Managing Strategic Marketing

Executive summary

Marketing mix is an important component of marketing and

organizations take additional care in formulating and implementing the
marketing mix.
This assignment analyzes and evaluates the marketing mix of MJR
Timber and Furniture Company based in India which is also my own
firm.
The company is in the wood furniture industry and competes with
OMER Furniture, another furniture manufacturer operating in the same
place.
The study has compared the present marketing mix of both the
companies and has traced out certain deficiencies in the mix of MJR
furniture Company when compared to the competitor.
An improved marketing mix has been formulated for the MJR Company
along with some action plans which would enable the company to
attain major market share thus achieving its mission and vision in the
next two years.

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TABLE OF CONTENTS

1. Introduction 3
2. Background of the Company 4
3. The marketing mix 5
4. Marketing mix of MJR Timber & Furniture 8
5. Improved Mix for MJR Timber & Furniture 14
6. Action Plans 15
7. Conclusion 16
8. Bibliography 17

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1. INTRODUCTION

Over the years, with rapid industrialization of the world, a massive

sector evolved and has occupied a relevant position in business and it
is identified as the marketing sector.
Marketing is an evolutionary process that links firms to customers.
Production has no meaning without marketing. In simple words
Marketing is “the performance of business activities that divert the
flow of goods and services from producer to consumer or
user.”(American Marketing Association).The traditional concept
stresses the selling of goods and services. The modern concept of
Marketing is a “total system of interacting business activities designed
to plan, price, promote and distribute want-satisfying products and
services to present and potential customers.” (William j. Stanton,
fundamentals of marketing, 1978, p.5.) The modern marketing is a
broad and customer oriented concept. One of the most important
components of marketing is the Marketing Mix.
The concept of Marketing Mix is an interesting one. The
four main elements namely, the product, price, place and promotion
play an important role in the plan. The Marketing Mix must be
delivered in the right way to the right people at the right time. It is
important that all the elements are given equal and balanced
importance and managed. Marketing Mix is considered as the blend
and batter of the ingredients that determines the appreciation by the
consumer. Marketing Mix occupies a dominant position in the plan of

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every organization and is adapted well in most successful

organizations. The marketing mix formulated should be according to
the nature, requirements and preferences of the customers.
Finally, it can be said that the way an organization uses
the component is important rather than sticking to theories and
waiting for result. Marketing plan should be designed and formulated in
a systematic way so that the execution results in the best and effective
way. The application of marketing mix will be according to the
demands of a particular situation as the situational variable is very
critical even though the Marketing Mix is very essential for an
organization to survive The assignment intends to evaluate and
analyze the application of Marketing Mix in own firm and comparisons
with the main competitor enabling a better understanding of the
concept.

2. BACKGROUND OF THE COMPANY

MJR Timber & Furniture Pvt Ltd is basically a wood processing and
furniture manufacturing firm where log wood is processed into timber
and assembled for the production of furniture. The industry is equipped
with modern machines capable of converting heavy log wood to timber
.The processed timber is then used for the manufacture of furniture
products in the manufacturing department of the company. The small
scale industry manufactures wood furniture products for living, dining

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and bed rooms under the brand name 'MJR' .The small scale industry
was started by Madireddy Janga Reddy in 1988 in Hyderabad, a major
city in the state of Andhra Pradesh, India with an initial investment of
US$ 20,000. The main aim was to obtain local processing works and
sell maximum upholstered wood furniture to customers through the
company retail showroom outlets operating in Hyderabad.
The company is committed to provide high quality furniture
products to the customers. The firm aims to deliver the customer
needs at the right time .High quality furniture products are
manufactured from top quality wood which is imported at times. The
wood furniture is manufactured in accordance to the latest design and
fashion. The sparkling performance of the company in selling in spite
of tough competition reveals the product quality; afford ability and
goodwill of the organization among customers. The company's main
competitor is the OMER Wood Industries which operates in the same
place. The mission of MJR Timber & Furniture Pvt Ltd is to create
monopoly in the wooden furniture market of Hyderabad.

3. THE MARKETING MIX

The concept of marketing mix starts with marketing and market
segmentation. No matter the size of the company, the principles of
marketing applied properly can improve one's profitability. ''Marketing
is the discovery or identification of needs and execution of those
activities necessary to plan and provide need satisfying products and
services and to price, promote, distribute and effect exchange of these
products at an acceptable cost and in a socially responsible

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manner”(Shaw and semenik,1985).The marketing mix is the core

component of marketing. It starts with market segmentation.'' Market
segmentation is the sub-dividing of the market into homogeneous
subsets of customers where any subset may conceivably be selected
as a target market to be reached with a distinct marketing mix.”(Philip
Kotler, Marketing Management, 1988, p.166.) In order to cater to the
requirements of identified market segment, an entrepreneur has to
develop an appropriate marketing mix. The marketing mix is a
systematic and balanced combination of four important elements and
is as follows:
► Product
► Price
► Place
► Promotion

The marketing mix is the combination of marketing elements used in

the sale of a particular product. All these are considered in planning a
marketing strategy. Any one may be enhanced, deducted or changed
in some degree in order to create the strategy necessary to efficiently
and effectively sell a product. The marketing mix is the essence of
modern marketing and definitely plays a vital role in the growth and
survival of an organization.

