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The company is one of the main players in the power portable tools industry. The increasing number of DIY consumers presented an opportunity for the company to exploit. In relation to targeting strategies, Skil Corporation will develop high quality tools for DIY consumer segment. The needs of this identified market niche include product durability, performance and quality. All these needs should be the focus of the company. The firm will have to position itself as industry cost leader and inventor that will be achieved by leveraging competitive advantage. In addition, Skil Corporation will also use pricing strategy, which involves setting relatively lower prices for its products.

The portable power tool industry is one of the world's mature industries, with intensive competition . The performance of this industry is mainly influenced by activity levels in other industries, such as engineering and manufacturing, as well as a wide range of market specific influences, such as product development. Regardless of the challenges and limitation arising from different domains of the portable power tool industry, Skil Corporation managed to become one of the key players in the industry. Emerson, another key player in the industry, acquired Skil Corporation in an effort to expand Skil Corporation's market share. The increase in the number of do-it-yourself consumers posed an opportunity for Skil Corporation to capitalize on, and expand its market share . This paper essentially develops a marketing plan for Skil Corporation with the objective of expanding market share, and improvement of sales and profitability.

Description of Skil Corporation

Initially established in Chicago, Skil Corporation traces its origin to the innovation of the circular Saw in 1924 by Edmond Michelle. With the circular saw as one of its main products during its early years, Skil Corporation eventually expanded its line of product to comprise other power tools. The company has emerged as one of the most internationally recognized and powerful brands in the power tools industry. According to the studies, the motivation behind Skil Corporation's achievement was innovation. With innovation as one of its strengths, Skil Corporation has been capable of expanding its line of product to include more than 100 different tools. All these products are based on research and development, and consumer input. Some of the products invented by Skil Corporation include the first electric hedge consumer hammer, portable saw and the cordless drill.

Besides the intensive innovation, Skil Corporation adopted a global strategy during its early years. For instance, in 1946, the company extended its operations to the Canadian market. During the same year, Skil Corporation commenced the manufacturing of low-priced tools for its consumers. After targeting the Canadian market, Skil Corporation expanded its operation to Europe and Australia, Far East and Latin America. It is evident that the portable power tool industry has been growing at a considerable pace, and Skil Corporation has been at the core of this growth . Consequently, this marketing plan gives a framework within which Skil Corporation can expand its present distribution, establish new products, and increase its market share in the industry.

Mission and Goals

Skil Corporation aims at becoming the leading market and manufacturer of high quality, durable, and superbly performing portable power tool in order to deliver exceptional value to consumers. Moreover, the company aims at inventing new portable power tools to cope up with the changing consumer needs, as well as the needs of users of industrial tools.

Skil Corporation financial goals aim at increasing by 50% yearly, and acquire finances needed to establish new product lines . Non-financial goals of Skil Corporation include upholding robust and positive increase in sales, launching new products, and entering new geographic markets, such as Asia and Africa.

Major Competencies

The company intends to utilize its primary capabilities in ensuring that it achieves maintainable competitive edge over its key competitors. Skil Corporation aims at disabling it rivals from offering similar value to customers as it does. From its inception, Skil Corporation has the following capabilities: manufacturing highly durable and quality tools; and innovation. These core competencies have enabled Skil Corporation to develop well-recognized brand . Over the years, Skill Corporation has been gaining a good reputation as dependable producer delivering highly durable and quality tools. By using these core competencies, Skil Corporation can improve its product line and increase the effectiveness of its distribution outlets.

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Situational Analysis

The marketing environment in the portable power tool industry poses several opportunities, as well as challenges that companies can address successfully. Frameworks such as SWOT analysis can be used in determining Skil Corporation's position in the marketing environment . The company has been capable of developing several remarkable strengths while expecting new opportunities since its inception. However, Skil Corporation will have to develop necessary strategies to make sure that it stays ahead of competition. Additionally, the corporation will be forced to implement cost-cutting strategies to limit the increasing cost of raw materials.

