Bargaining Power of Buyers

Assalamualaikum.

Hi. Thank you and welcome to our Marketing Plan blog. We reached the last part of Situation Analysis which is Customer Analysis. Just to refresh what we already covered. Situation Analysis contains three parts:

1.     Industry Analysis

2.     Competitor Analysis

3.     Customer Analysis

The process of identifying and evaluating the distinguishing characteristics of the consumers to understand their needs, purchasing behavior, and motivations for purposes of segmentation and target marketing. 

The bargaining power of buyers analyzes to what extent the consumers are able to put the company under pressure. The higher number of companies producing a similar product, the lower the controlled power they have on their product especially in terms of price and quality. As the result, companies need to bear higher costs at a lower profit. Bargaining power of buyer represents brand loyalty, price sensitivity, information ability and size of consumer order.

Bargaining power of buyers in the clothing industry is high. Customers can easily get information from various marketing channel. The more information we give to the customers in the marketing channel, the higher the percentage that customers will be interested in our products. The number of customers is big because not only Muslim women wear scarves, sometimes non-Muslims also using it around their neck or to cover part of their body. Size of each customer’s order depends on his or her income and the price of the product. It may be higher during the festival and pay-day. Prices sensitivity may not be a problem when the product has been made from the high quality of the material. Brand loyalty doesn’t seem to be high. The company should make promotions or package strategies from time to time to keep existing customer and attract new potential customer

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Rivalry among Existing Competitors

Assalamualaikum.

Hi. Thank you and welcome to our Marketing Plan blog. in this post, we will be moved to part two of Situation Analysis which is Competitor Analysis. Competitor analysis is a process of identifying your competitors and evaluating their strategies to determine their strengths and weaknesses relative to those of your own product or service.

Rivalry among existing competitors explains how intense the current competition is in the industry. It can be determined by the number of existing competitors and what each of them is capable to do. The rivalry is high when there are many companies selling equally product. The higher the rivalry, the lower the barriers to exit from the industry. Rivalry among existing competitors consists of industry growth, quality differences and industry concentration.

The rivalry is high when many competitors that are roughly equal in size and power. When the industry is growing slowly and when consumers can easily switch to a competitor, who offered for the lower price. In the beginning, the company could try to stay in the industry concentration line with their first baby, scarves. But they may face many challenges because they do not have any other products that can attract customers. In order to make sure the company continues growing after all the obstacles, the company should priorities their product in terms of quality to make it difference from other competitor. From that, company possibly will be in the safe zone from being kick out of the industry.

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Threat of Substitute Product

Assalamualaikum.

Hi. Firstly, thank you and welcome to our Marketing Plan blog. Especially to newcomers. In case if you don't read the last post, now I have briefed you on our company Industry Analysis. Industry analysis is part of the Situation Analysis which has another two-part which are Competitor Analysis and Customer Analysis.

The threat of substitute product studies about how easy it is for the consumer to change from a brand to another brand. It is because there are dumping of product alike on the market. The switch process is most influenced by the quality of the product and the prices. The threat of substitute includes a number of substitute product available, buyer’s propensity to substitute and switching costs.

In order to fulfill customers' demands, there are a variety of scarves have been designed such as square scarf as a traditional one, shawl or turban. The price of a piece also can differ due to the total supply chain cost that the company needs to bear in order to ensure the good quality of their products. The existing of similar products in the market increases the propensity of customers to switch to alternatives. Switching cost may be lower because it does not involve a large capital. As to conclude, the threat level of substitute products can be categorized as high.

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Threat of New Entrants

Assalamualaikum.

Hi. Thank you and welcome to our Marketing Plan blog. I will cover our company Situation Analysis. Situation analysis consists of three parts; Industry analysis, Competitor analysis, and Customer analysis. I am using Porter's Five Forces to do my analysis. Here is the first part which is Industry analysis.

The threat of new entrants examines a measure of difficulty for a company to join the industry. The higher the barriers the company should face to join the industry, the smaller the threat to an existing company. Barriers to entry for new entrants are access to distribution channels, capital requirement, and economies of scale.

The threat of new entrants in the clothing industry can be considered as low. This can be proved by many clothing companies that have been established, especially the production of scarves in the past 5 years. In addition, new entrant does not need a large capital to enter the clothing industry, especially the production of scarves. In addition, the economics of scale can be reduced as we know that in producing scarf, the process does not involve a lot of machinery used. In this era when everything can be reached at our fingertips, the access to distribution channels become much easier and diverse.

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