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Marketing Professionals Case Study Marketing Concept

Marketing Professionals Case Study Marketing Concept
Professional examination for marketing professionals with a federal diploma. Qualification exam prof. pour spécialistes en marketing avec brevet fédéral Esame per Specialisti in marketing con attestato professionale federale exam 2015 Marketing Concept Reiden Technik AG Examination time: 3 hours Task 1 from 2 3 ac 4 5 6 7 8 points 17 6 ​​33 9 8 12 10 5 Total 100 In the interest For the sake of legibility, the feminine form was omitted every time in the designation of persons. This task consists of 12 pages including a cover sheet. Please check whether you have received the task in full. Please note: no solution sheets may be stapled together. © by the MFL Examination Board Professional examination for marketing professionals with a federal diploma. Marketing concept certificate / D / 2015 1. Starting position Reiden Technik AG Swiss quality from tradition and innovation Reiden Technik AG is one of the most renowned and innovative companies in the mechanical engineering sector. Yesterday Founded over 100 years ago as Maschinenfabrik Reiden, water turbines were manufactured in the early years. However, the need for stable and precise machine tools was recognized early on, which at the time was difficult to meet. Through constant research and development, Reiden Technik AG has been able to build up its know-how over decades and incorporate it into new products. As a result, Reiden Technik AG offered the first machine tool with computer control as early as the 1970s. Today in 1997 two long-time management employees took over the company Reiden Technik AG. The company's strategic success position is not only to be found explicitly in the products - it is also the characteristic as a company to manufacture machine tools flexibly and customer-oriented according to special requests in the same high quality and at a similar price as its competitors series machines. The guiding principle of Reiden Technik AG is: “Not just offering the customer a machine, but a turnkey solution”. From the first idea to the finished machine, a lot of coordinated work steps are necessary. In order to be able to offer customers quick and practical solutions, development and construction is done 100 percent at the production site in Reiden LU. With the establishment of its own software development, Reiden Technik AG has created a good basis in recent years to implement even complex mechanical engineering projects in a simple and solution-oriented manner. Page 2 of 12 Professional examination for marketing professionals with a federal diploma. Marketing Concept / D / 2015 Sales Certificate Reiden Technik AG generates total sales of approx. CHF 36 million annually. In terms of sales, this corresponds to sales of around 35 machines per year. Compared to the market leader, who achieves an annual turnover of over € 1.2 billion, Reiden Technik AG has a small market share. For this reason, they call themselves a “niche manufacturer”. The ability to manufacture products at this size, whose technical data is comparable to that of the competition, is what makes the company successful. The machines enjoy a high reputation on the market thanks to the quality they produce and the state-of-the-art. Personnel structure Today, 138 employees work at Reiden Technik AG to guarantee the highest quality standards. With around 21 apprenticeships for apprentices in the professions of automation technicians, salespeople, design engineers, polymechanics and production mechanics, the company can grow in a controlled manner without the need for major recruitment measures. The personnel structure of Reiden Technik AG is characterized by short decision-making processes. The Marketing and Sales departments work closely together under the Head of Marketing & Sales. This guarantees a high level of knowledge transfer at all times and is essential for the successful marketing of machine tools. Organization of the "Marketing & Sales" department of Reiden Technik AG Head of Marketing & Sales Internal Sales Marketing External Sales Technical Clarification Switzerland East Project Coordination Switzerland West Order Processing Apprenticeship Training Germany International Markets Page 3 of 12 Professional examination for marketing specialists with federal diploma. Marketing concept certificate / D / 2015 Sales area and customer base Reiden Technik AG is mainly active in the European market. The core market is formed by the following countries: - Switzerland - Germany - Austria France Netherlands Belgium Russia Italy 30% share of sales 50% share of sales 20% share of sales Reiden Technik AG's customer base comprises around 400 customers, mainly in the aerospace sector ), The energy sector, wind power and automotive suppliers (e.g. Lufthansa, Airbus, Bosch, BMW, Ford, Daimler, SBB, BASF, ABB, Ruag) are active. Reiden Technik AG estimates its potential customer potential at around 5400 customers worldwide. Sales and distribution partners In Switzerland, Reiden Technik AG sells its machines directly. In the European market, distribution via sales partners has proven itself. They maintain personal contact with customers in their geographical sales area and refer interested parties to Reiden Technik AG for a commission. Purchase contracts are then negotiated and concluded directly between the customer and Reiden Technik AG. 2. Trade fairs - the most important marketing instrument 80 percent of Reiden Technik AG's customers are acquired at trade fairs, which are the most important marketing instruments for the mechanical engineering industry. Reiden Technik AG participates in 5 trade fairs in Switzerland and abroad every year. The world's largest and most important manufacturer's trade fair for metalworking, the “EMO Milano”, which takes place every two years, will take place in Milan this autumn from October 5th to 10th. Reiden Technik AG will take part and present its latest product for the European market, the RX 12, as a world first. Participation in a trade fair is associated with high costs and effort in the metal construction industry. While the 5 smaller annual trade fairs cost around CHF 50,000 each, the marketing budget for “EMO Milano 2015” is CHF 250,000. The administrative preparations start a few months in advance, the actual construction of the exhibition stand then takes place approx. 