Current situation
Product situation
Haverland offers a wide range of electric radiators, electric towel, natural conversion heater, electric radiant heating panel and many other related electric products. However, inertia radiators are the company’s most trusted product which is available on most of its market segment. The best thing about the company new inertia radiators is that it comes with two options i.e. dry and fluid., therefore, it presents customers with a wide range of choices based on their heating needs and budget. The fact that the company has already established several products that can be superior in the market is effective in ensuring they are competitive in the French market. Wide range of heating solution means that a large customer base can be colonized such that everyone will b able to get what they need within their budget. There is competition, and competitors are also improving their products continuously. Therefore, to be relevant in the French market, the company need to continuously update its product to reflect the sophisticated technology need of the customers currently. However, on diversity in terms of products, Haverland is doing great already.
Competitive situation
There is great competition in the French market already. There is are two forms of competition that the company should expect i.e. direct and indirect competition. On direct competition, there are six company that may face out the comp-any in terms of their competitive advantage. Under indict competition, there are two major competitors. The company should expect to face competition directly from Airelec, Acova, Thermor, Noirot, Atlantic and Applimo. Companies such as Airelec, Acova, Thermor and Noirot have the advantage of being France manufacturer; hence they can easily reduce their cost especially when transportation and import duties are concerned. Another advantage that other companies have is that they have a wide range of experience when it comes to the French market. For instance, they have been in the French market for years. All companies outlined also offer similar products to Haverland. Therefore, to be superior in the French market, the company must utilize development tactics to promises low energy consumption and low maintenance costs. Companies such as Invicta and Ducasa are indirect competitor since they offer different products from electric heating. For instance, Invicta offer wood stoves and they distribute their products directly via their stores. Ducasa, on the other hand, offers a wide range of technologically advanced systems including solar heating and electric.
Distribution situation
No doubt online distribution is the way for the future, but currently, at least the company should maintain outlet across major cities to attract traditional oriented customers when it comes to shopping. Most of the company’s competitors have utilizes retail outlet and wholesaling. The current model where the company sell only through their online platform may not give wide coverage. However, the fact that they adverse in e-commerce sites, it means that they can increase their market share. However, the company needs to consider using online wholesaling services such as amazon to reach even a larger market. Despite the benefit that third party websites offer, the company Haverland aims at marketing its product itself.
Environmental factors
The world today is most concerned about greenhouses gases and their effect on global climate. Therefore, it is more prudent than systems that use renewable energy are most likely to be promoted. Solar and geothermal system are moist preferred among regulators and consumers since they may be cheaper in the long run, and they do not expose the environment to additional danger. Above all, the system manufactured should strive to deliver efficiency and low energy consumptions rate to ensure there is sustainability. Also, it is important to understand the capability of customers. For example, the company must consider how well customers are financed to purchase and maintain the systems. It is indicated that 89% of customers usually abandon their first installed heating system. The reason being that the initial systems are usually expensive to maintain and use. Therefore, it is important for the company to understand the distribution of income and changes experienced by its customers and thus manufacture products that reflect the changing needs.
Opportunities and issues analysis
It should be noted that in France there is a regulation concerning the consumption of electricity by the heating system. The RT 2012 framework regulation requires the system consumption to be 50 kWh/m2 or less per year. A system that surpasses 50 kWh/m2 consumption per year stand to be scrapped off from the French market. Therefore, companies need to consciously improve the efficiency of their system to avoid losing important market share.
It should be noted that electricity is the only energy source that is not able to meet 50 kWh/m2 consumption per year requirements. It seems that opportunity is mostly available in renewable energy sources such as solar. However, for solar, there is a limitation when it comes to months when there is a limited supply of solar energy especially in winter months. Therefore, the greatest opportunity lies in the ability to manufacture a system that promises efficient and reliable heating at the least energy consumption rate.
Customer profile
As of 2011, only 40% of new buildings were fitted with electric heating system which indicated a decline from more than 70% in 2008. Electric heating is most used in the renovation of old buildings which represented over 60% in 2012. Of this 40 %, it should be noted that the majority are concerned with cost-effectiveness of the system and that is the reason why 80% of customers abandon their initial heating system. Therefore, the maintenance cost is most important for most customers and the company should focus mostly on meeting their efficiency and reliability needs.
Seasonality
month sales seasonality index
Jan 49451 86.4%
Feb 60045 104.9%
Mar 10584 18.5%
Apr 21895 38.2%
May 19684 34.4%
Jun 41202 71.9%
Jul 43266 75.6%
Aug 60130 105.0%
Sep 92391 161.3%
Oct 90124 157.4%
Nov 100372 175.3%
Dec 98035 171.2%
Sum 57264.92
From August to December sales are above average. Also in January and February sales are more than other months from March to July. It seems that most sales are realized during the winter and spring months.
Sales forecast for January 2014= average sales (January 2012 and January 2013)* seasonality index of January
=(91639+49451)/2*86.4%
=60918
The result indicates that in January 2014, company sales are likely to increase.
Loyalty strategy
Loyalty strategies are aimed at ensuring that customers or associates stick to your business. In this case, the loyalty strategy will ensure the wholesalers and electrician continue offering services on behalf of Haverland company. Some of the strategies that can be used include a point-based rewards program,
Point-based strategy: under this strategy, Haverland will be rewarding wholesalers and electrician based on their successes. For example, if wholesaler sells 50 units of the products, 10 points are awarded. The points can be used to get increase commission rate or even receive some products for free. Electricians can also get points based on their installation that has been successful and error frees hence no refund or reinstallation required. Therefore, for every 50 installations with full customer satisfaction, electricians will receive 10 points which can be renewed for additional pay.
Partnership: partnership will be essential for the company to be assured of unwavering support. Partnering with wholesalers will make wholesalers offer their best services with the assurance that they will be well rewarded. Partnering with a group of electricians will also ensure that they offer their best since they will be assured of better pay and better jobs when they offer their best and reduce customer complaints.
Encourage feedback: wholesalers and electrician are the ones who handle the product mostly ad they are the one that receives most feedback from customers. Therefore, listening to their complaints about the products is very important since it provides an affordable improvement opportunity. Above all, encourage them to continually give feedback by creating an open communication channel and encouraging them that the issues will be resolved in the next products. having a close relationship with electrician and wholesalers will extend good faith to customers and generally improve the brand of the business.
Conclusion
The French market is still growing but the priorities of the customers seem to be changing. The customers' priorities are influenced by several factors including maintenance cost and regulations. Regulations require that heating system should not exceed energy capacity of 50 kWh/m2 per year. Due to the expensive nature of electricity, most customers seem to favor renewable sources of energy. Going forward the company should consider improving its products portfolio to cover a wide range of product including renewable sources so that they can adequately tap from the French market. The company should also streamline their distribution and take note of growing online stores. They are currently selling online but utilizing reputable online wholesalers in the French market will be very important for the company. The data from the 2012 and 2013 sales indicate that winter to spring is the seasons with the highest demand for heating systems. Therefore, the company should always stock their wholesalers and other outlets adequately in those months. Also, it is very import for the company to consider loyalty programs to improve services quality of their wholesalers and electricians.