►Product
This element involves decisions concerning product line, product
design, brand name, package, after sale service, etc. The product is
considered as the core element because if there isn't a product there is
no marketing mix. The product requires renewal at frequent intervals
to sustain the customer. Branding and Packaging are extremely
important for a product. Branding is the process of assigning a
distinctive name to the product by which it is to be known and

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remembered. Packing implies placing products in suitable packages for

safe and easy handling. it is essential to determine the product, nature
of the product etc. Firms should never be shortsighted as to think they
only provide customers with a physical product. In today’s market
place it takes more than that to compete. A company is required to
develop a product that can capture the market. The product should
prove something special to the customer so that it can keep growing in
the product life cycle.
Types of products:
● Commodity products
● Specialty products
● Differentiated products
Hence the product element of the mix is the most important of all. A
company's main job is to create a product, a product that can create
favorable image in the minds of customers. Product positioning is
essential for this particular task.

►Price
It involves decisions relating to price policy, basic price, discounts,
terms of credit etc when setting a price we need to ensure
that the product will be able to compete with rival companies and need
to charge a price that the customer is willing to pay. Price enters the
second important consideration of the marketing mix. Price is an
important element of the marketing mix as it influences the profit
margin and the sales volume. The key to pricing is to build value into
the product and price it accordingly. A few pricing policies are listed
below:-
● Loss leader pricing
● Penetration pricing
● Price skimming
● Differential pricing

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All these policies can be adopted keeping in view the pricing policy of
the competitor. Pricing is a complex process that is important to the
success of a company. The price of a product has to include a number
of variables in addition to just the product cost which includes the cost
of producing the actual product, marketing that product,
transportation, packaging, insurance, and any necessary taxes.
Irrelevant pricing policy can prove fatal for an organization.

►Place
“If farms and factories are the heart of industrial America, distribution
networks are its circulatory system.”(Corey ET al.1989)
This statement helps to show how vital distribution is to the industrial
sector. Without proper distribution, products have no way of reaching
the ultimate customer. Place simply refers to how you will sell your
products to your customer. It involves the distribution of the products
to the customer. Distribution systems are organized into channels.
These channels are an organized set of institutions whose goal is to
move goods from point of manufacture to point of consumption. A few
channels of distribution are:-
● Manufacturer ▬ Customer
● Manufacturer ▬ Retailer ▬ Customer
● Manufacturer ▬ Wholesaler ▬ Retailer ▬ Customer
In order to select the right channel for the distribution of the product,
certain considerations like the nature of product, nature of market,
nature of firm etc are applicable.

►Promotion
Any personal or non-personal communication that creates a favorable
disposition toward a good, service or idea in the mind of the recipient

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of the communication. (Shaw and semenik 1985)The key objectives of

promotion are to inform, persuade and remind.
It requires decisions with respect to advertising, salesmanship, sales
promotion, advertising media, theme of advertising, advertising
budget etc. promotion leads to awareness of the product among the
consumers. Promotional mix comprises of Advertising, salesman-ship,
sales promotion and publicity. Advertising is a controversial topic.
Some experts believe that advertising is a social waste while others
consider it an essential ingredient of business. All major organizations
are involved in exclusive promotional activities and the giant
companies like Pepsi, coco-cola, Vodafone etc are those investing high
for media advertisements that creates immense popularity for the
product. Advertising can be done through many different types of
media. These can include:
● Radio
● TV
● Magazines
● Business Card
● Newspapers
The media advertising is the most effective media of promotion, the
best way of familiarizing the product among the public even though
high investment is required for advertising on TV, Radio, Newspapers
and Magazines.
The marketing mix is applicable and will be applicable in the future
because it is not something which can be ignored and if business
happens marketing mix will also happen and will be implemented. The
concept is only prone to changes according to the different
organization requirements.

