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To achieve its aim of increasing its market share, Tended Ltd could produce a new smartwatch and launch a marketing campaign for 'Tended Protect' - Edexcel - A-Level Business - Question 1 - 2022 - Paper 2
Question 1
To achieve its aim of increasing its market share, Tended Ltd could produce a new smartwatch and launch a marketing campaign for 'Tended Protect'. Evaluate these tw... show full transcript
Worked Solution & Example Answer:To achieve its aim of increasing its market share, Tended Ltd could produce a new smartwatch and launch a marketing campaign for 'Tended Protect' - Edexcel - A-Level Business - Question 1 - 2022 - Paper 2
Step 1
For developing a new smartwatch:
Answer
The Ansoff Matrix would classify this strategy as product development. With a significant anticipated market opportunity, smartwatches are expected to dominate the market, capturing about 50% of wearable device sales. As the industry is set to reach a valuation of $34 billion in 2020, there is potential for Tended Ltd to increase its market share by introducing a new personal safety smartwatch.
However, as Tended Ltd is a relatively small company, this approach would require considerable investment and expertise, particularly in the competitive landscape dominated by giants like Apple and Samsung.
Step 2
For a marketing campaign:
Answer
This strategy can be seen as market penetration, utilizing Tended Protect’s unique selling proposition (USP) as a wearable personal safety device. By focusing on its established market, Tended Ltd can increase sales through enhanced distribution and promotion strategies. The estimated net gain from the campaign is projected at £1.42 million, which is higher compared to £1.3 million from the smartwatch development.
Additionally, leveraging existing brand recognition can help improve Tended Ltd's competitive advantage over established products from companies like Fitbit.
Step 3
Recommendation:
Answer
Considering the current market dynamics and Tended Ltd's position, a marketing campaign appears to be the more suitable option. It presents a faster route to enhance market share without the high risks associated with product development. The focus on market penetration would be more efficient, particularly given the established nature of the Tended Protect brand.