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CanGo Marketing Analysis and Strategy The General Environment Currently the inflation rate is stable at three percent or less per year, and the consumer price index is steady with approximately 1. 5-2 percent change per year. A stable economy without significant inflation will likely maintain the strong spending power of the consumer. The consumer’s dollar will be stretched further allowing them to purchase more goods. Low inflation rates will also persuade the Federal Reserve Board to keep rates low allowing free economic growth as rates increase.
Copyright law infringement and lawsuits are on the rise for online providers, particularly those relating to music and print. CanGo has a product line heavily weighted with music and print materials, therefore CanGo will have to be particularly careful to keep current on copyright law changes. CanGo will need to ensure the material is being properly licensed and protected from being illegally copied. Some of CanGo’s major competitors include Amazon, CDNow, GameTap and eBooks. Generation Xers are CanGo’s primary customers. However, CanGo is also seeing some crossover from the Generation Y and Baby Boomer groups as well.
The VALS (values and lifestyles) report provides a way of viewing people based on attitudes, needs, wants, beliefs and demographics. The average CanGo customer is an experiencer with secondary characteristics of achievers. According to the VALS report, experiencers are motivated by self-expression. As young, enthusiastic, and impulsive consumers, experiencers can be extremely eager about new possibilities but are equally as quick to cool. They seek variety and excitement, savoring the new, the offbeat, and the risky. They find an outlet for their energy in exercise, sports, outdoor recreation, and social activities.
Experiencers are avid consumers and spend a comparatively high proportion of their income on fashion, entertainment, and socializing. Their purchases reflect the emphasis that they place on looking good and having fashionable possessions (Strategic Business Insights, 2010). Achievers have goal-oriented lifestyles and a deep commitment to career and family. Their social lives reflect this focus and are structured around family, place of worship, and work. Achievers generally live conventional lives, tend to be politically conservative, and respect authority. They value predictability, stability, and self-discovery.
With many wants and needs, achievers are active in the consumer marketplace. Image is important to achievers as they favor established products and services that demonstrate success to their peers. Because of their busy lives, they are often interested in a variety of time-saving technology (Strategic Business Insights, 2010). The Environment Within The Industry Some of CanGo’s major competitors include Amazon, CDNow, GameTap and eBooks. Background information on CanGo’s competitors is provided below, highlighting their strengths and weaknesses. Amazon is a profitable organization. Net sales increased 28 percent to over $24 billion in 2009.
In 1999, Amazon was only $1. 64 billion. Amazon’s business goals directly impact their customers. According to Amazon’s 2009 shareholder letter, nearly 80 percent of the company’s goals will have a direct impact on customer experience (Amazon. com Annual Report, 2009, pg. 3 ). Customer relationship management and information technology support Amazon’s business strategy. The company records data on customer buyer behavior. This enables them to offer to an individual specific item, or bundles of items, based upon preferences demonstrated through purchases or items visited (“Amazon SWOT”, 2010).
The Amazon brand is recognized worldwide. It was one of the original dotcoms, and over the last decade it has developed a customer base of around 30 million people. It was an early exploiter of online technologies for e-commerce, making it one of the first online retailers. Amazon’s early success began with books, and now has product categories that include electronics, toys and games, DIY and more (“Amazon SWOT”, 2010). As Amazon continues to add new categories to its business it runs the risks of becoming too large and confusing for customers.
Because Amazon is such a large company it has to burden the cost of making first mover decisions. Amazon is innovative and expanding rapidly, therefore it would be difficult to learn from the mistakes of others in the market, as no other competitors produce on the same scale. It is important for Amazon to stay relevant, as there is free entry into the online marketplace and the possibility of losing market share. CDNow formed an alliance with Amazon to enhance customer experience while providing familiarity. Customers can navigate the site with ease, however, programs to demonstrate loyalty to the customers should be revisited.
GameTap was established by Turner Broadcasting, a subsidiary of Time Warner in 2005. According to the 2008 Time Warner Datamonitor report, Turner sold GameTap to a Paris-based company called Metaboli. According to their website, the GameTap offers some free online games and also includes the option to purchase a single game or access to all games for a fee. GameTap has grown from having approximately 300 games to now over 1,000. GameTap has established partnerships with many world leading internet portals, and many prominent publishers entrust their games to GameTap for download.
