THE MIDNIGHT PEBBLE

Word count: 2000 words

Table of Contents

1. Introduction........................................................................................................................2

2. Marketing audit...................................................................................................................2
2.1 External analysis...........................................................................................................................2
2.1.1 PESTLE analysis..........................................................................................................................2
2.1.2 Porter’s Five Forces....................................................................................................................3
2.1.3 SWOT analysis............................................................................................................................4
2.2 Internal analysis...........................................................................................................................4

3. Objectives and Strategy.......................................................................................................5

3.1 Objectives – SMART analysis........................................................................................................5
3.2 Strategy – Porter’s Generic Strategies..........................................................................................6

4. Marketing Mix.....................................................................................................................6

5. Conclusion...........................................................................................................................8

6. References...........................................................................................................................9
1. Introduction
The Green Fish Design Limited was established by Dr Phil Green from Coventry University
Engineering Academic. Phil has always been interested in inventing real world applications and
his talent is widely recognized by the production of D30 as well as the ‘Popular Prize’ at the
European Inventor Awards 2019. The Midnight Pebble (MP) is another successful innovation of
Phil. His idea comes from a common incident that accidentally knocking over a glass of water at
night not only harms people with broken glass pieces but also damages expensive electronics
around such as smartphones and/or tablets. Thus, MP is designed as a circular aluminium alloy
ring grasping a photoluminescent clock face, which emits a pleasant green light at night. This
report attempts to look at marketing audit (including SWOT analysis), objectives and growth
strategies as well as marketing mix regarding the future development of this product.

2. Marketing audit
It is essential for businesses to conduct marketing audit or in other words, environmental
scanning in order to obtain a better understanding about the firm itself and surrounding market.
There are internal and external analysis.

2.1 External analysis

2.1.1 PESTLE analysis
Wheelen and Hunger (2004) suggested that PESTLE looks at external environments that can
partly or wholly influence a business. Consequently, business will be more considerable while
making strategic decisions.

Political As one of the most powerful nation worldwide and a permanent member of
the UN, UK has a stable political and regulatory environment. However, the
question that Brexit may create chaos or opportunities remains unanswered.
Economic UK is included in the top 5 economic giants by GDP and its corporate tax
will be reduced to 18% starting from 4/2020. Inflation and interest rate
remain reasonable, attracting vast number of investments both domestically
and internationally.
 Social The population of UK is growing in number and quality of education,
creating a sustainable workforce for all industries. In addition, its
multicultural diversity provides great opportunities for employers and
employees, as well as sellers and consumers.
Technological Technology is the main contributor of UK economy with £28bn of
investment contributed since 2011, compared to £9.3bn in Germany. Hence,
UK becomes an enormous playground for advanced initiatives.
Legal Following EU labour law, the standard working hours are 48 hours per week
with minimum 11 hours rest a day. UK also establishes laws to combat
discrimination and add benefits for workers.
Environmenta UK has carried out various methods to reduce the damage of climate
l changes and economic activities on the environment. Consequently,
sustainable development with minimal harm towards the surroundings is a
goal that all businesses aim to achieve.
Source: GOV.UK (2019), BBC (2019), McGoogan (2017)

2.1.2 Porter’s Five Forces

Porter’s Five Forces provide a framework for organisations to evaluate its competitive strengths
(Heger and Rohrbeck, 2012).
Porter’s Five Forces Level Reasons
Intensive of Low MP is a new initiative with high application that
competitive rivalry monopolises the market.
Bargaining power of Low Components are simple and in average quality.
suppliers Supplies are from UK, China and Hongkong.
=> Business can easily change suppliers.
Bargaining power of Low to Monopoly market results in guests not having another
buyers Medium options to choose.
The threat of new GB patent ensures that no similar products can be
Low to
entry developed or sold within UK.
Medium
Threat of substitutes

