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Date: 09/11/2010

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 The Irish Pottery Industry

Ballyshancarragh Pottery Ltd is launching a range of pottery products for the Irish market.

1. List the various segmentation variables the company can use to

segment their market? (10 marks)

“Market segmentation is the process of dividing markets comprising the heterogeneous needs of

many consumers into smaller parts or segments comprising the homogeneous needs of smaller

groups of consumers.” Web Reference 1

It enables us to understand our customers better. The bases of segmentation, is to determine

our customer needs and profile the customers so that we can apply a specific blend of our

marketing mix.

Market Segmentation Variables

“Segmentation is an art rather than a science” P.Doyle, P.Stern, 69

For the purpose of this assignment the findings from A.M.Torre's, University of Galway

Ireland, Galway, Ireland research into Judy Green pottery and the Irish pottery industry will

be used.

Table 1

One should now group these variables into profiles of the type of person we wish to target
and the segment that they may belong to.

From the study by A.M.Torres we know that the 3 main segments where we can apply these
variables are the

• Domestic Market
o Irish
o International Customers (Tourists)
• B2B Segments of
o Tourist Craft and Gift Shops,
o High End home ware shops
o Possibly high-end niche markets such as restaurants.
Question two Explain why you have selected each
segmentation variable and discuss which segments the
company should aim for?.

The Irish pottery industry is €8.75 million business. The research carried out shows 85% on

average of sales in hand crafted pottery in Ireland comes from domestic consumers. We also

know the domestic market has almost 4.5 million inhabitants and they spend on average of €2

per person. It amounts to a potential market of €9 million or in the case of the 1998 figures

€8.75 million for handcrafted Pottery items in Ireland.

Market Segment Oct- March April - Sept Average

Domestic 90% 80% 85%

Export 2% 5% 4%
Tourist 4% 10% 7%
Mail-Order 4% 5% 5%
Total 100% 100% 100%

Table 2 Adapted from A.M. Torres Judy Greene

Firstly lets look at each of the individual variables before looking at the profiles of

consumers/customers to which we can apply those variables.

Demographics’:

Research carried out by Judy Green clearly identifies the target demographic.

“Customers are mostly Female, 25 – 45 years of age and older, coming from middle to upper

middle incomes. Many younger Customers are (I.E Mid- twenties and mid-thirties) are newly

married couples and or new homeowners”

A.M.Torres Judy Green

Now a clear demographic has been identified to aim our strategy towards a profile can be

built using the variables of age, income, profession etc.

We can also identify from the research that Nationality plays an important role. For example

most sales to the tourist industry are American, (90%) and then British(5%) Others (5%) also
nationality plays a part for B2B sales through exports where again America has the highest %

at (55%), Canada (15%), France (10%) UK(10%) and others (10%)

Geographic:

Demographic information as a predictor of footfall will be a criteria in the selection of a retail

store location. Using CSO information also will help to determine tourist footfall in certain

regions of the country. Clearly if one was to setup a retail store or select business to act as

distribution channels then concentrating in areas of high population and high tourist footfall

would be a requirement

CSO Website International Travel Statistics

Physiographic

Variables such as social class and lifestyle may indicate the income levels of the customers to

target especially if Ballyshancarragh is to position themselves at the high end of the market.

For example Americans who perceive themselves as wealthy will purchase full dinner sets to

send home. Clearly Professionals will have a steady income, Mature Home owners may be at

the end of their mortgage responsibilities and may also have a good income. All these factors

will mean that they have the means to purchase a premium product

Behavioural

Variables such as brand loyalty, method of purchase and time of purchase need to be looked

at. This may help to determine if there is a need to create an ecommerce presence or to target

mail order customers. It may also indicate if we could target young couples planning to get

married and when the best time of the year to have special promotions etc. Professionals in

the study had a focus on convenience and no thought involved. They purchased as a gift and

required dunctional items. I.E they need a product that is useful. Home owners, Loyal

Customers and Professional all mentioned functionality as a major consideration.

Functionality is also a consideration for Niche market opportunities such as Restaurants etc.
What segments should we Aim For?
Having looked at aspects of

o The segment size

o Profitability of the segment

o And the type of consumers in the market place I would aim for the following

segments

Domestic market: Professional and Home Owners

I think we should target the professional and home owner / mature customer segments. They

are within the correct customer profile for age, income and lifestyle and our positioning

methods should reflect that they like unique items and not overly brand conscious.