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4. MARKETING MIX OF MJR TIMBER & FURNITURE

MJR Timber & Furniture Pvt Ltd employees a typical marketing mix. Our
marketing mix mainly depends on the product, but we also realized
that the pricing policy was the key to our recent growth. The company
aims to create monopoly in the wood furniture market of Hyderabad by
attaining a major market share. The marketing mix of the company
was a result of intensive research and market evaluation based on the
facts of survival and growth. The Target Market of our company is the
households of medium income bracket living in urban areas with status
consciousness. The marketing mix employed by the company is as
follows:

►PRODUCT

MJR Timber & Furniture Pvt Ltd manufacture upholstered wood

household furniture with the brand name ‘MJR’ .The company offers a
diverse range of modern and traditional furniture. The company's
success has grown from its ability to produce high-quality furniture at
affordable price with outstanding customer service. The brand is liked
and appreciated by customers all over the state because of the quality
and styling. The creation of a brand name was necessary in order to
familiarize the furniture product among customers. A variety of
furniture products are manufactured under the brand name MJR and
those include sofa sets, chairs, dining sets and doors exclusively for
living, dining and bed rooms. Our product is a unique combination of
fashion and fine furniture craftsmanship. We need to sell pride of our
workmanship and prestige. The brand furniture product is truly our
pride now but we had to face a lot of problems while planning the new

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product, the decision to produce wood furniture was implemented after

a study of customer preference and satisfaction. The study revealed
that the households and professional home builders preferred wood
furniture than other material furniture’s even though it was expensive
and it was because wood furniture always offered premium styling with
a glance of royal feel and durability. This fact tempted us to stick on to
wood and manufacture wood furniture. The wood used for the
production are teakwood, mahogany, jack wood and rub wood.
The brand faces tough competition from the competitor brand 'OMER'
manufactured by the OMER wood industries which operates in the
same city.

► PRODUCT OF THE COMPETITOR

The main competitor of MJR Furniture Company is OMER wood

industries which manufactures wood furniture products under the
brand name 'OMER’. The company manufactures quality products for
professional home builders and high income households. The OMER
brand also maintains high quality and produces living, dining and bed
room furniture. The collection of furniture models is large and OMER
offers a variety of the product.

►WHICH BRAND IS BETTER?

Both brands share the market equally at the present. The MJR brand is
better in terms of afforded ability and durability while the OMER brand
offers better trends and collection of wood furniture. Both the products
are equally appreciated and considered by the customers. The market
share of the brands is equal and can be shown as follows:

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MJR
OMER

Figure 1 PRESENTMARKET SHARE 50-50

It can be concluded that both the products share the market equally
and are customer satisfying brands. The products are of equal want by
the customers. There is no better product among the two brands and is
highly competitive.

►PRICE

The price is another important factor that determines the fate of the
product. We knew that the customers will be more concerned about
the price because we were targeting medium income households and
home builders. The cost of raw materials and labor was an unfavorable
factor for us to determine a low price and in spite we decided to go for
low profit at the beginning which slowly enabled us to penetrate into
the market. The pricing that we adopted was the penetrating pricing
policy. The MJR brand is now the best affordable furniture brand in the
market. We could penetrate the market only because of the apt pricing
policy. After the market entry and attaining a 50% market share the

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company increased the brand price by mere 5% to compensate the

cost of raw materials, cost of production and government taxes.

►PRICE OF THE COMPETITOR

The price of the competitor brand is high compared to the 'MJR' brand.
The OMER Company is now taking initiatives to decrease the price of
their products after loosing 50% of the market share to the MJR
Company.
It can be concluded that the pricing policy helped our company to
attain a half market share since the launch of the brand 'MJR'.

WHO’S PRICING POLICY IS BETTER

Our pricing policy is better when compared to the competitor

company. We tried to ascertain low profit till the market share started
favoring us and once 50% milestone was achieved we increased the
price by a mere proportion enabling a larger profit.

►PLACE

The MJR Company distributes the products through the simplest and
the shortest channel, the producer-consumer channel. The company
has own retail outlets operating in every part of Hyderabad. The
distribution channel of the company comprises of four showrooms and
attached service centers. We selected the direct producer-consumer
channel because of the following reasons:
 Our product is bulky and heavy products are normally distributed
directly to minimize transportation of products.

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 Direct selling is preferable when the market is small and is

located in a narrow area.
 We possessed marketing expertise and required control over
distribution.
 The desired types of middlemen were not available. The MJR
company distribution channel can be shown with the help of a
diagram:

THE COMPETITOR DISTRIBUTION

The OMER Company distributes their product through the producer-
retailer-consumer channel. The company has invested a lot for the

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distribution of their brand. The furniture retail outlets operating in the

city are their channel. The channel is shown below:

WHICH IS THE BETTER CHANNEL?

For a furniture company a short channel of distribution is always

preferable because the product is bulky and transportation can be
minimized and expenses can be reduced. The MJR Company has a
short and controlled distribution network. In this case the company can
study the customer and produce the products according to customer
preference and it can be concluded that the MJR Company has better
distribution by running its own retail outlets.

