Navtej Deyal Mark1012 case study

Option 2 Hunley, Inc.: Casting for Growth

Q.1

The current biggest challenge is their declining Brand Recognition of a prestige brand, intertwined
with Pricing Strategies. Hunley Inc. consists of high-quality products in their specific market and
holds a competitive advantage over other businesses; their pricing strategy of market penetration
was cost-effective and did allow them to differentiate from competition as their brand positioning
in consumers’ minds created a distinctive edge for their business. However, in a competive-market
with infinite buyers and seller and no dictator of the market, their average price point strategy
affected their brand recognition as their average price point strategy conflicted with the marketing
of a high-value product. The nature of this fishing market is all about competition, lifestyle and
material/ product value for consumers; their perception of this average pricing strategy has reduced
the value of the brand and product. Consumers in this market view market skimming strategies
imposed by competitors to be recognised as high-value and prestige products, therefore redirecting
the majority of the customer flow to their products, leading to Hunley’s being perceived and being
positioned on the market as a mid-tier product/ business. This has led to the decreased sales, profit
and average unit price which is evident in the case study as prices have dropped from $285-260
within the span of three years, highlighting that Hunley’s brand recognition through ineffective
marketing and brand awareness and pricing strategies are currently the biggest challenge the
business is facing.

Q.2

The first option explored by Hunley’s management team to aim for 10% of sales in 2018 was,
“Introduce a New Product Line at Higher Price Points”. Through thorough idea generation, product
research and R & D, innovation was made through a new graphite compound which will develop the
product to a more prestigious and competitive level in the market. This will allow Hunley to have a
competitive advantage over other businesses as their products were always considered to be made
of high-quality materials, resulting in increased market sales due to the psychology and nature of
the consumer personality and lifestyle in the market. However, as evidently stated in the case
study, Hunley’s is perceived as a mid-tier producer of high-end valued rods, a new direction might
lead to the detriment of the business as their marketing teams’ strategies and vision have not been
updated to today mobile’s marketing and social media. Also, due to this being a prestigious
product, Hunley’s management team are going to need to be willing to huge risk as marketing
expenses will increase as evidently in their case study it can be seen that throughout the years of
similar marketing strategies the average price of unit has dropped.

The second option, ‘The Klamath Entry-Level Line of Fly Rods and General Rods for Walmart’,
focuses on selling products at the level of, ‘Economies of Scale’, to wide range retailers
domestically. This can result in improved sales as Hunley will be appealing to both ends of the
market, as their products are already mid-tier high quality; through the utilisation of the loss leader
marketing strategy, there would be an increase of market share. Consumer behaviour may lead to
first time buyers utilising Hunley’s product from Walmart, in result leading to customer loyalty and
satisfaction as a future and long-time customer of the higher quality products. However, there may
be a problem of inventory through high demands and inventory holding expenses and brand
recognition of Hunley may jeopardise its brand image affecting its positioning on the market.
Navtej Deyal Mark1012 case study

The marketing environment that Hunley’s most associates itself is within the external micro
environment. The external forces in this environment are the most impacting to Hunley as evident
in the cast study; their market research on consumers and target markets was stated to be
vulnerable and invaluable. This will affect their understanding of customers, planning for the
future, exploring trends, threats and opportunities and as well as understanding competitors, which
is shown throughout the case study. Consumers and the public also play a vital role in the marketing
environment of Hunley, as their perception and perspectives play a pivotal part in-regard to
successful products and increased profits.

In-regard to environmental forces, there are two factors that will influence management’s decision:
social and technological. Social factors include thrift as consumer behaviour is more prevalent today
as customers research their products before buying, which may influence Hunley to focus on trends
in the market place and release a high price point product. However, family may influence them to
partner with Walmart as Hunley’s was built on the foundation of a family’s values as it was passed
on through generations. In contrast, technological advances (graphite compound) would influence
the launch of a prestige product through price skimming, making a breakthrough of competitive
advantage to become a market leader.