3 weeks before the start of the exhibition. Page 4 of 12 Professional examination for marketing professionals with a federal diploma. Fachausweis Marketingkonzept / D / 2015 3. The five business areas of Reiden Technik AG Today Reiden Technik AG is divided into the following business areas: 1) Manufacture of machine tools - 65% of sales The core business is the manufacture of machine tools for metal products (steel and aluminum), such as water turbines, rotor blades for aircraft engines, etc. The latest technologies and proven methods are used. The machines are entirely built at the Reiden LU production site. Customers appreciate the uncomplicated clarifications and quick decisions. That is why many of them have been loyal business partners for many years. 2) Trade in machine tools - 10% share of sales In order to be able to offer loyal customers machines with smaller machining dimensions, Reiden Technik AG has also included trade products in its delivery program. This has resulted in long-term and successful partnerships with suppliers. 3) Retrofitting of older machine tools - 8% share of sales. Older machines that have electronically and mechanically exceeded their peak are given a new shine through retrofitting (retrofitting, conversion and modernization). In economically difficult times, this mainstay of Reiden Technik AG is a popular alternative to a new machine for customers. Own brand products as well as third-party products are being revised. 4) Services - share of sales 12% In the event of an emergency, a competent and motivated service team is available for all machines delivered. With the aim of keeping any machine downtime as short as possible, Reiden Technik AG provides a 24-hour help and spare parts service for all European customers. 5) Contract manufacturing - sales share 5% In order to sense future needs, contract work is also practiced on a small scale. In this way, customers' excess capacities can often be bridged during the delivery time of the purchased machines. Page 5 of 12 Professional examination for marketing professionals with a federal diploma. Marketing concept certificate / D / 2015 4. The main products of Reiden Technik AG RX 10 - small and compact The RX10 is a compact machine tool with a very small footprint (approx. 6 x 4 meters) for the production of smaller steel / aluminum products. It is considered the Swiss Army Knife among machine tools and is particularly characterized by its universal range of use. Despite its compact appearance, the machining area is enormous compared to the size of the machine. The RX 10 is currently on the market for around CHF 550,000. RX 14 - a machine for maximum performance The RX 14 is a high-tech machine tool for manufacturing medium-sized steel and aluminum products. The RX 14 is particularly characterized by its stable but extremely flexible tool head. This enables products to be manufactured with incredible precision. Due to the size of the machine (approx. 8 x 6 meters), the machine ergonomics were tailored to the needs of the operator. The RX 14 is currently on the market for around CHF 1,200,000. RX 12 - the latest development from Reiden Technik AG Based on market research and customer surveys, Reiden Technik AG decided two years ago to develop a new machine tool, the RX 12, and to launch it on the European market first. It has roughly the same technical properties as the RX14, but is much more compact at approx. 7 x 6 meters. The RX 12 is expected to be available on the market for around CHF 895,000 and will be presented for the first time at the “EMO Milano 2015” at great expense. Page 6 of 12 Professional examination for marketing specialists with a federal diploma. Marketing concept certificate / D / 2015 5. Competitors For Reiden Technik AG, the following 4 competitors are central to the market:  DMG MORI: The DMG MORI group is one of the largest manufacturers of machine tools in Germany and also a leading manufacturer of computer-controlled machine tools worldwide . The range includes innovative high-tech machines, industrial services as well as software and energy solutions. The DMG Mori Group employs 6500 people and generates an annual turnover of € 2 billion.  SHW Werkzeugmaschinen: SHW Werkzeugmaschinen GmbH was outsourced from the large SHW Group in 1996. SHW Werkzeugmaschinen has focused on the manufacture of specific machine tools. SHW Werkzeugmaschinen GmbH has 230 employees and generates annual sales of € 46 million.  Hermle: Around 20,000 machines from the German company Berthold Hermle AG are in use worldwide, mainly in medical technology suppliers, in the optical industry, in aviation, in the automotive industry and in motorsport. Maschinenfabrik Berthold Hermle AG has 937 employees who generate annual sales of € 308 million.  Keckeisen: Keckeisen is a small mechanical engineering company from Germany that has been active in the market for over 160 years. The company specializes primarily in the construction of larger machine tools. Today 160 employees work at Keckeisen and generate annual sales of € 42 million. 6. Future prospects Reiden Technik AG is aware that its sales activities have so far been too strongly focused on Switzerland and Europe. A rough analysis has shown the following initial situation: The previous core markets of Germany, Switzerland and Austria only ensure insufficient capacity utilization.  The economic cycles of these markets behave homogeneously, the sales figures of Reiden Technik AG are thus completely based on the economic cycles. Longer economic downturns would jeopardize the company's existence.  New markets such as Russia, the Czech Republic, Slovakia etc. do not (yet) bring the expected turnover / sales figures. Page 7 of 12 Professional examination for marketing professionals with a federal diploma. Marketing concept certificate / D / 2015 Expansion into the US market In order to minimize the cluster risk in the future, Reiden Technik AG is aiming to expand into the US market. The following considerations are central:  The US market is showing considerable growth (USA: +1.85% / EU: -0.1%). Investments in the machine tool industry are very high.  