While the research has also profiled graduates I believe that they are not a good segment to

target as they may not possess the funds and resources to buy a product that may be perceived

as being premium. Also there are very brand conscious and while they may prefer to buy and

own brand for prestige and follow trends they may not be willing to purchase pottery from an

unknown brand.

Organisational / B2B segments

Under Organisational segments one might to look at the location of the company's that may

wish to align with Ballyshancarragh Ltd. Establishing good relations which companies of the

right size and quality is essential to develop Ballyshancarragh’s brand and to promote

products within the domestic and tourist industry. In terms of the domestic industry I think

looking towards the urban centres such as Dublin, Cork, Limerick, and Galway other large

cities with Ireland. The retailers should be an appropriate size such as medium to large Irish

handcraft and pottery shops. The reason targeting medium to large enterprises rather that
smaller retailers, is that smaller shops may not possess the resources or shelf space to

promote our products in the appropriate manner and the research shows that they tend not to

be willing to give up shelf space in preference for existing brands.

There may also be some areas of growth that may be found by selling items to the upmarket

restaurant and food industries that may want to create a differential service towards

competitors by using our high end products.

As with many companies in the pottery industry up to 30% of sales of pottery in Ireland is

through third party retail sellers. Not knowing the resources Ballyshancarragh and if they will

have a retail store it is essential that they create the appropriate links with third parties in

order to distribute their product around the country.

3. Explain the positioning strategy you would adopt for the

company.

Although there are different definitions of Positioning, probably the most common is:
identifying a market niche for a brand, product or service utilizing traditional marketing
placement strategies (i.e. price, promotion, distribution, packaging, and competition).

Wikipedia 1

As Ballyshancarragh is introducing a new range to the Irish market, it is hoping to grow the

market and steel market share from the other competitors. This process will have to begin

with what our customers deemed to be of value to them. The words that they associate with

pottery are functional chunky durable and heavy practical and old-fashioned. They want

something Irish without all the shamrocks.

We need to convert new customers by increasing awareness of our products, by incentivising

purchase with cost benefits. Pottery by its nature is different so depending on the quality of

the product the differential left to us is the cost.

Table 2 - Estimated Market Share Of Handcrafted Potters

For the Irish Market 1998

Est Market
Potter Share
Nicolas Mosse 16%
Lousi Mulcahy 14%
Stephen
Pearce 12%
Judy Greene 8%
Michael
kennedy 6%
Michael
Jackson 5%
Suzanne May 5%
Other Potters 4%
70%
 Import
s 30%
100%

Table 3 – Adapted from Case Study

Ballyshancarragh can drive sales by looking at the segments that we have chosen. Market

Share can be secured by targeting those segments with a special mix of marketing

In order to do this Ballyshancarragh can focus on a common marketing term of the five P’s

That is product, price, place, promotion and people.

It is very important that Ballyshancarragh set a firm and realistic budget for proposed

marketing plan so that they achieve the correct amount of market share. Judy Green has spent

between 4% and 5% and clearly Ballyshancarragh will at a minimum require the same

although launching a ne range is very costly and more resources may be required.

Product:

Ballyshancarragh are aiming to produce a product range that is both practical and functional.

Customers will like to see a product that is different from other products out there. Hand

Crafted Pottery especially by its nature (i.e. handmade and hand painted) it is unique. A range

of products must be designed that is both sustainable and profitable for the company.

This being said this is being offered by many other competitors within the market we need to

provide them with more than just a product we need to go provide them with a service that

goes with the product. From the text they want pottery that is “functional chunky durable

and heavy practical and old-fashioned”. They want something Irish without all the

shamrocks.

Price:

With a strong brand and a strong range of quality products Ballyshancarragh may be able to

command a premium price in the market however Ballyshancarragh need to be realistic in

entering this market not to under price the products or not to overprice them the same time.
The research carried out by A.M.Tories has shown that there is a large range of prices across

many products within the handcrafted pottery market. For example dinner plates may cost

between €12 and €26. A small ball may cost between €7 and €15. It is important that we enter

this market at the right price with a quality product to show that our brand quality and of

value.

