University Of Balamand

Faculty of Business Administration

Marketing Management

Mrkt 310

General Electric

Project presented to Dr. Bassam Khoueiry

Prepared by: Julien Mozaya

INDEX:

General Electric :

Company profile

Company portfolio

Current market situation

Product customization

Magic stick:

I) Executive summary

II) Target market(S-T-P)

III) Competitive strategy development

IV) Distribution channels

V) IMC

VI) Estimated sales volume

Conclusion

General Electric

GE is Imagination at Work - GE is multinational American technology and services conglomerate

that has businesses in energy, technology, financial, industrial, and entertainment.

Company profile:

GE began in 1876 with Thomas Alva Edison’s opening of his first experimental factory in New

Jersey. After a number of years of experimenting, he established the Edison General Electric

Company in 1890. For two years, Edison’s General Electric was in stiff competition with

Thomson-Houston Company, a rival electrical innovation company. In 1892, after each

company’s patents began to make it impossible to install new technology, the two companies

combined to form the General Electric Company.

Since that time, GE has gone through countless acquisitions and restructures to become the

incredibly diversified company that it is today. GE is now divided into four separate businesses

that focus on individual industries, and while these businesses are separate, they still

complement each other. Those divisions are Technology Infrastructure, Energy Infrastructure,

GE Capital, and NBC Universal. These four divisions employ over 327,000 people in over 100

countries.

In addition to the information presented above, GE has a 323000 high performance and quality

employees not to mention its annual Net Income estimated by 17,410,000 dollars. This puts GE

at the top of its game while leading its industry despite the challenging market conditions that

faced the economy in the last couple of years.

Company Portfolio:

Headquarters: Greater New York City Area Industry: Design Type: Public Company Status: Operating Company Size: 323,000 employees 2008 Revenue: $18,251,500,000 Founded: 1883 Website: http://www.ge.com

Appliances o Dehumidifiers o Dishwashers o GE® o GE Café™ o GE Monogram® o GE Profile™ o Microwaves o Refrigerators o Service & Support o Washers & Dryers o Water Systems

Aviation o Asset Management o Aviation Services o Business & General Aviation o Commercial Engines o Corporate Aircraft Financing o GE Capital Aviation Services (GECAS) o GE Honda Aero Engines o Maintenance o Marine Engines o Military Engines o OnPoint(sm)

o Systems o Unison Industries o Walter Engines

Consumer Products o Consumer Electronic Accessories o Computer Accessories o Digital Cameras o Home Electric Products o SmartHome Products o Telephones

Electrical Distribution o All Products o All Services

Energy

o All Products o All Services o Centrifugal Pumps o Energy Financial Services o Gas Turbines - Aeroderivative o Gas Turbines - Heavy Duty & Combined Cycle o Gasification o Hydropower & Water Control o Investment Focus o Lifecycle Services o Nuclear Energy o Solar Power o Steam Turbines o Wind Turbines

Finance - Business

o Energy Financial Services o GE Capital Aviation Services (GECAS) o Healthcare Financial Services o Media, Communications & Entertainment Financing o Real Estate Financing o Satellite Services

Finance - Consumer

o Consumer Financing o Global Banking

Healthcare

o All Products

o All Services o Diagnostic ECG o Healthcare Financial Services o Healthcare Information Technologies o Interoperability o Life Sciences o Medical Diagnostics o Patient Monitoring Solutions

Lighting

o All Commercial Lighting Products & Services o All Consumer Lighting Products & Services o GE's Commercial Lighting o Commercial, Automotive o Commercial, Ballasts o Commercial, Compact Fluorescent o Commercial, Halogen o Commercial, High Intensity Discharge o Commercial, Incandescent o Commercial, LEDs o Commercial, Linear Fluorescent o Commercial, Miniature o Commercial, Sealed Beam o Commercial, Specialty o Consumer, General Purpose o Consumer, Automotive o Consumer, Fluorescent o Consumer, Holiday Lighting o Consumer, Outdoor o Consumer, Specialty o Consumer, Track & Recessed o Lighting by Industry

Media & Entertainment

o Entertainment TV & Production o Media Communications & Entertainment Finance o Movies o NBC Universal o News, Sports & Info o Parks & Resorts o Peacock Equity Fund

Oil & Gas

o Air-Cooled Heat Exchangers o All Products o All Services o Centrifugal Pumps o Compressors

o Drilling & Production Systems o Energy Financial Services o Gas Turbines o Pipeline Inspection & Integrity Services o Reactors & Steam Condensers o Reducing & Metering Systems o Steam Turbines o Turboexpanders o Valves - Control & Safety

Rail

o All Services o Locomotive Products o Rail Services US o Rail Services Europe o Traffic Control & Dispatch Systems o VeriWise RAIL

Security

o Commercial Markets o Government & Military o Residential & Consumer

Water

o Energy Financial Services o Equipment o Membrane Elements, Cartridge Filters and Lab Products o Process Chemicals o Water & Process Technologies o Water Treatment Chemicals

Current Market Situation:

In today's hyper-competitive environment, market research is not an option; it is a necessity.

