Marketing Plan: Product diversification strategy - Media Strom SA

M.Sc in Marketing Management
MARKETS, CUSTOMERS &
MARKETING
Marketing Plan with product
diversification strategy
SPYROS LANGKOS
ID: 100285557
Tutor: Mrs. Ioanna Tsoka
Athens, January 2013
Academic Year 2012 – 2013

2Marketing Plan with diversification strategy for Media Strom S.A
MEDIA STROM:
« We stay awake…so that you can sleep better »
This study concentrates on the marketing plan of
the Greek company Media Strom S.A (Athenian
Mattresses Industry) and the development of a new
product in a new market: in the case of product
diversification through innovation.

1. TABLE OF CONTENTS
1. Contents ...................................................................................3
2. Acknowledgements.....................................................................4
3. Executive Summary....................................................................5
4. Introduction...............................................................................6
5. Situation Analysis .......................................................................7
6. Objectives ............................................................................... 15
7. Strategy.................................................................................. 16
8. Tactics .................................................................................... 20
9. Action plan an Controls .............................................................. 22
10. Personal Reflection................................................................... 26
11. Bibliography............................................................................ 27
12. Appendices ............................................................................. 29

2. ACKNOWLEDGEMENTS
The development and the implementation of this plan are made possible
by the appreciation of my family and friends and also to the help of
Andrew, the library bookkeeper. I would like to thank, our module teacher
Mrs. Ioanna Tsoka for her guidance so that we can bring closure to our
assignment work.
Still, I would like to thank Mrs. Kaliopi Tsamalou , Head of Corporate
Marketing and Communication at Media Strom S.A, for her time and the
interesting conversation that we had, over company related issues.
Without the help of these people, my research could not have taken place.

3. EXECUTIVE SUMMARY
This report reviews and evaluates the marketing plan of a well known and
established business, Media Strom S.A and recommends an alternative
marketing strategy for the needs of product diversification strategy. We
examine this proposition alongside with the ongoing marketing plan of the
company, as a one to one consultation process.
The paper attempts an overall analysis of the current market, the
competition and the influences of the external environment. Furthermore,
presents the company‟s capabilities and internal processes, highlighting
the strengths and opportunities of the organization.
The solution proposed by this paper moves to the field of product
innovation (product case: sleeping pillow enhanced with internal
speakers with connector for smartphones), so that it positioned as
an inspirational product with distinctive quality and technological function.
It mainly focus on introducing a modern relaxing sleep session to the
user, which provides affordable bed and sleep-related products to young-
middle age groups of people with concerns over technology and comfort.
The stated objective here, concerning price analysis, is that the above
product category should reach 1/10 of the overall sales of the company,
with regional targeting of the western societies, which are more
technologically advanced and innovation friendly.
Supporting the above mention, the delivered profit margins are expected
to be small with a rising ongoing trend, in the first semester of the
launching process. But as the assembly product line grows in numbers
and manufacturing experience, the business profits will accumulate as it
becomes a usual business service, ensuring the smoothing between
marketing and factory operations.

4. INTRODUCTION
Media Strom was established in 1967 from the brothers John and Nick
Niarchos, aiming to offer mattresses that improve the quality of sleep and
set new standards on the market. It is thought to be the No.1 company in
the mattress industry, having a presence in the field for over 4 decades.
It is a 100% Greek-owned company, having offered great sleep up to 3
generations so far. They have eco-friendly facilities without gas and waste
emissions due to their strict recycling and packaging program and
collaboration with the Hellenic Recovery Recycling
Corporation.
The history of the firm is filled with innovations that changed the way that
most Greek people slept. Above 2,5 million Greek citizens today wake up
in a bed or a mattress of Media Strom.
The New Sophisticated Factory of Media Strom builted in 2010, is the
jewel of the world quilting, confirming entrepreneurship and healthy
development.
H Media Strom mattresses is a market leader in over 40 years, offering
unparalleled quality sleep to customers. Consumers trust it for reliability,
unsurpassed quality and hygiene products. Covering a successful career
both in Greece and abroad, has managed to make its name synonymous
with good sleep.
The growth rate of the company's sales are impressive, and the period
2000-2010, which increased to over 329%.
In 2006, Media Strom won a major international award and ranked the
266th place among Europe's 500 fastest growing companies, and in recent
years has a prominent place in the list of Statbank for companies '
Diamonds of Greek Commerce and Industry ‟.
New Factory investment cost was over 25,000,000 euros, and is a model
for the European and international standards. This is the largest
investment to date, in the quilting industry and one of the largest in
Greece. The new company's factory, already houses the most modern and
fully automated production lines and additional layers of sleep products
and a well-equipped R & D laboratory for testing the strength of the
orthopediatric & anatomic layers.

