Principle of Marketing: Backpack Industry

This assignment has been designed to assess the following intended learning outcomes:

• Explain the foundational principles of marketing and apply them to a broad range of contexts, industries and outcomes.
• Apply marketing principles to segmentation and positioning and develop appropriate strategic responses.
• Critique the theoretical foundations and practical evidence for the marketing concept and marketing orientation

1.      Introduction

The backpack industry is in the limelight due to the demands of customers and new industry trends. It is important to make a complete marketing plan and apply all necessary or pertinent principles of marketing to start a business and sustain the success for the long run. In the competitive landscape, it is important to come up with good marketing strategies to get an edge over competitors. In this comprehensive marketing plan, several marketing concepts, principles, and strategies will be elaborated along with the impact on both internal and external business environment.

The company creates and sells backpacks for customers in the market. High-quality backpacks are to be designed according to different customer segments. The firm aims to enhance the positioning to attract customers and increase sales and market share in the presence of many other competitors (Golriz and Walker, 2012)

1.1 Backpack Marketing Mission Statement

“The mission of the company is to produce innovative backpack designs for the everyday customer at a realistic price.” The mission indicates the intention regarding creativity and innovation, which can drive the customer experience and satisfaction in the competitive market.

1.2 Corporate Objectives

The management of the company has designed several corporate objectives. These corporate objectives provide direction for the company to run the business. The illustration of corporate objectives is as under

• The objective of the company is to use its resources effectively to create an innovative culture and produce innovative products for customers.
• The objective of the company is to increase sales and revenues in the first 2 years to depict further business expansion in the competitive market.

1.3 Financial Objectives

The marketing budget of the company is $5,00,000. The firm has to divide the budget into different marketing activities. Marketing analysis, target market, targeting, and action plan are the main phases of the marketing plan. The most important thing for the company is to allocate the financial resources effectively to meet marketing objectives and create an impact on customers.

1.4 Marketing Objectives

• The objective of the company is to streamline high-quality products through an effective marketing process to enhance the visibility of positioning.
• The objective of the firm is to find the target market and make appropriate customer segments in the backpack industry.
• The objective is to increase the impact of all marketing efforts on customer satisfaction, loyalty, and engagement.

2.      Situational Analysis

The situational analysis is a comprehensive analysis including macro and micro factors. Macro factor includes political, economic, social, technological, environmental and legal. On the other hand, the microenvironment includes SWOT analysis to analyze the business situation in the backpack industry.

2.2 Macro Environment

• Political
• Political stability is the biggest advantage for the organization to exist strong in the backpack industry.
• It depicts the support for new companies in this particular market.
• Political parties have included business development and infrastructure in their manifesto, and it seems a great opportunity to make a successful entry.
• Economical
• England is a developed economy, after the recession, the country has sustained its growth effectively.
• The buying power of people in this country is high due to the high- or moderate-income level. The gross domestic product of the country shows consistent growth, and it looks the biggest advantage this backpack company can take.
• United Kingdome has become the 5^th largest economy regarding GDP growth (Cooper, 2018). It is a free market for businesses.
• Social
• The country contains an aging population. It creates the opportunity to make different customer segments.
• For Instance, it has been revealed that it is a cosmopolitan environment. People intend to travel frequently. People’s mobility is in the limelight in this culture, and the backpack industry is taking benefits from it.
• In the United Kingdom, the dependency ratio has been increasing with time. Literacy ratio is quite high but increasing education cost is a concern.
• Technological
• People in the United Kingdom are tech-savvy.
• They like to adopt new innovative products to make the work easy.
• The UK has good access to modern technology, and it has been depicted in science and information technology.
• Environmental
• The country has depicted some remarkable improvements in removing the negative impact on the environment.
• Organizations, from retail to manufacturing, have taken key initiatives (CSR) to reduce the visibility of impact.
• Business ethics and corporate social responsibility initiatives are quite visible in this region.
• Legal
• The legal structure of the company is effective for both the general public and corporate sector.
• For Instance, a firm has to integrate with flexible business regulations to sustain the business in this industry.
• Equality Act 2010 and equal employment opportunity act 1996 are prominent laws, which are triggered by business operations.

2.3 Micro Environment

The microenvironment depicts strengths, weakness, opportunities, and threats of the backpack company in this competitive market. Good SWOT analysis can help the management of the company to derive several insights and make appropriate marketing strategies.

Strengths The high brand image is the biggest strength of the company Financial capability is also a strength for further expansion Based on segmentation, the broad backpack line is in the limelight Technology is a key success factor to make high-quality backpacks.

Weakness The biggest weakness of the company is that it is new as compared to other backpacks industry giants Initially, the company may contain limited growth or market share, and it seems the biggest weakness in the competitive market. The cost of the business may be higher. The company has a good marketing budget, and it may create an impact on business formation.

Opportunities It is a great opportunity to target the aging population and make several segments to streamline backpacks Use of technology to differentiate the backpack is a great opportunity to make the difference. Through advertising and promotion, it seems a great chance to create hype in this potential market and increase sales and revenues. Capitalizing on students and professionals can be a good approach to attract and position better in the minds.

