Marketing-Change and Environmental Scanning Assignment

Marketing-Change and Environmental Scanning Assignment Words: 2781

The competitive environment and hunger for a higher standard of living impose a gig stress level on the average earning residents. This part of the assignment will now explore the demographic and lifestyle developments over the past decade in Singapore. Demographic and Lifestyle Developments Ageing population – The population of elderly residents aged 65 years and above increased 1. 5% from 2000, building up to 8. 7% of total population in 2008 (Singapore Department of Statistics, AAA).

During the same period, a contrasting decline in the population of residents aged below 15 years was recorded, developing into a higher old-age support ratio and a fast ageing nation. The growing hometown is due to a lower reproduction rate and increased life expectancy which are characteristics of a developed nation. People also tend to marry later and a lower reproduction rate from adopting a single child mentality in order to have a more enjoyable lifestyle and ability to provide more for the single child.

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Affluent lifestyle – The rise in job opportunities and higher salary positions over the last decade have steered the working class population towards a more affluent lifestyle. The average employed households income increased from $5097 in 1999 to $7549 in 2009 (Singapore Department of statistics, 201 b). This significant increase armed the working 1 population with a higher disposable income. They began to lead a more affluent lifestyle consuming goods and services of higher values amid the growing burdens of owning an accommodation and private transportation of their own.

The following section will now examine the changes developing from the shifts highlighted above. Socio-Cultural Trends Health awareness lifestyle – The population has enjoyed a wide variety of foods stemming from the multi-racial society that Singapore embraces. It also has easy access to processed foods resulting from the rapid growth of the nation. Ironically, the accompanying higher old- age support ratio ‘encouraged’ the nation into adopting a healthier lifestyle. The young working adults learnt that a healthier lifestyle is critical in order for them to carry on working longer and provide for their dependents.

The elderly painfully realized that chronic illnesses in Singapore carry a high burden to their next generation. This prompted them to follow the footsteps in adopting a healthier lifestyle. Health issues in foods ranging from the toxic chemicals found in farmed salmon to lesser pesticide residues in organic foods educated the mass about the benefits of healthy consumption. The Singapore government introduced a Nutrition Labeling Programmer (NIL) in 1 998 which is welcomed by both food companies and consumers.

Products meeting certain nutritional standards are allowed to display a Healthier Choice Symbol (HAS) as shown in Figure 1 which relates to healthier foods. The consumer is endowed with the appropriate information to make better informed choices. 2 Figure 1: HAS from the NIL Despite the higher costs associated with such offerings, the more affluent population realized the pros outweigh the cons in the long run. It also enhances the image of consumers as knowledgeable bout health and looked upon as trendy people. The nation is adopting the healthier eating lifestyle both from a practical and superficial standpoint.

Refined living – Singapore has given its population a higher disposable income over the last decade. It came with a price of relatively higher stress levels imposed on the working adults. The solution lies in the mentality of developing a more refined living so as to beset the stress. The most obvious showcase of refined living is captured in the preference Of more expensive services over the typical ones serving the same purposes. People who requested tradition Chinese medicine massages have switched over to specialized spa massages with the latter being the more upscale and trendier choice nowadays.

The working class also managed to find time for personal grooming which ranges from outrageously priced hair and facial treatments to designer brands and bespoke clothing. They realized that a better image speaks of their capabilities to enjoy a refined living lifestyle which has become a goal for all to strive for. 3 (ii) Affected demand for products and services (a) Struck in coffee nation Singapore developed a coffee drinking culture from the older days of spinsterhood coffeepots.

The nation quickly transformed into a coffee nation where the population is heavily reliant on coffee to as much as 44% (Syncopate-Change Agent, 2006). The nation’s addiction to coffee and influx of expatriates already familiar with Struck provided the Singapore outlets with the right environment to benefit from these social and ethnicity trends. It was common for people to indulge in the calories laden products offered by the American brand. As the population shifted to healthier consumption behavior, Struck Singapore saw its sales fluctuating due to demand effected in terms of the beverages and foods it served.

The iced coffees and [email protected] blended beverages which are favored in Singapore due to its tropical climate are packed with calories mainly in the form of carbohydrates and sugars. Consumers who follow the Atkins diet shunned from such products as reduction of carbohydrates is the key direction in the diet. (b) Spa Esprit with chic & refined living The tiny nation of Singapore filled with high stress levels is perpetually searching for ways of relaxation and rejuvenation. The spa scene emerged with a ferocity that captured the full attention of consumers, both women and men.

