Introduction

Marketing management is the process of reviewing as well as tracking down company’s or organization’s resources and activities. The business scope in marketing management relies on business size as well as the industry, in which a particular business operates. The effectiveness of marketing management increases the customer base, when it employs the available resources efficiently (Czinkota & Kotabe, 2001). This is because of the improvement of consumer opinions on the products and the services offered by the company. Therefore, successful marketing management increases the company alleged value.

1.   Executive summary

Skil Corporation is a front line producer of power tools, which serves both the consumer markets and the market for professionals. The most popular power tools are the circular saws, which are the best tools available in the market compared to all other tools produced by competitors. Skil Corporation was amongst the top three in the market as far as the power tools were concerned. Besides the tools discussed above, it manufactured drills and roto-hammers.

Skil specializes in the manufacture of multiple varieties of models, which are oriented towards the needs of the local market. Skil made the products, which are price friendly to its customers. A group of dedicated managers enabled Skil to gain competitive advantage in the market. Moreover, Skill stood at the third position in the overall sale of the circular saws. Although Skill had reported an increase in the profitability over recent years, it had not reached a high market volume.

In spite of the fact that Skil had established a strong position in the markets for some of its products, it has to invest in the public advertisement of its products in order to survive in the market. Although it did not undertake product promotion through advertisements, Skil enjoyed a large established worldwide market. However, its market was not strong enough to outdo its competitors because the market was saturated.

2.   Situation analysis

Both external and internal environment factors affected Skil operations. The management of the company needed to understand these factors and react to the changing environment. The timely analysis helps in determining the company’s current capability, customers, and the level of influence that the environmental factors have on its operations. The company is currently experiencing challenges from its competitors due to its slow growth. Besides, it has experienced threats from the industry structures, but they are not to succeed in the industry.

These challenges require Skil to focus on the prices by a continued reduction in product differentiation. For example, there are companies, which challenge the market leaders, and less product differentiation enabled them to get a market share fast. This is a serious approach as it might affect the low profitable industries if other companies follow this lead and begin pricing aggressively.

2.1    Market summary

Skil’s target market consists of fifteen broad categories or channels, comprising broader categories. These categories are consumer and industrial channels. The industrial channel included supplies to contractors, malls, and equipment rental outlets. Others were plumbing, electric supply chains, and automotive distributors. Among these supply channels, stores from mall supply chain played a key role in the channeling of portable electric power tools sales to factories.

Target markets of the company include a few categories of consumers: recreational, fitness, speed, hockey, and extreme. The individual consumers supported the other target market. These were inclusive of hardware stores home centers, buying clubs, catalog showrooms, as well as mass merchandisers. Each channel received tools from different price list and different discount structures applied.

2.1.1  Market demographics (behavior factors)

Market demographic analysis is aimed at data collection to provide information about the consumers for the organization. Effective demographic analysis helps in policy and decision making as far as the market conditions research is concerned. Skil Corporation marketers have used demographic factors to analyze the behavior of the consumers and the competitors. The marketer is using the formulated demographic profile in creation of a hypothetical collective visual. Skil Corporation has a few potential consumer groups, which include show rooms, home centers, and hardware stores.

Additionally, there is a target market of consumers, who are interested in crafts and home care, are used to fixing around the house without the extra help and are willing to save family budget money. This category consists of men that are typically married and have kids, may or may not have college education, full-time employed.  Who are using Skil tools in the professional activities, artisans, repair workers, workers-on-call. They may have family and kids, full-time employed in the blue-collar type of work. Also there is a potential segment of young men with no family and kids, and craftwork is either their hobby or the way of saving money on repairs. They are not married; do not have kids; typically students or starting their career in a white-collar job.

The major objective of this approach used by the marketers is to try to define various groups of customers, which live within this target population at large. These helps in generating a complete and understandable image of these target groups as well as determine traits of every group that it poses. These marketing companies are in a position to develop effective strategies, which are able to attract a precise group towards a certain Skil products. This will help Skil to have a competitive advantage over its opponents.

2.1.2   Markets needs

Market needs comprise of a number of issues in any company. First, it is necessary to identify the company’s target market. Then come up with clear information on the needs of the target market and the best way to satisfy those needs. Here, the target market is the artisans, who must first determine their needs and ensure that they are fully satisfied. The primary target market needs quality artisanship; they require well-developed design and quality customer service. There should be a clearly discussed return policy, which is easy to find. Consumers in any market set up should perceive a competitive advantage of any company. That is, the kind of consumer services offered will influence the sales of the company, in this case Skil Corporation. Nevertheless, it has ensured that what the consumer buys is what he actually wants.

