Dualit's Marketing Strategy Analysis

Over the next three years the market for kitchen products and appliances is expected to grow by up to 17.6% (Datamonitor, 2009). This growing market makes it the ideal time to be the manufacturer of these goods.  Consumers of these goods are looking for products which are both stylish and built to last.  Dualit has created a product with has incorporated both these key elements; the Dualit NewGen toaster.

Dualit is a British company which designs and manufactures toasters and other kitchen appliances.  Founded in the early 1940’s (Dualit, 2010), Dualit is portrayed as a company which offers high quality and well-engineered products. The first Dualit toaster to be made with a timer and manual eject button was created in 1952 and ever since Dualit has continued to produce toasters based on the original design (Dualit, 2010).

In this essay Dualit’s marketing strategy will be assessed using the 4P’s framework.  This framework allows product, place, price and promotion to be considered (Marketing Teacher, 2010).  As well as looking at the company’s marketing mix, their targeting, positioning and segmentation will also be evaluated.  By considering all of these aspects, alternatives can be suggested on how Dualit can improve their strategy.  All the information used for this essay will come from secondary sources.

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Dualit want to be considered as a company which offer high quality products which are superior to their competitors (Dualit, 2010).  This is illustrated in the way in which they target their customers.  Dualit use a differentiated marketing strategy to target their consumers.  Using a differentiated marketing strategy allows them to target several markets and design a separate offering for each market (Armstrong et al, 2009).  Products which use a differentiated strategy tend to be valued by customers and customers perceive the product to be better than or different from products of the competition.  Also, according to Michel Porter’s model if a company has a corporate reputation for quality and innovation like Dualit does, then they will usually use a differentiated strategy (QuickMBA, 2010).

Dualit segment their market using psycographic segmentation, this allows Dualit to divide its buyers into different groups based on social class, lifestyle or personality characteristics (QuickMBA, 2010).  Dualit’s 2 slice NewGen toaster will appeal to people with a high disposable income that will pay a lot to get a stylish product like the NewGen toaster but who also care about the environment, as the NewGen has a control which allows only one slot to be heated.  Whereas, the 4 slice NewGen toaster appeals more to the commercial users such as cafes and restaurants, who might need to make several slices at any one time.  By targeting more than one target market it allows Dualit to increase its market share.

After considering their target market and deciding how to segment them, Dualit can then consider all aspects of their marketing mix and how the different aspects work together.

Dualit’s NewGen toaster can be split into three product levels.  These three levels are the core product, the actual product and the augmented product.  The core product is the benefits the customer will receive (Kotler et al, 2008).  Buyers of the NewGen toaster range will benefit from a product which makes toast but at the same time is compact and stylish and comes in over ten colours meaning it will complement almost any kitchen.  The core benefits are offered through the components that make up the actual product (Armstrong et al, 2009). The actual product includes styling, features and design.  The extra wide slots on the NewGen toaster that allow for nearly every type of bread to be toasted can be seen as a core benefit.  The augmented product is built around the core benefits and the actual product by offering additional customer service (Armstrong et al, 2009).  Dualit offer a two year guarantee on the elements in the toaster and a one year guarantee on all other parts.  Customers are also given a users guild to allow them to see other ways to use their toaster, this guide is also available from their website.  The Dualit NewGen toaster also has replaceable parts meaning that if it breaks it doesn’t need to be thrown out, it can be fixed.  This means it will last significantly longer than any other toaster. There is no obvious improvement that Dualit could make to the NewGen toaster as it has more features than every other toaster currently on the market.

Dualit make some of the most expensive kitchen appliances on the market.  The NewGen toaster ranges in price from £135 to £195 depending on the size of the toaster and how it is finished (John Lewis, 2010).  Dualit appear to use two pricing strategies.  They appear to use product line pricing, where a company prices different models within a range at different prices (Armstrong et al, 2009).  It is more expensive for a 4 slice NewGen toaster than it is for a 2 slice NewGen toaster; this is a perfect example of product line pricing.  However, Dualit also appear to use value based pricing as a way of pricing their range, whereby buyer’s perceptions, not the seller’s costs are key to pricing (Armstrong et al, 2009). Dualit’s toaster may be highly priced but the consumer’s perception is that the high price means it is high quality.  Unfortunately for Dualit many of its competitors offer a similar product in a similar style for a fraction of the price that is sold by the same retailer.  Although they don’t have as many features as the NewGen toaster, they still do the same job so potential customers may feel it is unnecessary to buy a toaster that costs £135 and purchase a rival toaster instead.  Dualit may need to consider lowering their prices if it begins to affect them in the future. 

The Dualit NewGen toaster hasn’t been highly publicised.  The only advertising that Dualit does for the range is on their own website.  Any other advertising is mostly done by the individual retailers that sell the product.  John Lewis currently offer a five year guarantee with all NewGen toasters, this may act as an incentive to potential customers as they feel they are getting more for their money and their product is protected longer.  Dualit’s lack of advertising may be a way to reduce costs but in the long run it could cost them potential customers.  The NewGen toaster is currently sold out on one of its main retailer’s website so their lack of advertising doesn’t currently seem to be affecting their sales but in the future it could, so to increase publicity Dualit may consider taking part in a joint advertising campaign with a premium bread company such a Warburtons or Hovis, which are both popular brands.  This would allow Dualit to target a wider market which may, as a result increase their market share.

Dualit currently sell their product on their own website and through high end retailers such as John Lewis and House of Frasers, which are as reputable but expensive department stores.  This enhances Dualit’s image of being manufacturers of high quality products.  Department stores carry a wide range of product lines (Armstrong et al, 2009) which can attract a larger range of customers, so by selling their product they may increase their market share.  Dualit may want to appeal to a larger target market.  They could do this by selling their products in large supermarkets such as Tesco or Asda because thousands of people go to these shops every day.  Although this would allow them to reach a larger target marker, it may put off existing customers as they may feel that it takes away from the brands high end reputation.  If Dualit did consider this they would have to decide if they would rather gain new customers or risk losing existing customers.

After having analysed all the aspects of Dualit’s marketing mix, it can be seen that although there are a few improvements which they could make to their marketing strategy such as more advertising or vary where they sell the products overall their current marketing strategy is working well as their products are sold out on retailer’s websites.  With the market for kitchen appliances set to largely increase, Dualit may have to consider altering their marketing if they wish to dominate more of this increasing market.  If Dualit do decide to change their marketing strategy in the future it should be for the better as long as they continue to make high quality products that out perform their rivals.

References

Armstrong, G.; Kotler, P.; Harker, M. & Brennan, R. (2009) Marketing An Introduction. 8th Ed. Essex: Pearson Education Limited.

Dualit (2010) Dualit – Our History. Available at: http://www.dualit.com/our-history (Accessed: 12 February 2010).

John Lewis (2010) Search Results – NewGen. Available at: http://www.johnlewis.com/Search/Search.aspx?SearchTerm=NewGen (Accessed: 13 February 2010).

Kotler,P.; Armstrong, G.; Wong,V. & Saunders, J. (2008) Principles of Marketing. 5th Ed. Essex: Pearson Education Limited.

Marketing Teacher (2010) Marketing Mix. Available at: http://www.marketingteacher.com/Lessons/lesson_marketing_mix.htm (Accessed: 11 February 2010).

QuickMBA (2010) Market Segmentation. Available at: http://www.quickmba.com/marketing/market-segmentation (Accessed: 12 February 2010).

Datamonitor (2009) Kitchen Appliances – Global Industry Guide, Special Report, London, The Data Monitor Group