products. As such, competition is more heated for any possible gains in market share. Therefore, the GE Cook Alert is a potentially huge development for the company.

For decades, ovens have had features that make them easier to clean and more attractive. Now, for the first time, GE can offer consumers a completely unique product feature that can prevent household property damage, prevent personal injuries, and may even save lives! Such legitimate claims could give the company a distinct competitive advantage over close competitors such as Electrolux and Whirlpool. Electrolux, which is one of GE’s closest competitors, has recently seen their stock drop from a 52 week high of $63. 30 to the current level of $28. 85 (Yahoo Finance, 2008).

Coupled with a drop of income of nearly 45% from 2006 to 2007, Electrolux is not in a strong position to match the GE Cook Alert at this time (Yahoo Finance, 2008). However, this financial dip may create the incentive Electrolux needs to encourage greater investment in product development and quickly imitate the inclusion of similar safety sensor in its household appliance line. Additionally, GE competitor Whirlpool is a healthy company that has shown strong growth in recent years. Whirlpool should be considered the most likely competitor to rapidly mimic the GE Cook Alert.

Because of this close competitive threat, it will be important for GE to work quickly to obtain patents on the new product and to get the GE Cook Alert to the market as quickly as possible. This will help to maximize the positive impact for GE by allowing the firm to gain a competitive edge and improve sales for as long as possible. Pricing StrategyPricing strategies take into account the forgotten “P,” (Pricing), positioning. GE Cook Alert will enter the market in the beginning position of the life cycle, allowing flexibility in any selected pricing strategy.

Pricing strategy is nothing more than taking into account research, production, and how setting the price will affect the market, customer, and return on investment. Taking into consideration positioning and recommended target segmentation markets, pricing objectives will focus on quality leadership, with a cost-plus pricing method. GE Cook Alert is a high quality product worth paying a high, but not premium price. Price setting, while ensuring a profit on each product to a specific market segmentation that is not concerned with price when it comes to protecting their, is the best pricing strategy to use for the GE Cook Alert, (NetMba, 2007).

Organizations present products to a market for the first time once, so taking advantage of unique opportunities is critical in establishing a pricing strategy. Research shows potential for high sales due to the large number of families with at least one child and the desire to protect the lives of their families no matter what the cost. GE will focus initial pricing strategy on working middle class income with families living in Philadelphia, Chicago and Los Angeles.

The market segmentation will allow further conducted research testing for determining if a change in pricing strategy is needed, and a target profit return, which addresses other competitors and the possibility of ethical and social concerns. GE Cook Alert has the ability to protect the lives of millions of families from fire hazards. Development of an Initial Sales Promotion ScheduleDeveloping an initial sales promotion schedule is another way of the company using all its resources towards communicating its product or service.

In our case, GE will focus on how best to promote GE Cook Alert to the target segmentation area, by focusing on personal selling, advertising, publicity and a sales promotion. The direct areas of focus will allow a communication of GE Cook Alert feedback data so the marketing strategy might be refined in order to increase our geographic market. Personal Selling”Never assume that your product will sell itself, even if you are convinced that it will be a superior competitor in its field,” (Arl 2007).

Even though GE Cook Alert will revolutionize the market and save lives of potentially millions, if the product is undiscovered our marketing plan has failed to communicate and reach the potential customer base. GE will introduce GE Cook Alert using a zero though six week development sales promotion schedule to include sales calls, presentations, literature, direct mail, seminars, sales meeting materials, sample kits consumer trade shows, channel relationships, demonstrations, telemarketing support, lead generation support, and sales contest.

Week 0 – Develop initial introduction events

Week 1 – Distribution of GE Cook Alert to specific retailers

Week 2 – Training on GE Cook Alert at Fire Safety Seminars

Week 3 – Invite local radio and TV stations, demonstrate the product and offer free rides. (Coordinate release of story a week in advance of market test. )

Week 4 – Unveiling of GE Cook Alert to the same above mentioned seminars.

Week 5-6 – Work with salespeople, distributors, and consumers to conduct a research of using quantifiable measurements on how well the product was received to help gauge and focus the marketing strategy prior to launching an expanded campaign. Identify Public Relations Opportunities for the Product/ServiceSince our target audience is families with children, tailoring our public relations campaign to focus on areas most likely to be seen or heard is the key.

Identifying local family events, schools, or fire safety functions where families and children frequent allows GE Cook Alert an opportunity to be seen sharing common ideas and values important to seniors. Focusing on the below areas allows GE Cook Alert’s story to be told in a positive manner that generates curiosity.

Public relation campaigns must be able to shift focus to other areas of importance to the customer. Having flexibility allows GE Cook Alert to take advantage of any potential opportunity that may arise. The areas include:- Public relations- Press Kits and Media Events- Speeches and Seminars- Promote charitable donations from each sale- Social Causes- Community Activities- Industry Association Activities- Awards/Recognition-Competitions and ExhibitsAdvertising PlanThe advertising plan formulated in phases, promote market awareness as well as cost effectiveness.

GE Cook Alert’s target market is families with one or more child, and the advertising campaign will be focused on data gathering from critical fields. An introductory phase will involve database monitoring to obtain responses and details from the target audience. The advantages of Internet advertising far exceed that of the traditional print predecessor, as reflected in the lessened costs, the ’24x7x365′ availability, the expanded consumer markets, and predominantly in the overall profit margin per each consumer, (InternetAdvertisingAdvantages,2007).

