CanGo Marketing Analysis and Strategy
The General Environment
Currently the inflation rate is stable at three percent or less per year, and the consumer price index is steady with approximately 1.5-2 percent change per year. A stable economy without significant inflation will likely maintain the strong spending power of the consumer. The consumer’s dollar will be stretched further allowing them to purchase more goods. Low inflation rates will also persuade the Federal Reserve Board to keep rates low allowing free economic growth as rates increase. Copyright law infringement and lawsuits are on the rise for online providers, particularly those relating to music and print. CanGo has a product line heavily weighted with music and print materials, therefore CanGo will have to be particularly careful to keep current on copyright law changes. CanGo will need to ensure the material is being properly licensed and protected from being illegally copied. Some of CanGo’s major competitors include Amazon, CDNow, GameTap and eBooks.
Generation Xers are CanGo’s primary customers. However, CanGo is also seeing some crossover from the Generation Y and Baby Boomer groups as well. The VALS (values and lifestyles) report provides a way of viewing people based on attitudes, needs, wants, beliefs and demographics. The average CanGo customer is an experiencer with secondary characteristics of achievers. According to the VALS report, experiencers are motivated by self-expression. As young, enthusiastic, and impulsive consumers, experiencers can be extremely eager about new possibilities but are equally as quick to cool. They seek variety and excitement, savoring the new, the offbeat, and the risky. They find an outlet for their energy in exercise, sports, outdoor recreation, and social activities. Experiencers are avid consumers and spend a comparatively high proportion of their income on fashion, entertainment, and socializing. Their purchases reflect the emphasis that they place on looking good and having fashionable possessions (Strategic Business Insights, 2010).
Achievers have goal-oriented lifestyles and a deep commitment to career and family. Their social lives reflect this focus and are structured around family, place of worship, and work. Achievers generally live conventional lives, tend to be politically conservative, and respect authority. They value predictability, stability, and self-discovery. With many wants and needs, achievers are active in the consumer marketplace. Image is important to achievers as they favor established products and services that demonstrate success to their peers. Because of their busy lives, they are often interested in a variety of time-saving technology (Strategic Business Insights, 2010). The Environment Within The Industry
Some of CanGo’s major competitors include Amazon, CDNow, GameTap and eBooks. Background information on CanGo’s competitors is provided below, highlighting their strengths and weaknesses.
Amazon is a profitable organization. Net sales increased 28 percent to over $24 billion in 2009. In 1999, Amazon was only $1.64 billion. Amazon’s business goals directly impact their customers. According to Amazon’s 2009 shareholder letter, nearly 80 percent of the company’s goals will have a direct impact on customer experience (Amazon.com Annual Report, 2009, pg. 3 ). Customer relationship management and information technology support Amazon's business strategy. The company records data on customer buyer behavior. This enables them to offer to an individual specific item, or bundles of items, based upon preferences demonstrated through purchases or items visited (“Amazon SWOT”, 2010). The Amazon brand is recognized worldwide. It was one of the original dotcoms, and over the last decade it has developed a customer base of around 30 million people. It was an early exploiter of online technologies for e-commerce, making it one of the first online retailers. Amazon’s early...
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