2.1.3 SWOT analysis

According to Dyson (2004), SWOT analysis considers strengths and weaknesses of a business,
as well as opportunities and threats from the environment while establishing future directions.
 Strengths (S) Weaknesses (W)
The Magic Pebble  Unique design with highly  High price
functional application
 GB patent policy
Opportunities (O) S-O Strategies: Growth S-W Strategies: Internal Fix-it
 Monopoly market  Consumers can only purchase MP at  Promotion can be used to reduce
Phil’s business with the set price that price barrier.
Phil announced.
Threats (T) S-T Strategies: External Fix-it W-T Strategies: Elimination/
Survival
 Considered as unnecessary  Social media and/or broadcast marketing can help to change consumers’
for many people perceptions.

2.2 Internal analysis

The concept of MP allows the green light to shine up through the container (glass-based
materials are recommended) into the dark room. This light has been thoroughly studied and
confidently confirmed that it does not affect the quality of sleep. Furthermore, a clock face was
added to the product where the photoluminescence also back lights the hand of an analogue
clock. Phil offers 3 different colours for MP so that customers have a wider range of options to
choose from.

Even though MP is made of simple quality components, the final product is highly qualified.
Beside the UK, its source also comes China and Hongkong where materials are easily found at
cheap prices. Furthermore, Phil obtains the Great Britain patent for MP which states that no
similar products can be developed and sold within the UK, making MP the monopoly market for
this product. The patent is renewed every year and at the moment, it reaches about half of the 20-
year-period time. All the characteristics such as large number of promising customers, unique
design, applicable functions and monopoly market contribute to high commercial potentiality of
MP.

Phil has not been able to focus on product development and market expansion of MP due to his
other commitments. As a result, over the last 7 years, only 600 units of MP were sold, directly
through online retailers or bricks and mortar gift shops. Between the two, gift shops are
considered a more efficient channel since store sellers are always around to introduce and
promote MP to customers whereas retailers often prefer multi-product suppliers, rather than just
one like Phil’s business. Given an order of 5000 units; the cost of manufacturing is £4.50 per
unit. Obviously, unit cost will increase in inverse proportion with the number of MP ordered.
The price for B2B is £7.50 and B2C is £20. At the moment, Phil has around 400 units in
inventory for immediate sale.

3. Objectives and Strategy

3.1 Objectives – SMART analysis
As stated by Dallas (2015), five elements of SMART framework create a milestone and realistic
direction for organisations to follow.
SMART Goals Implications
Specific Increase sales turnover
Measurable Sell 200 units per month and continue the process of production
Attainable Focus on social media marketing, create promotion and ask current
customers for referrals
Relevant Rely on social media to raise interest in a wide range of consumers.
There are 400 units in the back to sell immediately therefore the business has
maximum 2 months to carry out production and afford continuous demand of
buyers.
Time-based Within the next month, marketing campaigns and promotion deals will be
ready, as well as the final decision of which factory to continue the
production.

3.2 Strategy – Porter’s Generic Strategies

Porter’s Generic model provides different strategic approaches that helps business to build a
sustainable competitive advantage and foster performance indicators (Sturman et al., 2011).
Advantage
Target Scope
Low Cost Product Uniqueness
Broad (Industry wide) Cost Leadership Differentiation
Narrow (Market segment) Cost Focus Differentiation Focus

Differentiation strategy offers unique products or services (in term of design, function, category,
etc.) to the broad market. In this case, MP represents an idea that has not been developed before.
Not only it enhances the convenience of people during night time (checking time and drinking
water without knocking the glass over), MP extremely cares for customers’ health i.e. emitted
light has been scientifically proved not to interrupt sleep. Moreover, this product does not limit
customer range as it is applicable and affordable for everyone.

4. Marketing Mix
Marketing mix is the most important marketing tool that assists the development of not only
long-term strategies but also short-term tactical practices (Thabit and Raewf, 2018). It is also
called the 7Ps referring to Product, Place, Price, Promotion, People, Process and Physical
environment.