Luxury marketers that want to win must stay vigilant in tracking the shifts, turns, and changing

preferences in their affluent consumer market. They need up-to-the-minute data, as well as a

historical perspective, to anticipate the next major luxury business opportunity or branding

challenge.

GE participates in a wide variety of markets including the generation, transmission and

distribution of electricity (eg. Nuclear, gas and solar), lighting, industrial automation, medical

imaging equipment, motors, railway locomotives, aircraft jet engines, and aviation services. GE

experts benefit from being part of a company that has deep, wide cross-industry activity, and

also has a significant presence in a wide variety of geographic markets. It has the fourth most

recognized brand in the world, worth almost $48 billion

GE has always been and is still the market leader in developing innovative products in its

industry sectors in order to solve the problems of the world. GE has not only survived for more

than 100 years but has also dominated the market share and provided its customers with the

products they need and want.

GE competes against a number of other companies, but most of them are more specialized,

focusing in one industry. GE's operations, on the other hand, are spread across many different

industries, limiting its exposure to competition from any one company.

GE mainly has two tiers of competitors which are:

GE Competitors:

Tier 1 Competitors: Honeywell (HON), Siemens AG (SI), United Technologies Corp (UTX),

3M Company (MMM)

Tier 2 Competitors: Bank of America (BAC), JPMorgan Chase (JPM), News Corporation

(NWSA), Viacom (VIA), The Walt Disney Company (DIS)

DIRECT COMPETITOR COMPARISON

GE C PHG SI Industry

Market Cap: 175.68B 79.11B 27.19B 81.11B 275.04M

Employees: 323,000 276,000 118,225 405,000 680

Qtrly Rev Growth (yoy): -20.00% 58.80% -11.30% -8.90% 13.90%

Revenue (ttm): 161.56B 38.99B N/A N/A 5.34B

Gross Margin (ttm): 30.63% N/A 35.56% 27.02% 33.22%

EBITDA (ttm): 24.66B N/A N/A N/A 217.84M

Oper Margins (ttm): 6.96% -35.45% N/A N/A 8.96%

Net Income (ttm): 11.75B -22.80B N/A N/A N/A

EPS (ttm): 1.080 -2.782 N/A N/A N/A

P/E (ttm): 15.28 N/A N/A N/A 21.36

PEG (5 yr expected): 1.67 N/A 2.9 0.61 1.72

P/S (ttm): 1.09 2.03 N/A N/A 1.29

According to the table viewed above, which compares different companies in the

Conglomerates industry, GE once again has been proven to be number one gaining the highest

positions according to all ratios and percentage estimates.

Product Customization:

Creating loyal customers is at the heart of every business. Therefore, GE is becoming a customer

oriented company focusing on building customer relationships through the following:

“Dreaming Sessions” help us look into future customers’ needs.

Net Promoter Score (NPS), a metric GE has adopted to track customer perceptions of

performance strengths and weaknesses.

Customer summits hosted by GE’s diverse employee affinity networks (such as the

African American Forum and GE Women’s Network) at Crotonville.

“Leading & Learning,” one of GE’s signature programs that brings together women

leaders from inside and outside the company with female GE customers to discuss

important issues of the day.

The GE Marketing Toolkit that has been organized around the company’s framework for

promoting growth: Calibrate-Explore-Create-Organize-and-Realize (CECOR). The tools in

the kit stem from many different sources, such as the Crotonville marketing classes,

different GE businesses, leading consulting and marketing textbooks and Six Sigma.

Through working together with their customers to understand their operational and

organizational needs, GE services and solutions are customized to provide the most cost

effective through-life support. They liaise with the customer to create the right solution

incorporating the appropriate capabilities of GE. These can include inventory management and

supply, spares, repairs, modifications, reliability enhancements, capability upgrades, data

management and information exploitation. All of GE’S flexible services and solutions are backed

up by 24/7 technical and logistics support, and the unique knowledge, expertise and know-how

of our GE Original Equipment Manufacturers (OEMs).

What is the Magic

Stick?

This unique creation consists of just a stick that blows a sheet of steady air forming an air canopy

that doesn’t let raindrops get all over you.

It is an innovative concept that uses wind power to form an air canopy. It forms a steady stream of

air that's sucked in from the bottom of the shaft and then released out the top. The result is an

invisible canopy of air that shields you from the downpour. The air-curtain whose air comes into

the intake, goes out into the outlet, and behaves like an umbrella is capable of blocking the rain. You

can easily control its length and size of the air-curtain. Not only does its refined and ingenious design

give convenience to users, but also saves the environment from the use of plastic bags.