Strengths

The wide range of product offerings from Skil Corporation is the first strength. This enables the company to meet a wide range of customer needs, widening its market share. The company's employees are also innovative, enabling it to meet the changing consumer need. In addition, innovation has been Skil Corporation's driving force. Over the years, the company has been capable of developing effective distribution channels, including department stores and hardware stores, increasing its reliability. Skil Corporation also enjoys robust product brand among its consumers. The distributed manufacturing plants in several regions assist the company in reducing the manufacturing and transportation costs. Skil Corporation's established market presence in several regions has also enabled to maintain sales.

Weaknesses

Despite having several strengths, Skil Corporation also witnesses some weaknesses. The first weakness is that members of one family have complete authority in Skil Corporation since its inception . This has denied the firm expertise from diverse professionals. Another weakness that gives competitors a leeway to decrease Skil Corporation's market share is that it does not engage in advertisement. Instead, Skil Corporation depends primarily on product publicity and with it help it creates awareness among its customers. Lastly, Skil Corporation's channel of distribution lacks mass merchandizers.

Opportunities

The increasing number of do-it-yourself (DIY) customers poses a significant market opportunity to the company. Originally, consumers of Skil Corporation's product had to have certain skills in order to use these products . This narrowed down their markets to only professionals. Marketing studies also point out that portable power tools industry is undergoing growth in terms of consumer and professional tools. The widening of global markets will also enable accessibility to raw materials and present excellent marketing opportunities. The anticipated increase in the need to save the DIY customers is another opportunity that the company should capitalize on. The ergonomic dimension of power is yet to be investigated by other companies. This presents an opportunity for the corporation.

Threats

The external environment in which Skil Corporation operates also poses some threats . The first threat to Skil Corporation since its establishment is competitors, which are Black & Decker, and Makita among other companies. The increasing number of competitors makes it hard for Skil Corporation to pursue differentiation strategies. The second threat is the unclear distinction between professional market segment and DIY market segment. This consequently affects the distribution of products . The diminishing quantity of raw materials, such as copper, poses significant threats to Skil Corporation. Due to the scarcity of raw materials, the company has to spend huge sums of finance.

Market Overview

The corporation has adequate information concerning the market and consumer characteristics. Such information is necessary in comprehending the attributes of consumers, their individual needs, and the corporation can efficiently communicate with them in order to increase consumer base. The demand for portable power tools has been projected to increase by about 5% each year. Additionally, the demand for DIY tools will also increase Skil Corporation's market share . Currently, Skil Corporation's market shares comprise of do-it-yourself consumers, industries, and professional consumers.

Market Segmentation

Besides focusing on major markets, such as Western Europe, North America, Australia and the United States, Skil Corporation has a continued penetrating new market in Africa, Middle East and Far East. By enhancing its international presence through promotion, the corporation can meet the needs of both global and domestic consumers across its target market.

The company serves both home consumer and professional consumer markets. With a wide product portfolio, which is comprising of differentiated goods, Skil Corporation can target a wide range of consumers. Professional consumers comprise of diverse individuals, such as electricians, farmers, metalworkers, carpenters, plumbers and building contractors . This consumer group is mainly concerned with durability, performance, and quality of the product. The home consumer/DIY market is more sensitive to prices compared to professionals. In the US, Skil Corporation's market has experienced tremendous increase and accounts for about half of the US tool market.

The portable electric power tools consumer segment comprises of industries, and individual consumers . This market segment spans internationally. Skil Corporation continues focusing on this market segment by providing heavy machinery that can meet industrial needs.

Market Needs

The Corporation presently provides its consumers with a wide range of tools. These tools aim at fulfilling consumer needs at the lowest price possible. A cross-sectional analysis of Skil Corporations' products revealed that the company is focused on the performance, quality, durability, and price of its products. In relation to performance, Skil Corporation ensures that the tools it develops perform their tasks efficiently and achieve their purpose. Industrial consumers, as well as home consumers are keen on the performance of the tools. In terms of quality, the tools manufactured by Skil Corporation have necessary characteristics that fulfill the set standards, such as safety. Poor quality tools are the major causes of accidents in the portable power industry . Skil Corporation hopes to reduce accidents by developing high quality products, and thereby building a good reputation. Durability ensures that the product deliver its value. Highly durable products stay effective for a long time. As such, durable products enable consumers to save on purchasing one product several times. Through constant innovation, Skil Corporation will develop products with unmatched durability. By offering quality products at low prices, the company will attain the cost leader position in the industry. This will enable it to enhance competitive advantage over its competitors.