5. SITUATION ANALYSIS
Marketing is a social and managerial process by which individuals and
groups obtain what they want and need through creating, offering and
exchanging products of value with others. The business market consists of
all the organizations that acquire goods and services used in the
production of other products or services that are sold, rented or supplied
to others (Kotler et al, 2012)
Brief Company History
1976 1977 1980 2004 2010 2011
1st
orthopedic
mattress in
Greece
1st
retail
mattress
store
Import of
American
type beds
Design of
Optimum
Innovative
Greek bed
mattress
Built of new
Factory
facilities,
one of the
best in EU
Franchise
expansion,
Globalization
Vision: To constantly improve the quality of Sleep and the quality of Life!
"New" is one of the strongest words in marketing. "New" invokes the
belief that something is moving forward, that it is different, modern or
improved. People are attracted to new products like a magnet.
Introducing new products on a constant basis is the best way to get
attention and is invaluable publicity for a business. "New" positions a
company as being dynamic and forward looking.
5.2 Business environment
Fixed business expectations, milder drop production. The confidence
indicator in industry remains at the same level in November to 80.4 points
(from 81 October), however, higher compared to the respective previous
price (72.6 points). On key index variables, the changes are zero or
marginal: the estimated reserves remain at the same level, while a
marginal decrease in estimates for current orders and demand is offset by
the corresponding marginal increase in production forecasts for the next
quarter. Specifically, the forecasts for the short-term evolution of
production, remain slightly negative, while strongly negative assessments
of operations for the current level of orders and demand weakened
slightly. Estimates of the level of stocks, although not altered, suggesting
slightly swollen inventories for the season.
Specifically:
a) For orders and demand, the relative negative indicator records fall
short and shaped to -46 points (from -44), with half the companies in the
sector to report again in the last quarter reduced orders for the season
and a 3% ( 5%) to indicate the opposite.

b) In the provision for the development of production in the next 3-4
months, the index formed again in negative territory, albeit marginally, at
-2 points. The 23-24% of businesses in the last two months down fall
production and nearly 1/5 expects rise.
c) Estimates of stocks of finished products, not change, the relevant
balance does not vary by six points. So, again an 18% of firms cited high
time for stocks and a 14% believes to be a low for the season.
d) Indicators linked to the export activity of companies show mixed
trends: estimates for exports in the last quarter varied positively with the
relative balance position to win the October 9 points and 1/4 of the
respective companies (from 1 / 5) declare that exports have increased
over the previous period. On the other hand, orders and foreign demand
is not satisfactory (from -18 to -27 points in balance), while a slight
decline recorded and forecasts for exports in the coming months, even
though the index remains firmly positive throughout through-out the year
(+12 from 14units). (Business surveys FEIR (DG ECFIN),2012).
Where economies stand in the global
Source: Doing Business database.
Pillow purchase market
Consumers first purchased pillows without much knowledge or information
concerning the product benefits. As product development increased the
consumers became better informed about the benefits and began to focus
their interest on sleep health issues, bone-spine structure, sleeping
disorders, etc. Advertising and promotion also increased due to creation of
premium and super-premium product class.
A pillow comprises a filler, often made from foam, synthetic plastic
fibers, feathers, or down and elastic foam and latex.
Traditionally straw was a filler, but this is uncomfortable and rarely
used today. Feathers and down are the most expensive and usually the
most comfortable; they offer the advantage of softness and their ability to
conform to shapes desired by the user, more so than foam or fiber
pillows.

“ There are few other products that you spend as much time with than the
pillow. It's right there on your face, and you spend 8 hours a night on it.
It's critical to have the right kind of pillow," says Matt Moses, vice
president of marketing for the utility bedding division of Pillowtex, a
leading pillow manufacturer. Sales for bed pillows are down, according to
the Facts: Bedding, an annual survey by the weekly newspaper Home
Textiles Today. Sales in 2011 were 737 million, compared with 840 million
in 2010, said the product editor for the newspaper, which tracks the
textile industry. Bed pillows made up 11 percent of total bedding sales,
which topped 6.7 billion in 2010. Sleep patterns, understanding how you
sleep is an important first step toward buying the right pillow, according
to a pillow expert at the Company Store, a La Crosse, Wis., bedding
company. Not surprisingly, consumers will pay more for a higher-quality,
more luxurious pillow. But it doesn't mean you have to spend 200 to find
a pillow that fits your needs. Prices vary depending on the fill.
Mobile market trends and sleeping in 2013
“Sleep On It” - Mobile App Tracks Sleep Habits
GE and MedHelp have partnered to create a mobile application that tracks
sleep patterns, aimed at identifying sleep trends and improving sleep
quality.
The app comes equipped with a customizable alarm and snooze function.
The alarm is integrated with “Going to Bed” and “I‟m Awake” buttons that
initiates the tracking feature. This feature allows users to track nightly
sleep patterns to determine what factors may affect their sleep and how
much sleep they need each night to feel rested and energized. After
waking users can select their mood on a gradient scale that aids the
tracker in identifying trends in the users sleep. A calendar view displays
overall sleep trends, and easy-to-read charts detail sleep cycles and hours
slept in the last seven, 30 and 90 days. Additionally, it allows people to
record medications, health symptoms and naps to learn what triggers
poor sleep cycles.

