kogan retial organization report5

KOGAN RETIAL ORGANIZATION REPORTBSBMKG502B ESTABLISH AND ADJUST THE MARKETING MIX

[ MAY 5TH, 2011 ]

MISS JIRATTIKARN CHAIPATTANA

STUDENT ID: 20092330

Kogan is an Australian manufacturer

and retailer of consumer electronics devices i.e. HD TVS, LCD TVS, LED

TVS, PLASMA, GPS, DIGITAL PHOTO FRAMES., etc. The company, founded in 2006 by Ruslan Kogan, sells products direct

from China to customers in Australia and

theUnited Kingdom. Company Mission is to make the latest technology affordable for all Australians.

COMPANY BACKGROUND

KEY PRODUCT & SERVICE

KEY PRODUCT: High Definition LCD

TVs and LED TVs make up the bulk of Kogan Technologies' products.

Product range: HD TVS, LCD TVS, LED TVS, PLASMA, GPS, DIGITAL PHOTO FRAMES., etc.

Innovation & Technologies such as Agora range

KEY PRODUCT & SERVICE

SERVICE: 7 days money

back guarantee Extended

Warranty Live Price Fast Delivery Chat live to sales

team TV quick start

guide

CURRENT TARGET MARKET

Males 25-49 yrs. Females 25-24 yrs. Professional or white collar profession. Single > Family Income: > $50,000. Prefer electronic and entertainment

devices Buy electronic device via online

shopping.

PRICING STRATEGY

The company competes on price by selling a budget range direct to consumers, bypassing wholesalers, distributors, and retailer.

Due to “LivePrice” service that cuts out the hidden cost of finance and gives power back to the consumer, whereas investors who usually fund the production of consumer goods expect a huge return.

After launching LivePrice in Australia, Kogan had sold nearly $330,000 worth of products using the new pricing system in 24 hours

PRICING BY BRAND: LED TV

24" 32" 40" 42" 46" 47" 52" 55"

SAMSUNG X

$697-

$699$1179- $1224 X

$1399- $2014 X X X

LG X X X$1495 - $2580 X

$2149 - $3291 X

$2115 - $4270

SONY X X$1129 - $1699 X X X

$3696 - $3929

$4989 - $6999

KOGAN259

1

$599 2 639 3 $779 4 $929 5 X X 1599 6

Kogan LED TV price is significantly lower than key brands in all size range; 16”-24” , 26”-32” and 36”-55” and all products include offering service “Free Shipping”

1= 24" Full HD LED* TV with PVR2 = 32" Full HD LED* TV with Blu-ray Player, DVD Player & PVR - BD Series3 = 40" Full HD LED* TV with PVR (Samsung Panel)4 = 42" Full HD 100Hz LED* TV with PVR - DELUXE Series5 = 46" Full HD 100Hz LED* TV with PVR (Samsung Panel) - DELUXE Series6 = 55" Full HD 100Hz LED* TV with PVR (Samsung Panel) - DELUXE Series

PROMOTIONAL METHOD

TV News

programs

Newspaper Business & Investment

Sales promotion

special price, online

discount coupon, free

shipping., etc.

MagazineBusiness&

Investment

PROMOTIONAL METHOD: MEDIA

Kogan utilizes mass media and social network i.e. TVC, Newspaper & Magazine and Internet to promoteCurrent marketing news, corporate PR news and new product review.

PROMOTIONAL STRATEGY

TVC, Newspaper & Magazine • Product review: Australia's leading journalists to endorse Kogan

products. • Corporate News: Corporate PR , Management profile to

strengthen company trustworthy• Marketing News; update innovative product, Market competition.,

etc. Internet• PR news: update marketing, product innovation & corporate

news• Web blogs • You tube: Product review to promote the latest Kogan via videos

and reviews. • Face book & Twitter: daily update, Live chat to sales team Sales promotion • Kogan discount code coupon: such as Internet TV, Home Audio,

eBook electronic readers, PVRs, Cameras and even home appliances.

• Free HDMI cable • Free shipping • Live price

DISTRIBUTION CHANNEL STRATEGY

Online retailer Kogan cut out the

'middle men' and working directly with our factories overseas, we can sell the latest technology at the lowest prices. By cutting out the 'middle men' and working directly with our factories overseas, we can sell the latest technology at the lowest prices.

PRODUCT INNOVATION: AGORA

The Kogan Agora Internet TV Portal You can stream movies from YouTube, Ustream, and any

website with video. You can browse the web, chat to their friends on social media, share and view photos, movies and music, and play Angry Birds on your TV!

The Kogan Agora 12” Laptop: A complete productivity device for the budget

conscious for every student shouldn't have their own laptop.

The Kogan 7” Android Tablet A tablet entertainment device for business traveler and

on-the-go entertainment lover.

COMPETITORS: JB HiFi

JB HiFiStrength: • A well

recognized brand name and clear position as a low price retailer.

• A specialist product range, differentiating it from competitors. For example, it is a back catalogue retailer,

Weakness: • Discount

prices on outdated models leads to a reducing margins.

COMPETITORS: JB HiFi

Secured online transaction

Range of product

Delivery

Price

Warranty

Popularity

0 20 40 60 80 100 120

Quite lowlowmedium highQuite high

JBH gained high in many brand value, 75% of RD selected JBH value high in terms of Price, Warranty and Popularity. Brand should be high because of it have strong in retail marketing.