On the down side, GameTap changed business models in 2009 which disabled previously offered features as well as limiting the access to some games by certain Windows users (“About GameTap”, 2010). Ebooks offers consumers an easily searchable variety of ebooks. Because of their academic ebook offerings, they have expanded their market to appeal to students and those in the educational profession. With the rising cost of textbooks, less expensive ebooks can easily gain popularity. Ebooks offers consumers a variety of choices. They have many different book formats and support several different types of devices.
Ebooks also offers the convenient option of purchasing gift certificates. In addition, their mailing lists help keep their customers informed of the latest releases based on their preferences. Although eBooks is convenient, there are some disadvantages. They do not offer music, videos or games. When dealing with downloading a purchase, errors can and do occur. Their refund policy is vague and refunds are only issued at the discretion of a manager. Also, the U. S. based website does not cater to international consumers. Macroenvironmental Factors
The eBook market currently makes up six to eight percent of U. S. book sales. The eBook market is to reach 15 percent by 2015. Amazon is a competitor in the eBook market currently has approximately70 to 80 percent of the eBook market share. Amazon offers not only eBooks but also an eReader, Kindle, used to read eBooks. Another competitor, Barnes & Noble offers an eReader, The Nook. Barnes & Noble currently holds approximately 20 percent of the eBook market share. Sony is another competitor also has an eReader, the Sony Reader, and holds approximately five percent of the eBook market share.
Google is an upcoming competitor and plans to launch Google Editions allowing thousands of publishers to sell their book across their platform. Google launching Google Editions will bring a lot of competition to the eBook market. As eBooks become more popular, there is a growing concern of digital piracy (Frisch, 2010). To estimate the size of the US Ecommerce industry we look at the expected growth of the market and revenue. Forrester Research expects US online shopping to grow at a slower pace this year but to continue to increase its share of the retail pie, from 5% in 2008 to 6% in 2009 and to 8% by 2012 (“U.
S. E-Commerce”, 2009). Etailers will need to pursue strategies to maximize revenue, as growth is becoming more difficult. Due to the recession, Etailers will need to add value to their products to entice new customers and influence customer purchasing. They need to show how they stand out from their competitors (“Top Etailing”, 2010). The Etailing trends above are all important, but for CanGo, some trends may be more beneficial than others. If CanGo can offer gift certificates and reward points as well as bundling, this may create customer loyalty.
Although it can be difficult, CanGo must figure out how to acquire new customers. More importantly, CanGo may want to invest more of their marketing budget in maintaining their current customers. According to Digital Entertainment Group, DVD sales fell 14 percent in the first quarter of 2010 as compared to last year. This decline can be attributed to consumers choosing to rent rather than buy DVDs and also the closure of many rental stores nationwide. Direct competition in the DVD industry includes Netflix and Redbox which allow viewers to rent a movie for a low price (Fritz, 2010).
Other competitors include Amazon, Wal-Mart, and Barnes & Noble and Tower. com which offer on demand video content on select Blu-Ray players. By 2001, the online gaming industry had grown by approximately 30 percent and was worth $87 million. Due to the increased availability of internet access to consumers, online gaming has now become a large segment of the gaming industry. As the access to broadband internet grows and the variety of games increases, the online gaming industry will continue to grow as well. Some of the companies that are leading the online gaming industry include Sony, Microsoft and Electronic Arts.
In order to increase profits, it is recommended that online gaming companies expand their revenue streams. Online gaming consoles are expected to become profitable as popularity increases. Game developers can reduce costs by building partnerships with publishers (Online Gaming, 2002). CanGo is a relatively small company in the online sales industry when compared to its competitors such as Amazon. Some believe that automation and advanced technology leads to unlimited growth potential for companies. This statement may hold true in regard to the growth of online sales.
For several consecutive years now there has been positive forecast for growth in online sales (Engleman, 2010). CanGo does have a large amount of competition within the online sales industry, but it can market its products to a specific consumer group. There are companies that fall into the same market as CanGo in regard to marketing online sales to the Generation X consumer base. Due to the low barriers of entry for companies to enter the online sales market CanGo must understand that there will be others entering the same market place as long as there is market share to attain.