“Good quality and sufficient sleep is vital to our health and well-being,”
said MedHelp CEO John de Souza. “Lack of sleep has been linked to
serious health conditions ranging from diabetes to obesity, yet millions of
Americans are not getting enough sleep. Sleep On It was designed to help
consumers understand how much they are actually sleeping and how
much they need to get to feel their best.”
This app is currently free and can be found at Apple.com.(Mashable
2012).
TOWS Market Analysis
TOWS
Strengths
1. Leader company in the
industry
2. Strong brand name
3. International presence
4. In-house R&D department
5. Pricing policy
6. Strong franchise-retail
network
7. Strong corporate culture-
internal satisfaction
8. Capital accumulation
Weaknesses
1. No relevant
experience on
implementing
innovation
2. Lack of innovation
orientation
3. Lack of synergies an
outsourcing services
Opportunities
1. Innovation products for
technology oriented
generation
2. Extended use and life
cycle of a product
3. Strong profitable industry
industry
4. Exploit new niche markets
SO
 Customer value strategy
 Develop innovative sleep
peripherals and
supplementary
 Opportunity to become a star
company
WO
 R&D costs and
product launch time
 Cost of Training
employees on
innovation culture
 Disrupted brand
image by possibility
of product failure
Threats
1. Economic downturn
2. Demographics
3. Highly competitive
market
4. Low income taxpayers
5. Premium cosmetics have
maintained their global
dominance
ST
 Mark-up premium price
strategy
 Promotions focused on
lifetime added value
 Product life-cycle strategies
for extension to new
segments
WT
 Strong barriers for
opening a new
market segment
 High Young
customer base

5.1 Competitor analysis
Identification of competitors:
 Linea Strom: The main goal is to provide better quality sleep,
through specialized and innovative products of high quality that will
satisfy all customer needs.
 Elite Strom: with a strong network of 26 stores, with thousands of
satisfied customers and significant international collaborations with
TEMPUR and Hastens, the elite storm is one of the most
dynamically developing companies.
 Coco mat: The COCO-MAT was founded in 1989 and today is a
recognized leader for natural sleep products, bed linen and furniture
for homes and hotels. The constantly expanding our network
includes stores in ten countries
 Ideal: The ideal storm is a Greek company manufacturing high
quality products ideal sleep. The company's philosophy of "ideal
conditions Sleep".
 Terzostrom: The main priority is the care of consumer taking into
account individual needs. Having, as a result of the idealization of
the product right and achieving good sleep.
Quality - Strength - Detail - Natural Materials
 IKEA: offers a wide range of well designed and functional products
at prices so low that they can get as many people as possible. This
is the philosophy IKEA. From design and buying products until their
sale in IKEA stores worldwide.
5.3 Internal environment
Porter’s five forces analysis
Industry rivalry:
 Customers have low switching costs between companies and products
 Industry companies is grow very fast despite the crisis
 Exit barriers are high and rivals stay and compete
 Fixed cost are high resulting huge production and reduction in prices
 Media Strom is a market leader with the highest market revenues and
then there is equal competition of smaller firms.

Byers - Consumer power:
 Consumer purchasing power is very high in the industry.
 Consumers can choose from a number of different product variations
and test-touch-feel-use-combine them, having a real-time experience,
and turn back the ones when they are dissatisfied for any reason.
Products have long time-period warranties and good after sale
services.
 buyers chasing too many goods in one time/place
 Product are not differentiated clearly enough
 Buyers are price sensitive
Supplier power:
 Suppliers are concentrated and well organized
 A few substitutes available to supplies
 Their product is most effective or unique
 Switching cost, from one suppliers to another, is high
 Not an important customer to Supplier
Retail network
 24 Stores in Attica
• 7 Stores in Salonika
• 1 Store in Veria
• 22 Franchising Stores all over Greece
Wholesale network
 2.800 Furniture construction companies, furniture selling
stores, white linen stores, etc.
• Stromatex in Key Accounts & Hypermarkets (Praktiker)
Hotels product line
• 1.000 Hotel Units & Cruise Ships
Stores
 “wellness “ atmosphere and to stress the
importance of Sleep
 unique shopping experience
 different from the competition

Threat of new entrants:
 The turbulent economic environment worldwide makes it very
unattractive for companies to invest in any industrial sector at the
moment.
 High capital requirements to start a business and grow it
 Few economies of scale are in place due to regulation gaps
 Low switching cost
 Technology is not hard to acquire and isn‟t protected well
 Product is not differentiated
Threat of Substitutes:
 Small private business owners who offer competitive prices and
customized solution.
 Future consumer trends and scientific research upon sleeping
habits, the dropping importance of sleep. Working life more
important.
Competition:
 IKEA and Cocomat have a high brand name and brand awareness,
39 % and 15 % in top of mind positioning (Media
Strom_presentation, 2010).
 Competition in the industry is very intense, because of the
existence of numerous famous players in the market
(Eurobarometer, 2010).
 Candia Strom and IKEA are the best players in the market,
concerning value for money preposition.
 In the case of quality Media Strom and Coco-mat are perceived to
be way ahead others, something that is demonstrated also by their
exporting mentality.
 Media Strom is the biggest advertiser in the industry, with 12
million euro (2003-2010).
 Coco-mat is thought to be an expensive and luxury brand.
 Few companies have self-owned factories and facilities. Contrary to
this fact Media Strom has a state of the art factory with 19,000 sq.
m. of buildings in 42,000 sq. m. Land.