Threats International brands are coming to this market with loyal customers and differentiated products, and it is a huge threat of the business. The product imitation can be a big threat because other rivals are capable of producing imitation. The cost of the marketing process may increase with the passage of time due to increasing trends in this backpack industry.

These are some key insights regarding microenvironmental analysis. It creates the base for the company to make effective business strategies and enable business sustainability in the long run.

3.      Market Analysis

Market Snapshot

Market Dynamics	In the United Kingdom, trends by using the backpack are increasing, especially; women in the country like to carry laptops and other accessories (Whitehead et al., 2008). The overall market size of the outdoor backpack is expected to increase to 3.15 billion by 2021 (Businesswire.com, 2017). Luxury bags are in the limelight in the market, and LOUIS VUITTON UK Ltd, Burberry Group PLC and Prada Spa are the top brands.
Product/Market Fit	Products are available at high and low prices depending on the income level and demands of customers. The price competition also streamlines backpacks on the market Backpacks are designed due to demand and increasing outdoor work culture
Customer Segments/Demographics	Cosmopolitans are the main customers of the company, as they like to carry bags when moving. People, containing the age of 15 to 60 are customers of the company. It can be divided into students, business professionals, travelers, and households.
Backpack Customer Segments	Cosmopolitans Students Professionals Business executives Athletes Households

 

3.2 Market Overview

The business of backpack is safe in the United Kingdom. The backpack market value in the United Kingdom is $100 million (Boardsportsource.com, 201). It is a fact that the companies are integrating with customer trends regarding lifestyles, mobility, interest in sports and many other businesses and household needs. For Instance, the workforce culture in this region is quite similar to the United States of America. People have to carry technological equipment to conduct the work. Based on the job nature and needs of the customer, the sales of backpacks have been increased in this industry.

The backpack market in the United Kingdom contains optimistic growth.

It has been observed that trends in carrying bags have increased. The backpack is a modern shape of a handbag. Companies have increased the production of backpacks along with some key technological enhancements. USB chargers, Wi-Fi hotspots, and many other accessories are quite visible in new backpacks. These inclusions are due to customer demands and the need for modern culture and workplace in this country.  A prominent increase in sales of the backpack was observed in 2017. The broad portfolio of products has been shaped by the company to enhance the targeting.

The government support for different outdoor activities is a big advantage for this company to exist strongly and take benefits from its innovative culture. This market has potential; the company is quite up to it.

3.3 Market Segmentation in UK

4.      Target markets, Objectives, and Tactical Overview

To reach the target market, the company has to use different tactics.  The most important thing for the company is to enhance the targeting to increase sales and positioning.

4.1 UK Target Market

 4.2 Long Haul Market 

 

5.      Marketing Mix

The market mix strategy is an important element of the marketing process. Interestingly, it also depicts some key marketing principles. The main pillars of the marketing mix are the product, price, place, and promotion.  In every aspect of the marketing mix, the management of the company aims to make a separate marketing strategy to enhance the attraction and positioning. The backpack market needs a strong and workable market plan, which can open ways to gain success in an effective and lucrative manner.

5.1 Product

The product strategy of the company is to increase the product line.  With the evolvement of both market and customers, the intention is to come up with a broad range of backpacks to meet the needs of all market segments. For Instance, if the firm is looking to create a product line for students, it can integrate with the needs of all types of students such graduate, O level or A level in different educational institutions. It is the best way to increase the product line for all segments. The big benefit that the company can gain from the product expansion is the availability of backpacks for all customers in the UK market.  The company wants to maintain colors, styles, design, and quality of the product effectively to contain the differentiation (Borowski, 2011). Product differentiation is an appropriate product strategy that can lead towards a competitive advantage over the other rivals. Along with the differentiation of the product, making the product durable for the customer can also create a positive impact on the buying decisions (Baker, 2014).

5.2 Price

The firm has to face tough competition in this market. Price competition is also in the limelight. This backpack company is looking to come up with a penetration pricing strategy to increase attraction and get the customer’s attention. Substitutes are quite visible due to competitive prices. However, surprisingly, the firm has decided to come up with low prices of backpacks for customers. The purpose of this pricing strategy is to increase sales, grab the immense range of customers from different segments, and increase sales and revenues. After grabbing customers and increasing sales, the company can increase prices. The intention is to make customer loyalty and create the prominent brand image in this competitive market (Randazzo, 2014). On the other hand, customers want to have the lowest priced backpack, and it justifies this pricing strategy in this market.  The average price of different backpacks is $50 to $100.

5.3 Place

The backpack company wants to use both direct and indirect distribution channels. For Instance, in different urban areas of the United Kingdom, the firm will have its official stores. Selling direct to customer mat reduces the cost of intermediary, and it can create a good impact on revenue streams. Also, Backpacks can be sold through different sports stores, fashion retailers, and online businesses. The appropriate placement strategy of the firm is to make these products available to all target customers. Reaching target customers through these channels is the best approach in this competitive market. The company will start with 8 stores in the United Kingdom and expand after two years through different distribution channels (Richter, 2012 ).

