A designer and manufacturer of small electric fans used in heating and cooling units in autos, appliances and electronic equipment, Fanfare is in the business for over forty years. Their customers vary from manufacturers in the United States as well as those around the world. In spite of this, however, Fanfare is not the leader in the industry where they belong to, the mini-fan industry. According to the Trade association data, Fanfare ranks third in the mini-fan category having a twenty one percent market share dollars. This business report aims in proposing strategies that could help in making Fanfare the leader in their industry through innovation, sales organization, greater participation in trade shows, advertising, increasing the awareness of all the people in the company, focusing on the sale of their systems rather than their individual products without compromising the quality of their products.
As it has been mentioned, Fanfare has been in the business for over forty years as a designer and manufacturer of small electric fans used in heating and cooling units in autos, appliances and electronic equipment. Ranking third in the industry, it has a twenty one percent market share dollars, lagging behind Air-Circ Inc and M.T. Mind & Sons.
Fanfare sells its products to original equipment manufacturers or OEMS. These mini fans are then added in auto and truck dashboards and in some cases, rear compartment heating, defrost and cooling units. Most of the time, they are also being used in industrial and consumer refrigerators to facilitate the circulation of air in the freezer and the other cooling sections. At the same time, these fans also become a very important part of ovens as they also help in the circulation of air. Furthermore, they also have important functions in electronic appliances such as computers and servers as these mini fans ensure that they heat generated by the microchips are removed. At the same time, the small fan is also used in the freezer display cases of supermarkets and other convenience stores as well as the coolers of the restaurants and bars.
The company hires 21 Regional Sales Managers that help them in selling the mini-fans to their manufacturers. Each of the Regional Sales Manager helps in the development of sales and services in the geographical territory that has been assigned to them. Of these 21, 12 are based in the United States, 5 in Europe and the rest are in Asia. Working hand in hand with them is the research & development staff or R & D.
One of the main problems that this paper shall highlight is the absence of the company in trade shows where their competitors usually make themselves visible, thus catering to the needs of those in the appliance industry. Due to the absence of Fanfare in such events, they are missing out new opportunities such as the development of new contacts to increase the sales of their mini fans.
The second problem is concerned with their sales coverage. They are more often than not involved in the traditional rebuy situation. Generally, they keep on supplying their old customers, thus failing to obtain new accounts to increase the profits of their business. Blamed upon the incapability of their people to look for new businesses is the lack of time, not knowing who to call on and finally, lacking the technical knowledge in consultation with the design engineers and production managers. The executives of fanfare also know that there is a communication problem existing between the members of their R&D staff as well as the members of their sales force. Generally, these people are not aware of what the manufacturers really want. As a result, they do not know how to innovate their products.
To deal with this problem, it is proposed that the strategy be changed. Instead assigning sales managers to address the needs of their customers based on the geographical setting, it is but proper to assign them to specific industries instead. At the same time, it is also suggested that the Regional Sales Managers be properly educated with regard to fan technology.
In line with this, a more radical step in changing the organization is also proposed through the removal of sales agents with industrial representatives taking their place. Although they may lose the contacts that their sales people have already established, they would focus on the new ways by which they could address the needs of their customers.
Even without taking this radical step however, the business must still be able to develop external and internal communication in order to better understand and channel relationships. It is in doing so that Fanfare could obtain new accounts through the innovation of their products.
Advertising also becomes one of the issues to be addressed to ensure the success of Fanfare. As their customers are also manufacturers, it is suggested that they focus on business-to-business marketing rather than consumer marketing.
The suggestions made above should be strictly followed without compromising the quality of their products. Without a doubt, the company’s quality is top-notch, only having one or two rejects per hundred.
The company generally aims to overtake the businesses that are ranking as first and second in the market share of the mini fan industry. This plan shall focus on the development of marketing strategies that could contribute in this goal, making Fanfare the leading developer and manufacturer of mini fans. At the same time, the marketing strategies that shall be included in this report could also help in the innovation of their products in order to attract new customers.
The plan aims to provide suggestions by which they could increase their sales rates through innovation, reorganization of the system and advertising. In line with this, it aims to look into the factors that contributed so much to the competitors of Fanfare and how their strategies and corporate practice contributed so much in the success of their businesses, leaving Fanfare at the third place.
In tapping new opportunities for their business, Fanfare must be able to look at what their customers really want and from there, establish good ties with them that are necessary in the improvement of their business. At the same time, they should also be able to facilitate the development of good relationships internally so as to ensure the good interaction between their R&D staff who are in charge with their new products and the sales people, who deal with their customers and sell their products to them.
BACKGROUND AND TRENDS
The mini fan industry is booming due to the increasing popularity of electronic appliances that are greatly in need of these new technologies. The trend in the industry is the production of mini fans that are even smaller than its predecessors which is then becoming more valuable to applications with limited thermal conductions and the mobile phones, smart phones, PDA, portable IT and telecom applications (Sunonwealth, 2007).
