This section provides a sample marketing plan for Sonicare Electric toothbrush.
Sonicare, which is a division of Sonic Technology of Philips, is dedicated to producing various electric toothbrushes. Before Philips’s acquisition of Optival in 2000, Optival was responsible for the production of Domestic appliances and Personal care. Its acquisition makes it become a major division in the production of various health care products and has also become a global manufacturer of dental products called Sonicare electric toothbrush. Typically, Sonicare electric toothbrush has been designed to deliver superior results; nevertheless, Sonicare tooth electric brush is facing stiff competition in the competitive global markets. Many companies have also launched similar electric toothbrushes, and they serve as competitors to Sonicare Technology. The next section provides an overview of new products Sonicare is preparing to launch in the global competitive markets. (cited in Marketing Plan).
Sonicare is preparing to launch a new product called FlexCare RT 990 with sanitizer in a mature competitive market. Despite Sonicare’s share of markets, Sonicare will compete with other manufactures of electric brushes, the other manufacturers such as General Electric (GE), Siemens, Panasonic Doltz, Oral-B Triumph, Colgate, and Cybersonic will be competing with Sonicare. Despite the presence of these competitors of electric toothbrush in the global market, Sonicare is dedicated to launching a new product because of the new features that FlexCare RT 900 are designed to offer. FlexCare RT 900 will be easy to use with additional features that are lacking in the other electric toothbrushes. Apart from improving the whitening of the teeth, a new product will increase the hygienic conditions of the teeth, which other products have lacked. Launching this new product is among the implementation of Philips’ strategy to become a leading company in Health and Well–being. (Philips, 2009).
The primary market objectives of Sonicare in the first year are to achieve a market share of unique sales of more than 3% with unit sales of 10 million. Sonicare also targets to make revenue of US $80 in the first year from FlexCare RT 990, and keep losses to less than 8 million in the first year, and determine to break even in the second year. (cited in Marketing Plan).
Although Sonicare is determined to break even in the second year, however, it is essential to examine the current market situation in the United States.
Cuurent market situation
The pursuit of health and well-being has been among the major objectives of Phillips organization. With an intention to pursue this objective, Phillips acquired Optival in 2000, and Optival 2000 became one of the divisions of Philips health care. As a global leader in Electronics, Philips is one of the top players in healthcare, and since it has launched its market venture of Sonicare electric toothbrush, the company has increased its annual sales over the years. The pursuit of universal trends in the market represents a significant proportion of Philips’ objectives, and this objective enhances the market strategy in Sonic Technology. In 2008, Sonic Technology made sales of over US$10.9 billion in Sonicare Electric toothbrush. (cited in Philips, 2008).
However, to gain market share, Sonicare should be ready to deliver a quality product that meets customers’ requirements. It should be noted that there are other players of the electric toothbrush that are also seeking to have shares in the U.S. and global markets. Some of the competitors are also offering quality products similar to Sonic are products, thus, Sonicare must be very tactical in launching its new product in the U.S market.
Market Description: The market for FlexCare RT 990 will consist of consumers between the ages of 15 and above, and the population of this age group contains almost 80 % of the US population. (U.S Census Bureau).
Typically, there has been an increase in the health awareness of most people globally, and this awareness will enhance the market availability of the new product. In the USA and Europe, people are spending a large part of their income in sustaining their health care. Moreover, in the emerging markets, such as China, India, South Africa, and there is a dynamic increase in health awareness, and people are spending part of their income on products that will increase their health being. Thus, female and male consumers of 15 and above will make the target markets. However, from past market experience, Sonicare also realizes that regions, where there will be higher markets for the new products, are places where the majority of people are middle-income earners. Thus, Sonicare will concentrate on marketing publicity in the regions of middle-income earners than regions of low-income earners. (cited Philips 2008).
Sonicare toothbrush model FlexCare RT 990 is designed to offer the following standard features:
First, FlexCare RT 990 has a standard brush head working with a high rate speed of
45000 brush strokes per minute. This is more sophisticated compared to conventional standards with a speed of between 2500 and 7500 per minute. (Animal-teeth.com, 2009).
FlexCare RT 990 has features of a compact brush head with vibration motion. It also has UV sanitizer adapted with an integrated charger, cord wrap, and brush head storage.
FlexCare RT 990 also comes with a travel charger that makes it easy to use when travelling a long distance.
