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Marketing strategies in Honeywell | Analysis

3228 words (13 pages) Essay in Marketing

18/05/17 Marketing Reference this

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We are researching on Analyze on Marketing Strategy in Honeywell and the study background is mentioned below in the next sequence.

The research objective is to design a marketing strategy that encompasses the marketing mix. It is a unique blend of marketing planning, customers and promotion offerings to reach a specific market.

1.1 Study Background

Honeywell International, Inc. (NYSE: HON), global of US$ 38 Billion with 128,000 employees and presence in businesses ranging from Automation & Control Solutions, Aerospace, Transportation Systems and Specialty Materials. (Honeywell Inc 2002)

HON Security Group (HSG)

Honeywell Inc acquired Ademco Group an Intrusion Alarms patented technology for Intrusion transmission over telephone line. Acquisition of Technical Growth of HON through acquisition of other businesses and grow its technology base by adding on Video Surveillance Systems, Access Control technology forming Honeywell Security Group (HSG) an Electronic Security Technology Company. (Honeywell Pittway Corporation n.d.)

HSG focuses all efforts on product developments, R&D and manufacturing. R&D Centers and factories are in China, Korea, India and Mexico catering to different needs in the regions.

HSG direction to grow organically by selling more, employing more people, approaching and increasing the market share. (In 1998: 85)

In the recent years, there is an influx of strong competitions in the Security Industry in Singapore with competitors from China, Japan and Korea to capture the market shares thus challenging the position of Honeywell Security.

Honeywell Security based on the market concepts makes the necessary business strategies to strengthen its position in the Security Industry in Singapore hence the researcher decides to research on the following topics.

Marketing Planning Process

Marketing Planning is a rigorous review of the marketing functions, that is marketing objectives and strategies implemented. The market is currently clustered with products and services. With an excellent marketing planning process, it helps the organization to grow by increasing sales profitability. It does so essentially by finding new customers.

Customer Types

Customers consists of buyers who intend to consume or use products for themselves. Customers can be defined as individuals or groups who purchase products for re-sale or for use in making other products and for the purpose of making a profit.

Promotion Strategy

Promotion strategy comprises Sales Promotions, Direct Mail, Holding Events and Seminars, Public Relations and Personal Selling. It’s about opportunity to promote and create awareness in the product, company and branding and how Honeywell, an Electronic Security Technology Company can capitalize on these strategies.

1.2 Study Area

Marketing Planning Process

Marketing planning and stating objectives covers a company’s marketing activities, together with its implementations and control. It should show clearly where we want to be at or by particular points in time. Without knowing clearly where we want to be, we cannot possibly establish the extent to which we are getting there or indeed whether we have arrived. Objectives should be achievable given market conditions and resources. (Quester and McGuiggan 2005: 10)

Realistic planning process will be based upon past performance moderated by internal and external audits, the latter supplemented, as necessary, by marketing research.

Customer Types

The activity used to try to establish whether the potential customers are likely to buy and to discover the best form the product should take, is market research.

By researching these matters, the chances of a successful launch are better than if no such research is carried out. Since customer’s preference in terms of all these products characteristics and since economic changes affect the types of customers for particular kinds of products. It is essential market research is carried out on an on going basis and incorporated as part of the company’s operational activities. (Gitomer 2008: 236)

Promotion Strategy

Promotion Strategy are shaped around the following 9 step process. It is important that the promotion strategy mix integrates with and supports the total communication plans to avoid conflicting messages and confusing the customers. (Stanton, Etzel and Walker 1994: 468 ,469 and 470)

identify the target audience

determine the communication objectives

create the message

select communications channels

decide the communication mix

agree the budget

initiate the campaign

measure the results

manage and modify the communication plan

1.3 Research Structure

The research will first present the study background, study area on Analyze on Marketing Strategy in Honeywell followed by research objectives and literature review. This will prepare and help the researcher to finalize the final report. All the below mentioned will contribute to Data Analysis in the final report.

Study background is a broad description and reasons given for the research topic.

Study area is to write a specific topic chosen and the company being researched

on.

Research objectives is a systematic, objective collection and analysis of data about a particular target market, competition, and/or environment. It always incorporates some form of data collection whether it be secondary research (often referred to as desk research) or primary research which is collected direct from a respondent.

The purpose of any market research project is to achieve an increased understanding of the subject matter. With markets throughout the world becoming increasingly more competitive, market research is now on the agenda of many organisations, whether they be large or small. (DJS Research Ltd 2009 )

Literature review – “There should be clear links between the aims of your research and the literature review, the choice of research designs and means used to collect data, your discussion of the issues, and your conclusions and recommendations. To summarize, we can say that the research should: (About.com Guide 2010)

focus on a specific problem, issue or debate;

relate to that problem, issue or debate in terms that show a balance between the theoretical, methodological and practical aspects of the topic;

include a clearly stated research methodology based on the existing literature;

provide an analytical and critically evaluative stance to the existing literature on the topic.