After Germany, the USA is the second most important trading partner for the Swiss electrical and metal industry (MEM industry) and still offers a lot of potential. Exports of $ 6.8 billion to the US represent 10.5% of total exports in 2014.  The forecasts for the next few years are very optimistic. The USA is facing reindustrialization due to the expected low raw material prices (natural gas / oil). New factories mean new machines, systems and devices - also from Swiss companies that export to the USA.  Compared to China or India, the USA is a relatively traditional and simple market (language, law, business practices, etc.).  The Midwest region, also known as the Rust Belt, is the largest industrial region in the USA. These include the “Autostadt” Detroit and the supply industry (steel, tires) around Cleveland. This region offers the greatest sales potential for Reiden Technik AG.  Basic language requirements are available (EN-speaking sales staff, product information in EN, operating instructions in EN).  The time difference is an important issue, especially for distribution partners and their service departments. For example, the time difference between Reiden and Chicago is 7 hours.  When it comes to logistics, several factors play an important role: export and import regulations / US standards, transport / packaging, spare parts management. Please note that in the present case not all facts correspond to reality. They have been changed and adapted according to the case. Page 8 of 12 Professional examination for marketing professionals with a federal diploma. Marketing concept certificate / D / 2015 Initial situation - your tasks As a marketing specialist, you report directly to the Marketing and Sales Manager at Reiden Technik AG. In this role, you will work in  Part 1 of the tasks on the market launch of the new RX 12 machine tool in the European market and in  Part 2 of the tasks on the decided expansion into the US market.  Make sure you are in a capital goods market. Exercise 1 Exercise 1a 17 points 8 points Prepare a SWOT analysis for the launch of the new RX 12 machine tool on the European market. Exercise 1b 9 points Then derive 3 possible strategic approaches for the market launch of the RX 12 in the sense of a conclusion from your SWOT analysis and give reasons for them. Exercise 2 6 points In the next step, formulate 2 pre-economic (qualitative) and 2 economic (quantitative) goals for the market launch of the RX 12. Page 9 of 12 Professional examination for marketing specialists with federal diploma. Qualification Marketing Concept / D / 2015 Task 3 33 points Task 3a 18 points How successful the market launch of the RX 12 is depends largely on the presence at the “EMO Milano 2015” trade fair in Milan. The marketing manager attaches particular importance to these three central goals: - Branding: Establishing and expanding awareness of the “Reiden Technik AG” brand - Product: Market launch of the new RX 12 machine tool - Customers: Acquiring new customers, but also maintaining existing ones Customers Develop 2 measures each as a basis for the implementation of the 3 central goals above. Use the given grid for this: Title of the detailed description Date Measure Exercise of the measure Task 3b Costs Responsibility Reason 7 points For Reiden Technik AG, the trade fair is the most important marketing instrument for customer acquisition. As mentioned, it is now primarily about the market launch of the new RX 12 machine tool and who you want to invite to the trade fair in Milan. Which companies are using the new machine? Describe the primary target group of the RX 12 in detail. Task 3c 8 points Contacts with potential interested parties are of little use if the follow-up work on the stand visits is not optimal. Describe 4 effective measures with dates and costs with which you want to process potential new customers after visiting the stand. Page 10 of 12 Professional examination for marketing professionals with a federal diploma. Marketing Concept / D / 2015 Expansion into the US market In order to be able to grow further, the management of Reiden Technik AG has decided to implement the expansion plans for the US market drawn up by the Marketing and Sales Manager. The task now is to put these plans into concrete terms. As a marketing specialist, you will actively support your supervisor in answering these questions.Task 4 9 points The export of machines to international markets presents companies with various internal and external challenges. Name and explain 3 internal and 3 external challenges with which Reiden Technik AG may be confronted with regard to its expansion plans in the US market. Exercise 5 8 points Reiden Technik AG has various options to specifically work on the US market. Name 3 possible growth strategies for working the US market. Then make a comprehensible decision on a type of strategy and explain your decision. Exercise 6 12 points In the next step, Reiden Technik AG has to make a decision about the suitable form of entry into the new market. First name and describe 4 forms of internationalization that are relevant for this case. Then decide on the most suitable form of internationalization based on 5 criteria and give reasons for your decision. Page 11 of 12 Professional examination for marketing professionals with a federal diploma. Marketing Concept / D / 2015 Technical Certificate Task 7 10 points In order to be up to date on the activities of any sales partners and to be able to support them, an MIS (Marketing Information System) should be set up. Name and describe 5 pieces of marketing information you need to manage and monitor, and explain why they are important. Exercise 8 5 points American customers only buy capital goods from European companies if their aftersales service (customer service after the purchase) works quickly, easily and smoothly. Name and describe 5 criteria that characterize an optimal and efficient aftersales service. Page 12 of 12