In addition, FlexCare RT 990 comes with hygienic travel caps that make it unique to another electric toothbrush. FlexCare RT 990 also has the additional feature of having a Luxury soft travel case that makes it more unique to another electric toothbrush. The other unique features of FlexCare RT 990 are its ability to brush enamel with an evaluation of cleanliness, and having results of creating waves of pressure, share forces that forcefully remove plaques from any part of the teeth. Typically, it has the capacity of cleaning the teeth measured to occur at distances of up to 4 millimetres. With the Unique bristles of a Sonicare, its high-velocity movement plays the dynamic cleaning action, which allows direct contact with teeth, and gums. (Philips, 2009). It’s completely unique difference with other electric toothbrush makes it have cleaning techniques and the qualities of FlexCare RT 990 can make it have overall market influence despite the strong competition. (Animal-teeth.com, Philips, 2009).
With unique features of improving the health conditions of the teeth coupled with providing genuine healthy features to enamel, FlexCare RT 990 will have competitive advantages over other electric toothbrush products. However, it is essential to analyse the competitors of Sonicare and examine how Sonicare can exploit its weaknesses.
This section provides a competitive review of the major electric toothbrush. Apart from Sonicare, there are also other manufacturers of electric toothbrush that serve as competitors to Sonicare. However, the new model electric toothbrush that Sonicare is intending to introduce in the markets, there are features this product have that other products in the market do not have. Some of the key competitors are discussed below:
Oral-B Triumph: Oral-B is one of the leading electric toothbrushes in the United States, and provides various brands in the market. However, Oral-B Triumph has a major weakness in designing products that cannot compete in the markets, and some of its products are between $80 and $180. Apart from this, most of the latest brands this company produces are of the same features with no innovative feature being added. Sonicare stands to gain competitive advantages from Oral-B Triumph weakness. Latest Oral-B Triumph Oral B portable Smartplug cannot stand a chance with Sonicare’s latest product.
Panasonic Doltz: Panasonic has just launched an electric toothbrush in the market, and currently struggling to have a major cut in the market. Although Panasonic Doltz has some unique features, the company does not have a tactical campaign strategy to launch its products nationwide. With prices ranging from $60 to $150, Sonicare campaign strategy will beat the Panasonic campaign in U.S markets.
Cybersonics: Cybersonics is one of the major electric tooth manufacturers in the United States. The company has a unique campaign strategy for launching its products nationwide. With prices of the electric toothbrush from $80 to $200, the company has been able to cover U.S national markets. However, a survey conducted by market watch reveals that there are some defects in their products after using for a few weeks, and the product does not clean the teeth as being described during publicity.
Colgate: Colgate has also launched some electric toothbrush in the market. Most of its products are good, and cheap compared with other competitors in the market. Despite their unique products, there are some features on its products that cannot stand with Sonicare products. Its product design is not innovative compared to Sonicare’s electric toothbrush, and this will make Sonicare have an edge over Colgate products.
Despite stiff strong competitions Sonicare is facing, Sonicare has designed distribution, and campaign strategies to beat its competitors
FlexCare RT 990 will be distributed in all 50 states in the United States, and all the 50 states will form the unique markets channel for the product. There are important channels that Sonicare has already contacted for the distribution of its products. Among them are:
Health supply superstores, which is Heath Max that specializes in distributing health products online and offline. Health Max has a network all over 50 states in the United States and has unique stores for Sonicare products. Its network distribution includes catalogues and online distribution. Apart from Health Max, Sonicare will also use the Biz rate for the channel of distribution. Moreover, Sonicare will use online retail stores such as amazon.com, drugsore.com and ebay.com, which will provide unique placements on their homepage during the introduction of FlexCare RT 990.
Although, there will be initial distribution in the United States in the first year. After the first year, Sonicare will launch its product in Canada, Europe, and other parts of the world. Depending on the demand for FlexCare RT 990, Sonic Technology will test the market viability of this product, and achieving the market viabilities will depend on the strengths, weaknesses, opportunities, and threats of FlexCare RT 990.
Strengths, weakness, opportunities, and threat analysis
Sonicare has powerful strength on which to build its market forces, however, the major weakness is its newness in the market because it has not yet fully developed the brand images compare to other viable competitors. A major opportunity that Sonicare is having is that it has a major advantage in the share of markets by eliminating other competitors. Typically, there is a current demand for electric toothbrush and Sonicare has a major share in the market. However, to maintain having a major share in the market, there is a need to carry customers along in continuing demand for Sonicare products.
The major threats Sonicare is facing are the competition from other manufacturers of an electric toothbrush.