To ensure that the umbrella has a significant effect on those who see it, the designs and colors

used should captures people’s attention.

I) Executive Summary

By evaluating people's feelings towards umbrellas, we were able to identify shortcomings with

the current model of umbrella usage. At the moment, everyone is expected to carry a personal

umbrella. Compact umbrellas, while easy to carry, are prone to failure and in most cases do not

provide adequate coverage. Full-sized umbrellas and golf umbrellas are too large and bulky for

daily use. Market research showed these two commonly recurring complaints. People want

large umbrellas when it's raining but do not want to carry them once they get inside. Our

solution to this problem is an umbrella distribution system.

II) TARGET MARKET

STP:

The initial step in conducting our marketing research is to divide the market into different

segments and identify the target segment in order to communicate the distinctive benefits of

the product’s market offering.

A- Segmentation:

A market segment is a subgroup of people or organizations sharing one or more characteristics

that cause them to have similar product needs.

Successful segmentation requires the following:

-Homogeneity within the segment

-Heterogeneity between segments

-Segments are measurable and identifiable

-Segments are accessible and actionable

-Segment is large enough to be profitable

Demographic variables:

- age :Generation X-Y

- gender: unisex

- Size: S-M-L

→ Psychographic variables including personality, life style, value ,income and attitude

- General Electrics' magic stick is perfectly adapted the fashionable people.

→ Geographic variables: (Regions, Countries, Climate…)

B- Targeting Strategies:

Magic stick’s targeted market is the niche market.

Its strategy is to target the niche market .The niche market is a narrowly defined custom group

seeking distinctive mix of features. In this way, we are targeting a small segment but concluding

large profit and growth potential. It is unlikely to attract other competitors.

C- Positioning for competitive advantage:

Product position is the way the product is defined by consumers on important attributes or the

place the product occupies in consumer’s minds relative to competing consumers’ greater value.

Magic stick is positioned on high quality features and designs.

Market Analysis

Umbrellas have been utilized and evolved with human beings to provide a sense of safety and

protection from the elements. Umbrellas keep us dry during the rain. However, users are not

satisfied with the current stage of umbrellas and still look for more evolution and improvement

of the products. To identify major customer needs regarding the umbrella usage, market

analysis and user studies related to the product were conducted by getting feedback of the

actual users for different types of umbrellas.

Selected Responses

Among the answers to survey questions asked during the user studies, the following responses

are selected.

"I want the size of my umbrella to be adjustable, so I can get into my car with an

umbrella when it rains. In that way, I don't need to get wet when I get in."

"I don't want to lose my umbrella in any case since I usually lose one and get a new one

before it breaks off."

"I want my umbrella to be smaller, so it's easier to carry around."

Identified Customer Needs

Based on the observations and answers to the survey questions, our team has identified four

major customer needs:

Umbrellas should be hard to lose

Umbrellas should be easy to open and close

Umbrellas need to be portable

III) Competitive Strategy Development:

A competitive advantage is an advantage over competitors gained by offering consumers

greater value, either by means of lower prices or by providing greater benefits and service that

justifies higher prices.

1) GE’s competitive strategy development:

GE’s competitive strategy development options allow for many different kinds of possible

developments. Along the same lines, they thrive on the thrill of certain components of the larger

practice. In their competitive scenario planning practice, they make sure that their clients

understand what they’re doing and why.

In a competitive economy, wasting time can mean missed business opportunities — to prevent

that, commercial lending companies try to quickly identify and meet their borrowers' needs. As

experts from GE note, the shift in alignment is more than a marketing ploy—instead it can offer

value in a variety of ways.

To try and stay in the lead, GE dedicates time to try and manage its speed lending. Their

executed plan is:

GE maintains horizontal and vertical specialists— with teams that focus on specific

geographic areas, supplemented by ones with specific-industry expertise.

They have in-house industry experts means that our customers don't have to explain

their industry to us, which can save them valuable time and avoids time-consuming false

starts.

Other advantages and characteristics that differentiate it from its competitors are:

Strength: Customers can rely on GE Capital as they navigate changing business

cycles. They’ve been through it all before and have the strength and experience to help

its customers now, and as their financial needs change and grow in the future.

Flexibility: Once GE has designed and helped its customers build a tailored finance

solution for their business, they can count on premium on-going customer service,

giving them the security of an experienced partner. GE will ask for feedback all along

the way to make sure they root out any problems as they strive to continually improve

service delivery and look for new ways to meet their needs.

Global: GE can take its customers to the places they want to go through their extensive

network of local talent — whether it be entering new markets, exporting outside the

customer’s market, or supporting operations the customer already has in place. They

can also provide funding in local currencies and complete cross-border transactions.