BCG Matrix
New Product Concept:
Vertical diversification strategies will be used for a new kind of Pillow, “a
high-tech pillow”. This new product will have the same layout as a
traditional pillow, but it will be enhanced with two internal micro-speakers
that would connect to an external smart-phone device. The user will be
able to connect the phone, lie down to his pillow and hear his favorite
radio station or music and relax.
They key of thin concept is to offer to the buyers the experience of having
a fully customized comfort sleep with his favourite audio preferences. This
is because, during sleep hearing is the only element and sense that is
active till we fall into the deep REM sleep. By offering this pillow add-on
the user will record his sleeping patterns and gain access to a more enjoy-
full sleeping experience without “harassing” his mind with unnecessary
thoughts of the next day
Media Strom is in the category shown by the red circle above. It will enter
the digital pillow industry as in the middle of Star and a Question mark.
Companies which belong to the question category have low market share
in growing markets (Hill 2007). Also by building synergies and
partnerships with a familiar company to mobile market and exploiting the
network store and internal R&D will approach the necessary niches.

6. OBJECTIVES
As Kotler (2012) notes in his latest book, “it is useful to assume that
companies strive to maximize profits. However, they differ in the relative
emphasis they put on short-term or long-term profit. In order to fulfill this
fundamental aim, each one pursues some mix of objectives: market share
growth, current profitability, cash flow, technological leadership and
service leadership. ”The last two of them, are our new market expansion
goal.
6.1 Mission statement
In this new pillow market it is proposed that the company will attend to
the consumer segment that needs of sleep relaxation with the benefits of
“choosing and personalizing their personal sounds/music/etch for mind-
relaxation”, offering an enhanced pillow with internal digital microphones
connected with the customers Smartphone.
6.2 Objectives
 Become an international company within the next 5 years in the
categories of bed mattresses and sleep peripherals.
 To be a major innovative company in the field and gain proper
market incentives for other breakthrough sleep-product lines.
 To exploit the technological oriented new niche segments of the
customer base and gain competitive advantage.
 Upgrade the perceived quality of our products with new digital and
customer friendly services.
 Thought of as Industry Leaderships in Sleep comfort.
 Identify growth opportunities in new market through the
identification of new customer niche segments and new product
uses.
 To Increase production capacity.
 To manufacture products of high quality, hygiene and innovation
 To operate with respect towards its employees and the natural
environment.
 To create the conditions for future expansion and Exports.

7. STRATEGY
In particular, authors have highlighted that key customers provide an
understanding of customer‟s problems and needs which is again a critical
factor of strategic success for the developer (Mons Freng Svendsen et al,
2011).
7. 1 Marketing opportunities
Niche/mainstream positioning strategy:
The main focus of niche positioning would be placed on consumers
who are concerned about their sleep disorders. There would be many
positive benefits to the company from the positioning of the “smart
pillow” as a niche product. These benefits would include one, by targeting
the segment of consumers who are worried about relaxed sleep, by
charging premium prices.
Two, Media Strom would be able to differentiate the new pillow from
other pillows , because technological superiority over the others already
on the market. I if costs were to decrease then it enable us to reduce the
losses if it were not successful.
Mission marketing strategy:
Media Strom mission strategy is to be successful in the sleep
enhancement market, and hope the new pillow is not a failure. They will
strive to gain a competitive advantage over other companies, while
producing a profit, and satisfying the wants and needs of buyers. A goal of
the pillow is for to add utility or value to consumer‟s lives.
7.2 Developing a proposition
Media Strom will follow the strategy of diversification (vertical), according
to which companies that expand their business by offering new products
to new markets (Hill, 2012), as it can be seen in the appendix.

7.3 Product levels
Media Strom functions their production activities at the field of retail
mattress production through franchise store sales. The future product
expansion of product lines will be made on sleep peripherals and
especially on digital high-tech sleeping pillows.
7.4 Service considerations
Our main issue here that the product can partly function and serve
customers need by its own. Due to its technological aspect, the usage of
the product and service is bound by a third party provider. If the final
buyer has not a smartphone, the product liability is in question. Therefore,
a partnership with another company of that market should be made in the
field of promotion and advertising.
Product and Service
Existing Product:
 What is this product's life cycle stage?
 How are quality and reliability viewed by the customer?
 Are they pleased with current service levels?
 How fast can the market grow?
 Is the product patentable?
 Can sales, production, and other operations systems
absorb the product, or does it require additional support?
Customer:
 Who is the current potential customer?
 What do you know about the customer's unsatisfied wants and
current level of satisfaction?
 Who makes the buying decisions, and where and how are they
made?

