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Marketing Strategy of Micro Power

IntroductionThe definition of marketing of American Marketing Association is that Marketing is the activity, setof institutions, and processes for creating, communicating, delivering, and exchanging offerings thathave value for customers, clients, partners and soci ety at large. Even though this is practiced indifferent and unique ways by different organizations, the core concepts followed are almost thesame. So as to our company, Micro Power Engineering.

Micro Power Engineering does not have a large marketing department. Still it has Marketing andSales departments combined under the Sales manager.

OfferingsOf all those which can be marketed, Micro Power Engineeringproduces goods, services and experience. They offer products in avast range mostly in electrical installations. Being a productionbased electrical equipment manufacturing company; Micro PowerEngineering produces products in Lightning Protection Systems,

Energy Saving and SurgeProtection Systems mainly.They are also in to retailingbusiness of computerproducts of premium brands.

Micro Power Engineering also provides consultancy services inelectrical installations especially in surge protection. It has thecapability with its Managing Director being a CharteredEngineer in consultation.

Segmenting, Targeting and PositioningEven though they are a small organization with a less number of workforce, Micro PowerEngineering has used the STP process to find their market share.

Initially the Managing Director, Eng. B.W.L. Silva has started the comp any back in 90s at his ownbackyard. He has started with the surge protective devices and electrical installations. So, theproduct had been selected at the inception.

He had identified that there are government and non-governmental organizations which import andoutsource the installation of the surge protective devices. There has been no indigenous producer ofsuch equipment at that time to compete with those expensive foreign branded equipment. So he

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had identified the market segment as those large organizations and has started his production toreach that level to bid for those.

Then he has positioned his products with the quality he produces.

Value and SatisfactionThey always try to make sure that their products are more than satisfactory in comparison with thecustomer expectation. They have achieved ISO 9001:2008 award. Also they have gained ConsecutiveAwards for the Best Locally Assembled Product, Most Inventive / Innovative Concepts product in theInco Industrial Exhibition and Sooryasinga Award from SEMA.

They test their products at Arthur C. Clerk Centre at Katubedda. By means of various tests they makesure that their products are at maximum possible quality.

Supply Chain & Marketing ChannelsStill they use limited channels for marketing since their production is not at a mass scale. Themarketing channels they use can be identified as communication channels and distribution channels.

They usually bid for projects found through television, newspaper and internet. How they advertisetheir products is by means of the World Wide Web, newspaper advertisements, brochures andcatalogues.

They have a limited number of distributors through whom the products go to the mass market forretail sales and wholesale.

In my opinion I think that they can make more profits if they could strengthen their sales throughempowering their channels more.

At the moment what Micro Power Engineering does at most of the times is that they directly bid fora project at a company. But if they could mass produce and sell their products through retailers andwholesalers, I believe that they can earn more profits.

They import the necessary raw material which are not easily found in Sri Lanka. Bt they give thepriority to use the indigenous materials as much as possible. For imported raw materials, their

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suppliers are Chineese companies. They have a factory with abled work force for production.Distribution is done accordingly directly to the consumer most of the times completing the supplychain.

CompetitionThe Managing Director Mr. De Silva said that they have intense competition with foreign suppliers.There are no substitutes to their products. But the rivalry is very high.Of course, one of their advantages is also that there are no rivaldomestic producers of such equipment. So, where the priority is given

to the Sri Lankan products, they have theupper hand. But when it comes to international rivalry, due to economiesof scale factor and due to the availability of cheap labour, Chinesecompanies can offer their products at much lower prices. Also the brand

name and reputation of some brands especially European ones can give an intense competition toMicro Power Engineerings products.

Marketing MixThey have tried a lot to find the right marketing mix in Product, Price, Place and Promotion. Eventhough they have run at a good phase for about twenty years in my opinion I think that they havenot reached to their full potential due to not finding the right marketing mix.

When considering their micro environment, they have found right kind of suppliers and may bebuyers as well. But they could have stretched both these factors further. Since they are in to manyyears of production of same kind of equipment they could have given a try to reach suppliers role aswell. What they at the moment do is that bidding for the paper advertisements and so on for surgeprotective devices. Rather than reactive, if they can take proactive measures in marketing theirproducts, I think that they can boost their sales by a few times more. Also they have the capability tostart production in large scale. They have to find more dealers, distributors, retailers, wholesalers,etc.

If we analyze their macro environment, we can identify that they do just fine. Most of the PESTEL

factors are handled well by the company. Especially in Social, Environmental and Legal aspects, theyhave shown their intent. They have training programmes for apprentices who are financially cannotafford such training. They also do their production and disposals according to the internationalstandards. It would be best if they could promote these factors as well when they are selling theirproducts.

ProductsThey have a range of products mainly specialized in Surge Protection, Lightning Protection and

Energy Saving. It is good that they have achieved a lot in what they produce and even have exportedto countries like Hong-Kong, Bangladesh and Maldives.

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What they have done up to now is selective specialization. But in my opinion, they can performbetter in market specialization. They have the capacityin electrical installations field. If they could diversifytheir productions, they could reach more segments ofthe market and increase their market share. What Imean is that since they are highly specialized andhaving competencies in electrical engineering, for anexample, they can start producing light bulbs orswitches which can attract a large number of newcustomers.

If we pay attention to their branding, there is room for improvement. They do brand their productsunder their company name, Micro Power Engineering. They do not pay much attention to marketone attribute which would gain them advantage. Id say if they market their product quality or green-tag, they could have gained huge advantage. Also they could have branded the productsbetter.

The quality, features, style and design of the products arequite acceptable and almost in par with internationalproducts. But as I see they can still improve a lot I theirpackaging and labelling. The electrical design is up tostandards and well designed. But the packaging andstickers are to be improved to get customer attractionmore.

Their after sales support service is said to be fine. TheFinance Director said that they have an able team which can perform their installations even atabroad; which they have done in Maldives recently.

PricingThe pricing is done through market penetration pricing strategy by Micro Power Engineering. Theysay that since they have intense competition with the foreign brands, it is necessary to price theirproducts at a lower price to penetrate the market. Of course it is cost based, but for the sake of

acquiring new customers, they try to sell at a cost where there are no very large profits.Psychological pricing is not considered since they do not sell their main products to mass consumers.

DistributionAs mentioned earlier, the distribution channels of the company is to be improved a lot. If they startmass production of more common appliance, they can find new wholesalers, retailers and agents toenhance their sales maximizing their profits through product concept in marketing.

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Promotional MixPromotional mix is really important for a product to reach new customers. Also this is an area whereMicro Power Engineering needs to improve. At the moment what they do is they advertise innewspapers, yellopages, rainbowpages and on their website. Just being reactive will not be enoughto survive in the market. Being proactive and reaching more new promotional channels would haveboosted their sales.