The backpack market is a competitive one with different players competing for its share. Competing companies employ different strategies to reach their ultimate customers. The market offers five different market segments that a company can target. The five are; Luxury trend followers, urban commuters, outdoor enthusiasts, University and school children. The selected backpack item targets urban commuters a market segment. The decision to focus on this category was informed by data from a market survey.
According to the market survey, the market size is twenty million with a growth rate of three percent. Additionally, the purchased pack in 2014 was twenty-three percent with an average purchase price of forty-five dollars. According to this segment, comfort is the main characteristic that they rated high with fifty-six percent followed by capacity and water proof at twenty-eight percent each. However, durability and eco-friendly are not primary considerations.
Delegate your assignment to our experts and they will do the rest.
The product that the company intends to produce is a Teardrop Rucksack a pleasantly tapered stylish pack that incorporates a roomy main compartment and several nooks and crannies to store items. The back pack main features are waterproof, with a water bottle and a laptop sleeve. It has thin spaghetti, and it's synthetic with straps that guarantee the comfort of the pack wearer.
The production cost for the back pack is $31 each, and the company expects to sell each piece at $87. The margin per unit is $56. The price, in this case is higher than the market average which is $45. At higher price, it would be difficult to capture a sizeable market share but it will enable the firm to incorporate different distributors therefore reaching a wider market. The additional features like the laptop sleeve will help boost the sale. At the current price, it is possible for the different distributors to enjoy high profit margins and sell the back pack as a superior offering.
The company will use direct distribution, online discount retailers, high end outdoors, fashion boutique and department stores to distribute the back pack. The total number of customers reached through the channels will be fifty nine thousand eight hundred and seventy. From the sales data, direct distribution with a market share of 16% will raise $ 13,571 from 156 sales. Online discount retailers with a market share of 19% will bring in $42,073.20 as revenues. Department stores will bring in $ 46, 079.55 from 963 sales and a market share of 18%. High end outdoors will have a market share of 23% ad total revenues of $41,217 Fashion boutique will have a market share of 23% and its total revenues from 729 sales will be 28,540.35
The company will use discount programs for promoting the back park. The programs will offer turnkey marketing support and value added to the customers and will focus on the innovators and early adopters to ensure that the desired growth is achieved. Additionally, the company will use market development funds in indirect sales. In this case, the company will avail funds to channel members, resellers, and distributors to help in creating awareness and sell the back packs.
The company will use a positioning message that employs luxurious, tough, safe, high quality, peak performance, professional, fashionable and classic as the benefit messages. Use of these benefits certainly appeals the commuters, outdoor, and luxury market segments. The positioning messages will demonstrate competitiveness at 96% and consistency.
The company will use print media and in particular financial journal which has a wider coverage for the selected segment. The paper is ideal due to its focus on financial news and economic issues. The paper has commuters as its highest demographic reach and a circulation of thirty-seven thousand eight hundred and fifty nine implying that it will be useful in the marketing campaign. The total campaign cost for using this media will be $ 1650.00 and a total reach of 171.