CanGo must grow and try to differentiate the company from its competitors by serving its customers’ wants and needs. External Environmental Analysis In order to understand the market in which CanGo competes, information for competing countries is examined. Information on consumer behavior as it relates to CanGo and its products will be presented. The countries to be discussed include Japan, Brazil, the Czech Republic, and India. American companies can look to Japan for the essential elements for successful business.
Many new products are introduced in Japan before they are introduced in other areas of the world, as Japanese consumers tend to adopt new technologies more easily (JETRO- Consumer Electronics, 2010). Direct marketing has become digital. Buses have become mobile billboards. Chat rooms have become the juries on what products are in. These touch points between consumers and brands have resulted in the Japanese consumer being king, having more choices than ever before and the information in order to make those choices (Till, 2008).
Japanese consumers are now reassembling their counterparts in Europe and the United States, after decades of displaying different consumer behavior. Japanese consumers are known for their willingness to pay for quality and convenience and usually uninterested in cheaper products. However, Japanese consumers are now flocking to discount and online retailers. This shift in behavior seems likely to persist due to deep-seated factors ranging from the digital revolution to the emergence of a less materialistic younger generation (“The new Japanese Consumer”, 2010). Almost 70 percent of Brazil’s population is considered to be low-income.
In Brazil, consumers tend to be loyal to a specific brand because they cannot afford to make a mistake by trying a new product. Brazilians want personal service, have a mistrust of large corporations and value face-to-face contact. Since most low-income Brazilians have jobs in which they serve others, they like to be served when they make a purchase. Brazilians are also skeptical of large corporations because they feel they may be exploited by them. Some low-income consumers have limited education and depend on merchants to inform them of the benefits of a product.
They are more likely to trust in an individual than a business. Brazilians desire to have a relationship with sellers and will sometimes pay a higher price to have this interaction (Barki, 2010). Consumers in the Czech Republic are considered to be ethnocentric. They tend to value convenience, brand image and modernity as a guide for quality products. Czech consumers also use price as an indicator of quality and are incline to buy local brands (Rojsek, 2001). There are a number of factors that influence Czech buying behavior when it comes to recreational products.
These factors include former experience, the recommendations of family and friends and product characteristics. Recreation and culture tend to make up over nine percent of general expenses in households in the Czech Republic (Stavkova, Stejskal & Toufarova, 2008). Although almost half of India’s population falls into the low income segment, India is still considered a market with tremendous buying power. The vast population of India is comprised of many different sectors in which marketers can use to tailor their advertising strategies. Those sectors include class, status, and income.
Each of these sectors can help to determine how Indian consumers spend their income and what influences them to do so. Marketers can in turn use this information to promote their services, products, and brands effectively. Indian consumers not only base their spending on monetary factors, but they also rely on familial and emotional cues. Tradition may influence some Indian consumers’ spending habits, but non-traditional ways of spending that money are becoming increasingly popular. Indian shoppers are turning to online sources for shopping and e-commerce spending is increasing every year. Alkailani, 2009) Some of the products Indian consumers are currently purchasing online include CDs, DVDs, books and educational material. Indian consumer buying behavior is influenced by receiving free products with a purchase. Celebrities also influence Indian consumer buying behavior. In India, celebrities are being increasingly used in marketing communication by marketers to lend personality to their products. The products endorsed by celebrities sell very well. Indian consumers are also more likely to purchase products that are use environmentally responsible packaging.
The market in India is favorable for CanGo’s products. In order for CanGo to gain market share in India, CanGo should implement strategies such as celebrity endorsement or free products with a purchase. CanGo also may need to get involved in the communities. This would support India’s value of family and community. Provided below is a PEST analysis that shows the political/legal, economic, socio-cultural, and technological factors that affect CanGo internally and externally. PEST Analysis Political/LegalEconomic Equal Employment Opportunity Laws * Data Protection * What legal and political laws that affect growth * Copyright Law, Intellectual Property, Patent Law, and Trademark and Unfair Competition Law| * Consumer unemployment rate * Technology business cycle growth * Consumer spending traits * Rate of economy growth| * Population demographics * Social Mobility * Disposable Income | * New technology * Moore’s Law * Competitiveness of technology * Consumer access to technology | Socio-Cultural Technological The Market EBooks are becoming trendy.