5.4 Promotion

Using traditional and modern media channels is the best tactic to attract a large customer base. However, integrated marketing communication will be enhanced through digital media channels. Online sponsored ads on different social media channels such as Facebook, Twitter, Pinterest, and Instagram can attract target customers. Attractive product simulation, depiction, and customization can be depicted on these digital channels along with comprehensive content. It is a great opportunity for the company to increase customer interaction to have valuable feedback on digital media channels. Obtaining strengths and weakness regarding the product and making some improvements accordingly is the biggest output of online marketing promotion.  On traditional media such as TV, Billboards, and business or sports magazines, the firm can create ads and provide pertinent content. In this potential market, the best way to promote backpacks is to participate in local and international events. Sponsoring and building a strong relationship with communities can make a difference (Kotler, 2012).

6.      Backpack Marketing Action Plan

The market action plan seems to be the implementation. Effective implementation is necessary to meet marketing and business objectives. First, the Backpack Company has to find its target audience and make several segments. After identifying the segments or target customers, the firm has to shape marketing goals and objectives. Backpack Company has set some objectives in this market, which can be measured. The development of goals and objectives needs a comprehensive market analysis to derive possible tactics to reach the target customers. For each target segment, the company has to use a different objective and tactic to reach effectively. Key performance indicators have been developed by the company to measure these tactics and make decisions accordingly.

6.1 Overview of Activities

The firm is looking to drive the marketing process on digital media channels. Along with social media channels, the firm also aims to create its website to depict the detailed overview of backpacks. The situational analysis demonstrates an effective overview of the county or region. The United Kingdom industry is a potential market for the new business. Political, economic, social, technological, environmental and legal factors are well elaborated to derive insights and make a successful entry. It is a key marketing activity by this backpack company to reduce the risks and prepare for the coming challenges. The supporting analysis is SWO because it derives some internal strengths and weakness of the firms. By utilizing opportunities in this competitive market, weaknesses and threats can be reduced.

The market analysis has portrayed some key backpack industry trends. Interestingly, this marketing activity has helped to obtain an association with other industries such as tourism and education.   Regarding several segments, the market is analyzed. The marketing strategies are based on this market analysis. The rivalry is quite high, and the firm has to contain some thoughtful considerations to sustain the business in the long run.  Another marketing activity is segmentation. It is conducted regarding the UK target market and long-haul market.  Each segment contains a different objective, tactics and the key success indicator. It is the initial phase of the marketing process because it has to reflect in the marketing strategy of the firm. The marketing mix has been shaped effectively. It is based on segmentation, strategic analysis, and segmentation. All these major activities of this backpack company are combined with this major element or activity of the marketing.  These are good strategies and make this new business able to get a competitive advantage.

The backpack company must implement these marketing activities or strategies to operate successfully. The competition is high, and it has to give a tough time to its rivals in this industry. 

References

Baker, M.J. (2014) Marketing Strategy and Management, Macmillan International Higher Education.

Boardsportsource.com (201) Backpacks FW17/18 Trend Report, 1 June, [Online], Available: http://www.boardsportsource.com/trend-report/backpacks-fw1718-trend-report/ [1 November 2018].

Borowski, A. (2011) Adidas Marketing Strategy – An Overview, GRIN Verlag.

Businesswire.com (2017) Top 3 Emerging Trends Impacting the Global Outdoor Backpacks Market from 2017-2021: Technavio, 18 January, [Online], Available: https://www.businesswire.com/news/

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en/Top-3-Emerging-Trends-Impacting-Global-Outdoor [1 November 2018].

Cooper, J.J. (2018) California now world’s 5th largest economy, surpassing UK, 4 May, [Online], Available https://www.apnews.com/dfe5adff6d3640

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Golriz, S. and Walker, B. (2012) ‘Backpacks. Several factors likely to influence design and usage: A systematic literature review ‘, Work; Shannon, vol. 42, no. 4, p. 1.

Kotler, P. (2012) Kotler On Marketing, Simon and Schuster.

McDonald, M. (2012) Market Segmentation: How to Do It and How to Profit from It, John Wiley & Sons.

Randazzo, G.W. (2014) Developing Successful Marketing Strategies, Business Expert Press.

Richter, T. (2012) International Marketing Mix Management: Theoretical Framework, Contingency Factors and Empirical Findings from World-Markets, Logos Verlag Berlin GmbH.

Wedel, M. and Kamakura, W.A. (2012) Market Segmentation: Conceptual and Methodological Foundations, Springer Science & Business Media.

Whitehead, S., Mailley, J., Storer, I., McCardle, J., Torrens, G. and Farrell, G. (2008) ‘IN SAFE HANDS: A Review of Mobile Phone Anti-theft Designs ‘, European Journal on Criminal Policy and Research; Amsterdam, vol. 14, no. 1, pp. 39-60.