Question

Basket of Goodies is positioning itself as an upscale manufacturer of gourmet gift baskets through the introduction of several production baskets as well as custom options. BOG will achieve this positioning by leveraging their competitive advantages. The competitive advantage is based on two factors, low overhead which supports reasonable prices, and an unrelenting desire for the highest quality product and service. 1. Overhead- BOG's overhead is particularly low because it is a home based business. Most of BOG's competition is based in retail shopping areas. While they receive more walk by traffic and therefore higher sales numbers, their rent is a very large monthly expense. BOG avoids this large expense by having the business run out of owner Susan Presento's home. Additionally, Susan will be using a modified version of JIT (just in time) inventory and assembling. Susan's husband passes by 90% of Susan's vendors on his way home from work so Susan is able to order inventory when she needs it and have her husband pick it up on the way home from work. This significantly lowers shipping costs and carrying costs for The Basket of Goodies Page 8 inventory. BOG will have some of the standard baskets in stock for walk by orders, but will try not to have large amounts in overhead. 2. Unrelenting desire for the highest quality product and service- Let's face it, this market space is already crowded and a mediocre gift basket service is not going to fly, so Basket of Goodies must have some sort of differentiating feature that lets it stand out. Susan only uses the finest quality ingredients and can afford to because of her low overhead. Additionally, she always follows the maxim that the customer must be 100% satisfied. That means she is willing to loose money on an occassional order, if necessary, to please a customer, confident that in the long run this is a wise business decision. 3.6 Strategies The single objective is to position Basket of Goodies as a manufacturer of unique, attractive, gourmet gift baskets for individuals as well as corporate customers. The marketing strategy will seek to create customer awareness regarding the product offerings, develop the customer base, and work toward building customer loyalty and referrals that will significantly decrease customer acquisition costs. BOG will seek to communicate the message that they offer a higher quality, gourmet alternative for gift baskets relative to the baskets currently available. This message will be communicated through various methods, tailored to each target market. The first method will be the use of a Website. The Website will have product information, company information, as well as ordering information and order taking. The site will be useful to both targeted groups, individuals as well as corporate customers. The second method will be brochures, primarily marketing to individuals. These brochures will be dispersed through many different sources. The last method of communication is networking and it is primarily for the corporate customer. Before founding Basket of Goodies Susan worked within the Human Resource Department of several larger corporations and has developed a large list of contacts. Susan will leverage these personal/professional relationships to generate business for BOG. Since she has worked within the HR departments before, she is quite familiar with the buying habits and decision making processes; key knowledge for generating corporate sales.

Question: How is the product positioned?

Answer 1

Product positioning is a marketing stratigy with a aim to influence the minds of people and reaching out to the target audience.

BOG has looked at many elements in order to reach out the customer and establish itself in the market. Ther positioning stratigies used by it are mentioned below:

• Low price of product- price is highly sensetive in the market. As price go down people buy more of that item. BOG has tried to cut down its cost by working from home rather than owning a shop and transportation cost reduction via pick of of material during coming back from office will help to reduce the cost which is why BOG will be able to sell its product at low cost thus beating its competitors.
• Focus on quality- it is mentioned in the case study that at times BOG is ready to loose profit in order to satisfy its customers. It will help to attract customers at the initial stage and bring more goodwill to BOG. BOG has highly focused its positioning stratigy towards making a place in the minds of people. It has accept the logic of the importance of retaining a customer.
• Product attribute - BOG has enabled the option to customise the basket of goods with rich in quality of ingredients to choose from.
• Relavant positioning- it has looked after the need of customer by making their product acceptable and relavant to customer's satisfaction. It aims to go for 100% customer satisfaction.
• Promotion of product - BOG has thought of promiting its product by the website as well as brochures. Thus making it easier for people to feel the existance of the company. It is very important to use the power of internet rather than only selling though a shop. As internet can capture a huge crowd.
• Target audience - BOG has focused on lookibg after individual customers initially and then corporate. By making it clear BOG is able to serve both the parties in a specific manner. Knowing the target audience is important as it helps to serve customers as per their need.