They are gaining popularity among students and travelers who seek alternatives to carrying heavy books with them. Recent issues of top women’s magazines such as Vogue have featured eBook readers as the latest must-have fashion accessory. Pricing and format can be an important decision-making factor in eBook purchasing. Retailers must competitively price their eBooks, as there are thousands of Ebook titles available for free download. Retailers such as Google, whose eBook reader supports all eBook formats will have a competitive edge over companies like Amazon whose readers only support certain eBook formats.
Although the market segment for eBooks is not easily identifiable, eBooks seem to offer something for everyone. EBook readers offer magnifying capabilities and are convenient for travelers and students. One market segment that may be difficult to reach is the Baby Boomers, as they may not be as technologically savvy as the younger generations. When marketing eBooks, CanGo could use an undifferentiated marketing approach. Using an undifferentiated marketing approach would craft a single marketing mix that could be attractive to all potential consumers. If CanGo adopted this approach, it would market uniformly to all market segments.
The e-tailing and e-commerce market according is made up of a wide variety of commerce, including things such as online marketing, online transaction processing, and automated data collection systems (“The E-Commerce Market”, 2009). The e-commerce market industries mentioned above gives companies an idea of multiple to enter the market. Many successful virtual companies deal with products including music, movies, educational materials, and software. Examples of this type of company include Amazon, Google, eBay and PayPal (“The E-Commerce Market”, 2009).
CanGo can monitor trends seen in other competing companies and take advantage of that information. CanGo understands their core customers and can market very well to this segment. CanGo should look into offering the products that are popular in the etailing market. However, if they want to become a market leader, then they should offer a new product that falls outside of these categories. In 2008, approximately 70 percent of the population played some type of video games. Of that 70 percent, approximately 40 percent participate in online gaming, an increase from the previous year.
Of the people who play online games, 90 percent are playing online, while less than 20 percent play via a game console. The two largest groups on online gamers are aged 25 and older (50%) and aged 2 to 12 (25%). One of the most popular areas of the gaming market includes multiplayer role-playing games with virtual environments, such as World of Warcraft (“Chapter 28”, 2009). Online gaming has now become a large segment of the gaming industry due to the increased availability of internet access to consumers. As the access to broadband internet grows and the variety of games increases, the online gaming industry will continue to grow as well.
Some of the companies that are leading the online gaming industry include Sony, Microsoft and Electronic Arts. In order to increase profits, it is recommended that online gaming companies expand their revenue streams. Online gaming consoles are expected to become profitable as popularity increases. Game developers can reduce costs by building partnerships with publishers (U. S. Online Gaming, 2002). Internal Environmental Analysis CanGo has a number of features that give them a competitive edge above their competitors. Consumers are able to preview songs on a CD on the website before making a purchasing decision.
They also boast quick download speeds, feature popular artists and consumers can enjoy shopping without the bothersome advertisements that competitor sites are bombarded with. However, CanGo does have areas that need evaluation and/or improvement. Currently, CanGo does not feature a guarantee of customer satisfaction by offering a return policy. For CanGo’s consumers, one of the biggest fears is not being able to return a product if they are not satisfied. In addition, research by the marketing department showed that while many consumers are adding products to their shopping cart on the website, they are never completing the transaction.
Also, an employee in shipping pointed out to the marketing manager that there has been an increase in shipments to Japan of which he was unaware. By adding a refund policy for their consumers, CanGo could potentially ensure that more consumers are completing their transactions, thereby increasing sales. If customers know that they have the option to return a product if they are not satisfied, they are more likely to make a purchase. The marketing manager could research why shipments have increased to Japan. This could be a new emerging group of buyers for CanGo and the company could capitalize on that by appealing to the Japanese market.
Another consideration is that consumers tend to want more for their money and seek promotional deals or savings such as gift certificates and buy one get one free sales. CanGo is taking these important issues into consideration and working to resolve these issues to ensure a more pleasurable buying experience from their website. CanGo wants to grab a larger share of the online gaming and sales market. CanGo’s core customers are the Generation X’ers. CanGo is also going to segment the Baby Boomer market in order to capture a percentage of the largest market segment with the most disposable income.