Internet advertising and database management will focus on target profiling which can track what type of individuals respond to each online advertisement. Advertising network companies manage and provide advertising for numerous unrelated Web sites – a network, based on the consumer information captured by the technique called “cookies synchronization. ” Combining cookie information with direct marketing databases, the target audience profiles are categorized by name, address, demographics and detailed off-line and online transaction history.

GE Cook Alert will use a third party company to collect and interpret key target data, (Advertising Networks, 2007). Demographical information obtained from research and development will assure logistics, production issues, and critical key variables to stay on target with the campaign. Prior to mass production, a test phase will be implement information gathered from the internet database. The advertising campaign will have this initial model: Internet introduction, television infomercials, radio ads and fire safety brochures.

Recommendations:

  • Logo and Slogan Development Team
  • Partner with local news broadcasts for Advertising/Promotions
  • Outsource Internet Data Acquisition /Interpretation
  • Advertising Approval based On Circulation/Cost/Monitoring Capabilities

Quantifying and AnalyzingGE Cook Alert, a new product to the market, has no past quantifying data for new technology in fire safety. Specific variables are needed to monitor and check progress of the launch, and the entire organization must function effectively for success.

Advertising and promotions must work together to form an impression in consumers minds along with product credibility to increase success rate of the initial production plan. The model will include an initial production allotment shipped to key retailers to launch the campaign. Distribution, logistics, advertising, and promotions will all be working closely together to assure the initial launch is effective. Measurable data in the initial advertising promotion plan is monitored to gauge numbers for the full production launch.

Recommendations:

  • Launch team implemented with key members from each department (channel distribution, production, operations, sales, marketing, and finance)
  • Phased production schedule/phased advertising model
  • Monitor Daily Effective Circulation and Infomercial Hits
  • Monitor Retailer Simulation/Promotion and Advertising plan
  • Monitor Internet Website key demographic information
  • The launch team will be successful if all departments work together, communicate effectively,and use a phased approach including, production, advertising and all other cost related areas.

Budgeting

GE will be venturing into a new target market when GE Cook Alert is launched. Although they are not a start up company, this will be a new arena. Determining the budget for a new product, that does not have a sales history, can be filled with guesswork. One method GE has available and has decided to use is the forecast sales method. The forecast method projects yearly revenues and computes the amount spent on marketing. In 2008, the average size company spent an average of 7. 2% of total revenue on marketing.

The figure breakdown into public relations, 33%, advertising 18%, directs communications 16% (Design Firm Management & Administration, 2008). The ability to use existing departments within GE is a huge benefit, especially when legal fees associated with costs are built into the budget. Although the budget is somewhat less than what is available, costs will escalate when detailed variables materialize. Legal fees, application fees, and patent plus trademark fees are not included. The budget of $300,000 will promote a value net price of 2000 units for testing at a cost of $150 per unit.

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A preliminary budget projected for GE’s forecasted revenue for GE Cook Alert is $5,000,000: (see chart below)General Electric’s corporate value statement emphasizes the firm’s “unceasing curiosity, passion, and drive to be first in everything we do” (GE. com, 2008). The GE Cook Alert allows the company to fulfill this promise to lead the industry while still improving the lives of consumers and the financial picture of General Electric. Effective marketing begins with thorough market research.

Such research includes understanding as much as possible about the target consumer, climate of the existing market, and competition. With the invention of the GE Cook Alert, General Electric hopes to achieve a competitive advantage within the market while satisfying the wants and needs of the customer. In short, GE still wants to “Bring good things to life”.

References

  1. www. GE. com. (2009). General Electric. Retrieved January 29, 2009, from the GE Website: http://www. ge. com/en/company/index. htm.
  2. NFPA. (2006). National Fire Protection Association. Cooking safety. Retrieved January12, 2009, from NFPA Website: http://www. nfpa. org/categoryList. asp? categoryID=282&URL=Research%20& %20Reports/Fact%20sheets/Home%20safety/Cooking%20safety&cookie%5Ftest=1
  3. Business Wire. (Dec. 2007). US Household appliance manufacturing industry consistsof about 300 companies with combined annual revenue of $25 billion. Retrieved January 18, 2009, from Look Smart Find Articles Web site:http://www. findarticles. com/p/articles/mi_m0EIN/is_2005_Dec_6/ai_n15896779.
  4. Arl. org. (2007). Market Analysis. Retrieved on February 8, 2009, from www. arl.org/sparc/GI/sectionB/B_4_09. html
  5. Internet Advertising Advantages. (2007) Retrieved on February 4, 2009, from www. associatedcontent. com/article/ 2345/internet_advertising_advantages. html? all=articles
  6. Advertising Networks. (2007) Retrieved on February 4, 2009 from www. ciadvertising. org/student_account/fall_00/ adv391k/hongjiy/seminarpaper/f-home. html
  7. Design Firm Management & Administration Report (2008, December). New study reveals marketing budget increases, allocations, & responsibilities. Retrieved February 8, 20098)Yahoo Finance. (2008). http://finance. yahoo. com

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