Market Trends

The Corporation aims at differentiating itself from its rivals through value pricing. Innovation and pricing are primary drivers in this industry, in which pragmatic consumers are constantly searching for value . Aggressive and effective promotions are at the core of Skil Corporations successful marketing as consumers demand for highly valued tools. Essentially, value and prices are the typical features of the portable power tool industry.

The DIY is another remarkable trend in the portable power tools industry. Consumers in this industry are learning how to use power tools. Consumers are also keeping themselves busy by using the tools at home instead of hiring professionals. Studies anticipate that this trend will remain, presenting an excellent market opportunity for Skil Corporation.

Stiff competition is another characteristic of the portable power tool industry. Skill Corporation operates in an intensely competitive market having several competitors, such as Hitachi, Black & Decker, and Makita Company among others. As such, the company will embark on the diversification of its product portfolio in order to make sure that the needs of consumers are fulfilled. The table below shows the market share of the companies operating in the portable power tools industry .

Company

Market Share

Skil Corporation

5%

Milwaukee

10%

Bosch

3%

Black & Decker

9%

Makita

50%

Ryobi

9%

Craftsman

5%

Porter Cable

3%

Marketing Strategies

The key to effective marketing is developing an efficient communication strategy, which has the ability to convey product information to the intended consumers. With several product lines, it is evident that the company account for not less than half of the market. Due to its competency in innovation, Skil Corporation can pursue the leadership strategy in an effort to attain competitive edge. Despite the market segment being unique in terms of product durability, quality and scope of use, Skil Corporation can develop power tools that are tailored based on the needs of a specific market niche . Two important marketing strategies that Skil Corporation can use include targeting and positioning strategies.

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Targeting Strategies

Skil Corporation will target the increasing number of DIY customer segment . Skil Corporation's objective is to widen this target market by manufacturing power tools for individual use, including home designing tools. Most people are looking for ways of reducing costs related to performing some home tasks, such as repairing broken fences. Consequently, people are choosing to repair their homes on their own rather than employing professionals. In order to target effectively this consumer niche, Skil Corporation will manufacturer powered hand tools, home appliances, garden tools, and business and home maintenance tools. Skil Corporation will achieve its objective of increasing market share by targeting domestic consumers seeking to perform construction and to remodel their homes by themselves. In addition, the DIY market share comprises of lightweight professionals, such as builders, farmers and plumbers, who are price conscious. Consequently, they seek new value in the goods they buy. In order to target these lightweight professionals, Skil Corporation will manufacture high quality tools and sell them at competitive prices.

Positioning Strategy

The company will position itself as both industry innovator and cost leader. This position will be achieved by controlling the competitive edge of the company . For example, the corporation boasts of being the first to invent cordless drill, electric hedge hammer and the portable electric saw. This will offer the corporation an opportunity to position itself as the industry innovator. Consequently, by selling its tools at comparatively low prices, the corporation will achieve cost leadership strategy.

Skil Corporation's Marketing Mix

Product

Skil Corporation had a broad product line that includes all considerable forms of tools in various shapes at all price points . In the US, 11 motor frame sizes were used by more than 130 models. Presently, the company provides various power accessories and tools in its product line, such as drills, Skil Saws, power screwdrivers, sanders, tables, reciprocating saws, grinders, bench tops, measuring tools and domain-specific tools .

Product designs differed in various nations based on local needs. For instance, circular saws had seven different versions in the US, and two different versions in Europe and Canada. During its early years, Skil Corporation had more tools for professionals in its product portfolio than Black & Decker Company. The company's products were majorly metallic, with steel gears and metal housings.

