Principles of Marketing (MGT301) Spring, 2020
Due Date: July 28, 2020
Total Marks: 10
Topic: Product/Market Expansion Grid
The core objective of this activity is to familiarize students with the concept of Product/Market
This activity will widen student’s vision, and make them capable enough to understand how
renowned brands formulate appropriate strategies during critical situations in order to sustain their business operations meanwhile gaining customer attention.
The COVID-19 has extensively impacted almost every industry across the globe and has brought great economic fluctuations for every business sector. However, the sectors that were greatly affected and had extremely hard hit are the ones that come in the category of non-essential spending. Having said this, branded clothing industry and branded footwear are two market giants that fall in the category of non-essential spending, have seen major downfall over the past few months. Specifically talking about Pakistani market, due to the lockdown imposed by government these industries had suffered a lot and seen the toughest time.
What has been experienced by the designer made clothing industry worldwide, in the last few months, is just the beginning of a ripple effect. The COVID-19 pandemic has alter the market dynamics. It is observed that online shopping has replaced in-store shopping. During this pandemic, majority of the renowned Pakistani clothing brands have heavily started marketing their products through digital mediums such as Facebook and Instagram. Because of the ban imposed by government due to pandemic Gul Ahmed, Khaadi, Saphire, Sana Safinaz, Nishat Linen and Alkaram are some of the top notch clothing brands that have momentously took the benefit of digital media to carry forward their business operations. Though their clientele and target market is the same but the medium of being connected to them is changed. Previously they were using their physical outlets for product sale now they have acquired digital mediums to target their customers and product sale. Not only has this, but these renowned brands are offering lucrative sales offers to catch the attention of target customers. It has never been observed that the renowned brands are offering sales for such a prolonged period. Since, it is uncertain to predict the betterment in economic condition of the country, this is the reason why majority of the business operations
are going online.
After reading the above case, which of the below product/market expansion grid strategy the clothing industry is following during this pandemic and what benefits they could achieve through it? Support your discussion with logical arguments.
1. Market Penetration
2. Product Development.
3. Market Development.
*Note: You are required to select only one strategy and mention at least 3 benefits to support your answer. The definitions of strategies are not required.
The total marks of this assignment are 10; the identification of correct strategy carries 4 marks, and each correctly written benefit carries 2 marks. Avoid irrelevant text/material while answering the question.
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I think the Market penetration strategy is adopted in the given scenerio
1). Market Penetration—making more sales to present customers without changing products in any way. Market penetration means trying to increase sales of a firm’s present products in its present markets probably through a more aggressive marketing mix. The firm may try to strengthen its relationship with customers to increase their rate of use or repeat purchases, or try to attract competitors’ customers or current nonusers. New promotion appeals alone may not be effective. A firm may need to add a home page on the Internet to make it easier and faster for customers to place an order. Or, it may need to add more stores in present areas for greater convenience.
1 Companies use market-penetration pricing. They set a low initial price in order to penetrate the market quickly and deeply—to attract a large number of buyers quickly and win a large market share.
2 The high sales volume results in falling costs, allowing the company to cut its price even further.
3 The firm may try to strengthen its relationship with customers to increase their rate of use purchases, or try to attract competitors’ or repeat customers or current nonusers.