 A well-thought-out design of the tools attracts the initial attention and the customer may start searching more information. Moreover, comfortable tool design would leave a customer happy, which improves the company’s image and recognition. Improved customer service that assists in any kind of questions, starting from the instructions of usage to the explanation of the return and refund policy would make sure that the customer does have all necessary information to start working with the purchase.

2.1.3   Market growth

Another way to view the market is in the context of an increase in the demand for a certain service or product. Market growth rate can be determined by the time, during which a consumer adopts. This happens when there is an increased demand for a product or when a consumer discovers the usefulness of the product or service on the price level. With the price of most Skil products going down due to the increased competition caused by a lack of product differentiation, Black Decker is still one of its major competitors. In spite of this competition, the market had a steady growth from 1975 to 1979. This growth started from $27 thousand to over $60 thousand of revenues in the year 1979.

The statistical estimation for the year 1979 was more than $70 thousand because more consumers are forming an increased demand for these products partially the increase in revenues is caused by a decrease in price of the products due to competition while the usefulness of these products increases.

2.2   SWOT analysis (weaknesses, strengths, threats, opportunities)

Every organization, company or any business in general is faced by difficulties. Therefore, this subsequent SWOT analysis tries to look into the major strengths and weaknesses in the company, and describes the opportunities and threats facing Skil Corporation.

Strengths

Some of the Skil strengths is that it is a fully experienced and insight industry. It has a group of creational efficient product designers. This means that its product design fully meets the needs of the consumers. Finally, the company uses very efficient business models that are flexible, like the utilization of direct sales and direct distribution to the consumer.

Weaknesses

Skil has some weaknesses. The company is unable to differentiate its products. This exposes them to stiff competition and as result, low prices. In the case of developing a start –up company based on the brand awareness strategy, it would make Skil drag behind.

Opportunities

There are evident opportunities that remain unattended. Skil has a chance of taking part or participating in a growing industry. Moreover, there is a decrease in product costs all through the economies of scales. Other than these, it has the ability to influence other participants in the industry through additional marketing efforts that will help its growth in the general market. The company may utilize the marketing budget for active advertisement to attract new customers.

Threats

Skil is at the risk of experiencing potential competition from the well-established participants in market in the future. The economy downturns have negative effects on the people disposable income, which is optional income dedicated to the fitness or recreational products. There might be increased publicity attracted to the questions of safety while using power tools, which might have a negative impact on the consumers taste for the products.

2.2.1   Competition

Competition in any market set up refers to a situation, where corporations compete for a market share. In this context, buyers and sellers in most cases have no control over the product prices. During competition, efficiency is achieved because any company in the market tries to produce quality products as per the demand of the consumers. On the other hand, competition between suppliers forces them to charge their minimum supply price for any given product. Skil and other companies, which produce power tools, have no product differentiation that makes the competition very stiff. In such a case, Skil has no control over the market prices but the buyers have a high likelihood in determining the price of the products it offers in the market. The major competitors of Skil Corporation in the tool market include Black Decker Power Tools, Dremel Tool and Hitachi.

2.2.2   Product offering

Skil Corporation offers a variety of power tools. The most recognised brand product is a circular saw by Skil. The company also manufactures power tools like electric drills and screw drivers, and hammers among others.

2.2.3   Keys to success

The development of good ideas is the first step to success. By developing new ideas that are innovative compared to the existing or simply learning from the previous mistakes will help the company to grow successfully. Moreover, Skil should ensure that management and customer support department is interested in the growth of the company. This means that they should have good qualifications, which will lead it to a successful ending. Constant innovation and improvement of the existing tools is the key to success. Customer service from the first steps of product selection to refunds should be excellent to ensure the return customers

2.2.4   Critical issues

Skil management has to focus on different issues. One of these issues is the need for current market analysis. These issues can be in the state of competitors, customer response or rather in the trends of management and marketing environments as well as all product promotion activity. Nevertheless, the management team should address various codes of ethics in product promotion.

3.   Marketing strategy

The development of marketing strategy is a very important aspect in marketing management. The success of any business depends on the well-defined marketing strategy. However, good marketing strategies occur because of an extensive marketing research that helps to collect information about the customers and the market in general. In the case of Skil Corporation, marketing strategies will enable it to reach its ultimate customers and show them that the power tools are affordable and make the life easier. The strategies will alleviate communication process between the corporation and its potential customers on the benefits of the products and on how these products meet their needs. In the end, these strategies will cultivate for a profitable relationship between Skil Corporation and the customers. The strategy should also be flexible enough in order to go along with customer changes in perceptions, and the possibility of identifying new target markets.
The best strategy at this period is the heavy advertisement of the power tools to the consumers. Moreover, the heavy reliance on the personal selling and offering of the products to the mass consumers, like construction firms and repair firms, should be developed and executed. The new channels of distribution should be searched for and analysed.