CanGo has a marketing department and a head of marketing but is limited in terms of experience. CanGo is somewhat flexible regarding its marketing policies, CanGo mostly markets to its core customers but is trying to branch out to gain a larger customer base and in turn grow revenue. CanGo just recently began to design its marketing campaign. CanGo plans to release new products and is looking for ways to attract new customers and retain its current ones. CanGo also plans to expand to different demographics and has begun to strategize its segmentation and targeting efforts.
CanGo offers a full range of products geared to the Generation X consumer group. I think the product mix is complementary and does not compete with itself; however they should consider marketing products to the Baby Boomers and/or Generation Y consumers. At this time, CanGo needs improvement with the services they offer their customers. As of now, there is no guarantee of satisfaction or refund policy. If CanGo would add this service, they could potentially gain the sales of consumers who are afraid of purchasing a product they cannot refund if they are not fully satisfied.
In addition, they might consider adding some promotions for new customers such as gift cards or buy one get one free offers to attract customers and maintain a competitive edge. On the positive side, CanGo offers a site without bothersome outside advertisements as many of their competitors do. The overall level of business could be significantly increased if new products and services were added. With the addition of online gaming, mp3’s, ebooks, and a formation of a buyers club will increase business at CanGo. CanGo is currently offering music CD’s. There aren’t any products CanGo should consider to discontinue at this time.
SWOT Analysis Strengths * CanGo knows how to appeal to its primary consumer group * CanGo attracts a smaller consumer group, the Generation X group * Considering offering more such as product bundling, gift certificates and online gaming to keep and attain new customers * Offers trendy and interesting products that appeal to the Generation X group * CanGo is priced competitively with its larger competitors * CanGo starts its marketing strategies months prior to releasing seasonal products * The Generation X group is successfully marketed to and capitalized on * Diversified approach to each demographic E-commerce growth, more people using the internet for purchases Weaknesses * CanGo has limited resources and cannot compete on the same level as larger competitors. * CanGo is concentrating all of its resources on the smallest market, Generation Xers * Smaller distribution system than bigger retailers Need IPO capital to be able to compete with bigger retailers such as Amazon * CanGo is less efficient in cost structure that its larger competitors * CanGo only specializes in products that appeal to the Gen-X market unlike its competitors * Unaware of increased shipments to Japan Opportunities * Stable inflation and rate and consumer price index Half of Gen-Xers live with their parents, thus providing more disposable income * CanGo is starting crossover with the Generation Y and Baby Boomer groups * Primary consumer group, Gen-X, is technologically savvy * Primary consumer group, Gen-X, makes up 19% of the population * CanGo could take advantage of one-click purchase features that are being used by other savvy sites to enhance customer experience * Offer product bundling, gift certificates and online gaming * CanGo can gauge the market using the strategies from similar companies Threats * Technologically savvy competitor sites will have a difficult time competing with the larger companies * Similar companies could enter the market and take market share * Cost for expansion and capital expenditures leaves CanGo with fewer resources to put toward innovation * Many new comparison-shopping features throughout the Web, increasing the number of shopbots * If CanGo does not take advantage of one-click purchase features, competitors who do will have an edge * Copyright law infringement and lawsuits are on the rise for online providers, particularly those relating to music and print * Larger competitors have more resources to spend on advertising, which has resulted in competitors’ stronger brand awareness. Amazon. com was established in 1997, and its primary scope of business was to sell books on the Internet. While many top companies spend millions to market their brands, Amazon puts that money into advancing technology on its website and creating affordable shipping options for its customers (Ante, 2009). Amazon’s website offers not only books, but also a wide variety of products ranging from electronics to home goods. Amazon also has six international sites including Canada, China, the United Kingdom, Germany, Japan and France.
Although sales have decreased for many retailers during the recession, Amazon continues to thrive by offering low prices and a broad selection of products (Ante, 2009). Amazon. com has expanded its product categories and sells a variety of products and even hosts independent seller’s stores to allow them to sell their products on Amazon. com’s platform. The CEO of Amazon. com encompasses Amazon’s branding strategy by stating “We’re not in the book business or the music business. We’re in the customer service business. “(Amazon Media Room, 2010) Amazon. com is effective in positioning their brand by building their branding strategy on the assurance that even though their customers want the convenience of doing business on-line, they also want personalized customer service.