Spa Esprit entered the market with a holistic concept of alleviating stress in everyday life. It was a day spa specializing in massages and also the pioneer to introduce Hot Stones massage to Singapore. As the market players increased, consumers have more choices which resulted in Spa Esprit reaching a plateau for its demand and fluctuations in its sales. The ever-evolving consumers are also in perpetual search for more services to pamper themselves. They are more concerned about their personal appearances, how they view 4 themselves and perceived by the society (Kettle and Keller Bibb).

They want o fall under the chic and refined category which is deemed cool and impressive in Singapore. In essence, consumers no longer crave for the limited services offered by Spa Esprit. (iii) Reaction to the affected demand (a) ‘Do you want a light version? Struck is the world number one specialty coffee retailer which is also dubbed the ‘Mcdonald’s of coffee’. As the 21st century headed in with a healthy consumption behavior, Struck modified elements of its marketing mix (Borden 1 964) to fit in and retain its market position as shown below.

Struck in Singapore offers the discerning consumers with lighter versions f its coffees and pastries. Matching its coffee customization model, consumers are presented with choices of whole, low-fat, non-fat and even soy milk which is suitable for people suffering from lactose intolerance. The popular [email protected] blended coffee Of a 1 oz size contains 240 calories whereas the new light version of similar size contains only 130 calories. The staff will also remind the customers whether they prefer a light version whenever they are purchasing their products.

Pastries of low-fat and low- sugar contents are also introduced with usage of fruits such as blueberries ICC in anti-oxidants that are welcomed by health conscious customers. There are coffee addicts who enjoy the taste but also learnt to control caffeine intake. The pricing of its beverages and foods remains the same even when the healthier versions such as the light or decaffeinated are preferred. This demonstrates Struck is in line with the healthy lifestyle and does not transfer the additional costs to consumers. The outlets in Singapore are also strategically placed to capture the health conscious consumers.

The blooming of fitness clubs in Singapore also witnessed Struck locating or relocating their outlets to the same building r within short walking proximity. 5 Capitalizing on the growing customer base in health and fitness clubs, Struck also has joint promotion activities with them. The coffee chain also promotes profusely on its website, sharing and comparing nutritional values between a regular and light version of its coffees. The health conscious consumers definitely appreciate the honesty intention behind this move. It has also communicated a reduction of up to 40% in calories for their light versions.

Though it might not have utilized visual aids, the huge beneficial reduction figure worked its way through understanding of consumer behavior via selective retention in perception of products (Kettle and Keller AAA). With the perpetual web technology, such information sharing is also effectively used via channels like faceable and twitter. (b) ‘The HOUSE Of refined living’ The concept of need reinforces an individualistic perception on the part of consumers that their desires can be satisfied through services which deeply fulfill their needs (Knights et al 1994).

Spa Esprit saw the need for expanding its services to enhance its holistic approach to eradicate the stress levels of consumers. It created other services; BROUHAHAS specializing in brows and facial hair treatments, STRIP providing Brazilian wax and body hair removal methods and Spa Esprit which was further enhanced with more exciting spa massages treatment. In 2007, Spa Esprit created HOUSE which has a beauty emporium where the above mentioned services are located together, providing a one stop solution for all. It adds in a section where the discerning consumers can purchase beauty products brought in from all over the corners of the world.

It is also clear that the pricing strategy employed by Spa Esprit aims to capture both the working and student population. From a mere $18 brow trimming to a $1 000 brow 6 reconstruction, they can claim to have a refined living lifestyle as compared to the general society. Spa Esprit understands that serviceable dimensions (elements of the built environment) can influence the cognitive and emotional responses of consumers to their service experience (Baron et al 2003). As such, the HOUSE is located at Dempsey Hills which is a cluster of upscale shops providing gourmet foods and services set in a green environment.

In the concrete city of Singapore, greenery is a luxury which HOUSE complements it with an array f neighboring shops sharing the similar concept of a refined living lifestyle. HOUSE also has a cafe called BARRACKS and a bar named CAMP located on- site which serves a trendy menu with a fine dining approach. It offers promotions in the form Of packaged treatments which can be utilized in HOUSE or any of its island wide specialized outlets. It also uses naughty and provocative advertisements to entice the consumers to try their new products and services with a deep discount during the introduction phase.