►PROMOTION
Our promotion strategy is mainly based on making the information
available to the right target customer. The main job of our promotion
team is to make people interested in our kind of product aware that
the product exists and where to find it. The main source of promotion
for our company is publicity and sales promotion.

● Publicity include news releases, articles in trade magazines and

newspaper articles. This is a valuable method for creating positive
public perception for the firm. It is also an economical method suitable
for small scale organization.

● Sales promotion activities of our company mainly include point-of-

purchase literature and trade shows. Trade shows have become a good
way to promote products within the industry. We normally highlight our
product price in order to attract customers.

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►THE OMER PROMOTION

The OMER Company is involved in every kind of promotional activities

which include advertising, personal selling and sales promotion. The
company advertises often on the radio and newspapers. The company
has been successful in their promotional activities and kept it going till
the arrival of the MJR Company. After the launch of the medium priced
MJR brand the OMER Company experienced decline in the sales and
lost half of the market to our company. The promotional activities are
still in action and effective extend.

►WHOSE STRATEGY IS BETTER?

The OMER Company’s promotional activities are better than that of the
MJR. The OMER company has been successful advertising on the Radio,
which is one of the most mass appealing media and also by the means
of personal selling. Personal selling is very effective and is used often
in the wood products industry and it has many advantages over other
forms of promotion. It can be concluded that the competitor has better
promotional activities when compared to the MJR mode of promotion.

5. ‘IMPROVED MARKETING MIX FOR MJR TIMBER & FURNITURE’

There is a wide scope for improvement in the marketing mix of MJR

Furniture Company. The company has to develop a new strategy
focusing on the product and promotion elements of the mix. Even
though the company has been successful in selling in the recent past,
the product and promotion strategies need to be reformulated. The
competitor has better strategies of the product and promotion
elements. It is clear from the analysis of the mix that the competitor

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has a variety of models under their brand and has superior collection
of furniture while the MJR brand has only a few models and the
promotional activities are insufficient when compared to the
competitor. The pricing and distribution strategies are well structured
and adapted in our organization. The following are suggestions for
improvement in the mix and growth of the company:

► Customers are mainly interested in selecting from a range of

furniture models, the company should provide them with more variety
of models both traditional and modern.
► Promotion plays a very important role in the customer’s decision
making process. In case of MJR it has less sales promotion schemes. So
importance should be given to promotional activities.
► Advertising has to be done on Radio and TV as these are the mass
appealing Medias.
► Advertising has to be done in other Medias also like hoardings,
posters and magazines.

6. ACTION PLANS

 To develop new models of upholstered wood furniture product

under the same brand.

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 To advertise on the most mass appealing Medias like TV, Radio

and Magazines.

 To concentrate on new product development and the

promotional activities.

Recently we noticed a craze for traditional model furniture among the

customers. The company now concentrates on developing traditional
models under the brand 'MJR ROYAL' and providing them with
exclusive promotion.
Hence by enforcing the new strategies the company can make
impressive improvements in the Marketing Mix and compete in an
advanced manner thus achieving its mission and the vision.

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7. CONCLUSION

The marketing mix is the true essence of an organization. All the

elements namely the product, price, place and promotion are equally
applicable and important even though organizations can prioritize
according to the nature of Business. The Company has to examine how
well the product can be managed and send to the consumer. All these
can be achieved by employing a suitable marketing mix. This
assignment evaluates the application of marketing mix and its
importance for the growth and sustainability of an organization. The
idea of comparing marketing mix with that of the main competitor is
well appreciated and effective because there is a scope for
improvement in most cases.
In such cases the company can identify the areas that need to be
reformulated and prioritized. It can be concluded that the marketing
mix is an essential component of marketing which cannot be ignored
and kept aside as the circulatory system of marketing is identified to
be the Marketing Mix.

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8. Bibliography

References:

S.K Gupta & S.Jain, Entrepreneurship and Small Business Management,

s.chand publications.

Russell S .Winer, Marketing Management, Pearson Prentice Hall.

Hooley, G. J., Saunders, J. A. and Piercy, N.F., 1998. Marketing Strategy

and Competitive positioning. 2nd ed. London.

Baker, M. J., 2000. Marketing Strategy and Management. 3rd Ed.

Basingstoke. Macmillan.

Doyle, p., 2001. Marketing Management and Strategy. 3rd ed. London.

A. Vinod, 2004. Marketing Management. Calicut University.

Websites:

http://www.vtwood.forprod.vt.edu/cfpmm/index.htmL

http://www.ext.vt.edu/pubs/forestry/420-145/420-145.html

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