Amazon has on there homepage links to their return policies, privacy policies and shipping policies. A customer can track a package from there site. Also one can sign up and have an account which features a wish list so one can put things into this list and buy later. Anyone can open a store on Amazon. com and sell their products or self publish. Barnes & Noble has established itself as a Brick-and-Mortar retailer. The first step Barnes & Noble pursued was to put its brand on a Website to expand their business to the internet??? www. barnesandnoble. com ??? because the existing brand was well established on the off-line market. Amazon is one of Barnes and Noble’s biggest competitors.
In 2007, online revenues for Amazon were over 30 times that of Barnes and Noble (Hall & Gupta, 2010). The Barnes and Noble website offers over a million book titles which is more than any other online retailer of books, including Amazon (“About Barnes”, 2010). Barnes and Noble also offers other items such as music toys and DVDs. Although Barnes and Noble ships to international locations, unlike Amazon, it does not offer any international websites. According to IB Times. com Barnes & Noble, the 137-year-old company recently announced that it is looking for strategic alternatives including putting itself up for sale. Sizable investments associated with the transition to digital books and risks to tore profitability associated with the digital migration were primary concerns within the company (Bagh, 2010). Barnes and Nobel positioned their branding strategy by relying too heavily on books and their brick and mortar stores. Barnes & Nobel is now rushing to the Ereader market after Amazon. com already has a first mover advantage. Amazon seems to have greater brand equity because of the fact they got into the online game much sooner than Barnes & Noble and they allow anyone to sell on their platform. Amazon. com is strongly focused on achieving differentiation through customer-oriented information services. Perhaps the most important information service Amazon. om provides is an all encompassing online catalog, which enables customers to search for books or CDs or whatever else they are looking for. Although Barnes and Noble is a successful bookseller, Amazon has stronger brand equity. Amazon has built a strong name for itself and no other online retailers offer products on the same scale. Both Amazon and Barnes and Noble offer deals on shipping to their customers. Amazon has a multitude of items that qualify for “free super-saver shipping” on purchases over $25. Barnes and Noble offers free shipping to its customers on purchases over $25 on eligible items. Both online retailers offer return policies. Amazon items must be returned within 30 days and Barnes and Noble items must be returned within 14 days.
Each site allows for consumer ratings in order to aid future shoppers with their purchases. Both sites offer quick links to their return policies, shipping rates and order status from the home page. It was much easier for me to find an actual phone number on BN. com than it was on Amazon. Knowing that customer service representatives are easily accessible makes a difference in a buying experience. Should something go wrong with the transaction, a consumer will have peace of mind knowing that help is just a phone call away. Since CanGo is not a brick and mortar retailer and is strictly online. It would do well to follow the Amazon. com strategy and find ways to improve on this strategy.
One way CanGo can differentiate itself is by offering online gaming on their website but CanGo shouldn’t stop there. CanGo should also implement ways to allow customers to sample there music, provide movie trailers and perhaps create a trial period for online games. CanGo must understand that technology is constantly changing and if customers are to become comfortable with this new technology your strategy must meet your customer’s needs if not they will go elsewhere. By examining Amazon, CanGo could see that putting their money into advanced technology and lower prices could still result in strong brand equity. Also, it could be to CanGo’s benefit to create international sites where they are seeing an increase in products sold (i. e. Japan).
CanGo can take lessons from both of these online retailers by offering discount shipping, customer satisfaction and return policies and customer reviews. Each of these services offers and enhanced customer experience and would help CanGo be a more profitable company. CanGo can learn that consumers feel more secure when they are certain they will be able to get help when it is needed. Blue Mountain Arts employs their viral marketing network by providing electronic greeting cards people can e-mail to friends and family. Recipients are invited to visit the site to send their own cards. Blue Mountain arts in this way have increased their brand recognition, customer traffic and usage of their site. The idea that the e-card being sent can be customized with your personal message.