Place

Presently, the Corporation distributes its commodities via hardware stores, contractor supply channels and department stores . Over the next coming years, Skil Corporation aims at integrating both consumer and industrial channels in its distribution strategy. The industrial distribution channels will integrate mill supply, contractor supply, tool specialists, and electrical supply outlets among others. On the other hand, consumer distribution channels will comprise of hardware stores, mass merchandizers and home centers. The corporation also aims at extending its market to cater for the global needs. Therefore, Skil Corporation's channels will be expanded to accommodate global distribution of commodities. The table shows the percentage of distributed units in the regions in which the company conducts business .

Region

Percentage Distribution units in the region

Canada

10

US

15

Western Europe

20

China

13

Other Asia/Pacific

5

Latin America

6

Eastern Europe

6

Easter Europe

6

Africa and Middle East

10

Promotional Strategy

Various tools of promotion, including customer relationship management and sponsorship programs, and trade and consumer promotions, will be utilized in reaching the target market . The corporation will participate in coordinating several home expositions in order to market its product portfolio to the DIY market segment.

Since its inception, the company seldom advertises its commodities. As such, the promotional strategy will emphasize on the advertisements through television, print and electronic media in order to reach the target market. Advertisements will also deny competitors the leeway they had enjoyed because Skil Corporation seldom engages in advertisement.

Pricing Strategy

Consumers in the portable power tool industry are very sensitive to prices. In addition, they demand high value and highly durable tools. This implies that Skil Corporation's pricing strategy must consider the prices offered by rivals, such as Black & Decker and Makita Companies among others. The pricing strategy proposed by this marketing plan will involve setting prices comparatively lower than the competitors' prices. Lower prices, coupled with high quality tools, will increase Skil Corporation's market share.

Financial Projections

This section offers a financial overview of the corporation in relation to its market activities. It highlights the estimated sales and expenditures that will be witnessed upon the implementation of this marketing plan within three years.

   

Annual Sales Forecast ($ million)

Product Portfolio

 

2015

2016

2017

 

Professional tool

SUM() 55

65

80

 

Portable Electric tools

40

55

70

 

Hand help power tools

45

50

75

 

Industrial Power tools

200

250

320

 

DIY/Consumer tools

75

100

150

         
 

Total

415

520

695

   

Yearly Expense Forecast in $ (2015-2017)

Product

Portfolio

 

 

2015

2016

2017

 

CRM Development

SUM() 5000

5500

6000

 

Advertisement

8000

9000

10000

 

Sponsorship

1000000

1000000

1000000

 

Others, such as e-Marketing

2000

2000

2000

         
         
 

Total

1015000

1016500

1018000

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Implementation Controls

The objective of this marketing plan is to serve as a guide for Skil Corporation. As a result, performance of the plan will be assessed using various variables, including yearly revenue, actual sales, yearly expenditures and market penetration and expansion of the product line. Implementation of the marketing plan will take approximately 5 months as shown in the Gantt chart below.

Activity

January

February

March

April

May

June

Putting together Marketing Team

 +  +        

Conducting Market Research

   +  +      

Designing of Advertisements

     +    

Actual Advertising

       +  +  

Control and Evaluation

           +

Conclusion

The portable power tools industry has undergone significant changes that warrant the formulation of marketing plan. Most of these changes have resulted from innovation and consumers' demand for quality products. Consumers in this industry can be segmented into do-it-yourself consumers, professional consumers and industrial users. Geographically consumers in this industry can be segmented as Western Europe, North America, Australia, the United States, Africa, Middle East, and Far East. With a wide product portfolio, comprising of differentiated goods, Skil Corporation can target the wide range of consumers in each of this market segments. Two important marketing strategies that Skil Corporation can use include targeting and positioning strategy. Targeting strategies involve developing domain-specific tools. In relation to targeting strategies, Skil Corporation will develop high quality tools for DIY consumer segment. In relation to positioning strategy, the company will position itself as both industry innovator and cost leader. The pricing strategy proposed by this marketing plan will involve setting prices comparatively lower than the competitors' prices. Lower prices, coupled with high quality tools, will increase Skil Corporation's market share.