The staffs working at HOUSE are treatment specialists who are also good immunization to ensure the consumers receive the advice and information of their services. The immaculate service at HOUSE is based on several philosophies such as hygiene, quality and speed which a Brazilian wax can be accomplished in 15 minutes flat. The cleanliness of spa rooms is maintained at a consistent level regardless of the packed appointments it has. The presence of a dried basin in the rooms and toilets during peak periods further impressed consumers who believe they are really in for a treat at HOUSE. Conclusion The two cases presented showed that analyzing socio-cultural rends is crucial to retain and grow their businesses. They also learnt to be customer oriented rather than product oriented (Levity 1960) in order to capture the ever-evolving Singapore society. Part B: (1) Introduction of Honeywell Customer Care Program Manufacturers design and sell products which come with a life-cycle that typically involves repair and maintenance. Honeywell being a manufacturer in Auxiliary Power Units (PAP) is no exception.

The Apes are used to start the main engines of aircrafts and also used as a backup mean of sustaining power during flight in the event of main engines failure. Repairs become a need to prolong the life of the product and Honeywell Singapore Aerospace (HAWS) provides the maintenance, repair and overhaul services for Aphis which can be considered as the service arm of the manufacturer. As such, HAWS markets its services to regional customers and originally started with a time and materials (T) program which the customers pay for the labor hours and materials consumed in the repairs.

Understanding the need for growth and retaining market position, HAWS embarked on a challenge to create a wholesome customer care program to fulfill the customers’ needs. Market Scanning Activities The essence of environmental scanning lies in the collection of information about external influences for analysis so as to communicate it into aiding a company’s decision making process (Albright 2004). External environments impacting organizations include 8 social, economic, political technological, regulatory and industry. HAWS carried out a series of activities to collect the information required to create a customer care program.

Informal Scanning – Informal activities consisting of a casual and ad-hoc characteristic were also conducted externally through trade fairs such as the Paris Air Show and Asian Aerospace. HAWS uses these platforms to gather information in a more relaxed manner to understand what their customers really want to create its customer care program. Field service specialists hired by HAWS who are located on-site to assist airlines with PAP problems also gathered ‘realization’s based on the established close relationships with the airlines.

Informal collection of internal information was also conducted as a discussion topic in respective department meetings. Employees will throw out suggestions to what the customers are looking for and the proposed solutions. Formal Scanning – Formal activities which typically include structured and proper procedures are carried out by HAWS using its key enabler of Six Sigma to initiate the environmental scanning for creating its customer care program. Figure 2 illustrates the relationship between a formal scanning process and HAWS six sigma model. Figure 2: Using Six Sigma as a formal scanning process HAWS defined the problem as “What are the customers’ needs to capture and retain them? “. External activities were tasked to research companies to find out about customers’ responses and satisfaction level of their competitors’ after-market revises. Internal activity for information collection was performed through Technical Coordination Meetings (ETC) which involved a special team of managers, customer support and technical specialists who visited airlines customers to understand their needs in repairing the APES.

Another barrier to environmental scanning is that there is no integrated model to effectively analyze and ‘read’ the external influences on the long term actions of the organization (Brownie 1994). HAWS soon realized that the .NET program that was offered to its customers had a major drawback. The initial environmental scanning did not tie up as much with the operation and engineering arm as planned. This resulted in a higher than expected operating costs which HAWS absorbed due to the terms f the .NET contract it promised.

Profit margin was affected and they re- evaluated the formal scanning process and came up with an additional program called Maintenance Service Agreement (MASS). Customers can pay a flat rate repair cost based on their calculated average hours of APES in use. This time, HAWS did a better job in the analysis and derived a lower overall cost for customers and a higher profit margin for the organization. Through a better understanding of external influences and the organization’s internal processes, HAWS is able to operate in a more effective manner (Albright 2004).

A supportive management often plays a critical role in the initiatives launched by a big organization. The importance of information has to be deemed crucial to be disseminated to everyone in the environmental scanning team. Decision-makers tend to keep most of the 1 1 information and limit its sharing (Costa and Tear 2000). An example took place when a Japanese airline signed the MASS contract with HAWS. However, as the customer wanted to retain its own staff, it decided to assemble the PAP on its own. This translated to the customer deciding to send the PAP in modules or piece parts rather than the whole PAP.

This doesn’t seem to be a serious problem until the customer consistently encounters problems in assembling the PAP due to the lack of experience in their assembling team. Parts were sent back claiming for warranties which no fault was actually found. Though HAWS was not at fault, the customer no doubt still feel the inconvenience and hence had a bad experience. The root cause lies in a simple fact that the top management who agreed to the customers request did not share this information which the operation or engineering specialists could have worked out a better solution for both parties.

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