Blue Mountain Arts uses a paid member based subscription service to use their website to send e-cards which is valid for a year. Blue Mountain allows customers to log into their Facebook accounts through their website, enabling birthday reminders based on customers’ Facebook friends. Viral marketing depends on a customers’ good experience. If a company like Blue Mountain Arts doesn’t satisfy their customers, they won’t recommend its product, and the viral marketing concept does not work. CanGo can take advantage of viral marketing by incorporating this strategy into their online gaming. CanGo can take advantage of their core customer the generation X’ers by viral marketing.
If CanGo attaches their marketing message to their online gaming products, and if customers like their products, they will pass it on. This especially holds true in the Generation X market, because the Generation X consumer base is technologically immersed. CanGo could use some of Blue Mountains strategies and offer unlimited access to online games or music for a monthly or yearly fee. They could also consider connecting with a trendy social networking site like Facebook or Twitter to increase their popularity. In order to cater to customers in the Czech Republic, I would recommend that CanGo follow in the footsteps of Amazon and add international websites including one for the Czech Republic.
Because consumers in the Czech Republic tend to be ethnocentric and buy local, it is important for CanGo to enhance the experience for potential Czech customers to make them more comfortable purchasing their products. In addition, CanGo could pursue something similar to Blue Mountain and partner with a social networking site like Facebook. This would allow customers to become “fans” of CanGo on the social networking site. Because consumers in the Czech Republic often rely of recommendations from friends and family before purchasing a product, this would allow potential consumers who use Facebook to see which of their friends are “fans” of CanGo and could influence their purchasing decision. Digital piracy is a major problem in Brazil.
According to the International Federation of the Phonographic Industry, “In Brazil, full priced major label local album releases from the five largest music companies in 2008 were down 80% from their 2005 level. ” This decline is attributed to illegal file sharing but Brazil’s government does very little to discourage piracy. A service I would recommend is that music retailers make it more difficult to pirate music perhaps by requiring a subscription to obtain music. This change in consumer behavior would result in higher sales for the Brazilian market. This would be a good service because it would require that users pay for the music that they received.
This subscription service would be a good fit for CanGo’s current product mix because it would allow them to track consumer preferences and sales. CanGo could also create applications for mobile devices, such as the IPhone, which would generate revenue and appeal to more customers. One product I would recommend to offer in the e-book market in India is an e-reader. The Indian middle-class consumer is very price sensitive. The e-reader would have to be priced accordingly and so the e-reader would be a simple device on which to read books or perhaps to download and listen to music on as well. To target the Gen X and Y groups, the e-reader could be offered in different colors or can offer a variety of skins to use on the e-reader.
The e-reader is a good choice also because of the fact text books are expensive and hard to get for educational purposes. Perhaps schools could make use of the e-reader. CanGo could establish itself in India if it has the image being involved with the community and offer products that support family values and this could be done by offering textbooks at discount to schools in e-book format to use on inexpensive, no frills, e-readers. By offering a new product such as the e-reader to India CanGo would be employing a diversification strategy. One new product that CanGo could start introducing in Japan would be to incorporate their games into the mobile technology industry. (e. g.
Iphone, Ipads, any hand held device) Because Japans technological infrastructure is so advanced this would be a perfect test market for these games. According to International Bussiness. com, over the past decades, Japan has established itself as both a firm presence and a leader in the industry for advancing technologies (Technological Advancements, 2007). Identification of the problem CanGo has several key issues that need to be resolved in order to improve the organization’s overall performance. CanGo has recently seen an increase in Japanese sales but is unaware why this is occurring. CanGo has a limited product scope, only offering online gaming.
Currently CanGo does not have a return or refund policy which could be resulting in lower sales figures because consumers are afraid of committing to a purchase with which they are not sure they will be satisfied. CanGo’s brand image is also not very strong and it needs to improve its market standing. At this time, CanGo is appealing mainly to Generation X-er’s. While they know and cater to their clientele, they need to have a more diversified approach to attract different demographics, such as the Baby Boomers and Generation X-er’s. CanGo is focused on being a site that offers excellent service and benefits but does not want to offer bargains and promotions for fear of becoming a discount chain and losing revenue. Development of Strategic Alternatives CanGo’s marketing department needs to research why shipments to Japan have increased.