7.5 Operational dimensions
The proposed product expansion has to be carefully designed, tested and
launched due to technical issues upon implementation and slow
acceptance of add-on innovations. Some of these considerations are
minimized by the newly operation of the company‟s Main Factoring
facilities, upgrading their original productive capacity to new heights and
maintaining an in-house Research and Development Department.
The process of customer introduction will be slow and it will take a time
period of 2 years until the product grasps full sales potential. This timeline
and the promotional activities presented in the appendix.
7.6. Customer segmentation
Every person has different sleeping patterns and preferences. Some
people want silence while others prefer hearing something to lull them
(radio, music, etc). Therefore our target are these people, aged between
20-40, with a fair financial position, who do not fall immediately into a
deep REM sleep, are late-sleepers and want technology to ease their sleep
(for example, some tend to listen to the radio until their not awake
anymore). The most common characteristic of our target is the fact that
want technology and innovation to participate in their everyday life by
making it easier.
7.7 Risk associated with proposed strategy
In today‟s challenging environment, it is extremely difficult to create
sustainable growth in the offer of consumer value. Recent studies
conducted by PwC and Ernst & Young show that a low percentage of
organizations actually link risk management to their strategic planning
process. Most organizations address risks as an afterthought. Therefore,
we must incorporate a detailed risk identification and mitigation analysis
into strategic planning process:
 Ensure that strategies maximize the potential of an organization‟s
resources.
 Establish what resources are needed to be competitive.
 Decide what resources are needed to achieve the greatest increase
in customer value.
 Evaluate strategic risk – what could undermine the proposed
strategy.

 Determine operational risk – what limitations in current operations
will restrict the organization‟s success in the proposed strategy.
 Examine compliance and financial reporting risk – how might the
strategy affect these risks, in addition to affecting risks related to
the organization‟s reputation.
 Avoid the risk by not pursuing certain strategies.
 Transfer the risk by looking for partners
 Accept the risk – determine that the amount of potential risk is
within stakeholder.

8. TACTICS
8.1 Product
The new product is a digitally modified sleeping pillow enhanced with 2
internal audio speakers in the core of it, so that the pillow would not loose
softness. At one edge of the pillow there would be an input for external
phones devices. The product will be accompanied a connector, charged
free. An established company like Media Strom will focus on incremental
innovation, allowing it to enter the new market of pillows by adapting
existing market offerings for new customers and using technological
enhanced variations on the core product, so that it can be a step ahead of
the market and create alternative solutions for customer problems (for
example sleeping anxiety/relaxation).
The new pillow , is a product that should add value to a buyer‟s life. It
should also add utility, and meet the wants and needs of targeted
consumers. The product should be unique and different from all similar
products that are already available on the market. The strategy is to
differentiate the product‟s design and packaging, so that is more
sophisticated and will stand out from the others.
8.2 Price
Under a niche-positioning strategy the price of the pillow would form at
the premium price of 18,75 EUR per unit. It is of high importance that the
product is perceived a qualitative enough to be position as a high-end
sleeping commodity which would stand up to the competition of our main
competitor Coco-mat, that is thought of as offering high-end products.
Mark-up price policy (Kotler et al,2012)
A] Variable cost per unit: EYR 5
B] Fixed cost (approximately): EYR 300,000
C] Expected unit sales: EYR 100.000
Unit cost: A + B = 15
C
Mark-up price: unit cost = 18,75 euros
1 – return on sales
8.3 Place
The high–tech pillow market is spread worldwide mainly targeting
company retail network, hotels, airport accommodation, luxury household
owners and large retail stores.

8.4 Promotion
The price budget for promotion is set at 7 millions. The company‟s
promotion plan is to “induce trial” first.
Product promotion is communication spread through advertising,
publicity, and sales promotion. It is suggest to advertise their products by
using commercial, magazine ads, the radio, TV, internet, ads that are to
be placed in billboards, and the sides of buses.
Advertising is done to promote new products, remind consumers of
existing products, and also promote the image of the company at hand.
Through company site the consumers will learn about the new product,
features and the potential benefits. Social media will implement the
dialogue and feedback for the product. PR and events with NGO‟s and
organizations concerning sleeping health will be demonstrated so that the
product benefits can be acknowledged.
8.5 People
Media Strom‟s people participate in every stage of the products creation
and implementation from marketing to design and finally the production.
They maintain highly educated and specialized personnel combined with
top machinery in order to deliver excellent quality and care. They always
train their stuff and sales people so that they can deliver information and
offer a unique sleep consultation. Employee‟ will also be a first trial-test
for the new product.
8.6 Process
 Observe the product usage by customers
 Ask customers to report product problems
 Ask customers about their dream sleep
 Use corporate website for customer‟s ideas on product
improvement. Find related blog and posts concerning the general
product.
 Form a community of product enthusiasts. Participants will be seen
as collaborators working towards a common goal
8.7 Physical evidence
The company has a unique fame for the pre-sale and after sale
service. They have one of the most modern retail networks in
Europe, which gave them the Franchise Award back in 2010.
They possess 68 store, corporate fleet and factory facilities.
The product placement should be made on exclusive bedroom with
a digital and technological design theme and gadgets.