The mini fan produced by Sunon, a company based in Taiwan and operating in all the major countries around the world, accounts for 60% of its total shipments. This means that the mini fan’s popularity is indeed increasing as more and more appliances and other technologically advanced products are already using it (Sunonwealth, 2007).
Fanfare Inc is the third largest manufacturer and producer of mini fans.
Fanfare Inc. has already established a wide base of contacts.
Fanfare Inc. already has a Research and Development teams who could facilitate the innovation of their products.
The organization fails to attract new customers
Fanfare Inc. does not innovate its products.
Their sales people do not know everything about their product.
The mini fan industry is booming because of the popularity of electronic appliances and other technologically advanced products.
Competition from other members of the mini fan industry.
Fanfare envisions itself to be the leader of the mini fan industry, thereby overtaking its competitors through the introduction of innovative products, manufactured according to the demands of their consumers. Furthermore, it also aims to obtain new customers so as to increase their profit.
The goal of Fanfare is to innovate their products to be able to increase its market share in the mini fan industry. At the same time, they also aim in increasing their visibility in trade shows so as other members of the electronic industry would get to know them, thus obtaining new customers for their businesses.
The objective of this company is to develop their own brand of mini fans and at the same time, be able to market them to a higher percentage of customers to gain a greater market share. In order to do so, they must be able to acquire new customers, something they were not able to do for the past years.
Business to business marketing is one of the important strategies that this firm shall undertake to be able to gain a greater market share in the mini fan industry. It shall be based on how much the firm knows its customers thus, the foundation is laid upon their relationship. Business to business marketing will increase the number of customers that Fanfare has. It is through this that they could successfully cater to the needs of their customers.
Business to business marketing is characterized by the following (Dobney.com, 2007):
There are a small number of big customers that account for a large percentage of the revenue, as compared with consumer marketing wherein every customer has equal value and represents a small percentage of the revenue.
Sales are made personally, the manufacturer gets to know the consumer compared with consumer marketing wherein sales are made remotely, thus, the manufacturer does not meet the customer.
Products in B2B marketing are customized for different customers. Thus, service is highly valued. On the other hand, for consumer marketing, the service element is low as products are the same for all the customers.
In B2B marketing, purchases are made for others to use- image is important where it adds value to the customers. On the other hand, purchases in consumer marketing are made for personal use and image is important for its own sake.
The purchaser in business to business marketing is normally an integrator whereas in consumer marketing, the purchaser is also the user.
For B2B marketing, purchase costs may be a small part of the total costs of use whereas costs are restricted to purchase costs in consumer marketing.
The purchase event is conducted professionally (includes tender and negotiation) in business marketing while the other kind of marketing, the purchase event there is not subject to tender and negotiation.
The exchange in B2B marketing is of strategic intent which means that there is the potential for long term value whilst that of consumer marketing has no long-time view.
Aside from business to business marketing, the company must also be able to organize their research and development teams so as to ensure they could easily enter the different trade shows. A complete and thorough analysis of these trade shows is suggested so as to ensure that they will be participating in something that is of vital importance to them. In the same manner, the R&D team must also be able to research on ways by which the company could innovate their products.
In implementing the strategies mentioned above, it is suggested that the company looks for the best people for the job so as to ensure that their knowledge could contribute so much to the goals and objectives of their businesses. They must be able to customize their products for every customer to ensure that a long term business relationship could be established.
They could also come up with a website that would present their business that could be easily accessed by their customers. The creative teams could also provide an email address where organizers of the trade shows could send them invitations. As to their products, the research and development team could also look into the products being manufactured by their competitors to simply look at it and compare it as to how they could improve theirs based on the products of their competitors.
For the next fiscal year, the teams that Fanfare Inc. will develop will solely focus on the improvement of their products. They would ensure that the marketing strategies herein mentioned must be followed to ensure the success of their business and to make sure that they are performing based on the best interest of their company.
The financial status of the company could support the financial strategies to be adopted. The business proposal aims to increase the sales of their mini fans by 50% in the next quarter. At the same time, they must be able to reach this mark by acquiring new customers.
For this matter, advertising was considered although it was not adopted as the business needs to focus more on business to business marketing rather than marketing to their consumers. At the same time, the incorporation of public strategies was also given importance so as to ensure that the public would be made aware of their business and its aims. However, as it has also been previously mentioned, the corporation must focus on the businesses that are in need of their products since they are the ones who purchase these mini fans.
CONTROL, REVIEW, REVISION
The profit of the company next quarter shall be monitored. If in any case it increases by 50%, then these strategies are seen to be successful. If however, these strategies do not increase the profit of the company, then the immediate solution to the problem would be to increase the visibility of the company not just in trade shows but to other events that major producers of electronic appliances are present to further increase the visibility of the company.
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