Ballyshancarragh should aim for a price that is above average but not at the upper end of the

scale in order to entice people to look at our product and to see some value in it.

Selling through Gift Shops etc will require a separate pricing structure. Norms expect a whole

sale price to be agreed. Ballyshancarragh may be able to maximise profits if they can setup

their own retail store.

Promotion:.

Promoting Ballyshancarragh and its brand name is going to be very important to the success

of this business. The company will have to use a mixture of direct and indirect marketing in

order to achieve a good market share.

1) This may require personal sales calls to give retailers and craft shops Point of Sales

Materials, to promote the brand and maintain relationships.

2) The company may also attend trade fairs especially those aligned towards home design,

holiday trade fairs, retail workshops, and maybe if we wish to have some tour operators

promote the range of products it would be a good idea to visit these at trade fairs and

introduce the company to them

3) The company should also promote the business in magazines in which our core customer

group may read such as home design magazines. Local and national newspapers also like

to hear stories of job creation and new designs coming from Irish craftspeople we may be

able to gain some free advertising by publishing local interest news stories possibly to

promote the brand and seven resources.

4) Many companies within the craft industry have managed to set up cooperative advertising

whereby organisations like Failte Ireland may gather one or two companies together to

take out a full-page ad splitting the cost between all the advertisers therefore making it

more cost-effective for them to advertise.

5) At all stages we must communicate with the customer even after purchase maybe setting

up a registration scheme which will allow Ballyshancarragh to gather the information of

the customers who have bought our product and offer them items true direct mail later on.

6) The company can introduce a special sale scheme during the off-peak season to keep

sales coming in and help cash flow also helping to promote the brand as we go along

brochures and signs are also a very good way of advertising the company and it's very

important that we do not produce a low quality brochure or sign. It would be much better

to produce sign with less colours and better quality than assign this full of colour and low

quality.

7) Something that was not available to a great extent with Judy green is e-advertising.

Promoting through the use of twitter, face book, online store and for a more fun element a

viral may give the company a more technical avenue of promotion and gain the attention

of internet savvy customers.

Place:

First and foremost customers like to be able to shop in a local outlet and many competitors

have setup such an opportunity to show off their full range of stock both new and old. I

believe it is vital for Ballyshancarragh to do the same.

Distribution channels are key to our brand success we will distribute where possible in

medium to large tourist gift shops, luxury home ware companies such as Meadows and

Byrnes or Brown Thomas. Focus will be to target large urban areas especially city centres

and tourist regions.

In relation to small retail stores I recommend that Ballyshancarragh should avoid them as

market research shows that they are harder server and can only handle a limited amount of

stock and poor facilities for promotion.

Ballyshancarragh will exploit opportunities of mail-order and e-commerce beginning with the

Irish market and building brand and services to further expand to international markets.

People:

“Marketing is the delivery of customer satisfaction at a profit” (Kolter et al, 2008)

At all times, Ballyshancarragh, want to run a customer led business. Our frontline staff and

the retailers we choose must listen to that the customer wants and respond in kind. Our aim is
to create a company that is value added. This can be a combination of price, Service and a

Quality Product.

VALUE =

Treachy, The Discipline of Market Leaders, 1995

Adapted from the notes in class

Conclusion:
The positioning recognises the strengths of existing players in the market. By creating a
unique range offering value to the customers a market share of 4% is achievable. Is
there a particular focus that will allow this to be achieved and is it going to be possible
to grow the market by more than 4% is uncertain at present.
Question 4-The Irish pottery Market was Valued at 8.75
million Euro in 1998. How has Judy Greene positioned
her pottery products? Create a positioning Map?

Judy Greene has positioned her Brand as one of the top players in the Hand Crafted Pottery

Market. Judy enjoys a market share of nearly 8% and is ranked 4th in Ireland; that being said

she only has a turnover of 50% of the leading player in the market Nicolas Moss and yet Judy

Greene’s pottery is as well know if not better known amongst her focus group. Nicolas Moss

widely known for having the largest production facilities in Ireland and hence this is probably

a major factor in his position.

Graph Position 1
Graph Position 2

In creating the positioning maps I looked at the mass market as having an average price but
still good quality. Judy herself said that there products were high quality but yet here pricing
structure is just above average.