Strengths: Strengths are a capacity of an organization to reach its objectives. There are three important methods that Sonicare can use to build its strengths.
- Innovative product: There is variety of unique features that Sonicare product possesses. Being an electric toothbrush with sophisticated bristle tips, it can move three times faster than another electric toothbrush in the market. Typically, its unique dynamic fluid cleaning action and bristle speed motion give it a unique innovative opportunity that can make Sonicare’s product have forces in the markets.
- Pricing: Although, the pricing of Sonicare is average compared to the prices of other electric toothbrushes manufacturers. With unique innovative features that are coming with FlexCare RT 990, Sonicare will have an edge over other electric toothbrush manufacturers.
- Health: The design of FlexCare RT 990 will enhance the health improvement of potential consumers. It has the potential of cleaning the teeth whiter and making gum healthier three times than other latest electric toothbrush in the markets.
Weakness: These are the internal elements that may serve as threats to an organization to achieve its objectives. Although, Sonicare has really studied the markets, and analyzed the weakness of other competitors before deciding to launch FlexCare RT 990, nevertheless, Sonicare has some unique weaknesses.
Lower Brand awareness: Soni Technology, which is responsible for designing Sonicare products is under Philips, and typically, Philips is known to be among the top players in electronic products. Thus, Sonicare does not have brand recognition in healthcare compared to other brands in the market.
Length of time to recharge: It takes extra two minutes to recharge than other electric brushes. Moreover, it is expensive to replace the battery of a charger.
Opportunities: These are external elements that an organization can exploit for its advantages, and opportunities are the advantages that Sonicare can achieve by launching its new products. These opportunities are as follows:
- There has been an increase in awareness among consumers about using modern technology in enhancing their well-being. Many people are now using the latest electric toothbrush compared to a traditional toothbrush, and the awareness that innovative electric toothbrush has more dynamic features of giving teeth healthy features will add to the opportunities of launching this new product in the market. Moreover, consumers using the latest electric toothbrush will like to replace the old ones they are using, and there is also dynamic awareness among people, where consumers are changing from using a traditional toothbrush to an electric toothbrush. With the more educational campaign, many people will replace their former electric with a new model.
- Lower technology cost: With a lower cost of technology, the new electric toothbrush model has more features than old models, and there will be no differences in prices. Non-increase in prices of the new model will be an additional opportunity because customers will prefer this product to other similar products in the market.
Threats: These are the external elements that may serve as challenges to organizational performances.
There are two major threats to the introduction of FlexCare RT 990.
- Increase in competition: Apart from major competitors discussed in the previous sections, there are more new companies launching electric toothbrushes in the market. Although their products do not have the latest innovative features that Sonicare new model product is having, nevertheless, Sonicare will have to intensify a marketing campaign on value-added prices, and stress differentiation with other products from the competitors.
- Downward pressure in pricing: Another major threat facing Sonicare is downward pressure in market price as a result increase in competition. Nevertheless, Sonicare main objective of securing more than 10% market share in the second year will be realisable due to Sonicare’s unique strategic advantage.
This section evaluates the external environment, which FlexCare RT 990 will be operating before initiating the marketing process. It is very important to use Pest analysis for evaluation in order to analysis the external environment for FlexCare RT 990 in the United States.
Political factors: the United States is politically stable and the government offers protection for business organizations. Apart from these, there is accountability in the public sector, and there is transparency among government workers. Additionally, there is stiff control on corruption, and the system is free trade economy, and there are no political barriers to launching FlexCare RT 990 in the United States. Meanwhile, the peaceful political factor will contribute to the success of Sonicare when launching its new product.
Economic factors: The United States has the largest and most powerful economy in the world with a per capita income of $47,000. The economy encourages private ownership of production and services. The total population is 307,212,123, and the unemployment rate in the US economy is 7.2. %. Sonicare has chances of securing markets for its product in the U.S economy, with peoples’ standard of living, and with a total number of populations, Sonicare will be able to secure desired customers in the U.S market.
Social factors: The United States has a variety of diverse people with diverse cultures. Although English is an official language, other languages from different parts of the world are spoken by residents. Typically, Christmas and Easter are the most important public holidays in the United States. Sonicare will have no social barriers in securing desire markets in the US economy. Although there are diverse cultures in the U.S, nevertheless, with more intensification on product campaigns, this will serve as no barrier for the launching of FlexCare RT 990 in the U.S market.