2) Magic Stick’s competitive strategy development:

All the above will boost the Magic Stick’s competitive strategy development. Because GE is a

global brand, it will be able to distribute the Magic Stick across all of its market segments. What

makes the Magic Stick unique are its following characteristics and their benefits to people in

general:

Customer

Dryness

Ease of use / ergonomics

Speed of operation

Portability

Reliability - includes ditching of canopy

Cost- it being a new and improved umbrella

Accessibility

Aesthetics

Safety

Mildew/rust resistance → low maintenance- since it’s made of plastic.

Umbrella accessory manufacturers

Standardization (size) - adjustable

Cost

Competing rainwear manufacturers

Market differentiation from umbrellas

Satisfying consumer needs, especially reliability and ease of use

Retailers

Standardization (size)

Cost / margin

Aesthetics / product differentiation

Ease of storage and inventory

Reliability / few returns

Customer satisfaction

People around umbrella users

Unobtrusive (size) open and closed

Low sound signature

No leakage post use

Aesthetics

IV) Distribution Channel:

A distribution channel is an organization or set of organizations involved in the process of

making a product or service available for use or consumption by a consumer or business user.

The program is multi-tiered, providing a range of expertise and specialties, yet always bringing

mutual collaboration and success to GE customers. The program is expanding rapidly with new

strategic channels and a revitalization of longstanding relationships. Each channel brings

enhanced customer value through GE product sales, complementary technology offerings,

consulting or implementation services supporting our Smart Grid, Smallworld and Enmac

software suite of solutions.

V) IMC Program

In our campaign for the launching of our new product we will have to use the IMC program. IMC

program Integrated Marketing Communications is a term used to describe a holistic approach to

marketing communication. Therefore, our aim is to ensure consistency of message and the

complementary use of media. We will be using offline marketing channels which include

magazines, public relations, industry relations, billboard, radio, and television. By developing an

integrated marketing communication program using all the elements of the marketing mix

(product, price, place, and promotion) we will meet our aim and have future success and profits.

By using the right approaches and resources within our company maximizes the impact on

consumer mind and results into maximum profit at minimum cost. To start with the four P’s:

Product: the magic stick is a new product and invention in the market. Therefore it’s a

differentiated product that carries unique qualities like no other product.

Price: we decided to set a price ranging between 30 – 40 dollars depending on the accessories

that the consumer chooses. It’s a high price compared to the price of an umbrella, but not to

forget it is very differentiated and no one has seen it before.

Promotion: in Lebanon the advertising field relies mostly on televisions, bill boards, and

magazines. We will conduct a sales promotion in the beginning of the launch just to encourage

people to experience our new innovation.

Place: the magic stick will be distributed to our retailers in the different regions, and by name

General Electric sells itself due to the good reputation and high end products it has delivered to

customers all through.

Concerning the advertising, we will have to carry the special features of the magic stick in this

way we will be seeking to generate increased consumption of our product through branding,

which involves the repetition of an image or product name in an effort to associate related

qualities with the brand in the minds of consumers

Moreover, direct marketing is our procedure to sell this product. We chose direct marketing

since that it attempts to send its messages directly to consumers and the second characteristic is

that it is focused on driving a specific "call-to-action." This means that the response from

consumers is measurable and tracked in a faster way which is the main aim of any firm, since it

tells whether the product has excelled or failed.

The goal is a campaign that is effective and consistent across media platforms. As marketers we

want ads with the greatest breadth of appeal which provide the greatest number of attention-

getting, expose the brand, and motivates.

Using all these strategies we will definitely gain edge over competitor is called Integrated

Marketing Communication.

VI) Estimated sales volume:

Estimated sales for a business are based on the assessment of:

the advantages of our product

our customers

the size of the market

our competition

In order to measure and check the success of sales of the magic stick we should be able to know

our return on investment (ROI), which is the ratio of money gained or lost on an investment

relative to the amount of money invested.

G.E has an ROI of 3.24 which is relatively good compared to the industry average which is 4.77.

Therefore, the new innovated product should add up on these figures to increase the ROI to

increase the level of return for G.E. in the industry.

Total production volume is estimated at 2000 units up front, with an additional 400 units per

year for upkeep. And related to the market our estimated sales are to be more than 50% during

the first year.

VII) Conclusion:

GE’s new product, Magic Stick crosses all boundaries of unconventional design and prevents you

from getting drenched. According to the studies we have conducted, the magic stick will be very

accepted by consumers since people are always following innovation and new products and

don’t mind paying a premium to have a privilege over others and be differentiated. Our product

also has many features that consumers have not experienced before. Competition is minimized

since no other company has done such a product before.

Isn’t that magic? After the thing gets real, not only we’ll change the way to use an umbrella, but

the definition of the word ‘umbrella’ may be changed, too.

VIII) References:

http://news.cnet.com/8301-17938_105-10434061-1.html

www.ge.com

http://ar.wikipedia.org/wiki/.ge