Final Report is the contents of your proposal should not be of primary importance. Any truly important information should be incorporated within the proposal’s main text. Valuable data (proof, substantiation, or information that clarifies a point) should appear in the text where it is easily accessible. (Gerson 2006: 95)

1.4 Research Objectives

We are researching on Analyze on Marketing Strategy in Honeywell hence the researcher decided to research on Honeywell based on the following objectives

To analyze the Marketing Planning Process in Honeywell

To find out the Customer types in Honeywell

To find out the Promotion Strategy in Honeywell

2.0 Literature Review

2.1 Introduction

This literature review will provide academic work related

To analyze the Marketing Planning Process in Honeywell

To find out the Customer types in Honeywell

To find out the Promotion Strategy in Honeywell

2.2 How marketing planning works

Marketing planning is a systematic process involving the identification and assessment of marketing opportunities, assessment of current and future resources and distinctive competences, development of objectives and strategies and implementations of marketing programs. (Hou 2001: 79)

The process is defined and categorized in three main stages as follows:

analysis of markets environment opportunities.

determine the core markets, competitive edge, differential advantage, goal setting and brand positioning.

determine marketing programme for implementation.

The marketing planning process combines the organization’s overall marketing strategies with fundamental analyses of trends in the marketing environment, company strengths, weakness, opportunities and threats, competitive strategies; and identification of target market segments. Ultimately the process leads to the formulation of market programs or marketing mixes which facilitate the implementation of the organization’s strategies and plans. (Business Resource Software, Inc. 2010)

Marketing planning makes a very big contribution to corporate planning. Market analysis, competitor analysis and environment scanning play a large part in determining the opportunities and threats which shape a company mission and objectives. Marketing also contributes greatly towards the evolution of a good corporate image since it is marketing which is responsible for the major part of external communications with customers and potential customers. Marketing also contributes to the shaping of the corporate image by conducting attitude studies and image surveys.

Most important, marketing contributes towards a corporate culture. In a truly marketing orientated organization, the culture focuses on the customer. Customer care pervades right through the organization and is the prime concern not only of all the functions but also of all the staff from the highest executive to the lowest operator. All staff unite in the prime endeavour to satisfy customer wants/need better than competitors. Hou, Wee Chow. (2001) The Inspirations of Tao Zhu Gong – Modern Business Lessons from an Ancient Past. Singapore, Pearson (Pg 289)

Marketing helps the organization to grow by increasing sales profitably. It does so essentially finding new customers and markets by identifying and developing new products and services. (Quester and McGuiggan 2005: 46)

2.3 Customer Analysis

Analyzing Customer Group

The number of potential customers, their buying behaviours and their geographical locations are key influences. Increase efforts to sell more to same types of customers. This strategy has the advantage of carrying the least risk. There are three basic sub-strategies to consider. (Kotler 2003: 37)

More purchase and usage from existing customers

Could offer incentives such as special prices to purchase more or cross sell. (Hiebing and Cooper 2003: 135)

Gain customers from competitors

To do this, require to offer some advantages. These might include emphasizing the current success of your product/services, lowering prices to offer better value. (Kim 2006: 131)

Convert non users into users

A good way of doing this might be to offer existing and previous customers an incentive for recommendations resulting new customers. Existing customers have wide circle of networking who might be influenced. (Harding 1994: 74 & 75)

How to enhance Customer Retention?

In order to retain its preferred customers, company needs to ensure that such customers are completely satisfied because this practically translates to customer loyalty. Based on a study by Accenture, the completely satisfied customer is six times more likely to repurchase a product/ service from it. Research findings from the same study indicated that the principal reason for customer defection is within the company’s control 83 percent of the time. Based on these figures, it can safely assume with a high degree of probability that this phenomenon is expected for other parallel markets. (Hiebing and Cooper 2003: 134)

What are the Strategies for Customer Retention?

It costs five times as much to acquire a new customer than to retain an existing one. Of course, customer acquisition can be expensive. But the implication that loyalty programs must be beneficial is simply not true in many situations. For example, a loyalty scheme that gives a one percent discount on gross margins of 20 percent needs a 5 percent uplift in sales to make money. Many financial services have neither these margins nor price sensitivities (for existing customers). Loyalty schemes originated in business class air travel and hotels where highly valued rewards can be provided at low marginal cost. But most loyalty schemes achieve no better than breakeven.

It needs a fully integrated, real-time customer information system . This costs a fortune, takes forever, and avoids answering how all the data will actually be utilized by marketing, sales and customer service personnel. In addition, often the most valuable information about customers is, for example, price elasticity, utility for product and service features, propensity to be cross-sold, likely response to various marketing initiatives, etc. Whereas many institutions have begun to understand customer economics, very few have collected much data customer behaviour.

It needs to organize around customer segments. In consumer businesses, segmentations evolve and change so each time they change their segmentation they would have to rip up their organisation. Most retail financial institutions, therefore, should not organize around customer segments. The alternative approach is that of cross-function project teams.

In short, customer profitability analysis, generic loyalty programmes, new systems or re-organisation, on their own, will not deliver the results. Indeed, in the face of disappointing results, companies increasingly recognize these arguments and use them to question future investments in CRM. Despite initial disappointments, to reject CRM now would be a mistake. CRM offers huge potential but requires a more sophisticated approach adapted to specific opportunities and circumstances.

