Marketing Plan – Balcony Bar
In assessing Balcony Bars’ current business structure and operations, market segments have been identified and strategies have been suggested. Adoptions of these strategies seek to achieve growth in both sales and market share for a sustainable future.
Market research was conducted and this provided thorough insight into the current situation, the business environment, and a SWOT analysis was conducted to view the internal and external characteristics, which identified avenues for achieving marketing objectives.
By positioning the Balcony Bar as a modern, unique and innovative solution to outdoor entertaining in high density city living, enables them to target young, affluent adults. This allows them to position themselves away from competitors by emphasising the Balcony Bar’s benefits.
Marketing promotions have been implemented to position Balcony Bars in the market and control mechanism need to be in place to measure progress against initial objectives.
Finally, further research will provide Balcony Bar with a way of measuring their progress against their initial objectives.
The Balcony Bar creates a bar top experience on balcony rails. It is seen as so versatile it can be easily moved around to ‘follow the sun’1.
Balcony Bars were invented and designed by Troy Griffin and Richard Jones. The inspiration came when Troy heard that the building of his new apartment had experienced a safety problem with things falling from balcony rails. He was then inspired to team up with Richard, and hence, Balcony Bars was invented.
They launched their recreational invention via the ABC program “The New Inventors” in March 2008, and won the Peoples Choice Award2. This enabled Balcony Bars to send their message of ‘raising the bar’ when it comes to outdoor entertaining.
The purpose of this report is to provide Balcony Bars with an effective marketing plan, which will enable them to adopt an entrance strategy into the market segment.
2. Situational Analysis
Understanding the situation in which consumers make decisions is important to understanding Balcony Bars’ market. The communication, purchase and usage situations are the most important to consider.
Consumers who are actively seeking to purchase a Balcony Bar are more likely to be receptive to marketing communication efforts. Consumers’ attention should be maintained by promotional material containing a large degree of message arguments. Marketing efforts need to be tailored to the needs of consumers who are not actively seeking to purchase a Balcony Bar.
The purchase situation relates to the situation that can effect product selection. The purchase of a Balcony Bar is not impulsive. Potential consumers are likely to spend some time searching different furniture options to use on their balcony. The purchases will depend on the time consumers have to research, available options, amount of money and also the influence of external parties. This provides a need for Balcony Bars to ensure their product is consumer savvy.
The Balcony Bar can be varied depending on how it is going to be used. A consumer may use it as an outdoor office or as an entertaining bar.
3. SWOT Analysis
The SWOT3 analysis is essential for the marketing plan as it examines the Balcony Bar’s internal strengths and weaknesses and their external opportunities and threats. It also takes into consideration the various uncontrollable factors within the business environment.
The balcony bar has several uses and can fit varying types of balconies4. The balcony bar can move to follow the sun as it slides on top of the balcony rail. It is strong, yet only weighs 8 kilograms and abides with Strata By-Laws. Matching bar stools are available, which act as a profitable add-on sale.
The design is available in clear Perspex and aluminium. Being modern, it appeals to city living professionals with high disposable income. The transparent type does not block out the view and is unseen from below.
Balcony Bars’ website5 allows for further understanding of the product through the availability of in-depth product information. Online ordering makes purchasing safe and convenient.
The balcony bar is not completely original as there is already a similar design6 and the market is small and competitive.
The maximum cost is $6757, which may deter potential buyers. The bar does not fold not to allow access to balcony edge. It may not fit all types of balconies and some may find it difficult to assemble.
To differentiate from competition and enhance brand image Balcony Bars could use
eco-friendly materials such as bio degradable packaging and recycled aluminium and Perspex.
Balcony Bars has much opportunity to increase size, variety and accessories. The bar could be available in a larger size, stools and bar tops could come in different styles. Complementing products such as ice buckets, bottle openers and outdoor lighting are possibilities.
In the current global recession households are experiencing a decrease in disposable income, therefore the demand for luxury goods, such as the Balcony Bar, may fall. However, the Balcony Bar is aimed at the higher end of the market and this segment is less affected by the economic downturn.