Technological factors: The United States is the most technologically advanced country in the world. The Information Technology sector is fast developing, and apart from this, the government is pumping money into research and innovation in technological development. Sonicare will benefit from the technological advancement of the US economy. Many people in the United States use products that reflect new technology, and Sonicare has initiated product innovation that can improve the health, and well-being of people. Thus, with the methods Sonicare uses to design its new product, there are chances of finding the desired market in the United States. (Central Intelligence Agency, 2009).
Examining both internal and external factors is to analyze whether Sonicare has chances of realizing its objectives. Its objectives and issues are discussed below:
Objectives and issues
Sonicare has a set of aggressive objectives to be achievable in the first year and second year of its market entry. To achieve these objectives, it is essential to track the progress of its new product in the market.
First Year Objectives: In the first year, Sonicare is aiming for 3% of the market share in the United States with sales volume reaching 10 million.
Second Year Objectives: Sonicare’s objective in the second year is to achieve 10% of market share in the United States in order to break even during this period.
Issues: To increase market awareness, it is essential to improve the brand image, and this involves increasing publicity of the product in order to create a unique brand name for the product. Thus, there is a need for Sonicare to increase its brand image innovation by intensifying on marketing strategy so as to increase consumers’ awareness of the new product.
To build a public image of the product, Sonicare will initiate a marketing strategy in order to increase publicity on the product.
Sonicare’s marketing strategy is to select consumers’ different income groups for its new product. Sonicare’s primary consumers will be middle- and upper-income earners who believe in using the latest technology for improving their health. In addition, Sonicare marketing strategy is to target high school students, college students, and graduate students who have the awareness that electric toothbrushes improve health conditions than traditional toothbrushes. These demographical segments are between 16 and 30, and they have achieved certain educational status. Sonicare also will target workers throughout the United States with an average income of $12, 000 and above per annum. Sonicare is also targeting businessmen from all the states in the United States.
There are various tools that Sonicare will initiate in enhancing its marketing strategies. Some of its marketing strategy techniques are as follows:
Positioning: Sonicare will use this technique to build meaningful differentiation of its product in order to build a competitive advantage. By using product differentiation, Sonicare will be able to position its product for the health improvement of its consumers. The marketing strategy will include wide publicity to increase people’s awareness in order to differentiate FlexCare RT 990 from other products.
Product strategy: The features of the FlexCare RT 990 will be the same as what has been described in “Products Overview” in a previous section, however, the new product will be sold with a two-year warranty, and Sonicare will introduce additional features in a new product that will make Sonicare model be more powerful. As part of Sonicare strategy, Sonicare will add more value to the new product, and to enhance product recognition, Sonicare will inscribe a blue logo to differentiate Sonicare’s product from other electric toothbrushes, and this blue logo will also reinforce the marketing campaign.
Packaging: Sonicare will provide a packaging solution that will enhance brand identity to FlexCare RT 990. With the latest packaging technique, FlexCare RT 990 will be lighter to carry by customers; the attractive colour that Sonicare will use for the product will be undeniable customers. Moreover, the packaging system will be environmentally friendly that will be designed to be low carbon and sustainable in nature.
Pricing strategy: Sonicare aims to offer the product at $160 per unit for retail price, however, Sonicare will offer a wholesale price at $90 per unit. Sonicare has the intention of reducing the prices in the second year, this is to attract more customers and beat the competitors.
Distribution strategy: The distribution strategy will cover all states in the United States, and Sonicare will use several online retail stores for distribution, especially online stores that sell virtually health products. To support the distribution channel, Sonicare will distribute catalogues, handouts that provide detailed specifications of the product, there will be a display of a full-colour photo of the product that will display the full image of the new product to potential consumers.
Marketing Communication Strategy: Sonicare will use media as a means of communication. The media will focus on advertising the new product with intention of building brand image. The advertisement strategy will convey brand awareness and enhance product differentiation. To attract more customers, there will be a discount for customers that purchase up to 10 items and long-standing customers. Apart from distribution online, Sonicare will also use communication channels to encourage customers to buy through channel partners.
Marketing research: Sonicare will conduct market tests, surveys, questionnaires, and interviews to get people’s feedback on the product. Through people’s feedback, Sonicare will be able to determine customers’ satisfaction with the product. Marketing research will also help Sonicare to determine the effectiveness of the advertisement of its product, and the overall feedback will help in determining where there is a need for improvement on the product. In addition, Sonicare will solicit professional services such as Vendria Inc, which is leading online multimedia to introduce FlexCare RT 990 to the public. The tactics are to educate consumers by employing the latest online display tools to create interactive product demonstrations and enhance online shopping for the product. The network provided by Vendria Inc will enhance the demand for FlexCare RT 990 by consumers both online and in the traditional stores. (Appliance Design, 2003).