9. ACTION PLAN & CONTROLS
9.1 Finances
Fill (2011), proposes that, “the role of marketing budget is the same
weather is multinational, trading in numerous international locations, or a
small manufacturing unit. The desired result is to ensure we achieve the
greatest efficiency with each dollar/euro/pound they allocate to marketing
activities. No one can afford to be profligate with scarce resources, and
each is accountable to the owners of the organization for the decisions it
makes”.
Considering the large target group of the brand, the high net deficit, the
increasing expenses of first year‟s testing, launch activities,
promotions,advertising and the medium-rate projected sales figures, a
budget of 15 million Euros, over a three year campaign should be
appropriate. Moreover it is proposed to reallocate the budget
recommending, an 8 million euro spent in the first year, 4m in the second
and 3m in the third. This way our launching period has more chances of
integrating and successes.
Sales strategy will be to emphasize competitive advantage of
comprehensive research and product offerings. This is likely to turn
prospective clients into long-term customers because people are often
cautious with their financial future and offering a comprehensive solution
willing to work extra hard to research all options.
Financial projections should be summarised and highlighted. The
following format is suggested as a guide:
Sales Forecast
Month
1
Month
2
Month
3
Month
4
Month
5
Month
6
Month
7
Month
8
Month
9
Month
10
Month
11 Month 12
Sales (Euros)
planning 0% 0 2,145 2,254 3,215 3,654 3,985 4,124 4,456 4,874 5,014 5,214 5,365
Investing 0% 0 1,245 2,187 3,354 3,547 3,845 4,215 4,545 4,774 5,023 4,878 4,978
Total Sales 0 3,390 4,441 6,569 7,201 7,830 8,339 9,001 9,648 10,037 10,092 10,343
Direct Cost of
Sales
Month
1
Month
2
Month
3
Month
4
Month
5
Month
6
Month
7
Month
8
Month
9
Month
10
Month
11 Month 12
planning 0 172 180 257 292 319 330 356 390 401 417 429
Investing 0 100 175 268 284 308 337 364 382 402 390 398
Subtotal Direct Cost
of Sales 0 271 355 526 576 626 667 720 772 803 807 827

Annual Sales Forecast
Year 1 Year 2 Year 3
Sales (Euro)
Planning 44,300 65,455 72,545
Investing 42,591 62,545 74,545
Total Sales 86,891 128,000 147,090
Direct Cost of Sales Year 1 Year 2 Year 3
Planning 3,544 5,236 5,804
Investing 3,407 5,004 5,964
Subtotal Direct Cost
of Sales 6,951 10,240 $,767
Break-even Analysis
Monthly Revenue Break-even 8,518
Assumptions:
Average Percent Variable Cost 8%
Estimated Monthly Fixed Cost 7,837

Year 1 Year 2 Year 3
Sales (hundred of Euros) 86,891 128,000 147,090
Direct Cost of Sales 6,951 10,240 11,767
Other Production Expenses 0 0 0
Total Cost of Sales 6,951 10,240 11,767
Gross Margin 79,940 117,760 135,323
Gross Margin % 92.00% 92.00% 92.00%
Expenses
Payroll 63,120 67,000 72,000
Sales and Marketing and Other Expenses 1,200 1,200 1,200
Depreciation 456 456 456
Leased Equipment 0 0 0
Utilities 0 0 0
Insurance 1,800 1,800 1,800
Rent 18,000 18,000 18,000
Payroll Taxes 9,468 10,050 10,800
Other $0 $0 0
Total Operating Expenses 94,044 98,506 104,256
Profit Before Interest and Taxes 14,104 19,254 31,067
EBITDA 13,648 19,710 31,523
Interest Expense 0 0 0
Taxes Incurred 0 5,776 9,320
Net Profit 14,104 13,478 21,747
Net Profit/Sales -16.23% 10.53% 14.78%

9.2 Measuring service quality
Marketers are accustomed to measuring the physical attributes of a
product: dimensions, angles, power, hardness, tensile strength, colour,
and many other characteristics. Getting a handle on services can be
difficult. Service provision is radically different from manufacturing.
Output measurements that are applied in manufacturing make no sense in
a service situation because the customer has such a strong influence over
the environment.
Some of the traditional measurements are:
• Number of customers processed per hour
• Minutes spent on each call
• Reports generated per day
• Average time per repair
• Repairs fixed per shift
The measurements that we should trust are:
delivery time, responsiveness, effectiveness, availability and cost control
Innovation is the key to long-term survival and the customer should be a
part of this process, simply by answering a given questionnaire that we
should include inside the label or the manual, for investigating his service
satisfaction and get an immediate feedback on our product.

