The marketing-mix model is applied to discuss the Marketing Strategy of Silver Chef Limited.
This Marketing Strategy element reflects the solution to the customers’ needs. Silver Chef Limited should develop unique product design, name and features to stand out in the competitive market. Following factors should be considered to develop the product strategy- quality, variety, features, packaging, brand name and augmented services.
This Marketing Strategy element requires an evaluation of the value of products for targeted customers. The pricing strategy of the Silver Chef Limited will focus on setting the list price, credit terms, payment period and discounts.
Today's customers are not interested in knowing the ‘price' but a total cost involved in acquiring, consuming and disposing of the product.
This Marketing Strategy element requires Silver Chef Limited to make some important decisions when developing its distribution plan. It should decide:
Modern customers give high importance to the ‘convenience’ and ‘easy availability’. The selection of ‘right’ distribution channels will require Silver Chef Limited to:
This is one of the most important elements of Silver Chef Limited Marketing Strategy. Silver Chef Limited can blend above and below the line promotional strategies to achieve its marketing objectives. The above the line promotion options for Silver Chef Limited are- television, radio and print advertising. Below the line promotion options are- catalogues, tradeshows and direct mail campaigns.
The promotional plan of Silver Chef Limited Marketing Strategy requires the company to consider the following factors:
The development of effective marketing mix strategies depends on Silver Chef Limited’s knowledge of its potential customer base. The strategies will be more effective if the company understands the needs, expectations and attitude of its customers. The detailed analysis leads towards the identification of different customer profiles or segments (as explained in detail in the next section).
Silver Chef Limited can follow three steps to conduct customer analysis:
Silver Chef Limited can consider following factors when developing the customer profiles:
The customer analysis and development of segmentation strategies run in parallel. Silver Chef Limited can use the information obtained from the customer analysis to develop the segmentation, targeting and positioning strategies as discussed below:
The development of Silver Chef Limited Marketing Strategy requires identifying segmentation basis to understand the specific buying behaviour of customers. The needs, expectations and buying behaviour of customers are heterogeneous and depend on multifaceted factors- like:
By using the segmentation technique, Silver Chef Limited can narrow down the large, diversified target audience into specific and narrowly defined groups. Market segmentation surveys are common methods of obtaining the customer-specific information that could be used to create groups sharing common characteristics.
After understanding the unique buying behaviour of customers and getting the required information through surveys, Silver Chef Limited can divide the market into small homogeneous groups. It can be done by exploring the geographic, demographic, behavioural and psychographic characteristics of customers.
The company can use one or more of these segmentation strategies to choose the right market segments and develop an effective Marketing Strategy.
Silver Chef Limited can combine the different segmentation strategies for more specific targeting as explained in the next section.
After dividing the large diversified customer market into smaller groups with homogeneous characteristics, Silver Chef Limited should wisely choose the target segment/segments whose needs and expectations match the company’s resources and capabilities.
The targeting can be done by evaluating the commercial attractiveness and growth potential of identified segments. Silver Chef Limited can choose one or more segments depending on the segments’ characteristics and the company's resources, capabilities and growth objectives.
The commercial attractiveness and growth potential of each segment can be evaluated by using the following indicators:
After segmenting the customer market and choosing the right target market, Silver Chef Limited now requires to set a clear positioning statement that could create a positive image of the offered product in the customers' mind. Silver Chef Limited can follow the following steps to develop an effective positioning strategy:
The survival in the increasingly competitive market requires Silver Chef Limited to set the clear differentiation basis that could provide an edge against rivals. Silver Chef Limited Marketing Strategy should focus on identifying unique selling propositions (USPs). Some examples of USPs are the highest quality, lowest cost or uniqueness of idea. Identifying USPs is not sufficient as the effectiveness of the Marketing Strategy of Silver Chef Limited will directly depend on management's ability to communicate the identified unique selling propositions.
The Silver Chef Limited can apply Porter's generic strategies model to explore how competitive advantage can be created. The pictorial presentation of the Porter Model is given below:
The company can set a competitive advantage based on cost or differentiation.
The differentiation strategy focuses on developing brand loyalty by offering premium products. The company can find different ways to develop differentiation leadership, such as- by focusing on the reliability, durability, benefits and distinctive features of products, by developing strong brand recognition and by increasing expenditure on marketing efforts like celebrity endorsements and sponsorships etc. Silver Chef Limited can set achieve competitive advantage by adopting product, service, quality, image, people or innovation differentiation.
Following the model shows how Silver Chef Limited can develop an effective Marketing Strategy by evaluating its resources and capabilities, identifying distinctive competencies and leveraging those competencies by adopting either cost or differentiation orientation:
Silver Chef Limited should continuously evaluate its product line by assessing their growth potential and share in the market. The products can be classified into the following categories:
The high number of stars and cash cows will indicate good performance, whereas, a high number of question marks and dogs will be a cause of concern for Silver Chef Limited. The product classification is necessary for evaluating the success of the Marketing Strategy of Silver Chef Limited.