COMPETITORS: e-Bay

e-BayStrength: • Market leadership

• Intellectual property Brand

• Pay PalWeakness:• Advertising revenues

• Technology development

• Increased expectations

COMPETITORS: e-Bay

Secured online transaction

Range of product

Delivery

Price

Warranty

Popularity

0 20 40 60 80 100 120

Quite lowlowmedium highQuite high

100% selected the highest scale for e-Bay in popularity , it can imply that e-Bay brand is quite well-known and strong in the market. And 75% of RD selected a wide range of the products.

COMPETITORS: Harvey Norman

Harvey Norman

1. Retail products: Electrical, Computers & Communications, Small Appliances, Furniture, Bedding & Manchester, Home Improvements, Lighting and Carpet & Flooring. 2. Stores in Australia, New Zealand, Slovenia, Ireland, Singapore and Malaysia. 3. Recently created online store, tried to offer more advantages of online shopping to the community, such as price, convenience, customer service and ease of research and comparison.

COMPETITORS: Harvey Norman

Secured online transaction

Range of product

Delivery

Price

Warranty

Popularity

0 20 40 60 80 100 120

Quite lowlowmedium highQuite high

100% of consumer selected medium scale of Delivery, Range of the product as well secured in transaction, imply that Harvey Norman gained medium recognition in those brand value.

PEST Analysis

Political

• GST laws

Economical • Foreign exchange rate, it may not effects much to Kogan since their products are manufactured in China.

• Interest rate; higher interest rates may deter investment because it costs more to borrowSocial cultural • There is the “drift to thrift”. Value became a stronger influencer

of buyer behavior and Kogan has continued to build on its reputation of low prices product.

• Consumers are highly likely to research online (product reviews) before they make an offline purchase.Technological

• Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as Kogan organizations providing the products.

SWOT

Strength: •Affordable price•An online consumer electronics store, Kogan’s reinvesting business to help make our products better and more affordable.

Weakness: •Low brand awareness•Despite Kogan spend amount of budget for media and publicity i.e. TV, Print, and a bit much via online.

Threats: •A slowdown in consumer spending•Competitors may cut prices to maintain or grow market share. •Both factors will compress Kogan sales.

Opportunity: •Innovation in consumer electronics will fuel demand for the latest products.

CONSUMER BEHAVIOR

Kogan brand gained the lowest awareness (5%) comparing to the key competitor; JBH which gained 50%, e-Bay 30% accordingly.

Consumers are mostly influenced by themselves and family group i.e. parents (65%). When they decided to buy online product.

CONSUMER BEHAVIOR 

Majority of consumers often shop via online at home (75%).

Buying / Shopping period is variance, Most of consumers shop when they need the products(50%). And some of them bought product by monthly (35%)

CONSUMER BEHAVIOR

Timing Online Shopping: Consumers mostly shop via online on evening (70%) and morning time (20%) respectively.

CURRENT MARKETING MIX

Product & Service • Key product: High Definition

LCD TVs and LED TVs• Innovation: Agora range • Key service: Live Price; cuts out

the hidden cost of finance that means you save more!!

Price: • Affordable price, we can

sell the latest technology at the lowest prices.

Place: • Online store, cutting out

the 'middle men' and working directly with our factories overseas, we can sell the latest technology at the lowest prices.

Promotion: • Mass media: TV, Print, Internet • Face book, Twitter and Kogan

blogs• Online discount coupon• Free shipping• $ 5,000 Giveaway (5th Birthday)• Free HDMI cable for JBH user.

MONITOR AND ADJUST MARKETING MIX

Monitor and implement Brand reputation & promotional activity against communication objectives in the marketing plan

Monitor product, pricing and distribution decisions against organizational policy and the objectives of the marketing plan

Monitor marketing results against targets in the marketing plan

Monitor marketing revenue and costs against budget, and analyze record variations

MONITOR MARKETING MIX

Promotional

activity

• Paid monitoring service: Nielsen Buzz Metrics, Buzz Logic, Cymfony, Trackur

• Free social blog: Google, Blog Posts, Blog Comments, Social Comments, Discussion Boards, Twitter, Friend Feed, Social Search, Interactive Search

Pricing

• Measuring customer value

• perceived value analysis 

• Distinguishing between attributes, benefits, and values for effective pricing

Target Market

• Customer-focused research.

Marketing Revenue

• Measuring return on investment

CURRENT MARKETING MIX

Product & Service • Key product: High Definition

LCD TVs and LED TVs• Innovation: Agora range • Key service: Live Price; cuts out

the hidden cost of finance that means you save more!!

Price: • Affordable price, we can

sell the latest technology at the lowest prices.

Place: • Online store, cutting out the

'middle men' and working directly with our factories overseas, we can sell the latest technology at the lowest prices.

Promotion: • Mass media: TV, Print, Internet • Face book, Twitter and Kogan

blogs• Online discount coupon• Free shipping• $ 5,000 Giveaway (5th Birthday)• Free HDMI cable for JBH user.

Branding: Should strengthen trust-worthy as well-

innovative brand image Should accelerate to build up brand awareness

New Target market: Continuously expand to new target market

with new product such as Agoda series. Communication:

Should increase brand awareness by adjust media vehicles i.e. SEO, Tri-vision in high traffic venue i.e. Supermarket.

ADJUST MARKETING MIX

Pricing: Should continue “LIVE PRICE” and bold up

“7 Days money back guarantee” promotional campaign.

Place: Should maintain on-line store because Kogan’s

targets prefer to buy product via on-line since it’s convenient to them.

ROI: Maintain good relation ship with China

manufacturer to gain high profit

ADJUST MARKETING MIX

THANK YOU