Q.3

Before any actions or precautions should be implemented, Hunley’s management team should
revaluate and understand their current positioning and re-examine core elements such as: core
values, value proposition and brand persona. These elements help businesses to reassess strategies
implemented for brand position and allow Hunley to gather appropriate market research and target
specific groups. For example, instead of focusing on lower- price points and Walmart and a higher-
price point product, the management should use a mix of demographic and psychographic market
segments to increase profit. Through the targeting of loyal and lifestyle passionate fly fishers and
the target range of 40-65 years evident in the case study, Hunley can achieve their objective as
these groups are target market that invest a lot in fishing. Then next, focus and study how
competitors are positioned and use product differentiating procedures and swot analysis to fixate
on problems and focus on what the competition or you do better. Through this, Hunley, can
research the unique personality or feature of their product in-regard to others and implement their
brand positioning strategy from that perspective as potential and existing customers will further
understand the managements value proposition through thorough investigation. The next step in
the process is to on a statement or a slogan that will help promote the direction of your branding
strategy, with references to your target market, product differentiation or unique feature and why
this product is better in all or certain aspects that other similar products in the market. The last step
is implementing the proposition for positioning by utilising SMART (specific, measurable,
achievable, results-drive, time bound) goals and see if your branding statements reflect your
marketing plan and the value proposition/ promises that you are suggesting.

Q.4

The marketing-growth relationship is not about the process of substantial sales and profit, is solely
focuses around the definition of a long-term relationship that is stronger and rewarding as time
progresses. However, with the current marketing strategies and the matrix that Hunley’s marketing
management teams are implementing are not effective in creating a relationship as they are
outdated methods and don’t further create the incentive of customer and business relationship. As
evident in the case study, most of Hunley’s advertising is on the basis of customers doing research
on their own to educate themselves through prints in specialty fly-fishing magazines such as, “Fly
Fisherman” and, “Flyfishing & Tying Journal”. Further, through the utilisation of ads referring
Navtej Deyal Mark1012 case study

potential customers to stores and company websites, supports the notion of limited awareness in
marketing as customers are again subconsciously in this process of brand recognition by
themselves.

To help further bridge this gap, new marketing strategies such as social media platforms need to be
implemented creating a relationship between customers and management as engagement rates
such as likes, share and comments can create this stronger relationship as evergreen content
provides value for every existing or potential customer that visits the page. Also, further instead
luring consumers in with inbound marketing; drawing the attention of the public making the
business more visible as awareness increase. Native advertisement will further help this progress as
customers will view advertisements less materially but more of a conversation, luring in more
customers and increasing loyal customers. Lastly, to finish this process, a customer relationship
management program should be implemented for post purchase through emails, SMS, and
discounts to loyal customers creating that marketing-growth relationship.

Q.5

As evident in the in the case study, pricing is a critical concern for Hunley and his management
team, which could lead to the detriment of his business. However, through value-based pricing,
which is seen as the pricing method throughout the cast study; Hunley can calculate its product
differentiated worth. But, results in the management team having no progress in their vision from
value creation (sales, revenues,) to value capture (profits), as the pricing has been decreasing
profits and the value of the product. In-regard to delivering value, Hunley’s product has successfully
implemented this as the average-price points have represented the mid-tier high quality product.
Their value has been delivered as they have been a progressive long-term business that has
sustained itself in the fishing market, however; recently through ineffective market research and
investigation on trends, pricing has shown the conclusion of Hunley’s pricing strategy. In-regard to
capturing value, Hunley and his management team have failed as they haven’t completely captured
value into profits as their pricing strategy hasn’t differentiated them from other products. Their
decision-making managers haven’t focused on price skimming marketing strategies or quick
decisiveness in implementing a prestige product into the market to capture all value. Factors such
as competitive advantage and majority of the customer flow buying their product and the
perspective of consumer in the market would have allowed this to happen, but the result in the case
study is evident.