Today’s customers are used to having a wide variety of choices. Customers want its requests (and demands) to be handled quickly and accurately without having to spend a lot of time and effort explaining (or re-explaining) its requests in order for it to be fulfilled.

(Leigh n.d.)

It follows that selecting a CRM technology solution is critical to customer retention. Yet it is important to remember that technology does not replace the need for a solid CRM strategy: – these are the Objectives of a CRM Strategy.

Communicate with your customers when and how customers choose.

Deliver differentiated service based on each customer’s preferences and overall relationship with your company.

Respond to customer requests consistently and effectively, with the right resource and the right information.

Continually improve your company’s processes for delivering a world-class customer experience. (Leigh n.d.)

Although Asia lacks customer retention strategies, many companies have begun taking notice of how they can keep their loyal customers. And companies readily admit that technology alone is not the cure. Such companies recognized the 80/20 rule where 80 percent of their business will come from 20 percent of their customers.

2.4 What is Promotion Strategy?

Promotion Strategy is a mix of personal selling, advertising and other promotional activities. (Stanton, Etzel and Walker 1994: 461)

Sales Promotion

Sales promotion is part of an overall communications strategy and can make an important contribution to the achievement of the company objectives by helping to inform, persuade or remind customers about the products/services offering. (Kotler 2003: 160)

Packaging can be used to support and promote a company sales promotion activity. Cereal, soft drinks manufacturers utilize this technique. Great care is taken to ensure that the promotion does not detract from the packaging’s overall appearance. Responses obtained from such promotions provide an opportunity to enhance manufacturer database and development of future direct marketing activity. The packaging can also be used to advertise related brands. (Hou 2001: 96)

Literature also plays an important part in the promotion with a variety of leaflets, cards and information packs, some of which are specially designed for individual market segments. (Hiam 2004: 135)

Direct mail

Direct mail can build up a database of previous customers split into the types of goods purchased, which indicates their interests. This could be used to send mail shots to interest groups about new products as they come on to the market. This technique could be quite powerful in building up a closer and longer term relationships with the customers. (Mars Direct Mail 2003)

Exhibitions, shows and special Events

These can take the form of special events for example in store demonstrations, special displays, educational talks, New Product Introduction Seminars, Movie nights, Networking Sessions, Family Day Campaigns, Sports Tournaments, Product End of Line Promotions. (Gallo 2009: 9)

Public Relations

Public Relation covers a host of activities designed to maintain favourable relations between the company and its various publics – shareholders, employees, customers, society at large. (Kotler 2005: 82)

Duties include writing press releases, articles, speeches, reports for a variety of media and audiences. Public relations personnel need to be sensitive to the moods of others, good writers, creative, excellent hosts and smoothly articulate. Articles in journal and editorials help to convince readers.

This can play a particularly important role in persuading buyers, influences and specifies.

(Hiam 2004: 198)

Personal selling

There are many types of personal selling including telesales, pioneer selling, technical sales, special account executives as well as sales managers and sales trainers.

However, the duties of a sales force are first and foremost to sell the company’s products, to present a favorable image, to provide feedback and to handle customers’ problems and complaints. (Murray 2009: 123)

To do this, a sales person needs to be presentable, persuasive, likable and determined. Sales managers need the extra attributes of leadership qualities and sales trainers should be good teachers, demonstrators and motivators. (Hou 2001: 155)

3.0 Conclusion

From the results of the above research, the marketing department will be able to :

ascertain the level of demand and the total market size allow the marketing department to know how much sales if a new product is likely to get when it is introduced.

identify the types of customers that would be most likely to be attracted to the new product. The information provided will enable the marketing department to design a marketing program tailored especially for this group of customers to receive the maximum results. Take for example, information on the life style of the market group will enable marketing to design the type of packaging most appealing, types of promotions to roll out. Information on where they patronize will enable Honeywell to choose the most appropriate distribution channel.

Although it has a number of strengths, there is an almost equal number of weaknesses. Following Kotler’s recommendations, the strengths and weaknesses should be scored and their degree of importance assessed so as to facilitate prioritization. For example it seems clear that the product design and mechanical quality would have a high score and a high importance and should ranked as a major strength.

However lack of market intelligence rank as a major weakness but can be rectified. There are often much to learn from competitors especially the highly successful ones in the industry. Knowing their weakness enable the company to capitalize on their competitors’ weakness. Knowing their strength will allow the company to avoid confronting these strengths directly and at the same time learn from them.

Some of these competitors are long in the industry and their management style and history is worth studying. While it will not work to mimic them, there are strong elements that make them remain strong and successful over the years in a competitive business world.

We would propose the Marketing team to enhance, plan, look for new markets and selling more closely with other promotional elements and actions to further the company’s interests.

The plan has to be regularly monitored to ensure that adequate progress towards the agreed objectives is being made and corrective action is taken otherwise the company’s directions and goals will not be met. Honeywell has to draw up a contingency plans in respect of adverse development such as competitor response, market decline, etc.

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