It was quite interesting understanding the difference between product and marketing orientation. The Clean Queen Company faced significant profitability challenges. Their upright vacuum line, a less profitable product, has maintained a 5% growth rate per year in a market that has only been growing at 3% in the current fiscal year; however the more profitable canister line is experiencing decreased sales. This situation results in zero overall sales growth. Within the management team there is a difference of strategy between two approaches. The sales manager wants to lower the price point in order to increase sales. The Chief Design Engineer wants to introduce an innovative, but higher priced unit, that offers improved performance.
In the Clean Queen Company we can define two main problems:
- The participants weren’t commenting from a data-driven perspective which makes us understand that the company doesn’t have enough secondary and primary data gathered from the company based on effective market analysis.
- The General Manager in the discussion is focused in the quality of their products based on their feature oriented product, which helps us to understand that the company is product-oriented.
The recommendation would be for the company’s marketing philosophy to be based on a market orientation strategy. This approach should be focused on understanding and meeting the needs and desires of its customers in a very competitive marketplace through its product offerings. Clean Queen’s product was dated because it hasn’t been innovated for 20 years. It doesn’t have sufficient quality in today’s market and it is priced too high relative to competitors. Market orientation strategy would support and give credence to the innovative approach of the Chief Design Engineer in develop leading edge products to expand and enhance the product mix. It will contribute in deciding for reasonable price and high quality in order to satisfy the customers. The market orientation approach would most likely prove to be successful given that it would be a coordinated marketing campaign between Clean Queen and its customers by refining the sweet spot to meet customer’s needs thru market sensing and analysis.
The market research should start with secondary research. Then continue with primary research from qualitative to quantitative data. Both are based on asking questions, over the phone or face-to-face meeting. Most importantly, they have to gain insight from the market data regarding what customer needs in a vacuum cleaner are currently not being met? What specifications are valued at a higher perspective of the customer? How do they clean their house? What tools do they use to clean the house? Where do they buy those tools? In addition, the design and specification should be modified as required to create a stronger alignment with the needs and desires of the targeted market.
The Clean Queen needs to discover the competitors. Researching the competitors helps understanding their specifications. What they are doing? Why their product is attractive to customers? What are competitor’s main strengths and weakness? What are their prices? Specifically they have to Average the Price Index Analysis so they can approach strategically for their price setting clearly .