3.1   Mission

Mission refers to the reasons why an organization or business exists in terms of the products it offers to the market. A good mission for any organization should incorporate aspects such as purpose, strategy, and strategic scope of the organizational policies, values, and culture. Skil Corporation’s should focus on how the marketing plans meet and fulfil this mission. Finally; a mission should provide an incentive in the process of implementing the marketing plan of this corporation. The mission of the new marketing strategy is to upsell the power tools to the professional market in order to increase the sales, thus increase revenues of the company. In addition, it is necessary to monitor the quality of the power tools offered for professional use to support the social responsibility of the company.

3.2   Marketing objectives

While setting business objective, there are certain factors, which need to the company needs to consider. These factors should show all what a business or organization plans to accomplish or achieve, and analyze factors, which enable an establishment of an effective marketing objective (Miller, 1967). Some of these factors are measurable, achievable, time specific and realistic objectives. Some products by Skil Corporation have a good position and recognition in the market. These include circular saws and drill corded. On the other hand, some products like roto hammers and planes are doing poorly in some markets bringing down the company’s market growth. The marketing objective is to improve the recognition of the roto hammers and drills by employing advertisement and personal selling.

3.3   Financial objectives

This category contains a company’s financial goals or needs for its future. These objectives focus mostly on how to earn money, and determine the period that is required for the company in order to achieve its requirements. Finally, is should consider how the time will be spent. There are internal and external factors that affect these objectives, which are, so much focus on cash flows as well as breakeven analysis, business ownership, economic factors, competitors and social and political factors. According to the Skil market information provided, more funds should be allocated to product promotion, especially of products such as roto hammers and planes. The more specific financial objective for Skil Corporation is to increase the roto hammer sales by 7% by the end of the financial year.

3.4    Target markets

The focus of the new strategy needs to be on the group of customers that business organizations have chosen to direct its marketing efforts to and eventually sell merchandise. The main roles of market management is getting new customers and retaining the existing ones. In Skil, company products such as circular saws and drill corded are purely doing well in both consumer and industrial markets. This has helped the company achieve a market growth of 2-4 % growth. The current strategy implies the target market of professional users and large industrial firms that use power tools on day-to-day basis.  

3.5   Positioning

Through positioning marketers try to create an image of the products they are offering in the market to their potential target markets. For example, Skil is experiencing stiff competition from Becker because of the lack of product differentiation. Therefore, for it to stand out in the market for power tools, it has to invest more in positioning by ensuring that its target market has a clear picture on its products. It will achieve its objectives through a continued product promotion process. The positioning of the company in the minds of consumers is the best producers of the quality power tools for attractive price. The merchandise will serve many seasons of hard construction and industrial work and will not break.

3.6   Strategies

In marketing management, marketing strategies are vital to attract the customer. Skil can attain an effective marketing strategy by simply examining clearly the ways a company can create profit, and at the same time sustain customer value. This can be achieved through active advertisement and strategic placement of the Skil power tools in the mass merchandisers and hardware homecare service. The products mostly affected are roto hammers as well as planes.

3.7   Marketing program (pricing, advertising, distribution, and customer service)

In marketing management, a marketing program is an organized, considerately planned set of activities that helps achieving of marketing objectives. In order for any business to come up with a good marketing program, it has to consider some factors that include identifying a market niche. According to the market research, Skil target markets are the mass merchandise and the hardware and homecare service among others. The company will be able to get a large market share through product differentiation. By executing this strategy, Skil will be able to move over its competitors and even achieve a market growth of more than 4%. What follows is identification of affiliate partners, who have ventured in the market who show some interest in the products a company is selling. What follows is providing these partners with good promotional materials, which will help them to promote the company products with ease. Finally, the affiliates should be monitored and updated with information on the products should be given to them to ensure a continued success in the promotional process. The pricing does not need to change, but the quality should be ensured. So, the pricing remains unchanged while the customer service is improved.

3.8   Marketing research

In the field of marketing, there is need for efficient and objective information to solve problems. The data gathered and recorded would be relating to a certain products.  It is performed by collecting information from customers, competitors and from any other force in the potential market. Conducting a market research is important as far as the company is able to understand the needs of the target market. Therefore, it is able to organize on how to satisfy their needs and in the end being able to meet organizations goals and objectives. A company will be able to surpass the competition in the target market. According to the information provided about Skil in 1979, the products such as roto hammers and planes are doing poorly in both consumer and industrial levels. The extensive marketing research on the consumer perceptions about the product quality and pricing needs to be employed. It is also necessary to analyze the competitors’ actions in the market for roto hammers to understand their competitive advantage. A market research would help in guiding; and the information can be gathered from hardware home services or even places of mass merchandise.