Product: MP is a unique product from the UK using the latest innovation of photoluminescent
technology. It is a drinks coaster with non-slip rubber base and luminous clock face that glows at
night, making the glass visible to avoid unwanted crashes. MP can charge itself by nature and
artificial light absorption to reflect its green light all night long. Furthermore, health of
consumers is significantly considered, proving by intensive research in confirming the green
night is completely safe and unaffected to people’s sleep. Besides being a coaster and a clock,
MP can also be used as paper weight due to its weight (180g) and solid construction (11 x 1.5
cm).

Place: Since the beginning, MP has been sold through gift shops and online retailers. From now
on, the selling channels will be expanded. Since materials and production are sourced not only
from the UK but also China and Hongkong, those Asian market can be potential through
wholesalers or retailers. In addition, internet is a big marketplace in invest on. The business
should establish its own official website to introduce and sell MP online. Furthermore, it can
include the information of social media and email address on the website in order to increase
sales channels.

Price: As manufacturing and B2B cost is £4.5 and £7.50 respectively, MP prices £20 in the
market. An advantage of MP is that it monopolises the competition and thus, consumers does not
have other sources to compare and business can set the price without considering its competitors.
As a consequence, MP set a premium pricing. However, a number of buyers considers £20 a bit
high for a beverage coaster despite its utility. Therefore, MP business can apply promotional
pricing where customers pay full price for the first unit but an increase of 5% discount for each
additional unit of MP they purchase.

Promotion: There are various ways that MP can be promoted. The first method is creating
special offers such as promotional pricing mentioned above. Second, digital marketing should be
heavily exploited. Establishing social media such as Facebook and Instagram, and official
website with directed links, email address and contact number will open more opportunities for
MP sales. During the first month of promotion, the business can also include free gifts (i.e. a
glass and sell the whole set at £20) to increase consumers’ interest.

People: Since Phil outsources production and sales, his business does not have employees or
organisational culture. Consequently, the link between business and customers do not exist.
Together with official website and social media channels, the business should establish a
customer service team to control online accounts, take feedbacks, handle uncertainties and
complaints, and encourage buyers to introduce MP to their social circles.

Process: MP components are cheap, simple and easy to find. Thus, Phil choses the source from
China and Hongkong to reduce cost of finding resources and production. The final product is
carefully assembled in the UK to guarantee quality. Moreover, Phil renews GB patent every year
to ensure the monopoly market of MP. Until now, process is under great control.

Physical environment: As mentioned before, Phil does not have any real establishments or
manage any online accounts of MP distribution channels. However, if he wants to run business
online effectively (via official website and social media), experienced employees are required.
Therefore, recruitment the right candidates is another important step in the next development
stage of the business.
5. Conclusion
In summary, various marketing tools are applied to analyse the existing and future development
of MP. Marketing audit, including SWOT, looks at all the external and internal factors that
influence MP. As a result, MP receives all the advantages from the surroundings as well as
possesses its own strengths to compete in the market such as first-time innovation, unique
design, highly functional application, GB patent and wide range of targeted customers. MP’s
strategy is differentiation, selling unique products to a broad market. To be specific, it aims to
sell about 200 units per month. The business will also apply 7Ps effectively, for example,
promotional pricing and extending market via online channels. Since Phil does not manage any
brick and mortar establishments as well as online accounts before, he needs to recruit the right
team to manage the future online businesses.

6. References
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allowances-corporation-tax (Accessed 22.03.2020).
Heger, T. and Rohrbeck, R. (2012). ‘Strategic foresight for collaborative exploration of new
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McGoogan, C. (2017). Tech sector growing faster than UK economy with 72pc of investment
outside London. Available at: http://www.telegraph.co.uk/technology/2017/03/22/tech-sector-
growing-faster-uk-economy-72pc-investment-outside/ (Accessed 22.03.2020).
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