10. PERSONAL REFLECTION
Aim of this particular section of the assignment is about the evaluation of
my overall experiences and management during the writing of this report,
so that I can act upon future difficulties and develops the personal key
areas that demand more focus.
In my opinion, marketing is all about “saying the right thing, to the right
people”. Fundamentally, the choice of channels plays a major role to the
understanding and consistency of the perceived message. Especially, in
our times were economy is on the down term and the budgets are tighter,
the chosen promotions should be thought and designed more carefully.
Part of the job I do now has to do with, addressing the customer and
acting upon customer services.
Reading different sorts of Academic information and models, revised for
the today‟s digital era, I have found a level of difficulty, in whether I have
made the best possible model choices at the given time.
I found keeping to the word count and the up to date references
particularly difficult, as there are numerous theories around marketing
and the implementation.
From the lectures, seminars, workshops and the assignment my key
learning is that marketing needs must be consistent and adapted to
different customer perceptions. I was able to get a very good insight of
the company, due to the visit to their offices.
I found out that in these organizations, product quality and standards
work as “badges” and give their customers the confidence and trust to
purchase from them. Relationship Marketing and Reputation Management
is a key factor for these types of organizations, because the whole
industry is built upon immense pressure to continually improve and
become more efficient, in order for a company to maintain competitive
advantages.
Concerning my future development, I discovered that I need to train more
on the field of analyzing the perspective of customers, so that I can
understand their experiences and then make recommendations for
product improvements.

11. BIBLIOGRAPHY
Academic Journals
1. Mons Freng Svendsen et all (2011). “Marketing strategy and
customer involvement in product development”. European Journal
of Marketing.Vol. 45, No 4
2. Michael Porter (1998). “Clusters and the new economics of
Competition”. Harvard Business Review. pp. 77-89
3. Byron Sharp and John Dawes (2001). “What is differentiation and
how does it work?”. Journal of Marketing Management. No 17,
pp. 739-759
4. James H. Gilmore and B. Joseph Pine (1997). “The 4 faces
Customization”. Harvard Business Review. pp. 91-101
5. Wendell R. Smith (1956). “Product differentiation and market
segmentation as alternative marketing strategies”. The Journal of
Marketing, AMA
6. William E. Cox, JR (1967). “Product life cycles as marketing
models”. The Journal of Business, Vol. 40, No. 4
7. Theodore Levitt (1981). “Marketing intangible products and product
intangibles”. Harvard Business Review. pp. 94-102
8. Theodore Levitt (1980). “Marketing success through differentiation
of anything”. Harvard Business Review. pp. 83-91
9. Jagadish N. Sheth (2002). “The future of relationship marketing”.
Journal of services marketing, Vol 16, No 7, pp.590-592
10. Theodore Levitt. “Innovative Imitation”. McKinsey Inc.
Quarterly. pp. 35-45
11. Ian C. MacMillan and Rita Gunther MCGrath (1997).
“Discovering New Points of Differentiation”. Harvard Business
Review. pp 133-145
12. Benson P. Shapiro (1977). “Can marketing and
manufacturing coexist?”. Harvard Business Review. pp. 104-114

Academic Books
13. Dibb, Simkin, Pride, Ferrell. Marketing-concept and
strategies.
3rd
European Edition
14. Michael J. Baker. The Marketing Book. CIM 2nd
Edition,
pp 335-347, 415-455
15. Isobel Doodle & Robin Lowe. International Marketing
Strategy. Analysis, Development and Implementation. 2nd
Edition.
Thomson Business Press. pp. 72-74, 78-104, 267-360, 414-430
16. Nigel Piercy. Market-led strategic change. 2nd
Edition.
Chartered Institute of Marketing. pp. 137-312
17. Helen Peck, et al. Relationship Marketing. Strategy and
Implementation. Elsevier, pp. 33-111
18. Phillip Kotler. Principles of Marketing. 6th
Edition. Prentice
Hall International Editions. Pp 216-307
19. P. Kotler, K. Keller, M. Brady, M. Goodman, T. Hansen
(2012). Marketing Management. Pearson Education Limited. 2nd
Edition.
20. Porter M.E (1980). Competitive Strategy: Techniques for
Analyzing Industries and Competitors. New York Free Press.
Internet
21. http://www.franchisesuccess.gr/pdfs/MediastromPresentation.pdf
[Accessed 16/12/12]
22. http://www.mediastrom.gr [Accessed 16/12/12]
23. www.iobe.gr [Accessed 22/12/12]

12. APPENDIX
PESTELE ANALYSIS
Political  Greece policy about
innovation
 Unstable governmental
environment in Greece
 Trademark policies
Legal  European guidelines for
raw materials
 Competition and quality
assurance law
 Transfer pricing
Economic  less available and
disposable income
 Chinese people grasp
High Greek Taxes
International  Vat taxonomies
 Good distribution channels
 World trade agreements
further expansion of the EU
 Customs policy
Social
Cultural
 Tense relationships
and anxiety
 Techno-oriented kids
 Western civilization
Markets  Community groups
 Consumers - money savers
 Many niche markets
 Change of Consumer
Behaviors
Competitors  Strong local competing
brands
 International
competitors
 Many high-end
subsidiaries
Ecological  Increased concern in
recycling of damaged/end of
use goods
 Use of eco-friendly packaging
 Overall community action
upon environmental issues
Technological  Mobile trends
 gadget oriented
 Social media active
Demographics  Aging European Population
 Highly education
 High young unemployment

Source: Media Strom S.A

Source: Imerisia – Hellenic Economic Newspaper

ACTIVITIES
Year 1 Year 2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Market research, R&D
Choice of new product
Objectives
Market segments
Alternative actions
Budget & actions
Action planning
Budget agreement
Review alternative pricing strategies
Price strategy
Estimate product stock
Train employees towards new products
Advertising and promotion budget
Alternative marketing activities
Marketing activities
Implementation
Retail distribute of new
New Product purchase by customer
Source: Class Module