4. Marketing Objectives
The marketing objectives for Balcony Bars include increasing brand recognition and the amount of sales. Furthermore increased market share and distribution in the outdoor furniture segment is necessary.
Another objective is establishing an awareness of problem recognition as the Balcony Bar was designed to overcome specific safety problems, thus it is important to establish them as a feasible and appropriate solution.
5. Marketing Strategy
5.1 Target Market Segment
The market segment that is most viable for the Balcony Bars is young professionals8. The segment of young professionals encompasses a group of well-educated people, mainly twenty-three to thirty-five, who enjoy self expression through identifiable social symbols and experiences.9 The main purpose of purchasing a Balcony Bar is for outdoor entertaining.
Below further examines the market segment in terms of their lifestyles, activities, interests, attitudes and opinions.
People in this segment are described as “Young Optimism”10. This group’s characteristics are described as young professionals who enjoy an outgoing lifestyle and a sense of fulfilment that generally live in inner city and urban lifestyles. They are into image and style as well as being innovative.
The potential Balcony Bar customers are described as young professionals who reflect the need to seek new experiences and adventure. This group tends to have disposable income as “about half of people in their early 20s are also living at home, whereas two decades ago this proportion was two in five.”11 And once they have moved out of home they are found living in inner city apartments that offer a ‘cosmopolitan lifestyle’.
This group is highly involved in sport and social activities. They are enthusiastic about the activities that they are engaged in and believe they can have it all.
5.1.4 Attitudes and Opinions
The specified demographic fall into the category of opinion leaders12 and those who wish to be seen as “fashionable”13. They are “experiencers” driven by self expression.14 Spending disposable income on luxury goods are seen as symbols of “wealth”, “success” and “status”15, these are referred to as Latent Motives. Although this is the case, the desire to communicate this goal is communicated through Manifest Motives16.
5.1.5 Identified Segment
Our identified target segment is current and potential apartment owners that are likely to be:
* living in Australia
* aged between 23 and 35
* have a sense of adventure
* have disposable income
* open to new experiences
5.2 Positioning Strategy
The unique and innovative functional design of the Balcony Bar, combined with its high quality look and finish, makes it a desirable addition to any balcony entertaining space,17” is the way the Balcony Bar should be positioned.
A number of strategies can be employed to support this position, and to create a clear and effective brand image for the Balcony Bar.
Non-product related attributes include price and user/usage imagery. The price is quite expensive, therefore positioning Balcony Bars as superior quality is particularly important so that consumers can justify their purchase
Product user/usage imagery is an extremely important component to the positioning of the Balcony Bar. It is a piece of furniture that is intended to be used on a balcony which means it is best suited for city apartments and smaller residences. It would be excellent for young professionals that have that disposable income to spend. The user imagery should therefore appeal to those sociable people living in inner city suburbs, and the usage imagery, is using the balcony for outdoor entertaining.
The Balcony Bar is a good representation of practical design, and puts itself in a unique outdoor furniture category. The choice of practical but aesthetically pleasing materials of Perspex and stainless steel, adds to the attractiveness of the bar, and ensures it is easy to maintain18.
5.3 Marketing Mix
Currently the Balcony Bar belongs to the unsought product class because it is a new innovation and the majority of consumers would not recognise the brand. Consequently Balcony Bars’ marketing mix must focus on building brand awareness particularly through promotional strategies. To establish product differentiation they need to develop the idea that the Balcony Bar ‘raises the bar’.
The Balcony Bar is available in clear Perspex and the other stainless steel. Stools with an aluminium frame can be custom made to fit under the Balcony Bar19.
The Balcony Bar can be made to fit many different types of balcony railings20. They should offer delivery with included installation to appeal to time poor customers. A competitive device would be to provide an expressed warranty.