Brand equity reflects the overall value of the brand. The customers' experiences and perceptions determine the brand value. Positive perceptions reflect the high brand value and positive brand equity, while negative perceptions reflect the low brand value and negative brand equity. Silver Chef Limited should continuously evaluate its brand equity to ensure the long-term survival in an increasingly complex and competitive customer market. It can be done by evaluating the following brand equity components:
Brand awareness provides the basis for brand equity development process. High brand awareness shows that the customers know that the Silver Chef Limited brand exists and can recall the important brand-related information. The company can measure brand awareness by conducting brand recall surveys. The high brand awareness acts as an anchor to other associations. It increases brand visibility that can help Silver Chef Limited gain consideration in the competitive market.
Brand association reflects the customers’ associations with Silver Chef Limited based on their memories, previous experiences, interaction with Silver Chef Limited’s employees, price points, advertisements, WOM, celebrity associations and publicity in different media channels. It is important for Silver Chef Limited to carefully plan each interaction with internal and external environmental actors (such as government, employees, shareholders and media), as customers develop brand association not only due to direct interaction with the brand, but also the indirect interaction with different environmental factors.
Silver Chef Limited should carefully evaluate the customers’ perceptions of product quality as these perceptions influence their pricing decisions.
Brand loyalty is among the most important element of Silver Chef Limited’s brand equity. It can be attitudinal (customers’ feelings towards the brand) and/or behavioural brand loyalty (repeat purchase). Higher brand loyalty can decrease the marketing expenditure, increase Silver Chef Limited's ability to introduce new products successfully, erect the barriers to new players and strengthen the company's bargaining power against other channel members.
Silver Chef Limited can increase brand loyalty by rewarding the customers' repeat purchase behaviour. Although the loyalty programs are expensive, it will benefit Silver Chef Limited be reducing the costs of acquiring new customers.
Lastly, Silver Chef Limited should evaluate its proprietary assets (like channel relationships, trademarks and patents). These intangible assets prevent the competitive advantage erosion and develop brand loyalty.
In light of Keller brand equity model (shared above), the Silver Chef Limited can take the following steps to develop the brand equity:
Silver Chef Limited can measure its brand equity by evaluating the:
The company can also combine the above methods and formulate a multiplier to accurately assess the esteem and strength of the brand that reflects the brand equity.
The detailed competitor analysis is highly important for the development of Silver Chef Limited Marketing Strategy. The competitive analysis is done to understand the relative positioning and market share of the company's direct and indirect competitors. Silver Chef Limited should first identify the competitors, evaluate their strategies and compare the strengths and weaknesses of their products with their product offerings. There are five steps Silver Chef Limited can follow to understand the strategic positioning of its key competitors:
The company can use different strategies to get the information about competitors, such as- doing Google research, going to trade shows, browsing public documents, asking customers, playing secret shopper technique and tapping the vendors
A detailed competitor analysis can be categorised into the following parts:
Silver Chef Limited Marketing Strategy development requires a comprehensive market analysis. It can be done by quantitatively and qualitatively assessing the customer market. The information obtained from the market surveys will help Silver Chef Limited management in identifying the emerging opportunities, exposing the potential threats and understanding how they relate to the company’s major strengths and weaknesses.
Silver Chef Limited can follow the following steps to conduct the market analysis:
Silver Chef Limited should evaluate the market potential and volume to determine the size. The market potential includes potential customers and considers upper demand limit. The market volume includes certain indicators like realised sales and total turnover. Silver Chef Limited can take information from different sources to accurately determine the market size, such as- financial data of industry’s major players, government data, customer surveys, published industry reports and trade association data.
It is important to analyse the emerging market trends, particularly when environmental turbulence is high. Silver Chef Limited can use different trend analysis techniques for this purpose, such as- marketing mix modelling, risk analysis, choice modelling and customer analysis. Silver Chef Limited should also monitor the political, legal, regulatory, social and economic changes as these environmental forces play an important role in shaping the market trends.
Silver Chef Limited can extrapolate the historical data to determine the market growth rate. This information can help a company in determining the current lifecycle stage of the industry.
Silver Chef Limited can use Porter's five force framework to determine market profitability. The high buyer power will negatively affect market profitability, showing Silver Chef Limited’s customers have different options. Low supplier power positively influences profitability and indicates Silver Chef Limited has a strong position during the negotiation process with suppliers. High entry barriers show that there will be lesser new entrants in the market. High substitute product threat and high competitive rivalry will also decrease the market profitability and attractiveness for Silver Chef Limited.
Silver Chef Limited can use Porter’s value chain model (as given below) to determine the industry’s cost structure.
It will help Silver Chef Limited in isolating the costs and identifying critical success factors. Silver Chef Limited can also use the information obtained from cost structure analysis to develop cost advantage.
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