Managing New Products and Services

Positioning is all about perception When it comes to positioning of the new line, “growing with you”, it is all about the perception of the new target group. In our opinion CFML made a misjudgment in positioning its new line by not understanding the new target group; teenagers and their parents. The misunderstanding, we believe, is a result of CFML not having researched its new target group. Teenagers have different wants and needs than nouns children and parents with regard to product attributes. The survey states that teenagers have a great influence when it comes to buying new furniture.

The opinion of this target group has to be taken into account. First of all we believe that introducing a “simple and cheap kit” to convert your kids furniture to teenager furniture can damage the existing high quality image of the already existing “high quality’ line. Second of all we think that converting “old” and probably out of fashion furniture into furniture suitable for teenagers doesn’t enhance the association with fashionable furniture. We believe that the new positioning is perceived as functional and a cheap solution which saves money.

This is not in line with the first positioning of high quality, premium price, modern and safe. Positioning of new line vs.. The existing kids line (see Appendix) Alternative positioning 1 An alternative positioning Tort CAL could De to position ten new Ellen as a low parcel high quality product. With the simple and cheap kit to convert existing children furniture into furniture for teenagers the price for the new line can be considerably lower than the prices of Cuff’s competitors. In this alternative positioning we choose to maintain the concept oaf high quality brand but at a lower price than Cuff’s local competitors.

With this new “alternative” price setting CFML would position itself at the level of the suppliers of MAD furniture. In the positioning matrix this alternative positioning could be described as high quality furniture, save money (low price), functional and ease of use by adapting children furniture into furniture for teens. In fact, in this alternative positioning, we would only be lowering the price. Advantages and disadvantages of this alternative positioning 1 The advantages of his alternative positioning would be that we enlarge our “total market”.

With this new positioning we would enlarge the “pie” by not only aiming at 25% of the market, families with the highest incomes, but we would also be aiming at the rest of the market. Disadvantages would probably be the image problem that we create by lowering the prices for the new line. CFML has been well-known for its high quality products and brand against a premium price. By lowering Cuff’s price for the new line the whole brand name of the company, including the original children line, would probably be damaged.

However, by only changing the price we wouldn’t deal with the problem of the very low “brand recognition” in the market segment for 7 – 12 years old and 13- 18 years old. We strongly believe that the very low brand recognition in this “new segments” is an important problem for the failure of Cuff’s new line. Because of the disadvantages we do not recommend this alternative. Advantages and disadvantages of this alternative positioning 2 In our recommended new positioning strategy we choose for a modular line with a high quality against a premium price comparable with the existing children line.

To deal with the problem of the very low brand recognition we would position this new line as a very teenage minded, trendy, high quality, premium priced, modern and functional line. In our marketing plan, the description of the 4 AS, we elaborate on how we will achieve this. The advantage of this new positioning is that we do not harm the existing high quality brand image, in fact we enhance this image. We would still be aiming at the top income families which is in line with our strategy. A disadvantage could be that our new target group still associates the new line, aimed at teenagers, with children reunite.

Another disadvantage, in this new positioning, could be that CFML sets its prices too high and prices itself out of the market with this new line. With the launch of a very effective marketing campaign we would avoid being vulnerable for these wrong associations. Question 3. The new marketing plan should be as unique as the product line. In the marketing plan the following should be taken in consideration: Segmentation and Targeting There are multiple target groups for this product: – Families in the top 25% of household income brackets – centre In several segments ( gender, age, Interests etc.

I Nils segment Is not a homogeneous enough to serve with only one product line. With the flexibility of our product we solved this problem. With marketing research we will define several target groups within this segment. For each target group we can easily make a customized theme of the exterior appearance of our furniture. Product The product should be redesigned in a way that the needs and wants of all separate target (sub)groups can be fulfilled. For this we should separate the furniture’s framework from its external appearance. It should be possible to keep the remark and relatively easy restyle the exterior.

In this way it will be possible to sell a high end quality framework which will not get out of date, is high end quality, safe and meets all Cuff’s quality demands. Price Since this will be a unique high end product line it can and should be sold at a premium price. * The framework should be sold at a price setting of 50% above local manufactures and in this way pricing will help to build the exclusivity and quality of the brand. * The redecoration should be priced at a price setting of Max. 50% of buying new local manufactured furniture.

In this way the life time cost of the initial sales and 3 decorations will be cost less to local manufacturers but the customer will have a premium quality furniture. (see appendix 2) Position / Place The existing dealer network should be used for their local recognition and customer contacts. However we must provide extra tools for the dealer network. This product will not be sold through a catalog only. Tools which should be considered: * Three dimensional animation software (website) * Training of dealers * Flagship stores in the mayor city (number and location to be decided on after racketing research. ) Dealers will be given a choice.

Invest in this product line, in this case they will be trained and educated in sales and use of the animation software and get a appropriate commission. Dealers which stay reluctant to sell this product themselves can redirect the customers to CFML Flagship stores in the mayor city’s. These dealers will get a lower commission which however still be better than selling the competitors furniture. Next to the dealer network we will provide in an extensive website with three dimensional animation. Customers and dealers can digitally customize the child’s / en’s room and add the framework of the furniture with the click of a mouse.

After this digitization the room can be digitally redecorated as many times as wanted. Adding furniture, adapting framework and especially adjusting the external appearance with Just a mouse click. By using several themes you are able to redesign your complete room even Taster. I names are Dates on ten multiple target groups (gender, age, sports, etc, etc). Themes go from “Barbie” to “Hard Rock” and from “Racing” to the latest and hottest band or artist. The redecoration should be a omelet concept including drapes, rugs, lighting and accessories.

After digital redecoration the required product can be bought online. We expect that there will be an increase of sales through redesign of the children’s rooms because: * Children and teens are able to redesign their own room online, we create a “want” or even a “need”. With this children will ask and even pressure their parents for the new “hot” decoration of their room. * Redesign is relatively cheap ( ; 50% of the cost of buying new furniture) * Low cost of “switching”, after online redecoration is made the required items can e bought online with the click of a mouse. Next to furniture a complete range of other interior decoration articles can be sold. For this we will need to search for strategic partnerships with other manufacturers (see appendix 3) Promotion Just as the product the promotion should be multi-segmented. Partly aimed at the parents (quality, safe, durable, guarantee, cost during lifespan). The larger part of the promotion should be aimed at the Children. We should build a hot and Trendy brand, with an equally hot and trendy name. Decoration and redecoration of your mom online should become a game, even if your parents did not buy our furniture.

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