Packaging is vital when sending the product to the customer without damage occurring. Balcony Bars need to use protective packaging, as well as prompt delivery to maintain customer satisfaction. Socially responsible packaging would strengthen the reputation of the brand, thus using recyclable packaging is advisable.
A price skimming policy is most suitable as Balcony Bars is at the introduction stage of the product life cycle. They will benefit by selling at the top of the demand curve at a higher price, before aiming at more price-sensitive customers21.
The Balcony Bar is considerably more expensive than its close competitor The Urban Balcony22. The higher price appeals to more affluent customers who are buying a more innovative and upmarket product, thus creating a point of difference.
Being expensive, it gives an indication of quality materials used in production. The price can be further justified as the customer is purchasing a product that is custom designed to suit their individual balcony structure.
Currently the Balcony Bar is only available online and so selective distribution in a number of specialty stores is needed. The selected outlets must be perceived in a manner that helps to enhance the products position as unique and modern23. Stores such as small home ware boutiques24 are best suited to the brand’s image. To maintain their exclusiveness, they should avoid large stores such as Bunnings and Mitre10.
Few promotion methods are currently utilized by Balcony Bars; however they have gained positive publicity by featuring on The New Inventors website and television program25. Much more promotion is required to build primary demand through informing consumers of the Balcony Bar.
As the target market is relatively narrow and the Balcony Bar is currently operating as a niche product, the best suited promotion methods include sales promotion and some advertising. Print advertisement26 in magazines and newspapers of a modern and high-class status27 are going to reach the target market most effectively. Personal selling, although expensive, would stimulate interest and purchasing from customers28.
6. Implementation Plan and Control Mechanisms
6.1 Implementation Plan
When implementing the marketing mix it is important to use operational decisions and activities, which lead to faster feedback and review.29
The price strategy chosen for the Balcony Bar will be price skimming, and distribution will be through exclusive niche retailers, which reinforce the consumer’s minds that the Balcony Bar is a unique product. The consumer will relate the Balcony Bar to other products in the store, which has a good reputation for supplying innovative and unique products.
Promotion and distribution are closely linked when implementing the Balcony Bar. Promotion, as well as distribution, should underpin the proposition of the Balcony Bar as an exclusive and unique product (see Section 5.3).
6.2 Control Mechanisms
It is very important to analyse the success of the implemented marketing plan. Various control mechanisms can be employed to by provide feedback30 on the operation decisions. Ongoing control and evaluation allows for corrective action to be promptly carried out, ensuring the ongoing success of the plan. Some measures of success are sales/performance analysis, and marketing audits31.
A sales analysis would provide a breakdown of the Balcony Bar’s sales records32. Elements could include where and how the product is performing in the market. Sales analysis’s can be carried out at different time intervals for example seasonal, to ensure that sales opportunities are not missed.
Performance analysis provides feedback to be used against planned performance, which can be used similarly to a sales analysis33.
Marketing audits are important as they provide unbiased feedback on the marketer’s objectives and policies, methods and procedures, and people used in the marketing processes. If the audit shows that the approach used to market the Balcony Bar was not appropriate, or needs to be improved, the necessary corrective action can be taken. The action may be to change the objectives of the plan, or change the people working on the Balcony Bar.
7. Further Market Research
Balcony Bars should undergo further research to help them achieve their marketing objectives.
As Balcony Bars sales increase, further research on additional promotional opportunities can be spent on.
Balcony Bars should also research and keep up-to-date with the ongoing trends in the market. Customer feedback forms would allow direct information, and the use of surveys and online polls as well as recording the amount of hits Balcony Bars’ website is receiving. This will enable them to understand the consumer’s needs and wants.
In order to successfully penetrate and establish its position in the market, Balcony Bar needs to focus on enhancing its strengths and seeking effective means of developing its weaknesses.
The balcony furniture is a small market that has potential for growth. Balcony Bar needs to attract its potential customers through an affective promotional strategy and focusing on their target market’s needs.
Balcony Bar’s plan includes establishing brand recognition as well as achieving brand preference within the target market.