Marketing Plan for Widgets

Regardless of the quality of a particular product, if it is not promoted effectively, it will not be successful. In this hypothetical marketing plan, a new widget has been developed which is superior in most areas (cost, longevity) to widgets currently in production. The marketing plan considers a pricing structure, promotional plan, method of distribution and market segment for the new widget, all of which are designed to give the product the marketing support it needs to be successful.

The widget in question is manufactured by Wonder Widgets and lasts six times longer than other widgets on the market. The Wonder Widget costs twice as much as its chief competitor (Wacky Widget) in materials, but uses only one-third the manpower and 40 percent fewer hours in manufacture time. These savings are gained through the use of highly technical production methods. The result is higher quality per unit, which is the factor that yields the longevity.

The following chart illustrates the cost structure for the two products:

Unfortunately, the savings in manpower and manufacture time does not make up for the materials cost. If Wonder Widgets plans on a markup strategy similar to that of

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sitioned on price because it is not the lowest priced unit on the market. While its overall cost is lower (since only one Wonder Widget is needed for every six Wacky Widgets), the initial investment is significantly higher than its competition. As a result, the Wonder Widget appeals to the premium market. This market does not want to buy the least expensive unit on the market, and in fact expects more for the additional money it is willing to spend. Wonder Widgets certainly fit this category. While the Wonder Widget will be directed at those consumers who have the resources to put toward the higher initial purchase price, the value that the Wonder Widget offers will also be emphasized in the marketing campaign. The high initial cost will be contrasted with the lower overall cost of the widget, and the savings translated into comparable goods (such as a VCR, a large screen television, a shopping spree or similar items). In this way, the widget can appeal to both the price conscious consumer as well as those that are interested in quality without regard to price. Method of Distribution The Wonder Widget will be distributed at the retail level through specialty stores. Discounters, such as K-Mart and Wal-Mart will not be us

Category: Business - M