Source: Media Strom Company Presentation Handbook 2012

Strategic marketing models and theories
There is an inherent problem of defining strategy: strategy means
different things to different people.
" There is no single, universally accepted definition" (Mintzberg & Quinn,
1991). The Roots of strategy come from- Ancient Greek military usage
„strategos‟: Initially it was a role - the general in command of an army.
Later strategy became "the art of the general".
By the time of Pericles (450 BC) had become a recognized "managerial
skill". By the time of Alexander The Great (300 BC) strategy was: "the
skill of employing forces to overcome opposition and create a unified
system of global governance" ( Evered, 1980). The modern business
usage of “Corporate Strategy” has become a metaphorical extension of
the ancient and modern (military concept).
There are many comparative definitions of strategy, a few are:
"strategy” is the determination of the basic long-term goals and
objectives of an enterprise, and the adoption of the courses of action and
the allocation of resources necessary for carrying out those goals."
(Chandler, 1962). The business historian Chandler subscribes to the view
that strategy is as much about defining goals and objectives as it is about
providing the means for achieving them. Kenneth Andrews (1987),
distinguishes between corporate strategy which is the lead strategy, and
business strategy, a secondary, yet vital, aspect of corporate strategy:
"a pattern of decisions which represents the unity, coherence and internal
constituency of a company's strategic decisions that position a company in
its environment and give the firm its identity, its power to mobilize its
strengths, and its likelihood of success in the marketplace."
By comparison, Ansoff and McDonnell (1990), separate strategy
(concerned with means) from goal-setting (concerned with ends). They
define strategic management as:
"a systematic approach for managing strategic change which consists of
the following,
 Positioning of the firm through strategy and capability planning
 Real-time strategic response through issue management
 Systematic management of resistance during strategic
implementation."
Cole, (1997) proposes a working definition of strategic management to
be:"a process, directed by top management, to determine the
fundamental aims or goals of the organization, and ensure a range of
decisions which will allow for the achievement of those aims or goals in
the long-term, whilst providing for adaptive responses in the short term."
Definitions of strategy fall into five categories with differing areas of
emphasis:
 A plan: “a consciously intended course of action”.
 A ploy: “a maneuver intended to outwit a competitor”.
 A pattern: underpinning “a stream of actions”.
 A position: a deliberate stance taken in relation to the
environment.
 A perspective: an all embracing way of thinking about the
organization and its approach to the world.

“ A strategy is the pattern or plan that integrates an organization‟s major
goals, policies and actions into a cohesive whole”. (Quinn 1980)
A marketing plan has been defined as: “ A written statement of the
marketing aims of a company, including a statement of the products,
targets for sales, market shares and profits, promotional and advertising
strategies, pricing policies, distribution channels etc. with precise
specification of timescales, individual responsibilities (Masner, 1988).
To achieve this marketing plan, the organization will have to go through a
number of stages which take the form of questions, as follows:
o The analysis of the current marketing situation.
o Setting the objectives.
o Creation of the strategy
o Monitoring and evaluating
Market economic theories of the Textile Industry
The expectation that textile exports will swamp the US and EU retail
markets now that international quotas on those products have been
eliminated has fueled much of the discussion of the future of these
industries. Although imports from China have surged since the
elimination, this conventional wisdom masks important choices that
remain for public and private policies over time. In particular, two factors
will continue to have major effects on the location of textile production
going forward. First, public-policy choices will continue to influence
sourcing location; in particular, as they relate to tariffs and regional trade
policies as well as to policies affecting the linkages between countries.
Second, the lean-retailing model that now prevails requires suppliers to
replenish basic and products on a weekly basis.
Interest in supply chain management (SCM) has increased as
organizations seek opportunities to improve performance. Monitoring
plays a key role in enhancing supply-chain performance by highlighting
opportunities for improvements. However, evidence on the use of
performance measures in SCM is scant (David Smith, Australian
Accounting Review, 2008).

The textile industry is characterized by short product lifecycle, high
volatility, large variance in demand, and a high number of stock-keeping
units (Jin, 2004).
The apparel industry has practiced the philosophy of SCM in the name of
Quick Response (QR). QR is a concept that requires three key
philosophical aspects: communication of information between trading
partners, reduction of time in the soft goods pipeline, and consumer
responsiveness (Kincade et al., 1993).With these concepts, QR is one
example of SCM already executed by the textile industry. These factors
have created long lead-times and poor coordination among trading
partners (Aron, 1998; Christopher and Pech, 1997; DeWitt, 1994; Iyer
and Bergen, 1997).
Major KPI‟s influencing Business:
 Demand and Supply
 Marginal and Total Utility
 Money and Banking
 Economic Growth and Development
 Income and Employment
 General Price Level
 Trade Cycles
 Inflation
 Recession
 Exchange Rate
 Rate of Interest
 Government Regulations

Marketing Plan: Product diversification strategy - Media Strom SA

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