Marketing Organizations: This section discusses the strategies the marketing department will initiate to organize marketing programs for FlexCare RT 990. The marketing department will consist of a Chief marketing officer, Advertising manager, and Promotion manager who will coordinate all marketing activities of FlexCare RT 990. Exhibit 1 provides detail of the Sonicare marketing team. However, the marketing department needs to be tactical in the introduction of new products in the market. The next section discusses the action programs of FlexCare RT 990. (cited in Marketing Plan).
Coordination of resources from other departments is essential in order to plan the strategies on how Sonicare will introduce a new product in the market. FlexCare RT 990 will be introduced in March, and Sonicare will use the first six months of next year to achieve its objectives, and summary of the action programs are as follows:
February: Sonicare will initiate a sum of $400, 000 in February to educate the distributors on the benefits of FlexCare RT 990 over other electric toothbrushes. This campaign will include trade shows, webcast for the launching of the product, there will be the provision of samples, and opinion leaders will provide a public image for the product. Moreover, selected product reviewers and celebrities will be used as part of the public relations strategy for FlexCare RT 990. Sonicare staff will educate people on the features of FlexCare RT 990, and its benefits over another electric toothbrush.
March: Sonicare will integrate internet, radio, and television campaigns for FlexCare RT 990. This campaign will target consumers from 15 and above, and the campaign will target middle, high-income earners, and educated people. During the campaign, many benefits of using FlexCare RT 990 will be displayed to potential customers, and there will be displaying of its benefits in improving teeth conditions.
April: As the campaign is progressing, Sonicare will use more tactics to enhance public awareness of the product. There will be an increase in the promotion of sales by giving away some gifts added to consumers that buy the products. Moreover, Sonicare will provide additional support for the retailers by providing point-of-purchase displays.
May: To induce salespersons and retail organizations, Sonicare will introduce sales context during this month, and organizations and salespersons that have the highest sales volume will be awarded very good prizes.
June: To give of FlexCare RT 990 national coverage, Sonicare will initiate a national advertisement campaign through radio, and television featuring voices of opinion leaders about FlexCare RT 990. There will also live show program on the television where people will be allowed to make direct phone calls posing questions about the features of the product.
July: Sonicare will exhibit an electric toothbrush trade show, and there will be distributions of handouts. Sonicare will also initiate market research to analyze customer satisfaction with the products, and the report will be used for future promotions.
First-year revenue for FlexCare RT 990 will be approximate $10 million, and Sonicare determines to cut loss in the first year. Price $160 per unit will be achievable to secure the target of $10 million in the first year. During the second year, Sonicare is determined to break even in the first and second months of the second year. Meanwhile, after the second month of the second year, Sonicare determines to enhance sales of FlexCare RT 990, and increase the profit margin from the sales. To calculate the break-even of the Sonicare new product, the wholesale price is $90 per unit, where the retail price is offered at $160 per unit, and the fixed cost for the first year is assumed $36,900,000. From this assumption, the calculation for the break-even will be estimated as follows:
$36, 900,000 = 410, 000 units
$160 – $90
This section describes how Sonicare will use control to access management efforts of the overall marketing initiation plan for FlexCare RT 990. The assessment will help management to identify problems that might have arisen. The control will also help the management to initiate corrective measures if there in case of problems. Control also serves as assessing performances variation in the marketing plan.
To ensure an effective marketing plan for FlexCare RT 990, Sonicare is initiating tight control measures to monitor customers’ satisfaction with the new product, control will also be used to monitor the quality specifications of FlexCare RT 990. A quality control unit will be set up to ensure that there is no deviation in the product’s quality provided. Moreover, control will ensure monitoring of monthly sales, and monthly expenses and Sonicare will ensure that FlexCare RT 990 is environmentally friendly in order to enhance the product image. (Marketing Plan).
Analysis of the marketing plan reveals that Sonicare stands to gain by launching FlexCare RT 990 in the U.S market. Although, there are maybe threats that can serve as challenges to new products, nevertheless, Sonicare will achieve competitive advantages by launching the new product. Despite the potential competition, initiating marketing campaigns, and other resources that Sonicare is using for a marketing campaign, Sonicare will realise its market objectives by securing more than 10% market share in the second year.
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