Place:

Judy Greene went against the trend of setting up a pottery business in Cork and Kilkenny in

the early 1980’s. She did not want to restrict herself to a 3 month tourist season and wanted to

attract more domestic clients. Her decision of setting up in Galway proved to be a success as

it now enjoys up 920000 visitors to Galway per year and a tourist footfall of 30% of all

visitors.

Key to her success was having her retail shop and workshop side by side so she could get

constant feedback from her customers. Judy has developed distribution channels across

Galway and west of Ireland and sales seem to have become regionalised in the market as a

whole. Maybe the use of her website and mail order system may expand on this and possible

selection of appropriate retailers outside of the west of Ireland. As the CSO Tourist Table
Shows a large area that can still be utilised is Dublin with a tourist footfall of 3.8 million per

anum.

Price:

“Hand Crafted items are not Price Sensitive as other sectors in the craft industry“

As it is pointed out it is not seen as a price sensitive product especially in the limited edition

and large item categories where a lamp can go for as much as €200. That being said Judy sell

most of her product in the €9.95 to €29.95 range and must remain competitive in these areas.

Judy has kept here pricing in line with the market average with a slight premium built in for

most of the items in this range. 3rd party retails tend to sell at 2.1 to 2.2 times the wholesale

prince and Judy is fortunate to have her own retails shops where she keeps the price in line

with retailers. This has the advantage of being able to capitalise on the Recommend Retail

price while not undercutting her distribution channels. Judy also sells 60% of her products in

her stores so this gives her a higher profit margin than just distributing through the retailers.

Judy has also helped her brand by not over pricing her main products. While most focus

groups agreed that value and functionality were more important than price except for Young

graduates Judy has kept quite in line with the industry average.

Product:

Judy’s bluebell range developed her brand in 1988 and up until 1995 Judy introduced a new

range every year. This constant innovation has kept her brand fresh and new and ideal for

collectors who want to buy more of her product. She has introduced new lines to encourage

younger buyers to become interested in her designs and has also introduced gourmet

cookware products. She has continuously looked at the market trends and the requirements of

her customers and put these requirements into action.

Her introduction of the gourmet cookware which used tradition simple designs and old

farmhouse look required no costs to develop as she used existing resources and this has

opened the possible opportunity of entering the food market when her products will be used

in international demonstrations with the possibility of creating a new customer base.

Actually it looks like Judy has been ahead of her market for some time as the focus group

results show that her core segment: The domestic Market made up of Professionals, Mature

Home Makers and loyal customers wanted in that her products seem to reflect what the

customers regard as important to them

“Functional Chunky Pottery” - “Practicality, Functional, Shape, Colour, simplicity, design,

style” – “Shape Colour and Functionality”

Promotion:

Judy Maintains that point of sale literature and signage remains very important. Customers

see the Judy Green Sign over the door and do not understand that everything for sale was

actually made by Judy Greene. The typical promotional literature is leaflets and information

cards. Maybe she could develop that further to create product registration cards and so build a

customer database if she is not doing so already. Also awareness may need to be developed

especially with the tourist industry. Awareness in Ireland is clearly very strong but as Judy

Pointed out sales tends to be regionalised and maybe this needs to be a focus of attention in

order to maximise Irish sales.

Judy has developed advertising campaigns in cooperation with other potters and this certainly

helps to save costs. She spends 4 – 5% of her turnover on advertising and clearly advertising

in magazines and newspapers take up a lot of this funding.

Judy’s best investment to date has been in developing her brand which was last completed in

1992. Maybe she needs to further develop this at this stage to increase her market share.

People:
Judy Greene and her husband run the business and Judy herself, admits that in order to focus

on design she may need to employ a marketer and a manager for the manufacturing

workshop. This will give her a professional touch to her business in terms of marketing and

should be a key focus to developing her brand. This is what I see as a strategic decision that

must be made.
References

Web Reference 1: http://wps.prenhall.com/wps/media/objects/213/218150/glossary.html#M

Pdoyle Stern: Marketing Management and Strategy Fourth Edition: Prentice Hall

Wikipedia 1 http://en.wikipedia.org/wiki/Positioning_(marketing)

CSO Website International Travel Statistics www.cso.ie