Japan is an untapped territory for CanGo and these sales should be capitalized upon possibly creating a new market. In order to expand its product lineup, CanGo should look into offering products that are trending in the current market such as EBooks, music subscriptions, downloads, and movies. CanGo needs to gauge the market and use strategies from similar companies like Amazon. com. CanGo can improve upon its customer relations by offering a return policy and making sure they provide excellent customer service. Customers are more likely to purchase with the guarantee that an item can easily be returned if it does not meet their standards. To improve their brand image and market standing, CanGo needs to crossover and expand into other demographics.
The Baby Boomers (70-80 million people) and the Gen Y’ers, (60-80 million people) each contain more people separately than the Gen X-er’s (30-40 million). CanGo needs to offer products that appeal to these markets to broaden their customer base and increase sales. CanGo also needs to abandon its fear of becoming a discount chain and begin offering free trials, gift certificates, product bundling and promotions. This will help attract and retain more consumers. Evaluation of the Strategic Alternatives Targeting the Japanese market could be a viable option for CanGo. Because shipping to Japan has noticeably increase, targeting this market should be considered before targeting other countries such as Brazil, the Czech Republic or India.
Considerable research must go into this option to determine the best way to cater to this market. This increase in shipments to Japan should not be overlooked. While it may be a good idea for CanGo to add new products to their lineup, they should be careful not to start a variety of new ventures at once. They should research which products are most likely to appeal to their target consumer group and start with that product. If and when that proves successful, CanGo can add its next new product. Understanding marketing strategies from larger companies, such as Amazon, could be beneficial in this process. One of the easiest improvements CanGo can make is offering a return policy for their customers.
This should be relatively easy to implement and will allow consumers to feel more secure in their purchasing decision and keep them from moving on to a competitor that does offer a return policy. Because this change is not as difficult to implement as targeting a new market or adding new products, it should be one of the first problems CanGo works to resolve. It is important for CanGo to broaden their consumer base, but just like with adding new products, CanGo should take on one new consumer group at a time. CanGo should research ways to attract new groups, such as the Baby Boomers, and market to them. If and when that proves successful, CanGo can use the same process to target another group, such as Gen-Y. Another easy change CanGo can make is offering promotions to its consumers.
Similar to implementing a refund policy, offering free trials, gift certificates and product bundling should be relatively simple. This problem should be resolved before taking on the larger task of marketing to other countries or offering a range of new products. Recommendations The first recommendation for CanGo is to implement a refund policy and promotions. These items are less expensive to apply than the other alternatives and will ensure that current customers remain satisfied. It will also ensure that potential customers will feel secure in purchasing from CanGo and not look to competitors with these offers. The other recommendation for CanGo at this time is to explore the Japanese market.
Because the company has already seen an increase in sales to Japan, this market is likely to be easier to target than others. Upon success of the recommendations mentioned above, CanGo could then look into targeting new age groups and adding new products. Implementation CanGo should move forward in implementing several of their strategies such as entering the generation y and baby boomer market, further expansion of their products, and upgrading their distribution systems. CanGo should also move forward with expansion into global markets. There are limitations which will affect whether or not CanGo will be able to move forward in implementation of the above items.
CanGo must have adequate resources in order to implement all of the above items and if these resources are limited then CanGo must prioritize or if it becomes apparent that CanGo does not have the resources or the structure to implement all of the recommendations CanGo must target other recommendations. Finalizing the Report One of the most effective benefits of e-tailing for CanGo is economic efficiency resulting from the reduction in communications costs, low-cost technological infrastructure, speedier and more economic electronic transactions with suppliers, lower global information sharing and advertising costs, and cheaper customer service alternatives.
CanGo uses e-tailing to market and promote their products to capture consumers within their given markets, both big and small. CanGo also specializes in their use of the internet and e-commerce to enhance customer service and support. It is easier for CanGo to provide their target consumers with more detailed product and service information using the Internet. References About Barnes & Noble. com. (2010). Retrieved from http://www. barnesandnoble. com/help/cds2. asp? PID=8184 About Gametap. (2010). Retrieved from http://www. gametap. com/about-gametap. html Alkailani, M. (2009). Percieved risk, locus of control, product, tactility and cultural impact: a study of online buying behavior in usa, india and Jordan.
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