4.   Financials

When we talk of financials in marketing management, we try to examine how to handle financial issues in the industry. The dealers and corporate staff members have some immediate access to the analysis of financial performance in the industry. This is because it opens the doors for the dealers to identify opportunities that enable them to improve their operations. Financial issues in any organization help the marketers in the industry to determine how much they require in promotion. The financial requirements of the undertaken project are less than 10% of the Skil income. The major expenditures would be allocated to the promotion materials and training of the customer service support. Also 20% of the marketing budget for this year would be spent of the consumer opinion poll.

4.1   Break-even analysis

Break-even analysis a technique used by industrial or organization marketers when making decisions. These decisions involve categorizing of production cost based on fixed variable. A total of variable and fixed cost is calculated then compared to the sales revenue to determine the sales volume (Corey & Administration, 1977). The sales volume calculated is then used to determine the level at which the industry is neither making profit nor loss.

4.2   Sales forecast (monthly sales forecast)

Sales forecasting is a difficult area in management. Businesses are able to determine when to withdraw or close their products in the market. Some of the key decisions that results from sales forecast are promotional mix capacity investment in production process, and the employment levels required in the industry (Mentzer & Moon, 2005). Sales forecasting can be either macro or micro. In macro forecast, all the markets in total help in determining the behavior of the market demand in future by closely studying its behavior. Macro goes for detailed market sales that are the determination of a market in an industry putting into consideration the course of the market in the future (Kotler, 2000). According to the information given on Skil sales, there is the growth in sales of 748 units in 1978 and 1205 units in 1978.This is a growth in sales of 457 units or 37 % increase in sales. Therefore, the company should focus on increasing its sales up the maximum levels. Skil has to capitalize on the increasing trend of the unit sales.

4.3   Expense forecast

In marketing, an expense is simply the measure of the industry outgoing expenses, which include overheads and outgoing fixed costs in a year. Expense forecast helps to determine how much is required in running an industry over certain duration of time. In this sense while setting the prices of products, these sale levels must accommodate amount, which covers these expenses. Skil expenses were increasing from 1974 to 1978, registering a far much high figure in net sales, and therefore being able to make a profit.

Monthly expenses for the marketing strategy:

  • Month 1: 25% of the budget – required to finance the active promotion and starting the market research
  • Month 2,3,4: 15% of the budget monthly – stable financing of the promotion, analysis of the market research results
  • Month 5: 30% of the budget – final evaluation of the marketing strategy effectiveness.

5.   Controls

In every planning of any activity there must be control. Therefore, in marketing plan, control is the process of monitoring plans as they go on or during adjustment. The control processes gives marketers in the industry green light of how the products of the company are doing in the market. If a set object states the direction then a plan sets a clear road map to the destination of the products in the market. Then, out of all these, control helps the marketers to determine if the decision made is right. The major control elements are expenditures; the expenses on marketing should not exceed the budget. In case the additional finances are required to fulfill the objectives, the marketing plan should be edited, not the financial tables.

5.1   Implementation

After all the above processes are undertaken the next step the marketers in Skil Corporation need to undertake is the implementation of these procedures for an effective outcome. First, start with the communication process with new distribution channels to start the promotion on site. Second, develop the promotion and advertisement materials to up sale the roto-hammer and other tools. Third, employ the personal selling of the tools to the large industrial companies.

5.2   Marketing organization

Skil sells its products to hardware stores, and catalogs showrooms among others. In a situation where customers fall under buying preferences that are distinct, an organization’s marketing management is necessary.  Marketing managers are able to organize and develop annual as well as long-term strategy for the markets. Skil Company is the second best in the market behind Decker in terms of market dominance. Therefore, when it organizes the new marketing strategy well it will be able outdo Decker in terms of product sales.

5.3   Contingency planning (difficulties and risks, worst-case risks)

The contingency plan in marketing is the process of preparation of strategic actions taken up by a business in case the initial plan does not succeed. . Whenever a company puts emphasis on contingency policy, it is a sign of being realistic. Skil Company has to recognize the competitive market and the economy, in which they operate that is changing. Decker is the main competitor of Skil Company and it has sales of 306 units in all markets compared to 106 units sold by Skil. This market is prone to changes and Skil needs to identify these market changes. The worst-case scenario of this strategy is the failure of fulfillment of the financial goals. The company would incur losses in marketing budget. However, the marketing research spending would not go unused and help managers in developing the new strategy.

The major difficulty in the undertaken strategy is unwillingness of stores to cooperate on promotions. So, Skil has to be ready to offer some extra benefits for the stores, like discounts, longer time of accounts payable, etc.

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